The first function of warehousing is it acts as a storage facility

The first function of warehousing is it acts as a storage facility

The first function of warehousing is it acts as a storage facility. Storage is the primary role of many warehouses. Commodities which are not required right away can be kept in the warehouses until when they are needed. Those commodities can be supplied to the customers when they require them. Secondly, warehouses help in price stabilisation (Mahroof, 2019). Warehouses play a significant function when it comes to stabilisation of commodities prices. It is attained when time utility -is created by warehousing. Companies can avoid the fall in goods prices when they are in surplus as well as price rise when commodities are fewer during the slack season.

Thirdly, warehouses place a role in risk-bearing. Commodities are exposed to several forms of risks such as fire, exploration, deterioration and theft. Due to these risks, the construction of warehouses is done in a manner that they can minimise such risks. Agreement of bailment works when products are kept in wave-houses. The warehouse keeper and the person who keeps goods in the warehouses are referred to as boiler. The function of the warehouse keeper is to ensure that the goods are in good condition and they protect them against several risks. If goods are damaged or lost, the warehouse keeper shall be answerable to the goods’ owner.

Furthermore, the role of warehouses is to safeguard the business’s goods (Khan & Yu, 2019).  Warehouses have excellent and personal security to make sure that unauthorised persons cannot access sites. Moreover, in cases of emergency strikes like delays or product faulty due to transportation, the warehouse will play an important role, since the business when using the products in the warehouse to replace the spoilt goods.

Fourthly, business owners can get loans for meeting their daily business operations because warehouses are a source of finance.  Business people can raise loans from banks against the goods they have kept in the warehouses. Correspondingly, financial institutions and banks give owners of warehouses loans against warehouse receipts (Choe, Oettl, & Seamans, 2020).  Fifthly, currently, warehouses offer facilities for grading, processing and packaging of goods. Goods that are stored in the warehouse can be packed in expedient sizes depending on the owner’s instructions. Sixthly, warehouses provide various economic benefits to companies because of their proficient operations. Costs like shipping, outbound delivery and transportation are immensely decreased with a warehouse. Besides, by building up goods, the owner of the products have a buffer in demand and supply of goods that is very beneficial for the business’s profit.

Lastly, warehouses have an essential function in enhancing the profits of an organisation, as they preserve, store and receive products, which are transported to many destinations.  Many businesses use rescheduling approaches to delay products delivery to exploit fluctuations in markets. In present competitive markets, warehousing has become a significant part of contemporary firms that have many objectives to increase profits and sales turnover over a short period (Sierra, Estrada, Montoya, & Posada, 2020). Warehouses offer services like picking, receiving, and storing of goods and delivering them to various destinations.

References

Mahroof, K. (2019). A human-centric perspective exploring the readiness towards smart warehousing: The case of a large retail distribution warehouse. International Journal of Information Management, 45, 176-190.

Khan, S. A. R., & Yu, Z. (2019). Warehousing and Storage Equipment. In Strategic Supply Chain Management (pp. 81-107). Springer, Cham.

Choe, D., Oettl, A., & Seamans, R. (2020). What’s Driving Entrepreneurship and Innovation in the Transport Sector?. In The Role of Innovation and Entrepreneurship in Economic Growth. University of Chicago Press.

Sierra, L. O., Estrada, J. J. S., Montoya, J. A., & Posada, J. G. A. (2020). Approach for profiling warehousing activity using customer’S order data history. Revista EIA, 17(33), 14.