Warehouse And Distribution

Facilities Management

Session - 1
* Introduction

* Storage vs Warehousing

* Need & Importance

* Types & Classifications

* Warehouse Terms
 INTRODUCTION
Origin :

Goods were called as ‘Wares’

Ancient warehouses were Palace Storerooms

which stored surplus food grains in mass.

Storage vs Warehousing
STORAGE :

- an important function

- involves holding & preserving goods from

procurement to production until they are
needed for consumption.

- involves proper management for When Storage is done in a large scale and in a
preserving goods. specified manner, it is called WAREHOUSING.
 WAREHOUSE
* A structure / place where
goods are stored & a primary
part of SCM.

* A large building where raw

materials or manufactured
goods are stored for future use.

WAREHOUSING
* One of activities in SCM.

* Procedure or a process of
storing goods within a storage
facility.

* Involves Administrative and

Physical functions associated
with storing.
Difference between Warehouse and Inventory
in Management Perspective

WAREHOUSE(ING) INVENTORY

* Its a planned space for the * Represents the stock of

storage and handling of products. products in a warehouse.

* Involves managing employees * Focuses only on product and

and shipping or freight personnel stock.
operating in the
warehouse environment.

* Process of maintaining and * Process involves keeping a

controlling goods, equipments and track of company’s stocked
personnel. goods.
Importance of WAREHOUSE in
SUPPLY CHAIN OPERATIONS
 Need for a Warehouse
* To Even out Supply Chain Imbalances

* To Ensure High Speed and Zero Defect Supply Chains

* To Consolidate Products as per Customer or Location

Result – Increased Customer Satisfaction and Reduced Transportation Cost

* To Achieve Economies of Scale

Meaning - saving in costs gained by an increased level of production

* To Store the Excess Produces.

Reason – firms produce large batches of goods to make full use of capacity
to reduce fixed costs

* To Reduce Response Time to Market

Result – Lead Time is minimized
 Need for a Warehouse

Value Added Processing

* To Achieve Postponement Strategy

Result – firms produce only generic products

* To Ease Inventory Management as Aggregate Forecasting is more accurate

* To carry out Pricing and Labelling Activities instead of doing at Point-of-Sale

* To Stockpile the products needed for next season

Reason – Replenishment will be low during off season
 Types of Warehouses

I Classification Based on Materials Stored

1. Raw Materials Warehouse (Eg) Grains, Vegetables, Wood, Metals, Minerals, Crude Oil, etc.

2. Work in Process / Semi Finished Goods Warehouse (Eg) Parts of Furnitures, Computer &
Electronic Components, Automobile Spares

3. Finished Goods / Plant Warehouse (Eg) Textiles, Furnitures, Automobiles, Processed Oil,
Computers, etc.

4. Order Fulfillment Centers (Eg) Amazon, Flipkart, Myntra, etc.

5. Refrigerated Warehouse (Cold Storage) (Eg) Meat, Poultry, Dairy, Ice creams, Flowers,
Export Quality Fruits & Vegetables, etc.
 Types of Warehouses

II Classification Based on Customer Groups

1. Retail Distribution Center 2. Service Parts Distribution Center

 3. Catalogue Fulfillment or
E-Commerce Distribution Center

4. 2PL/3PL/4PL
Warehouse
 Types of Warehouses

III Classification Based on Ownership and Usage

1. Private Warehouse 2. Public / Contract Warehouse

3. Government Warehouses - Owned and Managed by Govt of a country. Both Govt and
Private firms can use this warehouse
 4. Bonded Warehouse
Owned, Managed &
Controlled by Govt and
Private Agencies

5. Cooperative Warehouse
Owned, Managed and
Controlled by Co-operative
Societies
 Logistic Terms

* Storage * Economies of Scale * Raw Materials

* Warehouse * Storage Costs * Finished Goods

* Warehousing * Postponement Strategy * Semi Finished Goods

* Stock * Generic Products * Order Fulfillment Centres

* Inventory * Perishable Items * Refrigerated

* Manufacture * Point of Sale * Service Parts

* Retail * Replenishment * Catalogue Fulfillment

* Wholesale * Stockpiling * E-Commerce

* Distribution * Lead Time * Private, Public, Govt Warehouses

* Consolidation * 3PL * Bonded, Co-operative Warehouse