All the goods that move through the supply chain process need storage and that’s where types of warehouses come in. Warehouses provide storage for a company’s upstream and downstream inventory until they are distributed to the final destination. They are responsible for a smooth flow of goods throughout the supply chain from the manufacturer to the customer.
But, not all warehouses are the same. Different types of warehouses have unique purposes in the logistics chain. They also have distinct and unique features, advantages and drawbacks. So, we’ll see them all.
9 Types of Warehouses
Here are the various types of warehouses in supply chain management and how they help the storage purposes of businesses:
1. Public Warehouse
Such warehouses are under the ownership of government entities. Private sector companies and rent it from them. Public warehouses are particularly an attractive option for businesses that need to store inventory for a short amount of time. Getting other storage facilities can be expensive.
Usually growing businesses are warehouses, like e-commerce companies and startups. They are more affordable. But remember, that these warehouses are usually bar-bone when it comes to their settings and don’t have the latest tech that other types of warehouses might have.
Pros:
- Accessible to public
- Affordable for SMEs
- Good for seasonal businesses
- Perfect for short-term storage
Let’s see the next type.
2. Private Warehouse
It’s also known as a proprietary warehouse and is owned by a company division. If businesses want this warehouse they have to make an upfront investment to secure the building space, facilities management and general maintenance and upkeep.
It might be a more expensive option, but they offer business owners more overall control of their inventory management.
Pros:
- More control over building facilities
- Companies needing a significant long-term presence in a specific region
- Provides an exclusive location for business operations
Now, we’ll take a look at a special one among all the types of warehouses.
3. Smart Warehouse
An increasingly popular option in the warehousing space is the smart warehouse. In this, there is AI automation for storage and fulfilment processes with robots and drones.
The AI automation monitors tasks like packing, weighing, transporting and storing of raw materials, with multiple incoming orders being automated to be fulfilled immediately.
Smart warehouses have long been the ideal option for large e-commerce companies like Amazon who want to make their order fulfilment and inventory management more agile and accurate.
Pros:
- More accurate inventory management
- Automation of functions that reduce human error and save time
- Increased safety and security on facility premises
- Provides insights into business efficiency
But what happens when multiple businesses co-own a warehouse? We’ll see just that in our next option on this list of “types of warehouses”.
4. Cooperative Warehouse
A cooperative warehouse is a storage solution for multiple businesses or organisations that they own and manage together. These businesses can share the costs of the warehouse, staff, and equipment, leading to significant savings on inventory storage.
This model is particularly attractive to businesses with similar storage needs, such as farmers or wineries. By joining forces in a co-op warehouse, these businesses can boost their profits in the long run.
Pros:
- Ideal for shared storage for businesses with similar inventory needs, allowing them to pool resources for efficient storage.
- Cost-effective option by sharing the investment, businesses gain access to a warehouse at a reduced rate compared to individual leases.
- Multiple tenants in a cooperative warehouse can negotiate lower rates for utilities, security, and other operational costs.
But what happens when you have to store imported goods that come from other countries before they go through the customs process? That’s what the next one on this “types of warehouses” list does.
5. Bonded Warehouse
These warehouses store imported goods before the completion of customs duties and you pay for them. Customs clearance can become an extensive process, so these warehouses provide a safe space to store the items.
Governments give businesses a “bond” to rent the space to ensure their businesses don’t have any losses when they order products. These features are useful for importers who might need short-term storage options.
Pros:
- Companies will pay the duties only when the items are released from storage for delivery
- Versatile facilities that accommodate a large variety of products
- It is the best option for companies or businesses that deal with cross-border training
Let’s see the next option.
6. Consolidation Warehouse
This is highly efficient for small businesses. With them, you get a strategic storage solution in case your business has limited inventory. They are like the central hubs, receiving small shipments from various suppliers and combining them into larger, more cost-effective loads destined for a single geographic area.
This approach is particularly attractive for startups and new companies that don’t require dedicated storage space for a large volume of goods.
However, there’s a trade-off to consider. Consolidated warehouses are limited in flexibility. Shipments must be directed towards a single region, which might pose a challenge for businesses aiming to expand their reach to diverse locations.
Pros:
- Doesn’t require high inventory levels
- Economically-friendly and time-saving
- No capital investments are necessary for low-risk use
- Lower shipping costs for warehouse tenants
However, some businesses need excess storage space. If you are that type of business, you can avail the next warehouse option.
7. On-Demand Warehouses
The rise of online commerce has made on-demand warehousing a popular option. Also known as on-demand storage, this provides space to businesses that need to connect to companies.
Since the company using the warehouse may not need the extra space, it provides the option to other businesses that might need space for seasonal needs. It’s quite similar to cooperative warehouses. It’s highly beneficial for merchants who are willing to combine their inventory needs.
Pros:
- Good for businesses who have had a sudden spike in inventory
- Appealing to companies who can store goods together
- Cost-effective for seasonal or temporary warehousing needs
Let’s see our next type of warehouse.
8. Cold Storage Warehouse
What would you do if you had temperature-sensitive units to store? For that you need a cold storage warehouse. This might include an entire building or a portion of it. These warehouses have a regulated environment that ensures inventory is safe so there are no losses for the items before delivery.
Pros:
- Best for companies that have perishable inventory
- Pharmaceutical companies use it the most
This brings us to the last of the types of warehouses.
9. Distribution Centre
These “centres” or warehouses store large quantities of inventory to move them out to retailers quickly. Products move in a distribution centre rather than a usual warehouse.
These centres are different as they are paramount to the connection between customers and customers. They are not just for storing inventory. They are also responsible for distribution, order fulfilment and preparing for shipment.
Pros:
- These types of warehouses are for companies that sell their products to wholesalers
- Aims to increase overall efficiency for inventory management
- More savings since it offers long-term product storage.
How to choose one?
Choosing the Right Warehouse: Pointers to Consider
Here’s a quick checklist to guide for you to choose the perfect warehouse:
- Location: Consider proximity to suppliers, customers, and transportation hubs to optimise delivery times and costs.
- Room to Grow: Choose a space that meets your current inventory needs with room for future expansion.
- Safety First: Prioritise robust security measures to protect your staff and inventory.
- Budgeting Wisely: Ensure the warehouse cost aligns with its value to your business.
- Meeting Regulations: Comply with all relevant regulations when selecting a warehouse.
- Easy Access: Accessibility by road, rail, or water should match your transportation needs.
- Adaptable Space: Choose a warehouse with the flexibility to adjust to changes in inventory or operations.
You can choose any of these warehouses depending on your storage needs.
FAQs: 9 Types of Warehouses: Which One Do You Need
What are the important trends in the public warehouse industry?
Public warehouses are experiencing trends like adopting automating tools, digitisation and mechanisation. All these are revolutionising inventory management and reducing lead times. Cold storage and on-demand warehousing are also popular. Also, they are sustainable.
How do public warehouses meet evolving customer needs?
Warehouses achieve this by providing customised solutions such as special storage or on-demand warehousing. In addition, they implement warehouse management systems and automation technology, which increase operational efficiency.
Conclusion
Selecting the ideal warehouse is crucial for a seamless supply chain and efficient operations. This guide explored nine types of warehouses, each with distinct advantages and purposes.
Uncertain about the right fit?
Qodenext can help! Contact us today to discuss your specific requirements and discover how we can streamline your storage and distribution processes.
