MRI 2315 Warehousing and Distribution

6. Warehouse Management 6.1 Types of Warehouses

The Role of the Warehouse in the Logistics System: A Basic Conceptual Rationale The warehouse is where the supply chain holds or stores goods. Functions of warehousing include: Transportation consolidation Product mixing Cross-docking Service Protection against contingencies Smoothing

Cross-docking is used extensively by retailers to replenish store inventories Cross-docking combines inventory from multiple origins into a prespecified assortment for a specific customer

Mixing is usually performed at an intermediate location between origin and destination Mixing combines inventory from multiple origins (like cross-docking) but also adds items that are regularly stocked at the mixing warehouse Stock Inventory

Types of Warehouses Private Warehouses Public Warehouses Government Warehouses Bonded Warehouses Co-operative Warehouses

Types of Warehouses Private Warehouses Public Warehouses The warehouses which are owned and managed by the manufacturers or traders to store, exclusively, their own stock of goods are known as private warehouses. Generally these warehouses are constructed by the farmers near their fields, by wholesalers and retailers near their business centres and by manufacturers near their factories. Public Warehouses The warehouses which are run to store goods of the general public are known as public warehouses. To start such warehouses a licence from the government is required. The government also regulates the functions and operations of these warehouses. Mostly these warehouses are used by manufacturers, wholesalers, exporters, importers, government agencies, etc.

Types of Warehouses (con’t) Government Warehouses These warehouses are owned, managed and controlled by central or state governments or public corporations or local authorities. Both government and private enterprises may use these warehouses to store their goods. Central Warehousing Corporation of India, State Warehousing Corporation and Food Corporation of India are examples of agencies maintaining government warehouses.

Types of Warehouses (con’t) Bonded Warehouses These warehouses are owned, managed and controlled by government as well as private agencies. Private bonded warehouses have to obtain licence from the government. Bonded warehouses are used to store imported goods for which import duty is yet to be paid. In case of imported goods the importers are not allowed to take away the goods from the ports till such duty is paid. These warehouses are generally owned by dock authorities and found near the ports.

Types of Warehouses (con’t) Co-operative Warehouses These warehouses are owned, managed and controlled by co-operative societies. They provide warehousing facilities at the most economical rates to the members of their society.

Basic Warehouse Operations

Parts-to-picker systems include automated storage and retrieval systems (AS/RS) CRT (Cathode Ray Tube) A vacuum tube used as a display screen in a computer monitor or TV. The viewing end of the tube is coated with phosphors, which emit light when struck by electrons.

The Computerized Warehouse

6. Warehouse Management 6.2 Layout and design

Warehouse Layout and Design Develop a demand forecast. Determine each item’s order quantity. Convert units into cubic footage requirements. Allow for growth.

Warehouse Layout and Design (con’t) Allow for adequate aisle space for materials handling equipment. Provide for the transportation interface. Provide for order-picking space. Provide storage space. Provide recouping, office, and miscellaneous spaces.

Warehouse Space Requirements

Principles of Warehouse Layout Design

Layout and Design Objectives Cubic capacity utilization Protection Efficiency Mechanization Productivity

Basic needs

Warehouse Productivity Metrics Pounds or units per day Employees per pound moved Pounds unloaded per hour Pounds picked per hour Pounds loaded per hour Percentage of orders correctly filled Productivity ratio = pounds handled/day divided by labour hours/day Throughput = amount of material moved through the system in a given time period

6. Warehouse Management 6.3 Utilization of warehouse space

Utilization of a Warehouse’s Cubic Capacity

6. Warehouse Management 6.4 Warehouse management system. (refer to 2.3)

Management System A management system is the framework (organized structure) of processes and procedures used to ensure that an organization can fulfill all tasks required to achieve its objectives. For instance, an environmental management system enables organizations to improve their environmental performance through a process of continuous improvement.  

Warehouse Management System A Warehouse Management System (WMS) is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, putaway and picking. The systems also direct and optimize stock putaway based on real- time information about the status of bin utilization. A WMS monitors the progress of products through the warehouse. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations.

Warehouse Management System (con’t) Warehouse management involves the receipt, storage and movement of goods, (normally finished goods), to intermediate storage locations or to a final customer. In the multi-echelon model for distribution, there may be multiple levels of warehouses. This includes a central warehouse, a regional warehouses (serviced by the central warehouse) and potentially retail warehouses (serviced by the regional warehouses).  Warehouse management systems often utilize automatic identification and data capture technology, such as barcode scanners, mobile computers, wireless LANs and potentially radio- frequency identification (RFID) to efficiently monitor the flow of products.

Warehouse Management System (con’t) Once data has been collected, there is either a batch synchronization with, or a real-time wireless transmission to a central database. The database can then provide useful reports about the status of goods in the warehouse.  Warehouse design and process design within the warehouse (e.g. wave picking) is also part of warehouse management. Warehouse management is an aspect of logistics and supply chain management.

Warehouse Management System (con’t) Warehouse management systems can be standalone systems, or supply chain execution suite, modules of an ERP system such as Odoo, SAP (System Applications Products), Oracle, MRP. Depending on the size and sophistication of the organization, the system can be as simple as a handwritten list that are updated when required, spreadsheets using software such as Microsoft Excel or Access or purpose-built software programs. In its simplest form, the WMS can track product's data during the production process and act as an interpreter and message buffer between existing ERP and WMS systems.

Objectives of Warehouse Management System The objective of a warehouse management system is to provide a set of computerized procedures for management of warehouse inventory, space, equipment and people with the goal of minimizing cost and fulfillment times. A standard receiving process to properly handle a shipment when it arrives. This process can be individualized to each warehouse or product type.

Objectives of Warehouse Management System (con’t) The receipt of stock and returns into a warehouse facility. An efficient warehouse management system helps companies cut expenses by minimizing the amount of unnecessary parts and products in storage. It also helps companies keep lost sales to a minimum by having enough stock on hand to meet demand. Certain products are often sold together or are more popular than others, those products can be grouped together or placed near the delivery area to speed up the process of picking, packing and shipping to customers.

Objectives of Warehouse Management System (con’t) Enabling a seamless link to order processing and logistics management in order to pick, pack, and ship product out of the facility. Tracking where products are stocked, which suppliers they come from, and the length of time they are stored. Companies can control inventory levels and maximize the use of warehouse space. No stockout, especially during special circumstances such as a peak season on a particular month. Alone warehouse management system cannot automate the process. It also involves the combination of business process to be followed along with that system to achieve 100% productivity and accuracy.

SAP Logistics Execution & Warehouse Management (Video) https://www.youtube.com/watch?v=LaARpRaYq9w&list=PLJM0kqj1c Cubvp0Utxy-Q5NGedjSB4E7J&index=5