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What are warehouses?

A warehouse as a place used for the storage or accumulation of goods. The function of storage can be carried out successful with the help ...

Tuesday, 4 July 2017

Type of Warehouses


There are three types of warehouses as described below:
Private Warehouses: 
A private warehouse facility is owned and managed by the same enterprise that owns the merchandise handled and stored at the facility.
public warehouse, in contrast, is operated as an independent business offering a range of services - such as storage, handling, and transportation-on the basis of a fixed or variable fee.
The major benefits of private warehousing include control, flexibility, cost, and other intangible benefits.
Private warehouses provide more control since the enterprise has absolute decision-making authority over all activities and priorities in the facility.

The private warehouses are owned and operated by big manufacturers and merchants to fulfill their own storage needs. The goods manufactured or purchased by the owner of the warehouses have a limited value or utility as businessmen in general cannot make use of them because of the heavy investment required in the construction of a warehouse, some big business firms which need large storage capacity on a regular basis and who can afford money, construct and maintain their private warehouses. A big manufacturer or wholesaler may have a network of his own warehouses in different parts of the country.

Public Warehouses:
A public warehouse is a specialized business establishment that provides storage facilities to the general public for a certain charge. It may be owned and operated by an individual or a cooperative society. It has to work under a license from the government in accordance with the prescribed rules and regulations.
Public warehouses are very important in the marketing of agricultural products and therefore the government is encouraging the establishment of public warehouses in the cooperative sector. A public warehouse is also known as duty-paid warehouse.
Public warehouses are very useful to the business community. Most of the business enterprises cannot afford to maintain their own warehouses due to huge capital Investment. In many cases the storage facilities required by a business enterprise do not warrant the maintenance of a private warehouse. Such enterprises can meet their storage needs easily and economically by making use of the public warehouses, without heavy investment.
Public warehouses provide storage facilities to small manufacturers and traders at low cost. These warehouses are well constructed and guarded round the clock to ensure safe custody of goods. Public warehouses are generally located near the junctions of railways, highways and waterways.
They provide, therefore, excellent facilities for the easy receipt, despatch, loading and unloading of goods. They also use mechanical devices for the handling of heavy and bulky goods. A public warehouse enables a businessman to serve his customers quickly and economically by carrying regional stocks near the important trading centres or markets of two countries.
Public warehouses provide facilities for the inspection of goods by prospective buyers. They also permit packaging, grading and grading of goods. The public warehouses receipts are good collateral securities for borrowings.
Bonded Warehouses:
Bonded warehouses are licensed by the government to accept imported goods for storage until the payment of custom duty. They are located near the ports. These warehouses are either operated by the government or work under the control of custom authorities.
The warehouse is required to give an undertaking or ‘Bond’ that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the custom duty. The goods stored in bonded warehouses cannot be interfered by the owner without the permission of customs authorities. Hence the name bonded warehouse.
Bonded warehouses are very helpful to importers and exporters. If an importer is unable or unwilling to pay customs duty immediately after the arrival of goods he can store the goods in a bonded warehouse. He can withdraw the goods in installments by paying the customs duty proportionately.
In case he wishes to export the goods, he need not pay customs duty. Moreover, a bonded warehouse provides all services which are provided by public warehouses. Goods lying in a bonded warehouse can be packaged, graded and branded for the purpose of sale.



What are warehouses?

A warehouse as a place used for the storage or accumulation of goods. The function of storage can be carried out successful with the help of warehouses used for storing the goods.
Warehousing can also be defined as assumption of responsibility for the storage of goods. By storing the goods throughout the year and releasing them as and when they are needed, warehousing creates time utility.
Functions of Warehousing:
1. Storage:
This is the basic function of warehousing. Surplus commodities which are not needed immediately can be stored in warehouses. They can be supplied as and when needed by the customers.
2. Price Stabilization:
Warehouses play an important role in the process of price stabilization. It is achieved by the creation of time utility by warehousing. Fall in the prices of goods when their supply is in abundance and rise in their prices during the slack season are avoided.
3. Risk bearing:
When the goods are stored in warehouses they are exposed to many risks in the form of theft, deterioration, exploration, fire etc. Warehouses are constructed in such a way as to minimize these risks. Contract of bailment operates when the goods are stored in wave-houses. The person keeping the goods in warehouses acts as boiler and warehouse keeper acts as boiler. A warehouse keeper has to take the reasonable care of the goods and safeguard them against various risks. For any loss or damage sustained by goods, warehouse keeper shall be liable to the owner of the goods
4. Financing:
Loans can be raised from the warehouse keeper against the goods stored by the owner. Goods act as security for the warehouse keeper. Similarly, banks and other financial institutions also advance loans against warehouse receipts. In this manner, warehousing acts as a source of finance for the businessmen for meeting business operations.
5. Grading and Packing:
Warehouses nowadays provide the facilities of packing, processing and grading of goods. Goods can be packed in convenient sizes as per the instructions of the owner.
Importance of Warehousing In the Development of Trade and Commerce:
Warehousing or storage refers to the holding and preservation of goods until they are dispatched to the consumers. Generally, there is a time gap between the production and consumption of products. By bridging this gap, storage creates time utility.
There is need for storing the goods so as to make them available to buyers as and when required. Some amount of goods is stored at every stage in the marketing process. Proper and adequate arrangements to retail the goods in perfect condition are essential for success in marketing. Storage enables a firm to carry on production in anticipation of demand in future.
A warehouse is a place used for the storage or accumulation of goods. It may also be defined as an establishment that assumes responsibility for the safe custody of goods. Warehouses enable the businessmen to carry on production throughout the year and to sell their products, whenever there is adequate demand.
Need for warehouse arises also because some goods are produced only in a particular season but are demanded throughout the year. Similarly certain products are produced throughout the year but demanded only during a particular season. Warehousing facilitates production and distribution on a large scale.
Benefits from Warehouses:
1. Regular production:
Raw materials need to be stored to enable mass production to be carried on continuously. Sometimes, goods are stored in anticipation of a rise in prices. Warehouses enable manufacturers to produce goods in anticipation of demand in future.
2. Time utility:
A warehouse creates time utility by bringing the time gap between the production and consumption of goods. It helps in making available the goods whenever required or demanded by the customers. Some goods are produced throughout the year but demanded only during particular seasons, e.g., wool, raincoat, umbrella, heater, etc. on the other hand, some products are demanded throughout the year but they are produced in certain region, e.g., wheat, rice, potatoes, etc. Goods like rice, tobacco, liquor and jaggery become more valuable with the passage of time.
3. Store of surplus goods:
Basically, a warehouse acts as a store of surplus goods which are not needed immediately. Goods are often produced in anticipation of demand and need to be preserved properly until they are demanded by the customers. Goods which are not required immediately can be stored in a warehouse to meet the demand in future.
4. Price stabilization:
Warehouses reduce violent fluctuations in prices by storing goods when their supply exceeds demand and by releasing them when the demand is more than immediate productions. Warehouses ensure a regular supply of goods in the market. This matching of supply with demand helps to stabilize prices.
5. Minimization of risk:
Warehouses provide for the safe custody of goods. Perishable products can be preserved in cold storage. By keeping their goods in warehouses, businessmen can minimize the loss from damage, fire, theft etc. The goods kept in the warehouse are generally insured. In case of loss or damage to the goods, the owner of goods can get full compensation from the insurance company.
6. Packing and grading:
Certain products have to be conditioned or processed to make them fit for human use, e.g., coffee, tobacco, etc. A modern warehouse provides facilities for processing, packing, blending, grading etc., of the goods for the purpose of sale. The prospective buyers can inspect the goods kept in a warehouse.
7. Financing:
Warehouses provide a receipt to the owner of goods for the goods kept in the warehouse. The owner can borrow money against the security of goods by making an endorsement on the warehouse receipt. In some countries, warehouse authorities advance money against the goods deposited in the warehouse. By keeping the imported goods in a bonded warehouse, a businessman can pay customs duty in installments.
Type of Warehouses:
There are three types of warehouses as described below:
Private Warehouses:
The private warehouses are owned and operated by big manufacturers and merchants to fulfill their own storage needs. The goods manufactured or purchased by the owner of the warehouses have a limited value or utility as businessmen in general cannot make use of them because of the heavy investment required in the construction of a warehouse, some big business firms which need large storage capacity on a regular basis and who can afford money, construct and maintain their private warehouses. A big manufacturer or wholesaler may have a network of his own warehouses in different parts of the country.

Public Warehouses:
A public warehouse is a specialized business establishment that provides storage facilities to the general public for a certain charge. It may be owned and operated by an individual or a cooperative society. It has to work under a license from the government in accordance with the prescribed rules and regulations.
Public warehouses are very important in the marketing of agricultural products and therefore the government is encouraging the establishment of public warehouses in the cooperative sector. A public warehouse is also known as duty-paid warehouse.
Public warehouses are very useful to the business community. Most of the business enterprises cannot afford to maintain their own warehouses due to huge capital Investment. In many cases the storage facilities required by a business enterprise do not warrant the maintenance of a private warehouse. Such enterprises can meet their storage needs easily and economically by making use of the public warehouses, without heavy investment.
Public warehouses provide storage facilities to small manufacturers and traders at low cost. These warehouses are well constructed and guarded round the clock to ensure safe custody of goods. Public warehouses are generally located near the junctions of railways, highways and waterways.
They provide, therefore, excellent facilities for the easy receipt, despatch, loading and unloading of goods. They also use mechanical devices for the handling of heavy and bulky goods. A public warehouse enables a businessman to serve his customers quickly and economically by carrying regional stocks near the important trading centres or markets of two countries.
Public warehouses provide facilities for the inspection of goods by prospective buyers. They also permit packaging, grading and grading of goods. The public warehouses receipts are good collateral securities for borrowings.
Bonded Warehouses:
Bonded warehouses are licensed by the government to accept imported goods for storage until the payment of custom duty. They are located near the ports. These warehouses are either operated by the government or work under the control of custom authorities.
The warehouse is required to give an undertaking or ‘Bond’ that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the custom duty. The goods stored in bonded warehouses cannot be interfered by the owner without the permission of customs authorities. Hence the name bonded warehouse.
Bonded warehouses are very helpful to importers and exporters. If an importer is unable or unwilling to pay customs duty immediately after the arrival of goods he can store the goods in a bonded warehouse. He can withdraw the goods in installments by paying the customs duty proportionately.
In case he wishes to export the goods, he need not pay customs duty. Moreover, a bonded warehouse provides all services which are provided by public warehouses. Goods lying in a bonded warehouse can be packaged, graded and branded for the purpose of sale.


Warehouse

Warehouse is a facility where commodities meant for marketing are accepted for storage on rental basis on behalf of producers, traders and farmers. The purpose of warehousing is to ensure better price by avoiding distress sale by creating a negotiable instrument for the commodities stored to get loans from the banks and lenders, ensure continuous supply of commodities and by following scientific method of storage avoiding wastage and commodity losses due to natural calamities, pests and other problems. The Warehouse Man, the establisher of the warehouse acts as a custodian between the owner and the lender guaranteeing the quantity and quality of the commodities offered for storage . The warehouse man has to get a license from the district collector for running a warehouse and a weigher grader license for weighment and grading the commodities to assess the market value of the merchandise offered for storage and analyzes the same for storage worthiness.
Traditionally, agri products being more susceptible to damages during storage,( there is an estimation that about more than 15℅ of the agri products are getting damaged due to lack of scientific warehousing facility) and the Indian farmers were at the mercy of private money lenders for farm operations and to resort distress sale to repay the loans and in a perpetual debt trap often resulting in sale of the cland even! The warehousing facility provided an opportunity for them to avoid distress sale by keeping in warehouse, get loans from the bank to meet the expenses and sell the produce whenever market conditions are favorable.
The warehouse offers facilities of handling, transport, packing and other related ones.
Industrialization especially after 1980, required large scale imports of raw materials and machinery consisting of heavy custom duty of more than 200℅ in some cases which was a drag on the limited finances and loans of more than 24℅rate of interest. To help the industries, government of India allowed public custom bonded warehouses to keep the duty payable stocks in a bonded warehouse immediately on landing in India by submitting a double duty bond to the customs department. As said above, the warehouse man gets license from customs and acts as a custodian between the department and the importer to release stocks only to the extent of the duty cleared and it is the responsibility of the warehouse man for all safety and security of stocks offered for storage.
Warehousing and logistics cost to the production cost of commodities is on higher side in India compared to the developed nations, meaning there's a great scope for better and innovative management of warehousing and integrated logistics using modern technology. The biggest problem is the high cost of Land, structure and the manual handling, lack proper knowledge and the services of this sector need to get proper importance like other infrastructures. Please don't hesitate to contact for any further information in this regard.


History of Warehouse

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities, towns and villages.

They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks. Stored goods can include any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture, manufacturing and production. In Indian English a warehouse may be referred to as a godown.

History :
The origins of the warehouse are difficult to pinpoint. Early civilizations relied on storage pits rather than large structures to protect seeds and surplus food. Sociologists like Alain Testart have argued that these early storage techniques were essential to the evolution of societies.

Some of the earliest examples of warehouses that resemble the buildings of today are Roman horrea. These were rectangular buildings, built of stone, with a raised ground floor and overhanging roof to keep the walls cool and dry. Roman horrea were typically used to store grain, but other consumables such as olive oil, wine, clothing and even marble were also stored inside.

Though horrea were built throughout the Roman empire, some of the most studied examples are found in or around Rome, particularly at Ostia, a harbor city that served ancient Rome. The Horrea Galbae, a warehouse complex in the southern part of ancient Rome, demonstrates that these buildings could be substantial, even by modern standards. The horrea complex contained 140 rooms on the ground floor alone, covering an area of some 225,000 square feet (21,000 m²). As a point of reference, less than half of U.S. warehouses today are larger than 100,000 square feet (9290 m²).

As attested by legislation concerning the levy of duties, medieval merchants across Europe commonly kept goods in household storerooms, often on the ground floor or one or more storeys below the ground. However, dedicated warehouses could be found around ports and other commercial hubs to facilitate overseas trade. Examples of these buildings include the Venetian fondaci, which combined a palace, warehouse, market and living quarters for lodging travelers. A number of representative medieval warehouses can also be seen in King's Lynn, U.K., where a complex of buildings, including dwelling-houses, shops, counting houses and warehouses, once served the Hanseatic League.

During the industrial revolution the function of warehouses evolved and became more specialized. Some warehouses from the period are even considered architecturally significant, such as Manchester's cotton warehouses. Always a building of function, in the past few decades they have adapted to mechanization, technological innovation and changes in supply chain methods.



Warehouse function :
Historically, warehouses were a dominant part of the urban landscape from the start of the Industrial Revolution through the 19th century and into the twentieth century. The buildings remained when their original usage had changed. There are four identifiable types of warehouses. The cotton industry rose with the development of the warehouse, and all five types were represented in Manchester in the United Kingdom. Warehouses of that period in Manchester were often lavishly decorated, but modern warehouses are more functional.

Warehouses allow transport optimization along the supply chain, and allow companies to work with an optimal inventory (economic order quantity) regarding service quality. For example, at the terminal point of a transport system it is necessary to stockpile produce until a full load can be transported. Warehouses can also be used to store the unloaded goods from the vessel.

In industries whose goods require a period of maturation between production and retail, such as viniculture and cheese making, warehouses can be used to store the goods in large quantities.

Display of goods for sale :
These displayed goods for the home trade. This would be finished goods- such as the latest cotton blouses or fashion items. Their street frontage was impressive, so they took the styles of Italianate Palazzos.

Richard Cobden's construction in Manchester's Mosley Street was the first palazzo warehouse. There were already seven warehouses on Portland Street when they commenced building the elaborate Watts Warehouse of 1855, but four more were opened before it was finished. It was this type of warehouse that inspired the Germans in Düsseldorf and Munich to name their prestigious department stores Warehouse.

Overseas warehouses :
These catered for the overseas trade. They became the meeting places for overseas wholesale buyers where printed and plain could be discussed and ordered. Trade in cloth in Manchester was conducted by many nationalities.

Behrens Warehouse is on the corner of Oxford Street and Portland Street. It was built for Louis Behrens & Son by P Nunn in 1860. It is a four storey predominantly red brick build with 23 bays along Portland Street and 9 along Oxford Street. The Behrens family was prominent in banking and in the social life of the German Community in Manchester.

Packing warehouses :
The main purpose of packing warehouses was the picking, checking, labeling and packing of goods for export. The packing warehouses: Asia House, India House and Velvet House along Whitworth Street were some of the tallest buildings of their time.

Railway warehouses :
Warehouses were built close to the major stations in railway hubs. The first railway warehouse to be built was opposite the passenger platform at the terminus of the Liverpool and Manchester Railway. There was an important group of warehouses around London Road station (now Piccadilly station).In the 1890s the Great Northern Railway Company’s warehouse was completed on Deansgate: this was the last major railway warehouse to be built.

The London Warehouse Picadilly was one of four warehouses built by the Manchester, Sheffield and Lincolnshire Railway in about 1865 to service the new London Road Station. It had its own branch to the Ashton Canal. This warehouse was built of brick with stone detailing. It had cast iron columns with wrought iron beams.

Canal warehouses :
All these warehouse types can trace their origins back to the canal warehouses which were used for trans-shipment and storage. Castle field warehouses are of this type- and important as they were built at the terminus of the Bridgewater Canal in 1761.

Storage and shipping systems :
Some of the most common warehouse storage systems are:

Pallet racking including selective, drive-in, drive-thru, double-deep, pushback, and gravity flow
Mezzanine adds a semi-permanent storey of storage within a warehouse
Vertical Lift Modules are packed systems with vertically arranged trays stored on both sides of the unit.
Horizontal Carousels consist of a frame and a rotating carriage of bins.
Vertical Carousels consisting of a series of carriers mounted on a vertical closed-loop track, inside a metal enclosure.
A "piece pick" is a type of order selection process where product is picked and handled in individual units and placed in an outer carton, tote or other container before shipping. Catalog companies and internet retailers are examples of predominantly piece-pick operations. Their customers rarely order in pallet or case quantities; instead, they typically order just one or two pieces of one or two items. Several elements make up the piece-pick system. They include the order, the picker, the pick module, the pick area, handling equipment, the container, the pick method used and the information technology used. Every movement inside a warehouse must be accompanied by a work order. Warehouse operation can fail when workers move goods without work orders, or when a storage position is left unregistered in the system.

Material direction and tracking in a warehouse can be coordinated by a Warehouse Management System (WMS), a database driven computer program. Logistics personnel use the WMS to improve warehouse efficiency by directing pathways and to maintain accurate inventory by recording warehouse transactions.

Automation and optimization :
Some warehouses are completely automated, and require only operators to work and handle all the task. Pallets and product move on a system of automated conveyors, cranes and automated storage and retrieval systems coordinated by programmable logic controllers and computers running logistics automation software.[citation needed] These systems are often installed in refrigerated warehouses where temperatures are kept very cold to keep product from spoiling, especially in electronics warehouse where they require specific temperature to avoid damaging the parts, and also where land is expensive, as automated storage systems can use vertical space efficiently. These high-bay storage areas are often more than 10 meters (33 feet) high, with some over 20 meters (65 feet) high. Automated storage systems can be built up to 40m high.

For a warehouse to function efficiently, the facility must be properly slotted. Slotting addresses which storage medium a product is picked from (pallet rack or carton flow), and how they are picked (pick-to-light, pick-to-voice, or pick-to-paper). With a proper slotting plan, a warehouse can improve its inventory rotation requirements—such as first in, first out (FIFO) and last in, first out (LIFO)—control labor costs and increase productivity.

Pallet racks are commonly used to organize a warehouse. It is important to know the dimensions of racking and the number of bays needed as well as the dimensions of the product to be stored. Clearance should be accounted for if using a forklift or pallet mover to move inventory.

Modern trends :
Modern warehouses commonly use a system of wide aisle pallet racking to store goods which can be loaded and unloaded using forklift trucks.

Traditional warehousing has declined since the last decades of the 20th century, with the gradual introduction of Just In Time techniques. The JIT system promotes product delivery directly from suppliers to consumer without the use of warehouses. However, with the gradual implementation of offshore outsourcing and off shoring in about the same time period, the distance between the manufacturer and the retailer (or the parts manufacturer and the industrial plant) grew considerably in many domains, necessitating at least one warehouse per country or per region in any typical supply chain for a given range of products.

Recent retailing trends have led to the development of warehouse-style retail stores. These high-ceiling buildings display retail goods on tall, heavy duty industrial racks rather than conventional retail shelving. Typically, items ready for sale are on the bottom of the racks, and crated or palatalized inventory is in the upper rack. Essentially, the same building serves as both warehouse and retail store.

Another trend relates to Vendor-managed inventory (VMI). This gives the vendor the control to maintain the level of stock in the store. This method has its own issue that the vendor gains access to the warehouse.

Large exporters and manufacturers use warehouses as distribution points for developing retail outlets in a particular region or country. This concept reduces end cost to the consumer and enhances the production sale ratio.

Cross docking is a specialized type of distribution center (DC) in that little or no inventory is stored and product is received, processed (if needed) and shipped within a short timeframe. As in warehousing, there are different types of cross docks.

Reverse logistics is another type of warehousing that has become popular for environmental reasons. The term refers to items that are going from the end user back to the distributor or manufacturer.

Cool warehouses and cold storage
Cold storage preserves agricultural products. Refrigerated storage helps in eliminating sprouting, rotting and insect damage. Edible products are generally not stored for more than one year. Several perishable products require a storage temperature as low as −25 °C.

Cold storage helps stabilize market prices and evenly distribute goods both on demand basis and time basis. The farmers get the opportunity of producing cash crops to get remunerative prices. The consumers get the supply of perishable commodities with lower fluctuation of prices.

Ammonia and Freon compressors are commonly used in cold storage warehouses to maintain the temperature. Ammonia refrigerant is cheaper, easily available and has a high latent heat of evaporation but it is also highly toxic and can form an explosive mixture when mixed with oil containing high percentage of carbon. Insulation is also important, to reduce loss of cold and to keep different sections of the warehouse at different temperatures.

There are two main types of refrigeration system used in cold storage warehouses, a Vapour absorption system (VAS) and Vapour compression system (VCS). VAS, although comparatively costlier, is quite economical in operation and adequately compensates the higher initial investment.

The temperature necessary for preservation depends on the storage time required and the type of product. In general, there are three groups of products, foods that are alive (e.g. fruits and vegetables), foods that are no longer alive and have been processed in some form (e.g. meat and fish products), and commodities that benefit from storage at controlled temperature (e.g. beer, tobacco).

Location is a very critical aspect for the success of cold storage. It should be in close proximity of a growing area as well as a market, be easily accessible for heavy vehicles, and have uninterrupted power supply.

Cold storage and the law :
There are state and local laws that regulate the cold storage industry, requiring safe working conditions for employees, and operational procedures must be in accordance with these laws. Companies that are aware of and comply with applicable regulations are more likely to pass inspection, avoid notices of violation, and will be able to continue operating at full capacity, ensuring greater customer service and uninterrupted product flow.

Warehousing education :
There are few non-profit organizations which are focused on imparting knowledge, education and research in the field of warehouse management and its role in the supply chain industry. The Warehousing Education and Research Council (WERC) and International Warehouse Logistics Association (IWLA) in Illinois, United States. They provide professional certification and continuing education programs for the industry in the country. The Australian College of Training have government funded programs to provide personal development and continuation training in warehousing certs II – V (Diploma), they operate in Western Australia online and face to face, or Australia wide for online only courses.