Warehousing was initially viewed as a static unit for keeping and storing goods in a scientific and systematic manner so as to maintain their original quality, value, and usefulness. Today, warehouses have ceased to be mere storage service providers and have become logistical service providers in a cost-efficient manner, making goods available at the right place and time.

The key functions of warehousing include consolidation, where materials from different production plants are received and dispatched to a customer in a single transportation shipment. Another function is break the bulk, which involves dividing the bulk quantity of goods received from production plants into smaller quantities for clients. Warehouses also perform stock piling for the seasonal storage of goods, such as agricultural products, which are released based on demand. Additionally, they provide value added services like packaging and labelling, and help in price stabilisation by adjusting the supply of goods with demand.