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Historically warehouses were a dominant part of the urban landscape used from
the start of the Industrial Revolution through the 19th century and into the
twentieth century: the building remained when their original usage had changed.
There are four identifiable types of warehouses. The cotton industry was co-
terminus with the development of the warehouse, and all five types were
represented in Manchester, United Kingdom. Warehouses in Manchester were
often lavishly decorated juxtaposing with the modern view of warehouses which
are assumed to be standard industrial buildings.
MEANING
We need different types of goods in our day-to-day life. We may buy some
of these items in bulk and store them in our house. Similarly, businessmen also
need a variety of goods for their use. Some of them may not be available all the
time. But, they need those items throughout the year without any break. Take the
example of a sugar factory. It needs sugarcane as raw material for production of
sugar. You know that sugarcane is produced during a particular period of the year.
Since sugar production takes place throughout the year, there is a need to supply
sugarcane continuously. But how is it possible? Here storage of sugarcane in
sufficient quantity is required. Again, after production of sugar it requires some
time for sale or distribution. Thus, the need for storage arises both for raw
material as well as finished products. Storage involves proper arrangement for
preserving goods from the time of their production or purchase till the actual use.
When this storage is done on a large scale and in a specified manner it is called
warehousing. The place where goods are kept is called warehouse. The person
in-charge of warehouse is called warehouse-keeper.
Warehousing refers to the activities involving storage of goods on a large-
scale in a systematic and orderly manner and making them available conveniently
when needed. In other words, warehousing means holding or preserving goods in
huge quantities from the time of their purchase or production till their actual use
or sale. Warehousing is one of the important auxiliaries to trade. It creates time
utility by bridging the time gap between production and consumption of goods.
Overseas Warehouses
These catered for the overseas trade. They became the meeting places for overseas
wholesale buyers where printed and plain could be discussed and ordered. Trade
in cloth in Manchester was conducted by many nationalities.
Behrens Warehouse is on the corner of Oxford Street and Portland Street. It was
built for Louis Behrens & Son by P Nunn in 1860. It is a four storey
predominantly red brick build with 23 bays along Portland Street and 9 along
Oxford Street. The Behrens family was prominent in banking and in the social life
of the German Community in Manchester.
Packing Warehouses
The main purpose of a packing warehouses was the picking, checking,
labeling and packing of goods for export. The packing warehouses: Asia
House, India House and Velvet House along Whitworth Street were some of the
tallest buildings of their time
Warehouse storage purpose is to provide provisions for easy access facilities. A
security system with closely monitored 24-hour CCTV surveillance, infrared
recording and on-ground security is provided for safety purposes. Climate control
facility is also catered for preserving required objects.
Railway Warehouses
Warehouses were built close to the major stations in railway hubs. The first
railway warehouse to be built was opposite the passenger platform at the terminus
of the Liverpool and Manchester Railway. There was an important group of
warehouses around London Road station (now Piccadilly station).In the 1890s
the Great Northern Railway Companys warehouse was completed on Deansgate:
this was the last major railway warehouse to be built.
Canal Warehouses
All these warehouse types can trace their origins back to the canal warehouses
which were used for trans-shipment and storage. Castle field warehouses are of
this type- and important as they were built at the terminus of the Bridgewater
Canal in 1761.
Horizontal Carousels
Vertical Carousels
A piece pick, also known as broken case pick, split-case pick, each pick, over-
pack or pick/pack, is a type of order selection process where product is picked and
handled in individual units and placed in an outer carton, tote or other container
before shipping. Catalog companies and internet retailers are examples of
predominantly piece-pick operations. Their customers rarely order in pallet or
case quantities; instead, they typically order just one or two pieces of one or two
items.
Some warehouses are completely automated, and require only operators to work
and handle all the task. Pallets and product move on a system of
automated conveyors, cranes and automated storage and retrieval
systems coordinated by programmable logic
controllers and computers runninglogistics automation software. These systems
are often installed in refrigerated warehouses where temperatures are kept very
cold to keep product from spoiling, especially in electronics warehouse where
they require specific temperature to avoid damaging the parts, and also where
land is expensive, as automated storage systems can use vertical space efficiently.
These high-bay storage areas are often more than 10 meters (33 feet) high, with
some over 20 meters (65 feet) high. Automated storage systems can be built up to
40m high.
Modern trends
Aisle with pallets on storage racks
Traditional warehousing has declined since the last decades of the 20th
century, with the gradual introduction of Just In Time (JIT) techniques. The JIT
system promotes product delivery directly from suppliers to consumer without the
use of warehouses. However, with the gradual implementation ofoffshore
outsourcing and offshoring in about the same time period, the distance between
the manufacturer and the retailer (or the parts manufacturer and the industrial
plant) grew considerably in many domains, necessitating at least one warehouse
per country or per region in any typical supply chain for a given range of
products.
Another trend relates to Vendor Managed Inventory (VMI). This gives the
vendor the control to maintain the level of stock in the store. This method has its
own issue that the vendor gains access to the warehouse.
Large exporters/manufacturers use warehouses as distribution points for
developing retail outlets in a particular region or country. This concept reduces
end cost to the consumer and enhances the production sale ratio.
Cold storage helps stabilize market prices and evenly distribute goods both
on demand basis and time basis. The farmers get the opportunity of
producing cash crops to get remunerative prices. The consumers get the supply of
perishable commodities with lower fluctuation of prices.
Ammonia and Freon compressors are commonly used in cold storage
warehouses to maintain the temperature. Ammonia refrigerant is cheaper, easily
available and has a high latent heat of evaporation but it is also highly toxic and
can form an explosive mixture when mixed with oil containing high percentage of
carbon. Insulation is also important, to reduce loss of cold and to keep different
sections of the warehouse at different temperatures.
There are two main types of refrigeration system used in cold storage
warehouses, a Vapour absorption system (VAS) and Vapour compression
system (VCS). VAS, although comparatively costlier, is quite economical in
operation and adequately compensates the higher initial investment.
Location is a very critical aspect for the success of cold storage. It should
be in close proximity of a growing area as well as a market, be easily accessible
for heavy vehicles, and have uninterrupted power supply.
Internet impact
Internet-based stores do not require physical retail space, but still require
warehouses to store goods. This kind of warehouse fills many small orders
directly from end customers rather than fewer orders of many items from stores.
Having a large and complex supply chain containing many warehouse can be
costly. It may be beneficial for a company to have one large warehouse per
continent, typically located centrally to transportation. At these continental hubs,
goods may be customized for different countries. For example, goods get a price
ticket in the language of the destination country. Small, in-warehouse adjustments
to goods are called value added services.
NEED FOR WAREHOUSING
ii. Public Warehouses - The warehouses which are run to store goods of
the general public are known as public warehouses. Any one can store his goods
in these warehouses on payment of rent. An individual, a partnership firm or a
company may own these warehouses. To start such warehouses a licence from the
government is required. The government also regulates the functions and
operations of these warehouses. Mostly these warehouses are used by
manufacturers, wholesalers, exporters, importers, government agencies, etc.
Public Warehouse
Private (Company) Pure Public
Contract Warehouse
Cost Component Warehouse Warehouse
Capital Cost l Building cost Not applicable Based on contracted
(depn) responsibilities for
l Facilities & eqm land, buildings, and
l Matl-handling eqm facilities
l (Un)loading
docks/rails
A) PUBLIC WAREHOUSE
There are some disadvantages relating to the contractual agreements between the
warehouse and the business lessee. When a lessee enters into an agreement, its
terms are rendered for a specific period of time. This can be unhandy, for the
business who has leased the space desired. Many public warehouse locations
make it more difficult to continue a level of satisfaction for customers services.
xxxxxxxxxxx Another disadvantage might be the fact that these warehouses are
operated by a 3rd party. If not properly monitored, an unsatisfactory method of
dealing with a business customers could become a detrimental aspect in relation
to its customers needs... Lack of communication is yet another negative factor of
public warehouses. This can be caused by technological devices, such as
computer systems, that are incompatible.
When the credentials and/ or references of a public warehouse are not thoroughly
investigated, then the experience can result in customer dissatisfaction or even a
loss of customers. It is crucial to check as to whether a warehouse is bonded
and insured. If this is not the case, then this public warehouse should not be used.
The reason that this is such a vital subject is due to the fact that if there is a
mishap like a fire, theft, flood, vandalist situation, etc, the products that are stored
can readily and / or easily be replaced without any additional expense for the
company leasing the space. This is probably one of the most important details to
remember when businesses acquire the services of public warehouses.
PRIVATE WAREHOUSE
a) Lack of flexibility:
The major drawback is it is too costly, because of its fixed size and costs. This
means that in the short run, the private facility cannot expand or contract to meet
increases or decreases in demand. Thus, when demand is low, the firm still
assumed the fixed costs as well as the lower productivity linked to unused
warehouse space. However, the disadvantages can be minimized if the firm is able
to rent out part of its space. Moreover, it loses flexibility in its strategic location
options. They cant change quickly to rapid changes in market size, location and
preferences, and this may mean that they will lose an excellent business
opportunity.
ROI on other investments may be greater if funds are channeled into other profit-
generating opportunities. Besides, there is also a potential probability of not being
able to sell the w/h in the later period due to its customized design.
Since the rate of return is about the same as the firms other investments, most
companies find it advantageous to use a combination of public and private
warehousing. It is best to use private warehousing to handle the basic inventory
levels required for the least cost logistics in markets where the volume justifies
ownership. On the other hand, any extra volume can be stored in the public
warehouse during peak periods where private warehouse is full.
Warehouses provide a receipt to the owner of goods for the goods kept
in the warehouse. The owner can borrow money against the security of
goods by making an endorsement on the warehouse receipt. By keeping
the imported goods in a bonded warehouse, a businessman can pay
customs duty in installments.
GOVERNMENT AGENCIES
The Government has set up three agencies which are engaged in building large
scale storage/warehousing capacity :
The Food Corporation of India was setup under the Food Corporation Act 1964,
in order to fulfill following objectives of the Food Policy :
In its 45 years of service to the nation, FCI has played a significant role in
India's success in transforming the crisis management oriented food security
into a stable security system. FCI's Objectives are:
To provide farmers remunerative prices
To make food grains available at reasonable prices, particularly to
vulnerable section of the society
To maintain buffer stocks as measure of Food Security
To intervene in market for price stabilization
Headquarters
The Food Corporation of India was setup under the Food Corporation Act
1964 , in order to fulfill following objectives of the Food Policy:
Statistics
It is one of the largest corporations in India and probably the largest supply
chain management in Asia. It operates through 5 zonal offices and 26 regional
offices. Each year, the Food Corporation of India purchases roughly 15-20 per
cent of India's wheat output and 12-15 per cent of its rice output. The purchases
are made from the farmers at the rates declared by the Govt. of India. This rate
is called as MSP (Minimum support Price). There is no limit for procurement in
terms of volume, any quantity can be procured by FCI provided the stock
satisfies FAQ (Fair Average Quality) specifications with respect to FCI.
Operation
The stocks are transported throughout India and issued to the State Government
nominees at the rates declared by the Govt of India for further distribution
under the Public Distribution System (PDS) for the consumption of the ration
card holders. (FCI itself does not directly distribute any stock under PDS and its
operations end at the exit of the stock from its depots). The difference between
the purchase price and sale price, along with internal costs, are reimbursed by
the Union Government in the form of Food Subsidy. At present the annual
subsidy is around $10 billion. FCI by itself is not a Decision making authority,
it does not decide anything about the MSP, Imports or Exports. It just
implements the decisions made by the Ministry of Food and Ministry of
Agriculture.its best
Apart from storage and handling, CWC offers services in the area of clearing &
forwarding, handling & transportation, procurement & distribution,
disinfestation services, fumigation services, consultancy services/ training for
the construction of warehousing infrastructure to different agencies and other
ancillary activities. CWC has 17 Regional Offices in the country.
Function
Act as agent of the Government for the purposes of the purchase, sale,
storage and distribution of agricultural produce, seeds, manures, fertilizers,
agricultural implements and notified commodities; and
Operation
CWC operations include scientific storage and handling services for more than
400 commodities include Agricultural produce, Industrial raw-materials,
finished goods and variety of hygroscopic and perishable items.
CWC enables the movement of imported and exportable goods to and from the
port towns and has developed infrastructure of Container Freight Stations &
Inland Clearance Depots throughout the country. It operates 36 CFSs/ ICDs
where composite services for containerised movement of import/export cargo
are provided. The Warehousing Corporation is empowered to acquire and build
Warehouses for storage of Agricultural produce, seeds, fertilizers and other
notified commodities and also to act as an agent of the Central Warehousing
Corporation or of the Government, for the purpose of purchases, sales storage,
distribution etc., of Agricultural Commodities in time of need.[6] Though it has
been criticised for lack of manpower and technologically equipped warehousing
facility.
Statutory Public Warehouse Keepers for Agricultural Produce Inputs & Stocks
in its Warehouses.
WAREHOUSE MANAGEMENT
Most activities that take place within WM are initiated in Inventory Management.
For example, most goods receipts, goods issues and posting changes are initiated
in IM and subsequently processed in WM.
WM is also interfaced to Sales and Distribution (SD) through the Shipping
module to process delivery documents for both the integrated WM application and
the decentralized WM system.
The WM interface to Quality Management (QM) allows warehouse administrators
to track and manage inspection lots that are stored in the warehouse.
WM is also interfaced to the Production Planning (PP) system to assist in
providing materials to supply areas in production.
Features
WM provides several features that support warehousing activities. These include
the following:
Warehouse Structure
_ Management of complex warehousing facilities to include automatic
warehouses, custom designed storage areas, high rack storage, bulk storage, fixed
bin storage and all other commonly used storage areas
_ Definition and adaptation of a limitless variety of storage bins for use in your
specific warehousing complex
Goods Movements
_ processing of all relevant warehousing activities, such as goods receipts, goods
issues, deliveries, internal and external stock transfers, automatic replenishment of
fixed bins, material staging to production areas and stock difference handling
_ Utilization of random slotting for multiple owners of goods Strategies
Controlling
_ Optimization of capacity and material flow utilizing storage units in the
warehouse
_ monitoring and display of stocks on hand and summary evaluations of all goods
movements via warehouse controlling tasks
Inventory
_ Capability to maintain up-to-the-minute inventory records with the aid of stock
transfer confirmation
_ Archiving of records of all goods movements and inventory activity
With its inventory functions, WM ensures that book inventories in Inventory
Management match the stock in the warehouse at any time. Because SAP
components are fully integrated, you do not need separate interface programs
between IM and WM.
Printing Tasks
_ printing (of pallet slips, move orders, delivery slips, inventory documents, and
so on) is available for all relevant transactions
Although it is possible to print material documents for each separate transaction in
the warehouse, WM facilitates automatic flowthrough warehousing tasks that are
virtually paperless.
Lean WM
_ This warehousing structure makes it possible to create transfer orders for
deliveries when no storage bins are managed in the system. For Lean WM, no
goods receipts or goods issues are processed as a subsequent process in WM. This
means that no bin data and no stock is updated at the storage bin level using
quants. Instead, this transaction takes place at the storage location level. It is used
primarily to handle pick orders for deliveries.
As a rule, it is a good idea to manage only the stocks of one storage location and
the same plant within a warehouse number. However, you can also manage
several storage locations of one and the same plant within a warehouse number.
Warehouse Number Definition
In Warehouse Management (WM), a complete physical warehouse is defined
under a single warehouse number. Using the warehouse number, you can manage
several individual warehouse buildings that, together, form a complete warehouse
complex.
Use
The warehouse number encompasses the organizational and physical aspects of a
warehousing complex as a single concept. For example, a unit of weight is
defined at the level of the warehouse number. Furthermore, at this level, the
system determines the standard unit of measure for WM documents, and special
interfaces, such as external interfaces or interfaces between Warehouse
Management (WM) and Production Planning and Control (PP), are defined here
as well. You can change these settings subsequently.
WAREHOUSE MANAGEMENT SYSTEM
Warehouse design and process design within the warehouse (e.g. wave picking) is
also part of warehouse management. Warehouse management is an aspect of
logistics and supply chain management.
Objective
This includes:
Tracking where products are stocked, which suppliers they come from,
and the length of time they are stored. By analysing such data, companies
can control inventory levels and maximize the use of warehouse space.
Furthermore, firms are more prepared for the demands and supplies of the
market, especially during special circumstances such as a peak season on a
particular month. Through the reports generated by the inventory
management software, firms are also able to gather important data that
may be put in a model for it to be analyzed.[3]
Types
In its simplest form, the WMS can data track products during the production
process and act as an interpreter and message buffer between existing ERP and
WMS systems.
EVOLUTION
Even though WMS continues to gain added functionality, the initial core
functionality of a WMS has not really changed. The primary purpose of a WMS is
to control the movement and storage of materials within an operation and process
the associated transactions. Directed picking, directed replenishment, and directed
putaway are the key to WMS. The detailed setup and processing within a WMS
can vary significantly from one software vendor to another, however the basic
logic will use a combination of item, location, quantity, unit of measure, and order
information to determine where to stock, where to pick, and in what sequence to
perform these operations.
Not every warehouse needs a WMS. Certainly any warehouse could benefit from
some of the functionality but is the benefit great enough to justify the initial and
ongoing costs associated with WMS? Warehouse Management Systems are big,
complex, data intensive, applications. They tend to require a lot of initial setup, a
lot of system resources to run, and a lot of ongoing data management to continue
to run. Thats right, you need to "manage" your warehouse "management" system.
Often times, large operations will end up creating a new IS department with the
sole responsibility of managing the WMS.
The Claims:
The Reality:
WMS Setup
If this sounds simple, it iswell sort of. In reality most operations have a much
more diverse product mix and will require much more system setup. And setting
up the physical characteristics of the product and locations is only part of the
picture. You have set up enough so that the system knows where a product can fit
and how many will fit in that location. You now need to set up the information
needed to let the system decide exactly which location to pick from, replenish
from/to, and putaway to, and in what sequence these events should occur
(remember WMS is all about directed movement). You do this by assigning
specific logic to the various combinations of item/order/quantity/location
information that will occur.
Below I have listed some of the logic used in determining actual locations and
sequences.
Location Sequence. This is the simplest logic; you simply define a flow
through your warehouse and assign a sequence number to each location. In
order picking this is used to sequence your picks to flow through the
warehouse, in putaway the logic would look for the first location in the
sequence in which the product would fit.
Zone Logic. By breaking down your storage locations into zones you can
direct picking, putaway, or replenishment to or from specific areas of your
warehouse. Since zone logic only designates an area, you will need to
combine this with some other type of logic to determine exact location
within the zone.
Fixed Location. Logic uses predetermined fixed locations per item in
picking, putaway, and replenishment. Fixed locations are most often used
as the primary picking location in piece pick and case-pick operations,
however, they can also be used for secondary storage.
Its very common to combine multiple logic methods to determine the best
location. For example you may chose to use pick-to-clear logic within first-in-
first-out logic when there are multiple locations with the same receipt date. You
also may change the logic based upon current workload. During busy periods you
may chose logic that optimizes productivity while during slower periods you
switch to logic that optimizes space utilization.