This document contains an interview with responses from a logistics professional on the importance and functions of warehousing. The interview consists of 7 questions and answers on topics like the purpose of warehouses, requirements for choosing a warehouse, who makes decisions about warehouses, the importance of layout and design, primary warehouse functions, and the role of warehousing in logistics systems. Accompanying each answer is a short excerpt from logistics literature that provides further context or supports the points made in the response.

1. University of Cebu – Banilad Campus
Banilad, Cebu City, Philippines 6000
2nd Semester – A.Y. 2013-2014
Major Essay
In Partial Fulfillment of the Requirements of the Course
Distribution Management
Submitted by:
Canama, Janvic Jan
Nudalo, Felipe
Quiñones, Marlyn
MM3 5:00-6:30 TTH
Submitted to:
Mrs. Elouis Tejada
March 2014

2. Theory vs. Interview

3.  The italicized paragraphs are theoretical statements taken from the book
Logistics Management. They are placed after the interviewee’s answers
that match with the theories.
Question 1: What is the importance of warehousing?
First, having a warehouse, you will have the opportunity of consolidating
the products. So to provide service to our customers, we need a variety of items.
Before we deliver them to the customers, we have to consolidate those
products. Without the warehouse, we can’t do that. If you can consolidate the
items in the warehouse, it will be cheaper than sending each item to your
customer.
Second is the buffer lead time. With the warehouse, you can reduce the
lead time in delivering your service to customer because you have the materials
available already. Unlike if you will order your items every time you receive order
from your customer, it will take time.
The third one is the transportation mode trade off. Meaning to say, if you
have a warehouse, you can take advantage of the economies of scale in
transportation. You can optimize the use of transportation. You can send your
materials in bulk orders and whatever quantity you desire.

4. The fourth one is you will have the opportunity to save due to bulk orders.
When you buy a particular item from a supplier, more often than not you can
avail of discounts.
Last one; it gives you protection from unforecasted price upsurge. There
are times in a year; suppliers decide to increase the price of their commodity. So
when you have the warehouse, most likely you will not be affected for that year.
Warehousing has traditionally provided storage of products (referred to as
inventory) during all phases of the logistics process. Two types of inventory can
be placed into storage: [1] Raw materials, components and parts (physical
supply); and [2] Finished goods (physical distribution). Warehousing of products
has occurred for one or more of the following reasons – to:
 Achieve transportation and production economies
 Take advantage of quantity purchase discounts and forward buys
 Maintain a source of supply
 Support the firm’s customer service
Aside from that, warehouses can be used to support manufacturing, to mix
products from multiple facilities for shipment to a single customer, to break-bulk
or subdivide a large shipment of product into many smaller shipments to satisfy
the needs of many customers, and to combine or consolidate a number of small
shipments into a single higher-volume shipment.

5. Question 2: What are the requirements needed in choosing a warehouse?
You have to know what goods you are going to store in the
warehouse. Like for instance, you need a warehouse which controls
temperature. First and foremost, you have to know what you need to store. Then
space requirement and capacity, accessibility, safety, security and location.
In general, firms have a number of warehousing alternatives. Some
companies may market products directly to retail customers thereby eliminating
warehousing in the field. The selection, design and management of warehouse
operation depend on the purpose and operation of a company or business.
Below are important things must be taken into account to choose and decide
what type of warehouse to be used:
 Type of goods to be stored as well as the characteristics of the goods. The
main thing to consider is whether the goods to be stored are food or non
food items or both
 Total quantity will be stored in order to calculate total space / area
required
 The storage time requirement
 The security perimeter of the building and warehouse areas should
provide adequate protections for the building, goods and vehicle also
equipment in the warehouse compound

6.  Site location and access. Warehouse compound should be free of
flooding and access/road to the warehouse should be passed or suitable
for large truck
As a company levels increase, it typically requires more warehousing space
to provide storage for higher level of inventory. When a firm has multiple
products or product groupings, especially if they are diverse, it needs larger
warehouses to maintain at least minimal inventory levels of all products. In
general, greater space requirements are necessary when; products are large;
production lead-time is long; manual materials handling systems are used; the
warehouse contains office, sales or computer activities; demand is erratic and
unpredictable.
Question 3: Who make decisions in choosing a warehouse?
For us, it can be decided by the logistics and coordination with our
safety. That is if your company has a safety department.
(I NEED HELP WITH THIS THEORY)
Question 4: Do you consider the warehouse layout and design in choosing a
warehouse?
Layout and design is very important in choosing a warehouse. In
warehouse loss and prevention, it is very critical in choosing a good layout in the
warehouse. But nowadays, warehouse has not become the core competence

7. of many companies. That’s why most companies no longer build their own
warehouses. So they lease their own warehouse.
The optimal warehouse layout and design for a firm will vary by the
type of product being stored, the company’s financial resources, the
competitive environment and the needs of customers. In addition, the
warehouse manager must consider cost trade-offs between labor equipment,
space and information.
A good warehouse layout can [1] increase output, [2] improve
product flow, [3] reduce costs, [4] improve service to customers and [5] provide
better employee working conditions.
Question 5: Who is in-charge in the warehousing operation?
It depends on the organizational setup of your company. If
centralized or decentralized, regionalized, it depends. In the case of Globe, I
don’t know if I can tell you. Our warehouse now is being run by a third party.
(No theory)
Question # 6: What are the primary functions of warehousing in your company?
Just like any other warehouse, we have receiving, identification and
sorting, storage, picking, packing, shipment and then recording.

8. Warehousing has three basic functions: Movement, Storage, and
Information Transfer. Recently, the movement function has been receiving the
most attention as organization focus on improving inventory turns and speeding
orders from manufacturing to final delivery. Fast and efficient movement of
large quantities of raw materials, component parts and finished goods through
the warehouse, coupled with timely and accurate information about the
products being stored, are the goals of every logistics system.
Question # 7: Do you consider warehousing important in the logistics system of
your company?
Yes it’s very important, in day to day operations and as well as
keeping good service to our customers.
Warehousing is an integral part of every logistics system.
Warehousing plays a vital role in providing a desired level of customer service at
the lowest possible total cost. Warehousing activity is an important link between
the producer and the customers. Over the years, warehousing has developed
from a relatively minor facet of a firm’s logistics system to one its most important
functions.