CHAPTER 9 (WAREHOUSE MANAGEMENT)
What Is Warehouse Management
-P A R T O F FI R M ' S L O G I S T I C S SY S T E M T H A T S T O R E S
PRODUCTS AT AND BETWEEN POINT OF ORIGIN AND
PO I N T O F C O N S U M P T I O N
-T E R M W A R E H O U S I N G I S R E F E R R E D A S
TRANSPORTATION AT ZERO MILES PER HOUR
-W A R E H O U S I N G P R O V I DES T I M E A N D P L A C E U T I L I T Y
FOR RAW MATERIALS, INDUSTRIAL GOODS, AND
FINISHED PRODUCTS,ALLOWING FIRMS TO USE
CUSTOMER SERVICE AS DYNAMIC VALUE-ADDING
COMPETITIVE TOOL.
WAREHOUSING
-Warehousing is defined as combination of multiple functions that
involves responsibility of safeguarding the quality and quantity of
goods stored.
-Warehousing involves the technique like use of chemicals,
fumigation, sunlight and aeration to protect the goods from damage
Warehousing Activities
-Storage
-Pick/Pack Operations
-Goods in/out/ Marshaling
-Value Added Services
-Other Services
THE ROLE OF THE WAREHOUSE IN THE LOGISTICS SYSTEM
The warehouse is where the supply chain holds or stores goods
Functions of warehousing include
-Transportation consolidation
-Product mixing
-Docking
-Service
-Protection against contingencies
THE CHANGING ROLE OF THE WAREHOUSE
TRADITIONAL DISTRIBUTION CENTRE FULFILLMENT CENTRES
STOCKING (DCs) (FCs)
WAREHOUSE
RECEIVING KITTING OPERATIONS DYNAMIC CROSS -
DOCKING
STORAGE OPERATIONS RETURNS HANDLING MULTI-CHANNEL
INCLUDING ON-LINE
FULFILLMENT
SHIPPING SCHEDULED CROSS- GREEN OPERATIONS
DOCKING (e.g=END-OF-PRODUCT-
LIFE
DISPOSITION,RECYCLING
AND RECLAMATION)
TYPE OF WAREHOUSING
-Private Warehousing (e.g.=any logistics service provider)
-Contract Warehousing (e.g.=government)
- Multi-client Warehousing (e.g.=multi company like DHL, CITYLINK AND J&T)
-Public Warehousing (e.g.=Royale kastam)
DESIGN CONSIDERATION
-Order picking
-Receiving
-Shipping
-Order assembly
-Storage
-Office
-Miscellaneous
PRINCIPLES OF WAREHOUSE LAYOUT DESIGN
-Use one -story facilities
-Move goods in a straight line
-Use efficient materials - handling equipment
-Use an effective storage plan
-Minimize aisle space
-Use maximum height of the building
WAREHOUSE PROCESS
-INPUT (RECEIVING)= Schedule carrier, unload vehicle and inspect for damage
-STORAGE (Equipment and stock location) = Popularity, unit size and cube
-ORDER PICKING= Information, batch picking, walk& pick
-SHIPPING PREPARATION= Packaging, labelling and stacking
-PUT -AWAY = Identity product, identify product location, move products and update
records
-OUTPUT (SHIPPING)= Schedule carrier, load vehicle, bill of loading and record update
Process flow
INVENTORY MANAGEMENT
-Management of damaged stock
-inventory reconciliation INCOMING GOODS
-Stock check planning
RECEIVING
-Return handling
-Delivery check
-Put away
STORAGE
-Configuration of location
-Replenishment of pick location
-Warehouse management system (wms) or user -selected put away
logic
ORDER PROCESSING
-Order release or planning
-Lot allocation
-Order receipt from host
PICKING
-Perpetual inventory stock checks
-Support for multiple pick technologies
-Pick by order and batch pick
POST -PICK HANDLING
-Packing
-Consolidation
-Labelling
-Finishing
MARSHALLING AND DESPATCH
-Area configuration
-Lane assignment OUTBOUND GOODS
-Controlled Trailer Loading
-Direct Loading
OBJECTIVES OF WAREHOUSE OPERATIONS
-Provide timely customer service.
-Keep track of items so they can be found readily & correctly.
-Minimize the total physical effort & thus the cost of moving goods into & out
of storage.
-Provide communication links with customers
Benefits of Warehouse Management
-Provide a place to store & protect inventory
-Reduce transportation costs
-Improve customer service levels
COSTS OF OPERATING A WAREHOUSE
-Capital costs (E.G=Costs of space & materials handling equipment)
-Operating costs (E.G=Cost of labor and Measure of labor productivity is the number of units
that an operator can move in a day)
-RECEIVE GOODS (E.G=Accepts goods from Outside transportation or attached factory & accepts
responsibility, Check the goods against an order & the bill of loading, Check the quantities, Check for
damage & fill out damage reports if necessary and Inspect goods if required)
-Identify the goods (E.G=items are identified with the appropriate stock-keeping unit (SKU) number
(part number) & the quantity received recorded)
-Dispatch goods to storage (E.G=goods are sorted & put away)
-Hold goods (E.G=goods are kept in storage & under proper protection until needed)
-Pick goods (E.G=items required from stock must be selected from storage & brought to a
marshalling area)
-Marshal the shipment (E.G=goods making up a single order are brought together & checked for
omissions or errors; order records are updated)
-Dispatch the shipment (E.G=orders are packaged, shipping documents are prepared, & goods
loaded on the vehicle)
-Operate an information system (E.G=a record must be maintained for each item in stock showing
the quantity on hand, quantity received, quantity issued, & location in the warehouse)
TO MAXIMIZE PRODUCTIVITY& MINIMIZE COST, WAREHOUSE MANAGEMENT MUST WORK WITH THIS
-Maximize use of space (E.G=–space is the largest capital cost)
-Effective use of labor & equipment (E.G=–labor is the largest operating cost and material
handling equipment is the second largest capital cost)
FACTORS INFLUENCING EFFECTIVE USE OF WAREHOUSES
(1) Cube utilization and accessibility
-Goods stored not just on the floor, but in the cubic space of the warehouse; warehouse
capacity depends on how high goods can be stored
‒ Accessibility means being able to get at the goods wanted with a minimum
amount of work
(2) STOCK LOCATION
-objectives is to provide the required
customer service, keep track of items stored and to
minimize effort to receive, put away and retrieve item
-Basic Stock Locating Systems (E.G= Group functionally related, fast moving,
physical similar items together and locate working stock and reserve
stock separately)
-Floating (Random) Location (E.G=It requires accurate, up-to-date
information and Warehouses using floating-location systems are usually
computer-based and Advantage is improved cube utilization)
-Fixed Location (E.G=SKU assigned a permanent location, & no other items are
stored there, Fixed-location systems usually have poor cube utilization and
usually used in small warehouses; throughput is small, & there are few SKUs)
-Point-of-use storage (E.G=Inventory stored close to where it will be needed and used in
repetitive manufacturing & JIT systems)
Advantages of Point-of-use Storage
-Materials are readily accessible to users and accessible all time
-Material handling is reduced or eliminated
-Central storage costs are reduced
-Central storage (E.G=Contains all inventory in one central location)
Advantages of Central Storage
-Contains all inventory in one central location
-Inventory record accuracy is easier to maintain
-Reduced safety stock, since users do not need to carry their own safety stock
Order Picking and Assembly
When any order received this is the way of item obtained and the
system used from the warehouse, grouped and prepared for
shipment
(1) Area system
-Order picker circulates throughout warehouse selecting items on an order is ready to ship when
order picker is finished
(2) ZONE SYSTEM
-Warehouse is divided into zones, & each picker works only in an assigned zone -- order is divided by
zone, & the items from each zone are sent to the marshalling area
(3) Multi-order system
-Same as the zone system, except that each picker collects items for a number of orders at the same
time
PHYSICAL CONTROL & SECURITY -ELEMENTS
-Good part numbering system
-Well-trained workforce
-Limited access (E.G=Must kept in secure place and limited general access)
-Well-documented transaction system (E.G=Identify the item, verify quantity, record
transaction and physical execute the transaction)
Warehouse challenges
-CUSTOMER
-INVENTORY
-GLOBALIZATION
-PRODUCT DIVERSITY
-E-COMMERCE
-UNBALANCED BUSINESS GROWTH (E.G=Warehouse
technology supplier)
