【正文】 d quality bee indistinguishable from one pany to another and distribution cost bees a significant part of a product’s value, the invisible hand of logistics bees a key petitive advantage, and warehouse optimization bees critical to the logistics chain from supplier to customer. One home furniture manufacturer recognized the strategic necessity of maintaining easy access to its finished products and was able to turn its strategic business purpose into the operational details of a warehouse optimization process. This article describes the optimization journey of this 50yearold pany of nearly 1,000 employees. Situation Because it had no central distribution center, this furniture manufacturer and importer was operating 13 satellite warehouses ranging from 8,600 square feet to 100,000 square feet within a 100mile radius. Domestically manufactured products were stored at the producing facility’s warehouse. In total, each warehouse was handling more than 150 ining and outgoing pieces of furniture on a daily basis— both domestically manufactured and imported products from suppliers in Asia were shipped to customers. More than 100 containers were received from suppliers through a freight forwarder using multiple ocean carriers. What was the result of all this activity? First, the pany suffered from reduced throughput due to split, partial, and wrong shipments. Shipping became a major challenge and a large part of the corporate overhead. A special traffic department was created to consolidate shipments,route trucks,and schedule pickups at different locations. Split or partial shipments that were unnecessary and unrequested occurred frequently. Second,operating costs rose due to three factors: ? Handling damage. Unnecessary product moves were creating major damages, which were having a significant impact on the pany’s financial situation. Customer returns and allowances had reached 10 percent of sales. A large number of pieces were put on hold and could not be shipped due to internally inflicted damage, delaying customer order fulfillment and increasing repair costs. ? Exception charges. Demurrage and per diem charges were a major financial hit to the pany. Demurrage charges were incurred due to lack of space in warehouse facilities. Entire shipments were voluntarily held at port to avoid an overflow situation, not only increasing operating expenses but also delaying customer response time. Per diem charges (incurred when a container is not unloaded in a timely manner and held at the facility) were mon due to the lack of a scheduling system for ining containers. ? Inefficient product flow. Direct labor cost was being a major part of the pany’s cost structure. Excess handling, along with not being able to make good use of economies of scale, were driving inefficiencies up. These poor warehouse management practices resulted in excess operating costs. The lack of an adequate inventory method and the relatively short product life cycles created an obsolescence problem. Another problem was insufficient inventory turns due to the absence of firstin, firstout principles. Typically, pieces were received and warehoused in no orderly fashion, which did not allow the space required for a FIFO system and causes new and old products to be mixed. The jumble of products was generating color mismatches that were attributed to different supplier cuttings or even sourcing changes. The lack of an adequate information system worsened the situation because there was no way to track inventory location inside and outside each warehouse. Employees had to keep track of product locations manually or mentally, often creating duplicate locations and ex