INTRODUCTION TO WAREHOUSING AND WAREHOUSING

MANAGEMENT
 Introduction to Warehousing
• In good old days Warehouses were considered as addition to production cost.
• But due to the movement of production facilities into developing countries due
to low cost of production, growth of e-commerce and increasing demands from
consumers.
• Warehouses are considered as a vital links of Material Management, Inventory
Management and Supply chain management.
• Proper flow of Materials is necessary for production system & considered as a
lifeline of any organization.
• Warehouse is a heart of the organization for the smooth running of the
production line.
• Warehousing function is co-related to Material Management, Inventory
Management and Supply Chain Management.
• Working capital is contributed by materials in any industry.
• The society and markets are unpredictable. As such firms need to hold stock at
various stages within their supply chains. Due to different test of customers
there is need to hold stock of product ranges and sizes leading to
 Need for Storage
• Uncertain and erratic demand patterns
• Transport and Shipping costs for Larger Shipments
• Discounts on Bulk Purchase
• Price Fluctuation (Raw Materials and Finished Goods)
• Manufacturer’s Distance from Supplier and End User
• Protections from shutdown
• Ability to increase Production Runs
• Manage Seasonal Production
• Situations Demanding Storage: Stocking is Inevitable
• High Seasonality
• Spare Parts Storage or Maintenance Stores
• Work-in-Process Storage
• Investment stocks
• Document Storage
• Maturation and Ripening and Consignment Stock
 OBJECTIVES OF WAREHOUSING
• In a supply chain, warehouse is important because it is the
connecting junction point between the supplier and the company as well as
between the company and the customer in the market.
• Its connecting activities are related to the correct storage, protection and
conservation of goods in an installation for the required period of time.
• It also involves the management, monitoring, transportation, location,
handling and conditioning of this materials right from receipt to dispatch.
• Thus the warehouse is the key area that enables the organization to regulate
the flow of goods between supply and demand.
• It is treated as the heart of the company if the materials are comparable to
blood, where this heart pumps the materials to keep business live, while
stores and handles materials to respond to commercial and production needs.
• The ultimate goal of warehouse is to minimize operating costs while
maintaining quality service.
 OBJECTIVES OF WAREHOUSING
• Following are the objectives of Warehousing
1) Maximize the use of storage space.
2) Facilitate Movement of goods and Safeguarding of goods
3) Quality Inspection and Stock Count
4) Documentation
5) Proper Pest Control as and when needed
6) Facilitating Financing of Inventory
7) Price Stabilisation
8) Leverage handling equipment.
9) Preserve the integrity of the goods.
10) Ensure optimal utilization of the workforce.
11) Guarantee access to goods as and when needed.
12) Maintain the security measures necessary.
• Warehouse managers strive in every area of the warehouse and
its logistics to meet the aforesaid objectives.
 PRINCIPLES OF WAREHOUSING
• Warehouse management is commonly associated with six
basic Principles.
(i)Accuracy,
(ii)Cost control,
(iii)Efficiency,
(iv)Cleanliness,
(v)Safety and
(vi)Security
• The underlying processes are complex and
dynamic, presenting major activities for
warehouse managers across industries.
 Audit of the Inventory and Warehousing Cycle
• The overall objective in the audit of the inventory and warehousing cycle is to provide
assurance that the financial statements fairly account for raw materials, work in-process,
finished goods inventory, and cost of goods sold.
• Warehouse cycle time is the total time it takes to complete a warehouse process, such as
receiving, picking, packing, or shipping. Reducing warehouse cycle time can improve
customer satisfaction, inventory turnover, and operational efficiency.
• Warehouse management is the process of handling inventory and related tasks within a
warehouse. Inventory management deals with managing stock for the whole business and
forecasting business trends.
• For example, if a bakery keeps flour in its warehouse for loaves of bread, it requires a certain
amount of flour to meet its typical order amount. Tracking this cycle inventory ensures that
the bakers have enough flour for each batch of bread and that the company can respond to
increases or decreases in demand efficiently.
• Warehousing enables on-time delivery and optimized distribution, resulting in higher labor
productivity and customer satisfaction. It also aids in the reduction of errors and damage
during the order fulfillment process as all products are sourced in one location.
• Warehousing services are not only beneficial but crucial for businesses engaged in selling
physical products to customers. They streamline the order fulfillment process while
controlling costs and providing enough flexibility to scale the inventory or business as needed.
 Audit of the Inventory and Warehousing Cycle
• Inventory differs from whether business is retail or wholesale. Inventory
is the main item in B/S.
• For a manufacturing company inventory may include raw materials,
Spare parts and supplies for use in production, goods in the process of
being manufactured and finished goods available for sale.
• The inventory and warehousing cycle are related to other transaction
cycles.
• For a manufacturing company, raw material enters the inventory and
warehousing cycle from the acquisition and payment cycle, while direct
labor enters it from the payroll and personnel cycle.
• The inventory and warehousing cycle ends with the sale of goods in the
sales and collection cycle.
• The audit of inventory, at the year-end, is crucial and complex audit
function.
 Audit of the Inventory and Warehousing Cycle
• Following factors affect the audit of inventory:
• Inventory is often the largest account on the balance sheet.
• Inventory is often in different locations, making physical control and
counting difficult.
• Diverse inventory items are often difficult for auditors to observe and
value.
• Inventory valuation is also difficult when estimation of inventory
obsolescence is necessary and when manufacturing costs must be
allocated to inventory.
• There are several acceptable inventory valuation methods and some
organizations may prefer to use different valuation methods for different
parts of the inventory, which is acceptable under accounting standards.
Business functions and the related documents and records
• The 6 functions that make up the inventory and warehousing cycle& records used by
a manufacturing company are:
1) Process purchase orders: It starts with the acquisition of raw materials for
production. Related documents is the purchase order.
2) Receive raw materials: Related documents is the vendor’s invoice.
3) Store raw materials: Related record is the raw materials perpetual inventory master
file.
4) Process the goods: Related documents and records are the raw materials requisition
and the cost accounting records.
5) Store finished goods: Related records is inventory master file and the cost
accounting records.
6) Ship finished goods: Related documents and records are the shipping document,
the finished goods perpetual inventory master file, and the cost accounting records.
Shipping completed goods is part of the sales and collection cycle. shipments of
finished goods must be authorized by a properly approved shipping document.
Functions in the Inventory and Warehousing Cycle

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Functions in the Inventory and Warehousing Cycle

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 Audit of Inventory

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Problems and challenges in
warehousing
• Warehouses are an intricate ecosystem with several different processes
working in tandem to serve customers effectively.
• Warehouse management challenges act as a major roadblock in the
efficiency and productivity of the warehouses and can cause serious
damage to the complete warehouse workflow.
• Recent events have warranted warehouses to change their business
dynamics and stay profitable while fulfilling customer orders as well and
the best way of ensuring sustainability and longevity for your warehouse
is to overcome some of the common warehouse management challenges.
• Managing laborers efficiently, making the most use of available
warehouse space, and adapting to seasonal demands and other issues
require warehouse managers to stay on top of their game at all times and
get ahead of warehousing challenges.
• Following are the challenges in warehousing:-
Problems and challenges in
warehousing
• Following are the challenges in warehousing:-
1. Inaccurate Inventory Information:-It is the major challenge in warehousing.
• Manual processes of updating inventory data lead to improper stock information, the
buildup of obsolete inventory, and workers spending a lot of time in physical checks
and error correction.
• It results in wasting a lot of valuable time and money for the warehouse being one of
the most crucial warehousing challenge.
• Implementing automated warehouse management system can solve this problem.
2. Inefficient Space Utilization:-A poorly configured warehouse can cause challenges
in inventory management for the warehouse manager. The average warehouse
capacity utilization is only 68% proving that warehouse spaces are not being utilized
efficiently.
• Warehouse setup mistakes can also lead to unnecessary time wastage in searching
for high-frequency and fast-moving items. The setup inefficiencies have a direct
impact on profitability as the more time a picker spends in finding a product, the
fewer orders they can fulfill.
Problems and challenges in
warehousing
• 3. Improper Labor Management
Labor costs can comprise nearly 65% of the total warehouse budget. Laborers are an integral part of the
warehouse and managing them effectively can improve the overall productivity of different warehouse
processes.
• With staff ranging from associates to managers, and the availability of expensive equipment, managing a
large labor force can become chaotic and complex leading to major warehouse management challenges.
• Warehouse managers have to make important decisions for getting the most out of the available
workforce. They have to find areas where automated systems can pitch in to reduce labor costs and
make the order fulfillment process more efficient
• 4. Following Rudimentary Processes
While warehouse digitalization is picking up speed in several industries, most warehouses are still
following obsolete paper-based processes. Challenges in warehouse management like manual data
entries, excessive handling of products, and passing the same ticket among different workers can be
time-consuming and costly.
• With business dynamics changing post the COVID-19 era, warehouse managers need to adapt and
evolve quickly. 77% of the organizations are serious about automated warehouse systems and mapping a
plan to maximize data-driven performance.
• Using modern warehousing technologies such as barcode scanners helps in streamlining warehouse
processes and counter problems in a warehouse. Automated warehousing systems move fast, complete
tasks more efficiently, and eliminate duplication of efforts.
Problems and challenges in
warehousing
• 5. Adapting to Seasonal Demand:-Changing customer demands is one of the key challenges
of warehousing. Seasonal changes, economic cycles, trending products, and other factors lead
to fluctuations in customer demand.
• Dynamic customer demand cycle poses some serious challenges in warehouses. There can be
a dip in sales in some months while demand can surpass inventory levels in other months.
• Keeping a balance between demand and supply is very essential for the fulfillment process.
There shouldn't be any gaps between the warehouse and other aspects of the supply chain,
especially procurement and transportation.
• 6. Substandard Picking Process:-Picking is one of the most important steps in any
warehouse which causes biggest problems in warehousing. As soon as an order is placed, a
picker is assigned with the responsibility of completing order. If picking isn't done efficiently, a
lot of time would be wasted in fulfilling a single order.
• There can also be picking errors and inventory issues that delay the process even further.
• 50% of a picker's time is spent in movement and not picking items. Picking should be done in
an optimized way to minimize movement and time consumption. Enhanced inventory layout
and warehouse automation systems reduce picking errors and increase picking efficiency.
• Proper data capture and storage also make it easier for pickers to identify which product is
placed where.
Problems and challenges in
warehousing
7. Flawed Order Management:-
• Due to advancement in technology, consumers have multiple sources for ordering a
product. Managing customer orders from multiple channels can be a tedious task and
complete warehousing challenge.
• Orders can come in from company websites, e-Commerce portals, offline sales
channels, and more. Excel sheets and pen-and-paper-based methods can give rise to
several errors in order management and fulfillment.
• This can lead to challenges with capacity allocation, pickers being sent to retrieve
incorrect orders, and customers receiving something they didn't order. For such
problems in warehouse management, an order management system is a must.
8. Managing Heaps of Data
• Warehouses generate a lot of data while executing different processes. Data is
essential for improving warehouse productivity and making it more efficient.
• Tracking goods movement through the supply chain, managing logistics operations,
multiple delivery channels, and dealing with the returned or damaged products can
be a herculean task for warehouse managers, especially for the small and medium-
sized warehouses that don't have a lot of budget at their disposal.
Problems and challenges in
warehousing
9. Variety in Products Stored:-Most businesses operate on the Pareto Principle where
80 of their sales come from 20% of the inventory.
• However, constantly finding that 20% of products can be difficult given the frequent
shifting landscape. With customer demands changing in an instant, warehouses are
storing a wider variety of products than they did before.
• Incorrectly forecasting customer demand and ordering large stocks of a product that
end up staying on the shelves can hurt the warehouse's ROI. Similarly, having less
stock of a fast-moving product will lead to warehouses missing out on customer
orders due to unavailability.
10. Poor Quality Control
• With hundreds of orders coming in and going out every day, quality control can
sometimes end up taking a backseat. Due to the pressure of fulfilling orders quickly,
workers can sometimes overlook key details during picking, packing, or shipping.
This can lead to customers receiving poorly packaged, incorrect, or damaged products
and having a forgetful shopping experience.
• The pandemic has posed serious challenges for quality control as warehouses are
trying to do more with less. Proper quality control can eliminate the hassle of returns
and below-par customer service.
 Customer Service in Warehousing
• Customer service is the support you offer your customers — both before and
after they buy and use your products or services — that helps them have an
easy and enjoyable experience with you.
• Offering amazing customer service is important if you want to retain
customers and grow your business.
• Warehousing services provide efficient storage, inventory management and
order processing. It also cater to different needs.
• Logistics customer service is a part of a firm's overall customer service
offering, customer service elements that are specific to logistics operations
including fulfillment, speed, quality, and cost.
• The term fulfillment process has been described as the entire process of filling
the customer's order
• Their responsibilities typically revolve around answering inquiries, addressing
and troubleshooting problems, processing refunds, maintaining records of all
transactions, and referring them to other services when necessary.
 Customer Service in Warehousing
• Customer service is important because it's the direct connection between your
customers and your business. It retains customers and extracts more value
from them. By providing top-notch customer service, businesses can recoup
customer acquisition costs
• One example of customer service is when a customer receives a product (say,
a shirt) and the item doesn't fit. You would need to provide a way for the
customer to reach out to you so they can either return the product or
exchange it for a different size
• 5 Essential Elements of Customer Service
• Respect.
• Patience.
• Personalization.
• Empathy.
• Responsiveness.
 Knowing What is inside the warehouse
• When people think about warehousing, the first thought that comes to
mind is a cold, dark, and dusty building full of racks and crates.
However, actually, the warehouses are clean, bright, technically
advanced places, and help to keep an economy moving. According to a
report published by Statista, in 2020 the warehousing sector
contributed around 85.58 billion US dollars to the GDP of USA. The
data clearly shows that the demand for warehousing services is high
and will continue to grow with the increasing craze of online shopping.
• Warehousing is an inextricable part of the retail supply chain.
Warehousing remarkably affects everything in a business from sourcing
materials to managing inventory to on-time delivery of orders to the
customer.
• Warehousing refers to the process in which you purchase items from a
manufacturer and store them before shipping them to any other place
for fulfillment. You can store these goods or items in a spare room, or
other facilities, but for better management, it is always a good idea to
 Knowing What is inside the warehouse
• To succinctly describe, warehousing is actually the procedure of storing
the merchandise before selling them or transferring them to other
fulfillment locations. Warehousing services help to safely store
merchandise and monitor all the items using advanced technologies.
• Warehousing depends on how many goods you need to store or the size
of your business. If your business is small, you can do warehousing
from home, but if the business is bigger you would need to use a bigger
storage space or rent a 3PL warehouse or use fulfillment warehousing
services.
• In the case of e-commerce, people store items until an order is placed
and then it is shipped directly to the consumer from the warehouse. In
traditional businesses, products are stored temporarily in a warehouse
before shipping them to the offline or brick and mortar store.
Types of Warehouse
 Types of Warehouse
• There are different types of warehousing that come in different shapes and
sizes including:
• Private Warehouses
• The private warehouses refer to a storage facility that is usually owned by a
single manufacturing unit or larger companies to store and ship their
merchandise. This type of warehousing service is also known as proprietary
warehousing. It can be operated as a separate division in an organization or
company. These warehouses also work like distribution centers of finished
merchandise.
• Public Warehouses
• Public warehousing services are usually businesses that offer long or short-
term storage solutions to businesses and companies on a monthly basis.
Other services offered by public warehouses include inventory management,
warehouse shipping, and physical inventory counts. In short, public
warehousing includes commercial inventory space that is available for rent.
 Types of Warehouse
• Distribution Centers
• A distribution center is a specialized storage space that often comprises air
conditioning or a refrigerator. It is used for receiving merchandise, temporarily storing
goods, and distributing them according to received orders.
• People often think that warehouses and distribution centers are the same things,
nevertheless, it is not true. The major use of a warehouse is to store merchandise; on
the other hand, a distribution center offers other services also like storage space,
order fulfillment., packaging, and much more.
• Co-Operative Warehouses
• Co-operative societies own the co-operative warehouses and they are responsible for
controlling and managing them. These societies offer storage facilities at affordable
rates to their members. The main purpose of these warehousing services is not to
make a profit but to help the community members.
• 3PL Warehouse:-A 3PL warehouse is one of the most popular warehousing services
that offers end-to-end e-commerce fulfillment services. The services include receiving,
order processing, warehousing, shipping, and more. That’s not it. Many 3PL
warehouse service providers also render other amazing services such as returns
processing, customization, and customer support.
 Free Trade Warehousing Zones (FTWZ)
• A Free Trade Warehousing Zone (FTWZ) or export processing zone (EPZ), or a foreign-
trade zone (FTZ), or a free port is an area within a country in which goods may be
landed, handled, manufactured, or reconfigured, and re-exported without the
intervention of the customs authorities. Only when the goods are moved to
consumers within the country in which the zone is located do they become subject to
the prevailing customs duties.
• FTWZs are a special category of Special Economic Zone (SEZ), offer services such as
speedy delivery of cargo, one-stop for Customs clearance capability; integrated
solutions, such as packing management, sorting, inspection, re-invoicing, strapping
and kitting, assembly of complete and semi-knocked down kits, and taxation benefits.
Basically, FTWZ is a special category of SEZ with a focus on trading and
warehousing.
• FTWZs have been a phenomenal success in Jebel Ali, Singapore, and Rotterdam and
considered as logistic hubs.
• In India, FTWZwas introduced in the Exim Policy to facilitate the import and export of
goods and services. Each Zone was considered to have Rs. 100 crores outlay and 5
lakh sq. its built-up area. The GOI introduced the FTWZ Policy as a part of FTP 2004-
2009 governed by the SEZ ACT, 2005 and SEZ Rules, 2006 to leverage India’s
strategic geographical location and cost and skill arbitrage.
 Free Trade Warehousing Zones (FTWZ)
• For the development and establishment of FTWZ, the government has permitted
100% Foreign Direct Investment.
• Concept of Free Trade Warehousing Zone:
• FTWZ is a ‘Sanitized Zone’ designated as Foreign Territory for carrying on a business.
FTWZ’s are envisaged to be Integrated Zones & to be used as ‘International Trading
Hubs’. Each Zone would provide ‘World Class’ Infrastructure for:
• Warehousing for various kinds of products
• Handling and Transportation Equipment
• Commercial office space
• All related utilities – telecom, power, water, etc
• One-stop clearance of Import and Export of goods
• FTWZ would be a key Link in Logistics and Global Supply chains – servicing both
India and the Globe.
 Free Trade Warehousing Zones (FTWZ)
• Objective:
• The objective of FTWZ is to create trade-related infrastructure to facilitate the import
and export of goods and services with the freedom to carry out trade transactions in
free currency. The scheme envisages the creation of world-class infrastructure for
warehousing of various products, state-of-the-art equipment, transportation, and
handling facilities, commercial office-space, water, power, communications, and
connectivity, with one-stop clearance of import and export formality, to support the
integrated Zones as ‘international trading hubs’. These Zones are planned to be
established in areas proximate to seaports, airports, or dry ports so as to offer easy
access by rail and road.
• Free Trade and Warehousing Zones (FTWZs) are envisaged to be essential logistics
infrastructure to facilitate EXIM trade and to root out inefficiencies associated with
the movement and valued addition of EXIM cargo in India.
 Free Trade Warehousing Zones (FTWZ)
• Objective:
• The objective of FTWZ is to create trade-related infrastructure to facilitate the import
and export of goods and services with the freedom to carry out trade transactions in
free currency. The scheme envisages the creation of world-class infrastructure for
warehousing of various products, state-of-the-art equipment, transportation, and
handling facilities, commercial office-space, water, power, communications, and
connectivity, with one-stop clearance of import and export formality, to support the
integrated Zones as ‘international trading hubs’. These Zones are planned to be
established in areas proximate to seaports, airports, or dry ports so as to offer easy
access by rail and road.
• Free Trade and Warehousing Zones (FTWZs) are envisaged to be essential logistics
infrastructure to facilitate EXIM trade and to root out inefficiencies associated with
the movement and valued addition of EXIM cargo in India.
 Benefits of Free Trade Warehousing Zones (FTWZ) for Imports in India
• Flexibility to clear cargo in part consignments (unlike in the case in other CFS/ ICDs
allowing flexibility towards consumption/end distribution duty deferment benefits, for
avoiding Shipping Line detention charges and customized delivery. The same product
stored in FTWZ at much lower costs as compared to detention charges.Benefits for
imports into India are listed as below:
• Quality control prior to duty payment, hence no duty to be paid on rejected products
• Exemption of SAD, VAT & CST on imports through FTWZ Service
• Tax exemption for Handling & Transportation of containers from Port to FTWZ
• Availability of Container Storage Yard with World Class Safety, Hazardous Storage
and Maintenance and Repair Facilities within the FTWZ with Service Tax Exemption
• Free foreign exchange transaction capability for the services rendered including
CY/Container Freight Station services.
• Value addition services can be provided like labeling, packing, kitting, bar-coding,
palletization, and other authorized services.
• All such activities are exempted from service tax as well as any purchases of
packaging material, labels, and the like from DTA into the FTWZ would be treated as
exports from such suppliers.
Benefits of Free Trade Warehousing Zones (FTWZ) for Exports from India
• Factory stuffed containers entering the FTWZ are treated as deemed export providing
immediate export benefits
• Local Tax Exemption (e.g. CST, Sales Tax, Excise & VAT) on all activities conducted
inside the FTWZ
• Increased efficiency through lowered reverse logistics activities through quality
control before dispatch from India
• Facilitating consolidation of cargo with other users of the FTWZ for cost optimization
through last-mile distribution
• Value addition services can be provided like labeling, packing, kitting, bar-coding,
palletization, and other authorized services with all fiscal and regulatory benefits
• Availability of state-of-the-art Container Storage Yard with world-class safety,
hazardous storage, maintenance, and repair facilities within the FTWZ with service
tax exemption
• Free foreign exchange transaction capability for the services rendered including
ICD/CFS services
Primary Elements Of Warehousing Logistics
 Primary Elements Of Warehousing Logistics
• Warehousing logistics comprises all processes, people, and programs needed to keep the
merchandise moving through the warehouse. A properly managed warehouse helps to
save a lot of time, lowers overall costs, and is also beneficial to deliver products and
services in an efficient way. Warehousing is the primary part of any business involved in
selling physical goods. Following are important elements of warehousing logistics.
• Warehouse Management:-It includes a lot of operation for smooth functioning. WM is the
day-to-day running of operations in a strategic way at the warehouse to promote,
enhance, and ensure top-notch operational quality.
• It includes taking care of all inventory, staff, security, safety, and managing relationships
with the merchandise. Following are the primary roles and responsibilities of warehouse
management.
• Managing projected labor and merchandise & Ensuring adequate safety gear
• Getting proper certifications and license for people using operating equipment
• Managing operations properly as the business becomes more complex as it grows
• Giving proper instructions about receiving, unpacking, retrieving, and shipping packages
• Keeping records of all outbound and inbound shipments and assembling proper
documentation.
 Primary Elements Of Warehousing Logistics
• Warehouse Management System
• WMS or the warehouse management system is a type of software that renders
required tools to manage inventory movement and warehouse operations. It helps to
save a lot of time by eliminating time-consuming manual processes.
• A good warehouse management system helps to optimize tracking, inventory,
distribution of workload, and shipping. It offers unparalleled real-time insights and
visibility into everything happening at the warehouse.
• Warehouse Operations
• Warehouse operations include tracking inventory and goods. The main principles of
warehousing include receiving inventory, managing SKU, and forwarding products to
the next destination. Appropriate warehousing operations can help to:
• Keep overall costs low, Boost staff productivity, Manage in-time receiving and
shipping of inventory, Enhance customer satisfaction, Keep proper stock
• Role Of Warehousing In Ecommerce Management :-Whenever you order something
online, it comes to your doorstep. However, before that most of the parcels are stored
at the warehouse. Businesses use logistics to deliver orders to customers and manage
the flow of goods. Warehousing services play an essential role in the smooth operation
of e-commerce. Here are how warehouses help in e-commerce management.
 Knowing how much is inside warehouse
• Warehouse capacity is a critical factor for warehouse management. Accurate
planning can help businesses to maximize their warehouse space utilization
and minimize the cost of warehouse operations. But how do you know what
the storage capacity of your warehouse is, and how do you optimize it?
• Warehouse capacity is the amount of space available in a warehouse for
storing goods and materials which is a key factor for maximizing
warehouse space utilization and reduce costs associated with warehouse
operations.
• Why is warehouse capacity important?
• An accurate warehouse capacity helps to maximize space utilization and
minimize the cost of warehouse operations.
• It is important for a basic pallet storage. Lack of knowledge of total pallet
space capacity will result in unaware of when to say “no” to more inventory?
• Finally, if you don’t have enough materials to utilize what your warehouse is
capable of storing, then you are leaving money on the table. Alternatively, if
you have more storage capacity than you need, this makes it more expensive
 Knowing how much is inside warehouse
• How to calculate warehouse capacity?
• It can be done with 6-step process:
1.Measure the total square feet of your warehouse space.
2.Measure the total clearance height of your warehouse.
3.Measure the total square feet of your unusable space (ex: office space, bathrooms,
break rooms, etc.)
4.Subtract the unusable square feet from the total square footage. This gives you the
total usable square footage.
5.Multiply the total usable square footage by the clearance height. This produces the
total usable volume of your warehouse in cubic feet.
6.Set your ideal warehouse utilization (optional). Which should be not more than 80%
for the standard utilization cap.
The layout of the warehouse
 Warehouse layout design

• Devising a warehouse's layout is the first step in designing an

installation.
• While this may seem like a simple issue, in practice it is difficult to
figure out.
• A warehouse layout is distributed into six differentiated areas,
including AS/RS systems. (Automated storage and retrieval systems for
managing and optimizing the storage, preparation and dispatch of
goods.)
• Warehouse designers work with a space in which certain factors limit
the surface area available & the layout has to be carefully planned.
• When deciding on the internal and external layout of a warehouse, there
are three possible scenarios that could necessitate a different
assignment of space: the installation of new warehouses,
the extension of existing facilities and the reorganization of those
currently operating.
 Warehouse layout design

• Despite the specific circumstances, the general layout must cover:

• Making the most of the available space
• Reducing the handling of goods to a minimum
• Providing easy access to the stored product
• Having the highest rotation ratio possible
• Offering maximum flexibility in the positioning of products
• Controlling the amounts stored
• To achieve these objectives, the first step is to create a warehouse layout,
where the design of the warehouse is represented in the form of a plan.
• First and foremost, the created layout must respect the basic rules of good
storage mentioned above and avoid areas and points of congestion, facilitate
maintenance tasks and establish the resources required to obtain the greatest
possible workflows, with the associated reduction in runtimes.
 Warehouse layout design

• The following areas must be perfectly defined when designing a layout:

• A. Loading and unloading areas
B. Reception area
C. Storage area
D. Picking area
E. Dispatch area
 Loading and unloading areas (A)

• Loading and unloading areas, which are normally located outside the
warehouse or incorporated into it, are those that trucks and vehicles
transporting and distributing goods have direct access to.
• In a well-organized warehouse, it is useful to separate these activities from the
rest of the installation, allowing sufficient space for loading and unloading. This
area can be integrated into the warehouse or be independent.
 Reception area (B)

• The reception area must be independent from the rest of the warehouse for
receiving goods, for quality-control and sorting. The characteristics and
quality of the delivery received matches with the products ordered. The next
stage is to determine where to position the load within the warehouse.
• A suitable area must be established for reception function. For e.g., it may
be necessary to split the pallets that have arrived into smaller units,
remove parts that are strapped together, etc.
• The accurate checking and correct positioning impacts the performance of
the warehouse. This area must be as large as possible.
• With Barcodes on the products which can be read by Scanners.
Warehouse’s central computer identifies the No. of units & generate the
position label for the goods. This label can subsequently be read by a
forklift operator or by the scanners of the warehouse’s automated system
so that, they can be positioned in the correct location.
Reception area (B)
 Storage area (C)

• A storage area is, strictly used only to store goods. Goods can be stored in a different
ways: directly on the ground; directly on the ground but stacked or in blocks; or
on racking units which depends on the type of product to be stored.
• In Stacking units are put on top of each other on the pallets that support them.
Stacking makes better use of space. However, all materials can not be stacked & has
their limits in terms of strength. The main disadvantage of this system is that it does
not allow for access to the loads, and a load can only be accessed by first removing all
the loads on top of it.
• Goods with great internal strength, such as ceramic bricks, concrete blocks, feed,
cements which are stored in sacks etc., can be stored on pallets.
• Rigid packaging, such as cardboard, wooden or plastic boxes, can be stacked
depending upon rigidity and resistance of these packages.
• Racks are used when unit loads are not strong enough to be stacked to the required
height, or when there is a greater need to access the product.
• Goods are stored on metal Racks, which are made up of suitable braced frames and
beams. These elements create a multi-cellular structure that generates slots into
which unit loads can be placed.
Storage area (C)
 Order picking areas (D)

• These areas are required only in those warehouses in which outgoing goods must
require modification. It may be integrated into storage areas or can also be separate
from storage areas, creating specific picking areas, generally with automated or semi-
automated systems.
 Dispatch areas (E)

• This area is used for goods that have to be dispatched and loaded into the delivery or
distribution vehicles to ensure correct speed of movement within the warehouse and need to
be designed in a specific location and differentiated from the rest of the installation.
• If separate reception and dispatch areas have been created, then separate loading and
unloading area is required. If, however, the reception and dispatch are close to each other, a
single loading and unloading space can be created. However, this option makes it more
difficult to control the flow of goods and the movement of vehicles.
 Service areas (F)

• Part of the warehouse must be assigned to support activities at the facility, such
as general and management offices, changing rooms, bathrooms, and the area
for recharging the batteries of handling devices.
• The ideal solution is for the management office to be located in the reception and
dispatch area and, if possible, between these two areas.
• This provides greater operability and efficiency in the work of the personnel in
this department.
• Changing rooms, bathrooms, and general offices can be located anywhere in the
warehouse, although it is more logical to locate these close to the control offices.
• A good solution for bringing together these resources is to construct a mezzanine
over the reception and dispatch area, and to locate these functions there.
• Lastly, the space for recharging the batteries used by handling devices must be
isolated and well ventilated, to improve health and safety and avoid any incidents
involving operations taking place in this area.
 Storage Utilisation and Organisation Techniques
• When your warehouse space utilisation is high, it means you're making the most of
your warehouse capacity.
• In other words, you're minimising wasted space to store as much inventory as
possible.
• On the other hand, if your warehouse space utilisation is low, it means you're
underutilising your warehouse capacity.
• 9 strategies to optimise warehouse space utilisation
• Improve warehouse layout. ...
• Use vertical space. ...
• Adopt cross-docking:-Cross docking is a logistics procedure where products from a supplier or manufacturing
plant are distributed directly to a customer or retail chain with marginal to no handling or storage time.
• Acquire a warehouse management system. ...
• Consolidate warehouse locations. ...
• Build a warehouse slotting strategy. ...
• Regularly audit your inventory. ...
 Storage Utilisation and Organisation Techniques
• Proper Warehouse Layout
1.Organize Floor Plan for Optimum Process Flow.
2.Stay Organized with Labels and Signage.
3.Provide Maps.
4.Review Storage Capacity.
5.Classify Inventory.
6.Compartmentalize Inventory with Totes, Bins and Dividers.
7.Implement a Slotting Strategy.
8.Implement an Efficient Receiving Process.
9.Include pallet racks, multi-tier racks, static shelving, mobile shelving, and
mezzanine flooring in warehouse storage systems
 How to manage warehouse employees:
• Operational Risk always comes from human being working in the organisation if they
do not follow set guidelines, systems and procedures.
• Human being are rebellious in nature. They act in different direction.
• HRD and HRM techniques are necessary to manage warehouse employees.
• Here are some practical tips on how to overcome the most common employee
management problems in warehouse operations.
• 1. Poor Scheduling:-Poor scheduling leads to missed shipments, delayed orders,
unhappy customers and unproductive employees. Logistics staff scheduling software
can help schedule employees on short notice, in line with shifts in budget and
demand. In addition, proper scheduling allows workers to swap shifts with the right
colleagues. Keeping track of all employees from a single dashboard irrespective of
their location can simplify and improve warehouse operations.
• 2. High Turnover Rates:-High turnover causes missing delivery timelines and
production deadlines. Reduce worker turnover by offering good working conditions –
introduce flexible working hours so employees feel like they can still accomplish their
personal, family, educational and recreational goals without necessarily
compromising their job security.
 How to manage warehouse employees:
• 3. Safety Hazards:-Warehouse spills, slips, falls from height, falling objects
and moving equipment are an ever-present danger. They jeopardize the safety
of your employees and pose a risk to your operations. Fatality is the most
severe consequence of warehouse hazards. It is not the only thing you should
be worried about, though.
• When employees are injured or fall ill, they have to take time off work,
something that doesn’t reflect well on your operations. The transport and
warehousing industries have the highest illness and injury rate involving days
away from work. Add to that the impact of workers’ compensation claims.
• Make safety a priority in your work environment. Provide enough space for
employee movement and equipment maneuverability. Use pallets for storage
and easy product retrieval. Invest in forklifts to minimize the need for staff to
reach for or place items at height.
 How to manage warehouse employees:
• 4. Lack of Communication
• A lack of communication is a recipe for warehouse dysfunction. Mispicks, incorrect
routing and scheduling conflicts represent just a snippet of what could go wrong. 86%
of executives and employees cite a lack of communication and collaboration as the
primary cause of workplace failure.
• Streamline communication and automate information dissemination wherever
possible. Have employees automatically receive alerts about events relevant to them.
• Ensure everyone is kept up to date with the latest warehouse-wide announcements
and procedures. Pin critical updates to a central noticeboard online and onsite.
• 5. High Labor Costs
• Labor cost is as much as 50-70% of a warehouse’s operating budget. Every
organization can not hire the best-qualified people because it is the most expensive.
When labor costs are higher then it is difficult to run the warehouse profitably.
• Explore possibilities to reduce warehouse staff. You could cut your worker headcount,
give a raise to those that remain (as motivation) and still enjoy significant savings on
your overall labor costs. Continuously upskill your existing staff to curb the need for
expensive outside experts. Simultaneously, identify processes that could benefit
from partial or full automation.
 Key Role of Warehouse Manager
• Strategically manage warehouse in compliance with company's policies and vision.
• Oversee receiving, warehousing, distribution and maintenance operations.
• Setup layout and ensure efficient space utilization.
• Initiate, coordinate and enforce optimal operational policies and procedures.
• Supervise daily warehouse activities, including quality assurance, inventory control,
space management, logistics, floor productivity, shipping, and customer service.
• Schedule and oversee warehouse team, and manage the flow and quality of work to
maximize efficiency and minimize overtime.
• Fix the duties and responsibilities of a Warehouse Worker like restocking shelves,
accepting incoming orders, processing and packing orders, counting inventory and
ensuring orders are shipped in a timely manner.
• The leader is responsible for ensuring that all aspects of warehouse operations
function smoothly.
• This includes making sure that team members are on hand to assist with loading and
unloading and that delivered materials are stocked appropriately and promptly.
 The motivation of warehouse employee
• Retaining and motivating warehouse employees is a challenging but essential task to
keep them engaged and productive.
• The employee's morale and a sense of purpose can significantly affect the success of
any organization and lead to high turnover.
• The employee turnover rates in the logistics industry are higher than most other
businesses due to long working hours, physical labor, and lack of recognition.
• Therefore, warehouse management should focus on motivating their employees and
creating an atmosphere of positivity.
• A motivated workforce leads to improved customer service, lower operating costs, and
a greater sense of satisfaction among the team.
• Following are the techniques of motivating the employees:-
• Acknowledge Accomplishments, Provide Opportunities For Advancement
• Provide A Positive Work Environment and Ensure Health And Safety
• Set KPIs And Goals
• Give Opportunities For Employee Feedback
• Implement techniques of Quality Circle.
 The motivation of warehouse employee
• 6 ways to motivate and retain warehouse employees
1.Offer financial incentives. ...
2.Foster ownership and responsibility. ...
3.Provide a clear path forward. ...
4.Cultivate cohesive teams. ...
5.Offer work shift flexibility. ...
6.Provide the right tools: implement collaborative automation solutions.
 Safety in the Warehouse
• Warehouse safety is one of the biggest concern faced by warehouse managers and their
employees. It stems from workers sustaining many injuries and fatalities.
• The first step to boosting warehouse safety is understanding common workplace injuries and
what's causing them. The following are the most common causes of these injuries:
• Heavy Equipment Accidents:-Heavy warehouse equipment such as forklifts and heavy pallets
are the leading cause of injuries and sometimes even fatalities in the warehouse. Workers run
a risk of being hit or run over by forklifts, falling between the trailer and the lift, or falling from
an elevated platform. These accidents usually take place due to a warehouse being crowded,
inadequate forklift safety training, or just by chance.
• Slips, Trips, and Falls:- The cause of such incidents can be slippery or uneven floors and
accumulation of debris, residue, grease, or cords lying in walking areas.
• Exposure to Chemicals:-A number of warehouses store hazardous chemicals or use them for
production purposes. Accidental spills, sadly, cannot be prevented from happening. These
chemical leaks and spills can be a threat to the safety of warehouse employees.
• Being Hit by Falling Objects:-There is always a massive risk of stacked items falling from the
shelves at any point. These types of injuries are caused by incompetent operations setup and
human error.
• Machine Entanglement:- The most severe injury that can happen in a warehouse is machine
entanglement. This type of injury occurs when employees get entangled with dangerous and
large equipment while working.
 Warehouse Safety Tips
• Warehouses are required to implement a safety plan & executed properly.
1. Ensure Safety Equipment is Always Used:-It is vital to use safety
equipment such as forklifts or hydraulic lifts to raise bulky products to
prevent major back injuries.
2. Eliminate Potential Safety Hazards:-It is important to ensure that floors are
free of slip and trip hazards. It is also vital that the staff understands
the importance of good housekeeping. There should be regular checks on
any stray cords, liquids, accumulated debris, cracks, and pits on the floor.
These can cause severe injuries to employees and damage valuable
machinery and cargo.
3. Identify and Mark Hazardous Zones Clearly:- Signs and stickers are the
most cost-effective and functional way of keeping your warehouse
organized and safe from hazardous situations. Labeling racks, equipment,
and materials clearly can help workers prevent serious injuries. Also, it's
important that emergency exits and the safest routes to them are clearly
marked.
 Warehouse Safety Tips
4. Provide Proper Training and Courses:-Providing staff with adequate training about warehouse
safety processes can ensure that they are aware of the consequences of an unsafe workplace. It
can also encourage people to follow procedures more closely.
5. Proper Clothing Should be Worn:-Loose-fitting clothes should be avoided as they can get
caught in the machinery or pallets, which can lead to injuries. Also, wearing protective clothing,
including hard hats, gloves, vests, masks, and eye-wear is another valuable tip to ensure the
safety of the workers in the warehouse.
6. Promote Awareness:-Promoting awareness about any potential safety hazards and alerting
colleagues of passing machinery, such as forklifts, can drastically reduce accidents. This can be
achieved through constant communication among employees.
7. Shelving Safety:- It is essential to assess how much weight a rack can endure and how the
materials should be stacked to achieve effective distribution. This prevents workers from getting
injured from falling objects.
8. Vehicle Safety:-Whether you work with forklifts or lift trucks, vehicle safety is essential to
preventing crush injuries. This can be done by ensuring workers are provided proper practical
training about maintaining speed limits, avoiding reversing whenever possible, and being aware
of blind spots. It's also important to enforce a zero-tolerance policy about reckless driving.
9. Carry Out Fire Safety Drills:-Fire and smoke alarms should be tested on a regular basis. Drills
help you check if these alarms work and also with creating and updating a safe evacuation and
emergency plan. Ensuring the installation of emergency lights can go a long way in making sure
 Warehouse Safety Tips
10. Ventilate:-A crucial part of a safe warehouse is good ventilation, but it is usually overlooked
by employers. Limited air circulation can lead to stagnation of fumes and vehicle exhaust in the
warehouse, which can hinder both employee comfort and safety. Putting in exhaust fans can
help ensure that the warehouse is well ventilated.
11. Proper First Aid in Case of an Emergency:-No amount of warehouse safety tips can eliminate
the possibility of injuries completely. Hence, performing the right first aid is essential when an
incident occurs. Every employee should be trained in giving first aid since it could save
someone’s life.
12. First Aid Kit Requirements:-The Occupational Safety and Health Administration (OSHA)
requires the following items for a first-aid kit:
1. Adhesive bandage and tape 2. Medical gloves 3. Antibiotic application
4. Roller bandage (2 and 4 inches) 5. Antiseptic 6. Scissors 7. Burn dressing
8. Splint 9. Cold pack 10. Sterile/Trauma pads 11. Eye/Skin wash 12. Tourniquet
13. First aid guide 14. Triangular bandage 15. Hand sanitizer
 Productivity and Audit of Warehouse
• A warehouse audit is a safety net & necessary to prevent mishappening. It seems
like unnecessary bureaucracy but are indispensable tool that costs you a little in
time and money now while saving you a lot of both later.
• A warehouse audit is an inspection typically performed by warehouse managers
and leadership teams to gauge performance, efficiency & ensuring safety
protocols are followed, inventory is accurately counted, and operations run
smoothly.
• Conduct audit at regular intervals. It is a review mechanism.
• Use audit reports to identify areas where you can improve and make meaningful
changes, as well as to improve inventory control. A poor rating shouldn’t
necessarily be considered a failure but rather an opportunity to increase
efficiency, productivity, customer satisfaction—and, as a result, revenue. If safety
protocols aren’t being followed or you uncover theft, you’ll need to take serious
action. But most of the time, audits should be a positive experience.
• Verify that your warehouse team is communicating clearly with delivery
drivers (and vice versa).
• Review your delivery history and last mile analytics.
 Checklist for Warehouse Audit
• Warehouse Inventory:-Does the physical inventory on your shelves match the
numbers in your inventory management software? Are products stored safely
and securely? Are hazardous materials properly labeled and stored? Are
storage areas clean and free of pests? Are heavy items stored near the bottom
of racks?
• Warehouse equipment:-Are forklifts being properly maintained and inspected,
and do you have supporting documentation? Are ladders fully functional and
stored safely out of the way? Are storage racks in good standing, free of rust,
and assembled with all proper nuts, bolts, etc.? Are loading bay doors fully
functional and well maintained? Are all cords and electrical components
properly covered and secured? Are conveyors fully functional, and do you have
documentation of regular inspections?
• Warehouse space:-Do you have adequate cleaning stations? Are walkways
clean, clearly marked, and wide enough for people, pallets, and machinery to
navigate? Are lighting fixtures fully operational? Are dock plates secure? Are
dock edges clearly marked?
 Checklist for Warehouse Audit
• Safety compliance protocols:-Are all employees wearing proper safety gear and
identification? Are walkways free of debris? Are eye-washing stations and cleanup
stations fully functional and properly inspected? Are fire extinguishers appropriately
placed and maintained/inspected? Are spill cleanup kits available where chemicals
are stored? Are chemicals stored safely where forklifts and other equipment can’t
knock them over? Are chemicals properly marked? Are emergency exits and other
safety features clearly marked? Are proper security measures in place to restrict
warehouse access to fully vetted personnel only? Do dock ladders and stairs
meet OSHA (OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION) specifications?
• Employee performance:-Does the worker consistently meet or exceed goals and
benchmarks? Do they work well with their teammates? Are they proactive in
addressing issues or concerns if/when they arise? Do they follow proper safety
protocols? Do they document maintenance work and inspections as needed? Do they
consistently clock in and out on time?
• Warehouse operations- Receiving/product intake
• Are operations running smoothly and on time? Are products arriving in good
condition and matching purchase orders?
 Checklist for Warehouse Audit
• Put-away:-Are operations running smoothly and on time? Is inventory moving out of
receiving quickly and efficiently? Do put-away teams place stock in appropriate
locations within the warehouse and on racks?
• Picking:-Are operations running smoothly and on time? Do pickers receive picklists
in an easy-to-understand format? Are pickers able to gather products quickly and
efficiently? Are pickers able to gather products without running into traffic on the
warehouse floor?
• Packing:-Are operations running smoothly and on time? Do packers have ample
space? Are packing supplies organized by courier? Do products move easily from
pickers to packers?
• Transfer to last mile delivery/vehicle loading:-Is inventory moved to vehicles
quickly and efficiently? Are warehouse teams and delivery teams working cohesively?
• Restocking/reverse logistics (if applicable):-Are operations running smoothly and
on time?Are products being properly inspected before being returned to warehouse
shelves?
 Warehouse KPIs to Measure Warehouse Performance & Efficiency
1. Inventory accuracy-Inventory as tracked by system/Physically present inventory.
2. Shrinkage:-Formula: (Cost of recorded inventory – Cost of physically present
inventory) / Cost of recorded inventory
3. Carrying cost of inventory:-Formula: Total carrying costs / Overall inventory costs
4. Inventory turnover:- formula :-Number of sales made / Average inventor or Cost of
goods sold / Average inventory
5. Inventory to sales ratio:- Formula:-EOM inventory balance / Sales for the month
6. Receiving efficiency:-Formula: Volume of inventory received / Number of staff hours
worked
7. Cost of receiving per line:-Formula: Total cost of receiving / Total number of items
in each receiving line
8. Receiving cycle time:_Formula: Total time spent on sorting received stock / Total
number of received items
9. Accuracy rate:-Formula: Inventory put away correctly / Total inventory put away
10.Put away cost per line:-Formula: Total cost of putaway / Total line items
 Warehouse KPIs to Measure Warehouse Performance & Efficiency
11) Picking accuracy:-Formula: (Total number of orders – Incorrect item
returns) / Total number of orders
12) Total order cycle time
13) Order lead time
14) On-time shipping rate:-Formula: Number of orders that have been shipped
on time or in advance / Total number of orders shipped
15) Cost per order:-Formula: Total fulfillment costs / Total number of orders
16) Rate of returns:- Formula: (Items returns / Items sold) * 100
17) Accidents per year
18) Time since last accident
 Importance of packaging, Labelling, Marking in warehousing.
• IMPORTANCE OF PACKAGING
• The basic objective behind packaging is to prevent damage to the product
during storage, transportation and handling, when it is in movement for
distribution in the market.
• It forms an important cost element of goods and represents 5-30 percent of
the value of goods, depending on the type of product.
• The main cost elements are the purchase of packaging materials introducing
automated or manual packing operations, and further the need for disposal
of material. A systems approach is necessary to manage packaging.
 Importance of packaging, Labelling, Marking in warehousing.
• The first packages used the natural materials available at the time. Baskets of
reeds, wineskins, wooden boxes, pottery vases, ceramic amphorae, wooden
barrels, woven bags etc. Processed materials were used to form packages as they
were developed for example, early glass and bronze vessels. The earliest recorded
use of paper for packaging dates back to 1035, when a Persian traveler visiting
markets in Cairo noted that vegetables, spices and hardware were wrapped in
paper for the customers after they were sold. Iron and Tin plated steel were used
to make cans in the early 19th century. Paperboard cartons and corrugated
fiberboard boxes were first introduced in the late 19th century.
• Packaging advancement in the early 20th century included bakeliteclosures on
bottles, transparent cellophane overwraps and panels on cartons, increased
processing efficiency and improved food safety. As additional materials such as
aluminum and several types of plastic were developed, they were incorporated
into packages to improve performance and functionality.
• In-plant recycling has long been common for production of packaging materials.
Post-consumer recycling of aluminum and paper based products has been
economical for many years.
 PACKAGING AND LABELLING
• Types of Packaging Materials
• Shrink – Wrapping
• Stretch – Wrapping
• Aluminum
• High – Density Plastic Boxes
• Plastic Strapping
• Plastic Foam Dunnage
• Film – Based Packaging
• Blanket – Wrapping
• Returnable Containers
• Intermediate Bulk Containers
• Plastic Pallets
• Pallet Pools
• Refrigerated Pallets
 PACKAGING AND LABELLING
• Packaging Cost
• The packaging costs depends upon factors like nature of
product, physical dimensions, value, regulations etc. Delivery
of the product at minimum overall packaging cost is essential.
• The various costs involved in packaging are:
• Unit Package Cost
• Operational Cost
• Warehousing Cost
• Distribution Cost

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 PACKAGING AND LABELLING
• Designing a Modern Day Package involves the following steps:
• Briefing the designer
• Gathering information about the package
• Writing the Design Platform
• Creative phase
• Consulting Suppliers
• Initial Presentation
• Modification
• Design Testing
• Image Tests
• Usage Tests
• Visibility Tests
• Brainwave analysis
• Final design phase
• Production Design
Chapter 8 Import Export Management
• Finishing the Job
 PACKAGING AND LABELLING
• Factors effecting the choice of packaging
materials
 Characteristics of Materials to be packaged
 Destination
 Kind of Transportation
 Handling, showability and storage
considerations
 Conditions of usage and distribution
 Cost
 Availability of the type and choice of
substitutes
 PACKAGING AND LABELLING
• There are two main types of packaging:
• (a)Consumer packaging : This packaging is done with a
marketing emphasis
• (b)Logistical/Industrial packaging: The concept of
containerization or unitization of the individual products
are grouped into carton, bags, bins or barrels for handling
efficiency.

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PACKAGING AND LABELLING
• Functions of Packaging:
 Damage Protection
 Utility / Convenience
 Communication

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• Shipping Containers :
• A shipping container is a container with strength
suitable to withstand shipment, storage and handling.
• Shipping containers range from large reusable steel boxes
used for intermodal shipments to the ubiquitous
corrugated boxes.
 PACKAGING AND LABELLING
• Types of Shipping Containers:
• Intermodal freight containers
• Corrugated boxes
• Wooden boxes
• A crate
• An intermediate bulk container
• A flexible Intermediate Bulk Container
• A bulk box
• Drums
• Insulated shipping containers
• A Unit Load Device
• Specialized shipping containers
• Flight cases and transit cases
• Unitization
• Palletisation for Unitization
 PACKAGING AND LABELLING
• VALUE ADDED PACKAGING
• All consumers assume that a package
is going to contain and preserve food.
• The following are the value-added
functions for today’s consumer:
• 1.Brand Identification
• 2.Advertising at the Point-of-Purchase
• 3.Product Transport
• 4.At-Home Storage
• 5. Task Assistance
 PACKAGING AND LABELLING
• LABELING
• Many types of symbols for package labeling are nationally and
internationally standardized. For consumer packaging, symbols
exist for product certifications, trademarks, proof of purchase etc.
Some symbols and requirements exist to communicate aspects of
consumer use and safety, for e.g. the estimated sign that notes
conformance to EU weights and measures accuracy regulations.
• Technologies related to shipping containers are identification codes,
bar codes and electronic data interchange.
• With transport packages, standard symbols are also used to
communicate handling needs.
 PACKAGING AND LABELLING
• BAR CODES
• A barcode is an optical machine
representation readable
ofdata, which shows data about the
object to which it attaches.
• Barcodes originally were scanned by special
optical scanners called barcode readers;
later scanners and interpretive software
became available on devices including
desktop printers and smart phones.
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 PACKAGING AND
• LABELLING
Radio-frequency identification (RFID) is the use of a
wireless non-contact system that uses radio frequency
electromagnetic fields to transfer data from a tag attached
to an object, for the purposes of automatic identification
and tracking. Some tags require no battery and are
powered by the electromagnetic fields used to read them.
Others use a local power source and emit radio waves. The
tag contains electronically stored information which can be
read from up to several metres away. Unlike the barcode,
the tag code does not need to be within the line of sight of
the reader and may be embedded in the tracked object.
• RFID chips contain a radio frequency electromagnetic field
coil that employs a magnetic field to emit a coded
identification number when queried by a reader device. An
RFID application can be affixed to an object and used to
track and manage inventory, assets, people etc.
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 PACKAGING AND
•
LABELLING
1.5 DANGEROUS GOODS
• Dangerous goods are solids, liquids or gases that can
harm people, other living organisms, property or the
environment. They are often subject to chemical
regulations. HazMat teams are personnel specially
trained to handle dangerous goods.
• Dangerous goods include materials that are radio
active, flammable, explosive, corrosive, oxidizing,
asphyxiating , biohazardous, toxic, pathogenic or
allergenic.
• People who handle dangerous goods will often wear
protective equipment, and metropolitan fire
departments often have a response team specifically
trained to deal with accidents and spills.

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•
LABELLING
IATA DANGEROUS GOODS REGULATIONS ( IATA –RESOLUTION 618
ATTACHMENT “A”)
• Classification : Dangerous goods are defined as those goods which meet
the criteria of one or more of nine UN hazard classes and, where
applicable, to one of the three UN Packing Groups according to the
provisions of this section.
• Packing Groups: Packing groups are used for the purpose of
determining the degree of protective packaging required for Dangerous
Goods during transportation.
• Identification: Dangerous Goods are assigned to UN numbers and
proper shipping names according to their hazard classification and their
consumption. They must be assigned to one of the proper shipping
names shown in the list of Dangerous Goods.
• Packing : The shipper is responsible for all aspects of the packing of
dangerous goods in compliance with these Regulations.

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•
LABELLING
IATA DANGEROUS GOODS REGULATIONS ( IATA –
RESOLUTION 618 ATTACHMENT “A”) contd.
• Packing Specification & Performance Tests: Codes are
used to designate the Types of UN Packaging's. Two
system of Codes are used in these Regulations for
designating the types of packaging's. The first is
applicable to packaging's other than inner packaging's.
The second is applicable to inner packaging's.
• Marking & Labeling: The shipper is responsible for all
necessary marking and labeling of each
dangerous goods, package of and
dangerous goods, in compliance
each overwith these regulations.
pack
containing
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 PACKAGING AND
•
LABELLING
1.6 INDIAN INSTITUTE OF PACKAGING:
• The Expert Committee of Hazardous Goods of United Nations has
formulated the common regulations for the transportation of
hazardous materials either by Sea, Road or Air within the United
Nations member countries without any hurdles.
• The United Nations has implemented different regulations like
International Maritime Dangerous Goods Code for sea
transportation. International Civil Aviation Organization for air
transportation. Every member country of the United Nations has
got the controlling authority for the transportation of hazardous
goods.
• In India, the Directorate General of Shipping (Ministry of Surface
Transport, Government of India) and Directorate General of Civil
Aviation ( Ministry of Civil Aviation, Government of India) have
authorized the Indian Institute of Packaging as a nodal agency to
conduct various performance tests on bulk packages and also to
issue the UN Certificates.

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•
LABELLING
Indian Institute of Packaging is recognized by the
Ministry of Science and Technology, Government
of India, as the premiere Scientific and Research
Organization in the field of packaging.
• The laboratories of the Institute at Mumbai is
also accredited to National Accreditation Board
for Testing and Calibration Laboratories according
to ISO/IEC-17025.
• Users / exporters find greater market
acceptability for their products/packages, when
backed by the results from accredited labs.

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• LABELLING
1.7 SUMMARY AND CONCLUSIONS:
• Packaging has a key impact on the cost and productivity of the logistical
system.
• A central planning logic designed to control the total distribution cost
must incorporate all the relevant costs and trade-offs, also those
related to packaging. The cost of every logistical activity is affected by
packaging. Inventory control is dependent on the accuracy of the
manual or automatic identification systems that are keyed by product
packaging. The order, selection, speed , accuracy and efficiency are
affected by the identification of product, configuration and ease of
handling. The capability of utilization and techniques in packaging
influence the handling cost. Package size and density influences the
transportation and storage costs too.
• From the customers perspective, factors like quality control during
distribution, providing consumer education, compliance with
environmental regulations explain the importance of packaging.

Chapter 8 Import Export Management

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