History Warehousing as an Important Aspect of Business - Essay Sample

Warehousing is a significant aspect of the business that deals with the management of resources and the supply of products. Chua and Tao (2008) assert that warehouses play an important role when it comes to systems regarding supply chains. The current trends that include the proliferation of product range, volatility increase in the market and the decrease in time spent on lead for the customers influence the functions of the warehouses. They define a warehouse as: a commercial building for buffering and storage of goods, or an intermediate area for storage of raw materials or products until they are needed for production or consumption, (Chua & Tao, 2008).

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Tompkins et.al (1998) present a comprehensive analysis of the history of warehouses. They explain that in the early times, human beings practiced the domestication of animals and storage of excess food for the purposes of emergency. The excess food brought about the need for adequate storage facilities and hence the establishment of granaries that played significant roles during cases of famine and drought. Tompkins et.al (1998) explain that as the explorers from the Western world embarked on their journeys regarding a trade to various parts of the world, the need for having adequate storage facilities increased. The increase is associated with the presence of plenty and various forms of commodities from various parts of the world. They also required storage facilities of their products that were used during the trade. Most of the warehouses were located on ports as ships were mostly used by countries for trade.

The development of civilization brought about the need for the development local warehouses. The merchandise was stored depending on the trading, production activities and shipping. The Middles Ages was marked with progress in intellectual ability that brought about the function of storing shipped items in the warehouses. The initial and major commercial warehouse was established in Venice. The establishment can be attributed to the fact that Venice was among the major trading centers by which trade routes passed by (Tompkins et.al, 1998).

At the beginning of the 1900s in the U.S., the railroad played a significant role in enabling the transportation between cities that were inland and those on ports. Some of the common transport systems, especially during the harvest seasons of grains, were freight cars that were perceived as a warehouse on wheels. However, the freight cars were limited; an aspect that made railroad companies to divide their functions in regards to warehousing and transport. Later, the need for rail depots arose in regards to the storage of resources. The need was affiliated to the expansion of transportation of products and traveling by the railroads. The American Warehousemen's Association was formed in 1891 for the purpose of keeping in check the control exercised on freight depots by the railroad companies. The enactment of the Hepburn Act by the government in 1906 increased the presence of commercial warehousing by which restrictions were placed on the railroads (Tompkins et.al, 1998).

By the end of 1918, warehouses were employing the use of hand trucks to handle materials while stacking was handled manually. The range of the stacking heights was between eight and twelve as per the design. It is important to note that the Second World War presented various effects on warehousing. It brought about the need for expanding the size of the warehouses in addition to the need for having plenty of mechanized strategies for the storage and easy retrieval of resources and products. Furthermore, the increase in mass production in the manufacturing process brought about the need for adequate and effective storage facilities such that products were managed under good conditions. The wooden pallets and the forklift trucks were then introduced to boost product management in the facilities. The design of the stacking heights changed by which the height was now thirty instead of twenty. The increase brought about a three hundred percentage increase as a result of mass production when using the forklift truck (Tompkins et.al, 1998).

It is important to note that systems regarding warehousing have undergone various developments; from traditional storage facilities to commercial multimillion establishments (Tompkins et.al, 1998). By the 70s, automated systems had been introduced in warehousing facilities such that the systems for storage and retrieval of products were automated. The current warehousing systems are automated especially with people becoming more digital literate. Products are shifted from one place to another through automated conveyors. The machines used for storage and retrieval of products are also automated by which they are programmed with controllers and software regarding logistics automation. A warehouse management system, which is a computer program that manages data, is used in modern houses to keep track of materials. The program is mostly used by the logistics personnel to ensure that the warehouse in under stable condition by frequently analyzing the inventory in regards to the transactions taking place in the warehouse (Tompkins et.al, 1998).

Tompkins et.al (1998) highlights the method employed in traditional warehousing is becoming irrelevant as a result of introduction complex systems such as the WMS, and the JIT, the organization of systems used in the identification of goods such as voice picking and RFID in addition to the creation of control and automated systems. The focus of the new systems is to enhance improvements in regards to return on investment of businesses. They achieve this by assisting in the decrease of costs associated with warehousing in addition to elevating the inventory levels (Tompkins et.al, 1998).

The JIT, in this case, refers to an inventory method used in making improvements on returns on investments by which it lowers the inventory level regarding the in-process in addition to the associated transport cost. The idea of the JIT is founded on the direct supply of product from the supplier to the retailer whereby the retailer packages the products. The idea sets aside the concept of warehousing. The practice has become quite common in businesses by which most of them perceive it to be effective in the reduction of costs through the elimination of the need for a warehouse and hence to set aside the costs associated with the holding of inventory. The increase in distance between a supplier and the retail outlet brings about the necessity of having a warehouse for the purpose of decreasing the costs associated with transport in addition to having more activities that add value to the quality of the products. Also, if a warehouse is placed between the manufacturer and the supplier, pooling and consolidation are some of the advantages associated with its placement (Tompkins et.al, 1998).

The concept of retail warehouse came about with the various developments in warehousing. The retail store and the floor space are utilized for warehousing in the retail warehouse. The retail warehouses contain tall racks by which products that are ready to go to the market are kept at the bottom. The products that are already packaged, wrapped in addition to being palletized are put on top of the racks. The retail warehouses reduce the costs associated with warehousing and get rid of the need of having a warehouse. The scholar highlights that regardless of the changes taking place regarding quick response, advancements in e-commerce, integration in supply chain, effective client response in regards to the link between manufacturer and the targeted market, and timely deliveries, most companies experience challenges when it comes to eliminating the need for warehousing (Tompkins et.al, 1998). It becomes necessary for companies to maintain their warehouses and keep updated on changes taking place in the market such that current technologies are used in managing their warehousing facilities. Since its a challenge eliminating the need for warehouses, proper management needs to take place such that costs and time used in operations are reduced in addition to the minimization of complaints from customers. Adequate management requires the need for frequent checkups and employing new technologies and trends in addition to improving the skills of employees for the purpose getting quality results and good reviews from the clients. The strategies used in organizing warehouses should be efficient in the sense that losses are minimized while quality products are maintained (Tompkins et.al, 1998). From a general perspective, the scholar highlights that warehousing has undergone various developments form the time man saw the need for establishing facilities for the storage of surplus goods. However, recent developments are gradually decreasing the need of having warehouses especially since they assist in the reduction of costs and increasing the return on investments.

Frezelle (2002) mentions several categories of warehouses that include private, public, government, bonded and co-operative warehouses. Private warehouses are under the management of manufacturers or retailers who store their own products. The warehouses are established by individuals or organizations by which the manufacturers put the close to the factories while the retailers next to the market. It is important to note that the design of the warehouses depends on the nature of products requiring storage. Public warehouses store products required for the general public. Any person or organization is allowed to use the facility but at a fee or rent. A public warehouse can be owned by a single person, a company or through a partnership. Also, for one to operate a public warehouse, a license from the government is compulsory. The operations of the warehouses are also under the control of the government. Exporters, importers, wholesalers, government agencies and manufacturers mostly use these facilities (Frezelle, 2002).

Government warehouses are generally owned and controlled by the government or rather local authorities. It is worth noting that private and public companies may use the facilities for storing their products. Bonded warehouses are also under the control and ownership of the government. Private agencies may also own bonded warehouses but require a license from the government. They are mostly used for the storage of imported products by which import duty has to be paid. When import duty is not paid, the importers are denied accessing their products and removing them from the ports until the payment is met. The dock authorities own the warehouses and are mostly located next to the ports. The co-operative warehouses are under the management of co-operative societies by which the societies provide amenities for the warehousing at rates that are quite economical and convenient for the members (Frezelle, 2002).

Grimstone (2014) describes bonded warehousing as: a customs procedure allowing the import of goods for storing in a secure area without payment of import taxes until the goods are removed for domestic consumption. As stated earlier, the goods are only released when the import duty is paid. Grimstone (2014) explains that a bonded warehouse may either be private or public by which the authorization to own a bonded facility may be given in regards to the favored location by the operator or the premises that are already in existent. The government or rather the authorities control and manage the warehouses through the legislation of customs in addition to granting users an integrated pass by which the importers gain an advantage when it comes to reliefs associated with custom processing.

Grimstone (2014) explains that...