The Importance of Storage in Fair Transportation

What is Storage in Transport?

The basis of logistics is the movement of raw materials, semi-finished products and products, that is, their transportation. Each transported product stops at the starting point, at the points where it changes its mode of transportation, where an addition or reduction is made on it, and at the time of delivery. We give names such as warehouse, transfer center, distribution center, warehouse, transfer center, warehouse to the places where this movement stops. Storage; It is defined as the point where the speed of the movement is interrupted, that is, “zero speed transportation”. As a result, the ring where the movement of goods on the supply chain is stopped for various purposes is called warehousing. We call the process of preparing the transported products/loads to be sent to the destination points by keeping them for a certain period of time after they are received. The length of storage period differentiates warehouses. The places where the storage period is long are called warehouse (warehouse), the shorter the time, the shorter the distribution center, the shorter the transfer center (Transfer Center).

The term “storage” refers to shipping at zero miles per hour. Warehousing provides time and space utility for raw materials, industrial goods and finished products, allowing companies to use customer service as a dynamic value-added competitive tool.^[1]https://2012books.lardbucket.org/books/marketing-principles-v1.0/s12-03-warehousing-and-transportation.html

It provides the storage of finished goods and also includes the packaging and shipping of the order. Efficient storage provides a significant economic benefit to the business as well as to the customers. Thus reducing the transportation costs of a business. ^[2]https://2012books.lardbucket.org/books/marketing-principles-v1.0/s12-03-warehousing-and-transportation.html

History of Storage

Warehouses have been used for various purposes since ancient times. In ancient times, the use of warehouses was often to store food materials as a backup for anticipated famine or drought. Warehouses have been an indicator of wealth according to the amount of material stocked in ancient times. The fullest warehouse is the richest warehouse. Today, warehouses have become a ring of the Logistics sector, apart from just the purpose of storage.

During the industrial revolution of the mid-18th century, the function of warehouses developed and became more specialized. The mass production of goods initiated by the industrial revolution of the 18th and 19th centuries spurred the development of larger and more specialized warehouses, often located close to transport hubs on canals, railroads and ports. Specialization of tasks is characteristic of the factory system that developed in English textile mills and potters in the mid-1700s. Factory processes accelerated work and unskilled labor, bringing new profits to capital investment. ^[3]https://2012books.lardbucket.org/books/marketing-principles-v1.0/s12-03-warehousing-and-transportation.html

Warehouses also perform a number of commercial functions, as exemplified by Manchester’s cotton warehouses and Australian wool warehouses: receiving, stocking and shipping goods; displaying goods for commercial buyers; packing, checking and labeling and shipping orders.^[4]https://2012books.lardbucket.org/books/marketing-principles-v1.0/s12-03-warehousing-and-transportation.html

Storage Activities

Warehousing basically covers the activities of checking, receiving, placing in the warehouse, counting, re-picking, checking and reshipping of products. Warehouse is a center where added value is produced. It makes a high contribution to shortening the delivery times and reducing the customer order times. For this reason, storage requires a professional perspective and systematic work. Warehouses are strategically important intermediate points in the realization of a whole range of activities, from the raw material stage of products to the production environment, to consumption centers and distribution. For this reason, warehouses are very important for suppliers, manufacturers, distributors and retailers. In addition, in international trade, there is a need for open or closed areas where products are kept, stocked, protected and ready for transportation during import, export and customs processes.

Two basic concepts that provide economy in transportation are freight consolidation and distribution. Both are applications that aim to reduce shipping costs. As a result, it is aimed to reduce transportation costs by carrying a larger amount of cargo instead of small parts. For this purpose, warehouses are located at the center of logistics services, at the point of collection and distribution.

In consolidation, that is, in the process of combining the loads, the loads that will go to the same place are collected up to the capacity of the transport vehicle and transported as a single large load. Consolidation warehouses are close to the exit point. In this way, reducing logistics costs by making long-distance transportation more economical. Load distribution is also used to reduce costs as well as increase customer service quality. Distribution storage; Contrary to consolidation, it is far from the point of origin, close to the point of consumption. In distribution, the aim is not to accumulate the product, but to deliver the orders with a short, economical and fast transportation according to the consumer’s demand. The fact that the warehouses for distribution purposes are close to the customers will increase the speed of transportation to the customers and reduce the waiting time, thus aiming to provide better service. In our age, the acceleration of air transportation, the shortening of production times, the planning of customer demands, the widespread use of warehouses for distribution purposes have lost their effect compared to the last century.

The Future of Storage

In the future, warehouses will be used for further consolidation or value-creating transactions. The increase in carrying capacities today and in the future allows for more consolidation. Thus, a large amount of material is handled at once and kept in warehouses for a short time. In order to create economy during this waiting period, some operations that can be done in the production facility can be done during storage. These are value-added operations.

Examples of these transactions; Pallet opening or palletizing, shipping parcel preparation, protective application and packaging, labeling, banding, bar-code application and guide addition, battery or accessory addition, pre-assemblies, assembly, order slip or invoice printing, pre-shipment quality control and pre-shipment quality control operations such as operating, stock control, shelf life monitoring can be achieved and these processes can be increased even more.

These activities, which require time loss in the production area (factories), decrease in the speed of the supply chain, loss of space and additional manpower, are carried out in warehouses and increase warehouse efficiency. Factories have a high cost of production per square foot, and this is the cost that most manufacturers want to reduce. For example, individual control and barcoding of each product may cause an extra production line to be opened in the factory, use of personnel and time loss. However, since the square meter costs are low in warehouses, these operations can be done faster and at lower cost during storage and handling.

Performing operations that exceed the square meter cost in the factories at lower costs in warehouses, that is, in organizations that provide logistics services, will also reduce costs. Since factories are areas where production is made, storing in these places is a waste of space and time for operations that do not contribute to production, and it is an unnecessary cost.

It would be more appropriate to use the terms Distribution center or Collection center instead of the term warehouse, as the warehouse evokes immobile and idle goods, and today logistics gains more movement and function.

Warehouses, which have always been a functional structure, began to adapt to standardization, mechanization, technological innovations and changes in supply chain methods in the late 20th century. In the 21st century, we are currently witnessing the next big development in warehousing – automation. ^[5]https://en.wikipedia.org/wiki/Warehouse

Stages of Storage

Rick Stinchcomb of the University of Oklahoma Press defines warehouse operations as follows: “The purpose of warehouse operations is to meet the needs and requirements of customers while using space, equipment and workforce effectively. Goods must be accessible and protected. Achieving this goal requires constant planning and constant change.”

Warehouse operations cover a number of key areas, from receiving, organizing, fulfilling and distribution processes. These areas include:

• Receipt of goods
• Cross shipment of goods
• Organizing and storing inventory
• Add asset tracking solutions (such as barcodes) to assets and inventory
• Integration and maintenance of a monitoring software such as a warehouse management system
• Supervising the integration of new technology
• Selection of collection routes
• Creation of sorting and packaging applications
• Warehouse facility maintenance
• Developing rack designs and warehouse infrastructure

Of course, the points mentioned above represent only a fraction of the situation faced by many modern warehouse operations managers. However, they form the foundations of storage, elements that serve as building blocks for all warehouses large and small.^[6]https://en.wikipedia.org/wiki/Warehouse

As a result, warehousing is used not only for the purpose of storing the product, but also as an important link in the logistics chain and aims to reduce the costs of the manufacturer.