God, grant me the serenity to accept the things I cannot change, The courage to change the things I can, And the wisdom to know the difference. (Serenity Prayer, Reinhold Niebuhr)
A warehouse is a commercial building for storage, sorting, packaging, staging or finishing goods (Wikipedia). You add a warehouse in a logistical system if it reduces systemwide logistics costs or adds speed such that the investment in the warehouse is economically justified.
Types of Warehouses
- Consolidation Warehousing - used to reduce transportation cost by using the warehouse to group shipments.
- Break Bulk Warehousing - receives large shipments and arranges for delivery to multiple destinations gaining economy of scale for the large consolidated shipment.
- Cross-docking - unloading materials from an incoming shipment and loading these materials directly into outbound trucks with little or no storage in between (Wikipedia 2011). Usually done with large homogeneous shipments broken down into heterogeneous shipments to various geographic destinations.
- Assembly (finish) is often done at warehouses through postponement to place customization at a point closer to the customer.
- Seasonal storage - used to store seasonal products.
- Reverse logistics processing - usually done at warehouses
- Spot stocking - temporary inventory positioning in strategic markets.
- Full line stocking - reduces the number of suppliers that a customer must logistically deal with
- Postponement warehousing is a form of warehousing that combines classic warehousing operations with light manufacturing and packaging duties to allow firms to put off final assembly or packaging of goods until the last possible moment.
- Assortment warehousing is a form of warehousing in which a wide array of gods is held close to the source of demand in order to assure short customer lead times.
Warehouse operations must deal with:
- Receiving - unloading
- In-storage handling - movements performed within the warehouse, typically transfer and selection movements
- Shipping - order verification and transportation loading
- Slots (slotting) - specific assigned locations for material storage
- Product velocity (volume movement) drives warehouse layout. High velocity items are positioned to minimize movement.
- Active storage - materials handling processes and quick movement
- Extended storage - longer term storage
Warehouses commonly also perform various value-added services such a product packaging, assembly and customization. Some of these activities full under the concept of postponement by delaying investment in a product or service until the last possible moment (Wikipedia).
Warehouse Layout & Design
Warehouse design must accomodate:
- Receiving - handling incoming shipments
- Storage - areas to store goods, usually organized by product velocity in A, B and C inventories
- Order picking - areas to pick items for particular orders
- Packing or unitizing - areas to pack shipments, usually in pallets
- Staging - areas for staging shipments for transportation
- Shipping - area for handling outgoing shipments
Common pallet size is 40x48" and 32x40". Most warehouses are designed as single story with 25- to 30 foot ceilings.
Warehouse Management Systems (WMS)
A warehouse management system (WMS) aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, putaway and picking. The systems also direct and optimize stock putaway based on real-time information about the status of bin utilization (Wikipedia 2011).
WMS may also include advanced functionality such as yard management, labor management, warehouse optimization and returns management (Bowersox 2010).
Warehouses must manage damage and pilferage of the stock.