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Chapter 7 Warehouse Operations & Management

The document discusses various aspects of warehouse operations including types of warehousing, design considerations, receiving and storage processes, objectives of efficient operations, costs, and factors that influence effectiveness such as cube utilization, stock location, order picking, and physical control and security. It provides details on activities within warehouse operations and how to maximize productivity and minimize costs.

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Khánh Đoan Lê Đình
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546 views69 pages

Chapter 7 Warehouse Operations & Management

The document discusses various aspects of warehouse operations including types of warehousing, design considerations, receiving and storage processes, objectives of efficient operations, costs, and factors that influence effectiveness such as cube utilization, stock location, order picking, and physical control and security. It provides details on activities within warehouse operations and how to maximize productivity and minimize costs.

Uploaded by

Khánh Đoan Lê Đình
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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A.

WAREHOUSE OPERATIONS

Chen Zhou
B. WAREHOUSING
MANAGEMENT
Gaurav Narkhede, Josue Servalis,
Mike Macas, Praneetha Boda
• Part of firms logistics system that stores products at and
between point of origin and point of consumption.

• Term “Warehousing” is referred as transportation at zero


miles per hour

• Warehousing provides time and place utility for raw materials,


industrial goods, and finished products, allowing firms to use
customer service as a dynamic value-adding competitive tool.
THE ROLE OF THE WAREHOUSE IN THE
LOGISTICS SYSTEM
• The warehouse is where the supply chain holds or stores
goods.
• Functions of warehousing include
• Transportation consolidation
• Product mixing
• Docking
• Service
• Protection against contingencies
TYPE OF WAREHOUSING

• Public Warehousing

• Private Warehousing

• Contract Warehousing

• Multi-client Warehousing
DESIGN CONSIDERATION

Ideal Facility for Pure Supplier Warehouse Space Requirements


Consolidation
(Full Pallet Movement)
PRINCIPLES OF WAREHOUSE
LAYOUT DESIGN

Use one-story
facilities

Move goods in a
straight line

Use efficient
materials-
handling
equipment

Use an effective
storage plan

Minimize aisle
space

Use maximum
height of the
building
RECEIVING
INP •Schedule Carrier
UT •Unload Vehicle
•Inspect for damage

WAREHOUSE PROCESS
Storage
Put-away
•Equipment
•Identify Product
•Stock Location
•Identify Product Location
– Popularity
•Move Products
– Unit Size
•Update Records
– Cube

Shipping Preparation Order Picking


•Packing •Information
•Labeling •Walk & Pick
•Stacking •Batch Picking

Shipping
•Schedule Carrier
•Load Vehicle OUTP
•Bill of Loading UT
•Record Update
OBJECTIVES OF EFFICIENT
WAREHOUSE OPERATIONS

• Provide timely customer service.


• Keep track of items so they can be found readily & correctly.
• Minimize the total physical effort & thus the cost of moving goods into &
out of storage.
• Provide communication links with customers
• Benefits of Warehouse Management
– Provide a place to store & protect inventory
– Reduce transportation costs
– Improve customer service levels
• Complexity of warehouse operation depends on the number of SKUs
handled & the number of orders received & filled.
• Most activity in a warehouse is material handling.
COSTS OF OPERATING A WAREHOUSE

• Capital costs

— Costs of space & materials handling equipment


• Operating costs

— Cost of labor
— Measure of labor productivity is the number of units that an
operator can move in a day
WAREHOUSE ACTIVITIES

• Receive goods
• Identify the goods
• Dispatch goods to storage
• Hold goods
• Pick goods
• Marshal shipment
• Dispatch shipment
• Operate an information system
• Receive goods
Accepts goods from
‒ Outside transportation or attached factory & accepts
responsibility
Check the goods against an order & the bill of loading
Check the quantities
Check for damage & fill out damage reports if necessary
Inspect goods if required
• Identify the goods
items are identified with the appropriate stock-keeping
unit (SKU) number (part number) & the quantity
received recorded
• Dispatch goods to storage
goods are sorted & put away
• Hold goods
goods are kept in storage & under proper protection until
needed
• Pick goods
items required from stock must be selected from storage &
brought to a marshalling area
• Marshal the shipment
goods making up a single order are brought together &
checked for omissions or errors; order records are updated
• Dispatch the shipment
orders are packaged, shipping documents are prepared, &
goods loaded on the vehicle
• Operate an information system
a record must be maintained for each item in stock showing
the quantity on hand, quantity received, quantity issued, &
location in the warehouse
Maximize productivity & minimize cost,
warehouse management must work with the
following

– Maximize use of space


– space is the largest capital cost

– Effective use of labor & equipment


– labor is the largest operating cost

– material handling equipment is the second largest


capital cost
FACTORS INFLUENCING EFFECTIVE USE
OF WAREHOUSES

– Cube utilization and accessibility


– Stock location
– Order picking and assembly
– Physical Control & Security - Elements
• Cube utilization and
accessibility
‒ Goods stored not
just on the floor,
but in the cubic
space of the
warehouse;
warehouse capacity
depends on how
high goods can be
stored
‒ Accessibility means
being able to get at
the goods wanted
with a minimum
amount of work
• Stock Location
– Objectives
– To provide the required customer service
– To keep track of where items are stored
– To minimize effort to receive, put away, and
retrieve items
– Basic Stock Locating Systems
– Group functionally related items together
– Group fast-moving items together
– Group physically similar items together
– Locate working stock and reserve stock
separately
• Fixed Location
– SKU assigned a permanent location, & no other items are stored
there
– Fixed-location systems usually have poor cube utilization
– Usually used in small warehouses; throughput is small, & there are
few SKUs
• Floating (Random) Location
– Goods stored wherever there is appropriate space
– Advantage is improved cube utilization
– It requires accurate and up-to-date information
– Warehouses using floating-location systems are usually computer-
based
• Two other systems sometimes used are
– Point-of-use storage
• Inventory stored close to where it will be needed
• Used in repetitive manufacturing & JIT systems
– Central storage
• Contains all inventory in one central location
• Advantages of Point-of-use Storage
– Materials are readily accessible to users
– Material handling is reduced or eliminated
– Central storage costs are reduced
– Material is accessible all the time
• Advantages of Central Storage
– Ease of control
– Inventory record accuracy is easier to maintain
– Specialized storage can be used
– Reduced safety stock, since users do not need to carry
their own safety stock
• Order Picking and Assembly
– When an order is received, items must be obtained
from the warehouse, grouped, & prepared for
shipment, systems used
– Area system
– Zone system
– Multi-order system
– Area system
– Order picker circulates throughout warehouse
selecting items on an order -- order is ready to
ship when order picker is finished
– Zone system
– Warehouse is divided into zones, & each
picker works only in an assigned zone --
order is divided by zone, & the items from
each zone are sent to the marshaling area
– Multi-order system
– Same as the zone system, except that each
picker collects items for a number of orders at
the same time
PHYSICAL CONTROL &
SECURITY - ELEMENTS
– Good part numbering system
– Simple, well-documented transaction system
– Identify the item
– Verify the quantity
– Record the transaction
– Physically execute the transaction
– Limited access
– Inventory must be kept in a safe, secure (locked)
place with limited general access
– Well-trained workforce

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