This document discusses warehouse management systems and their benefits. It describes how warehouses can consolidate shipments, perform light manufacturing like packaging and labeling, and act as mixing facilities. Warehouses allow stockpiling to support seasonal demand and provide local market presence. Information technologies like EDI, barcoding, voice picking, and RFID help improve inventory management and supply chain efficiency. The case of Toyota and Walmart are discussed as examples of successful warehouse and supply chain management.

1. Warehouse Management Systems
Presented By,
Kannan Kartick
Venkatesh Krishnamurthy
Neha Agarwal
Divya manukonda

2. WAREHOUSE MANAGEMENT
A warehouse is typically viewed as a place to store
inventory. However, in many logistical system
designs, the role of the warehouse is more properly
viewed as a switching facility as contrasted to a
storage facility.
Warehousing Consolidation Shipment consolidation
is an economic benefit of warehousing. It receives
and consolidates materials from a number of
manufacturing plants destined to a specific customer
on a single transportation shipment which would lead
to lowest possible transportation rate and reduced
congestion at a customer's receiving dock.

3. MANAGEMENT BENEFITS...,
Consolidation combines the logistical flow of
several small shipments to a specific market area.
Is used by a single firm, or a number of firms may
join together and use a for-hire consolidation
service. This ensures lower total distribution cost
than could be realized on a direct shipment basis
individually.
Break bulk warehouse operations are similar to
consolidation except that no storage is
performed. A break bulk operation receives
combined customer orders from manufacturers
and ships them to individual customers. It
arranges for local delivery.

4. Warehouse and Packaging
Warehouses can be used to postpone production by
performing light manufacturing activities. A warehouse
with packaging capability allows postponement of final
production until actual demand is known. For
example, vegetables can be processed and canned in
"brights" at the manufacturer. Brights are cans with no
pre-attached labels. Once a specific customer order is
received, the warehouse can complete final
processing by adding the label and finalizing the
packaging.
With this the risk is minimized because final
packaging is not completed until an order for a
specific label and package has been received. Also
the required level of total inventory can be reduced by
using the basic product (brights) for a variety of
labeling and packaging configurations.

5. Stockpiling Benefits
The economic benefit of stockpiling comes from
the need of seasonal storage. For example, lawn
furniture and toys are produced year-round and
primarily sold during a very short marketing
period. In contrast, agricultural products are
harvested at specific times with subsequent
consumption occurring throughout the year. Both
situations require warehouse stockpiling to
support marketing efforts. Stockpiling provides an
inventory buffer, which allows production
efficiencies within the constraints imposed by
material sources and the customer.

6. Warehouse Mixing & Market
In a typical mixing situation, truckloads of products are
shipped from manufacturing plants to warehouses.
Each large shipment enjoys the lowest possible
transportation rate. Upon arrival at the mixing
warehouse, factory shipments are unloaded and the
desired combination of each product for each customer
or market is selected. When plants are geographically
separated, overall transportation charges and
warehouse requirements can be reduced by mixing.
A market presence benefit is often cited by marketing
managers as a major advantage of local warehouses.
It is based on the belief that local warehouses can be
more responsive to customer needs and offer quicker
delivery than more distant warehouses. As a result, it is
also thought that a local warehouse will enhance

7. SUCCESS OF TOYOTA’S BUSINESS
MODEL
Market share of 14% in the first four
months of this year.
2.3% jump from the previous year
Toyota ranks fourth in United States sales

8. Facility:
1. Vehicles coming out of assembly line are moved into warehouse
called “Marshaling yard” .
2. Fitting accessories, price tag and final quality assurance takes place
here.
Inventory:
1. Just-in – time based inventory method.
2. Pull based system and kanban methods are followed.
Transport:
1. Majority of transport of raw material through truck , since suppliers
stay close to plant.
2. Finished products transported through truck or rail for transport within
the country and ships for export.
3. Road transport is provided by third party logistic providers.
Information:
1. Parts and master database is maintained for part name, supplier, lot
size information.
2. 13 week forecasting is given to suppliers to provide them with
guidance.

9. WALMART’S CASE
1990 –Superseded ‘K-Mart’ rival retail chain as
one of the largest retailing chain in US
1991- Superseded ‘Sears Roebuck & Company’
and became the largest retailing chain in US
In November 2003, Wal-Mart, world’s largest
retailer, planned to replace bar code technology
with RFID.
Objective: To enhance supply chain efficiency
Expected they could save $8.35 million per year
primarily in labor costs

10. IT in Warehousing
1. Using EDI (Electronic Data Interchange) for
procurement
2. EDI saved time and made procurement
efficient.
3. Using the bar code scanners, an analysis of
daily, weekly, monthly sales data helped the
store manager determine what products
were selling and at what quantity.
4. Accordingly, the store manager would place
orders in the manufacturing division.

11. EDI for procurement
Wal-Mart placed orders for huge quantities of goods
with its suppliers
Cost of sales worked out to be 2-3 %(very low from
industry average)
Information of product, manufacturer, price was
recorded on computer system
That information was passed to centralized data
warehouse

12. EDI at Wal-Mart
Analysis of daily, weekly, monthly sales data
helped store manager to determine which products
were sold in which quantities
So that they can place purchase order
Edi also helped suppliers
Right merchandize at the right time, and have it at
right place at right price

13. Voice based technologies
1. Enhancing warehouse and logistics management
2. Wal-Mart could replenish stock at any of its 1525
stores in US within 24 hours
3. Cross-docking
4. It enabled the company to receive goods and
dispatch them to stores in lees than a day
5. Store ready displays called PDQ(pretty darn quick)
displays
6. Time saved per employees were not much but
aggregate time saved was quite good

14. Internet in Warehousing
1. CPFR (Collaborative Planning Forecasting
Replenishment)
2. Real time bases to determine product wise demand
forecast
3. Wal-Mart shared past data, customer data, demographic
data, stock positions
4. Both forecasted demand individually and then co-operated
5. Reduced inventory cost
6. Product availability across supply chain
7. July 2003 – Asked suppliers to place RFID(Radio
Frequency Identity) tags on goods, packed in pallets and
crates

15. Outcomes
As a result lead time was cut to 11 days from 21
days
On-hand inventory was reduced by two weeks
Sales grew by $8.5 millions in six months
Later on it was implemented to other stores
By 1990’s, about 90% of suppliers were doing
business through Retail Link

16. Benefits from RFID
1. Drastic decrease in Stock out situations
From $400 million to $1.2 billion for P&G
2. Lesser labor requirements
Almost $6.34 billion yearly
3. Decrease in merchandise thefts
Almost $2 billion
4. Real time tracking of consumption patterns
5. Would help enhance JIT Inventory management
system
6. Decrease in stock levels by around 25%[IBM]
Total savings expected to be 8.34 billion per
year

17. THANK YOU FOR
YOUR PATIENCE
AND PRECIOUS TIME
!!