Hello, welcome to this article, here I will be writing on The term Warehousing, describe the different types of warehouse, the importance or advantages and Disadvantages of warehouse and functions.
Meaning Of Warehouse
Warehousing is the act of storing goods produced or bought in a place until they are needed. Warehousing ensures that there is a regular and steady supply of goods. The producer or wholesaler must hold stock until the consumers demand for it. In order words, Warehouse is a place where goods are stored until they are demanded by the consumers.
Types of Warehouse
There are five types of warehouse
- Bonded warehouse
- State Warehouse
- Wholesale
- Public Warehouse
- Manufacturer Warehouse
1. Bonded warehouse: Bonded warehouse is a place where goods whose custom duties have not been paid are stored until the duties are settled. Bonded warehouse is usually located at the port for storing goods until the duties are paid.
2. State Warehouse: State Warehouse is owned and control by the government of a country. It is a place where contraband or smuggled goods seize by the custom authorities are kept until they are option (sold).
3. Wholesale: Wholesale is a types of Warehouse owned by the wholesaler to keep or store all the veriety of goods bought. From the stored goods, retailers are assured of the adequate and regular supply of goods. Wholesale warehouse are located near distribution or sale center.
4. Public Warehouse: Public Warehouse is owned and operated by private individuals who let it out to anybody for safe keeping of goods. They are usually located near seaports, airports etc. The person who hires a public Warehouse pay rent to the owner for services rendered.
5. Manufacturer Warehouse: Manufacturer warehouse is a types of Warehouse owned by the producer of goods to store their products until they are demanded. Many producers have warehouses which are located in the factory to store goods produced. Some manufacturers have warehouses at regional distribution center, e.g. Coca cola.
Factors to be considered in siting a warehouse
- Location of the Factory: One factor which must be taken into consideration is the proximity of a warehouse to the production ground, i.e, factory.
- Nearest to the market: A producer will consider the location of the market before siting his Warehouse. He will normally prefer to locate it near the market.
- Nearest to the distribution centers: A warehouse has to be located near the distribution centers. Recently, Coca-Cola has introduced mini warehouses (depots) at various sales points all over Lagos.
- Operating cost: He must also consider the operating cost of the warehouse. It has to be located where the operating cost will not be too high.
- Cost of building Warehouse: Before siting a warehouse, the cost of building or renting it has to be carefully considered.
- Transportation: The mode of transportation must be taken into consideration. The warehouse must be sited in a place that is accessible by road or Rail.
- Consumers buying pattern: The pattern of consumption of consumers in an area must be taken into consideration since it is good to site a Warehouse near the consumers.
Importance or Advantages of warehouse
1. Stability of price: Warehouse ensures that there is no fluctuation in prices of goods. It helps to stabilize prices of goods.
2. Seasonal problem is eliminated: Since goods are stored until they are needed, some seasonal problems pertaining to production or sales are eliminated.
3. Storage facilities: Warehouse serve as storage facilities; they are provided for keeping the goods safely. Want to learn about storage? Here on types of storage
4. Ensure production of Goods ahead of demand: Warehouse facilities ensures that goods are produced ahead of demand.
5. Provides security for Goods: It ensures effective check and adequate security for the products.
6. Facilitate repackaging: In the warehouse, repackaging and branding of goods are facilitated.
7. Employment opportunities: Warehousing creates job opportunities for many people, example, clerks and managers.
8. Ensures constant supply: Constant and steady supply of goods throughout the year is made possible through Warehousing.
Problems or Disadvantages of Warehouse
1. Problem of Pilfering: Goods stored in the Warehouse are sometimes stolen by the workers entrusted in the care.
2. Inaccessibility: Another Problem or disadvantages of Warehouse is inaccessibility. Certain locations of some warehouses turn out to be a problem when the roads are not easily reached by vehicles.
3. Unreliable supply: There are situations when the suppliers of goods find it difficult to supply to the warehouses. This tends to render such Warehouse non-functional.
4. Problem of stock valuation: Workers in the warehouse sometimes find it difficult to take accurate record of goods stored in the warehouses.
5. Lack of qualified manpower: Inadequate manpower is not easily available to manage the warehouses. Quick or unqualified staff are sometimes engaged to manage the warehouses.
6. Problem deterioration: Most of the goods stored in the warehouses may deteriorate there by leading to spoilage or poor quality of the goods stored.