Some warehouses are entirely automated, with no workers inside. Pallets and product are moved with systems of automated conveyors, storage and retrieval machines synchronized by programmable controllers and computers software. These systems are frequently installed in refrigerated warehouses where temperatures are kept very cold to keep the product from spoiling, and also where land is expensive, as automated storage systems can use vertical space efficiently. These high-bay storage areas are often more than 10 meters high, with some over 20 meters high.
Whether a company really need warehouse space depends on the orders received, product demand as well as the amount of storage that is required. When deciding if a warehouse is needed, the following are some basic factors to be considered:
- ability to help the company reduces its transportation costs
- ability to coordinate supply and demand
- ability to cater to production needs
- ability to assist in marketing process
- ability to obtain quantity purchase discounts
- ability to support JIT programs and preventing stock out
- owning (private)
- renting (public)
- leasing (contract)
- storing in transit
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