Warehousing Including Warehousing Decision in Detail and Distribution Centers

Warehousing including warehousing decision in detail and distribution centers:
Warehouse: A warehouse is a commercial building for storage of goods. Warehouses are used
by manufacturers,importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns and villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks. Stored goods can include any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture, manufacturing, or commerce.
Why Warehousing? To transcend time between supply and demand At a macro level, due to seasonality At a micro level, due to need for flexibility from having to anticipate/coordinate arrivals (supplies) and departures (demands) To facilitate logistical efficiencies Procurement/distribution network, including change of mode, requiring consolidation/break bulk and/or safe and secure handling In short, whenever there is inventory, which fundamentally is due to Seasonality Buffer stocks and Cycle stocks In a futuristic sense, focus on inventory reduction and logistical efficiencies due to lead times, handling etc will reduce need for warehousing. The big opportunity is in value addition for mature economies. Basic functions of warehouses: Consolidation Product mixing
Service/Product availability Protection Against Contingencies Smoothing Manufacturing Operations There are two types of warehouses,Public warehouses and private warehouses.The ownership decision depends onFactors to consider Throughput volume Stability of demand Density of market area to be served Security and control needs Customer service needs Multiple use needs of the firm
Advantages of public warehousea are Conservation of capital Meet peak requirement Economies of sale Flexibility Taxes advantages Storage & Handling costs Disadvantages are: Communication problem In effective communication Lack of standardization in conceptual agreement Advantages of private warehouses: Availability of specialized services Space availability Allows firms to integrate warehouse function more easily Highly flexible
Less cost Organizations can make greater use of its Human Resources. Tax benefits Disadvantages are: It results in Too costly because of its fixed size and fixed cost Loss of valuable business opportunity Loss of customer service Loss of sales Loss of flexibility in its strategic location options
A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center offers value-added services: Rather than simply offering static storage, DCs provide a myriad of services for clients, whether those customers are external or internal company departments and functions. A well-organized and managed distribution center will provide such services as transportation, crossdocking, order-fulfillment, labeling and packaging along with whatever services are necessary to complete the order cycle, including order processing, order preparation, shipping, receiving, transportation, returned goods processing and performance measurement. A distribution center is customer focused: While a warehouse is focused on the most efficient cost effective methods of storing products within its walls, a distribution center's sole mission is to provide outstanding service to its customers. A distribution center is technology-driven: The distribution center of today must have in place state-of-the-art order processing, transportation management and warehouse management systems if it is to receive, scan bar codes, locate and store product efficiently, pick/pack and process orders, and plan loads. A distribution center is relationship-centric: Whether its clients are outside companies or other intra-company units, a distribution center must remain focused on its customers' requirements. A distribution center is the principal link between suppliers and customers, and its management must be conversant not only with the customers' needs but also with the most efficient and cost-effective methods of meeting those needs. By contrast, a storage warehouse is so inwardly focused, in most cases, that there is very little understanding of what customer service really means.

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