Warehouse Operations Management (PDF)

SOUTHWESTERN INSTITUTE OF BUSINESS AND TECHNOLOGY DISCIPLINE…ACCOUNTABILITY…PROFESSIONALISM…HUMILITY Nautical Highway, Panggulayan, Pinamalayan, Oriental Mindoro Contact Nos.: +63917-127-8500/ +63912-448-...

SOUTHWESTERN INSTITUTE OF BUSINESS AND TECHNOLOGY DISCIPLINE…ACCOUNTABILITY…PROFESSIONALISM…HUMILITY Nautical Highway, Panggulayan, Pinamalayan, Oriental Mindoro Contact Nos.: +63917-127-8500/ +63912-448-6518 WAREHOUSE OPERATIONS MANAGEMENT HANDOUT No.1 PREPARED BY: SHERYL S. SABEDA, LPT. NAME: __________________________________________ COURSE/YEAR & SECTION: __________________________ 1  INTRODUCTION The field of supply chain management relies heavily on the study of storage to maintain the efficient movement of items through the logistics system.This handout provides an overview of the nature and importance of warehousing, the different types of warehousing, the functions they serve, and the decision criteria for selecting the appropriate warehousing types. LEARNING OBJECTIVES: At the end of the lesson, the students are able to: 1. Understand the nature and importance of warehousing in the logistics system. 2. Familiarize with different types of warehousing. 3. Comprehend the functions of warehousing. TOPICS: I. Concept of Warehousing a. Defining warehousing b. Kinds of warehouses II. Warehouse Logistics a. Challenges of warehouse logistics b. How to improve warehouse logistics c. Warehouse Management System (WMS) and Warehouse Logistics d. Benefits of Warehouse Logistics III. Functions and Objectives of Warehouses a. Primary Functions of a Warehouse b. Secondary Functions of a Warehouse c. Objectives of Efficient Warehousing Operations ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ “My mind is a warehouse of carefully organized human emotions. I lock away the things that do not serve me.” - Tahereh Mafi Something to Think About… A warehouse is a storage of goods. Do we really need a sophisticated one? 2  CONCEPT OF WAREHOUSING Defining Warehousing A warehouse is a structure intended for storing goods. Goods may either be:  Raw Materials  Industrial goods  Finished products Warehouses are used mostly by:  Manufacturers  Wholesalers  Importers  Transport Businesses  Exporters  Customs They are typically large, unadorned structures in industrial parks on the outskirts of cities, towns or villages. Assuming responsibility for storage of goods, warehousing affords not only the place but more on time, releasing goods as and when they are needed. Warehousing is the act of storing goods that will be sold or distributed later. It creates time utility, granting firms to use customer service as a dynamic value-adding competitive tool. In short, a warehouse is stereotypically viewed as a place to store inventory. However, in a much broader perspective, warehousing is denoted as transportation at zero miles per hour. It is a segment of a firms' logistics system that stores products at and between point of origin and point of consumption. In many logistical system designs, the role of the warehouse is more suitably regarded as a switching facility as contrasted to a storage facility. Evolution of Warehousing Warehousing types evolved to accommodate the following dynamic aspects:  Distribution Centers  Consolidation Terminals  Break-Bulk facilities  Cross-docks T he degree of change brought about by e-commerce and technology in the warehouse 3 industry is said to be so far and wide that the word "revolution” might be the more fitting term instead of an "evolution" The most obvious warehouse changes that had taken place during the last two decades include the following:  Innovative, ground-breaking, and advanced storage systems  Better tracking configurations  Comprehensive training and modern technology Kinds of Warehouses E-commerce has also prompted modifications in the types of warehouses that are used. The new kinds of warehouses include:  Centralized return centers  High ceiling facilities  Customer facing  On demand warehouses  Flow warehouses  Pop-Up warehouses  Futuristic facilities The outcome of e-commerce and technology to warehousing are both evolutionary and revolutionary. The degree and speed of change amidst supply chains is gaining momentum and does not show any signs of slowing down. The "shocks" and "budges" in the industry are being felt by all players - from producers, merchants, logistics service providers, wholesale distributors and, most considerably, by consumers. Such impacts are a global sensation. WAREHOUSE LOGISTICS A strategic component of logistics management, warehousing affords businesses the management of the transportation and storage of their inventories. Difference between Warehousing and Logistics  Warehousing is referred to as the safe storage of goods, inventory, and information within an identified structure, building, or area.  Logistics, on the other hand, is the predominant and all-embracing principles and function of:  Transportation  Warehousing  Internal movement of the goods, inventory, and information to manufacturing line and/or back to the firm from the customer. Warehouse Logistics  Logistics definition includes:  Detailed planning  Organization  Management  Implementation of complex operations  Logistics is not limited to the flow of tangible goods. It also extends to the flow of information and time. 4  Warehouse logistics incorporates all the wide-ranging, complex aspects involved in warehousing such as: This includes:  The flow  Shipping  Receiving Of physical inventory  As well as that of more abstract goods, including  Information and  Time Warehouse Logistics may also stretch to cover issues ranging from any or all of the following:  Warehouse Pest Control  Damaged Goods Handling  Safety Policies  Human Resources Management  Customer Returns Challenges of Warehouse Logistics Among the many proverbial and recognizable encounters in warehouse management includes the following:  Pinpointing the precise whereabouts of a definite item of inventory  Locating goods that are about to expire (NearEx or Near Expiry products)  Isolating the pallet that carted a supposedly expired and/or damaged items  Determining the truck that transported an item that was damaged during shipment and handling  Identifying the goods that should be released first – following the First-in First Out (FIFO) system. How to improve Warehouse Logistics Advanced Warehouse Management Systems - One of the most sought-after tools that is an integral part of Manufacturing and Distribution processes. - It works in conjunction with the Inventory Management and Shop Floor Control systems to manage your inventory and the products that you produce and ship. - It controls many aspects of warehouse operations; Receiving, storing items, Retrieving and Shipping. With the right vision and forecast, one can actually design a warehouse to optimize its available space, manpower time, and the unique storage requirements of the goods that you store such as:  Perishable vs. Non-Perishable goods  Food and Non-Food items 5 Advanced Warehouse Management Systems offer the following;  Gives real-time insight into your warehouse, and equip you - and all your employees - with the necessary tools to effectively, efficiently and profitably manage your warehouse.  Create a logical model of your warehouse in as much detail as you need by specifying such characteristics as location, dimensions, temperature, humidity, and lighting.  Create a logical model of each item in your warehouse to allow. the system to match items to storage locations based on the characteristics of the items and settings.  Control how stock is stored, picked, and replenished by setting up rules for the system to follow.  Move stock to and from specific locations using manual input or automatic system-generated suggestions.  Use random locations for storage by allowing the system to track inventory for you.  Generate an audit trail of reports for each stock movement. Sequence your employees' trips through the warehouse to maximize their productivity.  Confirm stock movement with minimal data-entry keystrokes. Salient Features of Advanced Warehouse Management System  User-defined rules for stock movement  User-defined parameters for items and locations to control stock movement  Fixed and random locations for more efficient stock movement.  Automatic shipping carton selection during picking  Ability to review warehouse contents using up to nine levels of detail  Manual or automatic storage, picking, and replenishment of stock  Audit trail reporting of inventory movement Warehouse Management Systems (WMS) and Warehouse Logistics Implementing a solid Warehouse Management System (WMS) to control your warehouse logistics is probably the best thing you could do for you operations. Advantages of incorporating WMS in Warehouse Logistics:  Ensure accurate, real-time inventory counts.  Decrease returns.  Auto-replenish stock.  Maximize warehouse space. 6 Benefits of Warehouse Logistics Simple observation and analogy states that when… All the people, process and systems fall into place as they should. Fewer operating errors occur Other WMS benefits extend to the following factors that boil down to reduced operational expenses and more revenue:  Better demand planning  Improved visibility & transparency  Stock traceability  Efficient labor allocation  Fewer picking errors  Improved customer services  Optimized processes Warehouse Considerations Affect Warehouse Logistics Possible changes that might influence warehouse logistics:  All concerned in the operations - from warehouse managers to all personnel involved - must be well trained in using the tools and apps applied in the system.  Transportation, third-party logistics, suppliers, related contractors and sub- contractors must coordinate with your logistics efforts.  Any external or internal changes in warehousing operations including physical lay-out, new racking, and updated organization set-up. 7  FUNCTIONS AND OBJECTIVES OF WAREHOUSE Primary Functions of a Warehouse 1. Storage of goods  the most familiar and customary function of a warehouse is to act as accommodation space for supply, tools or other items.  Goods may either be perishable or non-perishable.  Goods are sheltered from various elements including heat and rain. a. Planned Storage – simply refer to storage required as planned for the purpose of meeting regular customer demand. b. Extended Storage – is an inventory that is excess of usual warehouse operation. Reasons for extended storage requirements may be any of the following:  Seasonality in demand  Speculative purchases  Erratic demand  Discounts/Promos  Product conditioning  Price change expectations 2. Shipping Hub – Movement of goods; receiving shipments and holding the items until they are loaded onto the trucks and shipped elsewhere. Movement of goods consist of the following: a. Inbound activity b. Transfer to storage c. Order selecting d. Outbound activity 8  3. Information Management – This ensures data transparency in stock control management.  A Warehouse Management System (WMS) is a software application used to monitor and control warehouse operations and materials basically from receiving, storing, and shipment or up until it reaches its final destination. Their core functions include: Receiving of goods Tracking stock Dispatching goods Ensuring efficiency in storage Picking and hipping Providing information to manager Secondary Functions of a Warehouse 1. Protection of Goods – warehouse safeguards from loss or damage due to heat, dust, wind and moisture. 2. Risk Bearing – Warehouses are constructed in such a way as to minimize risks and it takes all precautions to prevent any mishap. 3. Processing – Certain commodities are not consumed in the form they are produced. Processing is required to make them consumable. 4. Grading and Branding/Packing – warehouses offer additional services to perform the functions of grading and branding of goods on behalf of the manufacturer, wholesaler or the importer of goods. These are usually intended for special promotions and sometimes for export transactions. It also provides facilities for mixing, blending and packaging of goods for the convenience of handling and sale 5. Transportation – Warehouses usually provide delivery services to their clients – wholesalers and retailers alike. Objectives of Efficient Warehousing Operations 1. Simple Storage 2. Ease of Access 3. Improved Turnover  Two common methods used in warehousing and distribution to better manage inventory turnover. These are: a. FIFO (First-In First-Out) model which helps keep inventory from becoming obsolete. b. JIT (Just in Time) model which reduces the amount of time inventory sits. 4. Enhanced Inventory Production Processes 5. Reduced Problematic Circumstances 6. Optimal Safety 1 9  WAREHOUSE OPERATIONS MANAGEMENT (SCM2) Handout 1 NAME:____________________________ DATE: _________________ YEAR & SECTION: __________________ SCORE: _______________ DIRECTION: Compare and contrast traditional warehouse management systems with advanced automated systems. Assess the advantages and disadvantages of each and determine which would be more suitable for a large-scale e-commerce warehouse. 2 DIRECTION: Please answer all the questions to the best of your knowledge. Write your answer inside the box. 1. Give at least three (3) challenges or problems encountered in warehouse logistics and propose innovative solutions to address each problem effectively. 2. Discuss the benefits of implementing automated technologies, such as Warehouse Management System. How do these technologies enhance productivity, reduce costs, and improve customer satisfaction? 3  3. Explore the various functions and objectives of warehouse logistics, such as inventory control, space utilization, order fulfillment, and returns management. How do these contribute to supply chain management and overall business success? 4. Analyze the impact of globalization on warehouse logistics. How do international trade, customs regulations, and cross-border transportation influence warehouse operations, and what strategies can be employed to mitigate associated challenges? 4