Warehousing:A Role Beyond Storage

OBJECTIVE

→Role of Warehousing in logistics

→Warehouse functions and options

→Strategic decisions in warehousing→(Site, layout, type, storage)

→Warehousing strategies

→Warehousing performance measures

Importance of WarehousingImportance of Warehousing

Inventories at rest to

Inventories at motion

Switching Facility rather than storage

facility

Storage to Flow INVENTORY

“Because of the value of strategic storage was not well understood, warehouses were often considered ‘necessary evils’ that added cost to the distribution process.”Donald J. Bowersox

The performance of a warehouse is judged by:

Acts as a supporting function

Cost of Performance

Productivity Lower Cost of Operation

Objectives of satisfaction

Necessities of Warehousing

Maximum utilization of

storage space

Higher labour productivity

Maximum assets

utilization

Reduce material handling

Reduce operating cost

Increase in inventory turnover

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Warehouse Operating Principles

• Once it has been determined to use a warehouse, the next step is designing it.

• Whether the warehouse is a small manual operation or a large automated facility, the following three principles are relevant:

–Design criteria,

–Handling technology, and

–Storage plan.

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Design Criteria

• Warehouse design criteria address physical facility characteristics and product movement.

• Three factors to be considered in the design process are: – the number of storey's in the facility, – height utilization, and – product flow.

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Handling technology

• The second principle focuses on the effectiveness and efficiency of material-handling technology.

• The elements of this principle concern: – movement continuity and – movement scale economies.

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Movement continuity

• Movement continuity means that it is better for a material handler or piece of handling equipment to make a longer move than to have a number of handlers make numerous, individual, short segments of the same move.

• Exchanging the product between handlers or moving it from one piece of equipment to another wastes time and increases the potential for damage.

• Thus, as a general rule, fewer longer movements in the warehouse are preferred.

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Movement scale economies

• Movement scale economies imply that all warehouse activities should handle or move the largest quantities possible.

• Instead of moving individual cases, warehouse activities should be designed to move groups of cases such as pallets or containers.

• This grouping or batching might mean that multiple products or orders must be moved or selected at the same time.

• While this might increase the complexity of an individual's activities since multiple products or orders must be considered, the principle reduces the number of activities and the resulting cost.

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Storage Plan

• According to the third principle, a warehouse design should consider product characteristics, particularly those pertaining to volume, weight, and storage.

• Product volume is the major concern when defining a warehouse storage plan.

• High-volume sales or throughput product should be stored in a location that minimizes the distance it is moved, such as near primary aisles and in low storage racks.

• Conversely, low-volume product can be assigned locations that are distant from primary aisles or higher up in storage racks.

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A Sample Storage Area

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Pilferage Protection

• Protection against theft of merchandise has become a major factor in warehouse operations.

• All normal precautions employed throughout the

enterprise should be strictly enforced at each warehouse.

• Security begins at the fence. As standard procedure, only authorized personnel should be permitted into the facility and surrounding grounds and entry to the warehouse yard should be controlled through a single gate.

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Pilferage Protection…

• Computerized inventory control and order processing systems help protect merchandise from being carried out of the warehouse doors.

• No items should be released from the warehouse unless accompanied by a computer release document.

• If samples are authorized for use by salespersons, the merchandise should be separate from other inventory.

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Pilferage Protection…

• Not all pilferage occurs on an individual basis.

• Numerous instances have been discovered where organized efforts between warehouse personnel and truck drivers resulted in deliberate over-picking or high-for-low-value product substitution in order to move unauthorized merchandise out of the warehouse.

• Employee rotation, total case counts, and occasional complete line-item checks can reduce vulnerability to such collaboration.

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Product Deterioration

• Within the warehouse, a number of factors can reduce a product or material to a non-usable or non-marketable state.

• The most obvious form of product deterioration is damage from careless transfer or storage.

• Another major form of deterioration is non-compatibility of products stored in the same facility.