Nowadays, you cannot deny the fact that warehouse logistics holds an important role in the entire supply chain. Warehousing is the foundation for storing goods, providing better customer service, and reducing costs for business. Although it may not be given much importance, still warehouse logistics affect everything from the procurement of raw materials to the proper management of inventory to the timely shipment of orders to customers.
In this article I am going to explain:
- What is warehouse logistics?
- Importance of warehouse logistics.
- Types of warehouse logistics.
- Process of warehouse logistics.
What is Warehouse Logistics?
Warehouse logistics is an essential part of any supply chain. When products are not being transported from one place to another, they are stored in warehouses. At any given time, there are numerous products in warehouses being stored, received and shipped. One of the most important ways to optimize warehouse space is to understand warehouse logistics.
To understand warehouse logistics, we must first know the meaning of logistics itself.
In the simplest possible terms, logistics may be defined as the detailed planning, organization, management, and implementation of complex operations.
In many industries, including warehousing, logistics also extends to the flow of both physical goods and information.
Warehouse logistics, therefore, includes all the diverse, complex factors – organization, movements, and management – involved in warehousing. This includes the flow (shipping and receiving) of physical inventory, as well as that of more abstract goods, including information and time.
Warehouse logistics also includes anything from warehouse pest control to damaged goods handling, to safety policies, to human resources management, to customer returns. In other words, warehouse logistics involves all the policies, procedures, and organizational tools necessary to keep your warehouse operations running smoothly.
Importance of Warehousing Logistics
Warehousing is an essential part of the logistics management system. It is used to store the finished goods and also includes the packaging and shipping of the order. Efficient warehousing is of great economic benefit to both the company and its customers.
Below points can show you the importance of warehouse services in a logistics system:
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Inventory control:
A warehouse helps in managing a large amount of inventory for a company. It helps match supply with demand in a rapidly changing environment.
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Centralization of goods:
Since all the goods are stored in a centralized location, it is easier to receive, store and distribute the products. This reduces a company’s transportation costs. Warehouse personnel is responsible for identifying, sorting, and shipping goods as soon as the shipment arrives.
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Value-added operation:
The warehouse system helps to increase the utility value of the goods as the products are available at the right place at the right time. Various other operations such as order consolidation, order assembly, product mixing, cross-docking, etc. take place in a single building, adding value to the entire logistics system.
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Economic benefits:
A warehouse provides a wide range of economic benefits to companies through efficient operations. Various costs, including delivery, shipping, transportation, etc., are reduced. By accumulating goods, a warehouse can act as a buffer and balance the demand and supply of goods. This helps to increase the profit of a company in several ways.
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Social Benefits:
A warehouse also has a great social benefit for customers, as it helps them build up a safety stock for emergencies, such as delays in transporting and shipping defective goods, etc.
Cross-docking: this is a process of moving goods directly from receiving to shipping with little or no inventory. It is a way to move products more efficiently and effectively.
Warehousing is the most important component of the supply chain and logistics system. It allows a company to maintain inventory, and data analytics helps minimize the risks of shipment delays. Tracking delivery times could become much easier with the warehouse management system.
Process in Warehouse Logistics
Warehousing may seem simple, as it mainly involves storing products, but there are a number of processes to ensure that it is done efficiently and that inventory can be moved in and out quickly, including:
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Capacity planning
Space is the most important resource. Therefore, when a shipment of products is expected, employees must plan where to store the products in order to use space as efficiently as possible.
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Receiving incoming shipments
When products arrive at the warehouse, employees must receive the items and carefully move them to a staging area for processing.
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Inventory tracking
Items coming in and out of the warehouse must be recorded in the inventory management system so administrators can track current inventory and plan for future changes.
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Store products
After products are received and processed, they must be stored. This may mean packing products into bins and pallets and then using transport equipment to move them to the appropriate storage location.
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Control of the climate
Depending on the type of product, factors such as temperature, humidity or pressure must be kept constant. Frozen goods, for example, must be stored in areas where the temperature is below freezing. These requirements affect how and where products are stored in facilities to ensure adequate quality.
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Reorganizing
When new products are introduced, existing inventory may need to be relocated to ensure all space is used as efficiently as possible. All changes must be tracked and updated in inventory management systems.
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Retrieval and outbound transportation
When products need to leave the warehouse for shipment, employees must retrieve, process, pack, load, and then release them from inventory to make room for new incoming products.
Types of Warehouses in Logistics
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Public Warehouses:
Government agencies own public warehouses that they make available to commercial businesses. Public warehouses may be used for both commercial and private purposes.
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Private Warehouses:
A warehouse that is privately owned by wholesalers, distributors, or manufacturers is called a private warehouse. Large retail and online marketplaces also have their own privately owned warehouses. Although private warehouses are often more expensive than public warehouses, they can be a good alternative for e-commerce SMEs that want a large, long-term strategic presence in a key location.
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Bonded Warehouse:
A bonded warehouse is a type of warehouse where imported goods can be stored before they are cleared through customs. When companies rent space there, they receive guarantees from the authorities to ensure they do not lose money when their goods are distributed. Companies that store products there do not have to pay customs duties until the goods are released. Restricted goods can also be stored there while their documentation is completed. Products can also be stored in a bonded warehouse for longer periods of time.
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Intelligent Warehouse:
AI is used to automate storage, handling, and administrative processes. Automation can range from management software to robots and drones that take over operations such as packing, weighing, transporting, and storing items. Amazon and Alibaba, for example, are deploying giant smart warehouses to speed up order fulfillment and reduce the risk of human error.
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Consolidated Warehouses:
A consolidated warehouse collects small shipments from many suppliers and combines them into larger shipments before distributing them to customers. The only problem is that all shipments go to the same location. Consolidated warehouses, on the other hand, are a very cost-effective method of order fulfillment, especially for small businesses and new companies. Consolidated warehouses also require a low initial investment and inventory volume, making them an excellent choice for eCommerce SMBs just getting started.
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Distribution Centers:
A distribution center is a warehouse facility that is usually designed to meet a specific need. The warehouse is used only for short-term needs, and goods are moved quickly through the supply chain. A significant amount of merchandise is received and delivered to resellers and distributors in a short period of time. Some food and perishable goods are often shipped from distribution centers within a day. Rent for distribution centers is generally inexpensive and can vary widely depending on the products stored there.
Final Words
It’s easier to take the next step in your business when you have the right understanding of warehouse logistics. It may take some time to find the right warehouse and partnerships; you should not rush into anything. Remember that no two businesses are alike, and make your warehousing decisions based on your personal needs.
We, at AVG Logistics Ltd., provide warehousing and distribution services to businesses across India.
Our services aim to provide the greatest possible satisfaction to customers. With our warehousing services, we manage your supply chain in a meritorious way. Supported by a team of professional experts and state-of-the-art technology, we constantly strive to increase productivity and efficiency. Moreover, we have a systematic approach to every sub-process and metrics tracking.
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