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Types of Warehouses
- 1. Outline of Presentation • Types of Warehouses • Criteria and Principles in Designing a Warehouse • Push vs Pull System • Warehouse Location • Strategic Supplier Partnership
- 3. Types of Warehouses • Public Warehouse - are owned by governmental bodies and made available to private sector companies as compared to different types of warehouses. • Private Warehouse - is a warehouse that is privately owned by wholesalers, distributors, or manufacturers. Large retail and online marketplaces also have their own privately-owned warehouses. • Bonded Warehouse - is a type of warehouse that can store imported goods before customs duties are required to be paid on them. Authorities give companies using their bonds when they rent space to ensure they don’t face monetary loss when their products are released. Source: 8 Types of Warehouses for eCommerce (List) | Easyship Blog
- 4. Types of Warehouses • Smart Warehouse - is a type of warehouse where the storage, fulfillment process, and management are automated with AI. • Consolidated Warehouse - is another type of warehouse that takes small shipments from different suppliers and groups them together into larger shipments before distributing them to buyers. • Cooperative Warehouse - is a warehouse that is owned and run by cooperative organizations like a farmer or winery co-op. Source: 8 Types of Warehouses for eCommerce (List) | Easyship Blog
- 5. Types of Warehouses • Government Warehouse – is a type of warehouses in the supply chain are directly owned and controlled by the government, such as seaport storage facilities. • Distribution Centers - is a storage space that is usually built with specific requirements in mind. • Cross-Dock Warehouse - involves the transfer of goods from an inbound carrier to an outbound carrier, with little to no storage time. Source: 8 Types of Warehouses for eCommerce (List) | Easyship Blog
- 6. Types of Warehouses • Temperature-controlled Warehouse – is a warehouse that maintain the temperature within a set range so that the quality of the goods remains intact. • Climate-controlled Warehouse - have the ability to maintain airflow, temperature range, and humidity levels to preserve very sensitive products. • Hazardous material Warehouse - these warehouses ensure high safety standards for storing and handling hazardous materials (HAZMAT), such as explosives, gases, chemicals, toxic, and radioactive substances. Source: A Complete Guide to All Types of Warehouses (Part 1) (cyzerg.com)
- 7. Criteria and Principles in Designing a Warehouse
- 8. Criteria and Principles in Designing a Warehouse • Budget Considerations • Space Availability • Flow • Accessibility • Equipment • Throughput • Product Specification • Personnel • Authority Guidelines
- 11. Warehouse Location • Physical Location – the right location ensures quick deliveries, reduced shipping cost, and boost customer service • Accessibility – WH should be near highways and public transportation
- 12. Warehouse Location • Market and Local Environment – consider proximity to suppliers, producers, and the market(s) being served as well as local environmental factors. • Building Availability and Utility Cost – Double check availability and utility cost!
- 13. Warehouse Location • Size and Capacity – choose a site with adequate space for your operations • Supply Chain Logistics - consider the location of your supply chain partners
- 15. Strategic Supplier Partnership Shared Vision and Strategy Shared Values Shared Investment Shared Planning and Management System Shared Communication Shared Risk Shared Reward
Editor's Notes
- Because many industries require warehousing, stored cargo vary among all sorts of shapes and sizes. Additionally, the demand for each product varies because of factors such as price, product type, lifespan, seasonality, and growth of the population. These variances compel warehouse to specialize in certain industries and/or products in order to meet the expected handling of the required cargo.
- Public Warehouse - Public warehouses can be lent for both business and personal use. If you’re an SMB owner and want to store your goods for a short period of time, a public warehouse can be a great option as compared to other types of warehouses. Generally affordable. Private Warehouse - Although generally more expensive than public warehouses, private warehouses can still be a great option there is a need for a major, long-term strategic presence in an important region Bonded Warehouse - Plus, companies storing goods in them don't have to pay any duties until their items are released. You can also store restricted items in them until their proper paperwork is complete. A bonded warehouse also offers facilities to store items for extended periods of time. Such types of warehouses in the supply chain are perfect for importers as they can keep their items duty-free until they find buyers. They also have reputations as secure and safe storage spaces for goods
- Smart Warehouse - Automation typically includes everything from software for management to robots and drones performing tasks like packing, weighing, transporting, and storing goods. Corporations like Amazon and Alibaba use huge smart types of warehouses that make order fulfillment quick and less prone to human error. Consolidated Warehouse - The catch is that all the shipments are intended for the same geographical location. Overall, though, consolidated warehouses are a very economical way of order fulfillment, especially for small businesses and new startups in comparison to different types of warehouses in the supply chain. The capital investment and volume of inventory required to use consolidated warehouses are fairly small too, making them a great option for eCommerce SMBs just getting off the ground. Cooperative Warehouse - Both co-op members and those outside the co-op can store goods at these facilities, though co-op members benefit from reduced rates with these types of warehouses.
- Government Warehouse - Typically, government warehouses charge fairly affordable rates. These warehouses cater to the government’s own storage needs but can also be used by the general public through rental.However, if a business is unable to pay their rent within the due time, the government has the authority to recover their rent by disposing of their goods. Distribution Centers - The storage is used for temporary needs and items are shifted quickly within the supply chain. A large inventory is received and distributed to resellers and retailers within a short period of time. In the case of some food and perishable items, distribution centers items are often distributed within a day. Cross-Dock Warehouse - When goods arrive at a cross-dock warehouse, they directly go through the sorting process instead of getting stored.
- Temperature-controlled warehouse – These warehouses utilize strategically placed cooling or heating units, and the requirement can vary depending on factors such as seasons and characteristics of products stored. Climate-controlled Warehouse - These facilities are equipped with high-quality HVAC systems (heating, ventilation, and air conditioning), dehumidifiers, customizable thermostats, and heavy-duty insulation to ensure superior environmental quality. Usually, these warehouses are limited and expensive. Hazardous Material Warehouse - They employ highly trained and HAZMAT-certified employees who use personal protective equipment (PPE) to minimize exposure to hazards that can cause serious workplace injuries and illnesses. These types of warehouses are located away from densely populated areas, as they can pose a risk to public safety, property or the environment.
- Designing a practical warehouse layout is a crucial process as it has a direct impact on the efficiency and productivity of your warehouse. The planned layout should arrange the processes in a logical sequence that can help streamline operations, boost productivity, and reduce expenses. A well-executed and optimized warehouse layout design can provide easy access to stored goods, minimize travel time, and improve order fulfillment rates. Some questions regarding inventory and handling: o How will product be stored? o How might product specifications limit or impact inventory options? o Do different products have different storage requirements? o Where is the product’s centre of gravity, and how might this impact the conveyors, sorters, and gap generation technologies used? o How much does a typical tote/case/pallet of product weigh, and how will this impact the technologies selected?
- Budget Considerations - Before starting with the design of your warehouse layout, it is essential to assess all your business requirements, review associated budgets, and then plan the layout accordingly. Consider the most suitable and cost-efficient solution for your warehouse. Space Availability - Effectively utilizing the warehouse space available can help improve inventory visibility, reduce travel time, and increase overall operational efficiency. When designing your warehouse layout, it is crucial to allocate maximum space to storage and inventory processing purposes while minimizing space for office areas, empty pallets, charging stations, etc. Flow - Ensuring the uninterrupted flow of goods, personnel, and equipment is vital to consider in the design layout for the smooth functioning of your warehouse. Avoid inefficient routes and disruptions by strategically planning the warehouse design. Accessibility - it is crucial to ensure easy accessibility to all the areas and products in your facility. The layout should be designed in a way that makes it easy for personnel to navigate throughout the facility while conveniently locating and picking items without having to move other products. As a result, your productivity can be enhanced and orders can be fulfilled at a faster rate. o Is inventory stored on a short-term or long-term basis, or a combination thereof? o Is product handled primarily by pallet, case, tote, or individual units? o Is it necessary to segregate inventory into individual lots and batches? o How product is currently picked and processed into orders? Equipment - The use of different types of equipment in your warehouse, such as lifting & packing tools, pallet racks, or conveyors, can influence the layout design. By identifying the equipment needed, you can evaluate and design the most suitable layout according to your requirements and boost the productivity of your facility. Throughput - refers to the number of products that are processed and moved through various warehouse processes such as receiving, putaway, storage, picking, packing, and shipping. By collecting and analyzing this data, you can design a layout to ensure an efficient flow of goods and accommodate the necessary equipment for your warehouse. A high degree of availability of accurate throughput data will assist greatly in the outcome of the design or layout exercise. The better the data and the longest spent on collecting and analysing it, the less the risk. Product Specification - To determine the most appropriate technologies and processes to implement in your new facility, it is critical to have a firm understanding of your products’ specifications. What, exactly, needs to be handled? What characteristics of that product might impact how it gets handled? Size, fragility, weight, weight distribution, and other factors are all important considerations, especially when it comes time to select inventory solutions and handling systems. Personnel - Knowing the number of people required, their current levels of training and shift timings, and other related factors can help you design your warehouse layout in a way that doesn’t limit your workforce’s productivity. Also, the layout must be planned in a manner that can safely accommodate new employees and their needs in the future. Authority Guidelines - it is critical to comply with the guidelines provided by the local authorities. Abiding by these guidelines not only ensures the safety of your workers, equipment, or other valuable assets but also helps you avoid fines and legal problems for your business. https://publication.sipmm.edu.sg/key-considerations-warehouse-design-layout/ https://articles.cyzerg.com/warehouse-layout-design-principles
- Push Strategy A push-model supply chain is one where projected demand determines what enters the process. For example, warm jackets get pushed to clothing retailers as summer ends and the fall and winter seasons start. Under a push system, companies have predictability in their supply chains since they know what will come when – long before it actually arrives. This also allows them to plan production to meet their needs and gives them time to prepare a place to store the stock they receive. Pull Strategy A pull strategy is related to the just-in-time school of inventory management that minimizes stock on hand, focusing on last-second deliveries. Under these strategies, products enter the supply chain when customer demand justifies it. One example of an industry that operates under this strategy is a direct computer seller that waits until it receives an order to actually build a custom computer for the consumer. With a pull strategy, companies avoid the cost of carrying inventory that may not sell. The risk is that they might not have enough inventory to meet demand if they cannot ramp up production quickly enough. Push/Pull Strategies A fully-push based system still stops at the retail store where it has to wait for a customer to "pull" a product off of the shelves. However, a chain that is designed to be a hybrid flips between push and pull somewhere in the middle of the process. For instance, a company may choose to stockpile finished product at its distribution centers to wait for orders that pull them to stores. Manufacturers might choose to build up inventories of raw materials – especially those that go up in price – knowing that they will be able to use them for future production. https://smallbusiness.chron.com/push-vs-pull-supply-chain-strategy-77452.html https://101blockchains.com/push-and-pull-strategy-in-supply-chain/
- Warehouse Location Choosing the right warehouse location can make all the difference in how effective, efficient, and profitable a company is. Leasing or purchasing a warehouse is a major decision, and choosing the right location can significantly enhance a company's ability to compete and effectively serve customers.
- Physical Location - The physical location of the warehouse is one of the most important things to look into when deciding which warehouse to use. The location should help you increase the efficiency of your warehouse’s supply chain without causing shipment delay or increase production cost. Accessibility - Your facility should be within easy distance of roads and highways, especially if your main transportation mode is trucking. Accessibility can have a huge impact on the competitiveness of your business: Consider the following: Accessibility to highways and exit ramps Access to public transportation Highway interconnectivity Average traffic volume and speed Traffic peak hours Road safety and conditions Proper road signs and signals
- Market and Local Environment - any new warehouse should be as close as possible to major suppliers, producers, and/or customers. This will help reduce lead times, decrease transportation costs, and enhance responsiveness. The factor to consider here is who is/are the major supply chain partner(s) and how you can make the supply chain more efficient by strategically selecting the warehouse location. Also, local environmental factors such as weather conditions and risk of exposure to natural disasters should also be considered. Other local environmental factors that should also be considered include proximity to neighbors (warehouses can be noisy – avoid disputes), traffic congestion, and peak traffic hours. Building Availability and Cost – If needed, move your warehouse in the same area to retain workforce, utilities, etc and minimize frustrations of truckers/carriers and customers. You will want to double-check the availability and cost of utilities. Some warehouses are more demanding/dependent on one utility than another. For example, refrigerated warehouses are more dependent on electricity and water.
- Size and Capacity - The site and facility should meet your business’ specific requirements, including the capacity and infrastructure. This is especially true if you’re planning to expand your business in the near future. Make sure that the warehouse has the right size to store all your goods properly and safely. If you choose a warehouse that is too big for your business, you will end up paying too much to rent empty, wasted spaces. Find a facility that has the right balance between too big and too little. Supply Chain Logistics - Strategic site selection helps boost efficiencies and reduce costs and delivery times. This helps attract more potential partners to your business. If you are importing goods from international suppliers or shipping goods overseas, the warehouse site should be accessible to nearby ports.
- Strategic Supplier Partnership strategic supplier partnership is a long-term relationship between at least two commercial entities (client and supplier), designed to solve a business problem and deliver key client solutions and is usually formalized by a contract. The strategic partner occupies the elite position at the top of the supply base hierarchy. Partnerships develop over time with conscientious effort on both sides of the relationship. There must be a multi-faceted commitment between the companies to establish the requisite foundation for the relationship to be mutually productive and valuable. Strategic partners may be the fewest in number but they are the most critical to the success of the buying organization. Ideally, both parties should share these perspectives: The strategic supplier partnership is the pinnacle of supplier relationships and takes a more holistic management approach to be successful. https://supplychaingamechanger.com/7-essential-attributes-of-strategic-supplier-partnerships/
- Shared Vision and Strategy - The most fundamental aspect of a relationship between two companies is the vision both have for their businesses. These visions of what it takes to be successful in their respective markets must align or overlap to ensure that the partnership can develop and remain strong. Shared Values - Values are the foundation for the identity of a company and its employees. Corporate values are the “persona” that is presented on a daily basis by the company(ies) and how it engages in and around itself. Shared Investment - There is money to be spent to bring new products or capabilities to market. Success will be contingent upon appropriate resource allocation and investment by all involved. it does require both parties to support the vision, strategy, and plans with the appropriate level of investment in human and financial resources and the commitment to stay the course. Shared Planning and Management System - With both companies approaching their joint activities with alignment at the vision and strategy level, the detailed plans must also be congruent. Planning has to be mutual and both parties need to be actively involved and vested with the entire plan. Regular business reviews are an integral part of a management system. Build them into the relationship plan to ensure alignment at all levels of the business. Shared Communication - Since a partnership sits atop the supplier hierarchy, a high degree of collaboration is required for the supplier and customer to be successful. This implies a structured and managed approach to communications and engagement across all dimensions of the relationship. Open, transparent, and strong cross-functional engagement between the partners is as important as the contractual and formal aspects of long-term performance and value contribution. Shared Risk - All business ventures have elements of risk. When two companies come together to do business, they are both taking on new and shared risks. It is critical that both parties acknowledge these risks and be transparent with one another. Shared Reward - Winners beget winners. At the end of the day, success in the marketplace needs to be shared all along the value chain. Supply chains with close, vested, and mutually-beneficial relationships at the highest levels of the supplier hierarchy will succeed the most. https://supplychaingamechanger.com/7-essential-attributes-of-strategic-supplier-partnerships/