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A private warehouse facility is owned and managed by the same enterprise that owns the merchandise handled and stored at the facility.
A public warehouse, in contrast, is operated as an independent business offering a range of services -such as storage, handling, and transportation-on the basis of a fixed or variable fee.
The major benefits of private warehousing include control, flexibility, cost, and other intangible benefits.
Private warehouses provide more control since the enterprise has absolute decision-making authority over all activities and priorities in the facility.
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The benefits of public warehousing are:
1. It is in general less expensive and more efficient and effective to achieve more customer service level.
2. Public warehouses are usually strategically positioned and easily available.
3. Public warehousing is adequately flexible to meet most space requirements, for several plans are available to suitthe requirements of different users
4. Fixed costs of a warehouse are distributed among many users. Therefore, the overallcost of warehousing per unit works out to a lower figure.
5. Public warehousing facilities can be given up as soon as necessary without any additional liability on the part of the user.
6. The costs of public warehousing can be easily and exactly ascertained, and the userpays only for the space and services he uses.
7. Conservation of capital is more in public warehousing
8. It has got enough space to handle peak requirements
9. Public warehousing has reduced risk in their operations.
10. Public warehousing has got good economies of scale
11. It would give Tax advantages for end users
12. Knowledge of exact storage and handling costs are available to end users13. It is insulated from labor disputes
The benefits of private warehousing are:
1. Private warehousing offers better monitoring systems over the handling and storageof products as required by the management from time to time which would enhancethe performance of the warehouse.
2. There is less likelihood or error in the case of private warehousing since thecompany’s products are handled by its own employees who are able to identify theproducts of their own company.
3. If there is sufficient volume of goods to be warehoused, the cost of privatewarehousing comparatively less than that of public warehousing. The cost of privatewarehousing per unit may be actually higher if the private warehouse is packed to the brim.
4. Private warehousing is the best choicefor some of the locations and the productshandled because of the non-availability of the public warehousing.
5. Private warehousing has the opportunity to specially design its facilities for automaticmaterial handling equipment where as public warehousing may have the same.
6. Enabling the end user to increase their efficiency by means of better design andstructured lay-out.
7. efficient use of human resources in warehouse operation improves end users’ overall performance
8. Intangible benefits in the form of cost reduction in all the warehouse operations.
