1. W&L Warehouse and
Logistics
Presented By:
Engr. Abdullah Ali AlGhamdi, CSCP
EFQM Leader for Excellence – Level 1
Founder of Silver Service Co. Ltd.
Founder of Silicon Systems Est.

2. 2
Acknowledgments
The material used in this presentation came from a variety of sources,
foremost being the member of the following body of knowledge:
• APICS as International Member.
• Saudi Society of Engineer
• Volunteer Member of The Centennial Funds
• Aberdeen Group
The slides were extracted from various workshops offered by the above
organizations to address the holistic (strategic) issues of the supply chain
in addition to the functional constraints (tactical) frequently encountered.

3. Location Briefing
4/1/2016 3
Contains Confidential Information of Sadara Chemical Company
• Emergency Management
• Emergency Egress
• Normal Operation Room and Building Exits (not alarmed)
• Prayer Room(s)
• Bathrooms and Other Facilities (Lunch)
• Smoking Area
• Issues ?
• Room seating, lighting, Internet, power
• Special Needs

4. Housekeeping and Behaviors
4/1/2016 4
Contains Confidential Information of Sadara Chemical Company
Attendance and Attention
• Start and end on time
• Respect time and timing of breaks
• Manage electronics and distractions
• Limit side conversations and war stories
Ownership
• We all own the success of this course
• Use the “Issues Parking Lot” to keep us focused on this meeting’s tasks
• We are learn something when we leave the room today.
Participation
• We are one team – everyone’s opinion counts
• Listen actively with a “beginner’s mind”
• Interact with both openness and respect
• Speak up if you don’t agree – don’t remain silent

5. Why Are We Here?

6. Purpose and Objectives
4/1/2016 6
Course Purpose:
The purpose of these sessions is to show how to implement all of the essential tools to enable better and
more effective, utilization of warehousing and planning to your logistics supply chain operation.
Course Objectives:
This course aims to help the supply chain professional to understand and apply four (4) major and significant
aspects of warehouse management:
• Optimize Inventory Levels
• Build an Inventory Management Plan
• Design & Manage Warehouse Operations
• Increase Accuracy, Traceability & Reduce Parts Variety
Participants should be able to understand the financial impacts of inventory and the risks in both over and
under holding of inventory - the management of inventory, including lead time management, demand
planning and interfacing with other functional groups directly and indirectly involved in inventory planning
and operations.
They should also be able to understand the importance of effective Warehouse Management in minimizing
the cost associated with the storing, moving and transporting goods into and out of the warehouse storage
locations; the importance of reconciled physical count balances and system records and most importantly, the
efficient, fast, precise and perfectly-timed issuances of the right quality & quantity of stocks to its intended
users.

7. Agenda
Kickoff 9:00
• Housekeeping
• Safety
• Leadership Message
• Who is Who
• Project Status Update (IT and MOM)
Lunch 12:00 -13:00
• Project Status Update (continued)
• Construction Schedule(s) Review
• Plan Forward / Meeting Closing
Adjourn 16:30

8. Introduction
• Warehouses are crucial components of most modern
supply chains.
• As the dispatch point serving the next customer in the
chain, they are critical to the provision of high
customer service levels.

9. Introduction
• Warehouses need to be designed and operated in line
with the specific requirements of the supply chain as a
whole.
• They are therefore justified where they are part of the
least-cost supply chain that can be designed to meet
the service levels that need to be provided to the
customers.

10. Introduction
• Owing to the nature of the facilities, staff and
equipment required, warehouses are often one of the
most costly elements of the supply chain and therefore
their successful management is critical in terms of both
cost and service.

11. Evolution of Logistics and Supply
Chain, 1960-2000+

12. Logistics Seven R’s
Logistics should ensure the availability of the:
• Right product
• Right quantity
• Right condition
• Right place
• Right time
• Right customer
• Right cost

13. The two most obvious aspects of logistics are
transportation and warehousing

14. Warehousing

15. Warehouse Options

16. Warehouse costs impact
Can Warehouse Management impact
Company Profitability?

17. Return on Investment

18. TIMES ........................................................................
The DuPont Model
Income Statement
Balance Sheet
“RETURN ON
ASSETS” %
CAPITAL
TURNOVER
$ OTHER
CURRENT
ASSETS
$ INVENTORY
$ ACCOUNTS
RECEIVABLE
$ CURRENT
ASSETS
$ FIXED
ASSETS
$ TOTAL
ASSETS
$ SALES

+
+
+

-
-
+
PROFIT
MARGIN %
$ SALES
$ COST OF
GOODS SOLD
$ VARIABLE
EXPENSES
$ FIXED
EXPENSES
$ GROSS
MARGIN
$ TOTAL
EXPENSES$ SALES
$ OPERATING
PROFIT

19. Income Statement
Balance Sheet
“RETURN ON
ASSETS” %
CAPITAL
TURNOVER
$ OTHER
CURRENT
ASSETS
$ INVENTORY
$ ACCOUNTS
RECEIVABLE
$ CURRENT
ASSETS
$ FIXED
ASSETS
$ TOTAL
ASSETS
$ SALES

+
+
+

-
-
+
PROFIT
MARGIN %
$ SALES
$ COST OF
GOODS SOLD
$ VARIABLE
EXPENSES
$ FIXED
EXPENSES
$ GROSS
MARGIN
$ TOTAL
EXPENSES$ SALES
$ OPERATING
PROFIT
Logistics Affects All ROI
Components
The DuPont Model

20. Strategic profit model (Inventory
reduction)
• Please Refer to course material.
Session 1: Warehouse & Logistics
Heading: Strategic profit model

21. Storage and Warehousing

22. Modern Warehousing

23. Modern Warehousing

24. Logistics Triangle
Customer
Service
Transportation Inventory
Location
Where is warehousing in this figure?

25. Warehousing
Is it a real science?
Do you agree ?
Yes, it is!

26. Is it only a storage facility?
• A warehouse is typically viewed as a place to store
inventory.
• However, in many logistical system designs, the role of
the warehouse is more properly viewed as a switching
facility as contrasted to a storage facility.

27. The Changing Role of Warehousing
Managing INVENTORIES
(The old mission)
Managing INVENTORY AND
INFORMATION (The new
mission)
Warehouse Employee Skill
Development
Warehouse
Computerization
Warehouse Equipment
Automation
Development of an Integrated
Perspective of Warehousing

28. The role of warehouses
• The prime objective of most warehouses is to facilitate
the movement of goods through the supply chain to
the end consumer.
• There are many techniques used to reduce the need to
hold inventory, such as flexible manufacturing systems,
supply chain visibility.
• Many of these have been encompassed in a range of
supply chain initiatives, for example just-in-time (JIT),
collaborative planning, forecasting and replenishment
(CPFR).

29. Warehousing Definition
“the part of a firm logistics system that
stores products (raw materials, parts, goods in-
process, finished goods) at and between point of
origin and point of consumption and provides
information to management on the status,
condition and disposition of items being stored”.

30. Basic Tenets Of Warehouse
Management
Accuracy;
Cost Control;
Cleanliness;
Efficiency;
Safety;
Security

31. Warehouse management challenges
Warehouse
Management
Cost
Reductions
Achieve the
Prefect Order
Shorter Order
Lead Time
Multiple Sales
Channels and
Increase in
Smaller Orders
Fluctuation in
Demand
Proliferation of
SKU
Labor Cost and
availability
Increasing cost
of energy and
environmental
challenges
Data Accuracy
and speed of
transfer

33. Session 2
Key Warehouse Functions & Operation

34. • Stock Keeping Unit (SKU) – The smallest physical unit of a
product tracked by an organization
• In general, the smaller the handling unit, the larger the handling
costs

35. Warehouse processes
Inspection
Put In
Stock
Storage Picking
Sort/Pack
Management Information System
Cross Dock

36. 36
Receiving
•Schedule Carrier
•Unload Vehicle
•Inspect Damages
•Compare to P/O
Put-away
•Identify Product
•Identify Location
•Move Product
•Update WMS
Storage
•Equipment – MHE
•Stock Location
Order Picking
•Pick List
•Proceed to staging
area
Shipping
•Schedule Delivery
•Load vehicle
•Check commodity
•WMS Update

38. Typical Warehousing Activities
Order Picking
Replenish
Putaway
Order
Picking
Putaway
Forward PickingReserve
Storage
Packing, Sorting
& Unitizing
Receiving Shipping
Cross-docking
Reserve
Storage
Receive Putaway Replenish
Forward
Pick
Order
Pick
Sort &
Pack
Ship

39. Receiving
• Tasks:
• Check, Inspect, Unload, Record, Stage, re-palletize
• Facility:
• Docks, Lift trucks, forklift, mobile conveyors, cart.
• Computer Terminals, Bar Code Printer
• Decisions:
• Schedule of arrivals
• Priorities
• Staging
• Problem Handling
• Cost: ~ 10% of operation Cost

40. Verification

41. Receiving Discrepancy Report
Example

42. Put-away
• Tasks:
• Move Goods Storage Locations
• Facility:
• Pallets Truck
• List Truck
• … More
• Decisions:
• Where…
• When….
• Equipment..
• Cost: ~ 15%

43. Cross-Docking Operations

45. Cross-Docking Warehouse
Suppliers
Customers
Receiving
Shipping
Sorting
Distribution Center Before Cross-Docking
LTL
Suppliers
Customers
After Cross-Docking
TL
TL
Cross-Docking
DC

46. Cross-Docking Stages
• Zero Stage Cross-Docking
A scenario in which the goods are moved directly from goods
receipt (GR) area to goods issue (GI) area
• One Stage Cross-Docking
A scenario in which the goods are first moved to a storage
type dedicated for cross-docking
Goods Issue
Goods Receipt
Zero Stage
Goods Issue
Goods Receipt
One Stage

47. Here’s how cross-docking works:
1) The supplier is notified of the shipping time, date,
carrier, stock-keeping units (SKUs), and quantity for each
order.
2) The supplier is notified by the carrier of the arrival
date and time for each shipment.
3) The supplier receives the order details from the
customer.
4) The outbound carrier is notified of the pick-up time,
load description, destination, and delivery date and
time.

48. Here’s how cross-docking works:
5) The customer is notified of shipment detail, carrier,
and arrival date and time.
6) A dock location is selected for trucks involved in
receiving and shipping.
7) Labor and handling equipment are scheduled.
8) Receipts are recorded and reconciled, and any
receiving variances are noted.
9) Labels are created, and cases and pallets are routed
and tracked from receiving to dispatch.

49. Cross-Docking

50. Order Picking Strategies
• Minimize travel time/distance in warehouse to fill
orders.
• Methods of Picking
1) Manual Picking
2) Batch Picking
3) Zone Picking
4) Wave Picking

51. Ten Strategies for Making Warehouse
Operations a success in the 21st Century
1. A focus on the customer
2. Compression of operations and time
3. Continuous flow
4. Cross docking
5. Electronic transactions
6. Customized warehousing
7. Third-party warehousing
8. Shrinking orders
9. Automation
10.The human factor

52. 52
Questions

53. The end of Today’s
Session….Thank you!