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Warehousing including warehousing decision in detail

and distribution centers:

Warehouse: Awarehouse

is a commercial building for storage of goods. Warehouses are usedby 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 matureeconomies.

Basic functions of warehouses:

Consolidation

Product mixing

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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 andmanaged distribution center will provide such services as transportation, cross-docking, 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 performancemeasurement.

A distribution center is customer focused: While a warehouse is focused on themost 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 andwarehouse 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 outsidecompanies 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 thecustomers' needs but also with the most efficient and cost-effective methods ofmeeting those needs. By contrast, a storage warehouse is so inwardly focused, in

most cases, that there is very little understanding of what customer service reallymeans.