Functions of Warehousing

The functions of Warehousing are as follows:

1. Consolidation

The warehouse gathers and consolidates materials/goods from several manufacturing units before dispatching them to a specific client on a single transportation shipment. 

2. Break the Bulk

The warehouse divides the large number of products received from the manufacturing units into smaller quantities. These smaller quantities are subsequently transported to clients’ locations based on their requirements.

3. Stock Piling

The seasonal storing of commodities for specific businesses is the next role of warehousing. Warehouses hold goods or raw materials that are not immediately needed for sale or manufacture. They are made available to businesses based on demand from customers. Agricultural items harvested at specific times for consumption throughout the year is also kept and released in lots.

4. Value-added Services

Value-added services such as in transit mixing, packaging and labelling, etc., are provided by warehouses. Such services contribute to the optimization of supply chain management, production of increased value, and the effective delivery of items to customers. Bundling, customising, re-branding, re-packaging, processing, etc., are examples. When prospective buyers check the goods, they may need to be opened, packed, and labelled again. Grading and dividing commodities into smaller quantities is also done by warehouses.

5. Price Stablisation

Warehousing stabilises prices by adjusting the supply of goods in response to the demand. Prices are, therefore, regulated when supply is high, while demand is low, and vice versa.

They help in the regulation of price fluctuations by:

• Stockpiling products when market supply exceeds market demand.
• Releasing goods when demand increases.

6. Financing

Financing is yet another of a warehouse’s various functions. Warehouse finance is a sort of inventory financing in which a financial institution provides a loan to a manufacturer or business. Goods, inventories, or commodities are stored in a warehouse and utilised as collateral for the loan in this situation. In other words, warehouse owners advance money to the owners in exchange for security of products, and then supply goods to customers on credit terms.

What is Warehousing? 

When goods are held in stock to make them available as and when required, it is known as Warehousing. It helps businesses to overcome the problems of storage and makes goods available when needed and thus, helping in maintaining prices at a reasonable level. It is a planned place for storing commodities in a secure and efficient manner until they are needed for consumption. It is important to keep pricing consistent and commodities available at the proper time. Warehouses (also known as distribution centers) are utilised by distributors, manufacturers, importers, exporters, enterprises, and wholesalers due to the diverse roles of warehousing.

Storage has always been a critical component of economic progress. Initially, the warehouse was seen as a static unit for maintaining and storing commodities in a scientific and methodical manner in order to preserve their original quality, worth, and utility. Typical warehouses received goods via rail, truck, or bullock wagon. The products were physically transferred to a warehouse storage area and hand-heaped in rows on the floor. In India, they are utilised by manufacturers, importers, exporters, wholesalers, transportation companies, customs, and so on. Today’s warehouses are more than just storage facilities; they are also logistical service providers that are cost-effective.

The main advantage is that you don’t have to worry about increasing product pricing because you can hold hundreds of goods in warehouses and sell them as needed. Otherwise, if you sell products based on orders instead of stock in warehouses, you will undoubtedly confront rising pricing.