WAREHOUSING

Warehousing was a customers function conventionally anywhere in the world. Customer to protect himself from shortages at the time of inclement weather always used to store provisions and other utilities in his house. Consumers own stores were underground cellars, smoke houses to store variety of items. Poor communication infrastructure was mainly the cause for this storage by customer. Producers and tradesmen conveniently shrugged off their responsibility for storage and passed it on to the customer who was left with no option Traditional concept of warehouse as store or godown has undergone major change now. Warehouse is considered a value adding facility now, playing a remarkable role as a function of logistical management.

As the times changed, manufacturer started applying modern scientific management techniques to improve productivity in his factories. Manufacturer visualized the need of a buffer between factory and market, now the warehouse became storehouse to stock production. This role of the warehouse supported production.

Advantages of warehouse:

Warehousing offers many advantages to the business community. Whether it is industry or trade, it provides a number of benefits which are listed below.

i. Protection and Preservation of goods - Warehouse provides necessary facilities to the businessmen for storing their goods when they are not required for sale. It provides protection to the stocks, ensures their safety and prevents wastage. It minimizes losses from breakage, deterioration in quality, spoilage etc. Warehouses usually adopt latest technologies to avoid losses, as far as possible.

ii. Regular flow of goods- Many commodities like rice, wheat etc. are produced during a particular season but are consumed throughout the year. Warehousing ensures regular supply of such seasonal commodities throughout the year.

iii. Continuity in production- Warehouse enables the manufacturers to carry on production continuously without bothering about the storage of raw materials. It helps to provide seasonal raw material without any break, for production of finished goods.

iv. Convenient location- Warehouses are generally located at convenient places near road, rail or waterways to facilitate movement of goods. Convenient location reduces the cost of transportation. v. Easy handling- Modern warehouses are generally fitted with mechanical appliances to handle the goods. Heavy and bulky goods can be loaded and unloaded by using modern machines, which reduces cost of handling such goods. Mechanical handling also minimizes wastage during loading and unloading.

vi. Useful for small businessmen- Construction of own warehouse requires heavy capital investment, which small businessmen cannot afford. In this situation, by paying a nominal amount as rent, they can preserve their raw materials as well as finished products in public warehouse warehouse.

vii. Creation of employment - Warehouses create employment opportunities both for skilled and unskilled workers in every part of the country. It is a source of income for the people, to improve their standards of living.

viii. Facilitates sale of goods- Various steps necessary for sale of goods such as inspection of goods by the prospective buyers, grading, branding, packaging and labelling can be carried on by the warehouses. Ownership of goods can be easily transferred to the buyer by transferring the warehouse keepers warrant.

ix. Availability of finance- Loans can be easily raised from banks and other financial institutions against the security of the warehouse-keepers warrant. In some cases warehouses also provide advance to the depositors of goods on keeping the goods as security. x. Reduces risk of loss - Goods in warehouses are well guarded and preserved. The warehouses can economically employ security staff to avoid theft, use insecticides for preservation and provide cold storage facility for perishable items. They can install fire-fighting equipment to avoid fire. The goods stored can also be insured for compensation in case of loss.

FUNCTIONS OF WAREHOUSES:

Warehouses are basically intermediate storage points in the logistics system where raw material, work in process, finished goods and good in transit are held for varying duration of times for a variety of purposes. The warehousing functionality today is much more than the traditional function of storage. The following are main function that warehousing serves today:

1. Consolidation: This helps to provide for the customer requirement of a combination of products from different supply or manufacturing sources. Instead of transporting the products as small shipments from different sources, it would be more economical to have a consolidation warehouse. This warehouse will receive these products from various sources and consolidate these into shipments, which are economical for transportation or as required by the customers.

2. Break Bulk:

As the name suggests, the warehouse in this case serves the purpose of receiving bulk shipments through economical long distance transportation and breaking of these into small shipments for local delivery. This enables small shipments in place of long distance small shipments.

3. Cross Docking: This type of facility enables receipt of full shipments from a number of suppliers, generally manufacturers, and direct distribution to different customers without storage. As soon as the shipments are received, these are allocated to the respective customers and are moved across to the vehicle for the onwards shipments to the respective customers at these facilities. Smaller shipments accompanying these full shipments are moved to the temporary storage in these facilities awaiting shipments to the respective customers along with other full shipments.

4. Product Mixing: Products of different types are received from different manufacturing plant or sources in full shipment sizes. These products are mixed at these warehouses into right combination for the relevant customers as per their warehouses and continuously provided for the product mixture shipments requiring these.

5. Stock Piling: This function of warehousing is related to seasonal manufacturing or demand. In the case of seasonal manufacturing, certain raw materials are available during short periods of the year. Hence, manufacturing is possible only during these periods of availability, while the demand is full year around. This requires stockpiling of the products manufactured from these raw

materials. An example is mango pulp processing. On the other hand, certain products like woolens are required seasonally, but are produced throughout the year, and thus need to be stockpiled as such.

6. Postponement: This Functionality of warehousing enables postponement of commitment of products to customer until orders are received from them. This is utilized by manufacturers or distributors for storing products ready up to packaging stage. These products are packaged and labeled for the particular only on receipt of the order.

7. Positioning: This permits positioning products or materials at strategic warehouses near to the customers. These items are stored at the warehouse until ordered by the customers when these can be provided to the customers in the shortest lead-time. This function of warehousing is utilized for higher service levels to customers for critical items and during increased marketing activists and promotions.

8. Assortment: Assortment warehouse store a variety of products for satisfying the variety requirements of customers. For example, retailers may demand different brands of the same product in small quantities rather than larger quantities of the single brand.

9. Decoupling: During manufacturing, operation lead-times may differ in order to enable production economies. Thus, the batch size and the lead-time of production may differ in consecutive operations. This decoupling of operations requires intermediate storage of materials required for the subsequent operation.

10. Safety Stocking: In order to cater to contingencies like stock outs, transportation delays, receipt of defective or damaged goods, and strikes, safety stocks have to be maintained. This ensures that, on the inbound site production stoppages do not occur, and, on the outbound side customers are fulfilled on time.