What is warehousing? Importance of Warehouses in 2021 and beyond!

Warehousing is the act of storing products or goods to distribute or sell it later. For warehousing, Big companies with large number of products use large sheds, buildings, etc. whereas small or home-based businesses use spare rooms, basements, garages, etc.

Warehousing comes under the branch of logistics management. It is a sophisticated industry that includes procurement, management of inventory, and distribution. This falls under the roof of the supply chain which also includes marketing, product development, sales, and any other product-related activities.

Warehouse features for efficient storage and management

Usually, warehouses are used strictly for storage purposes but some of them are also used for the distribution of goods. Depending on the type of goods there are certain elements that help you to monitor and store your goods safely in a warehouse. Some of these elements include:

  • Rack and shelves system in the warehouse that helps to store maximum products while allowing easy access to them
  • A system to control the climate inside the warehouse so that products won’t diminish in quality. This is necessary for frozen items, medicines, laboratory products, etc. where too much heat or cold can damage them
  • An inventory control software that helps the person in charge to know about the goods, stored, their number, and exact location
  • Machines in the warehouse that can move bulk or single products from one point to another. For example, conveyor belts, forklifts, pallet jacks, etc.
  • Workers who load and unload products and a warehouse manager who is In charge of the goods, the workers, and the movement of goods when needed
  • A 24/7 security and surveillance system to protect the goods inside
  • Easy access to transportation to bring in as well as move out products. This includes easy access to airports, rail lines, interstates, etc.

Warehousing is an important aspect of the supply chain that affects the business and allows to delivers the products on time to the customers.

Importance of warehousing in today’s world

The world we now live in is changing every day. New technologies are being invented, new business ideas are being emerged and a lot of things are happening. The population is also increasing in every part of the world, which has also caused an increasing demand for a large variety of products.

Warehousing has been around for years and has helped businesses in a variety of ways. Let’s have a look at why it is important during this time

A central location for storage

The production gap can be reduced by the use of a warehouse as a centralized location for the storage of all your goods. This means receiving, storing, distributing and shipping products can be done easily and by saving a lot of time and money.

For example, a warehouse located in the middle of the city will help the company to distribute their products to their customers easily, whereas, for a different company, a warehouse located near a loading dock will make it easier to receive and store goods from suppliers.

So the location must be prioritized while choosing a warehouse, a location in your target market, or one which is easily accessible by your suppliers.

Improved order processing

The timely delivery of the products is one of the main concerns of the customers, irrespective of what the product may be. And it is a factor that affects the business directly.

The use of warehouses allows you to ‘security stock’. This means that the products will be available for shipping whenever an order is being placed by the customer. This eliminates the time wastage that is likely to occur when you are getting the product directly from the production site.

Stocks for months can be stored in the warehouse to reduce delivery delays. Losing customers due to long and irregular delivery times can be avoided.

Offers Extra Space

Even though you might have a storage space in your production or distribution facility, during busy times that might not be enough. A warehouse will allow storing goods safely in such instances.

Goods are usually produced in surplus quantities by most companies anticipating demand. This means a storage facility is necessary until the clients and customers start ordering. A warehouse will meet all the storage needs and is ideal for easy transportation.

Improved production quality

Only the quantity of the products is monitored by the inventory control systems in warehousing. But, it is also possible to monitor the production quality as well, with some changes and better store management.

Tracking the finished goods and raw materials will give you the number of materials that go through the production process. It also helps in identifying and isolating products with defects and the ones that do not meet the necessary quality requirements. 

An effective tracking system in a warehouse will help to work together with both vendors and suppliers to minimize defective or low-quality raw materials. It also allows monitoring of shelf life and expiry date of different products, thus allowing to remove the products from the warehouse in time.

Risk Management

Violent fluctuations in prices in the market is something everyone fears. This can happen when the supply of a product is much greater than the demand. So selling during that time can cause huge losses.

In such cases, the products can be stored in a warehouse, rather than selling them and adding to the bad situation. This will help in stabilizing the market as well as save you from loss. You can sell these products when the demand becomes higher in the market.

A warehouse is also a safe place to store perishable products. Cold storage, refrigeration, etc. can be used to store without product spoilage.

Also storing products at the warehouse will not deplete you of your products in case any accidents like a fire happens.

Need expert advice? 

Pedraza Customhouse brokers have been in this trade for more than 15 years now. We have helped countless clients in realizing their dream of import/exports.

If you need advice on warehousing or how to make your inventory for exports or imports, let us know! We are happy to help you out!

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Pedraza Content Team

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