Importance of Warehousing (Essay Sample)

Importance of Warehousing
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Institution
Introduction
Warehouses have always played a crucial role in the business world, especially where the business involves large inventories. This is because such facilities provide a location for the storage of goods, which may be up for exporting, importation or selling to either retailers or wholesalers. At times, warehouse may also act as transit point in a trade cycle involving a region that spans wide areas. This essay, therefore, makes a comparison and analytically reviews various factors and how they influence the importance of warehousing in general.
Type of warehousing
A warehouse is as important as its intended function. There are different types of warehouses that are used daily for different operations around the globe. This section explores the most common types of warehouses in order to have a better understanding of the subject. The first type of warehouse is the distribution warehouse. Distribution warehouses are essential where a company has different market regions around the globe that require their products. Such facilities are located across a predefined region, based on the potential market. Similarly, consolidation warehouses provide hubs where goods received in bulk are subdivided into smaller units before being redistributed (Freese, 2000). Such facilities reduce the operation cost of companies by encouraging shipment in bulk to market areas before distribution of the same. Moreover, these warehouses play a great role in protecting the products stored.
Other types of warehouses i.e. value addition warehouses enable companies to customize their end products according to consumer specification at the delivery level. Thus, companies can serve even niche markets without compromising the larger market because these facilities integrate additional services such as repackaging and labeling to traditional warehouse services. Finally, there is the refrigerated type of warehouse which helps in price regulation of perishable goods (Freese, 2000). By offering preservation services to perishable goods like meat products, fruits and vegetables, the food industry is rarely affected by changing climatic conditions like draughts which would otherwise result in fluctuating prices of the stated products. Indeed, it is evident that the use of each warehouse depends largely on the product stored.
Warehousing Operations
Warehouses are designed to accommodate different operations performed by different companies. In that sense, different companies have varied choices on the type of operations they carry in their warehouses. Reflecting on a research, it is evident warehouse operations involve the actual planning and execution of activities within the warehouse. Warehouse operations revolve around the employment of different activities that are intended to improve marketing operations and client satisfaction. It entails calculations and monitoring of the inventory, taking orders of customers and servicing the said orders and finally, the collection of the payable charges from consumers after product delivery (Prabhu, 2011). In all these activities, accuracy and keenness to details is paramount because it determines the level of business efficiency and customer satisfaction.
Public vs. Private Warehousing
Warehouses can be categorized into two groups namely; public and private. The grouping largely depends on the intended use and the ownership of such facilities. The public warehousing aspect of being a zero capital investment is a good option of doing business especially to startup firms that may lack enough capital to acquire private warehouses. This option is also applicable in situations where a company only ventures into various markets seasonally (Wang, 2005). Private warehouses would be uneconomical for such business ventures. Additionally, some public warehouses come with specialized services like provision of guards thus, assured security for a company’s products.
Similarly, the option for a private warehouse also has its importance in warehousing. Private facilities come with a degree of control over one’s products hence minimizing instances of company sabotage by competitors. Again, private warehouses means a company can use its in-house, trained personnel on the facility as opposed to public facilities that normally have their own employee running the warehouses (Wang, 2005). Such expertise guarantees consumers of the company’s commitment to top-notch service delivery.
Warehousing Layout and Design
The way a company goes about the issue of warehouse layout and design during development defines the efficiency of such a facility to the business. Proper warehouse layout reduces the risks of line fills going down, which is usually the case when an item is reordered while an identical inventory is still in the store but cannot be found because of poor arrangements in the warehouse. Proper layout also reduces shipment errors that are characteristic of a disorganized storage facility (Koumpourelou, 2010). Moreover, a well-organized design guarantees inventory circulation e.g. first in-first out reducing chances of products expiring or wearing out. Noteworthy, warehousing layout and design is an important aspect of the business, since this determines product’s safety while in storage. A good design will always provide the required measures to accommodate a variety of products accordingly.
Facility Development (size, number and location)
During development the management should take some factors into consideration. For instance, a small-sized warehouse means less movement from one point to another to pick an item. Additionally, relatively similar items ought to be placed closer to each other so that if one needs to collect the items, they are picked at once. Location wise, fast moving items are stored closer to the door so as to improve runtime in the facility (Immon et al. 2008). However, while all these aspects are being used for the facility development, future growth and need for more space ought to be taken into account thus preventing the need to relocate or expand the warehouse.
Warehousing management systems and technological development
Physically keeping track of one’s inventory is near impossible for any company. The task becomes overwhelming the larger the company is and as such a need to embrace technology and use of warehousing management system. Such software systems keep track of the cycling of products, the manufacture and expiry date (Ponniah, 2013). Moreover, advanced systems check the rate of movement of the inventory and automatically alert the system administrator to re-order products thus averting instances of stock outs.
Capacity Management
Management, both in private and public sectors involving warehousing activities is important and should be given the first priority in order to ensure that business practices are performed in the right manner. Capacity management, which involves monitoring the performance of the warehouse management system, ensures that there is no system breakdown that might otherwise lead to loss of data. Systems under capacity management are always running, thus inventory data is analyzed and required changes made (Wang, 2005). Such monitoring also en...