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Location Types

Audience: Warehouse managers, operations team, system administrators

Overview​

Location types are classifications that describe the kind of location. Every location has a type that indicates its primary characteristic—whether it's a warehouse, a retail store, a production facility, or something else.

Purpose: Location types help organize locations and enable automated workflows based on location characteristics.

What is a Location Type?​

Definition​

A location type is a category that classifies what kind of facility or space a location represents.

Examples:

  • Warehouse
  • Retail Store
  • Production Facility
  • Office
  • Virtual

Why Types Matter​

  1. Organization: Group similar locations together
  2. Reporting: Analyze inventory by location type
  3. Workflows: Apply different rules based on type
  4. Permissions: Restrict access by type

Common Location Types​

1. Warehouse​

Description: Large storage facility for bulk inventory

Characteristics:

  • High capacity
  • Organized with zones/aisles/bins
  • Receives from suppliers
  • Ships to customers or other locations
  • May have climate control

Examples:

  • Main Distribution Center
  • Regional Warehouse - East Coast
  • Cold Storage Warehouse

Typical Operations:

  • Purchase receipts
  • Stock movements (internal)
  • Sales shipments
  • Inventory counts

2. Retail Store​

Description: Customer-facing sales location

Characteristics:

  • Display areas
  • Point-of-sale systems
  • Smaller quantities than warehouses
  • Direct customer interaction
  • May have backroom storage

Examples:

  • Flagship Store - Manhattan
  • Mall Location - Store #45
  • Pop-Up Shop - Summer 2024

Typical Operations:

  • Sales shipments (to customers)
  • Stock movements (receiving from warehouse)
  • Returns processing
  • Display replenishment

3. Production Facility​

Description: Manufacturing or assembly location

Characteristics:

  • Work-in-progress inventory
  • Component consumption
  • Finished goods production
  • May have quality control areas

Examples:

  • Manufacturing Plant - Chicago
  • Assembly Line - Building 2
  • Blending Facility

Typical Operations:

  • Assembly transactions (consuming components, producing finished goods)
  • Stock movements (components in, finished goods out)
  • Quality inspections

4. Office​

Description: Administrative location

Characteristics:

  • Small quantities of supplies
  • Not for bulk inventory
  • May track office supplies separately

Examples:

  • Corporate Headquarters
  • Regional Office - Boston
  • Sales Office - LA

Typical Operations:

  • Minimal inventory tracking
  • Office supplies (if tracked)

5. Virtual Location​

Description: Logical location without physical space

Characteristics:

  • Represents inventory not physically at company locations
  • Accounting/tracking purposes
  • No physical address

Examples:

  • Consignment Inventory (at customer's site)
  • In-Transit Between Warehouses
  • Customer-Owned Stock

Typical Operations:

  • Stock movements (logical transfers)
  • Special transaction types

6. External/Third-Party​

Description: Location owned by another company

Characteristics:

  • Not under direct control
  • May be supplier or logistics partner
  • Track for visibility only

Examples:

  • Third-Party Logistics (3PL) Warehouse
  • Supplier Consignment Location
  • Drop-Ship Location

Typical Operations:

  • Limited transactions
  • Visibility into external inventory

Visual Overview of Location Types​

Real-World Scenarios​

Scenario 1: Perfume Distribution Company​

Locations by Type:

Warehouses (Type: Warehouse):

  • Main Distribution Center - Chicago
  • Regional Warehouse - LA
  • Regional Warehouse - New York

Retail Stores (Type: Retail):

  • Flagship Store - Fifth Avenue, NYC
  • Mall Store - Beverly Center, LA
  • Outlet Store - Chicago Premium Outlets

Production (Type: Production):

  • Blending Facility - New Jersey
  • Bottling Plant - Chicago

Virtual (Type: Virtual):

  • In-Transit Inventory
  • Customer Consignment - Department Store X

Reporting:

Inventory by Location Type:

Warehouses:        2,500 items ($350,000)
Retail Stores:       800 items ($120,000)
Production:          300 items  ($45,000)
Virtual:             150 items  ($20,000)
───────────────────────────────────────────
Total:             3,750 items ($535,000)

Scenario 2: Workflow Automation​

Rule: "All purchase receipts at Production locations require quality inspection"

Setup:

  • Location Type: Production
  • Automated Workflow: Route to Quarantine → Inspection → Release

Benefit: System applies rule automatically based on location type

Comparing Location Types​

FeatureWarehouseRetail StoreProductionVirtual
Physical SpaceYes (large)Yes (small)Yes (medium)No
Customer AccessNoYesNoN/A
Receives PurchasesYesRareYesNo
Ships SalesYesYesNoPossible
ManufacturingNoNoYesNo
Typical CapacityHighLowMediumVaries
Address RequiredYesYesYesNo

Business Rules​

Rule 1: Each Location Has One Type​

Valid:

  • Main Warehouse is type "Warehouse"

Invalid:

  • Main Warehouse is both "Warehouse" and "Retail"

Why: Prevents confusion in workflows and reporting

Rule 2: Type Affects Allowed Operations​

Examples:

Warehouse Locations:

  • ✓ Can receive purchase receipts
  • ✓ Can ship sales orders
  • ✓ Can transfer stock

Retail Locations:

  • ✓ Can ship sales orders (to customers)
  • ✓ Can receive transfers (from warehouse)
  • ✗ Typically don't receive purchase receipts (directly from suppliers)

Production Locations:

  • ✓ Can consume components (assembly)
  • ✓ Can produce finished goods
  • ✗ Don't typically ship sales orders

Virtual Locations:

  • ✓ Can track inventory logically
  • ✗ No physical movements

Rule 3: Types Don't Determine Hierarchy​

Location Type is independent of Location Hierarchy.

Example:

  • Main Warehouse (type: Warehouse)
    • Zone A (type: Warehouse)
    • Zone B (type: Warehouse)

All are type "Warehouse" even though they're at different hierarchy levels.

See: Location Hierarchy

Location Type vs Location Purpose​

What's the Difference?​

Location Type: What kind of facility it is (Warehouse, Retail, Production)

Location Purpose: What it's used for (Storage, Sales, Manufacturing, Quarantine)

They Work Together​

Example 1:

  • Type: Warehouse
  • Purpose: Storage
  • Meaning: Standard warehouse for storing inventory

Example 2:

  • Type: Warehouse
  • Purpose: Quarantine
  • Meaning: Warehouse area used for quality inspection

Example 3:

  • Type: Retail Store
  • Purpose: Sales
  • Meaning: Customer-facing store

See: Location Purposes

Common Questions​

Q: Can I create custom location types?​

A: Depends on the system. Most systems allow creating new types if the standard types don't fit your business.

Example Custom Types:

  • Mobile Warehouse (trucks)
  • Event Location (trade shows)
  • Consignment Location

Q: Can I change a location's type later?​

A: Technically yes, but be careful:

  • Historical transactions reference the type
  • Workflows may be based on type
  • Reports may be inconsistent

Better: Create a new location with the correct type.

Q: What type should I use for a warehouse with a small retail counter?​

A: Choose the primary purpose.

If mainly storage: Type = Warehouse If mainly customer sales: Type = Retail Store

Alternative: Create two locations:

  • Main Warehouse (type: Warehouse)
  • Warehouse Retail Counter (type: Retail Store)

Q: Do I need an "Office" type if I don't track office supplies?​

A: No. Only create location types that you actually use.

Best Practices​

1. Use Standard Types When Possible​

Recommendation: Stick with standard types (Warehouse, Retail, Production) unless you have a unique need.

Why: Standard types are well-understood and work with most workflows.

2. Name Types Clearly​

Good:

  • Distribution Warehouse
  • Flagship Retail Store
  • Assembly Facility

Poor:

  • Type A
  • Location Group 1

3. Limit the Number of Types​

Rule of Thumb: 3-6 types is usually sufficient.

Too Many Types: Confusing, hard to report on

Example:

  • Warehouse
  • Retail Store
  • Production Facility
  • Virtual

That covers most businesses.

4. Document Type-Specific Rules​

For each type, document:

  • What operations are allowed
  • What workflows apply
  • Who has access
  • Reporting conventions

Example:

Retail Store Type Rules:
- Can receive transfers from warehouses
- Can ship sales orders to customers
- Cannot receive purchase receipts from suppliers
- Daily cycle counts required
- Store managers have full access

Reporting by Location Type​

Inventory by Type​

Report: Current inventory value by location type

Location Type          Items      Value
─────────────────────────────────────────
Warehouses             2,500   $350,000
Retail Stores            800   $120,000
Production Facilities    300    $45,000
Virtual Locations        150    $20,000
─────────────────────────────────────────
Total                  3,750   $535,000

Sales by Type​

Report: Year-to-date sales by location type

Location Type        Revenue      % of Total
────────────────────────────────────────────
Retail Stores      $1,200,000         75%
Warehouses           $400,000         25%

Insight: Most sales come from retail stores

Transaction Volume by Type​

Report: Number of transactions per location type

Location Type        Transactions
─────────────────────────────────
Warehouses                 1,250
Retail Stores              2,500
Production Facilities        300

Insight: Retail stores have high transaction volume (many small sales)

Integration with Other Concepts​

Location Purposes​

Relationship: Type + Purpose = Complete classification

See: Location Purposes

Location Hierarchy​

Relationship: Types apply at any hierarchy level

See: Location Hierarchy

Inventory Transactions​

Impact: Type may restrict which transactions are allowed

See: Inventory Transactions

Last Updated: 2025-10-28