Missions of a Warehouse
In a distribution network, a warehouse may play one or more of the following roles:
• Raw material and component warehouses Hold raw materials at or near the point of induction into a manufacturing or assembly process.
• Work-in-process warehouses Hold partially completed assemblies and products at various points along an assembly or production line.
• Finished goods warehouses Hold inventory used to balance and buffer the variation between production schedules and demand. For this purpose, the warehouse is usually located near the point of manufacture and is often characterized by the flow of full pallets in and full pallets out assuming that product size and volume warrant pallet-sized loads. A warehouse serving only this function may have demands ranging from monthly to quarterly replenishment of stock to the next level of distribution.
• Distribution warehouses and distribution centers Accumulate and consolidate products from various points of manufacture within a single firm or from several firms for combined shipment to common customers. Such a warehouse may be located central to either production locations or the customer base. Product movement maybe typified by full pallets or cases in and full cases or broken case quantities out. The facility is typically responding to regular weekly or monthly orders.
• Fulfillment warehouses and fulfillment centers Receive, pick, and ship small orders for individual consumers.
• Local warehouses Distributed in the field in order to shorten transportation distances to permit rapid response to customer demand.
Frequently, single items are picked, and the same item may be shipped to the customer every day.
illustrates warehouses performing these functions in a logistics network. Unfortunately, in many of today’s networks, a single item will pass in and out of a warehouse serving each of these functions between the point of manufacture and the customer. When feasible, two or more missions should be combined in the same warehousing operation. Current changes in
the availability and cost of transportation options make the combination possible for many products. In particular, small high-value items with unpredictable demand are frequently shipped world-wide from a single source using overnight delivery services