In simple terms, warehousing refers to the act of storing products or goods to sell or distribute them at a later stage. However, the functions of warehousing have now evolved from mere storage to handling and distributing the products in a manner that facilitates easy and smooth sailing of goods to the market when needed. Warehouses range from small and medium spaced areas to large spare rooms, basement, garage, and rented space specifically designed for storing goods. Presently, warehousing is considered to be one of the most critical and pivotal elements of the supply chain and trade.
How Does Warehouse Work?
There are multiple warehousing functions and features that help a warehouse worker to manage stored goods and products. Here are a few warehouse functions that are considered best practices in warehouse management.
Functions of a Warehouse
This is the primary function of any warehouse, i.e storing surplus goods. Businesses produce goods as per market demands and preserve the additional assets for future use, which can later be produced in the market when their supply is scarce.
2. Price Stabilization:
Warehouses play an essential role in stabilizing the market price. By merely storing the goods in warehouses when the market is brimming with products is an excellent way to stabilize their prices.
3. Risk Bearing:
The bearing of risk for goods is passed on by the businesses to the warehouse worker or manager. Being a vital warehouse function, risk-bearing holds the warehouse keeper responsible for any loss or damage to the goods.
Loans can be raised by businesses for short or long term from the warehouse keeper against the goods stored in the warehouse. These products act as the security for the warehouse manager. Similarly, even banks and other financial institutions also advance loans against warehouse receipts. In this manner, warehousing serves as a source of finance for the businessmen for meeting business operations.
Warehouse functions are no longer limited to storing goods. Today, the warehouse offers a range of functions, including packing, processing, and grading of products. The warehouse provides the ability to pack goods in convenient sizes as per the owners’ instructions.