Warehouse

processes from
replenishment to
despatch
Group 7
and
beyond
 Introductio
•nExplores key warehouse processes,
including replenishment, value-
adding services, and despatch,
alongside essential support tasks like
stock counting and security.
• Highlights the role of warehouses in
balancing efficiency, accuracy, and
adaptability in modern supply chains.
 Table of contents
01 03
Core Activities in Security
Warehouse Management
Management and Handling
Complex Goods

02 04
Operational Delivery
Support and Processes and
Inventory Control Overall
Evaluation
01
Core Activities in
Warehouse
Management
Replenishment • Objective: Ensure that the right
products and quantities are in the correct
pick location at all times.
• Role of WMS (Warehouse
Management Systerm):
+ Monitor stock levels in real time.
+ Predict replenishment needs before
new orders are
processed.
• Timing: Early or late replenishment
could cause problems like FIFO
imbalances or safety concerns.
• Optimization:
+ Multiple picking locations for one
SKU .
+ Separate the times of replenishment
and picking to
 • Common Services:
Value-adding
Services
+ Labeling, pricing and repacking
+ Bundling Promotional Items - Buy
One Get One Free
BOGOF), etc
+ Product Repair/Refurbishing
• Postponement Logistics: adding
components or accessories after
receiving the order about their
requirement, etc
• Benefits:
+ Less nos of SKUS to hold in the
Inventory
+ Lower workload in the retail shops
so that they can
purely focus on selling order
responsiveness and
savings on Operation Costs.
 Despatch

Packing Loading Shipping

• Use of air-filled bags or • Optimize vehicle/container • Late order processing
foams for protection. space to reduce transport times
• Consider investments in costs. • Flexible planning
machines that speed up • Use load configuration • Optimize loading and
the process and reduce software for efficient delivery
packaging waste. arrangements. • Return on Investment
• Order checking: (ROI)
+ Full, random, or
proportionate
checks depending on
error rates.
+ Weight checking or
 Shipping
• Late order processing times:
- Many businesses accept orders late into the evening and still deliver on time the next day. For
example, UK retailer Next allows
customers to order up to midnight for next-day delivery.
• Flexible planning:
- Plan backwards from the last cut to ensure warehouse operations (picking, checking, packing) are
done on time.
- Time division: mornings receive orders, afternoons and evenings focus on picking and delivering.
• Optimize loading and delivery:
- Load in order of delivery: last orders are loaded first.
- Ensure appropriate transport vehicles (clean, undamaged, correct temperature if temperature-
controlled goods).
- Implement a Yard Management System (YMS) to effectively manage truck arrival and departure
times, reduce congestion and optimize
processes.
• Return on Investment (ROI):
- Investing in automated handling equipment, such as telescopic conveyors, brings many benefits:
+ Increased productivity: 42% increase in tyre loading efficiency and 32% increase in unloading
efficiency.
+ More safety: Eliminates the need for manual lifting and rolling of tyres, improving working
02
Operational
Support and
Inventory
Control
 Indirect Activities
The management of labour, space and
equipment
• Ensure optimum staffing levels and provide trained
staff for peak periods
• Manage the allocation of labour for value-adding
services.
• Ensure optimum space utilization.
• Provision, allocation, and maintenance of equipment.
The control
• Monitor ofand congestion.
workflow
stock
• Identify and replenish fast-moving items.
• Identify and address non-moving stock.
• Maintain stock integrity and promptly handle non-
conforming, lost, or found stock.
• Manage cycle counts and organize full stock checks.

The security and safety of stock and

people
• Secure high-value or hazardous stock.
• Ensure warehouse cleanliness and safety for staff and
visitors.
 Stock Management
Stock classification is a critical tool in inventory control that helps warehouse
managers prioritize and organize stock based on its movement and value.

% of stock
Categories Characteristics Examples Management Strategy
items

• Smartphones, popular gaming • Frequent monitoring and

High demand, frequent consoles. replenishment.
A 20% sales, generates most • Fresh produce: milk, eggs, • Monthly/weekly inventory
revenue. bread. counts.
• Laptops. • Avoid stockouts.

• Seasonal items: jackets,

Moderate demand, steady • Regular monitoring.
swimsuits.
B 35% sales, significant • Quarterly inventory counts.
• Canned goods or snacks.
contribution. • Balanced stock levels.
• Budget smartphones.
 Stock Management
Stock classification is a critical tool in inventory control that helps warehouse
managers prioritize and organize stock based on its movement and value.

% of stock
Categories Characteristics Examples Management Strategy
items

• Specialized tools or rare accessories. • Annual or semi-annual counts.

Low demand, minimal sales,
C often backup or niche items.
• Exotic spices. • Evaluate for discontinuation or
• Replacement parts for old devices. clearance

• Outdated fashion collections.

• Dispose, donate, or sell at clearance
Obsolete, non-moving, no • Expired food items.
O significant revenue. • Accessories for discontinued
prices.
• Free up storage space.
electronics.

45
% Special, one-off purchases for
• Custom promotional merchandise.
• Specialty holiday products: Christmas • Monitor sales closely.
S unique needs/events. cakes. • Avoid over-ordering.
• Limited-edition gadgets.

• Customer-requested items.
Non-stock, sourced only on • Use just-in-time (JIT) ordering.
X demand.
• Ingredients for custom recipes.
• Hold stock only when pre-ordered.
• Industrial electronic components.
 Stock Management
A quick and easy way of ascertaining whether there is
an excess of
lowmoving stock in the warehouse is to calculate the
stock turn
• Based on cost:
Stock Turn = Cost of Goods Sold (COGS)​/ Average
cost of goods stored
• Based on quantity:
Stock Turn = Annual Throughput in Units​/Average
number of units
held in stock

Practical Applications
• Low Stock Turn: Indicates that goods
stay in the warehouse too long,
signaling a need to reduce safety stock
levels or liquidate old inventory.
• High Stock Turn: Reflects efficient
warehouse operations.
03
Security Management
and Handling Complex
Goods
 Security
• Objective: Ensuring product security
and protecting sensitive data.

• Measures:
+ Good housekeeping, use of security
cages and CCTV.
+ Unannounced inspections and
separating employee
parking from loading areas.
+ Password protection, firewalls, daily
data backups,
and mirror systems.

• Timing:
+ Accurate recording of inbound and
outbound goods.
 Returns Processing
• Definition:
+ Returns processing, or reverse logistics, involves the handling of product returns, trans
ackaging and surplus items.
+ The processes associated with this operation include repair, reuse, refurbishment,
ecycling and disposal.
+ It enhances cash flow, reduces costs, and ensures compliance with environmental
• Process:
egulations.
+ Immediate handling of
eturned items to
reintegrate them into the
upply chain.
+ Establish dedicated areas
or inspection,
repair, and recycling.
 Returns Processing
Factors influencing the
decision to manage reverse
Key Calculations logistics in-house or
• Percentage and value of subcontract to a third-party
goods returned directly to specialist.
• Level of returns;
stock and to vendor; • Available space;
• Percentage of goods • Available expertise;
refurbished and returned to • Cost;
stock; • Control and efficacy;
• Percentage of goods • Capacity and capability of third
dismantled and used for partie
spares; • Lead time from return to
• Percentage of goods available to ship
destroyed or given away to
charity, etc;
• Percentage of goods
returned due to
manufacturing defects; and
• Percentage of goods
returned due to sales
Real-World Example:
XPO Logistics and Costco
UK
A notable example in reverse logistics is the partnership between XPO Logistics
and Costco Wholesale UK.
In 2017, XPO Logistics was selected to manage reverse logistics for Costco's 28
• Scope of Collaboration
warehouses across the UK
Under the agreement, XPO is responsible for receiving
and handling waste from Costco stores, including old
corrugated cardboard (OCC), 98:2 classified plastics,
and electronic waste. Additionally, XPO processes
reusable transit packaging, recycles scrap metal and
hard plastics, and manages recycled wood and office
materials.
• Value Delivered
This project not only optimizes transportation
processes but also reduces non-recyclable waste,
contributing to environmental protection. XPO
Logistics’ efficient management system enhances the
speed of goods handling and minimizes unnecessary
Stock or inventory counting
Purpose of Inventory
Counting
• Ensure Accuracy: Provides inventory
data that reflects the actual stock levels.

• Identify Discrepancies: Detect and

promptly address mismatches between
system records and physical inventory.

• Legal Compliance: Meets auditing and

financial reporting requirements.
Stock or inventory counting
Methods of inventory
counting
Traditional Annual Stock
Count
Proces Advantage Disadvantage
s s s
• Conducted once • Suitable for • Disrupts business
at the end of the comprehensive operations.
financial year. evaluation of • Difficulty in tracing
• Requires a inventory status. discrepancies since
complete halt of errors may occur at any
all warehouse point throughout the
operations year​.
during the
counting period.
Stock or inventory counting
Methods of inventory
counting
Cycle Counting (Perpetual Inventory
Counts) Counting
Process Advantages Frequency Based
on ABC
• Sectioned • Reduced Classification
• Class A (Fast-Moving,
Counts: Disruptions: High Value): Counted
Conducted for Minimizes interruptions monthly or even more
specific, smaller to regular warehouse frequently
sections of operations. • Class B (Moderate-
inventory on a • Proactive Accuracy: Moving, Medium
periodic basis. Identifies and resolves Value): Counted
• Integrated with discrepancies as they quarterly to balance
Operations: arise, maintaining frequency with
Does not require a ongoing accuracy. operational priorities.
full warehouse • Lower Resource • Class C (Slow-Moving,
closure, allowing Strain: Reduces Low Value) : Counted 1–
04
Delivery Processes and
Overall Evaluation
 Documentation
• Despatch documentation and labelling must
comply with customer and legal requirements, which
vary by country and whether the shipment is domestic
or international.
• Errors in export paperwork can lead to delays, fines,
or seizure.
• For hazardous materials, accurate labelling and
proper documentation are critical.
• Typical despatch paperwork depending on ultimate
destination includes the following:
+ Advanced shipping notice;
+ Manifest;
+ Shipping labels;
+ Bill of Lading;
+ Commercial invoice;
+ Shipper’s export declaration;
+ Export packing list;
+ Certificate of origin;
+ Export licence;
 Role of the Driver
01 02 03
Driver’s Documentation and Driver Accommodation
Role in Discrepancy Handling During Loading
Loading
In-house drivers Drivers should note Drivers not
manage loading "unchecked" on participating in
directly, but third-party documents if they did loading should be
drivers may face not witness the accommodated
restrictions due to loading. Seal numbers outside their cab to
safety concerns. Some and relevant papers prevent premature
companies involve must be provided, with departure during
drivers in loading and a clear timeframe for the process.
checking, while others reporting
prohibit external staff discrepancies.
 Summary and
Conclusion
• Replenishment: Timely replenishment is key to efficient picking and
meeting customer lead times.

• Value-Added Services: These services reduce stock codes and allow

retailers to shift tasks back to the warehouse, improving overall
efficiency.

• Support Functions: Stock counting and security ensure product

integrity and credibility, maintaining warehouse accuracy.

• Despatch: Accurate despatch is crucial for timely delivery, enhancing

customer satisfactionreplenishment,
Efficient value-added
services, and accurate dispatch improve
warehouse operations and customer
satisfaction. Stock counting and security are
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