Aung Kyaw Moe / Task 2 – Warehouse and Inventory

Memo
To: Francois Damba
From: Aung Kyaw Moe
Date: 08 July 2021

RE: TASK 2 – WAREHOUSE AND INVENTORY

I have learnt that we need to relocate the warehouse away from the Mugla on account of the
forecasted hurricane. I this regard, I would like to present my report on how we are going to
organize this relocation of Mugla warehouse in the following Sections:

(1) Analysis of Current throughput of the Warehouse

(2) Characteristics of the Products Stored in the Warehouse
(3) Calculation of the Size and Space Requirement
(4) Criteria for Identification of New Warehouse

Analysis of Current throughput of the Warehouse

Most of the supplies stored in Mugla Warehouse are Foodstuff and Household items.
Rice 5% Broken is about 639900 Kg in total and packed in 50 Kg Bags.
Beans red Kidney is also packed in same size and it is 262312 Kg as opening balance.
These above-mentioned two items are the most bulky part of all supplies.
Vegetable oil is of 20 liter Tin can and 82214 Liters in total. This is fragile items to store and to
move from one place to another. 83042 Kg of Wheat Soya Blend comes under the package of
25 Kg bags whereas Sugar and Iodized Salt are packed in 1 Kg sachets. All of them are
powder type and very sensitive to the moisture and temperature.

The rest of supplies are those of family kit and household utensils such as Family Tents,
Plastic Sheeting, Kitchen Set, Blanket and Jerry Can. The first three of them come as
individual unit but 1230 Blankets are baled as bundle of 30 pieces and 40 Jerry Can
contained in a box for 520 boxes in total number.

Characteristics of the Products Stored in the Warehouse

We need to check the characteristics of the products to be stored because this will have an
impact on the selection of a new warehouse facility and the design of the layout, the selection
of any equipment and the working methods.
The main characteristics which should be taken into account for our new warehouse are as
follows:

(1) VOLUMES

The volume of goods to be handled is the major aspect to consider to building a new
warehouse. Especially, SCILaid supplies are foodstuff which is quite bulky and take much
space. In this regard, we must consider the frequency and size of deliveries to be received at
the warehouse at certain time interval and the quantity to be stored. Based on our distribution
plan, we should also think about the frequency and size of dispatches to be made from the
warehouse. These factors will surely determine the requirement of storage space for goods
receipt, bulk storage and goods dispatch activities and also the manpower requirements to
operate the warehouse.

(2) SIZE AND WEIGHT

Basically 80% of the space used in a warehouse is dominated by the bulk storage area and
this is mainly determined by the size, weight and quantities of the goods to be stored. In the
case of Mugla warehouse, food items like rice, bean, sugar and salt are very heavy as well as
bulky items even they can be piled up. Other household items are not very heavy but take
much of space and voluminous.

Another thing is that in a warehouse, we must add the extra space for access to the goods for
storage and retrieval of goods and supplies. So in calculating the volume of bulk storage area
that will be required, we have to take into account the fact that we will require more space
than the actual volume of supplies and that the storage equipment (if used) will also take up
space.

At its highest inventory level, we find that according to the recent stock report, Mugla
warehouse has 1856.13 Cub. Meter of total volume and 1,101,755 Kg of total weight.

(3) GENERAL ENVIRONMENT AND TEMPERATURE SENSITIVITY

To avoid deterioration in the quality of goods during their stay in the warehouse, we must
carefully consider about the physical environment that provides conditions that ensure the
goods to be stored safely. Not only temperature (heat and coldness) but moisture and
humidity in the air are the main causes that can damage the supplies when they are
transported and unloaded outside of the warehouse building.

In our case of Mugla warehouse moving, most of the items are foodstuff and they can be
contaminated and destroyed easily if they were put in improper environments.
When product like rice, sugar and wheat Soya blend are received in bags, and the
temperature is high outside, the product can increase in temperature. If we left the bags under
the direct heat of sun for a long time, they can absorb much heat and the supplies can be
damaged. In a confined and narrow space, if these bags are stacked in the warehouse for a
certain extent of time, they will generate heat and lead to spontaneous combustion.

Grains like rice and bean stored in Mugla warehouse need to be stored in dry and cool place
and we need pallets on which to stack these bags to get good ventilation. They are quite
sensitive to the maximum 70% of air humidity and 13.5 % of moisture in the storage
environment. We need to thoroughly monitor the moisture level, odour and parasites to
protect them from any damage.

Cereal and powders like WSB powder, sugar and salt need the similar care and condition of
storage like grains.

Canned products like Vegetable oil stored in Mugla warehouse are also sensitive to the
moister because containers can be rusted and bulging. These supplies can be stacked on the
pallets, avoiding direct contact with the cement floor, but not very high stacking because of
their weight. We have to investigate them if we find distorted cans (bulging lids) or gas
whistling out or there are some signs of oil leakages, whether they are still edible or not.

Other non-food items like tent, family kitchen set, plastic sheeting and jerry can need to be
stored in a dry and clean environment. Blankets and clothing are very sensitive to the
moisture and level of humidity because they can fully absorb the moisture and generate
fungus and moths.

If we are using battery operated handling equipments, we need good ventilation for
recharging these batteries because during the recharging process hydrogen gas is produced
which in a confined space is highly flammable with frightening consequences. This also
suggests that there needs to be strict control over smoking policy in a warehouse and no
hand phone usage near the flammable fuel stock.

(4) TYPE OF PACKAGING

There are various ways of Packaging types including box, bag, bulk and loose. The way to
handle these supplies depends on the type of packaging.

In the same way, the handling method, equipment needed to use and how to stack (block
stacked, binned, racking, etc.) and stock will depend on the variety of packaging types.
If possible, the warehouse manager should liaise with procurement on the specification of
packaging types used in order to minimize the impact on the warehouse operations.

In our Mugla warehouse, most of food items are packed in bags (50 Kg/ 25 Kg/ 1 Kg) and all
of them need pallets to put on.

Blankets, Kitchen set and Jerry Can are coming by bundles and boxes and we can consider
having stretch and shrinking wrappings to protect from moisture and humidity
According to our warehouse and inventory manual, “Shrink wrapping” uses either heat or
vacuum technology to “shrink” a giant plastic bag to the shape of the product whereas
“Stretch wrapping” is like the cling film that we use at home. If a pallet is wrapped around
the top layers with this it prevents movement in transit.

(6) HAZARDOUS MATERIALS

We need to keep Hazardous materials such as pesticides; compressed gases and fuels away
from food stuff and these items require special handling and storage. They will normally be
stored in an area separate from other materials and extra space will often be required. Ideally
they should be stored in a separate building.

Calculation of the Size and Space Requirement

Before moving to any new warehouse, we need to calculate about the total size and weight of
the current throughput of supplies stocked in Mugla warehouse, based on peak inventory
level in the year, as per following table:
STOCK REPORT/ MUGLA WAREHOUSE

Volume
Opening Closing Total Total Area
Item Code Item Description A/U Weight/Kg In Out per 1
Balance Balance Weight Volume/ M3 Needed/ M2
MT
FCRRICEBR5 Rice 5% broken (50 kg bag) kg 1 339,900 1,000,000 700,000 639,900 639,900 1.5 959.85 623.9025
FPULBEANRK01 Beans red kidney (50 Kg bag) kg 1 262,312 0 100,000 162,312 262,312 2.0 524.624 341.0056
FOILRAPERE01 Vegetable oil (20Lit Tin) litre 1 12,214 100,000 30,000 82,214 82,214 1.7 139.7638 90.84647
FNUTWSBX6722 Wheat soya blend (25 Kg Bag) kg 1 33,042 100,000 50,000 83,042 83,042 1.5 124.563 80.96595
FBAFSUGAWH04 Sugar white (1 Kg Bag) kg 1 7,071 0 5,000 2,071 7,071 1.5 10.6065 6.894225
FBAFSALTIODE Iodised salt (1 Kg bag) kg 1 2,357 0 2,357 0 2,357 1.5 3.5355 2.298075
HSHETENTF16C Family tents piece 85 213 0 0 213 18,105 3.4 61.77 40.1505
HSHETARPW460 Plastic sheeting (60 m Roll) piece 55 30 0 0 30 1,650 3.5 5.7 3.705
KRELCOOSETA Kitchen set piece 5 512 0 0 512 2,560 5.0 12.8 8.32
HSHEBLANWMT1 Blankets 50% (Bundle of 30) piece 50 1,230 0 0 1,230 2,050 4.4 9.02 5.863
HCONJCANP20 Jerrycan collapsible (40 per Box) piece 38 520 0 0 520 494 7.9 3.9 2.535
  Total           1,101,755   1856.1328 1206.48632

The total Area needed for storage is calculated by following way:

The total Volume can be derived by Total Weight in Kg divided by 1,000 multiplied by Volume per 1 MT.
The Total Ares needed can be calculated by Total Volume divided by 2 and multiplied by 130%.

In this case, the total area needed for new warehouse is 1,206.49 Sq. Meter for total volume of 1,856.13 Cub. Meter.
Criteria for Identification of New Warehouse

Mugla is now under the danger of hurricane strike so we need to move our main warehouse
to some other place in Betaland at least for the time being. Natrakona, a small town between
Mugla and Dhetra is not a bad choice for us because it is not very far from the capital and it
can access to Chagong easily by road.

The Operation’s purpose and requirement mainly determine the design and management of a
warehouse. The position of the warehouse in the humanitarian supply chain will affect the
requirements for the operation. A permanent global warehouse can be set up and operated
much like any commercial operation and can take advantage of the current best practices,
equipment and systems in warehouse management.

Selection of a New Location

There are some important points to consider when deciding on the location of a new
warehouse facility whether selecting a location for a temporary building or selecting from one
of a number of existing buildings. In our case of moving Mugla warehouse, we should prefer
to find one existing warehouse. The major factors to be reviewed are as follows:

(1) PROXIMITY TO PORT OF ENTRY AND BENEFICIARIES

The main reason of choosing a location of a warehouse is to minimize the total time that the
goods take from their source to their ultimate destination. Location of a warehouse defines the
efficiency and cost-effectiveness of a humanitarian operation. If the area in which the
humanitarian aids activities happen is geographically close to the (air) port of entry, in that
case the warehouse should obviously be located in the same area. Otherwise, in order to
minimize the total costs and the effectiveness of the transportation, we should chose a
location that has good transportation links to and from the warehouse.

In our case, Mugla which is the best place for warehouse geographically close to a sea port,
but now there is an impending danger of hurricane strike, we should find another option. I
think that, as I have aforesaid, Natrakona can be a possible choice for us. It is not very far
from Chagong where our sub office warehouse and temporary warehouses in the camps.

If Bharat the hurricane will actually strike, it can put Mugla port operations under extreme
pressure with volume of activity significantly exceeding what they were designed to handle. In
such cases the obvious port of choice could lead to a bottleneck situation and a consequent
breakdown in the supply chain. We should consider using another port of Betaland at Jumna,
a port city located at north eastern part of the country. Jumna is not very far from Natrakona
(about 240 km) and Dhetra (about 125 km) according to our map. Jumna can be our port of
entry if Mugla port is devastated by the hurricane. Even Dhetra, the Capital, might be a
potential location for our warehouse because it is nearer to the port of entry and it has various
choices for good warehouses in commercial sector except with a higher rental price.

(2) CHOOSING EXISTING BUILDINGS

If we need to choose an existing building for our warehouse, we should check the following
important points before renting it:

 The construction should be generally sound and waterproof.

 The building should have good system of ventilation.
 The inside walls should be clean and painted, preferably white.
 Doors and windows must be strong and secure.
 There should not be any sign of water leakage on the ceiling and roofing.
 There should not have any droppings and holes in the walls or floor for pest
infestation.
  The available space should normally be on the ground floor, with doorways which
provide adequate access to the warehouse space, taking into account the method of
moving the material that will be used.
 The warehouse size and shape must be assessed in advance and calculated in detail
for its capacity to accommodate the quantity of material which will be handled.
 If we have to choose between larger space and smaller space, we must choose the
former cramped conditions are difficult to operate in and keep tidy and increases in
stock or activity may be difficult to accommodate. We must plan ahead for the future
need of space for the supplies coming more.
 The floor area should be flat and made of a stable material, ideally concrete.
 The floor must be strong enough to support the weight of the material to be stored
and the weight of any vehicles that will enter the building.
 Floor capacity will normally be expressed in kilograms per square meter (Kg/sq m). A
typical ground floor building will have a floor capacity of 1000 – 3000 Kg/sq m but
floors with basements or sanitary installations underneath will generally have a lower
capacity.
 Most of our supplies are foodstuff so it may be necessary to have the building
disinfected or fumigated by a professional cleaning company.
 One important thing not to miss is about the ownership of the building. Sometimes,
ownership is a sensitive issue, especially more important in a conflict situation where
our organization’s neutrality may be compromised.\

On top of that, we need to check the following things are in proper order or not before renting
a warehouse.

 Sufficient storage capacity available

 Availability over a specific period of time
 Suitable access and egress for trucks and vehicles
 Truck parking area
 Surrounding Social Environment
 Ventilation
 Lighting
 Hard Floor
 Fireproofing
 Loading docks
 Roofing condition
 Risk of Flooding
 Availability of Electricity and Water
 Telecommunication
 Generator availability
 Toilet Facilities
 Pallets and Pallets trucks
 Forklift availability
 Lockable Doors
 Window guards
 Perimeter fence for security
 External Lighting

(3) SECURITY MEASURES

We must consider Security as a very important aspect of a warehouse to identify as our new
warehouse. In terms of security we have to check the following points:

 The compound of warehouse should be protected by a fence or a wall

 Gates and doors must have high security level locks
 At least 3 shifts of watchmen must be put in place
 Security staff must be well equipped with apparatus like torch lights, whistles and
batons to protect the intruders
 Outside lamps at 4 sides of warehouse must be properly installed
  The warehouse must be equipped with fire extinguishers, sand buckets and other
appropriate equipment.
 It is important to refer to local legislation. The local fire brigades are usually a source
of good advice. Further people must be trained how to use such equipment.

(4) THE CONTEXT

When selecting a location, we must also take into account the prevailing political, cultural or
security situation of the particular area. The context here means political and socio-cultural.
For a low profiled operation, we have to avoid making warehouse too much visible. But in our
case, we need just a normal kind of warehouse that is not very low-profiles since SCILaid is
an officially recognized humanitarian aid organization working in Betaland.

(5) SITE CONDITION

Another important aspect of a warehouse’s location is terrain. Some terrain might look fine in
the dry season, but during the wet season it could become flooded or impossible to move
vehicles around. If warehouse’s terrain is located in a valley or lowland, there will be drainage
problems in the rainy season. A warehouse should not be very close to the chemical factory,
nuclear power plant and a fuel reservoir to avoid potential danger of fire and chemical
hazards.

(6) ACCESS TO THE TRANSPORT FACILITIES

Warehouse is only for temporary storage of the supplies; therefore we must consider the
access to the site and make sure that suitable vehicles can reach the site easily and safely.
Another thing is that the warehouse should be located at a convenient place of access to the
railway station and roads.

Best Regards,

Aung Kyaw Moe

Logistics Officer
Sub-Office (SCILaid Betaland)