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Understanding About Warehouse Function In Business And Trade Activities

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Understanding, About Warehouse function in business and trade activities

In the world of business and commerce, especially in the field of production and manufacturing industry, we will often encounter a word and term called warehouse. 

The warehouse becomes a thing that will not be able to escape from the world of business and trade of goods, especially on manufacturing goods and production industry. A warehouse is indeed a crucial and crucial thing and has a vital role in business and commerce.

Warehouses in the world of manufacturing industries or these productions are essentially different from individual warehouses or warehouses that exist in houses. 

Although in principle simple can be understood and have the same meaning, but there is a thing that distinguishes between this type of warehouse with our home warehouse then, what is the warehouse sense and what is the function of the warehouse?


Warehouses are a fixed, special facility designed to achieve service level targets with the lowest total cost. A warehouse is essentially a building that physically has certain criteria as a storage place of goods, in which there is a warehousing process (warehousing) in the form of storing (storage) and material handling.

Thus, the sense of warehouse can be defined as a place given the task to store the goods that will be used for the production process, until the goods are requested according to the production schedule.

The existence of this warehouse is also functioned as a buffer or counterbalance and also serves to determine the next step of a company. In this case, whether the company will use the warehouse for commercial purposes or only for its use.

In the trade, warehouses are generally used as a place to serve several consumers or different. In general, the warehouse should also have a sufficient amount of manpower complete with equipment.

As a way to meet the needs of consumers, the procurement of a warehouse unit also aims to provide satisfaction to consumers or customers. Therefore, the storage distance is set within a certain time limit, both old and short, tailored to the needs of the consumer.

The Mission Of A Warehouse

The procurement of commercial warehouse units can be profitable for the industry and trade sectors. Because a warehouse will be able to encourage flexibility and creation of professional management.

As a storage place for products, a warehouse also has certain missions or tasks in the marketing distribution network. The warehouse mission in the marketing distribution network is as follows:
  • Maintain inventory of used goods, as counterbalance and buffer of variation between production scheduling and consumer demand.
  • As a distributor in an area of orders, which has the shortest transportation distance to provide a quick response to meet the demands of such customers.
  • Used as a place of accumulation and to strengthen the products in the production and distribution activities.

The Main Function Of A Warehouse

According to the opinion of the expert, Donal J. Bowersox (Logistics Management, the year 2000) says that the warehouse can be described as a logistics system of the company that serves to store products and other production equipment (raw materials, good-in-process, finished goods, spare parts, supplies, and deadstock) and provides information status of material or products that are stored in the warehouse so that the information is easily accessible by anyone interested and always factual.

The warehouse is a storage place for products and to meet customer demand quickly. From this sense, the warehouse has several functions and not merely as a place of acceptance and delivery of products only.

Understanding, About Warehouse function in business and trade activities

Here are some of the main warehouse functions, as follow:
  • Assembling the Order (assembly order)
  • Dispatching to storage
  • Dispatching the shipment
  • Identifying and sorting (identification and filtering)
  • Maintaining record (care product)
  • Packaging (packing)
  • Picking the order (order selection)
  • Receiving (admission)
  • Shipping
  • Storage

Warehouse Procurement Main Objectives

Warehouse or storage place of goods does have a very important function in maintaining the smooth operation of production and distribution of goods in a factory. 

The purpose and functionality of the storage of the warehouse, in general, is to maximize the utility of existing resources, then meet the needs of customers or maximize the service to customers with a way of observing the constraints of existing resources.

Related to this, there are three main objectives related to the procurement of goods, such as:

1. Supervision

A well-maintained administration system is done to control the material entry. This surveillance task concerns material safety so that no material loss occurs.

2. The selection

I.e. maintenance or maintenance activities so that the material stored in the warehouse is not quickly damaged when in the period of storage.

3. Filling or storage

The goal is that if at any time it is needed, the material to be used is always available, before and during the production process.

The Main Function Of A Warehouse

Understanding, About Warehouse function in business and trade activities

In facilitating the process and activities of the management of goods, warehouse main functions are as follows:

1. As a place of acceptance (receiving) goods

This is the process to receive the order material that was previously in order, by guaranteeing the quantity and quality of the material sent by the supplier following the specifications specified.

2. As a goods supply place

This is an activity to ensure that customers ' demands can always be fulfilled according to the company's goal of fulfilling their customers ' satisfaction.

3. Put away

This is to place items in a storage location.

4. Storage goods

This is a physical form of the items stored before there is a request to be expanded from within the warehouse.

5. Pick up order (order picking)

It is a process of taking goods from a warehouse that corresponds to the request.

6. Packing (packaging) goods

This is the preferred step after the picking process.

7. Sorting of goods

It is a batch-taking process to be an individual order and accumulation of distributed retrievals, which are due to large variations in the goods.

8. Packing and delivery of goods

This is a packing item before it is loaded into containers and sent to customers.

Warehouse Types

In reality, 6 types of warehouses are commonly used, among others:
  • Warehouse of general merchandise for factory products
  • Warehouse for cold storage. The warehouse provides temperature-controlled storage space.
  • Warehouse with customs clearance. Items such as tobacco and imported alcoholic beverages are stored in this warehouse.
  • Warehouse household goods. Used for storage of personal property. These properties are specifically stored in long-term, temporary
  • Special commodity warehousing. Special commodity warehousing is used for special agricultural products such as grain, wool, and cotton.
  • Warehousing storage of imported goods. Bulk storage Warehousing provides liquid storage tanks and open or hidden storage for dry products such as coal, sand, and chemical goods.

Warehouse Type Layout

Some factors that need to be considered in determining how much warehouse capacity is needed, among others:

The large size of each item to be stored. The larger the size of the goods will require a very large space.
  1. The lead time of the item ordered, if the grace time is faster then the storage space should be bigger.
  2. Number or quantity of goods to be stored and frequency out the entry of goods.
  3. Factors that want to be taken by the management of the warehouse that includes the factor of running out of goods, the shortage of storage factors when the goods arrive in the warehouse. Besides being determined by the large room, the warehouse capacity is also determined by how to adjust the location of the stored goods (warehouse space layout). The warehouse with space randomly and scattered of course less efficient than the warehouse that the layout is neatly arranged. In addition to this, other things should be considered, namely the type of goods that are stored whether the goods include:
  • Fast-moving, ie the circulation is fast, usually in the form of goods that sell quickly.
  • Slow-moving, i.e. the goods that are slowly circulating, usually in the form of slow goods.

Warehouse Ownership

On the other hand, according to warehouse ownership consists of three kinds:
  • Privately owned Warehouse
  • Public Property Warehouse
  • Government-owned warehouses
Private Owned Warehouse

A private warehouse is a storage facility that owns or is hired by a company for its use. Most companies, wholesalers, and retailers have several storage facilities in their buildings or separate locations.

Companies use private warehouses when there are large volumes of goods that must be kept regularly. But the cost of private warehouses can be costly if needs change. 

This type of warehouse is owned and operated by suppliers and resellers for use in their distribution activities. For example, large retail networks provide warehouses for their stores or wholesalers operating a warehouse in which he receives and distributes the products.

Public Warehouse

Public Warehouse is an independent storage facility. Public Warehouse can provide all services that can be provided by the company's warehouse. It is essentially a space that can be rented out to address the distribution needs in a short period. 

Retailers who have their warehouses sometimes find additional storage space if their warehouse capacity is insufficient or if they purchase large quantities of products for some reason. 

For example, retailers can order additional items to maximize sales in the store or when there is a promotional price from the supplier if buying in bulk.

Government Warehouse

Government warehouses are government-owned storage facilities, e.g. Enter port.

Warehouse Location

In a company, management decisions regarding warehouse location are strongly influenced by several factors, such as:
  • Types of goods
  • Transport fee
  • Market conditions
  • Rental Rates
  • Manpower Supply
  • Tax
  • Geographical conditions
  • Competition
That's the review of warehouse functions in business and commerce activities. Hopefully useful and can add to your insight.

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