Three methods for efficient warehousing of products

More and more products being driven in the market means more need of warehousing for companies. The demand of consumers is at a peak when compared to demand a few decades back. As warehousing and transportation contribute to a major cost in your operations, they need to be carried out in the most efficient way possible. Below are three ways you can have efficient warehousing

Sku basis – the method is apt if you have multiple sku’s. Sku is known as a stock keeping unit. If you have 10 different type of fruits, then they form 10 sku’s. But if you have 10 apples and 10 pears, then it is only 2 sku. Thus sku means one type of product. The more the number of products, the more are your sku’s, each of which has a different supply point.

Let us understand sku basis warehousing from a simple example. Imagine you are a manufacturer of spares. You are manufacturing 10 different spare parts. These parts are small in size so while packing, you pack at least 1000 units in one box. Thus warehousing will have to be on the basis of the individual packed spare parts. This is sku warehousing where each individual has its own place. Sku warehousing is the most basic and traditional form of warehousing being used from decades. It is however being slowly phased out. Sku warehousing is used for companies which have a few sku and manufacture it in bulk.

Job lot storage – Job lot storage is a very simple form wherein you warehouse what the customer needs. This is becoming a major business idea for a lot of small and medium logistics companies. Let us imagine that you have a warehouse of your own. You can either lend it to a single company, or more profitably you can invite 10 companies to take space in your warehouse. Thus the warehouse space is divided on the basis of products for individual companies. This example is for business entrepreneurs. However, for companies too, job lot storage can be done. Extending the above example of spare parts, if 5 spare parts are being manufactured for an automobile manufacturer, each spare part can be stored in an area of its own in the warehouse.

Crossdocking – Crossdocking is a form of warehousing pioneered by Wal-Mart. Crossdocking is one of the most efficient forms of warehousing for larger companies. However, the negative of cross docking is that it requires a lot of storage space, something which the likes of Wal-Mart could afford. In crossdocking, the products are stored in loose quantities such that they can be mixed and matched as per the order received. For examples, soaps may be transported in huge bulk, but they are broken down to smaller bulks at the warehouse and transported to each branch of walmart as per their requirement where they are broken down to individual units.

The above spare part example can also be used to understand crossdocking. If you are receiving 5 lots of spare parts, then the need may arise by your customer that he needs some spares from each lot (which happens in case of convenience stores). Thus if you are packing the spare parts in bulk, it will be difficult to fulfil the customers need. Hence the spares can be stored as individual unit so that they can be mixed and matched as per the customer’s requirement.