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Impact of Warehousing on Logistics

During a business activity, the function of storing the goods plays a vital role in its success and prosperity. When the business starts, goods are manufactured or bought by the businessperson for different selling purposes in the market. After the process of manufacturing these goods and products, a place is required by the business to hold these manufactured products, until they are sold.

 In this regard, the need of a commercial building is felt by the businesspersons to store their goods until they are sold, or consumed by their customers. This kind of building that is utilized for the purpose of storing different goods is called a Warehouse. The warehousing facility is also used, when the goods are manufactured, but await their time of demand.

In order to understand the background of the warehousing, there are some reasons that are the major factors for the need of a storage place during the different business activities. For example, before the manufacturing process, the goods are usually found in the form of raw materials or they await their turn to be sent in the processing sector.

In the mean time, these raw materials cannot be kept in some open place, which may turn into a big risk due to theft, weather, and other different undesirable conditions. Secondly, another reason is that some goods are meant for the specific seasons, and in the off-seasons, they are required to be kept in some place that may keep them from heat, air, and water.

There are some other reasons that are influenced by the use of warehouse. By warehousing facility, time utility is created during the business activities and the use of those goods are facilitated by the warehouse seasonally. However, prices of the goods are increased due to this facility, which is an expense. Nevertheless, it is worth to bear this kind of expense for the long run and utilization of the goods.

The production of some goods is done throughout the year, but they are used by the customers seasonally. For instance, the production of umbrellas, fans, air-conditioners, blankets, etc. are done regularly throughout the year, whereas, they are consumed only during the specific seasons. Conversely, the production of some other products is done seasonally, whereas, customers consume them throughout the year. For example, the production of agricultural produces is done according to their seasons, but they are mostly used throughout the year. Such as lentils, wheat, rice, and grains are used throughout the year in different countries.

As we have discussed the background of warehousing briefly, we should understand that storage is the synonymous term to the warehousing. In order to comprehend the warehousing purpose, there are some objectives, which should not be ignored by any businessperson.

Some of the objectives of warehousing are that it allows the business to produce different goods on the seasonal basis and permits its continuous use throughout the year. The warehousing facility consents the seller to wait for the better prices of the manufactured goods.

Thirdly, the warehouse also plays its role as a supportive branch in the business activities during the period of short demand of the products. On the other hand, it also supports during the time of excessive supply of the different products. Therefore, we may generalize that somehow, warehousing facility plays a vital role in reducing the risk factors that are attached with the business from the very first day of its foundation.

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