00:00 Hello, good morning, Ms. Lydia. Welcome to class. In our commerce class study, we will be treating the

00:19 topic warehousing, which falls under one of the aids to treat just as we've been discussing in our previous classes. By the end of this class, I expect you to be able to explain the term warehousing and describe the different types of warehouses and their functions, their different uses.

00:40 You should also be able to state the advantages and disadvantages of warehouses, then explain the importance and functions of warehousing in business and commercial activities of course.

00:55 Now, a warehouse, in laytems, in layman's definition, warehouses, the place where goods are stored, until they are needed for distribution or for consumption.

01:08 It is a place where manufacturers, who sell as store their goods, until they are requested. Now, going by the definition on the board, it is the acts of storing goods produced or bought in a place, until they are needed.

01:24 Now, warehousing ensures that there is regular and steady supply of goods. Now, in other words, a warehouse is a place where goods are stored until they are demanded by the consumers.

01:40 Now, there are different types of warehouse for different, which sell different purposes. That is, you will one cannot use a specific warehouse for one uses, a type of warehouse for specific purpose that serves their purposes.

01:58 So, let's discuss on the types of warehouse. Now, we have the bounded warehouse and it is a place where goods whose custom duties have not be paid and are kept until duties are stored.

02:09 You might be wondering that goods' custom duties, where does this come from? Now, custom duties are the charge that is placed, that is paid by importers, but when that is when their goods arrive from other countries, it is the due that is paid by importers to customs services.

02:29 This bounded warehouse is where these goods are kept. So, it takes a long time for these items imported from other countries. Sometimes it takes around 3 months, takes more than 3 months, that is, if there is a delay in the transit of these goods.

02:47 Now, this bounded warehouse is usually situated at the customs, at the seaports, at seaports. It is just situated at those places. Now, so, when these goods come into the country, of course, the importer must have an idea of the period of time these goods will come into the country, probably say in 2 weeks, in 3 weeks, in 1st time, in 3 months time.

03:12 So, now, that is why it is hard knowing that, okay, my goods will be coming into the country in 3 months time, there is no specific date. Hence, it is not like when these goods come into the importer will go to the seaports and wait for them to arrive.

03:26 And what if they arrive later at night and all that? So, these bounded warehouse, when goods have been sent from other countries and they finally arrive at the bounded warehouse, these goods might cannot be left on the ship.

03:41 So, they are usually offloaded from the ship of container into this warehouse. Now, this is where the goods are kept until the customs, customs are able to contact the importer of these goods, contact the owner of these goods to come and clear these goods from the warehouse. Now, this bounded warehouse, like I said, is usually situated at seaports, at airports, where importation and exportation services usually occur.

04:10 Then, we have the state warehouse. Now, the state warehouse is owned and controlled by the government of a country. Now, it is a place where control band and small good goods are seized by the customs, authorities and are kept until they are auctioned, auctioned here means sold.

04:29 Now, let's take a look at this pay attention to contraband or small good goods. When we talk about contraband goods, there are goods that have been, their law has passed on them not to be allowed into the country, not to be imported into the country. Then small good goods, of course, contraband goods when they are brought into the country means they've been small good into the country.

04:54 Now, when these goods arrive into the country, the customs services will be performed by checking these goods, making sure that these goods are held for consumption or allowed to be in the country.

05:13 Now, when these goods are recognized, not to be allowed into the country, when they are recognized as contraband goods that have been small good into the country, these goods are thereby seized and taken into the state.

05:24 These goods kept in the state warehouse if they can be consumed by the general public, the government's auctions then that is sells them to a bidding price.

05:36 So, the public is usually done in public setting that is, okay, people, the person who bleeds the highest price or reasonable price for the goods, this item is sold to this person.

05:48 Now, if they are goods such that are harmful to the health of individual, it could lead to a serious issue, that is a serious police issue, even a court case.

05:59 That is, the person who is responsible for bringing these goods into the country, who would be apprehended by the police and taking into police custody for questioning, and probably retention.

06:11 Now, take, for example, one of such goods, take, for example, cocaine or hadrocks, let's say, hadrocks is not allowed in any country, it's contraband good.

06:28 So, when it is brought into the country, it is not healthy for anybody to consume, it is not healthy for human consumption.

06:35 So, in turn, the government destroys these goods and sanctions the person, whoever the person who must have imported these goods into the country.

06:45 Then we have the wholesalers warehouse, just as it explains itself, it's the place where wholesalers keep stored their goods until they are able to sell, until they are requested by retailers.

06:59 You know, wholesalers get their items, get finished goods from producers, now they go to the producers, buy in very huge quantity, buy in large quantity, and they store in their warehouses for retailers to command, buy.

07:14 Now, it is owned by the wholesaler, who keeps those stores, the variety of goods, both.

07:23 Then we have the public warehouse, the public warehouse is owned and operated by private individuals, who lets it out to anyone for safe keeping of goods.

07:34 Now, the cost of building the warehouses, the cost of putting together your own warehouse can be, can be very demanding in lots of times.

07:46 So, people who are financially capable, when people who are financially buoyant enough to build warehouses, they build warehouses for people to come and store their goods in them.

07:57 And then, in turn, they pay a service charge for the period of time that they are storing their goods.

08:03 Now, the fact that it's termed as a public warehouse doesn't mean it is owned by the government, like we said in the explanation, it is owned by private individuals.

08:13 So, when, take for example, Mr. A, who is a businessman? Mr. A who is a businessman, and they also say that he buys from producers, but he has been able to build his own warehouse, where he stores his goods.

08:25 He comes to Mr. B, who already has his own warehouse, who already, who was financially capable enough to build his own warehouse.

08:34 And he comes to Mr. B's storage facility, which is the warehouse, and pays a sum of money for a period of time to store his items.

08:44 So, that is how the public warehouse operates.

08:49 Now, we have the manufacturers' warehouse.

08:52 Now, the manufacturer' warehouse is owned by the producer of goods to store their products until they are demanded.

09:00 Now, this manufacturer, you know, when production is a continuous process, it is not a process whereby until people request for the item, before it is produced, production is a continuous process hence,

09:16 manufacturers are not a set of people who are in dire need, who are in urgent need of warehouse.

09:24 So, manufacturers' warehouse is the place where manufacturers store their goods that have been produced until they are needed.

09:33 So, now let's look at the importance and advantages of warehousing.

09:39 Now, we have the protection and preservation of goods. Now, warehouse provides necessary facilities to the businessmen for storing their goods when they are not required for sale.

09:50 It provides protection to the stocks, ensure their safety and prevent wastage.

09:56 It minimizes loss from breakage, deterioration in quality, spoilage, etc.

10:01 Warehouses usually adopt little technologies to avoid losses as far as possible.

10:08 Now, let's take, for example, a businessman who has a warehouse for his products and the other who doesn't.

10:16 Of course, the other who doesn't and does not even have access to public warehouse' vacant store is good.

10:22 We run on losses, that is, there are some products that cannot just be stored anywhere, the cannot just be stored outside, for example, breakable items, perishable items.

10:33 Now, these goods, such items that are very fragile, that are very fragile in nature, such items when they are mishandued or kept carelessly,

10:48 they could lead to a huge loss to the owner or such items.

10:53 Now, some warehouses adopt like technological equipment, they include technological equipment to be able to store some certain nature of goods that is perishable items and breakable items in such a way that they are well-preserved and no sort of damage comes to them.

11:13 Now, warehouses provide so many, so many advantages to the goods of business people.

11:23 Now, it protects their stocks, it reduces, it minimizes wastage, it minimizes loss, it minimizes deterioration.

11:31 There are some items that when placed on the floor, on the bed floor, could reduce in quality or could start to smell in a way that they shouldn't.

11:39 So, these things are usually considered when items are stored in warehouses hence, warehouses is very important in our commercial and business activities.

11:53 Then, too, we have another importance of warehouses is that there is regular flow of goods. Now, many commodities like rice with ETC are produced during a particular season, but are consumed throughout the year.

12:07 warehouses ensure regular supply of such seasonal commodities throughout the year. Now, this explains it that not all commodities can be gotten or can be, can be, can be, yes, can be gotten at every point in the year throughout the year.

12:26 So, for the facility or warehousing, a producer during the season of these goods, that says such as rice with, and maybe some fruits, during the season of these particular items, these things are produced in large quantity, they are stored in large quantity in such a way that even for the rest of the year, when these things are not available, when nature or changes, when, when that changes affect the availability of these items of these products.

12:55 The one stored in the warehouse is enough to provide for the needs of the public and consumers. Then, there's continuity in production.

13:07 So, somewhere when I was explaining the manufacturer's warehouse, that this production is a continuous process. It is not a process whereby you just produce one item and keep it until, or produce one item when it is required, when it is requested, because that will take a lot of time in them, with delay delivery.

13:27 Another function or importance of warehousing is that in make sure that production continues, there is no need to owe, there is no space to keep these items, so let's see this production.

13:37 The warehouse is always available to accommodate, to accommodate enough storage, that is accommodate enough products that are being produced. So, warehouse and no-goos demand factors to carry on production continuously, without bordering about the storage of raw materials.

13:55 It helps provide seasonal raw materials without any break for production of finished goods.

14:02 Now, in this point about storing raw materials, there are some raw materials that cannot stand the test of time, that cannot be kept for a long period of time.

14:16 Now, with some technical equipment that have been put in the warehouse, these raw materials cannot be stored for as long as possible, and this helps production to continue rapidly and continuously without any need for cessation.

14:29 Now, another importance of warehousing is that it is useful for small businessmen.

14:36 Now, like I was saying, when we are explaining the public warehouse, that is the public warehouse that provides the services of warehousing to businesspeople who are unable to get built to their own warehouses.

14:48 So, the construction of your own warehouse could require huge capital, heavy capital investment, which small businessmen cannot easily afford.

14:58 Now, in this situation, by paying a nominal amount of rent, they can preserve their raw materials, as well as finished products in public warehouses.

15:07 Like we have earlier stated that it requires huge capital funding to build warehouses, considering the land space, considering the cost of construction, considering the cost of putting the required equipment in these warehouses.

15:27 A lot of times, small businessmen cannot meet up with these expenses hence, it is easier for them to be able to rent pay to store their items hence, with warehousing is very important to all of the soundry in the business world.

15:46 Then, 5. It reduces the risk of loss. Now, goods in warehouses are well-guarded and preserved. That is the security measures put in warehouses to make sure that to ensure the safety of goods and raw materials stored in these warehouses.

16:04 The warehouses can economically employ security staff to avoid theft, the use in synthesized preservation and provide cost storage for facilities of perishable items.

16:17 Now, they can install firefights in equipment to avoid fire and goods stored can also be ensured for compensation in case of loss.

16:26 Now, in this part, this part where goods stored in shop can be ensured for compensation in case of loss. There is no matter how much warehouses tend to put preventive measures of wastage that is preventive measures against wastage or damages.

16:42 Somehow, unfortunately, these occurrences still happen, they still take place. So, it is best that goods stored in warehouse are ensured that is in case of loss, in case of damage.

16:57 The goods that have been damaged, that has contributed to this process of damage will be given back to the owner of this grid, as he will be in demify by the insurance company.

17:12 Let's take, for example, Mr. Ben is a businessman and he produces in large quantities. He owns a manufacturing factory where he produces processed food.

17:31 Now, if he doesn't have a warehouse, this processed food cannot just be placed anywhere hence, this goods will get damaged or begins to smell in a sort of way that will not be easily consumed by the public.

17:47 Now, if he keeps them carelessly in maybe just keeps them carelessly for the sake of storage, they could be stolen or they could easily be damaged. Where people easily go through or people easily access, there could be bodily contact with these items and they could break or something.

18:05 So, Mr. Ben needs a warehouse. He should provide a warehouse for his goods and services so that one, there is regular supply of these goods, that is not just when they are needed but they are always available.

18:19 When someone comes to buy, it is readily available for delivery. So, there is also safety for his goods, that is it doesn't have to suffer huge amounts of loss or deterioration of his property.

18:34 Then, three, there is safety for his goods in the warehouse and he must have put a lot of some technological equipment to ensure that these goods are well preserved.

18:51 Now, as much as warehousing has a lot of advantages, there are also disadvantages of warehousing. So, let's discuss them. Now, one, there are no adequate transport facilities between the place of production and warehouses.

19:05 A lot of times because of the availability of land, warehouses are usually built in remote places. So, transporting goods, transporting these products from the warehouses to where they are needed, from the place of production to the warehouses could be very cumbersome and tiring.

19:26 So, that is one disadvantage of warehousing. Then, two, there is lack of sufficient storage facilities for different commodities such as perishable and non-perishable commodities.

19:38 It is only recent times that people started taking into consideration, "Oh, how do we store perishable items? How do we store breakable items? How do we store that? Okay, people started noticing that, "Okay, not all items can be stored in the certain type of, with the traditional warehouses where it just builds to have enough space to accommodate a lot of goods."

20:02 But normally, a warehouse should be able to provide a section where perishable items are kept, where normal goods are kept, and where breakingable items are kept, unfortunately, this is not always available and when they are available, they tend to be expensive.

20:20 Three, complicated formalities are to be fulfilled at the warehouses. That is, the illustrates and innocence from us are not able to cope with these procedures.

20:31 Now, a lot of times, this produces this small businessmen and not necessarily highly educated hands, they do not understand these processes of, especially those who do not have warehouses of their own.

20:44 Okay, let's take an example of those who have warehouses on their own, and who do not have warehouses on their own. Take, for example, a small business man.

20:54 A small business man who is not so educated in the warehouse and facility, he just builds a warehouse with enough storage for his goods and stuff.

21:01 This is not put into consideration or perishable items, how do I store them, breakable items, how do I store them, and the rest of raw materials, how are they to be stored.

21:11 Now, because they do not want to go through these processes, they are unable to understand these measures. So, hence, it could be, it could lead to damage of goods.

21:23 Or, then take, for example, for a business man who doesn't have a warehouse to go to a public warehouse to store his items. He might not understand these formalities, they seem to be complicated to him.

21:35 Hence, there is usually a little bit of conflict when it comes to storing their produce.

21:46 Then we have complicated process of backward technology can reduce the story of goods by some producers.

21:54 Now, for very, very advanced warehouses, they put backwards on each item that is brought into the warehouse. The backward for a particular item is different from another one.

22:06 So, as to be able to easily identify where this product is and where how to easily locate it for when it is time to deliver it to the people requesting for it.

22:18 So, a lot of times this process is very cumbersome and takes in very, very long time. Now, when producers bring their goods to the warehouse, they expect it to just be offloaded into the warehouse and kept.

22:31 But no, for advanced warehouses, the backward process, they have to go through the backward process and make sure that each item is arranged in accordance.

22:41 Now, a lot of producers seem to find this process very stressful. Hence, it could prevent some producers from storing their goods in warehouses.

22:54 Now, we've come to the end of this class and before we go, either on a sheet of paper or with somebody inside you, I'd like you to discuss the following question.

23:04 Now, I want you to be able to explain the meaning of warehouse. What is a warehouse? What is warehousing? What is the activity called warehousing? So, in your own words, not necessarily what is on the body.

23:17 So, explain the meaning of a warehouse. Then, too, describe the different types of warehouses. We discussed about 45 types of warehouses.

23:28 We discussed about the bonded warehouse. We talked about the state warehouse. We talked about public warehouses. We talked about manufacturers warehouses and we talked about wholesalers warehouses.

23:39 So, I'd like you to describe and explain these warehouses. What are their functions? Why? What are they used for? What are their functions? Who owns them? So, describe the different types of warehouses.

23:53 Then, three. List and explain three functions of warehousing. And when I say when functions of warehouses can also liken it to the importance of warehouses. List and explain three functions of warehouses. Why? Why? What is the function of a warehouse to a business? What is the function of warehousing to commercial activities? Then, four.

24:17 Explain to each of the advantages and disadvantages of warehousing. That is, tell us what's not necessarily what is in the world, please. According to your own understanding, after this class, I'm sure you must have deduced one or two things on your own from this class.

24:36 So, tell us in your own words, what do you understand? What have you been able to deduce as an advantage of warehousing and disadvantages of warehousing? Remember in class, we said that one of the advantages of warehouses that there's continuous production and there's always availability of which there's enough space to store raw materials.

24:55 Then, for disadvantages, we discussed that warehousing can be the process of backward income, very conversion and not easily understandable by small businessmen. And so many others like that.

25:10 So, I'd like you to explain this in your own words and according to your own terms. Thank you for watching. My name is Miss Lydia. Till next time.

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