Saturday 15 December 2018

Types of Warehouses

Types of Warehouses

Warehouse is the most common type of storage though there are indeed other forms (for example, storage tanks. Some warehouses have huge buildings and extensive demolition activities so as to allow goods from truck loading activities and supplier of goods to the customer simultaneously

Below we discuss five types of warehouses:

  1. Personal/private Warehouse– a warehouse type is own and operate by the vendor and re seller for use. In their own distribution activities. For example, a large retail chain provides sheds for their stores or wholesale operates a warehouse where he receives and distributes the product.

    2. The general public/Warehouse
    – warehouse is essentially public space that can be rent out to cope with the needs of the distribution in the short term. Retailers who own their own warehouses have sometimes looking for extra space storage warehouse capacity. If they are insufficient or if they purchase products in bulk with some reason. For example, retailers can order extra items to maximize sales at the store or. When there is a promotion price from the supplier if buying in bulk.

    3. automatic Warehouse – with advances in computer technology and robotics many warehouses now have the ability automatically. Phases of the automation to the discharging conveyor belt for transporting goods so requires fewer people to handle the storage activity.

    4. Climate-Controlled Warehouse. The Climate-Controlled Warehouse – a warehouse that handles the storage of different kinds of products with special handling conditions. Such as freezers to store frozen products and moisture environment.

    5. Distribution Center, there are some warehouses that simply store the product in a very quick time. This barn serves as the point in the distribution system on products received from different suppliers and immediately sent to many customers. Suppose, as with the handling of Distribution Center for Perishable Food most products that go in the morning and distributed at the end of the day.

Public Warehouse & Cost

The public warehouse [or contract] is that they are not requires capital investment from the user. The user avoids investment in buildings, land and material handling equipment. As well as the cost of starting the operation and the recruiting and training of personnel.

Or because of the high costs involve, many companies are only able to generate enough capital to build or buy a shed. The barn is long term, often risky, investment [which later may be difficult to sell because the customized designs]. Hiring and training employees, and purchase of materials handling equipment to make an expensive and start the process time-consuming. And depending on the nature of the enterprise, the return on investment might be greater if funds are channeled into other profit-generating opportunities.

Alternatives - Private warehouses

A further consideration in the decision is the rate of return that a private warehouse will provide alternatives. Minimum investment at the warehouse belonging to the company must produce. The same rate of return as another investment company. Most companies feel favorable to use some combination of public and private warehouses. Private warehouse used to handle the level of basic supplies need for logistics costs. At least in markets where volumes justify ownership. Warehouses are commonly use where the volume is not enough to justify ownership or to store peak requirements.

Storage and handling Costs

When a company uses a public warehouse, he knew storage and handling costs that right because you received a bill every month. The user can therefore be predicted costs for various levels of activity as it is known in advance. Companies that operate their own facilities often find it very difficult to determine in a fixed and variable tiara tepa warehousing.

Public Warehouses usually costs based on the case, pallet or kilograms of stored or handled. When the volume of activities is quite large, public warehousing costs exceed the costs of private facilities, which makes ownership more attractive.

Private Warehousing can be cheaper in the long run. Operating costs can be 15 to 25 percent lower if the company achieves adequate through placing or utilization. Generally accepted industry norm for utilization rate of 75 to 80 percent. If a company cannot reach at least 75 percent utilization, will generally be better suited using public warehousing.


A company can also realize tax benefits when he has warehouse. Depreciation allowance on the equipment of a building reduce tax debt.

In some countries, companies may have an advantage if it does not have a property in the country. Ownership means that the company is doing business in this State and thus subject to the various national tax. These taxes can be substantial. If the company does not have a treasure in a country, may find it advantageous to use a public warehouse.

Some countries do not wear property or value added tax (VAT) on inventory in a particular type of warehouse centers or fulfillment of tax shelters, this applies both to the usual storage and warehouse supplies in transit supplies. For example, Amazon. co. own sourcing order fulfillment of DC in the Change l (in the United Kingdom) for online consumer sales because they are exempt from normal United Kingdom 17.5 per cent VAT.

A free Port conditions imposed in some countries allows inventory to be held for up to a year, tax free. Manufacturers don't pay taxes anyway. Public warehouse to pay taxes anyway and this present include the cost of the warehouse, but smaller costs on a per unit basis through placing it because costs are allocated between all clients using public warehouses.

Economical Scale

Public warehouse is able to achieve economies of scale that may not be possible for some companies. Because publics warehouse handling requirements your number or firms, their volume enables the warehouse staff work full time. In addition, the cost of development which is nonlinear and companies pay a premium to build a smaller facility. Economical art can additionally be provided with use of materials more expensive, but more efficient, handling equipment and by providing administrative and other expertise.

Economic or scale is also a result of the consolidation of small shipments with competitors that do not use the same public warehouses. Public warehouse consolidates specific customer orders of products from a number of different manufacturers in a single shipment. This leads to lower shipping costs and reduce congestion in the harbor which receives customers. Customers who take their order at warehouse the public can obtain the product from some Manu invoice in one time, if the producers are all using the same facility.

Criteria for Storage Space.

Space to meet the needs of the Summit. If the operation of a company depends on the seasonal/trends, public warehouse option allows users to rent storage space as much as needed to meet the needs of the Summit. A private warehouse, on the other hand, has a constraint on the maximum amount of product that can be saved because it cannot be expanded in the short term.

Also, it is likely to be under-utilized during a portion of each year. Since most companies are experiencing a variation in the level of inventories due to seasonal demand or production, sales promotions or other factors, public warehousing offers a distinct advantage that allows storage costs vary directly with the volume.

The Limitation of Space

Public warehousing space may not be available when and where the company wants it. Space limitations do occur periodically in selected markets, which can be bad on logistics and marketing strategy of the company.


In warehousing, private company that owns the goods can exercise a greater level of control. The company has direct control of and responsibility for the product to the customer taking possession or delivery, which allows companies to integrate warehousing functionality more easily into the system total logistics.

With control of the warehouse will be a greater level of flexibility to design and operate warehouses to fit the customer's needs and characteristics of the product. Companies with products that require special handling or storage could not find a decent public warehousing. The company must utilize private warehousing or ship the products directly to customers. Sheds can be thorough renovation or expansion modifications to facilitate changes in products, or can be converted to a manufacturing plant or branch office locations.


The other advantage offered by the public warehouse is flexibility. Have or hold long term rental at warehouse can be a burden if business conditions require a change in location. Public warehouse requires only short-term contracts. Short term contracts are available from the public warehouse makes it easy for companies to change the location of the field warehouse due to changes in the market (such as the shift of the population), the relative costs of the various modal transport, the volume of product sold or position corporate finance.

In addition, a company using public warehouses do not have to hire or dismiss employees as the volume of business changes. A public warehouse does not provide the personnel required for the additional services when they are needed, without having to rent them on a full-time basis.

Public Warehouse & Flexibility

A public warehouse may be extremely flexible and adaptable in terms of fulfilling the specific needs of an organization or providing special services discussed below. However, a special space or services desired are not always available in a particular location. Many of the public warehouse facilities only provide local services and the use of limited companies that distribute regional or national. A factory warehouse wants to use public to national distribution may feel the need to deal with different operators and monitoring contractual agreements.

Many experts feel that a major weakness of private warehousing is the same as one of the main advantages; flexibility. A private warehouse may be too costly because fixed-size and cost. Regardless of the level of demand for the company's experience, private repository size is limited in the short term. Some private facilities cannot expand and contract to meet the increase or decrease in demand. When demand is low, the company still has to bear the fixed costs and lower productivity associated with unused warehouse space. Losses can be minimized if the company is able to rent out part of the space.

If a company uses only private warehouse, the loss of flexibility in the choice of location. If the company cannot quickly adapt to changes in the market size, location and preferences may lose valuable business opportunities. Customer service and sales could fall if a private warehouse cannot adapt to changes in the company's product mix.

Time Risk

Companies usually plan for distribution facilities have a life span of 20 to 40 years. By investing in a private warehouse, risk management assumes that the changes in technology or in the volume of business will make obsolete facilities. With the public warehousing company, the user can switch to other facilities within a short time, often within 30 days.

Human resources

the Court has ruled that the unions not to strike a public warehouse when the States involved in the labor dispute with one of the customer from the warehouse it. So, using public warehouses have the advantage of the manufacturer's distribution system isolation from the labor dispute.

Indeed, by using private warehousing, companies can also make better use of human resources. There is a greater care in the handling and storage when the company's own labor to operate the warehouse. Some of the public, the warehouse allows their clients to use their own employees in the handling and storage of the product. Companies can leverage the expertise of technical specialists.

Communication problems

 Effective communication can be a problem with a public warehouse as not all terminal computer them system compatible. A warehouse operator may be undecided and another terminal just for one customer. In addition, the lack of standardization in the new contract made communication about contractual obligations is difficult.
Special services

Public warehouses are often able to offer a number of special services that are more economical than a private warehouse. Special services include:

  1. Broken-case handling, which broke down the number of cases order to enable manufacturers to less than the total number of cases to be filled.

  2. Packaging products manufacturer for shipping.

  3. Consolidation of damaged products and remember for delivery to the manufacturer at a cart or the number of trucks, in addition to the documentation and packaging that may be required, the public warehouse can do rework [improvements] damaged.

  4. Equipment maintenance and service.

  5. Pay attention to Stock the product for producers with a very limited product lines or seasonal; stock note involves sending a car full of supplies to a consolidation warehouse contains. The public just before the seasonal sales period maximum.

  6. A bulk service where the manufacturer combines the different customer orders in a particular market. Their ship in the car containing the full rate or truck to the warehouse of the public. There are individual commands separate and local delivery is provide.

Intangible Benefits

There may be a certain intangible benefits associate with ownership of the warehouse. When a company distributes its products through a private warehouse. It can give customers a sense of permanence and continuity of business operations. The customers are more concern with the delivery time of products. Even and remote warehousing locations can provide the same level of service if maintain properly.

Facilities Development

Important decision an Executive logistics warehouse faces is how to develop optimal warehouse chain for the company's products and customers. Such a decision includes a number of significant elements. Management should determine the size and number of warehouses, and ensure a location. Each warehouse must be laid out and well designed in order to maximize efficiency and productivity. Box creative solutions illustrating how SPARA achieve better distribution and service. So that it is better for overall retail store's decision to build a new distribution center.

No comments:

Post a Comment