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Organizational Data in Warehouse Management 235

GBI has enabled warehouse management only in the San Diego plant, and
all three storage locations in that plant are assigned to warehouse number 100. If
GBI wished to enable WM in other plants, then the storage locations in the other
plants could also be assigned to the same warehouse number. Alternatively, GBI
could create additional warehouses for other storage locations. Although all
three storage locations in the San Diego plant are assigned to warehouse num-
ber 100, GBI could choose to assign the fi nished goods and trading goods stor-
age locations, but not the miscellaneous storage location, to the warehouse. This
setup would be appropriate if the miscellaneous storage location were a small
area that did not contain many materials.
A warehouse is divided into smaller areas, in a hierarchical manner, as
depicted in Figure 7-9. More specifi cally, a warehouse is comprised of storage
types, which are further divided into storage sections. In turn, storage sections
contain storage bins where the materials are ultimately stored. Note that stor-
age bins are actually master data. We introduce them in this section, however,
to clarify the relationships among the various elements in a warehouse. Finally,
storage types are sometimes divided into picking areas rather than storage sec-
tions. We examine all of these concepts in the following sections.

Figure 7-9: Structure of a warehouse

STORAGE TYPE
A warehouse must include at least one storage type. A storage type is a divi-
sion of a warehouse based on the characteristics of the space, materials, or
activity. For example, the space in the warehouse can be divided into storage
types based on how the materials are stored. In such cases the storage types
could include shelf storage, pallet storage, and rack storage. Some materials
may need to be handled carefully (e.g., hazardous material) or to be kept in
environmentally controlled areas (e.g., specifi ed temperature). In these sce-
narios the storage types would refl ect these specifi cations. Thus, storage types
could be designated as hazardous storage and cold storage. In Figure 7-9 there
is one area for shelf storage and one for pallet storage.
Recall that the assignment of storage locations to a warehouse links IM
activities to WM activities. To illustrate this point, consider a simple procure-
ment scenario in which a company receives a shipment from a vendor. When

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