Warehousing
Meaning of Warehousing
• A warehouse is a structure where goods are
stored
• Warehousing is one of activities in supply
chain management
• Warehousing is a procedure or a process of
storing goods within a storage facility
• Warehousing involves administrative and
physical functions associated with storing
Warehousing as an Integrating
function
• In supply chain integration, warehousing plays a
critical role
• Warehousing initiatives directed towards
minimising pipeline inventory
• Pressure points in warehousing include –
accuracy and cycle time performance.
– Cycle time refers to the period required to complete
one cycle of an operation
– What would the cycle time be in the context of
warehousing?
Roles of Warehouses in Warehousing
TYPES OF
WAREHOUSES
Raw
material &
Components
Warehouse
Work-InProgress
Warehouse
Finished
Goods
Warehouse
Distribution
Warehouse
Fulfilment
Warehouse
Local
Warehouse
AROUND A
MANUFACTURING
FACILITY
AROUND A
PRIMARY
DISTRIBUTION
DEPOT
Supports Production
Supports Distribution
Roles of Warehouses in Warehousing
(Contd…)
DISTRIBUTION CENTRE
Raw Material
Warehouse
Hold raw materials at or
near point of induction
into manufacturing
process
FIRM
Hold and consolidate
products from one or several
firms for combined shipment
WIP Warehouse
Hold partially completed
assemblies and products
at various points along an
assembly/production line
Finished goods
Warehouse
Hold inventory used to
balance and buffer the
variation between
production schedules and
demand
Fulfilment
Warehouse
Receive, pick and
ship small orders for
individual customers
Local Warehouse
Distributed in the
field in order to
shorten
transportation
distances to permit
rapid response to
customer demand
Need for Warehousing
• Seasonal Production
– Commodities like agricultural produce are harvested at a particular time
period
– Commodities associated with festivities
• Seasonal Demand
– Commodities like woollen garments during winters and umbrellas during
rainy season
• Large-scale Production
– More economical form of production for certain commodities
• Quick Supply
– Both industrial and agricultural products are produced at some specific
places but consumed throughout the country
• Continuous Production
– Continuous production requires adequate supply of raw materials
• Price Stabilization
– To maintain a reasonable level of the price of the goods in the market there
is a need to keep sufficient stock in warehouses
Functions of Warehousing
1.
2.
3.
4.
Receiving
– Orderly receipt of all materials coming into warehouse
– Providing assurance that the quantity and quality of such materials are
as ordered
Prepackaging
– When products are received in bulk from supplier and subsequently
packaged in merchandisable quantities or combinations with other
parts to form kits or assortments
Putaway
– Act of placing merchandise in storage
– Includes material handling, location, verification and product
placement
Storage
– Physical containment of merchandise while it is awaiting demand
– Storage method depends on its size, quantity of items in inventory and
handling characteristics of the product or container
Functions of Warehousing (Contd…)
5.
Order picking
–
–
6.
Packaging and/or pricing
–
–
–
–
7.
A basic service provided in a warehouse
Process of removing items from storage to meet specific demand
Optional step after picking
Individual items may be available for sale
Pricing is current at the time of sale
Prepricing at manufacture or receipt in warehouse inevitably leads to
repricing activity as price lists are changed while merchandise sits in
inventory
Sortation
–
–
This activity is undertaken when an order has more than one item
and accumulation is not done in picks
Sorting batch picks into individual orders and accumulation of
distributed packs into orders
Functions of Warehousing (Contd…)
8. Unitising and shipping
– Checking orders for completeness
– Packaging merchandise in appropriate shipping
containers
– Preparing shipping documents, including packing
lists, address labels and bills of lading
– Weighing shipments to determine shipping
charges
– Accumulating orders by outbound carriers
– Loading trucks (mostly carrier’s responsibility)
Source
• http://ciilogistics.com/coursware/sem2/Ware
housing.pdf
• http://www.distributiongroup.com/world_clas
s_warehousing_intro.pdf