Warehousing, in common with other commercial and industrial activities, has become a specialist activity. It has the responsibility for the receipt, custody and distribution of very large sums of money in the form of materials and finished goods. Indeed, the contribution that warehousing make to the success of an organization is today universally recognized.
Accordingly, the warehousing function is an integral part of the total supply chain system, which is a seamless flow of material from the supplier or manufacturer to the end user. Warehousing creates and orchestrates a synergy between the supply and demand aspects the firm. This is done by using the most appropriate procedure, policy or storage method to ensure the minimal cost of the function balanced with the satisfaction of customers.
Obviously, there is no universal system of management and control, which can be applied; nevertheless, certain principles and practices of more or less general application have evolved.
What is a warehouse?
A typical warehouse [Figure 1.1] is any point where goods are stored, changed forms (bulk-breaking), or reconfigured for distribution. Therefore, a warehouse is a temporary location to store goods so as to best match product availability to customer demand whether internally or externally. Thus, it is planned, organized and controlled, consistent with economic operation. Bearing in mind the great variety of organizations that exist today – wholesale and retail concerns, petroleum refineries, airlines, process industries, road transport, hospitals, schools, agricultural enterprises, and many others, before a warehouse system of management and control can be designed, account must be taken of the nature and needs of the organization it intends to serve.
Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of...