Function of warehousing

FUNCTION OF WAREHOUSING

Warehouse preserve goods on large scale in systematic and orderly manner. They provide protection to goods against heat, wind, storm, moisture, etc. and also cut down losses due to spoilage, wastage, etc. This is basic function of every warehouse. There are many other functions in addition to these basic functions which are as follows:

1)storage of goods

The basic functions of warehouses is to store large stock of goods. These goods are stored from the time of their production or purchase till consumption or use.

2)production of goods

A warehouse provides protection to goods from loss or damage due to heat, wind, dust, etc. It makes special arrangements for different products according to their nature. It also helps to reduce the losses due to spoilage or wastages during storage.

3)financing

When the goods are kept in a warehouse, the depositor gets a receipt which acts as a proof about the deposit of goods. The warehouse also issues a document in favour of  owner of goods which is called a warehouse- keeper's warrant. The warehouse warrant and receipt are negotiate instrument and can be negotiated by endorsement and delivery. Thus owner of the goods can raise finance from banks , financial institutions, etc.

4)risk bearing

The entire responsibility of goods stored in warehouse is passed to the warehouse keeper, once the goods are handed over to him for storage. Since he is bound to return the goods in the same condition , warehouse becomes responsible for any loss , theft, damage, etc. Thus , warehouse take all precautions to prevent the goods from any loss.

5) grading and branding

Warehouse also perform the functions of grading and branding of goods on behalf of the manufacturer, wholesaler and the importer of goods. It also provides facilities for packaging of goods for the convenience of handing.

6) processing

Certain commodities are not consumed in the form that are produced. Processing is required to make them consumable. Eg .paddy is Polished, timber is seasoned, fruits are ripened, etc. Sometimes warehouses undertake these activities on behalf of the owner.

7) transportation

Warehouses can provide transport facility to the bulk depositor. It collects goods from the place of production and also sends goods to the place of delivery on the request of the depositors. 

8) time and place

Warehouses create time utility by preserving the goods till it is demanded. It also creates place utility by providing the goods at the place, where that are required.