What is a Warehouse & why companies need them?
All organizations hold stocks. In virtually every supply chain, gaps exist between when something is produced and when a customer is ready to buy or receive it. Stocks occur at any point in the supply chain where the flow of materials is interrupted. This implies that products need to be stored during this period of gap.
All organizations hold stocks. In virtually every supply chain, gaps exist between when something is produced and when a customer is ready to buy or receive it. Stocks occur at any point in the supply chain where the flow of materials is interrupted. This implies that products need to be stored during this period of gap. Simply put, warehouse is a building for storing goods. Most organizations arrange for stocks to be kept in warehouses. A warehouse is any location where stocks of material are held on their journey through supply chains.
Other than providing storage, warehouses also fulfill a range of commercial functions like receiving the goods, stockpiling and dispatching goods to customers; during the process also displaying goods for commercial buyers; packing, checking and labelling orders, and dispatching them.
Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc.
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 standard pallets loaded into pallet racks. Apart from storage, they are used to inspect, sort materials and break bulk (taking large deliveries and breaking them into smaller quantities). They might also be used for finishing products, labelling, packaging, making products ‘store ready’ for retailers, doing other aspects of postponement, servicing vendor managed inventories, and so on.
Why we need Warehousing?
Once the goods have been manufactured, someone owns the products till they are delivered to end customers and has its money tied up in them. Hence someone needs to keep track of where those products are and protect them from damage. Warehouse enables the businesses to stockpile these goods and manage them before further distribution. Storage also includes a proper arrangement for maintaining goods from the time of their manufacturing or purchase till they are truly used. When storage is managed on a large scale and in a particular manner it is known as warehousing. Warehousing is one of the essential elements in current day business without which business is not possible.
Given below are the key benefits of the warehouse:
- Safety and Preservation of goods, preventing them from getting lost or stolen.
- Trouble free handling, reduce errors and damages in the order fulfillment process.
- Ensuring Continuous supply of products, ensuring timely delivery and optimized distribution.
- Warehouses helps price stabilization by creating time utility.
- Serve as local and regional store distribution centers and provide the facilities of packing, processing and grading of goods.
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Overview of Warehouse Processes
The basic function of a warehouse is to store goods. This means that they receive deliveries from suppliers, do any necessary checking and sorting, store the materials until it is dispatched to customers. Traditionally warehouses were seen as places for the long-term storage of goods. Now organizations want to optimize their customer experience and try to move materials quickly through the supply chain, so the role of warehousing has changed.
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One of the warehousing best practices that retailers like Walmart, Amazon, and Target have adopted is known as cross-docking. During this process the inbound products are unloaded at a distribution center and then sorted by destination, and eventually reloaded onto outbound trucks. In real parlance, the goods are not at all warehoused but just moved across the dock (hence the name).
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Warehouses may seem like a simple, straightforward concept, but they actually include a variety of different types of warehouses that all have their own niche. The type of warehousing that’s right for you depends on your specific industry, location, and needs. From private warehousing, distribution centers, and climate-controlled warehouses, there’s an option to suit every business.
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Types of Order Picking Methods in the Warehouse
There are many different types of picking in a warehouse and each one works as a customized solution for each business. Depending on the size of your warehouse and inventory, the manpower you have on hand, and the number of customer orders made each day, there may be certain methods that are more efficient for you than others.
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One of the most important decisions when running a warehouse is its layout. Warehouse layout defines the physical arrangement of storage racks, loading and unloading areas, equipment and other facility areas in the warehouse. A good layout aligned with the business needs could have a significant effect on the efficiency.
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At a high level, the essential elements in a warehouse are an arrival bay, a storage area, a departure bay, a material handling system and an information management system. As part of the process for enabling a warehouse layout, you must define warehouse zone groups, and zones, location types, and locations.
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To stay competitive in today’s tough market, the location of your warehouse is vital. To grow retail business need to offer to customers faster and affordable shipping time, which is dependent on the warehousing location as the location of the warehouse affects the transit time to ship orders to customers.
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Inventory is money, and hence businesses need to perform physical inventory counts periodically to make sure that their inventory records are accurate. The traditional approach to conducting inventory counts is to shut down a facility during a slow time of year to count everything, one item at a time. This process is slow, expensive, and (unfortunately) not very accurate.
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Warehouse management and distribution logistics involve the physical warehouse where products are stored, as well as the receipt and movement of goods takes place. Warehouse management aims to control the storage and movement of products and materials within a warehouse. These operations include the receipting of inwards goods, tracking, stacking and stock movement through the warehouse.
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Types of Inventory Count Processes
While dealing with lots of inventory in a warehouse, lots of things can go wrong. Shipments may not have the right number of units in them, or they could get damaged somewhere along the supply chain. Discrepancies in the stock may arise as part of every inventory control, and need to be corrected immediately after the inventory control procedure has been finished.
