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Warehousing
Warehouse
A warehouse is a commercial building for storage of goods.
Warehouses are used by manufacturers,
Wholesalers, retailers, importers,
exporters, customs etc.
They are usually large plain buildings
in industrial areas of cities and towns.
Today warehouses are not used to store things but rather to
receive, breakdown, repackage and distribute components to
a manufacturing location or finished products to customers
Warehouses
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Some warehouses are completely automated, with very few
workers working inside.
The pallets and product are moved with a system of
automated conveyors and automated storage and retrieval
machines coordinated by programmable logic controllers
The direction and tracking of materials in the warehouse is
coordinated by the WMS, or Warehouse Management
System, a database driven computer program.
The WMS is used by logistics personnel to improve the
efficiency of the warehouse by directing putaways and to
maintain accurate inventory by recording warehouse
transactions.
FUNCTIONS OF A WAREHOUSE
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Receiving, Storing, switching, change SKU size,
Allows stock rotation (FIFO, LIFO),
Buffer stock for customers – retail or commercial,
Command and control centre – inventory control,
Enables off-the-shelf (JIT) for customers,
Provides a more-local 'Market Presence'.
FUNCTIONS OF A WAREHOUSE
 Consolidation and Break-Bulk
 Assortment (Cross Docking, Mixing)
 Postponement (Packaging, Labelling)
 Stockpiling (Seasonal, Bulk-Buy)
 Reverse Logistics
Consolidation:
Groupage (Consolidation)
 Goods from a number of suppliers are
grouped together for single delivery
points,
 A range of goods from single suppliers are
grouped together for each customer.
Supply Chain Management
Plant 1
Store A
Plant 2
Consolidation
Warehouse
Store B
Store C
Plant 3
Break Bulk:
• Receives customer orders from manufacturer and
delivers to different customers.
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A break bulk operation receives combined
customer orders from manufacturers and ships
them to individual customers.
The break bulk warehouse sorts or splits individual
orders and arranges for local delivery.
Supply Chain Management
Store A
Plant
Break-Bulk
Warehouse
Store B
Store C
CROSS-DOCK
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No storage(?)
Cross-dock (from multiple suppliers):
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goods sorted as they arrive,
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goods moved across dock and loaded onto trailers,
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benefits - optimal vehicle use and low handling
costs,
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requires sophisticated planning techniques.
Cross Docking
• Transferring goods
• from incoming trucks
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at receiving docks
to outgoing trucks at
shipping docks
• Avoids placing goods
into storage
• Requires suppliers
provide effective
addressing (bar codes)
and packaging that
provides for rapid
transshipment
Incoming
Outgoing
Sainsbury's distribution timetable
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Early evening Goods arrive at warehouse from supplier.
Overnight Sorted and packed.
Early morning Despatched.
7.30am On store floor.
Warehouse Ownership Classification:
 Private (Ownership or Lease)
 Public (Standardized service, relationship is less
important)
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Contract (Customized, mutual benefits, long term
commitment, Good relationship)
Warehouse Planning:
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Location Analysis
Site selection
Design
Product mix
Future expansion
Location Analysis
Before selecting site, there is some location analysis
techniques that could assist company in selecting a
general area for warehouse location.
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Location Factor Rating
The location factor rating technique may be used when many
sites are available, and each site has some appealing
characteristics. The purpose of the technique is to "score"
each site to be somewhat objective about the location
decision. The steps in using the technique are:
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Center-of-Gravity Technique
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The center-of-gravity technique can be used when
multiple suppliers or customer bases exist at
different geographic locations, and it is
economically sensible to locate centrally to service
all of them. In general, transportation costs are a
function of distance, weight, and time.
Site Selection
Once location analysis is completed, a specific
building site must be selected.
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The primary factors in site selection are the
availability of services and cost.
The cost of procurement is the most important
factor governing site selection.
Beyond procurement cost, setup and operating
expenses such as rail sidings, utility expenses,
taxes, insurance rates, and highway access require
evaluation.
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Site Selection
Several other requirements must be satisfied before
a site is purchased
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Necessary utilities must be available.
The soil must be capable of supporting the
structure, and the site must be sufficiently high to
afford proper drainage
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Design Criteria:
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Warehouse design criteria address physical facility
characteristics and product movement.
Three factors to be considered in the design
process are:
◦ the number of stories in the facility,
◦ height utilization, and
◦ product flow.
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Number of stories in the facility
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The ideal warehouse design is limited to a single
story so that product does not have to be moved
up and down.
The use of elevators to move product from one
floor to the next requires time and energy.
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Height Utilization:
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Regardless of facility size, the design should maximize the
usage of the available cubic space by allowing for the greatest
use of height on each floor.
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Most warehouses have 20- to 30-foot ceilings, although
modern automated facilities can effectively use ceiling heights
up to 100 feet.
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Maximum effective warehouse height is limited by the safe
lifting capabilities of material-handling equipment, such as
forklifts.
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Product-Mix Considerations
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The design and operation of a warehouse are
related directly to the character of the product mix.
Each product should be analyzed in terms of
annual sales, stability of demand, weight, and
packaging.
It is also desirable to determine the total size and
weight of the average order processed through the
warehouse.
Future Expansion
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Future expansion is often neglected when an
enterprise consider initial establishment of its
warehouse facilities.
Well-managed organizations often establish 5 to
10 year expansion plans.
Such expansion considerations may require
purchase or option of a site 3 to 5 times the size of
the initial structure.
Warehouse Security
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Pilferage protection (Theft,)
Product deterioration (Damages)
Safety and Maintenance
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Health and safety
Incidents
Environment
Warehouse management System (WMS)
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Computer software designed to manage the
storage and movement of items throughout the
warehouse.
Home Assignment:
Role of Barcodes, RFID’s and Voice
picking technology in Warehouse
&
Role of MRP, MRPII and ERP systems in
SCM
End of Topic