1. PREPARE A POWERPOINT
PRESENTATION TO THE COO AND
MD ON THE TOPIC.
Process flow of warehouse operations and
system ( inbound and outbound )and how
you will set up the warehouse.

2. ANSWER.
The warehouse systems refers to the various mode of operation used by different
stores in the discharge of their bestowed functions.
Most often, basic operation system are noticed, these are:
The open warehouse system: many warehouse, supermarkets and multiple
shops use this system to effect their stores services. The system allows a
customer or requisitioner a degree of freedom within the entire warehouse. He is
allowed to move around, inspect and pick his needs and later report to the
issuing officer or the cashier as the case may be to effect the necessary
documentation.
This open system of operating warehouse has some merits and demerits
associated with it.
Merits.
It is easy to operate.
There is room for order pickers to search for their need.
After thought and subsequent return of what has been picked is possible with
ease.
The job of the issuing officer is reduced.
Low or empty stock can be noticed quickly, and information about such easily be
communicated to the officer concerned by the store’s customers.

3. Demerits.
There is the need to have very wide space and good environment for storage. This cost
more money.
Cost of safety and high cost of lighting.
A substantial loss can be incurred in the case of fire outbreak.
Clear identification and labeling of all stocks are necessary and this not a small task.
THE CLOSE WAREHOUSE SYSTEM: this system is more widely used in production,
maintenance, warehouses and finished products stores. The system keeps the
warehouse customers out of reach of the store items. Operation of the system is such
that all demands are committed into the store’s requisition and later approved by the
store officer before issues are made.
MERITS.
Items can be kept in larger containers over a long period as they are not often exposed
until they are required.
Since no unauthorized person is allowed into the storage area of the warehouse,
stocks are relatively more secured and protected from multiple handling.
Pilferage and theft are drastically reduced since not all persons can enter the
warehouse without permission.

4. DEMERITS.
One of the major disadvantages of the close warehouse system is that it required well
planned receiving and issuing bays before it can function well.
Where the store is busy, the queues of requisitioners are inevitable.
Occasionally, some items are stored in remote areas of the warehouse and the package
and packaging may go bad without the stores officer being aware.
However, the numerous advantages and disadvantages listed so far, in regard to the
open and close warehouse system do not exhaust the points.
Deferent warehouse with different operating systems are bound to have their own
peculiar merits and demerits depending on the operational situations and
circumstances.
Warehouse are created to keep pre-production parts, and materials, in-production
parts, and goods and spare parts. Others are non-production store for tools,
maintenance loans stores for garage, other stores created are distribution warehouses,
tools stores, etc.
The principle objectives of any physical warehouse planning must embody the
following:
a. Speedy and simple operation.
b. Economic use of space.
c. Economic use of equipment.
It is impossible to realize these objectives in practical terms. In some cases it is possible
to save space at the expense of time or to save time at the expense of space, while
machineries may be acquired to replace the services of manpower and the issue of
automatic warehouses.

5. Therefore warehouse should be planned or located to facilitate deliveries of
incoming goods and deliveries of outgoing goods to users or customers. The
warehouse layout should be able to enable goods to be offloaded, checked and
put away outgoing of goods to be picked, issued and dispatched without queue
and delays.
FACTORS TO BE CONSIDER WHEN DESIGNING A WAREHOUSE.
In order to achieve a reasonable percentage of the objectives of designing a
warehouse before it constructed, certain facts must be clarified and this will
entail the collection of relevant data for analysis to ensure that the facts are
objectively established and suitable for consideration in making the design
judgment. Few among the designed factor may include the following:
a. Type and volume of store: there is the need to know what type of
warehouse to be erected whether single storey or multi-storey, and the
dimension required. Whereas the type of warehouse required will be
based on several other factors, the size will specifically be based on
volume of items intended for holding now and in the probable future.
b. Type of handling: The type of movement required will determine the
type of handling equipment, much as the type of handling equipment
envisaged for use will determine the smooth running of the warehouse.

6. c. Type of storage: the ways and manner of storage will depend on type of
nature of items, as the latter will determine the kind of storage facilities that
will be required. And, this will go a long way to affect the store’s design.
d. Amount of transport and frequency of movement: To a warehouse that has
been existing somewhere before the new conception, the average rate of
vehicles delivering and dispatching materials can be easily determined.
Much as the frequency of delivery and dispatch can be readily thought of.
However, for a warehouse that intends to take off, this may be relatively
difficult. Nonetheless, these have to be objectively conceived to ensure that
warehouse design and operation is able to cope with both delivery and
dispatch needs of the warehouse.
e. Amount of space required for office staff: suitable place and space must be
provided for the administrative, clerical and accounting staff of the
warehouse to enable them discharge their duties without hindrance.
f. Parking space: this is not the same as the delivery and dispatch. Packing
space is to be provided outside but within the warehouse yard, to provide
parking facility for waiting vehicles. Until the idea of the parking space is
considered, the total physical dimension for the warehouse will be
inadequate.
g. Space required for Gang ways: there are the passages used for movement
within the warehouse and they must be of the required size to permit
smooth movement of equipment and allow for easy turn-rounds.

7. QUESTION NO. 2
CAPEX AND OPEX BUDGETING FOR SETING UP A WAREHOUSE FOR THE FIRST ONE
YEAR.
CAPEX also known as capital expenditures are the funds that a business uses to
purchase major physical goods or services to expand the economy’s abilities to
generate profits.
The procedures for preparation of a capital expenditures budget obviously vary from
company to another depending on such factors as the nature of the company’s
business and size of the company.
The capital expenditure for the setting up of a warehouse includes the following:
a. Construction cost: construction cost will vary according designs and plans,
and according to location.
However, the following will constitute the total construction cost.
1. Cost of land.
2. Survey cost.
3. Planning and designing cost.
4. Payment to building contractors and for other incidental services.
b. Cost of materials handling: movement in any respect, always cost
something. The cost of material handling are often difficult to identify except
those incurred on purchase of handling equipment.
c. Cost of vehicles to transport goods.

8. OPEX also known as operation expenditures is made up of cost of goods sold, selling,
general and administrative expenses, and research and development. These
expenditures are incurred through normal business operations. The goal of any
company is to maximize output relative to OPEX. In this way, OPEX represents a core
measurement of a company’s efficiency over time.
OPORATION EXPENDITURES for the setting up of a warehouse includes wages,
licensing fees, small repairs, office expenses, leasing commission, travel and
distribution expenses, raw materials, insurance, and property taxes.

9. QUESTION NO 3.
Definition of supply chain management: SCM is the management of the flow of goods
and services. Its includes the movement and storage of raw materials, work-in-
progress inventory, and finished goods from point of origin to point of consumption.
SCM operates at three levels, namely strategic, tactical and operational level.
Most of our discussion here will focus on strategic management level. Company
management makes high level strategic supply chain decisions that are relevant to
whole organization. The decisions that are made with regards to supply chain should
reflect the overall cooperate strategy that the organization is following.
The strategy supply chain processes that management has to decide upon will cover
the breath of the supply chain.
These include:
a. Product development: senior management has to define a strategic
direction when considering the products that the company should manufacture and
offer to their customers.
As product cycles mature or products sales decline, management has to make
strategic decisions to develop and introduce new versions of existing product offering
or whether develop a new range of products and services.
The strategic decisions may include the need to acquire another company or sell
existing businesses. However, when making these strategic product development
decisions, the overall objectives of the firm should be the determining factor.

10. b. CUSTOMERS. At the strategic level, a company has to identify the customers
for its products and services. When company management makes strategic decisions
on the products to manufacture, they need to identify the key customer segments
where company marketing and advertising will be targeted.
The first question management needs to answer is who are the ultimate users of our
products? Once this is determined it is easier to decide what route to use to reach
their final consumers.
C. MANUFACTURING. At the strategic level, manufacturing decisions define the
manufacturing infrastructure and technology that is required. Based on high level
forecasting and sales estimates, the company management has to make strategic
decisions on how products will be manufactured. The decisions can require new
manufacturing facilities to be built or to increase production at existing facilities.
However, if the overall company objectives include moving manufacturing overseas,
then the decisions may lean towards using subcontracting and third party logistics.
D. SUPPLIERS/VENDORS. Company management has to decide on the strategic
supply chain policies with regards to suppliers/vendors. Reducing the purchasing
spend for a company can directly relate to an increase in profit and strategically there
are a number of decisions that can be made to obtain that result.
Leveraging the total company’s purchases over many businesses can allow company
management to select strategic global suppliers who offer the greatest discounts. But
these decisions have to correspond with the overall company objectives. if a company
has adopted policies on suppliers will have to fall within the overall organization
objectives.

11. LOGISTICS : as well as strategic decisions on manufacturing locations, the logistics
function is key to the success of the supply chain. Order fulfillment is an important part
of the supply chain and company management need to make strategic decisions on the
logistics network.
The design and operation of the network has a significant influence on the performance
of the supply chain.
Strategic decisions are required on warehouses, distribution centers which
transportation modes should be used. If the overall company objectives identify the use
of more third party subcontracting, the company may strategically, decide to use third
party logistics companies in the supply chain.
PRODUCT DISTRIBUTION: distribution involve movement of goods through various
means from the manufacturer/producer to the final consumer/user.
A channel of distribution is the routes taken by a product as it moves from the producer
to the ultimate consumer or user. A channel will always consists of producer and
consumer, and may as well involve middle-men in varying numbers.
Channel of distribution start from manufacturer ---- Wholesaler ---- Retailer ---
Consumer.

12. Shrinkage prevention and management and zero time lost in delivery;
Goods that have been damaged during the process of delivery, storage, and
merchandising, which means they cannot be sold for any value. Examples
would include a pallet of sugar that is left outside in bad weather, cartons of
washing powder crushed by a forklift truck, pears or bananas that have been
badly brushed. To avoid all these loses, warehouse personnel must be well
trained in handling the equipment's that are to be use in warehouse.
Product movement: errors generally by the movement of goods within the
business. Key areas of vulnerability would include mistakes made in the
receiving of goods, the transfer of goods, and returns or refunds. Another
examples include shortages in deliveries to a store directly from a manufacturer
or a distribution centre, transfers to other stores incorrectly recorded products
for use within the store not recorded properly.