vikram chawla
Vikram Chawla
A Brief Introduction to Warehousing
A warehouse is a location with adequate facilities where volume shipment are received from a production centre, broken down, reassembled into combinations representing a particular order or orders, and shipped to the customer’s location or locations.
The concept of distribution warehouse or a distribution centre is vastly different from the earlier concept of a godown for storage. The godown is merely a dumping place. Godowns are maintained merely for storage of surplus goods. The earlier concept, which led to the establishment of warehouses, was based on the need for ensuring a continuous, uninterrupted supply of goods in the market area for the following:
(1) Ensuring protection against delays and uncertainties in transportation arising from a variety of factors.
(2) Eliminating lack of sophistication in production control and consequent uncertainties in the availability of product at the desired time and place.
(3) Providing for adjustment between the time of production and the time of use because production and use can be seldom synchronized.
From the foregoing, it is obvious that earlier a warehouse was considered a necessary evil which was to be toletated, but which did little to provide a differential advantage. The modern distribution centre or distribution warehouse is a pivot in the physical distribution system. According to this system, movement is the primary objective of a warehouse. As per this new concept, a warehouse is a location where inputs (incoming factory shipment) are converted into outputs (outward shipments representing orders of customers).this conversion takes place without consuming too much time. The goods may be received over a period of time from different places, combined or broken down into each individual customer’s orders, and dispatched to the next point in the distribution channel without their coming to rest within the confines of the distribution centre. Because of the usual and often inevitable lack of coordination between inbound and outbound goods, storage facilities of a temporary nature must be provided for in the scheme.
Characteristics of warehouse activity
The warehouse activity work is “non-value adding” work. It is pointed out for better profits the stores should not exist. Also the material movement should be reduced to zero. These are “non-value adding” activities.
This is because “value” is what the customer is prepared to pay for. A customer is willing to pay for is the physical conversion/ processing of material into product. The configuration of the product forms only one element of what a customer is willing to pay for. Also customer needs other points such as following.
The product should be available,Ø
At a required locationØ
At required time.Ø
Warehouse provides these values. These are apart from value added due to conversion. For that reason management must pay the maximum attention to the stocking and handling related activities.
A warehouse is a location with adequate facilities where volume shipment are received from a production centre, broken down, reassembled into combinations representing a particular order or orders, and shipped to the customer’s location or locations.
The concept of distribution warehouse or a distribution centre is vastly different from the earlier concept of a godown for storage. The godown is merely a dumping place. Godowns are maintained merely for storage of surplus goods. The earlier concept, which led to the establishment of warehouses, was based on the need for ensuring a continuous, uninterrupted supply of goods in the market area for the following:
(1) Ensuring protection against delays and uncertainties in transportation arising from a variety of factors.
(2) Eliminating lack of sophistication in production control and consequent uncertainties in the availability of product at the desired time and place.
(3) Providing for adjustment between the time of production and the time of use because production and use can be seldom synchronized.
From the foregoing, it is obvious that earlier a warehouse was considered a necessary evil which was to be toletated, but which did little to provide a differential advantage. The modern distribution centre or distribution warehouse is a pivot in the physical distribution system. According to this system, movement is the primary objective of a warehouse. As per this new concept, a warehouse is a location where inputs (incoming factory shipment) are converted into outputs (outward shipments representing orders of customers).this conversion takes place without consuming too much time. The goods may be received over a period of time from different places, combined or broken down into each individual customer’s orders, and dispatched to the next point in the distribution channel without their coming to rest within the confines of the distribution centre. Because of the usual and often inevitable lack of coordination between inbound and outbound goods, storage facilities of a temporary nature must be provided for in the scheme.
Characteristics of warehouse activity
The warehouse activity work is “non-value adding” work. It is pointed out for better profits the stores should not exist. Also the material movement should be reduced to zero. These are “non-value adding” activities.
This is because “value” is what the customer is prepared to pay for. A customer is willing to pay for is the physical conversion/ processing of material into product. The configuration of the product forms only one element of what a customer is willing to pay for. Also customer needs other points such as following.
The product should be available,Ø
At a required locationØ
At required time.Ø
Warehouse provides these values. These are apart from value added due to conversion. For that reason management must pay the maximum attention to the stocking and handling related activities.