This document discusses the concept and functions of warehouses. It defines warehouses as facilities where value is added through the large-scale, systematic storage and organization of goods to be made conveniently available when needed. The key functions of warehouses include receiving, inspecting, identifying, sorting, allocating space, order picking, marshaling goods, and dispatching goods. Warehouses are also classified based on their degree of centralization, product type, legal status, and whether they are bonded. The document then discusses private, public, contract, and bonded warehouses and their advantages. It concludes by covering factors considered in warehouse design, layout, storage space, stock location, and site selection criteria.

1. BY-
AMIT KUMAR CHAUHAN
13MT07INDOO1

2. •What is a warehouse?
Traditional concept of warehouse
• Store or godown
• Place where unneeded items are stored
Modern concept of warehouse
• A facility – where value addition takes place
•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.

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Functions of warehouse
1. Receiving goods & inspection – receive and accept
responsibility
2. Identifying goods – place, label, color code
3. Sorting goods- sort out the received goods for appropriate
storage area
4. Allotment of space – on the basis of frequency of
movement of goods
6. Order picking - items are selected and grouped
7. Marshaling goods- check the items of a single order for
completeness and order records are updated
8. Dispatching goods- consolidated order is packaged and
directed to right transport
9. Preparing records for shipping

4. Classification of warehouses
They are classified according to following parameter:
•Degree of centralization
•Nature of the product
•Legal status
•Bonded warehouse

5. Private Warehouses
 OPERATED by a company for shipping and storing its own
products
 CONSTRUCTION- Farmers near their fields, Wholesalers
and Retailers near their business centre's and
Manufacturers near their factories
 SUITABILITY- Firms that require special handling and
storage features and want to control design and operation
of the warehouse
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6. Advantages of private warehouses
 Better control over movement and storage
 Chances of errors are less as products are handled by its
own employees who have full knowledge
 Designing is done according to suitability of owner
 Greater flexibility with respect to storage and material
handling needs

7. Public Warehouses
 Provide storage and physical distribution services on rental
basis
 used by small firms and large firms
 in India owned and operated – Central Warehousing
Corporation and State Warehousing Corporation
 SUITABILTY – seasonal production or low volume storage
needs, companies with inventories maintained in many
locations, firms entering new markets

8. Advantages of public warehouse
 More efficient and less expensive
 Fixed cost distributed among many users
 Flexible to meet space requirements for different users
 Companies have a wide choice of locations and warehouse
types
 Operators generally offer relatively standardized services to
all clients.

9. Contract Warehouses
 Contract warehousing combines the best characteristics of
both private and public operations.
 The long-term relationship and shared risk result in lower
cost than typical public warehouse arrangements.
 Contract warehouse operations can provide benefits of
expertise, flexibility, and labor, equipment, and
information resources across a number of clients.
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10. Bonded warehouse
 These warehouses are owned, managed and controlled by
private as well as public agencies.
 Bonded warehouses are licensed by the government to
store goods prior to payment of taxes or duties.
 They exert very tight control over all movements of the
items.
 For example, cigarettes ,liquors and imported goods are
often stored in bonded warehouses.
 This tactic saves the firm money.

11. Selection of warehouses
Choice of warehouse is depends upon the following factors:
• demand
• no of items handled
• mode of transportation
• geographical location
• seasonality of product
• standardization in packaging , handling

12. Design of warehouse
The design of location would take into account the following
factor:
1- layout
2- storage space
3- stock location

13. Straight line flow pattern
shipping
Order
assembly
storage
Receipt
and
inspection
Shipment
in
Shipment out
storage
Order assembly
Receiving and
shipping
Shipment in
Shipment out

14. Storage space
1. Rectangular building layout are normally most efficient.
2. Goods should move the shortest possible distance
3. Loading and unloading docks should be positioned on the long sides.

15. Stock location
To reduce the effort and time , the items should be located
according to:
1. Frequency of movement
2. Functional relationship
3. physical similarity
4. Working stock and reserve stock

16. Location of Warehouse
 Criteria affecting the decision on location of warehouse
are:
(1) availability of land
(2) cost of land
(3) proximity to market
(4) labour availablity
(5) government taxes
(6) availability of utilities
(7) suitable climate condition

17. SCHAEFER logistic working for AUDI Volkswagen Korea