FUNCTIONS OF

WAREHOUSING
DIFFERENT FUNCTIONS OF WAREHOUSES
LEARNING OBJECTIVES

● Explain the functions of a warehouse

● Discuss the roles and responsibilities of a warehouse
manager
● Describe the benefits of warehousing
● Discuss various economic benefits of warehousing
● Explain various operational/service benefits of warehousing
INTRODUCTION
★ A warehouse is a place used to store inventory. Most tasks that occur in a warehouse
are related to inventory management.
○ collecting receipt of products, issuing of products, recording changes and
tracking the movement of the inventory.
★ The role of a warehouse includes processing of the inventory from entry to exit, and, at
times, it is limited to providing storage facility for products in transit from the point of
origin to the point of destination.
★ Warehousing can play a pivotal role in minimising supply chain inefficiencies,
improving the value addition during the logistical flow of products and inventory
management that includes consolidation and customisation of inventory.
★ A warehouse is an important cog in the supply chain of products as it forms a crucial
part of the chain.
FUNCTIONS OF A WAREHOUSE

➔ The prime function of a warehouse is to provide the facility of storage for the goods which are surplus with
the organisation.

COMMON ACTIVITIES AT WAREHOUSES

➔ Receiving: This includes tasks related to the receipt of all incoming products
at the warehouse, ensuring that the quality and quantity of the received
products are as ordered, and then disbursing the products to storage.
➔ Pre-packing (if required): This happens when products are received in bulk
from the supplier and are required to be packaged individually in
merchandisable quantities.
➔ Transporting to the appropriate storing place: This is also referred to as put
away. This includes material handling, location identification and placement.
COMMON ACTIVITIES AT WAREHOUSES
➔ Storage: The method of storage depends on the size, quantity and the handling
characteristics of the product.
➔ Order picking: This task involves physical picking of the product from the storage place to
meet the demand.
➔ Packaging or pricing (if required): This refers to activities normally left till the last moment
to avoid repricing as the inventory sits in storage.
➔ Sorting: This includes the shipment of products as per their packaging and destination.
➔ Consolidation and shipping: This includes checking orders for completeness and preparing
shipping documents, such as bills of lading, weighing shipments, loading trucks and related
tasks.
➔ Claim settlements: Any transit damage material and material rejection claim settlements
are done in the warehouse to control shrinkage.
ACTIVITIES OF A WAREHOUSE
BASIC FUNCTIONS OF A WAREHOUSE
➢ Store goods in a systematic and orderly manner: This includes the storage of
products from the stage of production till their consumption.
➢ Provide protection: This includes protecting products from natural
factors, such as heat, wind and rain. It helps reduce spoilage during
storage.
➢ Risk bearing: After handing over the products to the warehouse, the
responsibility of these products, including any losses on account of
shrinkage, theft or damage, is borne by the warehouse operator.
➢ Financing: When products are deposited in a warehouse, the depositor
gets a receipt and/or a warrant. This warrant or warehouse receipt can be
used by the trader as collateral to take a loan from a financial institution.
BASIC FUNCTIONS OF A WAREHOUSE
➢ Processing: Certain commodities require some processing to make them
consumable. For example, wood is seasoned and fruits are ripened. At
times, warehouses perform such activities at the behest of the owner.
➢ Transportation: This facility is provided by some warehouses to certain
depositors. It collects the product from the point of origin and delivers it to the
desired location at the behest of the depositor
➢ Provide regular flow: This includes commodities, such as rice and wheat,
which are produced during a particular season, but are consumed
throughout the year.
➢ Easy handling: Mechanical equipment in modern warehouses enables
easy handling of products including loading and unloading.
➢ Job creation: Employment opportunities are created for skilled and
unskilled workers in semi-urban areas.
FUNCTIONS OF A WAREHOUSE
ROLES AND RESPONSIBILITIES OF A WAREHOUSE MANAGER

➔ Warehouse managers are responsible for organising and

managing the receipt, storage and dispatch of inventoried
items.
➔ Warehouse managers must have sound knowledge of
distribution, logistics and transportation management to
perform various functions of warehousing efficiently.
DIFFERENT ROLES AND RESPONSIBILITIES OF A WAREHOUSE
MANAGER
➔ To oversee warehouse functions to ensure methodical receipt, storage, inventory management and
despatch of products
➔ To ensure that proper inventory management processes, principles and policies are followed in pursuance
of warehousing tasks
➔ To administer and guide the junior staff (such as warehouse employees and other supervisors and labour).
This is to facilitate timely and satisfactory completion of daily warehouse tasks while utilising various
resources, i.e., warehouse equipment, such as forklift, pallet jack or hand truck, and as per organisational
policies, rules and regulations, as desired
➔ To facilitate the professional development of the staff by utilising employee assessments, internal or
external training programs, training records and audit techniques, as required
➔ To supervise the subordinate workforce by keeping an eye on daily work allocation and performance to
ensure that the entire staff performs its duties while utilising duty reports and effective communication,
as required
DIFFERENT ROLES AND RESPONSIBILITIES OF A WAREHOUSE
MANAGER
➔ To discuss the forecast of the required materials with the staff to ensure an uninterrupted flow of material without overstocking
➔ To suggest the reduction of inventories to comply with the overall objective of management
➔ To review the purchase documents and purchase orders supplied to the warehouse periodically to ensure an appropriate allocation of
products to the appropriate location in the warehouse
➔ To ensure proper housekeeping in the warehouse by the appropriate person(s)

➔ To ensure sufficient stock of stationery, food and other items of general use

➔ To ensure the security of the warehouse

➔ To provide the management with updated reports on the current stock to enable high-level decisions
➔ To justify the replacement of worn-out equipment or purchase of new equipment to meet the needs of the warehouse

➔ To focus on shrink and claim settlements

➔ To follow product safety norms

ROLES AND RESPONSIBILITIES OF WAREHOUSEMANAGERS WITH
E-COMMERCE, GLOBALIZATION, JIT & SC COLLABORATIONS
➔ To handle a smaller and a greater number of
transactions
➔ To track and store more products
➔ To provide more customised services
➔ To offer more value-added services
➔ To process more orders
BENEFITS OF WAREHOUSING: ISSUES WHERE WAREHOUSING
EFFICIENTLY HELPS
★ Seasonal production: Different agricultural products are harvested during different
seasons, but they may be consumed throughout the year.
★ Seasonal demand: There are some products that have seasonal demand; for example,
woollen garments are required during winters while umbrellas are required during the rainy
season.
★ Large-scale production: The goods are manufactured to meet the existing as well as the
future demands for products.
★ Quick supply: Both the industrial and agricultural goods are produced at some specific
places, but are consumed throughout the country.
★ Continuous production: For ensuring uninterrupted production, factories require sufficient
stock of unprocessed material.
★ Price stabilisation: For maintaining a reasonable price level in the market, it is essential for
organisations to keep an adequate amount of stock in the warehouse.
TWO CATEGORIES OF THE BENEFITS OF WAREHOUSING
BENEFITS OF WAREHOUSING: ECONOMIC BENEFITS - THE 4 MAJOR
ECONOMIC BENEFITS
● Consolidation and break bulk: It helps in reducing transportation costs by using warehouse competence to group shipment.
○ CONSOLIDATION ARRANGEMENT OF WAREHOUSING - In consolidation, the warehouse receives materials from
various sources. The materials are formed in specified quantities into a large single shipment to the desired
destination.
BENEFITS OF WAREHOUSING: ECONOMIC BENEFITS - THE 4 MAJOR
ECONOMIC BENEFITS
● Consolidation and break bulk: It helps in reducing transportation costs by using warehouse competence to group shipment.
○ BREAK-BULK ARRANGEMENT IN WAREHOUSING - receives a single large shipment and arranges for the delivery for
multiple customers.
BENEFITS OF WAREHOUSING: ECONOMIC BENEFITS - THE 4 MAJOR
ECONOMIC BENEFITS
● Cross-docking: Cross-docking involves multiple manufacturers. In cross-docking, inventory from various origins is
combined and then shipped to a destination in a pre-specified assortment.
○ CROSS DOCKING ARRANGEMENT IN WAREHOUSING
BENEFITS OF WAREHOUSING: ECONOMIC BENEFITS - THE 4 MAJOR
ECONOMIC BENEFITS
● Processing: Warehousing is also used for protracting production by undertaking
processing and light manufacturing tasks. Postponing involves shifting the point
of differentiation towards the end of the value-addition curve.
■ Processing and postponement provide two economic benefits to a
manufacturer. It helps in minimising the risk as final packaging is not
completed until an order for specific labelling is received.
● Stockpiling: This warehousing service is provided for a seasonal product’s
storage.
OPERATIONAL/SERVICE BENEFITS THAT CAN BE ACHIEVED
THROUGH WAREHOUSING
➔ Stock spotting: The selected quantity of a product is spot stocked in a warehouse to fulfil the customer order
during an important marketing period.
➔ Assortment: In this, a combination of products is stocked according to the orders anticipated from the customer.
The assortments represent multiple products from multiple manufacturers assorted as specified by the customer.
➔ Mixing: Warehouse mixing is similar to the break bulk process except that in mixing, several different
manufacturer shipments are involved.

WAREHOUSE MIXING
OPERATIONAL/SERVICE BENEFITS THAT CAN BE ACHIEVED
THROUGH WAREHOUSING
➔ Production support: Production support warehouses provide a
regular supply of components required in the production or
assembly process in an economical and timely manner.
➔ Market presence: It is a major advantage of the local warehouses
as local warehouses can be more responsive to customer’s
requirements and offer speedier delivery as compared to distant
warehouses.
SUMMARY

★ A warehouse is a place used to store inventory. Most tasks that occur in a warehouse are related to
inventory management. These tasks include collecting receipt of products, issuing of products, recording
changes and tracking the movement of the inventory.
★ The role of a warehouse includes processing of the inventory from entry to exit and, at times, it is limited
to providing storage facility for products in transit from the point of origin to the point of destination.
★ Warehousing can play a pivotal role in minimising supply chain inefficiencies, and improving the value
addition during the logistical flow of products and inventory management that include consolidation and
customisation of inventory.
★ Consolidation and shipping include checking orders for completeness, preparing shipping documents,
such as bills of lading, weighing shipments, loading trucks and related tasks.
★ When products are deposited in a warehouse, the depositor gets a receipt and/or a warrant. This warrant
or warehouse receipt can be used by the trader as collateral to take a loan from a financial institution.
SUMMARY
★ Mechanical equipment in modern warehouses enables easy handling of products including
loading and unloading.
★ Warehouse managers must have sound knowledge of distribution, logistics and
transportation management to perform various functions of warehousing efficiently.
★ Warehouse managers have to facilitate timely and satisfactory completion of daily
warehouse tasks utilising various resources, i.e., warehouse equipment, such as forklift,
pallet jack, hand truck, etc., and as per the organisational policies, rules and regulations as
desired.
★ Warehouse managers have to review the purchase documents and purchase orders
supplied to the warehouse periodically to ensure an appropriate allocation of products to
the appropriate location in the warehouse.
★ Different agricultural products are harvested during different seasons, but they may be
consumed throughout the year. Consequently, these products should be stored properly in
warehouses, so that they can be made available to customers whenever they are needed.
SUMMARY
★ The organisations find it economical to manufacture goods in enormous volumes in order
to earn the advantage of extensive production. Therefore, products are produced in huge
quantities that require proper storage until they are moved out of the warehouses for sale.
★ For maintaining a reasonable price level in the market, it is essential for organisations to
keep an adequate amount of stock in the warehouse. Any scarcity in the supply of goods
may increase their prices in the market.
★ The economic benefits of warehousing are related to the reduction of overall logistics and
supply chain costs.
★ Break-bulk arrangement of warehousing receives a single large shipment and arranges for
delivery for multiple customers. It helps attain economies of scale by moving the large
consolidated shipment.
★ Cross-docking is extensively used in the retail sector to replenish fast-moving store
inventories. Cross-docking requires exact on-time delivery from each manufacturer.
KEYWORDS
★ Consolidation and shipping: It subsumes checking orders for completeness, and
preparing shipping documents, such as bills of lading, weighing shipments, loading
trucks and related tasks.
★ Consolidation: In consolidation, the warehouse receives materials from various
sources. The materials are formed in specified quantities into a large single
shipment to the desired destination.
★ Cross-docking: It involves multiple manufacturers. It is used to combine inventory
from multiple origins to a destination in a pre-specified assortment.
★ Order picking: It involves physical picking of the product from the storage place to
meet the demands of consumers.
★ Transportation: It refers to the collection of a product from the point of origin and
its delivery to the desired location at the behest of the depositor.