Many producers buy raw materials in bulk and also produce in large quantities. This indicates a need for storage of their raw materials and finished goods until the time when they will be needed. Warehouses play this role and create utility in the products. Most warehouses are located near a transport terminus.
LEARNING OBJECTIVES
By the end of this topic, you should be able to:
A warehouse is a building that is used to store goods until the time when they are required. They may also be called depots, godowns, or silos. Therefore, warehousing is the process of receiving, recording, storing, and releasing goods from the store when required.
IMPORTANCE OF WAREHOUSING
Some of the importance of warehousing include;
Storage. Goods are stored in warehouses until the time when the need arises.
A steady supply of goods. The warehousing can ensure that goods are stored during surplus and released during the shortage. This can ensure a steady supply of goods and stable prices.
Improvement of quality. The quality of some goods can be improved through warehousing. For example, bananas and wine.
Protection. Goods are protected from adverse weather conditions and physical damage in warehouses. The goods are able to preserve their utility.
Preparation of goods for sale. This is done through packaging, grading, sorting, blending, and branding.
Bridging the gap between production and consumption. Warehousing ensures that goods are kept in the warehouse after production and released when they are needed by consumers.
ESSENTIALS OF A GOOD WAREHOUSE
A good warehouse should have the following features;
Ideal location. It should be accessible to users.
Specialized personnel. It should have well trained and efficient staff to handle the activities of a warehouse.
Adequate handling equipment. A warehouse should have appropriate handling facilities for different types of goods like shelves, forklift, and shelves.
Adequate space. A warehouse should be spacious enough and allow for easy accommodation and movement of personnel and goods.
Security. It should be secure from explosions, fire, and release of toxic substances and free from pests.
Support services. It should have access to infrastructural facilities like power, water, and communication.
Legal requirements. It should adhere to government rules and regulations regarding warehousing.
Recordkeeping. In order to monitor the movement of goods, there should be effective record systems into and out of the warehouse.
Transport network. The warehouse should have access to an efficient system of transport for easy movement of goods into and out of the warehouse.
TYPES OF WAREHOUSES
According to one of the classifications of warehouses, the warehouses can be:
Private warehouses are those that are owned by individual businesses. They are used for the storage of their goods. Business people may rent spaces in these private warehouses where they can keep their goods and access them when need be.
Public warehouses are those that are owned by business people but are rented to the public. Anybody can access the space by renting it and can use it to store their goods. Such warehouses are mainly found near major transport terminals such as airports, land transport terminus, and seaports.
Bonded warehouses are those that are used for the storage of goods that await the payment of customs duty. These goods can only be accessed by the production of a warrant of release. A big number of imported goods are initially put in a bonded warehouse as they await the payment of import duty.
Another classification of warehouses includes these types of warehouses:
