STUDENTS' CORNER - 83
Different institutions prefer to have their own warehouses as their operations, different from the operations of other institutions, demand a warehouse that suits the operations of the institutions. For example, the Railways must have a warehouse exclusively for the purpose of receiving and storing large quantities of goods and also for dispatching to different locations, the destination of the goods received. Since it is national concern, it must have large warehouses across the country and those railways warehouses are institutional warehouses exclusive for their operations
Banks too have their own warehouses where they stock the things of the parties they have given loans, the things that must be kept safe and secure as they are the source of security for the loans given.
Finally, let us look into what are called the centralized warehouses and the decentralized warehouses.
All products are stored in one central place and centralizing warehousing has its own advantages. First of all, there will be no need to own or rent many buildings which saves money. That is, utility expenses are less; and, there is no need to employ many people as it would be necessary if the company has many small warehouses spread across the country or the chosen region. These cost reduction is bound to affect the retailerís pricing strategy; he can choose either high profit margins or offering low prices to customers. Generally, the second choice works better and longer since majority of the customers are cost-conscious, rather rightly too.
Another advantage is lower inbound distribution costs. The distributor goes in for large quantities from a single location instead of having them from different locations. This leads to better value for customers and retailers; the beneficiary can be the end user or the retailer; so, it gives better value to the end customer or higher profit margins.
Centralized warehousing gives another facility: improving relationship opportunities with online retailers.
.It also has some other advantages. Because the number of warehouses is limited, it gives room for focusing on getting more skilled workers who can be monitored more effectively unlike the need for managing the workers in different locations; it makes it easy to go in for the best equipment since duplication is not at all required; above all, it is easy to respond to customers with no loss of time.
The last one to consider is the Decentralized warehouse.
One great advantage of a decentralized warehouse is effective reduction in delay of material handling. The products from network of warehouses come quickly and they can be given to the customers more quickly.
A higher volume of the same products can be stored to keep up the demand; it is also possible that a wide range of products can be stored to meet the demands of the customers.
The only disadvantage, a big one at that, is said to be increased operating costs. Many warehouses in different locations of strategic business importance need to be rented if not owned and they must also be maintained. All these shoot up the costs of the operations which ultimately are expected to affect the end-users, that is, the customers.
With expanding business both nationally and internationally, logistics coupled with supply chain management demand utmost care and attention. This in turn leads to warehouse management. Warehouses play a critical role in the businesses of the world. Beginning from the manufacturer of a product to the ultimate end-user, the question of sending, receiving, distributing the products has to be effectively as well as efficiently addressed. To accomplish this process, warehousing turns out to be inevitable business strategy that counts so much.