Types of warehouses and their classification

Our ideas of what a warehouse looks like can differ dramatically. For one, it will be a large automated hall, for another, a farm building in a rural area – and in each case, indeed, these facilities can be called warehouses.

Since people love to classify, define and count everything, there is, of course, a generally accepted definition of what a warehouse is and a number of classifications of its functions. As is usually the case, classification does not boil down to a single, consistent and generally accepted system. Divisions are made due to a series of guidelines that create separate classifications for each.

Types of warehouses: classification by use

Warehouses can be divided taking into account their differences in terms of location, the specific features of the building itself, the degree of automation or the type of warehouse systems that have been implemented to work in it. The division we want to take a closer look at in this article is the division according to the use of the warehouse. In this respect, we can distinguish the following types of warehouses: transit, distribution, production, supply, consolidation and picking.

Transit warehouses: Links in the supply chain and interim storage

Transit warehouses (also called buffer warehouses ) are places for temporary storage of goods. They are a strategic link in the supply chain, located between the distribution site and the customer. The smooth functioning of transit warehouse processes determines the turnaround time of the entire order. These are places that are characterized by a high turnover of various goods, storage is short-term, and a number of logistical processes, such as consolidation or deconsolidation of shipments, take place in the warehouse itself. These types of warehouses often belong to companies with a large assortment of goods, categorized as e-commerce industries. At the same time, it is becoming increasingly popular to outsource this type of service, instead of maintaining an in-house warehouse for their own needs alone. Our company LCL Logistic offers a full range of logistics services for the e-commerce customer, responding to the growing needs of the market.

Distribution warehouses: Focused on efficient product distribution

Unlike the above type of facility, distribution warehouses have a smaller variety of stored goods, focusing on products that are in the highest demand in the area of operations of the companies served by the warehouse or to which the warehouse belongs. Turnover still remains high, but storage is usually for the same product unit. This is combined with fewer logistics processes needed to be implemented. Distribution warehouses are located as close as possible to the end customer, their main role is to provide a stock of products. Cargoes go to them directly from production facilities.

Types of warehouses and their classification

Production warehouses: Supplying the production line with raw materials and components

Location is also a strategic feature of production (supply) warehouses. However, unlike distribution warehouses, which are located as close as possible to the key customer, production warehouses are located close to factories, often having a connection to them via a pallet conveyor system. The role of this type of warehouse is to supply the production line with all necessary raw materials, semi-finished products and components on an ongoing basis. Materials necessary for production are stored in these facilities.

Picking warehouses: Quickly complete orders according to customer guidelines

Completionwarehouses are other logistics centers focused on ensuring an efficient and fast process of preparing orders according to customer guidelines. Goods in such a facility are divided into storage areas and assigned to individual storage containers, and most often replenished from the supply warehouse. Goods are not taken from the containers in their entirety, but only the portion necessary to complete the shipment. In warehouses of this type, storage systems are placed that allow direct access to cargo and retrieval of any part of the assortment efficiently and quickly. The racks are operated manually or through automated systems. All with the aim of optimizing working time and storage space at maximum cost reduction.

Consolidation warehouses: Speed up shipments and minimize transportation costs

Consolidation warehouses are another type of warehouse whose main function is to speed up shipments and avoid confusion when grouping cargo. These are centers where a high number of orders are handled, but the number of SKUs is small and cargo turnover is low. Goods are stored by route, end customer or assortment unit to speed up the process of getting goods out of the warehouse. Warehouses of this type are usually highly automated. By grouping multiple goods in a single shipment, the cost of transporting the order is significantly reduced. Logistics center services of this type are also a great option for an e-commerce customer, for whom the efficient processing of many individual orders is a priority.

Choice of storage system

The decision to choose a specific storage system depends mainly on the company’s logistics strategy and the parameters and adaptability of the warehouse space itself. It must be preceded by an analysis of these conditions, as well as adapted to the needs of the market in which we want to operate, respond to the needs of its customers. None of the solutions will be perfect, each will have its advantages and disadvantages, the point is that it should be maximally adapted to the needs of a specific logistics facility, streamlining the processes within it. The role of logistics in transportation and warehousing today is enormous, without it our world would not have the shape in which we currently know it. It is worth being aware of this and knowing the importance of planning activities and optimizing cargo transportation.