Is it only a storage facility?
A warehouse is typically viewed as a place to
However, in many logistical system designs,
the role of the warehouse is more properly viewed as a switching facility as contrasted to a storage facility.
A Sample Warehouse
Benefits of Warehousing
Consolidation Shipment consolidation is an economic benefit of warehousing. With this arrangement, the consolidating warehouse receives and consolidates materials from a number of manufacturing plants destined to a specific customer on a single transportation shipment. The benefits are the realization of the lowest possible transportation rate and reduced congestion at a customer's receiving dock.
The primary benefit of consolidation is that it
combines the logistical flow of several small shipments to a specific market area.
Consolidation warehousing may be used by a single
firm, or a number of firms may join together and use a for-hire consolidation service.
Through the use of such a program, each individua1
manufacturer or shipper can enjoy lower total distribution cost than could be realized on a direct shipment basis individually.
Break bulk warehouses
Break bulk warehouse operations are similar to
consolidation except that no storage is performed. A break bulk operation receives combined customer orders from manufacturers and ships them to individual customers. The break bulk warehouse sorts or splits individual orders and arranges for local delivery. Because the long-distance transportation movement is a large shipment, transport costs are lower and there is less difficulty in tracking.
Break bulk warehouses…
Warehouses can also be used to postpone, or delay,
production by performing processing and light manufacturing activities.
A warehouse with packaging or labeling capability
allows postponement of final production until actual demand is known.
For example, vegetables can be processed and
canned in "brights" at the manufacturer.
Brights are cans with no pre-attached labels.
The use of brights for a private label product
means that the item does not have to be committed to a specific customer or package configuration at the manufacturer's plant. Once a specific customer order is received,
the warehouse can complete final processing by adding the label and finalizing the packaging. 10
Processing and postponement provide two economic
First, risk is minimized because final packaging is not
completed until an order for a specific label and package has been received. Second, the required level of total inventory can be
reduced by using the basic product (brights) for a variety of labeling and packaging configurations. 11
The economic benefit of stockpiling comes from the
need of seasonal storage. For example, lawn furniture and toys are produced year-round and primarily sold during a very short marketing period. In contrast, agricultural products are harvested at specific times with subsequent consumption occurring throughout the year. Both situations require warehouse stockpiling to support marketing efforts. Stockpiling provides an inventory buffer, which allows production efficiencies within the constraints imposed by material sources and the customer. 12
Voice Directed Distribution: Talkman from Vocollect
Five basic service benefits are achieved
spot stock, assortment, mixing, production support, and market presence.
Under spot stocking, a selected amount of a firm's
product line is placed or "spot stocked" in a warehouse to fill customer orders during...