Page 221 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes
Did u know? The Food Corporation of India (FCI) is a public sector undertaking which is
also in warehousing. It has warehousing capacity of 24.40 million tonnes of which 7.90
million tonnes is hired from the CWC and SWCs. A large part of the remaining capacity
comes from private operators and rural and mandi godowns.
In addition, seventeen states also have State Warehousing Corporations (SWCs) that supplement
the capacity of CWC. If any state provides 50 percent of the initial capital for state warehouses,
CWC is obligated to invest the remaining 50 percent of the equity capital of the SWCs, though
CWC may have no representation on the Boards.
State Warehousing Corporations have a warehousing capacity of 19.40 million tonnes. These
state warehouses are primarily for the storage of agricultural produce, seeds, manures, fertilizers,
etc.
The Warehousing Corporations (Amendment) Bill, 2001 is being introduced that facilitates the
Central Warehousing Corporation to diversify and widen its activities further to strengthen the
service sector. This also allows it to place its members on the boards of the SWCs.

Self Assessment

Fill in the blanks:
9. A …………………… facility is warehousing on a contractual basis by Third Party Logistics
Providers.
10. A ……………………, in India, is a warehouse operated by the Central Warehousing
Corporation of India or by State Warehousing Corporations.
11. The successful execution of …………………… requires constant monitoring of inventory
levels and flexibility on the part of shippers.
12. …………………… warehouses are licensed by the government to store goods prior to
payment of taxes or duties.

9.4 Warehouse Decisions

Once it has been determined to use a warehouse, the next step is designing it. The following
discussion reviews basic warehouse design principles. Whether the warehouse is a small manual
operation or a large automated facility, the following three principles are relevant: design
criteria, handling technology, and storage plan. Each is discussed and illustrated.

9.4.1 Design Criteria

Warehouse design criteria address physical facility characteristics and product movement. Three
factors to be considered in the design process are the number of stories in the facility, height
utilization, and product flow.

Designing a Warehousing System

In most cases, products flow from the factory to the consumer through a long winding chain,
consisting of multiple tiers of warehouses and multiple tiers of marketing intermediaries. In
designing a warehousing system, the following basic questions relating to this flow become
significant.

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