MEANING

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 quantity 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.
functions
Storage of goods
Protection of goods
Risk bearing
Financing
Processing
Grading and branding
transportation

Need
Seasonal production
Seasonal demand
Large scale production
Quick supply
Continuous production
Price stabilization

Benefits
A. Economic benefits
B. Service benefits

A. Economic benefits


Economic benefits

consolidation Break-bulk Cross- dock postponemen
t
stockpiling
1. CONSOLIDATION
Definition

Features
1. Inward and outbound movement
2. Used as a forward stock location/differentiate and assembling facility.
3. Combines the logistical flow of small shipments to a specific markets area.
4. Used by single firm or by number of firms together
5. Lower total distribution cost.



2. Break bulk
These are similar to consolidation except that no storage is performed
Features
1. Large shipment
2. Small consignment
3. Divides order
3. Cross dock
cross-Dock facility is similar to break bulk expect that it involves
multiple manufactures. It serves primarily as a distribution mixing
center.
Features
1. Large quantity
2. Immediate process.
3. Across dock.
4. Transportation.
Economic benefits
1. Large movement.
2. Reduced handling cost.
3. Effective use of dock.
4. processing/postponement.
Warehouses can also be used to postpone, or delay production process and ease
manufacturing activities.
A warehouse with packaging and labeling capability allows delay of final production until
actual demand is known.
Economic benefits
1. Minimized risk
2. Reduced inventory level.
5. Stockpiling
Seasonal storage. E.g. blankets and knitting wool.
Agricultural products.
In both the situations, stockpiling becomes necessary to support selling efforts.
Stockpiling provides for a excess inventory allowing for balance between the availability
of materials and the market demand.
B service benefits
service benefits

assortment mixing Production
support
Market presence
1. Assortment
Assortment warehouse are used by a wholesaler or a retailer to stock
products combination in forecast of customer order.
An assortment represents multiple products from different
manufactures or special assortments as specified by customers.
Benefits
1. Improves the choice available to the customer.
2. Everything under one roof.

2. Mixing
Similar to break bulk process except that several shipments from
different manufactures are involved.
Truckloads of products are shipped from manufacturing plants to
warehouse and each large shipment benefits from lower possible
transportation rate.
Upon arrival at the mixing warehouse, factory shipments are unloaded
and the ordered combination of each customer is selected.
Mixing is considered to be an effective service benefits because
inventory is sorted as per customer specifications.

3. Production support.
Production support warehousing provides a continuous supply of spare
parts and materials to assembly plants.
It maintains a safety stock of items purchased from outside vendors
(suppliers).
Production support warehousing is used to supply processed materials,
components and subassemblies into assembly plant in an economic
and timely manner.

4. Market presence
As seen by marketing managers as an advantage of local warehouse.
Local warehouse and hence local inventory can be more responsive to
customer needs and offer quicker delivery than distant warehouses.
Local warehouse may increase market share and potentially increase
the profitability.
Types of warehouse
1. Private warehouse:
2. Public warehouse
3. Contract warehousing
1 private warehouse
I. Advantages
Greater control
High flexibility.
Intangible benefits.
Lower cost
ll. Disadvantages
Lack geographical flexibility.
High maintenance.
Liability.
2. Public warehouses
i. Advantage
core business.
Low variable cost.
transportation economies

ii. Disadvantage
Specialized service may not be available
Inconvenient.








Other types of warehouse
Contracting warehousing
Cooperative warehouse
Government semi government warehouse.
Bonded warehouse.
Duty paid warehouse.
General warehouse.
Special warehouse.
Refrigerated warehouse.