Warehousing Operations• Storing or warehousing, is a major part ofdistribution management.• Planned space for the storage and handlingof goods and material.
Warehouses• Store inventory for a period of time storage protection• Inventory may be turned over rapidly distribution center customer service
THE ROLE OF THE WAREHOUSE IN THE LOGISTICS SYSTEM• The warehouse is where the supplychain holds or stores goods.• Functions of warehousing include Transportation consolidation Product mixing Docking Service Protection against contingencies
Functions of Warehouse• Transportation consolidation From figure 1.1, warehouse consolidateall incoming goods from different suppliers„Less than Truck-load(LTL) and ship a FullTruck load (FTL) to a plant.
Functions of Warehouse• Product mix against contingenciesmaterials are Protection isIn a typical mixing operation, truck loads Docking - - a practice in which - Warehousing• Service are shipped fromcan provide mixing - Warehouses origin to the services thatof products from transportation delays, vendor stockexists such as an incoming semi-trailer truck orunloadedenhance a firms revenue growth.warehouse. little or no storage in betweenouts, or strikes.railcars, with
Some valid reasons for holding stock include the following.• As a buffer/consolidation point between twoproduction processes• suppliers lead-time • To enable savings to be made through bulk purchases or discounts To cope with seasonal fluctuations To provide a variety of product in a centralizedup/holding of anticipation stocks The build location (for example, before a new product launch) The build-up and holding of investment stocks
Purpose of a Warehouse• Primary aim for a warehouses anddistribution centers is to facilitate the movementof goods from our suppliers to customers and,by doing so, meet customers demand in atimely and cost-effective manner. • The purpose of warehouse management has expanded. The days of a warehouse just “housing” goods and supplies are long gone. • Basic aim must be to minimize the total cost of the operation while providing the desired level of service.
Types of warehousesThere are two basic types of warehouses:private and public. Facilities can be furtherdivided according to use as storage warehousesor distribution centers.1. Private2. Public
Private warehouses are owned by a single manufacturer,wholesaler or retailer. Most are run by largefirms with continuous storage needs for massquantities.Public warehouses are independently owned by operated.They are also used by manufacturers who needmultiple storage locations to get products tomultiple markets.
Warehouse Policies & ProceduresEquipment InstructionsPut Safety FirstRunning a warehouse business can be SafetyMost working warehouses use many should be your primary concern,challenging. To be successful, you will need to setand it is vital that every member ofas pallet jacks,different types of equipment such the staffclear guidelines and expectations.understands the importance of Although onlyforklifts, presses and stackers. established safetytrained operators should use that equipment,procedures.not every worker will have the same level oftraining and experience
Storage Warehouses provide storage for extended periods.Procedures of seasonal items, such agriculturalcorps, use this type of warehouse.Distribution Centers provide short-term storage of productswhose demand is both constant and high.Distribution centers are common in the groceryand food industry.
Warehouse Policies & ProceduresPost Hours and Rules - Signage is an important part of anywarehouse, and it is important that managementpost signs in conspicuous locations. - Large signs should be used to communicateimportant information such as emergencyprocedures, worker expectations and hours ofoperation.
DESIGN CONSIDERATIONIdeal Facility for Pure Supplier Warehouse SpaceConsolidation Requirements(Full Pallet Movement)
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 Layout and DesignLayout and Design Principles: • Use one story facilities where possible. • Move goods in a straight-line. • Use the most efficient materials handling equipment. • Minimize aisle space. • Use full building height. Chapter 8 Management of Business 17 Logistics, 7th Ed.
Basic Warehouse OperationsMovement Receiving Put-away Order picking ShippingStorage Stock location Warehouse Management System (WMS) Chapter 8 Management of Business 18 Logistics, 7th Ed.
RECEIVING INP •Schedule Carrier UT •Unload Vehicle •Inspect for damage WAREHOUSE PROCESS Storage Put-away •Equipment•Identify Product •Stock Location•Identify Product Location – Popularity•Move Products – Unit Size•Update Records – Cube Shipping Preparation Order Picking•Packing •Information•Labeling •Walk & Pick•Stacking •Batch Picking Shipping •Schedule Carrier •Load Vehicle OUT •Bill of Loading PUT •Record Update
OBJECTIVES OF EFFICIENT WAREHOUSE OPERATIONS• Provide timely customer service.• Keep track of items so they can be found readily& correctly.• Minimize the total physical effort & thus the costof 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 Complexity of warehouse operation Improve customer service levels depends on the number of SKUs handled & the number of in a warehouse is& filled. handling. Most activity orders received material Increase Employee Efficiency & Productivity Real-time data management enables you to view the exact levels of your inventory Online access to information
COSTS OF OPERATING A WAREHOUSE• Capital costs — Costs of space & materials handling equipment — Clerical costs of producing reports will be reduced because up-to-date information already exists in the database and there are predefined reports. As well, receiving discrepancies and inventory adjustments will be reduced by using handheld computers and bar codes.• Operating costs — Cost of labor — Measure of labor productivity is the number of units that an operator can move in a day
Warehouse ActivitiesIn general , a typical warehouse can be seento be performing the following activities• Receive goods• Identify goods• Dispatch goods to storage• Hold goods• Pick goods• Marshal the shipment• Dispatch the shipment• Operate an information system
Receive Goods• Acceptance of goods from outside transportationor an attached factory a. Check the goods against an order or bill of lading b. Check the quantities c. Check for any transit damage d. Inspect goods if required
Identify the goods• With appropriate stock keeping unit (SKU)number• With part number• Indicate the quantity• Quantity receive is recorded
Dispatch Goods to Storage• Goods are sorted• Put away goods recorded the location
Hold GoodsHolding Goods by keeping and preservingStorage is meant to protect the goods cold heated explosive
Pick Goods• Goods are picked from storage must be accessible location records• Brought to marshalling area
Marshal the Shipment• Marshalling the shipment such as goods making u a single order are brought together and checkedfor discrepancies. Order records are updated• All goods for an order are brought together check for missing items check for correct items change order information if required
Dispatch the Shipment• Orders are packaged, shipping documents areprepared.• The order is prepared for shipment and loadedon the right vehicle protective packaging for shipment documents prepared loaded and secured
Operate an Information SystemItems record must be maintained.Need to know what is in the warehouse quantity on hand quantity received quantity issued location of goodsComputer based or manual system
Warehouse ManagementDeals with receipt, storage and movementof goods, normally finished goods, tointermediate storage locations or to finalcustomer.• Make maximum use of space capital cost of space is very high• Make effective us of labor and equipment material handling equipment is the second largest capital cost need best mix of equipment and labor all SKU‟s should be easy to find move goods efficiently
Warehouse Effectiveness• Cube utilization and accessibility• Stock location• Order picking and assembly• Packaging
Cube utilization and accessibility‒ Goods stored not just on the floor, but in the cubicspace of the warehouse; warehouse capacitydepends on how high goods can be stored‒ Accessibility means being able to get at the goodswanted with a minimum amount of work‒ Space also required for: aisles offices receiving order picking shipping docks order assembly
Stock Location• Objectives – To provide the required customer service – To keep track of where items are stored – To minimize effort to receive, put away, and retrieve items• Basic Stock Locating Systems – Group functionally related items together – Group fast-moving items together – Group physically similar items together – Locate working stock and reserve stock separately
Stock LocationFixed Location • SKU assigned a permanent location. • Fixed-location systems usually have poor cube utilization • Usually used in small warehouses; throughput is small, & there are few SKUsFloating (Random) Location • Goods stored wherever there is appropriate space • Advantage is improved cube utilization • It requires accurate and up-to-date information • Warehouses using floating-location systems are usually computer-based
Stock LocationPoint-of-Use Storage JIT and repetitive manufacturing Floor stock are readily accessible to users materials small „C‟ handling is reduced material items inventory is adjusted when stock is central storage costs are reduced replenished accessible at all times materials are
Stock LocationCentral Storage• All items are kept in one location• The opposite of point-of-use storage ease of control accurate inventory control is easier makes use of specialized storage reduces safety stock
Order Picking and Assembly• When an order is received, items must beobtained from the warehouse, grouped, &prepared for shipment, systems used – Area system - Used in small warehouses – Zone system – Multi-order system
Area System• Used in small warehouses• Order picker circulates throughout warehouseselecting items on an order• The order picker moves through the warehouseand takes all the goods to shipping self marshalling order is complete when the picker is finished
Zone System• Warehouse is divided into zones• Order pickers work in their own area deliver goods to the marshalling area• Zones are established by related items type of storage type of material handling required• Marshalling area then organizes orders forshipment
Multi-order System• Similar to zone system• Multiple orders are picked together• Marshalling area then sorts orders byshipment• Used where there are many items or manysmall orders
PHYSICAL CONTROL & SECURITY - ELEMENTS • Good part numbering system • Simple, well-documented transaction system – Identify the item – Verify the quantity – Record the transaction – Physically execute the transaction • Limited access – Inventory must be kept in a safe, secure (locked) place with limited general access • Well-trained workforce
What Is Packaging?• Consumer packaging Marketing managers primarily concerned with how the package fits into the marketing mix.• Industrial packaging Logistics managers primarily concerned with efficient shipping characteristics including protection, ability to withstand stacking when on a pallet, cube, weight, shape and other relevant factors.
Packaging• Interest in packaging is widespread Logistics Warehousing Transportation Size Marketing Production Legal
The Role of Packaging• Identify product and provideinformation• Improve efficiency inhandling and distribution• Customer interface• Protect product
Inventory• Inventory is an idle stock of physical goodsthat contain economic value, and are held invarious forms by an organization in its custodyawaiting packing, processing, transformation,use or sale in a future point of time. From the above definition the following points stand out with reference to inventory: • All organizations engaged in production. • Inventory can be in complete state or incomplete state. • Inventory is held to facilitate future consumption. • All inventoried resources have economic value and can be considered as assets of the organization.
Managing Inventory LevelsInhas beenachieve this, that inventory manager mustIt order to established the the role of inventoryensure made uptobetweenthat the inventory itself, plusThis is a balance the costsupply and demand by ofmanagement is ensure of stock is available tothe cost of transporting the goods, cost of managingestablishing minimum holding stocks toand whenmeet the needs of the beneficiaries as coverthe goods.lead-timesrequired.
Types of InventoriesRaw materials & purchased parts - are inventory Partially completed goods calleditems that progress - (WIP) is made up of all the work in are used in the manufacturers conversion Finished-goods inventoriesprocess to produce(components), assemblies, and (manufacturing components, subassemblies, ormaterials, parts firms) or merchandisefinished products. that are being processed or aresubassemblies (retail stores)waiting to be processed within the system.
Types of InventoriesGoods-in-transit to warehouses or customers Transitinventories result from the need to transport items ormaterial from one location to another, and from thefact that there is some transportation time involved ingetting from one location to another.
Effective Inventory Management• A system to keep track of inventory• A reliable forecast of demand• Knowledge of lead times• Reasonable estimates of Holding costs Ordering costs Shortage costs• A classification system
Key Inventory TermsHolding (carrying) costs: cost to carry anOrdering costs: costs of ordering andShortage costs: costs when demandLeadin inventoryinterval between orderingitem time: time for a length of time,receiving supplyexceeds inventoryand receiving the orderusually a year
Auditing Inventory Records• Checking the accuracy of inventory records• Periodic Inventory usually an annual count• Cycle Counting daily counts of items
Auditing Inventory Records• To correct the on-hand balance periodic inventoryTo find the reasons for errors andeliminate them cycle counting
Periodic (Annual) Inventory• Periodic inventory is a method bywhich any inventory sold is physicallycounted at the end of an accountingperiod. • To satisfy financial auditors • Determine the value of the inventory • Financial auditors are concerned with the total value • Planners are concerned with the • item detail
Cycle Counting• A method of keeping track of inventoryby performing inventory counts constantly,or on a frequent and regular basis, insteadof once per year or once per quarter.• Count inventory continually throughout the year• Predetermined schedule some items counted frequently depending on value past history of problems• Count some items every day
Inventory Counting SystemsPeriodic SystemPhysical count of items made atperiodic intervalsPerpetual Inventory SystemSystem that keeps trackof removals from inventorycontinuously, thusmonitoringcurrent levels ofeach item
Inventory Counting SystemsTwo-Bin System - Two containers ofinventory; reorder when the first is emptyUniversal Bar Code - Bar codeprinted on a label that hasinformation about the item 0to which it is attached 214800 232087768