Case Study Of Westminster Company

There are three alternatives which come to view for consideration by the Westminster Company in terms of logistical adjustments. The first option would be to consolidate its warehouses. The second option is to make use of public warehouses and the third option would be to have private warehouses. All the options have advantages and disadvantages which should be considered before a decision is made on the best type of warehousing that should be adopted by the company.
System consolidation for the Westminster Company would result in easy gain of economies of transportation. This is because it would be easy to gather truckloads to and from the centers of distribution. This will lower both the customer freight as well as the transfer costs. The effects of warehouse consolidation have some great impacts on the costs of transportation. Firstly, it would reduce the inventory carrying costs. This will be as a result of the reduction of duplication of effort and use of better facilities. There would also be an improvement on order fill rates. This will be achieved because the inventory will distributed from fewer locations of storage. Moreover, the number of freight transfers needed to meet the demands of the customer would be considerably reduced. System consolidation would therefore result in great savings in terms of costs. Another advantage of using the consolidated system is that it offers greater opportunities for large volumes of shipment using trucks. The consolidated system also makes it possible to practice mixed shipment. The large volumes of shipment would mean that there would be need for fewer shipments, each carrying a large quantity. This would improve the economies of scale.
There are also some disadvantages of the consolidated system. There are some customers who feel comfortable when the stores are near them. Consolidating the warehouses would increase the distance from some customers. This may pose a challenge on the time taken to deliver the