An Introduction to Warehousing Private & Confidential
Table of Contents • Warehouse and Its Need • Warehouse Set - Up – Warehouse Site Selection – Warehouse Management Processes – Warehouse Process Flow Schematic I. Types of Material Flow II. Types of Inspection III. Put – Away Process IV. Types of Storage V. Picking and Packing Process – Warehousing Support Needs • Designing Warehouse – Warehouse Site Selection and Layout Design - Understanding Business Needs – Usual Challenges – Designing Layout – Parameters to be considered while designing – Sample Layout • Implementation • O-Links’ Solution
Warehouse and Its Need Definition – A designated place where goods are stored to balance demand & supply uncertainty, to serve customers in much better way, to consolidate upstream flow and distribute downstream flow as per requirement, to do last mile value addition such as packaging, kitting etc. and to reduce last mile distribution cost. Types of Warehouses Manufacturing Support Factory Retail Distribution Catalog Retailer• Stock room providing raw • Serves a number of captive • Fills orders from catalog • Interface production with material and work in process retail units sales wholesalers • Advance info about order • A large numbers of small, items to manufacturing • A Comparatively small operations composition is needed frequently single – lines number of orders are• Contains many small orders • Carton and item picking is done orders are picked up picked up on daily basis• Only Statistical information from a forward area • Item and, sometime, • Advance information available about order • More orders per shift than carton picking about the order composition consolidation/shipping lanes • Daily compositions of composition is required• Stringent time requirement • High focus on cost, accuracy, orders are usually • High focus on cost and for response time and fill rate of the packages unknown order accuracy• Primary focus on response • Responsiveness depends heavily • Only statistical • Responsiveness heavily time but accuracy and cost on truck routing schedules information available depends on production also are important • The only critical point is that if • High focus is on cost and schedules the retails units are not captive response time then responsiveness becomes a crucial issue
Warehouse Site SelectionKey Criteria (Cost vs. Service Reliability) Additional Factors Cost Availability of Transportation (Warehouse Operations Infrastructure and Maintenance) • Roads • Power • Water • Other utilities Availability of Skilled Manpower Serviceability (Proximity to Customers or Government Regulations Ports) Strategic Factors – monitoring & control, pre- determined sites, future plans Environmental Factors
Warehouse Site Selection Sample comparative analysis of possible Sites for a Customer needing warehouse closer to Port in the West ZoneFactors Zone 1 Zone 2 Zone 3 Zone 4 Zone 5Infrastructure cost Low cost Higher as compared Higher than Very High – attributed to High cost as compared to Zone 1 but much Zone 1 and 2 high land cost to zone 1 and 2 lower than Zone 3,4 and 5Transportation Lowest – Close Low Very High – High Highcost (Inbound ) proximity to attributed to port distanceDistance (Port to 0 km 17 km Inbound 100+ km 66 km 32 kmWh.)Connectivity Good Very good for Average Good Average Inbound and OutboundAvailability of Good Good – due to Average Good – due to GoodManpower (Other warehousing hub warehousing hubfacilities)Probable JNPT Panvel Vasai Bhiwandi KalamboliLocationsHere the comparison is based on few key parameters. Similar analysis can be done taking in to consideration criticalparameters, as mentioned in the earlier slide.From the comparative analysis Zone 2 is the best option and the warehouse can be set up in this Zone to cater toCustomer requirement of having the warehouse strategically closer to the Port
Warehouse Process Flow Schematic The general flow of material in the warehouse is as depicted in the adjacent figure The logical flow of the process is: 1. Receipt 2. Inbound Inspection 3. Putaway 4. Storage 5. Order Picking 6. Order Sorting and Packing 7. Dispatch/Shipping Each Process itself can be performed in a number of ways. For example there are numerous ways in which the materials can be stored – Racks, On ground, Pallets, etc. These topics are further explained in the following sections Typical Warehouse Process Flow
Type of Material Flows: U FlowA U flow occurs when the goods receipt and dispatch functions are located at the same end of a warehouse buildingProducts flow in at receiving, move in to storage at the back of the warehouse, and then to shipping, which is locatedadjacent to receiving area, on the same side of the buildingFast moving items are located closer to the loading baysAdvantages of U FlowExcellent utilization of dock resources because the receiving and shippingprocesses can share dock doorsFacilitating cross-docking because the receiving and shipping docks areadjacent to one another and may be co-mingledExcellent lift truck utilization because put away and retrieval trips areeasily combined and because the storage locations are closest to thereceiving and shipping docks, they become natural locations to house fastmoving itemsYields excellent security because there is a single side of the buildingused for entry and exit
Types of Material Flow: Straight or Through FlowThrough flow happens when separate loading bay facilities are available for Inbound and shipping are provided, oftenat opposite ends of warehouseProducts flow in at receiving, move into storage, picking area and then the staging area and despatch area in astraight lineItems with a higher throughput level are located at the centre of the warehouse because the total distance travelledwould be shorterThe major disadvantage of a Through flow layout is goodsneed to travel the full length of the warehouse, even forgoods that are fast movingIt is also harder to control and less flexibleWhen is it better to adopt a Through flow?When there is a risk of interference or confusion betweenGoods In and Goods OutWhen goods inwards vehicles and dispatch vehicles are verydifferent; for example differences in platform height ornature of unit loadWhen the warehouse is connected to a production Plant
Types of Inspection Sampling Sampling Inspection is a process in which parts of the Inbound material is checked for consistency and expected quality This process is followed in case of materials, which come in good number per batch. The underlying principle is that the quality of a small representative parts, is good enough to gauge the quality of the entire batch This type of Inspection is usually used for material like automobile components, Spares, toys, etc. Complete Count Complete Count is a process in which the quality of each component/material or part coming in has to be checked for quantity, quality and consistency This process is followed in case of materials, which come in small lot sizes per batch OR even if they come in large numbers per lot, there exists no way to say that there would be consistency of quality. The underlying principle is that the quality of a small representative may not indicate the quality of the whole batch This type of Inspection is usually used for materials like apparels, electronic products, etc.
Put – Away Process The allocation of the cartons to the Label products with Incoming date In the Put away “Add” function, The location will also follow the logic of to facilitate FIFO / FEFO are stuck on Part to Location Mapping is done load clustering and rack the carton and pallets and based on the logic optimization and Pick balancing and converted into palletized loads. routing Multiple Putaway run sheets are The pallets and Cartons are then In the automated system, the RF created based on the putaway physically transported to the Stage handhelds reflects the putaway in methodology – Batch putaway, for Putaway location which is at end their specific zones. Zone wise putaway for GRN clusters of the rack columns. etc. Once the Putaway confirmation is The Put away team which works in done, the material is available in the The Pallet label is scanned and then the rack columns puts away the ATP (Available to Promise) Stock. the location label is scanned and pallets and cartons to the racks, confirmed which acts as a trigger to Single rivet slotted angle racks as the WMS to confirm the Putaway per the part to location mapping in list. the Putaway run-sheet.
Types of Storage System Drive – In Racking Pallet Racking Broad Aisle Installation Block Stacking Push Back
Types of Storage System Dedicated Storage Product is assigned a designated slot. With multiple product storage, the space required is the sum of the max storage requirements for each of the product Randomized Storage Product is randomly assigned a storage location close to the input/output point. The space requirement will be equal to the max of aggregate storage required for the products. Dj is the space location, Summation dkj where k=1 to m (no I/O ports ) Class-Based Storage A mixed policy where products are randomly assigned within their fixed class. The classification is done based on the movement of the SKU 1. The 20% items which have 80 % Storage/Retrieval activity are termed as Class A 2. The next 30% items which have 15% Storage/Retrieval activity are termed as Class B 3. The next 50% items which have 5% Storage/Retrieval activity are termed as Class C
Selection of Storage System Storage System Selection through Comparative AnalysisParameter Push Back Racks Drive Through RacksStorage Density Offers high storage density coupled Can store large amount of inventory with selectivity in a smaller area increasing Storage DensitySelectivity of Inventory Ideal for selectivity – up to 400% Selectivity is sacrificed improvement in selectivityType of Goods Can store a variety of inventory Ideal for large amount of similar items (like seasonal goods) that move quickly - Not ideal for an inventory of wide variety
Picking and Packing Process Pick List Creation Receive shipment authorization document / label in the system The shipment orders are sorted by customer and geography and then converted into Picklists.There are multiple possibilities of a picklist – 1) Batch/ Wave Picks for the Bulk Pick area 2) Pick for Kitting – Batch Picking 3) FIFO Model The Pick Zone wise picklists are created. The Print copy of the Picklist will also have the Carton Labels (Packing list) for full carton picks. Batch picking is done for Kitted part IDs.
Picking and Packing Process Picking The Picks are done by reach Stacker /Retriever from the Storage area Manual picking with Picking trolleys are used in the Slotted angle area All completed picks are signaled by sticking the picklist to the pallet/Carton These are then moved to the Packing Zone for further process The carton/material is scanned along with the location scan and confirmed to complete the activity of picking
Picking and Packing Process Kitting/Rework The batch picked materials are sorted and re-assembled. The re-assembled materials are scanned and cartonized The cartonized packs are then moved to the Packing line.
Picking and Packing Process Packing The cartons from the bulk pick is transferred to the Packing line for taping/Strapping. Picklist ID is selected and Dispatch Labels are generated and stuck to the Cartons The loose picks are cartonized by scanning the individual material and Packing list is created and the Dispatch labels created and stuck to the Cartons. The high value material picked loose are shrink wrapped for safe transit.
Warehouse Site Selection and Layout Design (UnderstandingBusiness Needs)1. What is the need for the Warehouse?2. What business is it catering to?3. Where should the warehouse be located?4. Is the warehouse location well connected?5. Is there good telecommunication connection?6. What should be the size of the Warehouse?7. What should be the height?8. How many bays should the Warehouse have?9. What are the different SKUs expected to be stocked up at the Warehouse?10. What are the markets or locations that the Warehouse would be catering to?11. How to segregate the SKUs?12. What should be the stocking policies?13. What should be the replenishment policies?14. What should be the Health and Safety policies?15. What should be the Security arrangements?The answer to these questions will give us a strategic perspective to the need for the Warehouse and the LayoutDesign, thereafter.
Usual Challenges to be Handled while designing1. Product information in terms of throughput and storage level is uncertain or not available2. Need to minimize the existing cost of establishing and operating the warehouse3. Setting the Inventory Policy to store and maintain stock of Inventory of all SKUs, ready for distribution, at all time to meet demands of all items4. Assemble product batches prior to delivery, to stockpile critical parts, and to facilitate regional distribution network for quick and cost-efficient delivery
Designing LayoutObjective1. Ensuring Maximum utilization of space2. Maintaining a balance between Service and Operating Cost3. Using the most suitable unit load4. Minimizing movement5. Planning and controlling movement and location6. Providing Safe, Secure and Environmentally sound conditionsDesigning BasicsIn case of existing warehouse• Analyzing current and projected data on the activities in each of the areas of receiving, shipping and inventory levels.• The data should be supported by other considerations such as process flows, material handling equipment, type and styles of racking equipment, special handling requirements, and personnelIn case the New Warehouse• The designing will start for the Strategy document of the Organization and then further drill down to the Need and possible benefits of the Warehouse• Once this is established only then the designing of the new Warehouse begins
Parameters to be Planned when DesigningMaterial Handling Equipment Number of Docks1. Picking Equipment • Number of Receipts and Shipments • Static Shelving • Type of Loading and Unloading • Carton Flow Rack • Types and sizes of vehicles • Carousels • Number and timing of carriers • Automatic storage and retrieval system • Different areas in which materials will be • Automatic picking machines utilized, stored, prepared for shipment • Pick to Light Type of Docks • Voice directed picking • Automated Conveyor and Sorting systems • Saw Tooth Dock • Straight dock2. Receiving/Shipping Equipment • Open Dock • Interior dock • Conveyors • Industrial Vehicles Location of Docks • Automated Storage and Retrieval Machines • Traditionally at the rear end of facility and out • Automated Guided Vehicles of sight • Receiving/Shipping at the same area generally • However Multiple docks drastically reduce the flow of material with in a facility
Warehouse Optimization and SimulationChallenges Warehouse Owners Face OptiWare – Warehousing Simplified Warehouse Space Utilization Optiware is a 3-D warehouse Design, Simulation and Optimization product which helps you handle the warehousing Un-optimized Layout challenges, while achieving your strategic and operational Higher Cost of running warehouse goals. Sub – optimal throughput in warehouse Optiware helps you in: Challenges in implementing warehouse Processes • Optimal Layout Design • Planning the number of MHEs and Managing Peak hours Inbound and Outbound Material Resources Flow • Designing the Process and Material Flows Resource planning • Scenario Analysis Ensuring DIFOT ( Delivery In Full on Time) Leading to:Questions That Need to be Answered? • Customer Satisfaction • Utilization of Space, What should be the Layout Design of the warehouse? Equipment and People • Employee Safety and Is the Flow Streamlined? Morale Building How can I improve the throughput of the warehouse? How can I plan and support multiple customers from the same warehouse? How is the inbound and dispatch scheduling being Result: planned? Economic Layout Optimal Space How many MHEs do I require? Utilization Efficient Operations
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