Types of warehouses. Understand the differences & Choose right.

• Facebook
• X
• Line

Warehouses generally serve to store raw materials or finished goods. Sometimes, they may also be used to store work-in-progress, parts, or semi-finished goods. Efficient management is essential for storing these types of goods and materials to ensure maximum operational efficiency and prevent damage to the goods or materials stored within the warehouse.

1.1. Public Warehouse

A public warehouse is a warehouse that a business owner opens primarily to store goods. It’s a warehouse that charges rent for storing goods. Examples include cold storage warehouses that store frozen fish imported from abroad. Processing plants that don’t want to invest in building their own cold storage facilities will outsource the storage to these cold storage warehouses, paying a storage fee.

Advantages of Public Warehouses:

• Better utilization of capital: Because the warehouse serves multiple clients, the investment is shared.
• Better space utilization: Serving multiple clients leads to more efficient use of space.
• Reduced risk of warehouse vacancy: The risk is spread across multiple clients.
• Greater economies of scale: Larger operations lead to cost efficiencies.
• High flexibility: Can adapt to changing needs more easily.
• Greater knowledge and expertise in storage and handling.

Disadvantages of Public Warehouses:

• Potential communication problems: Communication systems may differ significantly.
• May lack specialized services: Specific product needs might not be met.
• Space may be insufficient during peak demand.

1.2. Private Warehouse

A private warehouse is a general-purpose warehouse owned by a company, which many companies build on their own premises. Examples include raw material warehouses and finished goods warehouses. These are used exclusively for storing the company’s own raw materials or finished products.

Advantages of Private Warehouses:

• Easy control: The company has direct control over operations.
• High flexibility: Can quickly adapt to the company’s specific needs.
• Lower cost in the long run: May be more economical over time.
• High labor efficiency: Labor can be optimized for the company’s specific processes.

Disadvantages of Private Warehouses:

• Lack of flexibility (in terms of expansion/contraction): It’s difficult to adjust the size or location.
• Financial constraints: Requires significant upfront capital investment.
• Lower return on investment: The warehouse only serves one company.

This type of warehouse has the main function of storing goods, which may be in the form of raw materials or finished products, in order to meet the needs of the production department or retailers, respectively. Therefore, the management of this type of goods focuses on maintaining the condition of the goods and preventing loss.

2.1. Distribution Center (DC)

A distribution center is a warehouse that functions both as a warehouse and as a link between manufacturers and retailers. It is a logistics provider in terms of warehousing and managing the transportation of finished goods to customers in a timely and accurate manner, according to their needs. Most DCs are outsourced or Third Party Logistics Service Providers (3PL).

They are responsible for receiving goods from each manufacturer and storing them in their warehouse. They manage the control of quantity using distribution and delivery technology on behalf of the product owner or manufacturer, taking responsibility for transportation until the goods reach the recipient. The benefit of this is reducing the transportation costs for manufacturers to retailers or individual customers. Manufacturers can transport to a single DC.

The DC will distribute the goods to retailers according to the frequency that the retailers require, eliminating the need for them to have a large inventory storage space. The retailer’s inventory costs are also reduced, making the total cost resulting in a competitive advantage in terms of both price and speed of service. Currently, many retailers are therefore able to guarantee the lowest price to consumers.

3.1. General Warehouses

General warehouses serve to store a wide variety of goods that do not require special handling or specific types of products. They are typically designed to accommodate a diverse range of products and materials, such as consumer goods, raw materials, equipment, or machinery. General warehouses often have large open spaces with shelving or racking systems for efficient organization and storage of items. These warehouses may have loading docks, forklifts, and other equipment for efficient handling and movement of goods. Overall, general warehouses serve as hubs for storing and distributing goods until they are ready for further shipment or processing.

3.2. Perishable Goods Warehouses (Cold Storage)

This type of warehouse is used to store perishable goods, such as fruits, vegetables, dairy products, meat, and seafood. These goods require special care with temperature control at the appropriate level to maintain their freshness. They are equipped with specialized refrigeration systems to maintain the freshness and quality of the goods. They often have temperature-controlled zones to meet different storage needs, ensuring that products remain in optimal condition before being distributed to retailers or consumers.

3.3. Hazardous Materials Warehouses

This type of warehouse stores goods that are hazardous and pose a risk to the safety of people and the environment, such as toxins, chemicals, fuels, and explosives. (How important is warehouse safety? This article has preventative measures everyone should be aware of when working inside a warehouse.) The most important aspect of the warehouse is managing the classification of hazardous materials and storing them properly according to the scientific principles of those materials. This type of warehouse must have a pollution control system supervisor who must be licensed by the Department of Industrial Works, Ministry of Industry. Strict safety regulations are in place to prevent potential hazards.

3.4. Specialized Warehouses (Temperature and Humidity Controlled)

Specialized warehouses are often smaller storage facilities found in various industries to preserve the properties of goods and extend their shelf life. Examples of such goods include pharmaceuticals, chemicals, perishable goods, hazardous materials, or high-value items. They may have precise temperature and humidity settings, advanced security measures, and specialized handling to ensure the safety and integrity of the stored goods.