WAREHOUSING MANAGEMENT

IWAN KARNEDI

NIM; 244312083

S1 MTL - STMT TRISAKTI - ANGKATAN XXII

WHERE IS WAREHOUSE IN SUPPLY CHAIN

 

WHAT IS WAREHOUSING?

•          Part of firms logistics system that stores products at and between point of origin and point of consumption.

•          Term “Warehousing” is referred as  transportation at zero miles per hour

•          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.

•          Warehousing refers to
“that part of the firm’s logistics system that stores products (raw materials, part, good-in-process, finished goods) at an between points of origin and point of consumption.”
Source:  Douglas M. Lambert, James R. Stock, and Lisa M. Ellram, Fundamentals of Logistics Management (New York:  Irwin McGraw-Hill, 1998), Chapter 8

THE ROLE OF THE WAREHOUSE IN THE LOGISTICS SYSTEM

•          The warehouse is where the supply chain holds or stores goods.

–        Hold goods that is used to balance and buffer between the variation between production schedules and demand

•          Functions of warehousing include

–        Transportation consolidation

–        Product mixing

–        Docking

–        Service

–        Protection against contingencies

TYPE OF WAREHOUSING

•          Public Warehousing

–        A public warehouse, in contrast, is operated as an independent business offering a range of services -such as storage, handling, and transportation- on the basis of a fixed or variable fee.

–        Public warehouses

•          Serve all legitimate users

•          Require no capital investment on the user’s part

•          Allows users to rent space as needed

•          Can be rented on a month-to-month basis

•          Offers more locational flexibility

•          May provide specialized services

–        Potential drawback of public warehouses

•          Lack of control by the user

–        Warehousing labor safety practices monitored by Occupational Safety and Health Administration (OSHA)

•          Private Warehousing

–        A private warehouse facility is owned and managed by the same enterprise that owns the merchandise handled and stored at the facility. A private warehouse is operated by the

–        Private warehousing

•          is owned or occupied on a long-term lease

•          Offers control to owner

•          Assumes both sufficient demand volume and stability so that warehouse remains full

–        Potential drawbacks of private warehouses:

•          High fixed cost

•          Necessity of having high and steady demand volumes

•          May reduce an organization’s flexibility

•          Contract Warehousing

–        Contract warehousing, which is evolving from the public warehouse segment, provides benefits of both the private and public alternatives.

–        Contract warehousing (3PL warehousing) is a long-term arrangement providing unique warehousing services to one client 

–        Both vendor and client share the risks associated with the warehousing

–        Less costly than private warehousing and more costly than public warehousing

•          Multi-client Warehousing

–        Mixes attributes of contract and public warehouses

–        Services are more differentiated than those in a public facility

–        Services are less customized than those in a private facility

–        Services are purchased through minimum 1 year contracts

–        Are attractive to smaller organizations

WAREHOUSING DESIGN CONSIDERATION

 

 

PRINCIPLES OF WAREHOUSE LAYOUT DESIGN

 

WAREHOUSE PROCESS

 

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

–        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 shipment

–        goods making up a single order are brought together & checked for omissions or errors; order records are updated

•          Dispatch 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

–        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

 •          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

•          Locate working stock and reserve stock separately

–        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

–        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

–        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

•          Central storage

–        Contains all inventory in one central location

–        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

–        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

–        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 WAREHOUSE PROCESS

1 - Receiving & Put away                              VIEW

2 - Order fulfillment & Stock allocation           VIEW

3 - Order picking & Shipping                          VIEW