Logistics
4/11/2022

The different bearing types at a glance

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Storage warehouse, open warehouse, distribution warehouse, handling warehouse or high-bay warehouse: In logistics, there are a lot of different warehouses that are used for specific purposes. They cannot always be clearly distinguished from each other. Nevertheless, there are some differences in terms of function, suitable locations, construction types and the technology used. What these are, which warehouse types can be distinguished and why there is no perfect warehouse for a company, we reveal in this article.

Table of contents

  1. What are bearing types? Definition
  2. What are the types of warehouses? Examples of storage types in logistics
  3. What are the advantages and disadvantages of the different bearing types?
  4. Optimize warehouse and logistics with TradeLink

What are bearing types? Definition

In logistics, warehouses are an elementary component of the value chain. Basically, different types of warehouses can be distinguished. The distinction is usually based on factors such as the workflow of the production process, the function of the warehouse, the structure and the individual needs of the players involved.  

The main function of each type of warehouse is determined by the structure of the warehouse and all the processes that take place there. If the main function is the distinguishing criterion, a distinction can be made between procurement, intermediate and distribution warehouses. According to the type of storage and the type of operation, it is also possible to differentiate between open-air, floor, high-bay, flat, block, row, tank and airdome warehouses.

However, it is not always possible to make a clear distinction between the individual warehouse types according to their main function. It depends to a large extent on the positioning in the value creation process and the perspective of the players involved. However, a clear separation is also not necessary. Different types of warehouses can complement and be combined with each other - depending on what the company needs.

There are different types of bearings. Their functions are determined by the structure of the warehouse and the accompanying processes.

What are the types of warehouses? Examples of storage types in logistics  

Depending on the function, the degree of automation, the type of construction, the location and the warehouse technology used, different types of warehouses can be distinguished. These include according to function:

  • Receiving warehouse / Procurement warehouse
  • Temporary storage/buffer storage
  • Distribution warehouse/distribution warehouse  
  • Transshipment warehouse
  • Commission warehouse
  • Stockpile

Receiving warehouse or procurement warehouse

Receiving and procurement warehouses are located chronologically before production. They provide sufficient space for the storage of goods and merchandise. Inbound warehouses usually hold raw materials, intermediate products and semi-finished goods before they are processed into the final product.  

The warehouse is either located close to the production facility or, alternatively, is directly connected to production. The nearby location means that the goods required for production can be delivered quickly, so that production does not come to a standstill and the actual production facility is relieved. This is because only the goods that are actually needed are processed.

Temporary storage or buffer storage  

Intermediate or buffer storage is used to hold goods as a buffer for a short period of time. Short-term storage can become necessary either in the manufacturing process between two stations or during transfer from one means of transport to another. As the name already suggests, intermediate storage facilities are therefore always a link between two other links in the value chain.

The warehouses are locally assigned directly to the production line and are characterized by a high turnover of goods.

Distribution warehouse or distribution warehouse  

If manufacturers supply their customers directly and sell their goods over a large area, a distribution or distribution warehouse is a good solution. For example, if a company from Bavaria wants to supply customers in northern Germany, it makes sense to set up a distribution warehouse in the north from where the goods can be delivered quickly. In most cases, these are products that have established themselves as particularly strong sellers in the corresponding region.

If the goods are stored at a central location, the company has the option of delivering to customers on the same day. The aim is to reduce delivery times to a minimum, avoid delivery failures and offer customers a high level of delivery service. For this high delivery capability, distribution warehouses are usually located close to potential buyers and have good infrastructure connections. Locations close to the highway are typical.

Transshipment warehouse

In a transshipment warehouse, the goods are only temporarily stored - similar to the interim storage facility. After a short time, the goods are transported onward. Transshipment warehouses cannot therefore be clearly distinguished from interim storage facilities. Rather, they are short-term interim storage facilities in which the goods are held until they can be transferred to another means of transport for onward transportation.

There are two types of transshipment warehouses: company-owned transshipment warehouses and warehouses of external service providers. In both cases, the aim is to keep handling times as short as possible and to achieve the greatest possible turnover of goods through a continuous flow of goods.

Commission warehouse

A commission warehouse is maintained by a so-called commission agent: He sells goods from his stock to other companies. In return, he receives a commission agreed in advance. However, the goods themselves do not belong to him - he is merely the keeper of the warehouse or a kind of intermediary.

This type of storage is often used in shipping centers and dispatch departments to make order picking as efficient as possible and to minimize costs and time. For this to work, the goods must be stored in such a way that the pickers can easily reach them at any time - for example, by placing the products on wide-span racks. The employees in the picking warehouse do not pick complete load units, but only the partial quantities that they need for the specific order.

Stockpile

Inventories are used to compensate for fluctuations in a company's demand and to ensure security of supply. By storing stocks of goods, the company can bridge a longer period of time until the next delivery in the event of supply bottlenecks, for example. Seasonal items can also be stored in warehouses until they are needed again.  

In addition, warehouses are used by companies that, for example, require crude oil for production, which is subject to frequent price fluctuations. Inventories therefore contain comparatively few product types with a low inventory turnover, but often in large quantities.

What are the advantages and disadvantages of the different bearing types?

The different types of warehouses do not have any general advantages or disadvantages. Rather, it depends on which specific products are stored, how high the goods turnover is and in what quantity the goods are available. Which type of warehouse best suits a company therefore always depends on the individual case and cannot be answered in a generalized way.

For example, compact storage systems such as drive-in racks are not suitable for a handling warehouse in most cases, but are suitable for homogeneous stored goods in rack and block storage. If goods are to be stored compactly in a small area for a longer period of time, high-bay warehouses are useful in the context of storage types such as the storage warehouse. For weather-resistant products, containers and machines such as forklifts, storage types such as an open warehouse are often the simplest and cheapest solution.

Each solution has its own advantages and disadvantages and may be better or worse suited for certain types of retail and wholesale warehouses. There is no such thing as the perfect warehouse that fits every business and purpose.

There is no perfect type of warehouse that fits every company. However, certain disadvantages can be overcome with digital solutions.

Optimize warehouse and logistics with TradeLink

In addition to the appropriate type of warehouse, efficient warehouse logistics depends above all on the cooperation of the players involved. From purchasing to delivery of goods, site logistics and distribution to delivery to customers, all processes must run smoothly. This is the only way to keep costs and time as low as possible.

Our SaaS platform makes this possible: With TradeLink, you increase productivity in warehouse logistics by simplifying and partially automating all coordinative tasks. As a central source of information, all the players involved have access to the necessary information relating to incoming and outgoing goods.

Time-consuming emails, phone calls and Excel spreadsheets are a thing of the past - because all information and warehouse documents are summarized and can be viewed in a clear tool. External delivery partners can also easily log in - DSGVO-compliant, secure in the cloud and without complicated IT implementation.

Effective collaboration between all stakeholders across all channels is a key contributor to better business results. With TradeLink, your company benefits from:  

  • 20 % higher storage capacity and a reduction in working capital
  • 30 % cost savings in goods receipt and goods issue processes
  • 60 % less demurrage and incorrect charges
  • 75% fewer emails and phone inquiries from partners
  • 100% transparency about the performance of suppliers and service providers

Thanks to TradeLink, you'll experience no more surprises at the ramp, no more downtime in the yard, no more expensive and error-prone paper processes, no more floods of emails and phone calls - and no more stressed-out employees.  

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