Warehousing

Warehousing is a process of storing and preserving stocks from the time of buying or manufacturing until they are sold
or used or distributed. This process contains the following:

Receipt of stocks
Identification
Inspection
Verification
Ensuring quality
Putting away
Retrieving for issue

Warehouse is the place where the goods are stored or a place used to keep the goods for a long term.

The following facts have to be considered when locating a warehouse

Layout and flow of the building

The optimum layout of the building used for the warehouse (location of doors, spaceous area, height of the ceiling,
system of storing the material etc.) will have a great impact on the operational activity (storage of the materials,
distribution, packing, labelling etc.) in the building. This will create limitations on the amount of rows available for the
storing of goods, the height of the celling and the equipment used to store the goods in a building and to the
movements of goods. It also influences the receiving of raw materials or finished goods to the warehouse or issuing of
materials. So it should be deeply considered whether the space of the building selected is suitable for the movements of
materials as expected by the businessman.

Zoning and intensity of use in the warehouse

When locating a warehouse it is necessary to consider what the speed of the operations which is done inside the
warehouse, how fast the storing of goods in the warehouse and withdrawing of the goods are done. Also the functions
expected to do in the future will be considered. If the functions of the warehouse are to store and protect for a certain
period or if it’s a simple assembly activity a place can be used to move the material with less speed. If the operations
happens for 24 hours, it is necessary to select a place with facilities to obtain the materials and distribute fast.

It should be considered where to locate the warehouse by taking into account the factors of outgoing noise, outgoing
substances and necessity of outdoor storing.

Proximity to major linkages Warehouse should be located according to

the main transportation method used to transport the stored goods, such as railways, airways or waterways. It is suitable
to locate the warehouse where is easy to depart from the expressway or easy to reach the airport. Apart from that
another important factor is the proximity to the consumers. If the majority of the production is exported and the rest of
the production is distributed to the retailers in the country, it is necessary to select the warehouse location where it can
be easily accessed by the express ways and railways as well to harbour. The accessible part of the cost of a production
includes the cost of transportation. Therefore, the location of the warehouse should be decided having much concern
about the cost of transporting of raw materials and finished goods.

Material handling capabilities

The facilitation of storing the materials and handling the equipment in movement of materials is also considered when
locating a warehouse. Loading and unloading terminals are needed to operate equipment which lifts the goods and
trucks which are used to move the goods. If the goods are needed to be distributed quickly the availability of such
facilities are essential.

Nature of stocked materials

Business needs to select the most suitable warehouse to store the materials according to their nature such as explosives
and inflammables, food items, perishables and chemicals. Warehouse should be selected according to its nature and
considering the environmental factors while ensuring the heat, moisture and not being harmed from fire and rain.
E.g. If the stores item is inflammable, the availability of water supply or resources should be considered.

Cost The transport

cost of carrying the raw materials to the factory, the cost of distributing the manufactured products to final consumers
and loading and unloading cost should be calculated where the transport cost can be minimised, expenses like o Rent
for the warehouse o Security deposits o Insurance rates o Parking premises and expenses
should also be considered.

Following are several ways of storing the goods in a warehouse.

Pallet racking This is an easy and profitable method of storing. Goods

are stored on several marble pallets which are kept on one another in a frame. It is easy to access any pallet at any time.
Individuals can reach to any pallet of goods using a ladder or forklift truck.

Block stacking/ Bulk storage

In this method the goods of the same type are stored on top of another on the floor of the warehouse. Accordingly
various types of goods are stored on the various places of the floor as heap of goods. So the physical media like sacks or
containers are not necessary to store the goods. E.g. Rice, Sugar, Flour, Natural stones, Bricks

Pallet Flow This method of pallet racks are composed with tracks or marble belts. These can be fixed to the
drive in method in which the storing of goods and removing of goods can be done on the same side or drive through
method in which the goods are stored on one side and removing of goods can be done on the other side. The quality of
the goods is very high when storing under this method and space can be optimized. This method is suitable to store the
goods which are high in cost and stored in refrigerated warehouses. Speed controlling equipment can be fixed to prevent
the damages to the goods.

Push – Back Racks In this method, small baskets are fixed to the racks which have several
layers. Baskets can be stored one top of another to make several layers. After placing the products on one layer it is
pushed to back and the next layer is placed in front of that.

Mezzanine An additional layers is crated in between two floors of the warehouse. Any method
explained above can be used to store on this layers. Existing area of the building can be doubled by this method.

Automated Storage System A mechanical arm device controlled by

computer technology is used to stock and remove the materials in the warehouse. This is very suitable to remove the
stocked items of very small quantities/sizes. This method is also suitable to store and remove thousands of books and
documents stored in archives.

Several types of equipment are used in a warehouse to move the goods

Fork lift
Pallet jacks
Conveyor belts
Forklift Truck

Following are some advantages of using the equipment in storing and moving the goods systematically in the
warehouse

The warehouse is well organized The warehouse is well organized when storing the goods systematically
using suitable methods and using equipment to move the goods. Then it is easy to the owner and employees to maintain
and manage the warehouse.

Safety of the stocked products and employees There will be no threat to the employees while they are
working and there will be no confusion in the warehouse. The products are safe because they are placed in respective
places due to systematically storing.

Contributed effort and saves time It is time consuming when storing and removing of goods are done using
manual systems. If the systematic method is used to store the goods, it will save the effort and time of storing and
removing goods.

Save space of the warehouse The warehouse is organized systematically since the goods are stored
systematically. When the goods are stacked over and over instead of piling all in the same place there will be more space
in the warehouse

Logistics
Logistics is the process of planning and implementation of the flow of goods, services and relevant information
forwards and backwards from the point of origin to the point of consumption efficiently and effectively with the aim of
ensuring the fulfilment of consumer needs and wants. A planned system of logistics is essential for
the smooth flow of operational activities of a firm. There are two basic processes in such logistics systems.
The movements of raw material or finished goods from the point of purchase to the point of production (Inbound
logistics)

The movement of supplying the products or relevant information from the end of the production process to the final
consumers. (Outbound logistics)

Vendor manufacturers wholesalers retailers customer

Inbound logistics outbound logistics

There may be various types of logistics systems according to the nature of the firm or nature of the products as
follows:

Balanced logistics systems The similar flows of a flow from raw material/ products up
to the firm and flow to the consumer after the production. E.g.: Firms providing consumer goods such as
Nestle, Uniliver
Heavy inbound logistics systems E.g.: Manufacturing firms of aeroplanes The manufacturing
process of aeroplanes is complex because various firms and countries are connected in obtaining the necessary
material and services but the process of selling the aeroplanes is not so complex
Heavy outbound logistics systems E.g.: Chemicals Company
Storing of chemicals, packing and transporting should be done with special attention. So this process is
complex.
 Reverse logistics systems E.g.: Packages like gas cylinders that will be handed over again.
Impacts on the environment by throwing out used items.

The necessity of logistics can be shown as follows:

Logistics is needed to provide the right product, in the right quantity, at the right time, to the right place, at the
right price, in the right quality to the right consumer.
Logistics is needed to do the activities such as stock control, product planning, purchasing of materials,
transportation and warehousing systematically.
Logistics is needed to ensure that all machines and all work centres are getting the required materials, in the
required quantities at the required quality, at the required time.
Logistics is needed to minimise cost and to maintain the supply chain continuously by conducting market
research, planning requirements, making or buying decisions etc.

Benefits of logistics can be stated as follows

Can gain the reliability of consumers by providing the products to the market continuously.
Can minimise the cost through minimising waste by doing all the activities according to a plan.
Can face competition firmly.
Can minimise the unnecessary cost relevant to machines and employees.
Can ensure the quality of products.
Problems are not generated due to the proper management of waste.
Can be leaders of the industry.