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NIOS Class 10 Warehouse Principles & Inventory Management Chapter 5 Functions of a Warehouse
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Functions of a Warehouse
Chapter: 5
Intext Questions 5.1
(i) By investing in a warehouse, you will be able to store, ship, and distribute ________ efficiently.
Ans: Inventory.
(ii) Perishable products, candles, artwork, and medication are a few examples of products that require _____________.
Ans: Temperature controlled storage.
(iii) Warehouses reduce fluctuations in _______ by storing goods when their supply exceeds demand and by releasing them when the demand is more than immediate production.
Ans: Prices.
(iv) List out two importance of warehousing.
Ans: Better Inventory management, Efficient packaging and processing.
Intext Questions 5.2
(i) What are the different value added services at the warehouse?
Ans: Packaging, Labelling, Grading, Kitting.
(ii) WDR ___________.
Ans: Warehouse Deposit Receipt.
(iii) _______________ means a warehouse receipt issued in an electronic form.
Ans: Electronic warehouse receipt.
(iv) __________function allows warehouse to store goods for seasonal requirements.
Ans: Stockpiling.
Intext Questions 5.3
(i) Most important function of warehousing is storing (True/False)
Ans: True.
(ii) GRN _______.
Ans: Goods Receipt Note.
(iii) List out the major activities of the warehouse.
Ans: Receiving goods, Breaking bulk, packaging.
(iv) Warehouse is a ________ unit.
Ans: Storage.
Intext Questions 5.4
(i) Primary elements of warehousing are ________.
Ans: Warehouse management, Warehouse management system, Warehouse operations.
(ii) WMS __________________.
Ans: Warehouse management system.
(iii) A properly managed warehouse helps to save a lot of time, lowers overall costs and is also beneficial to deliver products and services in an efficient way (True/false).
Ans: True.
(iv) _______________is a type of software that renders required tools to manage inventory movement and warehouse operations.
Ans: Warehouse management system.
Intext Questions 5.5
(i) Largest sector that shares _____________ per cent of the warehousing activity in India is _______________.
Ans: 55 per cent and Retail industry.
(ii) GST enabled the consolidation of warehouses (True/False).
Ans: True.
(iii) What is CFS?
Ans: CFSs/ICDs are custom-bonded facilities with public authority status for the handling and storage of containers. These depots are equipped with warehousing space, adequate handling equipment and IT infrastructure.
(iv) What are the devices used to locate the products in the warehouse?
Ans: Wearables, sensors and radio frequency identification tags are used to locate the products in the warehouse.
(v) GST__________________.
Ans: Goods and service tax.
Intext Questions 5.6
(i) Write down the full form of CWC.
Ans: Central Warehousing Corporation.
(ii) CWC established in the year __________________.
Ans: 1957.
(iii) CWC increases losses during warehousing, handling and distribution (True/false).
Ans: False.
(iv) CWC provides Consultancy Services (True/false).
Ans: True.
(v) List out one objective of CWC.
Ans: To meet changing needs of agriculture, trade, industry and other sectors by providing scientific warehousing and related infrastructural facilities.
| Terminal Exercise |
1. What are the activities of the warehouse?
Ans: Following are the important activities which occur inside the warehouse:
(i) Receiving of Goods.
(ii) Identification.
(iii) Breaking of Bulk.
(iv) Information about Receipt and System Updating.
(v) Storing.
(vi) Picking for dispatch of Goods.
(vii) Packing.
2. List the functions of the warehouse.
Ans: Follows are some of the key functions of a warehouse:
(i) Inventory Holding – Meeting demand and supply.
(ii) Consolidation.
(iii) Break bulk.
(iv) Stockpiling-Meeting seasonal requirements.
(v) Value Added Services:
(a) Packaging.
(b) Labelling.
(c) Grading.
(d) Kitting.
(vi) Helps in Packing, grading and Value adding.
(vii) Helps in Financing.
3. List the elements of Warehousing.
Ans: The elements of warehousing are:
(i) Warehouse Management Good: warehouse management is a must, in order to keep everything smooth and functioning of day to day operations of a warehouse. Warehouse management refers to the running of operations in a strategic way at the warehouse to promote, enhance, and ensure operational quality.
(ii) Warehouse Management System: WMS or the warehouse management system is a type of software that renders required tools to manage inventory movement and warehouse operations. It helps to save a lot of time by eliminating time-consuming manual processes.
(iii) Warehouse Operations: Warehouse operations include tracking inventory and goods. The main principles of warehousing include receiving inventory, managing Stock Keeping Units, and forwarding products to the next destination.
The following are the benefits of good warehousing operations:
(a) Keep overall costs low.
(b) Boost staff productivity.
(c) Manage in-time receiving and shipping of inventory.
(d) Enhance customer satisfaction.
(e) Keep proper stock.
4. What is WDR?
Ans: When goods are deposited in the warehouse, the warehouse provides a Warehouse Deposit Receipt (WDR). This WDR can be used as a security to raise loans or advances. The WDR is endorsable and can be traded. In India WDR is used in case of agricultural commodities and certain specified warehouses are authorised to issue WDR which are accepted by Banks for Loan purposes.
5. Explain about the warehouse management system.
Ans: WMS or the warehouse management system is a type of software that renders required tools to manage inventory movement and warehouse operations. It helps to save a lot of time by eliminating time-consuming manual processes. A good warehouse management system helps to optimise tracking, inventory, distribution of workload, and shipping. It offers real-time insights and visibility into everything happening at the warehouse.
6. Discuss in detail about the warehouse activities.
Ans: Following are the important activities which occur inside the warehouse:
(i) Receiving of Goods: It is the basic important function of the warehouse. Goods from the factory or imports are received at the warehouse. After verifying the correct quantity, the warehouse issues POD to the transporter.
(ii) Identification: After receiving the goods, the warehouse keeper checks the material for any damage and correctness. It marks each item separately. He may use the code number or he may attach the tag for identification. Due to identification one can easily separate different SKUs. The goods are then put away into a location. The location identification may be facilitated by the WMS system.
(iii) Breaking of Bulk: Generally goods are delivered in bulk to the warehouse keeper. They may be converted into smaller quantities, according to the requirements of the customer.
(iv) Information about Receipt and System Updating: A warehouse supervisor checks all the received goods and informs about the total record of the goods to the concerned DEO (Data Entry Operator). The DEO will make the necessary entries in the ERP system and create a GRN (Goods Receipt Note). After the entry, the inventory starts getting reflected in the system and now dispatch orders can be placed against received material.
(v) Storing: It is the most important function of warehousing. The goods are kept safely in the warehouse. Different areas are demarcated for storing different types of material. The material can be stored in the ground or vertically using racks.
(vi) Picking for dispatch of Goods: When an outbound order is received, a pick list is generated. The goods are picked up as per the pick list and brought to the staging area for further processing. The picking can be manual or as per the bin location suggested by the ERP/EMS system.
(vii) Packing: Before dispatch of the material, the goods to be packed. They may be required to stretch wrapped or bubble wrapped or just be strapped. Several small items may be packed inside a larger carton. Packing also involves labelling the goods for the quantity, consignee details and products inside.
7. What is break bulk?
Ans: This function refers to bringing the goods in bulk quantity from the source to the distribution warehouse. Then breaking the bulk into smaller lots and reshipping to the channel partners and customers. Example Mobiles in bulk may be imported from China in a 20 feet container. They may be broken into smaller lots at the warehouse and then supplied to distributors and dealers in various markets.
8. What is stockpiling?
Ans: This function allows warehouses to store goods for seasonal requirements. For example, farm products like Wheat or Rice are harvested once a year, stored at the warehouse and consumed throughout the year. There are products like Air conditioners which are manufactured throughout the year, stored at the warehouse and sold mainly during the summer season. Both situations require the stockpiling function of the warehouse for storage throughout the year.
9. Write about the functions of Warehousing.
Ans: The functions of warehousing are:
(i) Helps in Packing, grading and Value adding: Certain products require certain value addition to be done at the warehouse. Agricultural commodities may require grading of the goods. Kiting is a common service at the warehouse, for running promotional schemes; Warehouse may be required to do labelling. The prospective buyers can inspect the goods kept in a warehouse. A modern warehouse provides various ways of adding value to the product.
(ii) Helps in Financing: When goods are deposited in the warehouse, the warehouse provides a Warehouse Deposit Receipt (WDR). This WDR can be used as a security to raise loans or advances. The WDR is endorsable and can be traded. In India WDR is used in case of agricultural commodities and certain specified warehouses are authorised to issue WDR which are accepted by Banks for Loan purposes.
10. Give a detailed note on recent trends in warehousing in India.
Ans: The warehouse and logistics sector is growing stronger due to the rising demand from e-commerce, pharma and organised retail. As a result, automation and robotics are gaining traction as they are an effective solution for tackling challenges. According to a CARE research report, in the Indian Warehousing industry 55 percent accounted for retail and industry warehousing, 16 per cent by cold storage and 15 per cent by agriculture and 14 per cent by Container freight stations (CFS)/inland container depots (ICDs).
With the evolution of an organised retail sector, modern warehouses for the storage of perishable goods have become essential. The government’s initiatives to promote the growth of warehouses in the country through measures such as enactment of the Warehousing Act, 2007, investments in the establishment of logistic parks and Free trade warehouse zones (FTWZs) together with the introduction of Goods & Service Tax (GST) regime augurs well for the industry’s growth. Sensing the tremendous growth potential of the warehouse sector, the private players (including both domestic & international) have ventured with a view to bridge the gap between cost and efficiency of operations. In all the segments of warehousing industry accepting the agricultural segment, the majority of the capacity is controlled by the private sector. In the agricultural segment, approximately 3/4th is controlled by different Government entities. The primary objective of a majority of these warehouses is to only store food grains and ensure food security. Apart from the existing trends, future trends are emerging in the warehousing segment.
11. Discuss the importance of warehouses in the supply chain.
Ans: Following are the importance of warehouse in the supply chain:
(i) Better Inventory Management: A warehouse acts as a centralised location for storing inventory. It makes it easier to track and manage inventory. By investing in a warehouse, a company will be able to store, ship, and distribute inventory efficiently. If some products are out of stock, that also can be monitored.
(ii) Efficient Packing and Processing: Warehouses provide the required supplies that a company would need to store, move, process, and package customers’ orders. Loading docks, pallet racks, and packaging material are just a few to mention. This helps sellers save time and money and manage everything in one place.
(iii) Superior Customer Service: Customers expect quick delivery of products and expected delivery time. The delivery time and speed are primary things that convince the buyer to make a purchase. Timely delivery is an important tool to satisfy the customer’s needs. So, if the businesses fail to deliver orders on time it will impact the profit and brand image.
(iv) Price Stabilisation: The demand for goods and services varies from day to day, month to month, and year to year. Some businesses have seasonal sales while some businesses’ sales depend on customers’ purchasing power, employment rates, government policies, and other such factors. So, the products can be stored in a warehouse for later use when the demand is high in the market. This helps in price stabilisation and reduces losses as well.
(v) Improved Risk Management: Warehousing provides a safe storage place to store perishable products. It protects against price fluctuations. Depending on business type and needs, a firm can lease a warehouse with or without a refrigerator, freezer and temperature control. Perishable products, candles, artwork and medication are a few examples of products that require temperature-controlled storage.
12. Write about the objectives of Central Warehousing Corporation.
Ans: The objectives of Central Warehousing Corporation are as follows:
(i) To meet changing needs of agriculture, trade, industry and other sectors by providing scientific warehousing and related infrastructural facilities.
(ii) To reduce losses during warehousing, handling and distribution.
(iii) To be a major player in providing pest control services using environment friendly methods.
(iv) To assist in implementation of Warehousing (Development & Regulation) Act, 2007 with a view to expand credit potential of Warehoused goods through banking institutions and NBFCs.
(v) To plan and diversify across the logistics value chain, through forward and backward integration in areas such as port handling, procurement and distribution, cold chain, warehousing financing, 3PL (Third party logistics), consultancy services, multi–modal transport, etc.
(vi) To achieve global presence in the warehousing and logistics field.
(vii) To plan and implement Human Resource Development programmes to improve commitment, motivation and productivity of employees for achieving customer satisfaction.
