Chpt 6: Warehousing

• Meaning
• Feature/Nature/Characteristics
• Functionality of Warehousing
• Benefits/Need/Importance of warehouses
• Types of Warehouses
• Warehousing Strategy
• Warehouse Operating principles
• Factors affecting Warehousing
• Public vs private Warehousing
Meaning
• It is an important component of efficient logistic and supply chain
management system.
• It provides storage for goods and performs a variety of functions like
receiving, holding, assembling, packing and dispatching goods per
order.
• Its needed for balancing demand and supply and to provide economic
benefits to firms and customers.
Nature /Features/Characteristics
• Integral part of logistics: as it stores the product between its point of origin to
the point of consumption.
• Maintains smooth flow of goods: objective of warehouse is to maintain
uninterrupted flow of inventories and finished goods by storing them in right
quantity.
• Holds or stores the good: It holds or stores before they are shipped to the
customers.
• Creates Time and Place utility: There is always a gap between production and
consumption.A warehouse function creates time and place utility for the
organization by holding the raw materials, work in progress and finished goods
in right quantities and making them available at the right place and right time.
• Provides value adding services: services such as sorting, break bulk,
branding , grading and packaging.
• Components of warehousing: following are the basic components of
the warehouse.
Space:
Equipments :
Labour Force:
Functionality of Warehousing
• Receiving goods
• Sorting goods for storage
• Storage of goods
• Protection of goods
• Creating buffer stocks
• Processing of goods
• Consolidation or Assembling
• Breaking the bulk
• Grading and Branding
• Stock rotation
• Order picking
• Packing and shipping
• Transportation
• Financing
Benefits/Need/Importance of Warehousing
1.Operational /Service Benefits
• Protection and preservation of goods
• Steady supply of goods
• Time and place utility
• Ease of handling the goods
• Storage of seasonal goods
• Assist Pre-Sale Activities
• Market Presence
• Stock Spotting
• Assortment
Economic Benefits
• Consolidation/Assembling: Warehouse receives materials from
multiple sources destined for a specific shipment. Warehouse
provides a place for assembly, storage, sorting, and consolidating
goods as a single transport shipment. Consolidation helps in reducing
overall transportation cost.
• Breaking the bulk: This is opposite of consolidation . Here, the
warehouse receives combined or a bulk customer orders from
manufacturers and need to be broken down into smaller shipments to
individual customers. This function of breaking the bulk customer
orders into smaller lots is an important function of warehouse.
Cross Docking facility
• It is a practice of unloading and loading materials simultaneously to
save time and money. Cross docking also means a distribution
warehouse having doors on two sides i.e. inbound and outbound
doors, wherein goods are received from inbound door and then
transferred to outbound transport dock . The main advantage of cross
docking is that it elimates ”storage” link of the supply chain.
Stockpiling
• Ware housing provides seasonal storage which is essential to certain type of
businesses like agro-based product, fisheries, floriculture, etc.
Processing: Refers to undertaking light manufacturing tasks such as final packaging,
labelling, etc.
Product processing or mixing: Product processing also means mixing products from
multiple suppliers/ manufacturers for transportation to a single customer as per his
order.
Assortment: It means keeping stock of multiple products from different
manufacturers or as specified by a special customer.
Market Presence: the presence of local warehouse near the market plays a more
responsive role in meeting customer needs more quickly than distant warehouse.
This is how local warehouse increases market share.
Types of warehouses

Types of warehouses
As per ownership

As per market
presence

Others
As per ownership criteria
• Private Warehouse
• Public Warehouse
• Bonded
• Contract
• Government
• Co-operative
As per market presence
• Centralised
• Decentralised
Others
• Consolidation
• Distribution Centres
• Cold storages
• Smart Warehouse