Break Bulk Warehouse

Source: https://www.slideshare.net/amit8181/warehouse-3043976

Last post, we discussed a tool for distribution facility network design. Another factor potentially influencing network design is the role of the warehouse. For example, will all facilities be pure distribution centers, storing inventory and distributing to customers? Or will facilities be specialized, serving different purposes.

Within a supply chain, it is common to have multiple warehouses serving specific roles to improve customer service levels, reduce transportation costs, or both. For example, a break bulk warehouse will allow a company to leverage inbound transportation truck loads which are typically better rates than smaller less than truck load rates. The warehouse in this case serves the purpose of receiving bulk shipments through economical long distance transportation from plant and breaking of these into small shipments for local delivery to various customers. This enables small shipments in place of long distance small shipments.

The APICS Dictionary, 15^th edition, defines break bulk (warehouse) as:

‘dividing truckloads, railcars or containers of homogeneous items into smaller, more appropriate quantities for use…’

Another source, http://logisticssupplychainforum.blogspot.com/2010/03/logistics-warehouse-management-part-i.html presents economic benefits of various warehouse roles and defines the benefits of break bulk a receiving bulk shipments through economical long distance transportation from plant and breaking of these into small shipments for local delivery to various customers. This enables small shipments in place of long distance small shipments.