How does transportation and warehousing function with supply chain systems?

Supply chain
is an integral part of the business environment, and it impacts every area of production.
Perhaps most complicated is when it becomes involved with distribution, warehousing, and
inventory systems. The main complicating factor is that these functions all obscure the amount
of goods in house, and that causes confusion with supply chain management.

Inventory is the tracking and recording of processed goods or products within the walls
of the company, which is a warehousing function. If your produce 200 widgets but sell 150, the
remaining 50 go to inventory to be sold at a later date. Supply chain pulls information from
this because it informs the company how much they need to purchase in order to meet production
and sales goals.

Transportation, or distribution of goods, can also
complicate the process, because frequently, goods will be in transit. Purchased or sold goods do
not immediately arrive, so they need to be accounted for in the supply chain system. For
instance, if you have purchased a supply of raw materials for your company, and then you learn
that you have a much larger sale that needs production, you will need to adjust purchasing but
account for goods already in transit. The same goes for salesany goods sold have to be accounted
for, even if they are prior to reception and you have therefore not yet been
paid.