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Warehousing’s Role in the Supply Chain

Warehousing played a role in the storage and exchange of goods for centuries. Long-term storage to provide product for future consumption has been a utility of warehousing both past and present. Transit sheds, warehouses connected to a wharf, have facilitated the movement and storage of goods embarking or disembarking merchant and military vessels supplying domestic and world trade. Rail transportation set in motion the industrial era with the transport of agriculture commodities and livestock; warehousing was leveraged to store such cargo prior to processing and then distribute finished products traveling to other parts of North America.

Long-term storage and places to interchange products may have been enough utility prior to and during the initial stage of industrial development; however, U.S. involvement in World War II required the manufacturing of products to support military efforts. Increased manufacturing demanded more storage and organization of raw materials and parts, as well as more room for the stockpiling and strategic positioning of completed military products from ammunition and vehicles, to food stores. Figure 1-1 depicts a high-cube military storage warehouse. Warehousing became more of a strategic function in the chain of supplying the U.S. military and its allies.

Figure 1-1

Figure 1-1. High-cube military storage warehouse

Engineering breakthroughs partially resulting from war efforts were adopted by industry post WW II. Although railroads provided dominance in freight transport prior to the World War II, motor carriers and eventually air carriers would surface as viable competition for freight transportation. Competitive changes, such as these, changed the face of warehousing. Now, a warehouse could receive a single truckload of product rather than a railcar load of product. Dynamics of unloading a tractor-trailer load compared to unloading a railcar are dramatically different and require differential planning for unloading and storage.

At the same time, developments were achieved in forklift handling equipment. Simple pallet jack capabilities were exceeded by higher reach forklifts enabling operators to build and manage freight in higher vertical storage buildings and reduce the fixed cost of engineering and fabricating the facility.

With the proliferation of computers, information exchange in the late 20th century became a game-changer in the way warehouses collected, transmitted, and utilized data and information within facilities and with warehouse customers. Perhaps computers came about in such good time to enable warehouse operators better control over the increasing variety of products demanded by consumers. Ever since the end of WW II, the United States realized a growing middle class society demanding a greater selection of products that required greater warehouse control. Product variations require greater skill in inventory control over that of managing a single commodity or a few finished goods items. Each unique product type requires a location in the warehouse that it cannot share with a different product type. Moreover, as market expansion spread, so too did the number of warehouses called upon to service the distant markets. Products to satisfy customer regions were dedicated to a specific market warehouse. Consequently, the aggregate inventory total for all market warehouses increased the investment in stock required to compete for market share.

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