What are the disadvantages and advantages of a centralized warehouse?

Answer 1

I presume you mean centralized manufacturing or planning. Centralization implies standardization, thus the customer get less variety. It also implies less ability to change processes, survive destruction, control transportation costs to markets, and hire the best workforce. The centralized economy of the USSR had only one or two GIGANTIC plants for making aluminum, processing meat, building airplanes, etc. The US had hundreds of smaller plants as well as access to world markets. Who was the more vulnerable?

Answer 2

Warehousing facility should be appropriate to use ub terns of right size, structurally sound, well maintained and clean). The question arises-should size determine product volume or product volume determines size? This is defined with the following parameters- proper equipment on band( lighting, labeled racks, containers, forklift, etc.), efficient product flow (LIFO Vs. FIFO), security, and centralized or decentralized facility?

Warehousing had a following advantages and Disadvantages.

Advantages:-

It frees up space at individual plants.,

Central inventory is, less the sum of several decentralized warehouses., better purchasing leverage., faster turnaround on large orders., more efficient use of labor.

Disadvantages:-

Loss or hands on control at plant level., requirement for mutually agreed upon grading standards., taping procedures., hanging/folding standard., reduced local flexibility., “All eggs are in one basket”.

Layout of ware house should enable:-

Fast tracking product placement and withdrawals., Reduced travel distance for high volume products., Reduced handling., Portability of storage., Conveyors., Just In BY MaYank Taneja
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