Exploring Warehousing in Logistics: Types, Role, Benefits & Management

This report examines the role of warehousing within a logistics system, highlighting its importance in inventory control, centralization of goods, cross-docking, and providing social benefits. It explores various warehouse types, including private, public, bonded storage, cooperative, and distribution centers, detailing their characteristics and suitability for different industries, such as steel companies and fresh produce retailers. The report also discusses the benefits of a Warehouse Management System (WMS), including quicker inventory turns, effective warehouse area utilization, enhanced cycle counting, improved customer service, reduced overall costs, and increased transparency in the logistics system. The analysis provides a comprehensive overview of warehousing practices and their impact on supply chain efficiency.

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warehousing
[Type the document subtitle]
3/8/2020
student name

Warehousing 1
Contents
Role of warehousing in a logistics system.................................................................................2
Warehouse types........................................................................................................................3
Reason for a company or industry would benefit from using one warehouse type...................5
Warehouse management system (WMS)...................................................................................6
References..................................................................................................................................8

Warehousing 2
Role of warehousing in a logistics system
Warehousing is considered to be one of the relevant portions of logistics management
system. It reflects various roles and relevance in this system, Mentioned as below:
 Inventory control – warehousing is responsible for inventory control, which is one of
the major works in the logistics. Moreover warehousing is helping to manage the
inventory amount and transaction in the business considering balance of supply and
demand that is dynamically changing.
 Centralisation of goods – Another role of warehousing is to manage the goods at the
centralised location where the goods are stored and it si able to make easier to receive,
store and distribution of the goods. Moreover helping in the logistics system by
diminishing the transportation costs.
 Cross docking – This reflect the process of transferring the goods from shipping to the
dealer with no inventory, thus reflect the method to transfer the good more
effectively.
 Social benefits – warehousing is responsible for the social cause and benefit to the
customers by keeping the stock with safety constraint and makes it available at the
time of emergency (smallbusiness, 2020).

Warehousing 3
Warehouse types
There are various types of warehouses, where five of the common include
1. Private warehouses
The private warehouses are the warehouse that are managed and owned
through suppliers in the channel that are the traders or the manufacturers and resellers
using their own activities of distribution. Considering the key aspects of this type of
warehouse included that these make the distribution activity and manageability more
easy due to own system, but this could be expensive as having your own warehouse
may increase the cost of area, cost of maintenance and operating cost. However, it is
considered to be strategic advantage for the companies in long run.
2. Public warehouses
These are the warehouse that are owned and managed by government bodies
and make available for the private companies for rent payment. These are generally
helping the small retailers to keep their stock without owning their own place as they
are not able to invest huge amount in warehouse thus for this financial constraint they
opt for public warehouses. This is possible with short term distribution needs of the
traders that are the storage needs.
3. Bonded storage
These are also managed and owned by government official along with the
private firms. Thus it can be said that these are managed and conducted by private
companies that are licenced from the governmental officials. These are generally been
found near port regions and are subject to taxes that is custom duty and excise duty.
4. Cooperative warehouses

Warehousing 4
Operative societies are held responsible for owning and managing these types
of warehouses. The societies are providing the facility of storage to their members in
economical rates, where the purpose is to help the members instead or earning profit.
5. Distribution centres
Large space warehouse that enable large quantity goods to be stored and fast
movement for short period. These warehouses are control through computers and
movement of the goods are generally fast, quick and reliable (yourarticlelibrary,
2020).

Warehousing 5
Reason for a company or industry would benefit from using one warehouse
type
From the analysis of the above five types of warehouses it can be said that all the
warehouses are suitable for one or the other type of company and industry. For instance in
case of steel company where the products are large in quality and in weight, private
warehousing is better to be opt. The key reason for this is availability of the warehouse
whenever needs and storage of goods for long run. Other than this other type of warehouses
are suitable for short run or small quantities (Ayers, 2017).
Considering example of another type of company that is fresh vegetables and fruits
retailers, cooperative warehouses are more suitable, reason being these products may be large
in quantities but the movement needs to be fast. Other than this, the industry is not willing to
invest huge amount in warehouse. Other than this, they are trying keep the prices lower,
which reflect the suitability with this type of warehouse over others. Other warehouses reflect
huge payment or investment (Oke & Prajogo, 2016).

Warehousing 6
Warehouse management system (WMS)
Warehouse management system reflects managing of all the activities beginning from
suppliers in the logistic system to the clients. This includes inventory movements, safety
constraints and optimisation of the operations in warehousing. The key benefits that has been
identified for warehouse management are
 Quicker inventory turns – inventory management system that is enough effective is
responsible for minimising lead time by enhancing and restricting inventory
movement and supporting the aspect of just in time. Thus the safety stock requirement
is minimised (Andelkovic, 2018).
 Effective warehouse area utilisation – WMS is also held responsible for effectively
managing the space of the warehouse so as to make optimum utilisation. This reflect
more systematic and effectively localise goods to improve the space.
 Enhancing cycle counting – Another benefit includes record of relevant information
like specific locations and movements regularity. Thus the schedules for the personnel
considering the cycle counts are well organised and proper.
 Improved customer service – Through warehousing management system, the process
is being optimised which reflect the business could be able to run more effectively
and with up mark accuracy with reaching the clients as per the schedule increase the
customer service and satisfaction.
 Reduce overall cost – good WMS is responsible for the cost reduction in the logistic
system. This can be done through masking labour efficiency, ensuring the safety of
moving and package processes.
 Increase the transparency – another major benefit is provision of transparency in the
overall logistics system. WMS is responsible for making the process completely

Warehousing 7
transparent for the employees that si shipping, fulfilment of order and order tracking
(Gencer, 2017).

Warehousing 8
References
Andelkovic, A. (2018). Improving order-picking process through implementation of
warehouse management system. Strategic Management, 23(1), 3-10.
Ayers, J. (2017). Retail supply chain management. Florida: CRC Press.
Gencer, Y. (2017). Supply chain management in retailing business. In Ethics and
sustainability in global supply chain management, 197-210.
Oke, A., & Prajogo, D. (2016). ). Supply chain processes: Linking supply logistics
integration, supply performance, lean processes and competitive performance.
International Journal of Operations & Production Management, 220.
smallbusiness. (2020). importance-warehousing-logistics-system. Retrieved from
https://smallbusiness.chron.com/importance-warehousing-logistics-system-
74825.html
yourarticlelibrary. (2020). warehouses-types-5-types-of-warehouses-explained. Retrieved
from http://www.yourarticlelibrary.com/retailing/warehouses-types-5-types-of-
warehouses-explained/48302