Supply Chain Management

Chapter 10 : Warehousing

Nature and Importance of Warehousing in a Supply Chain

Functions of Warehousing

Economic Benefits Consolidation Cross-docking Processing/Postponement Stockpiling
Service Benefits
Stock Spotting
Product Mixing Production Support Market Presence

Warehousing Activities

Product Movement
Product Storage
Information Transfer

Warehousing Alternatives

Private Warehousing
Public Warehousing
Contract Warehousing

Factors to be Considered in Warehousing Strategy

Presence Synergies
Industry Synergies
Operating Flexibility
Location Flexibility
Scale Economies

Planning Warehouse

Site Analysis
Product Mix Considerations
Material Handling Equipment

Warehouse Design

Design Criteria
Material Handling Technology
Storage Plan

Managing a Warehouse

Stocking the Warehouse
Personnel Training
Developing Work Procedures
Security Arrangements at the Warehouse
Product Deterioration
Billing and Inventory Control.

Chapter Summary

Warehouses are the facilities in the supply chain where goods are held or stored. Warehousing affects customer service levels, stock-out rates, and sales and marketing success. Warehouses act as a bridge between the upstream members of the supply chain and the downstream members of the supply chain. In this chapter we discussed the importance of the warehouse and its operations.

First, we discussed the functions of warehousing. These are categorized into economic benefits and service benefits. The economic benefits include consolidation, cross-docking, processing/postponement, and stock piling. The service benefits that can be achieved through warehousing are stock spotting, stock mixing, production support and market presence.

Later we examined the types of warehousing facilities that exist in the market. There are three types of warehousing facilities: public warehouses, private warehouses, and contract warehouses. We also discussed the factors that need to be considered while devising a warehousing strategy. There are five important factors to be considered when developing an integrated warehousing strategy.

They are: presence synergies, industry synergies, operating flexibility, location flexibility, and scale economies. Later we discussed the elements that go into planning a warehouse. They are: site selection, product-mix considerations, material handling equipment, and warehousing design.

Finally we examined the different aspects of managing a warehouse. Various aspects of managing a warehouse include stocking the warehouse, personnel training, developing work procedures, security arrangements in the warehouse, preventing product deterioration, and billing and inventory control.

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