Types of Warehouses

Warehouses usually perform the following functions:

(i) Procurement:

Procurement is the very first step in warehousing. Under this step, goods are received, unloaded and moved to pre-receipt inspection point and for accounting purpose.

(ii) Sorting:

Sorting is a step in which items are received in bulk are sorted out item-wise for its better storage and easy identification. Heavy and big sized items are kept separate.

(iii) Breaking (dividing):

Under breaking, items received in bulk are broken down into smaller portions and packed separately to cater the requirements of various retail outlets and customers.

(iv) Storage:

After sorting and dividing, items are stored with proper identification and location so as to take them out as and when required. Bin location cards are used for this purpose. Big retailers also use computers and merchandise based software packages to locate, identify and maintain accounting of the items.

(v) Making items available for consignment/shipment:

In warehouses, goods are stored for short period, as per the orders from retail outlets or customers, goods are dispatched to the destinations.

(vi) Material handling:

Material handling is a part of physical distribution system consisting of proper handling equipments used for loading, unloading, lifting and moving goods from one place to another.

(vii) Display:

In order to promote sales, some warehouses display products.

(viii) Inventory control:

It includes procuring goods and keeping proper records of the goods. Warehouses are also responsible for inspection, maintenance and accounting of goods to avoid them from theft and unforeseen mishaps. Proper accounting results in avoiding large fluctuations in inventory levels.

(ix) Processing:

Certain goods are not to be consumed in the form they are produced. It requires processing to make them consumable. For instance, fruits are ripened, timber is seasoned, wheat is crushed, paddy is polished and juices are filtered etc. Some warehouses also perform these activities as per the demand from the owners.

(x) Grading and branding:

Some warehouses perform the functions of grading and branding of goods on the behalf of the producers, wholesalers or the importer of goods. Besides usual activities, some warehouses provide mixing, blending and packaging assistance for the convenience of handling and sale.

(xi) Transportation:

In few cases, warehouses provide transportation facility to big depositors. It collects goods from the factories and sends these goods to the place of delivery on the request of the depositors.

Types of Warehouses

Private Warehouses:

The private warehouses are owned and operated by big manufacturers and merchants to fulfill their own storage needs. The goods manufactured or purchased by the owner of the warehouses have a limited value or utility as businessmen in general cannot make use of them because of the heavy investment required in the construction of a warehouse, some big business firms which need large storage capacity on a regular basis and who can afford money, construct and maintain their private warehouses. A big manufacturer or wholesaler may have a network of his own warehouses in different parts of the country.

Public Warehouses:

A public warehouse is a specialised business establishment that provides storage facilities to the general public for a certain charge. It may be owned and operated by an individual or a cooperative society. It has to work under a license from the government in accordance with the prescribed rules and regulations.

Public warehouses are very important in the marketing of agricultural products and therefore the government is encouraging the establishment of public warehouses in the cooperative sector. A public warehouse is also known as duty-paid warehouse.

Public warehouses are very useful to the business community. Most of the business enterprises cannot afford to maintain their own warehouses due to huge capital Investment. In many cases the storage facilities required by a business enterprise do not warrant the maintenance of a private warehouse. Such enterprises can meet their storage needs easily and economically by making use of the public warehouses, without heavy investment.

Public warehouses provide storage facilities to small manufacturers and traders at low cost. These warehouses are well constructed and guarded round the clock to ensure safe custody of goods. Public warehouses are generally located near the junctions of railways, highways and waterways.

They provide, therefore, excellent facilities for the easy receipt, despatch, loading and unloading of goods. They also use mechanical devices for the handling of heavy and bulky goods. A public warehouse enables a businessman to serve his customers quickly and economically by carrying regional stocks near the important trading centres or markets of two countries.

Public warehouses provide facilities for the inspection of goods by prospective buyers. They also permit packaging, grading and grading of goods. The public warehouses receipts are good collateral securities for borrowings.

Bonded Warehouses:

Bonded warehouses are licensed by the government to accept imported goods for storage until the payment of custom duty. They are located near the ports. These warehouses are either operated by the government or work under the control of custom authorities.

The warehouse is required to give an undertaking or ‘Bond’ that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the custom duty. The goods stored in bonded warehouses cannot be interfered by the owner without the permission of customs authorities. Hence the name bonded warehouse.

Bonded warehouses are very helpful to importers and exporters. If an importer is unable or unwilling to pay customs duty immediately after the arrival of goods he can store the goods in a bonded warehouse. He can withdraw the goods in installments by paying the customs duty proportionately.

In case he wishes to export the goods, he need not pay customs duty. Moreover, a bonded warehouse provides all services which are provided by public warehouses. Goods lying in a bonded warehouse can be packaged, graded and branded for the purpose of sale.

Co-operative Warehouses:

As the very name implies, these warehouses are owned, managed and controlled by co-operative societies. These societies provide storage facilities on the most economical rates to their members only. The basic purpose to run such warehouses is not to earn profit but to help their members.

Distribution Centres:

This type of storage facility usually has large space, which enables fast movement of large quantities of stores for short period. While, on the other hand, conventional warehouses hold goods for long time, say 2 months or 1 year.

These warehouses basically by nature, serve as points in the distribution system at which goods are procured from different suppliers and quickly transferred to various customers. These centers provide computerized control, which make movement of goods quick, fast and reliable.

In order to minimize delivery time, these storage facilities are found close to transportation centers. In some cases, distribution centers handle the goods for less than a day period such as in case of fast foods or perishable products. Most of the goods enter in the early morning (dawn time) and is transferred/distributed by the evening time.