Meaning and role of warehousing

A warehouse is a planned space for the efficient storage and handling of goods and materials. Warehouses play a role in logistics which encompass:

  • Raw material and component warehouses hold raw materials at or near the point of induction into a manufacturing or assembly process.
  • Work-in-process warehouses hold partially completed assemblies and products at various points along an assembly or production line.
  • Finished goods warehouses hold inventory used to balance and buffer the variation between production schedules and demand. For this purpose, the warehouse is usually located near the point of manufacture and is often characterized by the flow of full pallets in and full pallets out assuming that product size and volume warrant pallet-sized loads. A warehouse serving only this function may have demands ranging from monthly to quarterly replenishment of stock to the next level of distribution.
  • Distribution warehouses, distribution centers accumulate and consolidate products from various points of manufacture within a single firm, or from several firms, for combined shipment to common customers. Such a warehouse may be located central to either the production locations or the customer base. Product movement may be typified by full pallets or cases in and full cases or broken case quantities out. The facility is typically responding to regular weekly or monthly orders.
  • Fulfillment warehouses, fulfillment centers receive, pick, and ship small orders for individual consumers.
  • Local warehouses are distributed in the field in order to shorten transportation distances to permit rapid response to customer demand. Frequently, single items are picked, and the same item may be shipped to the customer every day.
  • Value added service warehouses serve as the facility where key product customization activities are executed including packaging, labeling, marking, pricing, and returns processing.
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