Warehousing Basics

A warehouse is basically a large building for safely storing goods. Warehouses are commonly used by importers, manufacturers, exporters, distributors, wholesalers, shipping companies, customs, etc. They generally are large, plain structures in either industrial parks or outlying rural areas outside of major cities, towns, villages, or cities. They may be owned by one person/company, or several people/companies sharing space and resources.

The term warehouse management can include a wide range of responsibilities. Warehouse owners manage the facilities, inventory, supplies, storage, receiving, pick and pack, and delivery of products to the ultimate destination. They are also responsible for overseeing compliance with local, state, and federal regulations concerning the handling and transportation of hazardous materials. Warehouses may also directly or indirectly support various aspects of an organization’s supply chain management including inventory control, order fulfillment, quality assurance, return management, pricing and financial performance. Most warehousing functions are performed by independent third parties. Some organizations may also utilize a warehouse management system that includes consolidated warehouses, land-based and offshore manufacturing centers, and trucking systems.

In today’s competitive marketplace, warehousing costs have been continually decreasing, making warehouse usage increasingly prominent in e-business operations. The popularity of warehouses for e-commerce has been growing steadily because of the speed at which goods can be delivered to customers through the Internet, combined with increased storage costs relative to land-based warehouses. Many warehousing providers provide their services globally, while others focus on specific markets such as food, medical supplies, and energy. E-commerce enterprises have the option of purchasing or leasing a full or part warehouse space, facilities, equipment, and inventory. Some e-commerce websites choose to contract with fulfillment services to offload their warehousing needs, while others retain warehouse space in-house and utilize fulfillment software to streamline the warehouse process and incur fewer headaches and costs.