Warehousing trends in India September 19, 2007Posted by Ramnath Rangaswamy in Business, Emerging Markets, India, Indian Economy, Logistics.
With CST in place, it is cheaper to have a warehouse [ C&Fs/ Depots] in each state than pay 4% CST to ship across federal state boundaries. With CST going away, it is no longer pertinent to have a warehouse [ C&Fs/ Depots] in each state. Warehouses would get consolidated at a few places in India. Hence the trend towards large warehouses which would come up at few strategic locations in India.
Bhiwandi, NCR, Chennai, Howrah, Nagpur, Indore are the places which would see the biggest growth in warehousing.
As warehouses get larger they would also get more sophisticated. With warehouses becoming larger the processes, infrastructure and technology has to be more sophisticated.
Location of pallets and products/stocks
Because the warehouse is larger, the location of each pallet or stock is important. If a pallet’s location is not known it would be difficult to locate it in the warehouse. It is akin to finding a pin a haystack. [ I can vouch for this based on my own personal painful exeperience] For this racks and pallets spots should be marked. The WMS [ warehouse Management System] should specify the location. The warehouse crew should confirm the location by scanning the barcode.
Sufficient loading/unloading docks
There should be sufficient loading and unloading docks for the vehicles. Because the warehouse would be catering to a larger hinterland. [ as the depots in each state would have been eliminated] the number of trucks loading and unloading materials/ products/stocks would be high. And the truck movements would peak towards month end, quarter-end. During design of the warehouse adequate docks should be provided.
Adequate Staging Area
Similarly, adequate staging area for incoming stocks and outgoing picked stocks should be provided. With a view to maximize earnings, warehouse owners/operators, maximize the amount of racks while giving minimum space for staging. Warehouse operators/owners do not give adequate importance and consideration to the staging area.
In my experience, I have seen staging area becoming the bottleneck in warehouse operations. In fact bottleneck is a mild word; the correct word would be lock jam. Incoming stocks cannot be moved into storage because stocks to be invoiced have not been moved out because the staging area is full. The only way out of this lock jam is to stop operations for a day or two to sort the mess out.
System access from anywhere in the warehouse
Systems will have to be installed in the warehouse so that PCs distributed throughout the warehouse can access the main computer on which the WMS runs. In a small warehouse, the warehouse supervisor would have walked to the computer centre or office and got the information. In a large warehouse this would lead to a waste of time.
The layout of the warehouse should minimize the material movement, optimize the warehouse resources [ docks, staging area] and meet the business needs. In a large warehouse meticulous planning of the storage of materials becomes important. Fast movings and heavy goods should be close to the docks, slow moving stocks on the top racks and extra inventory on the top racks and away from the dock doors. Since the warehouses would be storing material from different companies, there should be no cross movement of goods.
The warehouse should have a customization/ repacking area so that stickering, bundle packing can be done. Warehouses should have this facility, as it is logistically simple and cheaper than transporting the material to be customized to another facility and handling the material additional times.
Since goods have to be delivered to customers over longer distances, efficient and reliable transportation is a pre-requisite for the move to larger warehouses, in light of the CST being eliminated, being successful.
For customers and clients, making the move to the post-VAT mega warehouses, my advice would be;
- Do a network modelling and optimization before finalizing the mega warehouses
- Ensure the warehouse has scope to accommodate the growth in your business for the next 5 years
- The warehouse should have adequate picking area and docks
- Not more than 85% of the warehouse should be occupied
- There should be no union for loading/unloading staff
- Warehouse should operate 24 hours and 7 days a week
For the complete story click on the link.CST phaseout and warehouse boom