What is warehousing?

Picture a warehouse. Is it a sprawling building with piled-up boxes and warehouse workers with clipboards in hand—or a high-tech space complete with real-time inventory tracking and staff sporting smart glasses?

For most businesses, the reality is somewhere in between.

In the age of online retail, warehousing has become a strategic operation for any organization distributing physical goods. But while some leading businesses have already transformed their warehouses into data-driven smart warehouses, many are yet to fully embrace the opportunities of digital warehousing technology.

Read on to learn all about warehousing, the benefits of warehouse digitalization, and warehousing best practices.

In this article

• A definition of warehousing
• The difference between warehousing and storage
• The key elements of warehousing
• Smart warehousing in action
• Best practices for an effective warehouse
• Summary

A definition of warehousing

Warehousing is the process of storing, locating, and distributing physical goods. It involves systematically placing goods in a designated space to ensure they’re easy to access and can be handled efficiently throughout the supply chain.

Nowadays, warehousing often even goes beyond that. Warehouses equipped with smart warehousing systems can automatically monitor the movement of products through the warehouse and the time taken for each part of the process.

Smart warehousing is particularly important in e-commerce, where warehouses need to fulfill large volumes of small orders within short time frames. Here, automated solutions can help warehouse workers process orders more efficiently and improve their inventory management. Plus, by tracking the progress of each order, these systems can provide automatic updates and estimated delivery dates to the customer.

There are many different approaches to warehousing. You might have heard of concepts like lean warehousing, flexible lease warehousing, or grade A warehousing.

Here’s what they entail:

• Lean warehousing: An approach that focuses on cutting out waste and making storage and distribution processes as efficient as possible.
• Flexible-lease warehousing: Rented warehouse space with short-term or adjustable rental options, so you can adapt your storage space as needed.
• Grade A warehousing: High-quality, modern warehousing facilities that deliver high efficiency and a low cost of ownership.

The difference between warehousing and storage

Are warehousing and storage the same? Not quite. Storage means keeping goods in a designated space for future use, while warehousing takes things a step further.

Warehouses are storage facilities where products are managed, tracked, and prepared for distribution. Systematic processes like inventory management and order fulfillment play a fundamental role in warehousing but not in storage.

With digital technology, warehousing has become more accessible and cost-effective for businesses. Hence, more companies are moving from classic storage concepts to digitally enhanced warehousing systems that help them improve the speed, accuracy, and transparency of their supply chains.

The key elements of warehousing

If you work in a company that sells physical products, warehousing most likely plays a central role in your operations. Here are some of the main elements it includes:

Warehouse management

Warehouse management lays the strategic foundation of your warehouse operations. It involves planning and implementing processes, monitoring and training your staff, and creating an inventory. Good warehouse management means continuously looking for ways to improve your warehouse processes.

Warehouse operations

Your warehouse operations are all processes carried out within your warehouse. This includes replenishing stores, keeping inventory, picking orders, and shipping them to customers. The more efficient your warehouse operations, the lower your costs and the faster your shipments.

Warehouse management systems

A warehouse management system (WMS) is software that helps you manage your warehouse and improve warehouse operations. WMS tools range from classic ones that simplify desk work—like tracking inventory, orders, and shipments—to augmented reality (AR) solutions that enhance manual tasks.

For example, AR-enhanced vision picking solutions run on smart glasses, allowing warehouse workers to see order details and item locations within their line of sight. This helps them pick orders faster and reduce the number of errors.

Read more: Smart logistics: Boost your warehouse IQ with AR | TeamViewer

Smart warehousing in action

Whether you’re a small business or a large corporation, digital solutions can transform your warehousing management and operations.

DHL has shown that equipping staff with AR-powered smart glasses makes their work easier and allows them to handle more shipments in less time.

Similarly, leading semiconductor manufacturer GlobalFoundries uses vision picking technology to boost warehouse productivity and save 100,000 sheets of paper per year.

What’s more, companies like DHL and GlobalFoundries demonstrate that these technologies can do more than boost operational efficiency. By generating and analyzing warehouse data, they can help improve transparency, enable smarter decision making, and ultimately create an agile supply chain.

That means you know the exact location of each item in your inventory, have full control over dispatched items, and can react quickly to product recalls, damaged stock, and expired goods.

Read more: How GlobalFoundries transformed warehousing with vision picking | TeamViewer

Best practices for an effective warehouse

Do you need to ensure that your warehouse functions smoothly and efficiently? Implementing these proven best practices is a great place to start.

1. Don’t rely on manual work
   Manual processes and data entries are time-consuming and prone to errors. Choose automated solutions that allow your staff to focus on other tasks.
2. Be smart about item placement
   Place the most popular items in easily accessible spots to save time and ensure smoother workflows for your staff.
3. Account for seasonal changes
   Seasonal fluctuations can be a challenge in warehouse logistics. If you need to be flexible, consider short-term warehouse rental.
4. Don’t work in silos
   Connect people and systems across your warehouse with the information they need. Smart technology solutions that integrate with one another are great for this.
5. Prioritize security
   Security—be it data protection or employee safety—is essential to an effective warehouse. Mitigate incidents, avoid costs, and keep productive with secure technology.