To understand the purpose of warehousing
Warehouse is a part of materials management process
concerned with storage to deliver on time:
Raw materials and part to manufacturing facilities for production
Finished goods to retail outlet customers and internal customer
Al Mutlaq Furniture co
The purpose of any store is to provide to users or customers
The right materials
In the right quantity
At the right place
At the right Time
Identification and sorting
Dispatching to Customers
Retrieval from storage
Every store and every storage system will be different and has to be tailor made to suit
a specific purpose. A broad approach is called PQRST analysis, The letters standing for
Product Quality Route Supervision Time
The main aim of warehouse is to fulfill material
management function with:
Warehousing is not just a place to store materials and delivered. It
is now becoming strategic device or strategic concept in the entire
PURPOSE OF WAREHOUSE
Safety stock is the stock held by
a company in excess of its
requirement for the lead time.
Companies hold safety stock to
guard against stock-out.
Provide safe storage of inventory Information management & Compliance
A supply of inputs held as a reserve to
safeguard against unforeseen shortages or
demands. See also strategic stock.
A ratio showing how many times a company's
inventory is sold and replaced over a period. The
days in the period can then be divided by the
inventory turnover formula to calculate the days
it takes to sell the inventory on hand or
"inventory turnover days."
Comparatively large stock of essential goods or
materials, built up to withstand long holdups or
scarcity due to natural calamities, strikes, or war. In
comparison, buffer stocks are held for stabilizing
prices to protect local exporters from losses resulting
from wild swings in world commodity prices. Also
called strategic stockpiles.
Mission of a Warehouse
To protect goods
To provide a service
To ensure a steady supply
To facilitate Just In Time (JIT) delivery of finished goods for internal and external
customers. To facilitate quick response to customers demand
In today's competitive business scenario, Warehouses are strategic tools delivering
customers satisfaction and contributing to the bottom - line of manufacturers and
distributors. To can improve productivity by delivery materials on the time to
customers or users. It can also manage the materials requirement as per company
To Keep Records
Delivered to Right
Information management and documentation of the warehouse internal component
MARSHAL RHE SHIPMENT
REPACKING AND SHIPMENT
MANAGE INFORMATION SYSTEMS AND REPORTING
SORTING / CONSOLIDIATION
DISPATCH GOODS TO CUSTOMERS
RECEIVE GOODS REPACKING
PUTWAY IDENTIFY GOODS
PERFORMANCE OF WAREHOUSE
COULD BE MEASURED FOLLOWING HEADS
CUSTOMER SERVICE COMPLIANCE
ORDER FULFILLMENT MEASURES
ON TIME DELIVERY
The rate at which customer orders can be filled from
existing inventory within the parameters of the order
request. For example, if a customer places an order for
10 units of a product, but the current inventory only
allows for the immediate shipping of 7 units. The fill
rate is 70%. A higher fill rate is usually equated to
higher customer satisfaction.
ORDER ACCURACY LINE ACCURACY
ORDER CYCLE TIME PERFECT ORDER COMPLETION
COMPLETENESS OF DOCUMENTATION
INVENTORY MANAGEMENT MEASURES
Days On Hand
Dock To Stock Items
Accuracy of right time delivery
Traceability and inventory tracking
Warehouse Productivity Measures
Orders per Hour
Lines per Hour
Items per Hour
Cost per Order
Cost as % of Sales
Accuracy of picking and put way
Transportation Performance Measures
Warehouse and logistic go hand on hand
Demurrage Cost Percentage
Freight Bill Accuracy
Cost per Order
Missed Appointments Percentage
Warehouse is an integral part of the supply
chain as well as consumer
It is not just a Warehouse, It is a strategic tool
in the material management process
It provides several value added services that
enable good customer service leading to an
improved customer satisfaction
What is Logistics?
For an example, in day to day we do transportation. Finished goods Inventory move from place to
place. For example we want to dispatch finished goods items to Riyadh or Jeddah . What do we do?
We arrange the container or trailer, Man power and materials handling equipment ,well in advance.
Finished goods items Move from our warehouse to container or trailer. Then, Finished goods items
will reach to Riyadh.
For which we need to do lot of planning. Like arrange Container or trailer well in advance, arrange
man power, Materials handling equipment etc. All these activities are called planning activities.
When we incorporate the planning activity into transportation, this will become logistics.
So when we are into logistics, we do a little bit of management activity. That is called the
Logistics Management. The definition of Logistics Management-It is the process of
planning, implementing, controlling.
Effective flow of goods, services, information from the point of origin to the point of
consumption and it will be with respect to two people. One the service provider,
another one service utilizing person, that means our customer. So for a service
provider it should be efficient. For a customer it should be effective.
Assuming I am a service provider, meaning that I need to do the activity very
efficiently. Then only my customer will use my service effectively. So the process of
planning, implementing, controlling. Effective flow of goods, services, related
information from the point of origin to the point of consumption, efficient and effective.
Above all the purpose of transportation or logistics to satisfy our customer’s
requirement. So what is that we are trying to do in the whole process? We take the non-
value added activity of our customer, convert into a value added activity give it back to
them by way of domestic logistics or international logistics. Or domestic transportation
or international transportation.
Point of origin Point of consumption
Logistics management is that part of the supply chain process that PLANS , IMPLEMENTS,
and CONTROLS the efficient flow and storage of goods and services and related information
from the point of origin to the point of consumption in order to meet customer
Effective flow of goods, services, related information from the point of origin to the point of
consumption, efficient and effective. Above all the purpose of transportation or logistics to satisfy our
customer’s requirement. So what is that we are trying to do in the whole process? We take the non-
value added activity of our customer, convert into a value added activity give it back to them by way of
domestic logistics or international logistics. Or domestic transportation or international transportation.
point of origin
Logistics plans implements and Controls
the efficient, effective forward and reverse
flow and storage of goods , Services, and
related information between the point of
origin and the point of consumption in
order to meet customers requirement’s
PLANT - A
PLANT - C
Functions of a Warehouse
PLANT - B
FACILITY - A
FACILITY - B
FACILITY - C
The consolidation warehouse and consolidation
materials from a number of facilities for delivery to
a specific customer location on a single
The primary benefit of consolidation is that it
combines the logistical flow of several small
shipments to specific destination.
Break Bulk Warehouse
PLANT - A
Break bulk warehouse help in ensuring that the
economical large bulk transportation from the origin
is split into smaller sized shipments for local
PLANT - A
PLANT - B
PLANT - C
Break Bulk Warehouse
COST OF LOGISTICS MANAGE BY BREAK BULK WAREHOUSING. ALTHOUGH BREAK BULK
WAREHOUSE RECEIVED COMBINE SHIPMENT.
Cross docking is a practice in logistics :-
Unloading materials from an incoming vehicle and loading materials directly in to
outbound vehicles with little or no storage in between.
Why Cross Docking
To change type of conveyance
To sort materials intended for different destinations
To combine materials from different origins
Cross Docking LTL Industry
In LTL (Less than Truck Load) Trucking industry cross docking is done by moving
cargo from one transport vehicle directly into another transport vehicle ,with
minimal or no warehousing.
In retail practice, cross docking operations may utilize staging areas where in bound
materials are stored consolidated and stored until the outbound shipment is complete
and ready to ship.
RECEIVE ALLOCATE MOVE OR PICK RECEIVE
When Is Cross Docking Used ?
The process of cross docking will not suit every warehouse’s needs. It is therefore
important to make an informed decision as to whether cross docking will increase
the productivity, costs and customer satisfaction for your specific business.
Cross docking can advance the supply chain for variety of specific products.
Unpreserved or temperature controlled items such as food which need to be
transported quickly can benefit by this process.
Packaged and sorted products ready for transportation to a particular customer
can become a faster and more efficient process through cross docking.
REASONS FOR CROSS DOCKING
Provide central site for products to be stored an similar products combined to be
delivered to multiple destinations in the most productive and fastest method.
Combine numerous smaller product loads into one method of transportation to
create an easier delivery process to the customer.
Re packing /Labeling can be done at warehouse and shipped only
when the order arrives
First, risk is minimized because final packaging is not completed until
an order for a specific label and package has been received.
Second, re required level of total inventory can be reduced by using
the basic production (Bright) for variety of labeling and packaging
The economic benefit of stock pilling comes from the need of seasonal
storage. Stockpiling provides an inventory Buffer, which allows
production efficiencies within the constraints imposed by materials
sources and the customers.
Logistics Service Providers
SUPPLY CHAIN AND LOGISTICS MANAGEMENT
PLANNING IMPLEMENTING CONTROLLING
SERVICE BENEFITS OF A WAREHOUSE
Spot Stock Assortment MIXING Production Support Market Presence
Under spot stocking a selected amount of a “company’s product “like is placed
or “Spot Stock” in a warehouse to fill customer orders during a critical
An assortment warehouse stock product combinations in anticipation of
When plants geographically separated overall transportation charges and
warehouses requirements can be reduced by mixing
Production support warehousing provides support of components and materials
to assembly plans.
The market presence factor is based on the perception or belief that local
warehouses can be more responsive to customer needs and offer quicker
delivery than more distant warehouse.
WAREHOUSING FUNCTIONS LIKE :- Consolidation, Break
Bulk, Cross Docking , Deliver economies of scale in storage and
transportation domain resulting in improved delivery performance in
the value chain.