Private Versus Public Warehouse Essay

Nowadays, manufacturing and services firms face growing challenges to increase profit margins amidst more and more fiercer competition. Under such circumstances, industry analysts and supply strand experts suggest manufacturers and service providers to promote more sound supply and demand planning, caution, and execution as the means to unlocking significant gains in margins. According to Search CIO (2007), SCM refers to management of information, materials, and finances along a chain of process from suppliers to manufacturers and then from manufacturers to customers.The interests in the discussion of supply chain management occur since it relates to costs reduction in all aspects of business process especially regarding the instrument reduction that suggests manufacturer produce goods when needed. In this situation, the endurance of type of w behouses play significant role since it determines the SCM dodge for a company. In general, there are two types of warehouses private and populace warehouses. 2. Private storage warehouse By definition, private warehouse is type of warehouse that directly maintained and operated by the owner of products or goods that are stored in it.Meanwhile, the warehouse facility itself could be happened to be privately owned or leased (Seaboard Warehouse Terminals, 2004) 3. Public Warehouse The other type of warehouses is public warehouse. Unlike private warehousing, public warehousing provides greater efficiency for a company since one warehouse is designed to design multiple logistics. Figure 1 shows typical design for warehousing needs in which the selection of public and private warehousing depends on the needs. Figure 1 Warehouses Needs Classifications 4. Public Warehouse versus Private Warehouse ConsiderationLike outsourcing decision, the selection of type of warehousing that is suitable for a company. And according to comparison based on several factors, the public warehousing is considered beneficial than private wareh ouses as following 4. 1. Costs Reduction Public warehousing does non require a company to have dedicated human resources/personal to operate the warehouses facility The manipulation and storage fee is predictable the warehouse costs can be translated into the storage costs to book that would help marketing department to include this costs in the pricing scheme of the products