Content: Meaning And Functions of Warehousing
- State the meaning of Warehousing;
- List and discuss the functions of Warehousing.
MEANING OF WAREHOUSING
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 usage or sale.
Warehousing is one of the important
auxiliaries to trade. It creates time utility by bridging the time gap between production and consumption of goods.
FUNCTIONS OF WAREHOUSING
Warehousing performs the following
- Storage of goods
- Protection of goods
- Risk bearing
- Grading and branding
These functions are discussed below:
Storage of goods: The basic
function of warehousing is to store
large stock of goods. These goods
are stored from the time of their
production or purchase till their
consumption or usage.
Protection of goods: A warehouse
provides protection for goods from
loss or damage due to heat, dust,
wind and moisture, etc. It makes
special arrangements for different
products according to their nature.
It cuts down losses due to spoilage and wastage during storage.
Risk bearing: Warehouses take
over the risks incidental to storage
of goods. Once goods are handed over to the warehouse-keeper for storage, the responsibility of these goods passes on to the warehouse-keeper. Thus, the risk of loss or damage to goods the in storage is borne by the warehouse keeper. Since it is bound
to return the goods in good condition, the warehouse becomes responsible for any loss, theft or damage, etc. Thus, it takes all precautions to prevent any mishap.
Financing: When goods are deposited in any warehouse, the depositor gets a receipt, which acts as a proof about the deposit of goods. The warehouses can also issue a document in favour of the owner of the goods, which is called warehouse-keeper s warrant. This warrant is a document of title and can be transferred by simple endorsement and delivery. So while
the goods are in custody of the
warehouse-keeper, the businessmen can obtain loans from
banks and other financial institutions keeping this warrant as security. In some cases, warehouses also give advances of money to the depositors for a short period while keeping their goods as security
Processing: Certain commodities
are not consumed in the form they
are produced. Processing is required to make them consumable.
For example, paddy is polished, timber is seasoned, and fruits are ripened. Sometimes warehouses also undertake these activities on behalf
of the owners.
Grading and branding: On request warehouses also perform the functions of grading and branding of goods on behalf of the manufacturer, wholesaler or the importer of goods. It also provides facilities for mixing, blending and packaging of goods for the convenience of handling and sale.
Transportation: In some cases
warehouses provide transport
arrangement to the bulk depositors.
It collects goods from the place of
production and also sends goods to
the place of delivery on request of
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