WAREHOUSING MANAGEMENT Final

Streamlining Supply
Chains: A Logistics
Overview
• Part of firm's logistics system that stores products at
and between point of origin and point of
consumption.
• 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
An overview of streamlining supply chains and optimizing
logistics for efﬁciency and cost-effectiveness.
What is Picking & Packing?
Pick and pack — sometimes known as pick, pack and ship is an order
fulfillment method in which workers pick individual items from
warehouse shelves and package them for shipment onsite.
It derives its name from two separate logistics activities:
Picking: The process of retrieving items from a storage location to

fulfill a specific order or requirement
Packing: The process of arranging and preparing items for shipment or

transport, ensuring their safe and efficient handling during transit.
Popular Pick & Pack Methods
Piece picking: The order picker(s) move(s) to collect the
products necessary for one order. It’s very simple, so it’s perfect
for small retailers who are just starting out.
Batch picking: Batch picking, or multi-order picking, is the

process of picking multiple orders at once. This method is ideal
for businesses who are starting to experience a higher volume
of orders and need to save time in the picking process.
zone picking: Zone picking is a method where warehouse

pickers only pick items from a specific zone they are assigned
to. A packing slip will move through multiple zones, where the
order is gradually picked until it is complete and ready to be
passed over to the packing station.
wave picking: Wave picking, or cluster picking, is the method of

picking multiple orders across different zones at the same time.
Usually coordinated by warehouse management software, the
system will identify similar clusters of orders and release them
at the same time for picking. Warehouse pickers will then work
in their zones to pick the correct items, before consolidating the
orders at the packing station.
DESIGN CONSIDERATION
Ideal Facility for Pure Supplier Warehouse Space

Consolidation Requirements
(Full Pallet Movement)
PRINCIPLES OF WAREHOUSE
LAYOUT DESIGN
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 OUT
•Bill of Loading PUT
•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
Cube utilization and accessibility
continued…
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
Stock Location
continued…
• 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
Stock Location
continued…
• 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
Stock Location
continued…
• 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

Stock Location
continued…
• 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
Order Picking and Assembly
continued…
• 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
Order Picking and Assembly
continued…
• 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
VIDEO
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Streamlining Supply

It derives its name from two separate logistics activities:

Picking: The process of retrieving items from a storage location to

Packing: The process of arranging and preparing items for shipment or

Batch picking: Batch picking, or multi-order picking, is the

zone picking: Zone picking is a method where warehouse

wave picking: Wave picking, or cluster picking, is the method of

Ideal Facility for Pure Supplier Warehouse Space

Shipping Preparation Order Picking

• Complexity of warehouse operation depends on the number

• Identify the goods

• Dispatch goods to storage

Dispatch goods to storage

Marshal the shipment

Operate an information system

• Two other systems sometimes used are

• 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

– Inventory record accuracy is easier to maintain

– Specialized storage can be used

– Reduced safety stock, since users do not need to

– Order picker circulates throughout warehouse selecting

– Warehouse is divided into zones, & each picker works

– Same as the zone system, except that each picker

• Simple, well-documented transaction system

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