The concept of virtual warehousing surfaced due to emerging networking and communication technologies in the 1980s. This helped very large organizations operating in the global markets to evolve a framework of competitiveness with effective and efficient logistics operation to develop an advantage over their business rivals. It is defined as a single storage system located at a convenient place to take care of worldwide requirements of products and services thereof, based on the information in a real-time environment. However, the effectiveness of a virtual warehousing system depends on the speed and accuracy of information flow and analysis . The success of a virtual warehousing system will depend on the availability of the following:
- Alternative and efficient transportation system
- Speedy communication and computing systems
- Networking facilities
- Real-time tracking system
- Inventory management software for demand management to handle product volumes and varieties.
The concept is still in its early stages of development and application. It is implemented only in few places in a phased manner.
Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.