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Warehouse Function In Logistics System And Supply Chain

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Warehouse Function In Logistics System And Supply Chain

A warehouse is a place of storage of goods or raw materials (raw material), the work-in-process, or finished goods. Activities in a warehouse include three aspects of acceptance, storage, and delivery of goods.

Today the warehouse has an increasingly important role in logistics and supply chain systems. Warehouse not only serves as a place of acceptance, storage, and delivery of goods but also can have several other functions, as well as the opinion of the experts, such as:

1. The opinion of John Warman (Management of Warehousing, 1988) stating that the main function of warehousing is the storage of raw materials (raw material), intermediate goods (middle goods), as well as the storage of finished products (final goods), and also become the shelter of goods to be shipped or new goods. And warehouses have an important role to support the success of the company in achieving its objectives.

2. Opinions from Donal J. Bowersox (Logistics managements, the year 2000) says that the warehouse can be described as a logistics system of the company that serves to store products and other production equipment (raw materials, good-in-process, finished goods, spare parts, supplies, and deadstock) and provides information status of material/products stored in the warehouse so that the information is easily accessible by anyone interested and always up-to-date.

Meanwhile, based on where a warehouse can be:
  • Warehouse of a factory which is place warehouse in a factory area
  • Warehouse store, which is a warehouse that is integrated or located in the cost area of the owner.
  • Warehouse in Port area

For warehouses located in the port area can be differentiated into 5 types, such as:

1. Warehouse As A Consolidation Terminal

Warehouse as a consolidation terminal (consolidation terminal) that serves as a place to collect goods originating from several locations (e.g. factories) to be shipped to the destination location (e.g. retailer). Each of these factories in different locations and goods they produce, so the warehouse function here as a gathering place and arrangement of goods before being sent to the actual destination location.
Warehouse Function In Logistics System And Supply Chain
source : supplychainindonesia.com

In the picture above illustrated there are three factories that produce different products for one customer. For example, factory A produces product A, factory B produces product B, while factory C produces product C. All three factories will deliver the goods to customer X that need all three products. As a consolidation terminal, a warehouse is used as the gathering place of the three factories to be sent to the customer X.

By using a warehouse as a consolidation terminal, the total shipping cost will be lower than if each plant sends its products directly to the customer.

2. Warehouse As A Distribution Center

The warehouse that serves as a distribution center is used as a place for collecting and storing goods or temporary products from a location (e.g. factories), to be sent to several destination locations when needed.

Let see an ilustration picture below:

Warehouse Function In Logistics System And Supply Chain
source : supplychainindonesia.com

With the warehouse as a distribution center, the cost of goods delivered will be cheaper than if the direct delivery from the original location to several destinations where the customer is located.

3. Warehouse For Break – Bulk Operation

The warehouse that serves as a break-bulk operation serves as a place to break up goods or products shipped in large volumes into parts with each smaller volume. This is done because of shipping from the place of origin (e.g. factories) in large volumes, for example for efficiency reasons for shipping costs.

You can see the illustration in the following image:

Warehouse Function In Logistics System And Supply Chain
source : supplychainindonesia.com

For example, a factory produces a product that is required by three customers with varying volumes of need. Factory A sends its products to the warehouse as a place to break the shipping volume of its products. The warehouse is then delivered back to three customers according to the required volume.

4. Warehouse As A Place In-Transit Mixing

The warehouse serves as a place in-transit mixing means warehouse as a place to mix (combine) goods or products shipped from several places of origin (e.g. factories) that produce different products to multiple customers with the need for goods or products with different combinations.

Note the following illustration of the image:

Warehouse Function In Logistics System And Supply Chain
source : supplychainindonesia.com

In the picture illustrated three factories that produce different products (eg factory A produce product A, factory B produce product B, and factory C produce product C). On the other hand, there are three customers who need products with different combinations, i.e. customer X requires product A, B, and C; Y customers need A and B products, and Z customers need products A and C. Gudang can be used as an in-transit mixing to combine the delivery of the customer's order goods.

5. Warehouse as Cross-Dock Operation Place

A warehouse can also be used as a place to cross-dock operation, which is the place to do the goods received from the original location and immediately delivered the goods to the next destination. The process of receiving and delivery of goods is done in a relatively fast time, so there is no storage process of goods or products in the warehouse.

Cross-Dock operation is done for several reasons or special purposes. One is because the goods or commodities are perishable or quickly damaged (for example vegetables).

In reality, a warehouse can also be used to run multiple functions at once.

To add to your knowledge reference, here are a few things about the operational activities of the warehouse that you need to know and understand, such as:

The process of receiving and storing goods in the warehouse

The storage warehouse is used as a storage space for long periods of time. Meanwhile, the distribution warehouse receives goods from various factories and companies suppliers and supplies and moves them as quickly as possible.

To keep the warehouse items needed the settings well. The following are the activities that occur in the warehouse, namely:

The process of receiving goods
  • Any item that comes first entered into a temporary warehouse for checking the invoice or send proof
  • Items grouped according to their type
  • Items that are not eligible are returned to the shipper company accompanied by a return letter of goods.

Storage of goods in the warehouse
  • The goods received in the warehouse are organized and stored according to the types or specifications and storage Instruction
  • All items are recorded in a warehouse card of any type of logged goods in and out
  • Physical examination is performed by the head of the warehouse and the number is recorded in bookkeeping for easy control and controlling
  • The condition of goods or products in the warehouse stored well

Some types of goods are stored, among others:
  • Merchandise stored by the company for resale in accordance with the normal percentage of a trade business
  • Raw materials and goods in the production process
  • Materials or items stored for use

The procedure of storage of goods warehouse include:
  • Doing grouping goods in accordance with its
  • Doing grouping goods according to the item type
  • Doing grouping items according to the nature of goods

In the storage of warehouse goods needed attention in order to maintain the maintenance in good condition, among others:
  • Nature of Goods
  • Ample illumination
  • Stable air temperature
  • Keeping the goods clean
  • Report generation

Expenditure of goods from warehouse
  • Withdrawal of goods from the warehouse on request stated in the goods. This item is a proof of support for goods expenditure.
  • For each item issued proof of introduction of goods signed by the head of the warehouse and handled by the recipient of the goods. Original introductory evidence is given to the recipient of goods and copies as archives.


That's the article about warehouse function in the logistics system and supply chain. Hopefully useful and give an added value to you. 

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