Types of Warehouses

Types of Warehouses

Let’s learn more about Types of Warehouses. Warehouse alternatives include,

• Private warehouses: This facility is owned and managed by the same enterprise that owns the merchandise handled and stored at the facility.
• Public warehouses: This is operated as an independent business offering a range of services such as storage, handling, and transportation- on the basis of a fixed or variable fee. These warehouses generally offer relatively standardized services to all clients.
• Contract warehouses: This has evolved from the public warehouse segment, and provides benefits of both the private and public alternatives. Contract warehousing is a long term, mutually beneficial arrangement which provides unique and specially tailored warehousing and logistics services exclusively to one client, where the vendor and client share the risks associated with the operation.
• Private warehouses are typically owned by large retail corporations or companies that privately store goods. Also known as proprietary warehousing, such facilities demand an upfront, capital investment to build and maintain. A private warehouse may be built on-site near manufacturing or off-site. This option is great for established companies that are willing to make a financial investment in the storage of their own goods.

Integrated Warehouse strategy

Many firms utilize a combination of private, public, and contract facilities. A private or contract facility may be used to cover basic year round requirements, while public facilities are used to handle peak seasons. In other situations, central warehouses may be private, while market area or field warehouses are public facilities.

Full warehouse utilization throughout a year is a remote possibility. As a planning rule, a warehouse designed for full-capacity utilization will in fact be fully utilized between 75 and 85 percent of the time. Thus for the remaining time, the space needed to meet peak requirements is not utilized. In such situations, it may be more efficient to build private facilities to cover the major requirement and use public facilities to accommodate peak demand.

An integrated warehouse strategy focuses on two aspects. The first concerns how many warehouses should be employed. The second concerns which warehouse types should be used to meet market requirements.