Can any manufacturing company smoothly run without warehouse ?

 What is warehousing?Is it just a godown to store materials and supply it whenever it is required? Or is it a distribution centre for finished goods? Or is it material stores in a production plan? Let’s find out.

Warehousing is actually part of a material management process concerned with storage of materials to deliver on time. What is that, that needs to be delivered on time? The raw materials and some of the semi finished goods and parts that are required for manufacturing. That’s one type of material.Finished goods that are required to be delivered to retail shops and customers is another type of material.

Hence warehousing handles both raw materials,parts,spare parts,semi finished goods and finished goods. The main aim of a warehouse is to fulfill the material management functions economy,speed and efficiency.

Typically in traditional sense a warehouse is viewed as a place to store inventory. Let us look at what are all the different types of inventory that are stored in a warehouse. As we all know now, raw materials, parts, sub systems, semi finished goods and finished goods are some of the key inventory that is stored in a warehouse. Warehouse can be used to store some other purchased items also. It can also be used to store scrap material till they are disposed. It can also be used to store machinery required for manufacturing and spare parts required for repairing or maintaining the machinery. This is about the inventory that is being stored in a warehouse. So what else can be stored in a warehouse?Warehouse could also be used to store documents. Any organisation, whether it is a distributional centre,whether it is a retail outlet, whether it is a manufacturing company, they need to store a lot of documents. Some of them are process related documentation. And many are statutory and compliance related documentation. For example, in India financial documentation of a company need to be stored for seven years. That is a huge amount of documentation for a large company. So where will they store this? Traditionally in the past, these documents were stored within a office premises. But now there are document warehouses where a large number of documents can be stored and retrieved quickly. One of the examples of where document storage becomes a huge warehouse activity is in the industry of mobile phone operators. Mobile phone services providers, especially in India are required to provide the original documentation of a customer application for whenever the regulartory authorities ask for it. 

Imagine a company like Airtel which has hundred and fifteen million subscribers in India where would they store under hundred fifteen million application forms,original signed documents of application forms and retrieve it quickly whenever the telcom regulatry authority asks for it. These are stored in specialised warehouses where records management and document management are the key issues.

The warehouse can also be used to store technology products like back up tapes. Large organisations which depend on information technology store their data in electronic format in tapes and other media. So where will they store this? These materials have to be stored under proper storage conditions and there are warehouses designed to store such technology products as magnetic tapes, backup tapes, CDs, DVDs, etc.

So with this input on warehousing, let us try to define what is warehousing provides time and place utility for raw materials, industrial goods and finished products. Allowing companies to use customer service as a dynamic value adding competitive tool. So warehousing is not just a place to store and deliver material. It is now becoming a strategic device, a strategic concept in the entire supply chain.

Thanks Dear,

In my opinion , i do not think we can run the business without warehousing especially when the company specialized in Sales,Distribution, manufacturing and sales , or nay activities related to market , Why:

• In time you need to feed your market from where you will get the goods.
• Financially , how you can account P&L , without soled warehousing system.
• If you need to make a delivery to you POS's , Sales team , showrooms how you can determine the quantities and who is responsible at the end.
• When you manufacture goods where you will store it , if you do not need ,how you can know what is the manufactured quantities , expired and valid one ?

Ware house is very important for a manufacturing organisation.

1, Planning- To plan daily orders to be processed, scheduled , your receiving area for goods in, despatch area. More- different stages of process,2. Organising sequence of goods picking  (Sales orders) 3. Organising the logistics of operations and distribution 4. Staffing 5. proper directions  and control  for (goods as well as documentation).

Quality management-Some times goods itself required particular set up/ temperature etc. (Like- Pharmaceuticals).

Customer service and minimising the picking time- to cater fast delivery- it is important to identify and locate correct products in minimal possible time with ease.

Lack of warehouse management- will lead to loss of revenue (including theft/damage) and increased cost of operation.

In today's world- e business is becoming very popular and very small units probably can have the possibility of functioning without warehouse- who cater specific individual orders.

This is very interesting question.

Yes, theoretically possible, if the receipt of raw materials is “Just-In-Time” and delivery of finished goods also “Just-in-time”, so there is no need for warehouse. All this possible provided the company have confirmed order for delivery of finished goods from customer and suppliers deliver the raw materials in sequence of production.

In reality, the company needs to forecast the market demand based on confirmed orders from customer + expected future demand and then shall go for production. Then, the company needs raw materials in sequence but suppliers will deliver in lot for logistical convenience. So, without a warehouse, everything will be stretched, sometimes the shop floor will be full of raw materials and also the company may miss delivery deadline - resulting in loss of customer. So,  for smooth operation, a manufacturing company needs a warehouse.

It is impossible for a Manufacturing company to run with out a warehouse.

Inbound - Parts inventory required to built a products. People above answered about JIT.

JIT strategy is to maintain Low inventory levels and not to stay without inventory.

Secondly Buffer stock is required to avoid unwanted stoppage of production.  It is an safety stock, where else we can maintain that other than warehouse

Outbound- finished product inventory required to to be stored either in warehouse or Distribution center.

Either way with out Warehouse operation doesn't work

One possible solution is making the supplier to keep near to the  Manufacturing unit, where JIT can be implemented efficiently. Nissan implemented it.

You can always operate without a warehouse, however, a warehouse will always facilitate the production cycle into a more being stable and efficient. Otherwise, the production line needs to be adaptable to an unreasonable level to match the market fluctuating and seasonal needs.

it is not easy 

but Toyota made it

warehouse is kind of waste that manufacturer should reduce to the minimum, it maybe so hard for sales and marketing team, supply chain, logistic or production to work without warehouse, they need a buffer. but warehouses and inventories do not add any value to the invested capital, it takes an excellent operating process to reduce or get ride of inventories as in Lean Manufacturing.

 i already deal with furniture suppliers in china who work with zero inventory ( in a month they could provide me with over four hundred hotel room furniture). so its possible      

NO , it can't the warehouse function run in conjunction with the other departments gives the optimum service to clients and other areas of required Buisness if run poorly it is eventually the demise of the product and company , Mike , F

No. Unless it is a Japanese company.

Having worked in a manufacturing setup in India for almost 15 years, running a manufacturing setup without a warehouse is practically not a viable option though theoretically it is feasible. The reason being that for a manufacturing setup to run smoothly and uninterrupted, at least a days inventory is required for some items and the rest can be managed with at least a shift inventory on hand.Yes, Toyota does run on JIT schedules but this may not be practical for all manufacturing set ups.We also need to remember that a stoppage of production due to non availability of a material can be a very costly affair depending on the size / type of the manufacturing setup.So ideally we need to take a call on the warehouse requirement considering the practicality of the deliverable's and plan for the bare minimum requirement for a smooth running.