Every company must store its goods while they wait to be sold. To ensure it can meet orders speedily, it must have stock available. A storage function is needed because production and consumption cycles rarely match. For example, a lawn mower manufacturer must produce all year long and store up its products for the heavy spring and summer buying season. The storage function overcomes differences in needed quantities and timing.

A company must decide on /IOTO many and what types of warehouses it needs, and 'where they will be located. The more warehouses the company uses,

distribution centre A large, highly-automated warehouse designed to receive goods frnm varioits planes and suppliera, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

the more quickly goods can he delivered to customers and the higher the service level. However, more locations mean higher warehousing costs. The company, therefore, must balance the level of customer service against distribution costs.

Some company stock is kept at or near the production plant, with the rest located in warehouses around the country. The company might own private warehouses, rent space in public warehouses, or both. Companies have more control over owned warehouses, but that tics up their capital and is less flexible it' desired locations change;. In contrast, public warehouses charge for the rented space and provide additional services (at a cost) for inspecting goods, packaging them, shipping them and invoicing them. By using public warehouses, companies also have a wide choice of locations and warehouse types.

Companies may use distribution centres, which are designed to move goods rather than just store them. They are large and highly automated warehouses designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible. In the European market, producers of industrial and consumer goods are having not only to make trade-offs between customer service level and costs, but also to consider the feasibility of incorporating pan-European distribution networks to provide consistently high standards of service and flexibility. For example. British Steel, in the face of stiff competition in mainland European markets, set up regional distribution centres to be closer to customers, while also developing information-technology links between production plants, distribution operators and customers in an attempt to improve service efficiency.'1'

Newer, single-store? automated warehouses with advanced materials-handling systems under the control of a central computer are increasingly replacing older, multistorey warehouses with outdated materials-handling methods In these warehouses, only a few employees are necessary. Computers read orders and direct lift trucks, electric hoists or robots to gather goods, move them to loading docks and issue invoices. The modern high-tech warehouse -with high bay storage, using narrow aisle trucks and more stacker cranes, backed by multilevel picking or sorting systems - is a growing trend in Europe. Such warehouses have reduced worker injuries, labour costs, theft and breakage, and have improved inventory control. Producers, however, do not necessarily have to

computer distribution centre can ship any of500 deferent types of Compaq computer

make heavy capital investments to secure such high-tech warehousing - increasingly, the advanced software and warehousing solutions are being provided by specialist distribution companies, which are taking over large sections of firms' in-house warehousing and distribution functions.

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