What is a Warehouse?
Warehouse management is crucial in managing the logistics and supply chain of the business. A warehouse is a place where goods store temporarily until it is distributed, transferred to another location, or until used for production. Both open and closed warehouses are available to manage the demand and supply efficiently. Bonded warehouses available to facilitate trade. There are companies specialized in providing warehouses facilities due to the importance it plays in the supply chain. Further warehouses support suppliers/manufacturers in pre-production and post-production processes.
Yards available in ports are also open warehouses which highly facilitate the Logistics requirements.
What are the Basic Warehousing Functions?
The functions of a warehouse depend on the purpose of establishing a particular warehouse. In general below are the functions of a warehouse.
- Issuing and Receiving Goods
- Goods Inspection/ Quality Check
- Packing and Marking
What is Warehouse Management?
Warehouse management can refer to a collection of activities involve in storing goods in a systematic order with easy access and minimum cost involvement.
Warehouse management is significant as it helps to:
- Reduce inventory with upstream partners
- Maximise space utilization
- Improve customer service
- Inventory management
- Reduce the costs involved
What are the Warehouse Models?
Warehouses models can identify under two categories based on the economic benefits and service benefits it provides. Economic benefits and service benefits also can discuss under few categories as below.
Warehouse Models- Economic Benefits
Cross-docking is a very effective method for high scale product distribution. Here shipments receive from several manufactures to the warehouse and sort them based on the requirement of several customers. The sorted shipments truck separately to the customer.
As the name reflects break the bulk into parts before distribution. Here, bring down a cargo lot from production, from a manufacturer and split it to the consignments as per customer requirement and distribute.
Consolidation helps to reduce the unnecessary congestion at a customer’s place and reduce the transportation cost to the customer. Here products transport to the warehouse and sort them to Identify all the customers in a specific area and transport them together to reduce the cost. Here consolidation can do for the products belong to one manufacturer in several plants or products from several manufactures.
Postponements or the processing are the warehouses use to delay the production of a product. i.e. Wine keeps in stores for a long period to enhance the value. International suppliers keep the final products in warehouses until the demand arise to do packing and labelling.
OEM’s (Original Equipment Manufacturers) use this method widely for the spare parts, vehicles and other equipment. This further makes sure the continuous production without keeping the resources idle. Having stocks also helpful to cater to sudden demands and avoid the risk of “loss of sales”.
Stockpiling use to cater the products with seasonal demand/production. There are products which have a very high demand only for a shorter time period. In such, it is important to produce the products year-round and stock them to supply when the demand arises. Stock-pilling helps to avoid additional production costs due to use of high resource for production. Some products have demanded all around the year but produce only in a specific period.
Firecrackers and toys have higher demand during Christmas. Producing them year-round and storing to use during Christmas is stock-pilling. At the same time, agricultural products have demand in the whole year, thus only can produce in the season. So, it is important to produce them during the season and stock to cater to demand.
Warehouse Models- Service Benefits
With assortment, the distributor makes available varieties of products in the warehouse. I.e. distributor bringdown products including, the same product in different brands. This will facilitate customer by avoiding him/her contacting several suppliers to buy a set of products in several brands. This further allows large shipment with a low transporting cost.
Mixing is very similar to the break-bulk function. But only involve the products from one manufacturer. Once the products receive to the warehouse from several production plants, mix them up as to the customer requirement in the warehouse and distribute.
ere inventory stocks in warehouses only to serve the market during the peak demand. After the peak demand or the season remaining inventory shift to one central warehouse to minimise the cost involved for a few warehouses. So, the spot stock warehousing will be available near to the clusters with key customers.
As the name reflects stock the materials required to assist the production of products. This will help to have a steady supply to the production plants. This will help to enhance service quality with minimum production downtime.
Instead of having a central warehouse, business establish several warehouses near to the customers. This will help to improve the brand awareness of the company too. Also easy to cater to the customer’s demand as products are readily available near to the customer.
Reverse Logistics Processing
Under Reverse Logistics below products will require warehouses for storing until further processed
Out of fashion products
What are the Basic Documents Involved in Warehousing?
- GRN: Goods Receive Note
- GIN: Goods Issue Note
- Stock Movement Report