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FUNDAMENTAL OF WAREHOUSING

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FUNDAMENTAL OF WAREHOUSING

  1. 1. 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 Foam AFF AMF External Customers Internal Customers Al Mutlaq Furniture co AMF PROJECT Manufacturing unit A C B
  2. 2. 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 Receiving Identification and sorting Shipping Dispatching to Customers Retrieval from storage Order accumulation Record keeping Space utilization 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
  3. 3. The main aim of warehouse is to fulfill material management function with: ECONOMY SPEED EFFICIENCY
  4. 4. Warehousing is not just a place to store materials and delivered. It is now becoming strategic device or strategic concept in the entire supply chain. 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. Read more: 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.
  5. 5. 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 policy To Keep Records Order Fulfillment Right Product Good Shape Right Package Right quantity At the right time Delivered to Right Customer Information management and documentation of the warehouse internal component of warehouse.
  6. 6. Warehouse Activity MARSHAL RHE SHIPMENT REPACKING AND SHIPMENT REPLENISMENT CUSTOMER SERVICE COMPLIANCE DOCUMENTATION MANAGE INFORMATION SYSTEMS AND REPORTING CROSS DOCKING SORTING / CONSOLIDIATION PICKING GOODS HOLDING GOODS DISPATCH GOODS TO CUSTOMERS RECEIVE GOODS REPACKING PUTWAY IDENTIFY GOODS
  7. 7. PERFORMANCE OF WAREHOUSE COULD BE MEASURED FOLLOWING HEADS ORDER FULFILLMENT INVENTORY MANAGEMENT WAREHOUSE PRODUCTIVITY TRANSPORTATION PERFORMANCE CUSTOMER SERVICE COMPLIANCE
  8. 8. ORDER FULFILLMENT MEASURES ON TIME DELIVERY ORDER FILL RATE 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
  9. 9. INVENTORY MANAGEMENT MEASURES Inventory Accuracy Damaged Inventory Days On Hand Storage Utilization Inventory Visibility Dock To Stock Items Accuracy of right time delivery Documentation Traceability and inventory tracking
  10. 10. 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
  11. 11. Transportation Performance Measures Warehouse and logistic go hand on hand On-time Deliveries Damage Demurrage Cost Percentage Freight Bill Accuracy Cost per Order Missed Appointments Percentage Shipment Tracking
  12. 12. SUMMARY 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
  13. 13. 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.
  14. 14. 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. Goods Services Information Point of origin Point of consumption
  15. 15. 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 requirements Warehouse Management Manufacturing unit Delivery Created Carrier Assigned Delivery Manifested Vehicle allocated Delivery Dispatch Delivery Confirmed customer Service Utilizing Service provide Efficient Effective
  16. 16. 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 services Effective flow of goods point of consumption Warehouse Management Service provide Efficient customer Effective Service Utilizing customer non-value added activity convert value added activity logistics
  17. 17. Order processing Customer Order Processing Transportation Manufacturing Unit Warehouse Customer Logistics Activity
  18. 18. 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 Logistics Materials Customer Warehousing Plant Satellite Distribution
  19. 19. PLANT - A PLANT - C Functions of a Warehouse PLANT - B CONSOLIDATION WAREHOUSE FACILITY - A FACILITY - B FACILITY - C CONSOLIDATION WAREHOUSE CONSOLIDATION WAREHOUSE
  20. 20. WAREHOUSE PRODUCTION COUNTRY IMORTER consumers COMSOLIDIATION WAREHOUSE
  21. 21. Consolidation Warehouse The consolidation warehouse and consolidation materials from a number of facilities for delivery to a specific customer location on a single transportation shipment. Benefits The primary benefit of consolidation is that it combines the logistical flow of several small shipments to specific destination.
  22. 22. Break Bulk Warehouse PLANT - A BREAK BULK WAREHOUSE CUSTOMER P CUSTOMER Q CUSTOMER R Break bulk warehouse help in ensuring that the economical large bulk transportation from the origin is split into smaller sized shipments for local deliveries.
  23. 23. PLANT - A PLANT - B PLANT - C BREAK BULK WAREHOUSE BREAK BULK WAREHOUSE CUSTOMER -D CUSTOMER -E CUSTOMER -F Break Bulk Warehouse COST OF LOGISTICS MANAGE BY BREAK BULK WAREHOUSING. ALTHOUGH BREAK BULK WAREHOUSE RECEIVED COMBINE SHIPMENT.
  24. 24. Cross-docking 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.
  25. 25. WAREHOUSE RECEIVE ALLOCATE MOVE OR PICK RECEIVE Cross-docking
  26. 26. 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.
  27. 27. RECEVEING SORTING SHIPPING SUPPLIERS CUSTOMERS DISTRIBUTION CENTER
  28. 28. BEFORE CROSS DOCKING SUFFLIERS LTL CUSTOMERS
  29. 29. FTL FTL CROSS DOCKING DC AFTER CROSS DOCKING
  30. 30. Processing Warehouse Benefits 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 configurations. Stock pilling 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.
  31. 31. EXTERNAL SUPPLIER AMF FACTORY AWF FACTORY AFF FACTORY AMF CENTRAL WAREHOUSE RIYADH AMF WAREHOUSE DAMMAM AMF WAREHOUSE JEDDAH STORE Showroom Customers Showroom Customers Showroom Customers Logistics Service Providers SUPPLY CHAIN AND LOGISTICS MANAGEMENT LOGISTICS MANAGEMENT PLANNING IMPLEMENTING CONTROLLING
  32. 32. SERVICE BENEFITS OF A WAREHOUSE Spot Stock Assortment MIXING Production Support Market Presence Spot Stock Assortment 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 marketing periods. An assortment warehouse stock product combinations in anticipation of customer orders MIXING When plants geographically separated overall transportation charges and warehouses requirements can be reduced by mixing Production Support Production support warehousing provides support of components and materials to assembly plans. Market Presence 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.

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