A warehouse is a building or room used for storing various materials, goods, and equipment—at least, that is what the average person commonly associates it with. And no wonder; that has been the case for years. Granaries, depots, and finally warehouses have for centuries been identified as places for storing various types of goods. It is only recently that warehouses have ceased to serve a purely storage function, and things are happening in the average warehouse that were not even thought of until recently.
The new face of the old warehouse
This has been the case since the warehouse was “entered” into the logistics supply chain and became a permanent, almost fundamental element of it. Today, the warehouse is an integral part of the distribution system; it has become a hub for the concentration and distribution of materials and goods in logistics chains from the manufacturer to the final recipient, i.e., the customer. The location of the warehouse in distribution channels determines its functions and organizational-technical solutions, which have a direct impact on the course of the entire technological process, its equipment, and the spatial solutions of the warehouse building itself. The increasing requirements of individual supply chain participants have raised the bar for the modern warehouse.
Modern requirements of the logistics market have led to the fact that warehouses in their pure form are practically becoming an anachronism. Today, it is better to call a warehouse a storage, logistics, or distribution center. Because beyond areas such as: integration of material and information flow, high throughput, minimization of inventory levels, timeliness of order fulfillment, and comprehensiveness of services performed, the modern warehouse is required to provide many other value-added services such as: packaging, creating promotional sets, issuing goods according to received instructions, issuing invoices on behalf of the client, and all this using specialized IT systems integrated with the supplier and recipient. And all this to save costs through efficient synergistic and outsourcing activities.
The condition for achieving the primary logistics goal, which is high-quality customer service, is that the manufactured product is delivered to the recipient and offered to the consumer in accordance with their expectations in the right quantity, of the highest quality, and in the right place and time.
Currently, in an increasingly difficult market, maintaining some departments within companies independently has simply become uneconomical. This results from a simple economic calculation. In such situations, external operators, often referred to as logistics service providers, help. Such companies deal with transport, forwarding, warehousing, repacking, sorting, but also, for example, ironing, co-packing, and preparing promotional sets.
Outsourcing as a cure for all ills
In the last few years, outsourcing—that is, commissioning an external contractor to carry out company tasks not related to its core business—has become a real sensation on the market. This is undoubtedly the most visible effect of the changes that have taken place in the warehouse market, and it has the greatest impact on the spectrum of value-added services provided by warehouse companies.
The benefits of transferring the logistics handling of certain warehouse activities to an external partner certainly bring significant savings in the economic sphere, as it contributes to achieving better company efficiency. Conducting all warehouse and logistics processes in-house involves incurring fixed company costs (e.g., maintenance of warehouses, vehicle fleet), and their amount does not depend on the turnover achieved—unlike when a company uses outsourcing in this area, which enables cost synergy, and reduced investment allows for greater efficiency and flexibility of the enterprise. Outsourcing also ensures better and higher quality market service, time savings—faster, timely deliveries, flexible response to customer needs, professional inventory management, detailed administration, and the use of the latest logistics solutions—in accordance with the most modern market trends, obtained thanks to the know-how of the logistics operator. The company can then focus on its main sphere of activity, and the enterprise’s potential is focused on production and sales.
Everyone requires something different
Every enterprise has its individual requirements regarding service, adapted to the individual nature of its business.
FMCG manufacturers, for example, are looking for the best solutions for their markets and therefore expect operators to provide solutions adapted to the requirements of each market, i.e., for fresh food products, wines and spirits, as well as non-food goods, and adapted to various distribution networks, including supermarkets, conventional stores, or cafeterias.
Therefore, the consolidation of flows and sharing of resources for the FMCG industry must include services such as: ensuring joint distribution, consolidation and transshipment, order and goods picking, handling inbound and outbound transport, replenishing stocks and supplying production lines, product tracking and recall, repacking, returns management, or packing promotional sets.
In turn, for FMCG retailers, the speed of delivery is primarily important. Therefore, these services must be adapted to increasingly shorter delivery cycles, changing demand expectations, or the nature of the stores (mass market retailers, specialized retailers, e-commerce, or large retail chains). In this segment, the most important thing is efficient flow management (storage, transshipment), order picking—increasingly using voice communication systems (Voice picking), managing logistics sales units, and synchronizing inbound and outbound flows. A modern warehouse center must now also offer its clients from this segment the ability to develop delivery plans and manage transport, provide reusable transport packaging, manage orders, fulfill orders, manage inventory, consolidate transshipments, and ensure the broadest possible customer service.
Quite different requirements come from the automotive and industrial sectors. Clients from these types of industries demand that operators ensure a supply chain based on stable foundations. Here, one must primarily demonstrate the ability and capacity to manage a large number of spare parts and store significant quantities of them. The needs for ensuring sequence and delivery on time (Just In Time), ensuring the center’s ability for trial assembly, so-called pre-assembly, the ability to efficiently manage spare parts, receive orders for spare parts and their express delivery, create shipment configurations, manage returns, warranties and repairs, and manage packaging are brought to the fore.
Industries from the IT sector, i.e., telecommunications and the technology market, absolutely require speed and efficiency from operators in a changing market. For this particularly competitive sector, it is therefore necessary to develop a number of solutions that take into account the latest market trends, provide a supply chain with maximum flexibility, react quickly to fluctuations in warehouse stocks, are available at the national and regional level, and emphasize best practices and constant innovation. Therefore, this group of clients should be particularly provided with optimal inbound transport, express deliveries, efficient customs handling, testing capabilities, pre-configuring shipments, tracking shipment routes, and managing call centers, repairs, and warranties.
The publishing industry also has its own specific requirements. For it, it is primarily necessary to ensure the possibility of long- and short-term storage of goods using a high-bay pallet racking system and EURO pallet units. In this segment, currently more often than in other industries, packaging services are used. Therefore, clients must be provided with the possibility of packaging any combination of products in collective and unit packaging. It is also necessary to offer services such as foil wrapping, inserting leaflets, preparing promotional sets, attaching occasional gadgets to products, labeling and tagging using multi-range labelers and dedicated labels, and in addition, all these services should be carried out in accordance with individual arrangements and customer needs. A warehouse and distribution center for this industry should additionally ensure the issuance of goods according to received instructions, issue invoices on behalf of the client, and ensure deliveries to the warehouse and distribution of goods with its own transport to indicated clients.
As many industries, as many requirements. Today, in a so-called warehouse hall equipped only with racks and forklifts, not much can be done, and a warehouse that does not have IT support for management, without an AI system, has no reason to exist today. As can be seen from the above review of several market segments, in the near future, there will be an increasing number of warehouses dedicated to specific industries, serving individual market segments. Specificity, far-reaching specialization, and individual demand for dedicated warehouse services will also force the use of narrow specialization and service for industry clients in this market.