In the past, warehouses were referred to as cost centers and rarely adding value. But the increasing need for transfer of products across cities, countries and continents resulting from movement of production to the Far East, the growth in e-commerce and increasing demands from end users has seen a change about the perception of warehouses. They are vital components within today's supply chain. They form the Integral part of the supply chain in which they operate, and so trends such as increasing Market volatility, product range proliferation and shortening lead times, all have effect on the roles the warehouse is required to perform. Warehouses are most likely involved In various stages of sourcing, production and distribution of goods, from the handling of raw materials, work-in-progress through to finish products It is therefore apparent that different activities take place at a warehouse and thus, require different nature of facilities, staff as well as equipment to suit each function.
With the vast nature of difference, warehouse operations could easily be the most costly element of the supply chain. The pressure is on warehouse managers to increase productivity and accuracy reduces cost and inventory whilst improving on customer service. The successful management of the warehouse is critical in terms of the level of service provided as well as the cost incurred.