Replenishment to

dispatch & beyond

Warehouse Processes
Introduction
Replenishment is ensuring right products and quantities are at right
pick location.
Replenishment helps in customer satisfaction.
Poor replenishment process results in order shortages, increased
picking times, increased cost per pick and reduction in service level.
Real-time Warehouse Management System (WMS) helps identify
replenish pick locations through real-time data transfer.
They help identify actual order quantities and accordingly replenish
for orders to come.
Real-time systems help in predicting potential orders with probable
timings. They help in optimal usage of time.
How to utilize time
Pre-plan for movement of goods from inbound section to
pick face. (avoid going to storage area)
Remember that replenishment order, either early or late
can cause problems.
Usage of right WMS helps in assessing and predicting
movement of goods from pick face and placement of
replenishment orders.
WMS also helps in setting time for replenishment at pick
face by taking into account the safety of workforce and
busy schedules.
Value added services
Commonly observed at both dedicated and shared-user
or public warehouses where third-party logistics
companies provide an all-encompassing service to their
customers.
Value added services include
(re)labelling; bundling, as in buy one, get one free
pricing; (BOGOF) offers;
(re)packing; tagging and kimballing;
reconfiguratio sub-assembly;
n; repair and refurbishment.
Value added services
Sophisticated value added services include

A form of production/assembling for products
that need customization;
Fitment or inclusion of a particular part for a
specific market;
Return process and repair services.
Indirect (support) Activities for better
operations
Ensuring optimum staffing levels and providing suitably trained staff for peak
periods;
Managing the allocation of labor for value-adding services;
Ensuring optimum space utilization;
Monitoring work flow and congestion;
Provision, allocation and maintenance of equipment;
Identification and replenishment of fast-moving items;
Identification of non-moving stock;
Stock integrity and dealing promptly with non-conforming, lost or found stock;
Managing cycle counts and organizing full stock checks;
Security of high-value or hazardous stock; and
Ensuring the cleanliness of the warehouse and the safety of both staff and visitors.
Stock Management
Determining the right stock levels is a tricky task for
warehouse managers.
They are not directly involved in the choice, purchase
and replenishment of stock. Yet, they can play a role in
identification of fast, medium, slow, non-moving and
obsolete stock.
Warehouse manager may opt for extra classification of
stock as non-moving, obsolete, and even stock not
requiring storage (i.e. directly sent from inbound to
outbound bay).
Stock Classification column 3 is
variable
Alternatives for non-moving & obsolete
stocks
Return to seller subject to contract.
Sell to staff at a discount.
Sell the item at a highly discounted rate either through normal
channels or via companies who specialize in selling overstocks
and obsolete items.
Assess whether it is cost effective to break the item down into its
constituent parts.
Donate to charities.
Dispose of the product as cheaply as possible. This may incur
charges but it will release space to store other faster-moving
product in its place.
Formula to know existence of excess slow-
moving stock
It can be found by calculating stock turn, where
Stock turn = cost of goods sold average cost of goods
stored
Or
Annual throughput in units average number of units held in
stock
A higher stock turn represents a better inventory
management policy.
A lower stock turn represents that stock sits in
warehouse for far too long time, implying safety stock
level has been set too high.
Stock or inventory counting
Stock counting is mandatory.
Stock count, of late, is done in the form of cycle or
perpetual inventory counts, as opposed to traditional
all-encompassing annual count.
Full stock count
Done once in a year by suspending all warehouse operations;
Reconciliation becomes tough due to long time gap.
Cyclical counts
Done at regular intervals improves accuracy and helps in easy
reconciliation;
Year-end audit becomes easy in this process.
Cycle counting or perpetual
inventory counts
Under cycle count, it is better to use ABC analysis to
ensure that fast-moving and/or high valued goods are
counted frequently.
Mis-picks are common for fast-moving goods and high
value goods are prone to shrinkage.
Accuracy of count should determine number of counts.
If error rate is high, frequency of counts should be
increased until accuracy rate improves.
Warehouse manager need to ensure a solution to each
such cause of error.
The count how to do it?
Under organized stock count process the manager need
to know about
Person responsible for stock count
Timing of stock count
Tools and equipment (including specialized) required and the
time scale allotted.
Warehouse manager has
To ensure that all items are put in at their respective place to
avoid congestion or even accident
To ensure all obsolete units are disposed off before
commencement of the count.
Security
Warehouse manager is responsible for the integrity of products under
his/her care, whether they are owned or stored on behalf of other
companies as a third party contractor.
Measures such as good housekeeping, use of security cages and
carousels for storage, and through vigilance by staff are to be
employed.
Loading docks and platforms tend to be the most vulnerable areas.
Closed-circuit television at strategic points, surprise checks, help in
maintaining security.
Security check at entry and exit gates.
Security of WMS is to be maintained by usage of passwords, firewalls,
data backups, etc.
Attributes of warehouse security
Appropriate recording of inbound and outbound
products;
Authorizations for all dispatches;
Accurate audit trails;
Regular stock checks;
Appropriate storage equipment; and
Vigilance.
Returns Processing (Reverse
Logistics)
This includes repairs, refurbishment, recycling, and disposal.
Processing of returns, in modern business, is a key component of after-sale
service.
Statutory regulations mandate proper packaging in environmentally friendly
manner.
Failure to adhere can attract penalty.
Improper returns policy may take-away warehouse space, difficulty in counting
stock takes, valuation, etc.
Warehouse need to be designed to facilitate stock-holding facility for different
types of stocks.
Space should be provided for sortation, inspection, repair, refurbishment and
disposal of stock.
Returned items should not stay at warehouse for a long period time.
Prerequisites for reverse logistics
operation
Calculate
percentage and value of goods returned directly to stock and to
vendor;
percentage of goods refurbished and returned to stock;
percentage of goods dismantled and used for spares;
percentage of goods destroyed or given away to charity, etc;
percentage of goods returned due to manufacturing defects; and
percentage of goods returned due to sales department, warehouse or
consumer error.
A final decision has to be made on whether to have reverse
logistics with-in the warehouse or to outsource it.
Factors influencing owning or
outsourcing of reverse logistics
facility
level of returns;
available space;
available expertise;
cost;
control and efficacy;
capacity and capability of third parties; and
lead time from return to available to ship.
Essentials for sound returns
management
Decision-making process before product is physically returned;
The use of returns authorization notes;
Ongoing measurement of product return cycle time;
Training of employees in returns handling;
Cross training of staff in warehouse operations and reverse logistics;
Use of software to monitor and evaluate product returns;
Time slots allocated for receipt of returns;
Two-stage approach for returns handling initial processing to identify quick wins
followed by in-depth examination;
Use of detailed product return process maps;
Availability of packaging material to re-box product;
Undertake regular audits; and
Achievement of higher recovery rates (> 80%).
Dispatch
Sinking order cycle time (lead time) covering order
receipt to dispatch put pressure on warehouse manager
to coordinate various activities to ensure in-time and
complete order dispatch.
Packaging
pieces/items/individuals
This follows the step selection of items for dispatch
For individual order picks, packing, labelling, dispatch documentation
and invoices happen immediately at least touch points.
For fragile goods separate care like polystyrene and foam pallets,
shredded paper, corrugated paper, air-filled bags may be taken-up.
Firms look for a trade-off between machine and human efforts for
packaging.
For orders requiring checks on delivery, a check list is affixed on the
packaging material.
Automation in processes of warehouse enables companies to use
equipment to automatically insert paperwork into a shipping
container, attach a lid and label it correctly.
Packing cartons
Individual carton dispatch require attachment of
shipping label generated by WMS or from the carrier
system.
For multiple cartons, it is important to assess the cost
effectiveness of dispatching through parcel network, or
a pallet distribution or LTL carrier.
If palletized, stabilization of cartons can be through
stretch-wrap or pallet straps. Trade-off is seen between
manual or mechanized.
Returnable packaging including plastic totes and pallets
, slip-sheets and collapsible cages.
Loading
Efficient loading is key for cost cutting.
Efficient loading of containers and vehicles begin with
efficient packaging of products.
Outer packaging of products need to be designed to fit
perfectly onto pallets used for both transportation and
storage.
Pallet load is configured to avoid damage to products,
cubic capacity utilization, load stability, and acceptable
at receiving location.
Organizations take help of software like Cubemaster or
Cube Designer for such configuration.
Shipping
24/7 order taking
Managers work on backward to ensure work flows, labor
and equipment availability
Dispatch activities aligned to other activities within
warehouse (usage of common facilities, tasks
alignment, etc)
Managing of loading and unloading bays, assigning
collecting vehicles their respective slots
Documentation
Dispatch documentation and labelling done as per
customer preferences and statutory provisions.
Any errors in the export paperwork can result in non-
shipment, seizure, fines or delays.
Typical dispatch paperwork depending on ultimate
destination includes the following:
Advanced shipping notice; Export packing list;
Manifest; Certificate of origin;
Shipping labels; Export licence;
Bill of Lading; Inspection certificate; and
Commercial invoice; Insurance certificate.
Shippers export declaration;
Role of driver
Companies do not encounter any problem if they own
the transportation service that they operate.
However, if they depend on 3rd party contractor then
devising the role of driver, especially during the loading
& unloading process becomes tricky.
Companies insist that drive should be helping in loading
& unloading process and checking the products.
Some companies, citing safety and health reasons, keep
them away from the loading and unloading process.
They keep the drive at a far-off place to avoid any
accidents.
Driver signing on document(s)
If driver has no knowledge on the products filled and the
container is sealed, he can sign the document with a
word unchecked.
If the vehicle is sealed, the seal number needs to be
recorded on the delivery paperwork and any other
relevant documentation such as hazardous data sheets
handed to the driver.
End of topic - Replenishment to
dispatch & beyond