Meaning
Warehousing refers to the activities involving storage of goods on a large-scale in a systematic and orderly manner and making them available conveniently when needed.
In other words, warehousing means holding or preserving goods in huge quantities from the time of their purchase or production till their actual use or sale.
We need different types of goods in our day-to-day life. We may buy some of these items in bulk and store them in our house. Similarly, businessmen also need a variety of goods for their use. Some of them may not be available all the time. But, they need those items throughout the year without any break.
Example of a sugar factory. It needs sugarcane as raw material for production of sugar.
You know that sugarcane is produced during a particular period of the year.
Since sugar production takes place throughout the year, there is a need to supply sugarcane continuously. But how is it possible? Here storage of sugarcane in sufficient quantity is required.
Again, after production of sugar it requires some time for sale or distribution. Thus, the need for storage arises both for raw material as well as finished products.
Storage involves proper arrangement for preserving goods from the time of their production or purchase till the actual use.
When this storage is done on a large scale and in a specified manner it is called ‘warehousing’.
The place where goods are kept is called ‘warehouse’.
The person in-charge of warehouse is called ‘warehouse-keeper’
OBJECTIVES OF WAREHOUSING
Warehousing is intended to maximize customer service by positioning the inventory as close to the customer as possible while still impacting cost reductions, especially in the transportation area.
Customer service (speed of delivery, consistency of delivery, completeness and quality of order fulfilment, customer/supplier communication
Costs controlled and to a budget
Effective and safe use of resources- people, equipment, building space
Minimum inventory levels consistent with service
Control of stocks and movements, with upto the minute information about orders status, stock status and stock location
NEED FOR WAREHOUSING
Warehousing is necessary due the following reasons:
Seasonal Production
Seasonal Demand
Large-Scale Production
Quick supply
Continuous Production
Prize Stabilisation
1. SEASONAL PRODUCTION
You know that agricultural commodities are harvested during certain seasons
But their consumption or use takes place throughout the year
Therefore, there is a need for proper storage or warehousing for these commodities
From where they can be supplied as and when required.
2. SEASONAL DEMAND
There are certain goods, which are demanded seasonally, like woollen garments in winters or umbrellas in the rainy season
The production of these goods takes place throughout the year to meet the seasonal demand
So there is a need to store these goods in a warehouse to make them available at the time of need.
3. LARGE-SCALE PRODUCTION
In case of manufactured goods, now-a-days production takes place to meet the existing as well as future demand of the products.
Manufacturers also produce goods in huge quantity to enjoy the benefits of large-scale production, which is more economical.
So the finished products, which are produced on a large scale, need to be stored properly till they are cleared by sales.
4. QUICK SUPPLY
Both industrial as well as agricultural goods are produced at some specific places but consumed throughout the country.
Therefore, it is essential to stock these goods near the place of consumption, so that without making any delay these goods are made available to the consumers at the time of their need.
5. CONTINUOUS PRODUCTION
Continuous production of goods in factories requires adequate supply of raw materials.
So there is a need to keep sufficient quantity of stock of raw material in the warehouse to ensure continuous production.
6. PRICE STABILIZATION
To maintain a reasonable level of the price of the goods in the market there is a need to keep sufficient stock in the warehouses.
Scarcity in supply of goods may increase their price in the market.
Again, excess production and supply may also lead to fall in prices of the product.
By maintaining a balance of supply of goods, warehousing leads to price stabilisation
Warehousing refers to the activities involving storage of goods on a large-scale in a systematic and orderly manner and making them available conveniently when needed.
In other words, warehousing means holding or preserving goods in huge quantities from the time of their purchase or production till their actual use or sale.
We need different types of goods in our day-to-day life. We may buy some of these items in bulk and store them in our house. Similarly, businessmen also need a variety of goods for their use. Some of them may not be available all the time. But, they need those items throughout the year without any break.
Example of a sugar factory. It needs sugarcane as raw material for production of sugar.
You know that sugarcane is produced during a particular period of the year.
Since sugar production takes place throughout the year, there is a need to supply sugarcane continuously. But how is it possible? Here storage of sugarcane in sufficient quantity is required.
Again, after production of sugar it requires some time for sale or distribution. Thus, the need for storage arises both for raw material as well as finished products.
Storage involves proper arrangement for preserving goods from the time of their production or purchase till the actual use.
When this storage is done on a large scale and in a specified manner it is called ‘warehousing’.
The place where goods are kept is called ‘warehouse’.
The person in-charge of warehouse is called ‘warehouse-keeper’
OBJECTIVES OF WAREHOUSING
Warehousing is intended to maximize customer service by positioning the inventory as close to the customer as possible while still impacting cost reductions, especially in the transportation area.
Customer service (speed of delivery, consistency of delivery, completeness and quality of order fulfilment, customer/supplier communication
Costs controlled and to a budget
Effective and safe use of resources- people, equipment, building space
Minimum inventory levels consistent with service
Control of stocks and movements, with upto the minute information about orders status, stock status and stock location
NEED FOR WAREHOUSING
Warehousing is necessary due the following reasons:
Seasonal Production
Seasonal Demand
Large-Scale Production
Quick supply
Continuous Production
Prize Stabilisation
1. SEASONAL PRODUCTION
You know that agricultural commodities are harvested during certain seasons
But their consumption or use takes place throughout the year
Therefore, there is a need for proper storage or warehousing for these commodities
From where they can be supplied as and when required.
2. SEASONAL DEMAND
There are certain goods, which are demanded seasonally, like woollen garments in winters or umbrellas in the rainy season
The production of these goods takes place throughout the year to meet the seasonal demand
So there is a need to store these goods in a warehouse to make them available at the time of need.
3. LARGE-SCALE PRODUCTION
In case of manufactured goods, now-a-days production takes place to meet the existing as well as future demand of the products.
Manufacturers also produce goods in huge quantity to enjoy the benefits of large-scale production, which is more economical.
So the finished products, which are produced on a large scale, need to be stored properly till they are cleared by sales.
4. QUICK SUPPLY
Both industrial as well as agricultural goods are produced at some specific places but consumed throughout the country.
Therefore, it is essential to stock these goods near the place of consumption, so that without making any delay these goods are made available to the consumers at the time of their need.
5. CONTINUOUS PRODUCTION
Continuous production of goods in factories requires adequate supply of raw materials.
So there is a need to keep sufficient quantity of stock of raw material in the warehouse to ensure continuous production.
6. PRICE STABILIZATION
To maintain a reasonable level of the price of the goods in the market there is a need to keep sufficient stock in the warehouses.
Scarcity in supply of goods may increase their price in the market.
Again, excess production and supply may also lead to fall in prices of the product.
By maintaining a balance of supply of goods, warehousing leads to price stabilisation