The Costing of Handling and Storage in Warehouses

Abstract

The successful exploitation of available resources and the planning of future resources in any organisation depend to a large extent on the avallabll1ty of accurate costs and on the way in which they are marshalled and related to activities and performance. Sometimes it is erroneously thought by general management that the cost of assessing costs is higher than any resultant savings and may result in missing opportunities for advancing the technology and making the most effective long term use of resources. The analysis of conventional warehousing costs discussed in Part I illustrated the wide variation which exists in this sector of industry. In that report an operational costing system was developed and used to establish costs of buildings, equipment and personnel in various warehouse systems. These costs were then related to the throughput of goods in the systems and revealed large differences This second report discusses the results of applying the same operational costing system to a sample of 'high-bay' warehouse systems and indicates a similar wide variation of costs and unit costs. The detailed analyses have been based mainly on 'unit load in-unit load out' systems, although some costs of order-picking systems have been collected and are discussed briefly. The design, evaluation and practical operation of the many kinds of manual and mechanised order-picking systems is so complex that it is to be the subject of a research programme to be started shortly by the National Materials Handling Centre.