Supply Chain Management

Warehouses are the facilities in the supply chain where goods are held or stored. Warehousing affects customer service levels, stock-out rates, and sales and marketing success. Warehouses act as a bridge between the upstream members of the supply chain and the downstream members of the supply chain. In this chapter we discussed the importance of the warehouse and its operations.

First, we discussed the functions of warehousing. These are categorized into economic benefits and service benefits. The economic benefits include consolidation, cross-docking, processing/postponement, and stock piling. The service benefits that can be achieved through warehousing are stock spotting, stock mixing, production support and market presence. Later we examined the types of warehousing facilities that exist in the market. There are three types of warehousing facilities: public warehouses, private warehouses, and contract warehouses. We also discussed the factors that need to be considered while devising a warehousing strategy. There are five important factors to be considered when developing an integrated warehousing strategy.