Characteristics of an ideal warehouse

India’s Post Harvest Supply Chain is fragmented, with poor infrastructure and high levels of wastage. The inefficiencies in the Indian supply chain are leading to major losses in food sector. The estimated loss of agricultural produce due to lack of adequate post–harvest infrastructure and an inefficient supply chain management is approximately Rs.500 billion to Rs.600 billion every year.

Most warehouses and logistics providers do not have adequate scientific and technical facilities to store and transport perishable commodities like seafood, fruits, vegetables etc. Nearly 30 to 40 percent of horticulture produce is wasted annually because of inadequate storage and transportation facilities.

The post–harvest supply chain is one of the critical levers that can resolve some of the key issues plaguing agriculture in India. It also presents large opportunities for the private players to build a profitable business. In this scenario, there is urgent need to tap the opportunities available in warehousing and logistic sector in India leading to reduction in post harvest losses and this could help farmers to fetch better prices.

Overall agri warehousing capacity is increasing by 8%–10% annually; however, 20%–30% of the total food grain harvest is wasted due to the lack of availability of storage capacity, regional imbalance in warehouses, lack of adequate scientific storage and inefficient logistic. The warehousing industry in India is currently valued at INR 745bn (FY 2013) and has been growing at ~15% for the last 3 years. The “ValueNotes” estimates that the industry will grow at a rate of 18% till 2017.

Convenient location: 

Warehouse should be located at a convenient place near highways, railway stations, airports and seaports where goods can be loaded and unloaded easily.

Use of mechanical devices for handling goods:

Mechanical appliances should be there to loading and unloading the goods. This reduces the wastages in handling and also minimizes handling costs.

Adequate space for storage of good:

Adequate space should be available inside the building to keep the goods in proper order.

Cold storage facility for perishable items:

Ware houses meant for preservation of perishable items like fruits, vegetables, eggs and butter etc .should have cold storage facilities.

Protection of goods from sunlight, rain, wind, dust, moisture and pests:Proper arrangement should be there to protect the goods from sunlight, rain, wind, dust, moisture and pests.

Round the clock security: Round the clock security arrangement should be there to avoid theft of goods.

Availability of fire fighting equipment: The building should be fitted with latest fire-fighting equipment to avoid loss of goods due to fire.

Advantages of Warehousing

There are several advantages of keeping the produce in warehouses like:

Protection & Preservation of goods: Warehouse provides necessary facilities to the businessmen for storing their goods when they are not required for sale. It provides protection to the stocks, ensures their safety and prevents wastage. It minimizes losses from breakage, deterioration in quality, spoilage etc. Warehouses usually adopt latest technologies to avoid losses, as far as possible.

Regular flow of goods: Many commodities like rice, wheat etc. are produced during a particular season but are consumed throughout the year. Warehousing ensures regular supply of such seasonal commodities throughout the year.

Continuity in production: Warehouse enables the manufacturers to carry on production continuously without bothering about the storage of raw materials. It helps to provide seasonal raw material without any break, for production of finished goods.

Convenient location: Warehouse enables the manufacturers to carry on production continuously without bothering about the storage of raw materials. It helps to provide seasonal raw material without any break, for production of finished goods.

Easy handling:

Modern warehouses are generally fitted with mechanical appliances to handle the goods. Heavy and bulky goods can be loaded and unloaded by using modern machines, which reduces cost of handling such goods. Mechanical handling also minimizes wastage during loading and unloading.

Useful for small businessmen: Construction of own warehouse requires heavy capital investment, which small businessmen cannot afford. In this situation, by paying a nominal amount as rent, they can preserve their raw materials as well as finished products in public warehouses.

Creation of employment: Warehouses create employment opportunities both for skilled and unskilled workers in every part of the country. It is a source of income for the people, to improve their standards of living.

Facilitates sale of goods: Various steps necessary for sale of goods such as inspection of goods by the prospective buyers, grading, branding, packaging and labelling can be carried on by the warehouses. Ownership of goods can be easily transferred to the buyer by transferring the warehouse keeper’s warrant.

Availability of finance: Loans can be easily raised from banks and other financial institutions against the security of the warehouse-keeper’s warrant. In some cases warehouses also provide advance to the depositors of goods on keeping the goods as security.

Reduces risk of loss: Goods in warehouses are well guarded and preserved. The warehouses can economically employ security staff to avoid theft, use insecticides for preservation and provide cold storage facility for perishable items. They can install fire-fighting equipment to avoid fire. The goods stored can also be insured for compensation in case of loss.

The post–harvest supply chain is one of the critical levers that can resolve some of the key issues plaguing agriculture in India.

It also presents large opportunities for the private players to build a profitable business. Driven by growth in production and organized retail, warehousing is the major segment contributing to the growth of the Indian logistics industry. Dynamic market requirements have made it essential for Indian warehousing players to overcome challenges, as well as maintain, improve and sustain competitiveness.

There is urgent need that challenges and concerns should be addressed with collaborative efforts among all stakeholders, including the government and its agencies, policy makers, entrepreneurs, investors, logistics service providers, manufacturers, farmers and sellers involved in supply chain. Globally, the focus has now shifted from increasing production to better storages and transportation of food produce, similar strategy need to be implemented in India.