Thursday, July 7, 2022

What is warehouse? Types of warehouses in Vietnam

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With the newly of development from e-commerce and the application of the following technological advances in consumer’s daily lives, many countries including warehouse in Vietnam have been a booming major services in both Logistics and Transportation industries

It plays an important role and is a key link in the global supply chain, in smaller scale, the storage of businesses. Currently, the limit of goods that can be stored at the warehouse has been extended to almost limitless from raw materials, finished products, machinery, equipment, etc.

Supporting the maintenance of stable quality of the environment in the warehouse and the products stored therein, warehouse service providers have applied more high-tech equipment to enhance the ability to manage the warehouse as well as become an automatic system, reducing errors arising from environmental and human factors.

So what is warehouse? How many types of warehouses are there currently? What are the criteria for choosing a warehouse with ensured capacity and safeness during the archiving? Let’s join us to find out more about one of the most essential types in the world’s supply chain

1. What is warehouse? How does it work?

A warehouse can be understood as a functional area or area that is fully built with facilities and equipment to store different types of items. Depending on the initial functional design, the warehouse can preserve goods in normal environment or special conditions in terms of temperature and humidity.

Moreover, the warehouse needs to be fully equipped with all kinds of equipment such as forklifts, air conditioning systems, dehumidifiers, shelves, goods locating, technology resources for management, monitoring, and safety inspection of common goods constantly and continuously

Goods in stock will be classified into 2 main types: Import and Export. The imported one here is the type that can be stored for a relatively long time with the main purpose of saving office space and resources of businesses while using third-party warehouse service providers

As for exported goods, it often includes those are continuously regulated, having a short storage time before being distributed to other markets in the region or to countries around the world. This type of goods is often more popular due to the constant demand for using and requires the capacity of warehouse providers to ensure two main factors: Accuracy and well-timing

In addition, the process of warehousing requires some types of goods needed to be preserved in a special environment such as low temperature or low humidity, such as: food, electronic equipment sensitive to environmental temperature, drugs, preserve on demand

Therefore, it can be divided into the main types of warehouses according to the next section:

Types of warehouses in both Asia and Vietnam

– Common warehouse: This is the most popular warehouse to store all kinds of goods under normal environmental conditions, ensuring safety factors for goods.

– Cold storage / cool storage: In fact, Warehouse in Asia can be divided into two types of warehouse due to the specificity of each commodity in cool storage (from 100C to 200C) or cold storage (where the temperature is ≤50C). The lower the temperature demand, the higher the cost of warehousing due to the more energy consuming

– Bonded warehouse: Basically it’s a general warehouse, which can be established by state agencies or a private companies, but all strictly comply with the goods management of the customs in which country. Bonded warehouses can meet the needs of storing goods in both normal and cold storage

– Automated warehouse (Or Warehouse automation): This is a fairly new concept and currently only a few leading enterprises in the transport sector has abilities to operate into full potential. Above from that, the future of automated warehouses is likely to become the main development of the field. due to its automation, highly efficiency, accuracy, speed and flexibility. While the system functioned under human control, but the detailed elements should be operated by systems of machineries including forklifts, racks, and tracking

– Distribution warehouse: A common model that retail businesses mainly applied for its combination purposes of storage and an offline point of sale. Depending on the company’s business strategy, the distribution warehouse can be the type of supply for retail units or direct sales. In tradition, cargoes in distributing warehouses only stored for a short period of time. This model’s being applied by many retailer warehouse in Vietnam, specifically many Warehouses in Hanoi are used as official outlets of the brands.

– E-commerce warehouse: With the rapid development of current e-commerce sites, service providers have promptly responded to e-commerce warehouses which main function to handle orders of online shopping which included picking up, packing and shipping are provided by a 3rd party aka 3PL

2. Criteria to choose the best warehouse asia?

Goods storage time

This is the prime importance not only for items with a short shelf life, but for all other commodities. Some warehouse services of enterprises can only be stored for a short time, limited support for items that need to be preserved for longer periods

The reason why there are warehouses that only receive short-terms due to method of business mainly relies on B2C, which commonly has limited capacity, short turnaround time, optimized area and requires few personnel 

Therefore, the storage duration’s the most important factor that businesses should prioritize to choose the suitable warehouse companies according to the current business’s demand

Storage cost and number of SKUs

An additional advantage of SKU more than of tracking labeled units, SKUs also gains further benefits from estimating the cost and area that needed for large amount of goods.

For example, with garment products, each shirt will be classified into different sizes, colors and styles, the storage cost will significantly increase per unit of goods. Even if you have small numbers of orders compared to the amount of goods you store, there’s a big chance that the fulfillment companies may not agree to cooperate.

The reason behind’s fulfillment companies work on reusing warehouse’s space as quickly as possible. So if you have a large number of SKUs but the number of sales still not keeping up with the pace, a logistics company will be more suitable choice as its leading edge is comfortable time and many supportive services

Location of the warehouse

In order to import / export goods operation goes smoothly and thoroughly, for example a warehouse ALS situated near the main traffic route as the optimal choice rather than located in center downtown but with crowded and narrow streets. This small pin point will help your business huge amount of time for passing through few meters-wide streets.

Moreover, the choice of warehouse location also depends vastly on the needs of customers, companies with the main target to store for longer time and occasionally access the cargo, you can choose Warehouse suppliers in rural or outer belt of urban areas

As for units that need to import / export goods continuously, you should choose a warehouse located at a main traffic route, which connect to many major city’s roads as possible.

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