Principles of warehousing Introduction Warehouses are crucial components of most modern supply chains. They are likely to be involved in various stages of the sourcing, production and distribution of goods, from  the handling of raw materials and work-in-progress through to finished products. As the dispatch point serving the next customer in the chain, they are critical to the provision of high customer service levels.    Warehouses are an integral part of the supply chains in which they operate, and therefore recent trends, such as increasing market volatility, product range proliferation and shortening customer lead times, all have an impact on the roles that warehouses are required to perform. Warehouses need to be designed and operated in line with the specific requirements of the supply chain as a whole. They are therefore justified where they are part of the least-cost supply chain that can be designed to meet the service levels that need to be provided to the customers. Owing to the nature of the facilities, staff and equipment required, warehouses are often one of the most costly elements of the supply chain and therefore their successful management is critical in terms of both cost and service.    The nature of warehouses within supply chains may vary tremendously, and there are many different types of classification that can be adopted, for example: 

• by the stage in the supply chain: materials, work-in-progress, finished goods or returned goods; 
• by geographic area: for example, a global warehouse may serve the whole world, a regional warehouse may serve a number of countries, a national warehouse may serve just one country, or a local warehouse may serve a specific region of a country; 
•  by product type: for example, small parts, large assemblies (eg car bodies), frozen food, perishables, security items and hazardous goods; 
•  by function: for example, inventory holding or sortation (eg as a ‘hub’ of a parcel carrier);
•  by ownership: owned by the user (eg the manufacturer or retailer) or by a third-party logistics company; 
•  by company usage: for example, a dedicated warehouse for one company, or a shared-user warehouse handling the supply chains for a number of companies; 
•  by area: ranging from 100 square metres or less to well over 100,000 square metres; 
•  by height: ranging from warehouses about 3 metres high through to ‘high-bay’ warehouses that may be over 45 metres in height; 
• by equipment: from a largely manual operation to a highly automated warehouse.