Warehouse Management: Concepts & Processes

Chapter 2: Warehouse Management

• Objectives include understanding activities, contents, processes, designs, controls, checks, and general activities related to warehouse management.
• Concepts, roles, and benefits are part of the content.
• Classifications and activities are elements of warehouse management.
• Processes and design considerations are important aspects.
• Control and checking are part of the warehouse.
• Documentation of activities is a content element.

Concepts, Roles, and Benefits of Warehouse Management

• Managing a large warehouse involves a challenging position that requires diverse skill sets.
• Warehouse managers now hold high-level positions in recognition of the costs, investments, and customer service they provide.
• Some key responsibilities include the provision of timely customer service.
• Keeping track of items to locate them readily and correctly is vital.
• Minimizing physical effort and the cost of moving items into and out of storage is a goal.
• Providing communication links for customers is a benefit.

Warehouse Management Systems (WMS)

• Manages warehouse inventory, space, equipment, and labor.
• WMS directs the flow of materials and information from receiving to light assembly.
• Includes order picking, value-added processing, and shipment.

Benefits and Complexity

• Provides a space for inventory storage and protection.
• Reduces transportation costs for the business.
• Improves customer service levels.
• Operational complexity is dictated by the number of SKUs and orders.
• Material handling constitutes most of the activity.

Costs of Operating a Warehouse

• Includes capital costs for space and material handling equipment.
• Also incorporates operating costs, such as labor costs.
• Labor productivity is measured in units moved per operator per day.

Activities

• Involve receiving goods.
• Also involve the identification of goods.
• Require dispatching goods to storage.
• Holding goods involves warehousing.
• Include picking goods.
• Include shipment marshalling.
• Demand shipment dispatching.
• Require the operation of an information system.

Receive Goods Details

• This operation accepts goods from outside transportation or an attached factory.
• Responsibility is accepted at this point.
• The received goods are checked against the order and bill of loading.
• Quantities are meticulously checked.
• Inspection for damage is performed.
• Damage reports are filled out if needed.
• Goods are inspected when required.

Identification of Goods

• Items are identified using the appropriate stock-keeping unit (SKU).
• SKU includes part numbers.
• Received quantities are recorded.

Dispatch to Storage Details

• Goods are sorted.
• Goods are put away appropriately.

Holding Goods Details

• Goods are stored.
• Goods are protected until needed.

Picking Goods

• This involves selecting items required from stock.
• Selected items may be brought to a marshaling area.

Marshaling Shipments

• Goods making up a single order are brought together.
• Checks for omissions or errors are performed.
• Order records get updated.

Operating an Information System

• Orders must be packaged.
• Shipping documents are prepared.
• Goods are loaded onto vehicles.
• Records are maintained for each item.
• Stock quantity, received quantity issued, and locations are all recorded.

Warehouse Design Considerations: Layout Principles

• One-story warehouses allow for efficient movement and layout.
• Straight-line movement of goods reduces complexity and handling.
• Loading equipment should be matched to the throughput of the distribution center.
• Minimize the material handling distances within the warehouse.
• Size of a warehouse is calculated by volume.

Warehouse Design: Important points

• Warehouse design should balance space utilization with the cost of handling.
• Should follow process-oriented design for easy movement of items.
• Warehouse design needs to ensure the smooth movement of goods from receiving to storage.
• Optimal warehouse layouts depend on goods types, quantity, automation degree, and equipment investment.

Control and Inventory Count: Importance

• Knowing inventory levels on the shelves at any given moment allows accuracy.
• Routine inventory counts help plan and avoid stockouts or overstocking.
• Understanding what is on warehouse shelves aids in the identification and prevention of losses.
• Provides increased clarity for a businesss entire supply chain.

Inventory types

• Periodic inventory: Accounting of stock and valuation is done at particular intervals weekly or monthly.
• Perpetual Inventory: Keeps track of inventory balances continuously, with updates made automatically when products are received or sold/delivered.
• ABC Inventory: Products are ranked based on their price and popularity.
• Just - In - Time Inventory: Raw materials are coordinated with the supplier as the customer purchases them, reducing waste in inventory housing costs.

Just In Time Inventory

• Just In Time (JIT) aims to procure raw materials as required without investing in storing items.
• JIT reduces raw material costs and investment, and speeds up production.
• JIT does not meet order from customer and has no margin to make inventory errors.

Inventory control process:

• Reporting
• Implementing
• Preparing
• Planning
• Solving gap issues