Important of Warehousing

Topics: Inventory, Logistics, Customer service Pages: 22 (4384 words) Published: June 26, 2011
Q1. Define Warehousing or what is Warehousing?
Definition Warehousing is that part of firm’s logistics System that stores products at and between point-of-origin and point of consumption, and provides information to management of the status, condition, and disposition of items being stored. A warehouse is a point in the logistics system where a firm stores or holds raw materials, semi- finished goods, or finished goods for varying periods of time. In the macroeconomic sense, warehousing performs a vital function. It creates time utility for raw materials, industrial goods and finished products. The proximity of market-oriented warehousing to the customer allows a firm to serve the customer with shorter lead times. This warehousing function continues to be increasingly important as companies and industries use customer services as a dynamic, value-adding competitive tool. Q2. What is the importance of warehousing? (Rationale for Warehouses) •

Achieve transportation economics

Achieve production economics

Take advantage of quantity discounts

Accomplish least total logistics cost

Maintain steady source of supplies

Support customer service policies

Meet changing demand(market) conditions

Reduce time & space distance between supplier & customer Q3. What is the need for warehousing?
A) Conventional Approach: (Push Concept)

Protection against delays & uncertainty in transportation •
Availability of products on desired time & at desired place •
Provide adjustment between the time of production & use of the product •
Serve as a reservoir of goods
B) Modern Approach: (Pull Concept)

Movement of products

Warehouse is a location where inputs received from production are converted into outputs to the customers, at shortest possible time

Warehouse is defined as a location of temporary storage facility & from where they are dispatched with main objective of maintaining the flow of goods throughout the logistics system( cross docking) •

Warehouse adds to the cost of distribution but the financial overall benefits over weigh the cost

Relationship between warehousing & transportation/ production/ customer service/ least total cost logistics.
Q4. The Role of Warehouse
A role plays a multifaceted role in the integrated logistics system. It can serve as a transportation consolidation facility. It also acts as a reservoir for production overflow. This function known as “Stock piling” can take a variety of forms:- (i)

Seasonal production level demand
Level production seasonal demand
Warehouse also acts as:-
a)Production Mixing Sites: - Variety of products can be stocked and when orders are received for a particular “Mix” they are sent from warehouse. b)Warehouse can also facilitate production: - Some final operation like writing name of the customer or coloring can be done there.

c) As a safety during strikes, more rejections etc.
d) Smoothening production runs.

e)The primary role is to provide customer service.
Q5. What are the basic components of a warehouse?
There are 3 basic components:
i) Space: - Space allows for the storage of goods when demand and supply are unequal. ii) Equipment: - Warehouse equipment includes materials handling devices, storage racks, dock and conveyor equipment and information processing system. The equipment helps in product movement, storage and tracking.

iii) People: - People are the most critical component of a warehouse. Space and equipment mean nothing without competent people. A primary reason for establishing a warehouse is to increase customer service levels. This often requires individual attention to special customer requests like final subassembly, specialized packaging, or price making of shipments. Customer requests can request standardization in the warehouse, making complete automation impossible. People play critical...
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