Beverage Industry logo
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Beverage Industry logo
  • NEWS
    • R&D News
    • Supplier News
  • PRODUCTS
    • New Products
    • Reader's Choice Poll
  • CATEGORIES
    • Alternative Drinks
    • Beer
    • Bottled Water
    • Cannabis Beverages
    • Carbonated Soft Drinks
    • Energy Drinks & Shots
    • Juice & Juice Drinks
    • Plant-Based Beverages
    • Sports Drinks
    • Tea and Coffee
    • Wine & Spirits
  • R&D
    • Beverage R&D Features
    • Ingredient Spotlight
  • PACKAGING
    • New Packages
    • Packaging Equipment
    • Packaging Material
  • OPERATIONS
    • Distribution
    • Plant Focus
  • TOP LISTS
    • Beer Market Report
    • Executive of the Year
    • State of the Beverage Industry
    • Top 100 Beverage Companies
    • Truck Report
    • Wholesaler of the Year
  • MEDIA
    • eBook
    • Podcast
    • Polls
    • Videos
    • Webinars
  • DIRECTORIES
    • Annual Manual
    • Contract Packaging Guide
    • Take a Tour
  • MORE
    • Classifieds
    • Channel Strategies
    • eNewsletters
    • Events
      • Membrane Technology Forum
    • Interactive Product Spotlights
    • Market Insights
    • Sponsor Insights
    • Store
    • White Papers
  • EMAG
    • eMagazine
    • Archived Issues
    • Advertise
  • SIGN UP!
CommentaryPlant Focus

Operations Perspective

The reality of the beverage market’s pre-distribution

Before and after movements affect warehousing needs

By John Peter Koss
OpsPerspective_GettyImages-1210182341.jpg
John Peter Koss
OpsPerspective_GettyImages-1210182341.jpg
John Peter Koss
May 25, 2021

Current industrial and media focus have been on the constantly changing supply chain ― what is changing and why? Needless to say, research into various industries, including the massive beverage arena, reveals more detailed analyses are being made of each phase of the supply chain, the tasks and costs involved and to identify (and prevent) serious real-time problems.

From an operations perspective, one general and obvious conclusion about shortages surfaces because materials have not been available to produce required goods. Beverage producers/distributors, and only distributors, fortunately, do not have that as a near-term issue. However, they are challenged by an operating function traditionally and generally referred to as warehousing. 

Questions about supply chain phases typically are defined with tasks and start/stop points, which facilitates execution of the responsibilities and controlling of costs. Review of processing and packaged production will substantiate this. Processing and production costs easily are tracked and managed when this is done.

When management addresses the inevitable supply chain questions about warehouse costs, the answer usually includes figures that might not be representative of “the warehouse operation.” The figures could include an array of tasks and costs that are not warehouse related, per se. This is why the focus must be directed toward the real functions performed within the bricks-and-mortar warehouse.

The true meaning of warehouse cost must recognize that the building was created to store materials and goods in what can be called a “before and after” movement. Raw and packaging materials are stored before being processed or produced. While stored, both materials take up space at a cost per square foot. Finished goods are stored after being produced or packaged. Again, while stored, finished goods take up space at a cost per square foot.

The example describes what realistically is warehousing cost ― to store materials of one category or another in a space that costs money. But, what about all the other activity that takes place in this same warehouse?

The other activity, usually lumped into warehouse storage cost, involves an extremely important segment of the supply chain. First, processing starts with raw materials to create an end product, production starts with packaging materials to create a salable package and warehousing starts with storing finished SKUs to create an inventory in the warehouse. As SKUs journey down the supply chain toward moving onto trucks for in-store delivery, distribution is the new cost strategy.

Within the warehouse, the starting point of pre-distribution is order processing, while the stopping point is loaded vehicles.

Order processing, paper or paperless; removal from storage, manual or automated; staging orders, full pallets or pallet make-up; loading of vehicles, manual or (someday automated) are all part of pre-distribution. All tasks performed in this function comprise pre-distribution costs, which are identifiable and controllable.

After vehicles are loaded and dispatched to respective routes, distribution starts upon delivery to designated locations. Remember, distribution depends on pre-distribution functions or distribution can’t be performed.

Beverage production/distribution operations in real-time practice are subjected to all phases of the supply chain with proper identity and cost controls. What’s missing? Post-distribution ― unloading and restocking? All told, the steps of getting beverages to market work more seamlessly when the right questions are asked — and when there is a well-thought-out strategy to ensure cost efficiency.

KEYWORDS: supply chain Warehouse

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

John peter koss beverage industry

John Peter Koss, the beverage operations advisor, has more than 60 years of beverage industry experience, was an operations executive for a Fortune 500 company and can be contacted at bossole2@gmail.com.

Recommended Content

JOIN TODAY
to unlock your recommendations.

Already have an account? Sign In

  • Chocolate, Strawberry, Vanilla shakes

    Classic flavors provide reliable, consistent results for beverage-makers

    Classic flavors of chocolate, vanilla and strawberry...
    Ingredient Spotlight
    By: Chloe Alverson
  • Free Spirits Instant Bar Bundle

    Lifestyle trends drive growth for non-alcohol category

    As lifestyle trends continue to drive growth for the...
    Wine & Spirits
    By: Lauren Sabetta
  • Younger generation displays unique habits when it comes to beverage consumption

    Generation Z shakes things up in beverage

    Experts share that Gen Z is changing the standard on what...
    Beverage News
    By: Chloe Alverson
Subscribe For Free!
  • eNewsletters
  • Online Registration
  • Subscription Customer Service
  • eMagazine Subscription
  • Manage My Preferences

More Videos

Sponsored Content

Sponsored Content is a special paid section where industry companies provide high quality, objective, non-commercial content around topics of interest to the Beverage Industry audience. All Sponsored Content is supplied by the advertising company and any opinions expressed in this article are those of the author and not necessarily reflect the views of Beverage Industry or its parent company, BNP Media. Interested in participating in our Sponsored Content section? Contact your local rep!

close
  • Fourpeople toasting with cocktails made with low-sugar ingredients, celebrating healthier drink options.
    Sponsored byCargill

    What’s Hot in Sugar Reduction: Beverages

  • chocolate milk
    Sponsored byCargill

    Sweetening the Future for Dairy and Dairy-Alternative Beverages

  • woman pouring a drink
    Sponsored byFFP

    Building a Beverage System: Meeting Consumer Demand for Precision Wellness

Popular Stories

halfday sodas

Beverage-makers turn to fiber, prebiotics and more to support consumer needs

smoothie

Opportunities abound for relaxation, stress-relief beverages

Mountain Dew Mango Rush

Mountain Dew, Little Caesars launch Mountain Dew Mango Rush

Vote for your favorite new product

Have your say in what makes it to the top this month!
Vote for your favorite new product and help us celebrate excellence.


VOTE NOW!

Events

April 16, 2025

2025 State of the Industry Series: Alcoholic Beverages

On Demand In Beverage Industry’s annual State of the Industry: The Alcohol Beverage Market, analysts at S&D Insights LLC delve into these trends and how they’re shaping the industry.

View All Submit An Event

Poll

Retail Coffee Segment

What retail coffee segments will fare well into the next year?
View Results Poll Archive

Products

Milk and Dairy Foods Nutrition, Processing and Healthy Aging

Milk and Dairy Foods Nutrition, Processing and Healthy Aging

See More Products

Related Articles

  • John Peter Koss

    Pre-distribution within beverage operations demands identity

    See More
  • John Peter Koss

    Assessing the progress of beverage operations technology

    See More
  • John Peter Koss

    The other faces of the beverage supply chain

    See More

Related Products

See More Products
  • bigfood.jpg

    Big Food: Critical perspectives on the global growth of the food and beverage industry

See More Products

Related Directories

  • The Drink Ink

    The Drink Ink is the premier supplier of beverage development and beverage manufacturing. The Drink Ink specializes in custom and private label beverages, energy drink manufacturing, beverage formulation, beverage development, beverage co packing and beverage production for energy drinks, supplements, sodas, carbonated beverages, relaxation drinks and other functional beverages.
×

Elevate your expertise in the beverage marketplace with unparalleled insights and connections.

Join thousands of beverage professionals today. Shouldn’t you know what they know?

JOIN NOW!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
  • SIGN UP TODAY
    • Create Account
    • eMagazine
    • eNewsletter
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing