Logistics

What is warehouse technology? Definitions and application examples

| Author / Editor: Sebastian Hofmann / Theresa Knell

Warehouse technology functions as an interface between procurement, production and distribution. Learn what you need to know about warehouse technology in this article.
Warehouse technology functions as an interface between procurement, production and distribution. Learn what you need to know about warehouse technology in this article. (Source: Pixabay)

This article provides the most important information on warehouse technology. Get an insight into various disciplines, warehouse types and application areas!

The term in brief: Warehouse technology deals with the storage and commissioning of goods. It is part of intralogistics and closely linked to materials handling and packaging technology.

A detailed definition can be found in the glossary of Lagertechnik Becker: "Warehouse technology comprises the storage of goods and is thus an essential component of corporate logistics. It functions as an interface between procurement, production, distribution and disposal."

As an interface between different areas of a company, warehouse technology is essential to ensure the flow of materials. In co-operation with materials handling and packaging technology, it ensures a sustainable supply chain and is a decisive means for maintaining a clear structure and order in warehouses. Warehouse management, i.e., the planning, organisation and control of warehouse systems and their technical equipment, is required to ensure intelligent warehouse logistics.

Did you know?

In fact, each one of us gets in contact with warehouse technology in our daily lives. This also includes detailed solutions such as shelves and cupboards for everyday office use or at home. MM Logistics however, uses the term only in the context of industrial warehouses or storage systems.

What types of warehouses are there?

Warehouses use different types of shelves - unless it is a block storage. These are ten of the most frequently used shelves in an industrial environment.

Flow racks are usually diagonally arranged and equipped with rollers to simplify the flow of goods.
Flow racks are usually diagonally arranged and equipped with rollers to simplify the flow of goods. (Source: Markj 52 / CC BY-SA 3.0)

  • 1. Wide shelving units are characterised by particularly large warehouse surfaces. They are therefore suitable for light and bulky goods.
  • 2. Flow racks are mainly used in the mail order business. According to the first-in-first-out principle, goods are stored on one side of the shelves and removed from the other side.
  • 3. Shelf racks feature a continuous shelf and are therefore suitable for the storage of small parts. Compared to shelves without a bottom or grid floor, however, they are also more expensive because they require more material. They are preferably used in the automotive and textile industries or in e-commerce businesses.
  • 4. In contrast to shelving racks, pallet racks are usually equipped with grates or depth supports with folded edges. They are characterised by stable frames and a push-through protection. In many cases they are also provided with a ram protection. Optionally, they can be designed as drive-through racks and adapted to various dimensional and load requirements.
  • 5. System racks can be assembled as a plug-in system and adapted to individual requirements. For instance, the height of the support can be changed if particularly large goods have to be stowed.
  • 6. Cantilever racks are mainly used for bulky and heavy goods. Support arms are fixed to the frame of the shelves on both sides, which can be attached at different heights depending on the requirements.
  • 7. As the name suggests, hazardous goods racks are used to store dangerous goods such as irritants and chemicals. They are often equipped with a special splash guard and a built-in sump to collect water-polluting substances. For the storage of acids, bases and the like in accordance with the law, hazardous substance racks are indispensable.
  • 8. Heavy-duty racking systems must meet special requirements in terms of stability and safety. They are used to store particularly heavy goods. However, they rarely exceed a weight of a few tons because the risk of shelf breakage increases drastically with additional weight. In any case, the load limit of corresponding conveyors must be taken into account.
  • 9. Racking systems are interconnected racks that are operated with automated conveyor technology. As a logistics approach in times of Industry 4.0, they can significantly increase the efficiency of warehouses and save time and space.
  • 10. Mobile racking systems are usually mounted on or suspended from rails and are used to store heavy goods. They can be moved back and forth lengthwise or crosswise with comparatively little effort. This makes mobile racks particularly space-saving. However, a pick, which is the removal of goods, takes considerably more time because the shelves have to be moved repeatedly.
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Basically, a warehouse depends on stability, durability, flexibility, installation time and simplicity as well as possible expansion options. It is also important to know the corresponding load limits. Otherwise there is a risk of the shelving to collapse. In addition to significant costs due to downtime and damage to the goods, such an incident also entails enormous security risks for employees.

Don't forget:

In warehouses, special attention must be paid to compliance with traffic rules. Safety risks can only be minimised by strictly separating walkways and driveways.

Procurement warehouses - the start of intralogistics

In addition to their nature, warehouses are also differentiated according to their position in the logistics chain:

What is procurement logistics?

Within the framework of procurement logistics, the company takes care of the purchase of goods and the transport of materials and goods to the receiving warehouse or to production. Procurement logistics is therefore a prerequisite for production and distribution. It ensures that companies are constantly supplied with high-quality goods at the lowest possible price, thus guaranteeing for uninterrupted production. Procurement logistics is therefore regarded as essential for maintaining the competitiveness of a company.

What are the most important facts about procurement logistics?

Procurement logisticians must ensure that their warehouses generate the lowest possible costs. A good choice of location, cost-effective warehouse technology, sustainable inventory policy, management of inventory cycles and optimisation of warehouse processes are important in order to achieve this goal. This also includes the installation of a buffer to bridge any supply gaps. In general, however, the aim is to achieve just-in-time production in order to keep storage costs as low as possible.

The ideal procurement logistician is a market expert who keeps an eye on price developments, knows the discounts of individual manufacturers and acts with foresight, for example, with regard to seasonal bottlenecks. At the same time, he keeps an eye on his competitors and pursues their market strategy and purchasing policy. Because many raw materials come from abroad, he is familiar with national holidays, customs duties and other trade barriers.

What is a procurement warehouse?

Procurement warehouses provide the storage capacity for goods that are used in production. Normally, the warehouse is located near the production site. In rare cases, procurement warehouses are positioned externally, for space reasons, for example. In these cases, reliable transport must be guaranteed. Personnel in procurement warehouses check the quality and quantity of the goods and are responsible for their internal distribution. Increasingly, however, these processes are being automated.

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Handling/ trans-shipment warehouses - the heart of production

Trans-shipment logistics deals with the exchange of goods and merchandise from one means of work to another. The term "work equipment" comprises all road, rail, water and air transport vehicles. Depending on the type of goods, there is often a change of modalities in trans-shipment logistics. A simple change of modalities is referred to as bi-modal transport, a double change as tri-modal transport. The decision as to which modalities for the transport of goods are chosen is based on the factors time, safety and costs.

What are the most important facts about trans-shipment logistics?

Trans-shipment logistics can be part of intra and extra-logistics, meaning, it happening either inside or outside the company. It links procurement and sales markets. If no direct trans-shipment takes place, the goods must be stored in an intermediate storage facility.

What are trans-shipment warehouses?

Interim storage or trans-shipment warehouses are used for the short-term reception of goods. They are intended to ensure the handling of as many goods and commodities as possible. Ideally, they should be placed at the relevant trans-shipment point. In some cases, they also make it possible to sort and assemble (commission) goods that have to be transported to the same destination. In order to save costs, one generally tries to avoid intermediate storage.

Distribution warehouse - on the way to the customer

What is distribution logistics?

Sales logistics (or distribution logistics) is the distribution of manufactured goods. It is therefore an important link between production and sales markets.

What is procurement logistics?

The aim of distribution logistics is to guarantee customers high availability of goods. Products must be available quickly and easily, while keeping storage costs as low as possible. These include strategic, operational and tactical tasks such as location selection, the creation of cost-effective distribution networks, fleet management and order picking. Currently, distribution logistics must, above all, find an answer to increasing demands of customers with regards to delivery times.

What are distribution warehouses?

Because customers are spread over a relatively large geographical area, producers set up so-called distribution centers, i.e., sales warehouses and distribution warehouses. The aim is to ensure that deliveries are made as quickly and accurately as possible. In most cases, such warehouses are relatively further away from the production site. The area near the company can also be supplied from there.

Static and dynamic warehouse systems

Apart from the function of the warehouse in the logistics chain, a distinction is also made between the types of warehouses. There are fixes warehouses (or static systems) and chaotic warehousing systems (or dynamic systems).

In a static system, fixed storage bins are assigned to every good. Car windows, for example, are always stored in compartment "A". Depending on the turnover frequency, certain goods are placed closer to or further away from order picking. This type of storage is particularly suitable for:

  • small companies
  • manageable article volumes
  • companies with generously sized storage areas.

On reaching 60 %, the degree of space utilisation in static warehousing is considered to be relatively low. There is comparatively much free space, because empty compartments may not be occupied by other goods. By default, the order picker walks through the shelves and picks up the goods himself.

In dynamic systems, warehouse units move freely within the storage. There are no fixed storage locations. ERP-Systems are not only supporting the task, but also ensure the functionality of the warehouse. ERP stands for "Enterprise Resource Planning" and refers to software that can be used, among other things, to manage inventory levels. Chaotic warehousing is suitable for:

  • large and confusing warehouses
  • companies requiring space-saving solutions.

Dynamic systems allow warehouses to be loaded more quickly and unoccupied spaces can be prevented. This significantly improves space utilisation compared to static systems. A prerequisite for efficient chaotic warehousing is carefully planned and implemented warehouse management. This includes detailed maintenance and analysis of data. To this end, throughput figures, stock turnovers, error rates and process route analyses must be constantly monitored. In contrast to fixed warehousing, the goods move in dynamic systems to the order picker and not vice versa.

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Working in the warehouse technology business

In order to get off to a successful start in warehouse technology, you need to study materials handling and warehouse technology. Plant manufacturers and industrial engineers are also sought after (the TU Kaiserslautern and the FOM University for Economics in Düsseldorf are only two of the most important addresses). But with job training one also has a good chance to start a career in warehouse technology. Ideally, specialists are organisational talents, have a high affinity to technical and partly also mathematical issues and have a good sense of orientation.

As a warehouse clerk and order picker, one can expect a starting gross salary of 1,600 euros to 1,800 euros. Qualified specialists, like plant constructors, can expect significantly higher salaries. It is not uncommon for them to earn 4,000 euros gross per month.

This article appeared on www.mm-logistik.vogel.de.

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