Managing warehouse operations. How to manage and run warehouse operations by Omar Youssef
By Omar Youssef
“The warehouse is our strongest asset.
Dedication, accountability and reliability
are at the heart of our business
philosophy. Focussed on our business
units needs, we provide integrated
logistics of outstanding product quality,
Product quantity, and delivered on time.
we are the extension of your business.”
1. Maximize effective use of space.
2. Maximize effective use of equipment.
3. Maximize effective use of labor.
4. Maximize accessibility of all items.
5. Maximize protection of all items.
6. Maximize effective use of information.
7. Maximize the protection of company’s assets.
8. Minimize goods Handling.
9. Minimize the company operating Cost.
• Receiving Objectives
• Right Product
• Right Quality
• Right Quantities
• Right Weight
• Right PPB.
• Right Condition
• Right Standards
• Right Time
• Prepare to receive goods and materials
• Check Temperature
• Unload the product (manual or
• Count the product
• Check the product (quality, quantity &
• Check Methods(100 % accept,100
%check, 10% sample check)
• Identify the product
• Mark the product
• Enter the product on the receipt
• Transfer the product to stage area
• Enter the product in stock
• Re-Stack the product
• Receiving Procedures
Put away & Stacking
• Stack according to First in First out
• Stack according to standards
• Method of stacking
- Manual Stacking
- Automated Stacking
• Keep stacked goods neat
• Boxes to be stacked evenly
• Keep Identity sticker visible
• Keep expiry date visible
• Stack goods in a safe way
Picking Time Consumption
Source: John J. Bartholdi, III, Steven T. Hackman, 1998
Pickers Time Breakdown
• 50-60% of time spent traveling
• - Optimize picking workload
• - Optimize work force assignm
• - Optimize picking route
• - Use of labor standards
• Apply First in First out
• Use the right picking equip
• Pick the right item (accuracy)
• Picking the right qty (accuracy)
• Keep the Picking area neat
• Picking Method
• - Manual Picking
• - Automated picking
This is wrong
This is Right
• - the right product
• - in the correct quantity
• - in good condition
• - and on scheduled time
Cold Storage Standards
• Proper Storage Temperature
• - Dry Storage from 55 to 70 F(13-21 C).
• - Refrigerator from 34 to 38 F(1-4 C).
• - Freezers from 0 to -22 F(-18 - -30 C).
• A relative humidity of
• - 50-60 % in the storeroom
• - 75-85 % in the refrigerators for meats, fish,
chicken, dairy products
• - 85-95 % for fruits and vegetables
• Good ventilation provides clean air at the
required temperatures and humidity.
Unit Load Racking
40” 40” 40”
• 3-6” between unit loads
• 3-6” between unit load and bay
• 4-6” between unit load and wall
• 18” between unit load and first
• 6” off the floor
• Loyalty to company is very important
• To implement all job description
• Cars, daily check up for maintenance
• Cars, Cleaning on weekly basis
• Cars, Damage resulting of omission
• No eating or drinking while driving
• Complying w/warehouse rules & regulations
• To execute information delivered to you
• Smoking is not allowed in warehouse
• Cooperation w/colleagues and direct managers
• Deal w/rests. representative Like the only customer
• Handling returns as per policy
Key Inventory Terms
• Lead time. Time interval between ordering and
receiving the order
• Holding (carrying) costs. Cost to carry an
item in inventory for a length of time, usually a
• Ordering costs. Costs of ordering and receiving
• Shortage costs. Costs when demand exceeds
• Ordering costs.
• Includes monitoring costs, order preparation.
order transmittal, order receipt (unpacking,
shelving, loss and damage).
• Holding (Carrying) costs.
• Includes interest, insurance, depreciation,
obsolescence, deterioration, spoilage, pilferage,
breakage and warehousing costs.
• Warehousing costs.
• Energy, Space, Labor, Equipment security
• Stock out costs.
• Includes opportunity cost of not making a sale
(lost profit), lost customer goodwill, backorder
costs, lateness charges.
COMPONENTS OF CARRYING COSTS
• Capital Costs. Cost of Money.
• Storage Costs. Is the cost of space,
personnel, and equipment.
• Risk Costs. It is the costs of obsolescence,
Damage, pilferage, insurance, etc.
• Records & Handling costs.
costTC = +
STC = +
TC Total annual cost D Annual Demand
C Cost per unit Q Order quantity
S Cost of placing an order
H Annual holding and storage cost per unit of inventory
The Total-Cost Curve is U-Shaped
Cost Minimization Goal
Optimal Order Quantity
TimeR = Reorder point = L*D + S Q = Economic order quantity
L = Lead time D = Demand per Unit of Time
S = Safety Stock
Reorder point Reorder point Reorder point Reorder point
WD Cost Breakdown
Figures based on October 31, 2005
% of Sales
Transportation & Maintenance ………………………… 0.19%
Salaries & Wages………………………………………………. 1.07%
Total WD Cost ……………………………... 2.72%
• To be Improved
• Inventory Accuracy
• Picking Accuracy
• Picking & Replenishment Efficiency
• Control of Products
• Space Utilization
• Stock Rotation
• Backorder Handling
• Resource Planning & Scheduling
• Labor & Equipment Productivity
• Performance Management
•Personnel Safety and Health
• Reduce all risks
• Follow procedure for security risk
• Report all accidents
• Handle any accident
• Report any security risk
• Promote good housekeeping
• Maintain a clean, neat personnel hygiene
• Maintain a clean workplace
• work according to standards
• Dispose of waste in timely way
• Effectively mark aisles & maintain their
• Have adequate lighting
• Apply all rules adopted in your organization
Fire Prevention and Protection
Is smoking permitted in the