1. Private& Confidential
An Introduction to Warehousing

2. 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

3. Types of Warehouses
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.
Factory Retail Distribution Catalog RetailerManufacturing Support
• Interface production with
wholesalers
• A Comparatively small
number of orders are
picked up on daily basis
• Advance information
about the order
composition is required
• High focus on cost and
order accuracy
• Responsiveness heavily
depends on production
schedules
• Serves a number of captive
retail units
• Advance info about order
composition is needed
• Carton and item picking is done
from a forward area
• More orders per shift than
consolidation/shipping lanes
• High focus on cost, accuracy,
and fill rate of the packages
• Responsiveness depends heavily
on truck routing schedules
• The only critical point is that if
the retails units are not captive
then responsiveness becomes a
crucial issue
• Fills orders from catalog
sales
• A large numbers of small,
frequently single – lines
orders are picked up
• Item and, sometime,
carton picking
• Daily compositions of
orders are usually
unknown
• Only statistical
information available
• High focus is on cost and
response time
• Stock room providing raw
material and work in process
items to manufacturing
operations
• Contains many small orders
• Only Statistical information
available about order
composition
• Stringent time requirement
for response time
• Primary focus on response
time but accuracy and cost
also are important
Warehouse and Its Need

4. Private& Confidential
Warehouse Set-up

5. Warehouse Site Selection
Key Criteria (Cost vs. Service Reliability)
Cost
(Warehouse
Operations
and
Maintenance)
Serviceability
(Proximity to
Customers or
Ports)
Additional Factors
• Roads
• Power
• Water
• Other utilities
Availability of Transportation
Infrastructure
Availability of Skilled Manpower
Government Regulations
Strategic Factors – monitoring & control, pre-
determined sites, future plans
Environmental Factors

6. Warehouse Site Selection
Sample comparative analysis of possible Sites for a Customer needing warehouse closer to Port in the West Zone
Factors Zone 1 Zone 2 Zone 3 Zone 4 Zone 5
Infrastructure cost Low cost Higher as compared
to Zone 1 but much
lower than Zone
3,4 and 5
Higher than
Zone 1 and 2
Very High – attributed to
high land cost
High cost as compared
to zone 1 and 2
Transportation
cost (Inbound )
Lowest – Close
proximity to
port
Low Very High –
attributed to
distance
High High
Distance (Port to
Wh.)
0 km 17 km Inbound 100+ km 66 km 32 km
Connectivity Good Very good for
Inbound and
Outbound
Average Good Average
Availability of
Manpower (Other
facilities)
Good Good – due to
warehousing hub
Average Good – due to
warehousing hub
Good
Probable
Locations
JNPT Panvel Vasai Bhiwandi Kalamboli
Here the comparison is based on few key parameters. Similar analysis can be done taking in to consideration critical
parameters, 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 to
Customer requirement of having the warehouse strategically closer to the Port

7. Warehouse Management Processes
10
72
12
11
1
83
5
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9
1 - Inbound
2 - Dock / Unload
3 - Receipt of goods
4 - Create GRN
5 - Putaway
6 - Picklist Creation
7 - Order picking
8 - Value-added services (Kitting)
9 - Rework
10 - Packing line
11 - Dispatch
12 - Tracking
13 - MIS & Documentation

8. 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
Warehouse Process Flow Schematic

9. Type of Material Flows: U Flow
A 'U' flow occurs when the goods receipt and dispatch functions are located at the same end of a warehouse building
Products flow in at receiving, move in to storage at the back of the warehouse, and then to shipping, which is located
adjacent to receiving area, on the same side of the building
Fast moving items are located closer to the loading bays
Advantages of 'U' Flow
Excellent utilization of dock resources because the receiving and shipping
processes can share dock doors
Facilitating cross-docking because the receiving and shipping docks are
adjacent to one another and may be co-mingled
Excellent lift truck utilization because put away and retrieval trips are
easily combined and because the storage locations are closest to the
receiving and shipping docks, they become natural locations to house fast
moving items
Yields excellent security because there is a single side of the building
used for entry and exit

10. Types of Material Flow: Straight or Through Flow
Through' flow happens when separate loading bay facilities are available for Inbound and shipping are provided, often
at opposite ends of warehouse
Products flow in at receiving, move into storage, picking area and then the staging area and despatch area in a
straight line
Items with a higher throughput level are located at the centre of the warehouse because the total distance travelled
would be shorter
The major disadvantage of a 'Through' flow layout is goods
need to travel the full length of the warehouse, even for
goods that are fast moving
It is also harder to control and less flexible
When is it better to adopt a 'Through' flow?
When there is a risk of interference or confusion between
Goods In and Goods Out
When goods inwards vehicles and dispatch vehicles are very
different; for example differences in platform height or
nature of unit load
When the warehouse is connected to a production Plant

11. Types of Inspection
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 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.
Sampling
Complete Count

12. Put – Away Process
Label productswith Incoming date
to facilitate FIFO / FEFO are stuck on
the carton and pallets and
convertedinto palletized loads.
In the Put away “Add” function,The
Part to Location Mappingis done
based on the logic
The allocation of the cartonsto the
location will also follow the logic of
load clustering and rack
optimizationand Pick balancing and
routing
Multiple Putaway run sheets are
created based on the putaway
methodology – Batch putaway,
Zone wise putaway for GRN clusters
etc.
In the automated system, the RF
handheldsreflects the putawayin
their specific zones.
The pallets and Cartons are then
physicallytransportedto the Stage
for Putaway location which is at end
of the rack columns.
The Put away team which works in
the rack columns puts away the
pallets and cartonsto the racks,
Single rivet slotted angle racks as
per the part to location mapping in
the Putaway run-sheet.
The Pallet label is scanned and then
the location label is scanned and
confirmed which acts as a trigger to
the WMS to confirm the Putaway
list.
Once the Putaway confirmation is
done,the material is available in the
ATP (Available to Promise) Stock.

13. Types of Storage System
Block Stacking
Pallet RackingDrive – In Racking Broad Aisle Installation
Push Back

14. 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
Types of Storage System

15. Selection of Storage System
Parameter Push Back Racks Drive Through Racks
Storage Density Offers high storage density coupled
with selectivity
Can store large amount of inventory
in a smaller area increasing Storage
Density
Selectivity of Inventory Ideal for selectivity – up to 400%
improvement in selectivity
Selectivity is sacrificed
Type 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
Storage System Selection through Comparative Analysis

16. Picking and Packing Process
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.
Pick List Creation

17. 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

18. 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.

19. 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.

20. Private& Confidential
Support Requirements

21. Warehousing Operational Needs
Material Handling Equipment and Parking Area Policies
Office Space Space for Employee Needs Safety Equipments
Fire Extinguishers CCTVs
Sprinklers
Men’s
Room

22. Private& Confidential
Designing Warehouse

23. Warehouse Site Selection and Layout Design (Understanding
Business 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 Layout
Design, thereafter.

24. Usual Challenges to be Handled while designing
1. Product information in terms of throughput and storage level is uncertain or not
available
2. Need to minimize the existing cost of establishing and operating the warehouse
3. 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 items
4. Assemble product batches prior to delivery, to stockpile critical parts, and to facilitate
regional distribution network for quick and cost-efficient delivery

25. Designing Layout
1. Ensuring Maximum utilization of space
2. Maintaining a balance between Service and Operating Cost
3. Using the most suitable unit load
4. Minimizing movement
5. Planning and controlling movement and location
6. Providing Safe, Secure and Environmentally sound conditions
In 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 personnel
In 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
Objective
Designing Basics

26. Layout Designing Process
Cost Considerations

27. Parameters to be Planned when Designing
Material Handling Equipment
1. Picking Equipment
• Static Shelving
• Carton Flow Rack
• Carousels
• Automatic storage and retrieval system
• Automatic picking machines
• Pick to Light
• Voice directed picking
• Automated Conveyor and Sorting systems
2. Receiving/Shipping Equipment
• Conveyors
• Industrial Vehicles
• Automated Storage and Retrieval
Machines
• Automated Guided Vehicles
Number of Docks
• Number of Receipts and Shipments
• Type of Loading and Unloading
• Types and sizes of vehicles
• Number and timing of carriers
• Different areas in which materials will be
utilized, stored, prepared for shipment
Type of Docks
• Saw Tooth Dock
• Straight dock
• Open Dock
• Interior dock
Location of Docks
• Traditionally at the rear end of facility and out
of sight
• Receiving/Shipping at the same area generally
• However Multiple docks drastically reduce the
flow of material with in a facility

28. Designed Layout (Illustration)

29. Private& Confidential
OptiWare – OLinks’ Solution for Warehouse Optimization

30. OptiWare – Warehousing Simplified
Optiware is a 3-D warehouse Design, Simulation and
Optimization product which helps you handle the warehousing
challenges, while achieving your strategic and operational
goals.
Optiware helps you in:
• Optimal Layout Design
• Planning the number of MHEs and
Resources
• Designing the Process and
Material Flows
• Scenario Analysis
Leading to:
• Customer Satisfaction
• Utilization of Space,
Equipment and People
• Employee Safety and
Morale Building
Warehouse Optimization and Simulation
Challenges Warehouse Owners Face
 Warehouse Space Utilization
 Un-optimized Layout
 Higher Cost of running warehouse
 Sub – optimal throughput in warehouse
 Challenges in implementing warehouse Processes
 Managing Peak hours Inbound and Outbound Material
Flow
 Resource planning
 Ensuring DIFOT ( Delivery In Full on Time)
Questions That Need to be Answered?
 What should be the Layout Design of the warehouse?
 Is the Flow Streamlined?
 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
planned?
 How many MHEs do I require?
Result:
 Economic Layout
 Optimal Space
Utilization
 Efficient Operations

31. Thank You
Contact Us : +91 22 41232770
Email: sales@olinks.co.in
Website: www.olinks.co.in