1. Chrejine M.Mandingiado
Reimond Niu
Babylyn Hernandez
Jennifer Salazar
Bon Juvicel Tabogon

2. Warehousing Operations
• Storing or warehousing, is a major part of
distribution management.
• Planned space for the storage and handling
of goods and material.

3. Warehouses
• Store inventory for a period of time
storage
protection
• Inventory may be turned over rapidly
distribution center
customer service

4. THE ROLE OF THE WAREHOUSE IN
THE LOGISTICS SYSTEM
• The warehouse is where the supply
chain holds or stores goods.
• Functions of warehousing include
Transportation consolidation
Product mixing
Docking
Service
Protection against contingencies

5. Functions of Warehouse
• Transportation consolidation
From figure 1.1, warehouse consolidate
all incoming goods from different suppliers„
Less than Truck-load(LTL) and ship a Full
Truck load (FTL) to a plant.

6. Functions of Warehouse
• Product mix against contingenciesmaterials are
Protection isIn a typical mixing operation, truck loads
Docking - - a practice in which - Warehousing
• Service are shipped fromcan provide mixing
- Warehouses origin to the services that
of products from transportation delays, vendor stock
exists such as an incoming semi-trailer truck or
unloaded
enhance a firm's revenue growth.
warehouse. little or no storage in between
outs, or strikes.
railcars, with

7. Some valid reasons for holding stock
include the following.
• As a buffer/consolidation point between two
production processes
• suppliers' lead-time
• To enable savings to be made through bulk
purchases or discounts
To cope with seasonal fluctuations
To provide a variety of product in a
centralizedup/holding of anticipation stocks
The build location
(for example, before a new product launch)
The build-up and holding of investment stocks

8. Purpose of a Warehouse
• Primary aim for a warehouses and
distribution centers is to facilitate the movement
of goods from our suppliers to customers and,
by doing so, meet customers' demand in a
timely and cost-effective manner.
• The purpose of warehouse management has
expanded. The days of a warehouse just
“housing” goods and supplies are long gone.
• Basic aim must be to minimize the total cost
of the operation while providing the desired
level of service.

9. Types of warehouses
There are two basic types of warehouses:
private and public. Facilities can be further
divided according to use as storage warehouses
or distribution centers.
1. Private
2. Public

10. Private warehouses
are owned by a single manufacturer,
wholesaler or retailer. Most are run by large
firms with continuous storage needs for mass
quantities.
Public warehouses
are independently owned by operated.
They are also used by manufacturers who need
multiple storage locations to get products to
multiple markets.

11. Warehouse Policies & Procedures
Equipment Instructions
Put Safety First
Running a warehouse business can be
SafetyMost working warehouses use many
should be your primary concern,
challenging. To be successful, you will need to set
and it is vital that every member ofas pallet jacks,
different types of equipment such the staff
clear guidelines and expectations.
understands the importance of Although only
forklifts, presses and stackers. established safety
trained operators should use that equipment,
procedures.
not every worker will have the same level of
training and experience

12. Storage Warehouses
provide storage for extended periods.
Procedures of seasonal items, such agricultural
corps, use this type of warehouse.
Distribution Centers
provide short-term storage of products
whose demand is both constant and high.
Distribution centers are common in the grocery
and food industry.

13. Warehouse Policies & Procedures
Post Hours and Rules
- Signage is an important part of any
warehouse, and it is important that management
post signs in conspicuous locations.
- Large signs should be used to communicate
important information such as emergency
procedures, worker expectations and hours of
operation.

15. DESIGN CONSIDERATION
Ideal Facility for Pure Supplier Warehouse Space
Consolidation Requirements
(Full Pallet Movement)

16. PRINCIPLES OF WAREHOUSE LAYOUT DESIGN
Use one-story facilities
Move goods in a
straight line
Use efficient materials-
handling equipment
Use an effective
storage plan
Minimize aisle space
Use maximum height
of the building

17. Warehouse Layout and Design
Layout and Design Principles:
• Use one story facilities
where possible.
• Move goods in a straight-line.
• Use the most efficient
materials handling equipment.
• Minimize aisle space.
• Use full building height.
Chapter 8 Management of Business 17
Logistics, 7th Ed.

18. Basic Warehouse Operations
Movement
Receiving
Put-away
Order picking
Shipping
Storage
Stock location
Warehouse Management
System (WMS)
Chapter 8 Management of Business 18
Logistics, 7th Ed.

19. RECEIVING
INP •Schedule Carrier
UT •Unload Vehicle
•Inspect for damage
WAREHOUSE PROCESS
Storage
Put-away
•Equipment
•Identify Product
•Stock Location
•Identify Product Location
– Popularity
•Move Products
– Unit Size
•Update Records
– Cube
Shipping Preparation Order Picking
•Packing •Information
•Labeling •Walk & Pick
•Stacking •Batch Picking
Shipping
•Schedule Carrier
•Load Vehicle OUT
•Bill of Loading PUT
•Record Update

20. 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

21. Benefits of Warehouse Management
Provide a place to store & protect inventory
Reduce transportation costs
Complexity of warehouse operation
Improve customer service levels
depends on the number of SKUs handled &
the number of in a warehouse is& filled. handling.
Most activity
orders received material
Increase Employee Efficiency & Productivity
Real-time data management enables you to view
the exact levels of your inventory
Online access to information

22. COSTS OF OPERATING A WAREHOUSE
• Capital costs
— Costs of space & materials handling equipment
— Clerical costs of producing reports will be reduced
because up-to-date information already exists in the
database and there are predefined reports. As well,
receiving discrepancies and inventory adjustments
will be reduced by using handheld computers and bar
codes.
• Operating costs
— Cost of labor
— Measure of labor productivity is the number of units
that an operator can move in a day

23. Warehouse Activities
In general , a typical warehouse can be seen
to be performing the following activities
• Receive goods
• Identify goods
• Dispatch goods to storage
• Hold goods
• Pick goods
• Marshal the shipment
• Dispatch the shipment
• Operate an information system

25. Receive Goods
• Acceptance of goods from outside transportation
or an attached factory
a. Check the goods against an order or bill of lading
b. Check the quantities
c. Check for any transit damage
d. Inspect goods if required

26. Identify the goods
• With appropriate stock keeping unit (SKU)
number
• With part number
• Indicate the quantity
• Quantity receive is recorded

27. Dispatch Goods to Storage
• Goods are sorted
• Put away goods
recorded the location

28. Hold Goods
Holding Goods by keeping and preserving
Storage is meant to protect the goods
cold
heated
explosive

29. Pick Goods
• Goods are picked from storage
must be accessible
location records
• Brought to marshalling area

30. Marshal the Shipment
• Marshalling the shipment such as goods making u
a single order are brought together and checked
for discrepancies. Order records are updated
• All goods for an order are brought together
check for missing items
check for correct items
change order information if required

31. Dispatch the Shipment
• Orders are packaged, shipping documents are
prepared.
• The order is prepared for shipment and loaded
on the right vehicle
protective packaging for shipment
documents prepared
loaded and secured

32. Operate an Information System
Items record must be maintained.
Need to know what is in the warehouse
quantity on hand
quantity received
quantity issued
location of goods
Computer based or manual system

33. Warehouse Management
Deals with receipt, storage and movement
of goods, normally finished goods, to
intermediate storage locations or to final
customer.
• Make maximum use of space
capital cost of space is very high
• Make effective us of labor and equipment
material handling equipment is the second largest
capital cost
need best mix of equipment and labor
all SKU‟s should be easy to find
move goods efficiently

34. Warehouse Effectiveness
• Cube utilization and accessibility
• Stock location
• Order picking and assembly
• Packaging

35. 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
‒ Space also required for:
aisles offices
receiving order picking
shipping docks order assembly

36. Cube utilization and accessibility

37. 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

38. Stock Location
Fixed Location
• SKU assigned a permanent location.
• 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

39. Stock Location
Point-of-Use Storage
JIT and repetitive manufacturing
Floor stock are readily accessible to users
materials
small „C‟ handling is reduced
material items
inventory is adjusted when stock is
central storage costs are reduced
replenished accessible at all times
materials are

40. Stock Location
Central Storage
• All items are kept in one location
• The opposite of point-of-use storage
ease of control
accurate inventory control is easier
makes use of specialized storage
reduces safety stock

41. Order Picking and Assembly
• When an order is received, items must be
obtained from the warehouse, grouped, &
prepared for shipment, systems used
– Area system - Used in small warehouses
– Zone system
– Multi-order system

42. Area System
• Used in small warehouses
• Order picker circulates throughout warehouse
selecting items on an order
• The order picker moves through the warehouse
and takes all the goods to shipping
self marshalling
order is complete when the picker is finished

43. Zone System
• Warehouse is divided into zones
• Order pickers work in their own area
deliver goods to the marshalling area
• Zones are established by related items
type of storage
type of material handling required
• Marshalling area then organizes orders for
shipment

44. Multi-order System
• Similar to zone system
• Multiple orders are picked together
• Marshalling area then sorts orders by
shipment
• Used where there are many items or many
small orders

45. 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

46. What Is Packaging?
• Consumer packaging
Marketing managers primarily concerned with
how the package fits into the marketing mix.
• Industrial packaging
Logistics managers primarily concerned with
efficient shipping characteristics including
protection, ability to withstand stacking when
on a pallet, cube, weight, shape and other
relevant factors.

47. Packaging
• Interest in packaging is widespread
Logistics
Warehousing
Transportation
Size
Marketing
Production
Legal

48. The Role of Packaging
• Identify product and provide
information
• Improve efficiency in
handling and distribution
• Customer interface
• Protect product

50. Inventory
• Inventory is an idle stock of physical goods
that contain economic value, and are held in
various forms by an organization in its custody
awaiting packing, processing, transformation,
use or sale in a future point of time.
From the above definition the following points
stand out with reference to inventory:
• All organizations engaged in production.
• Inventory can be in complete state or incomplete
state.
• Inventory is held to facilitate future consumption.
• All inventoried resources have economic value
and can be considered as assets of the organization.

51. Managing Inventory Levels
Inhas beenachieve this, that inventory manager must
It order to established the the role of inventory
ensure made uptobetweenthat the inventory itself, plus
This is a balance the costsupply and demand by
of
management is ensure
of
stock is available to
the cost of transporting the goods, cost of managing
establishing minimum holding stocks toand when
meet the needs of the beneficiaries as cover
the goods.
lead-times
required.

52. Types of Inventories
Raw materials & purchased parts - are inventory
Partially completed goods called
items that progress - (WIP) is made up of all the
work in are used in the manufacturer's conversion
Finished-goods inventories
process to produce(components), assemblies, and
(manufacturing components, subassemblies, or
materials, parts firms)
or merchandise
finished products. that are being processed or are
subassemblies
(retail stores)
waiting to be processed within the system.

53. Types of Inventories
Goods-in-transit to warehouses or customers Transit
inventories result from the need to transport items or
material from one location to another, and from the
fact that there is some transportation time involved in
getting from one location to another.

54. Effective Inventory Management
• A system to keep track of inventory
• A reliable forecast of demand
• Knowledge of lead times
• Reasonable estimates of
Holding costs
Ordering costs
Shortage costs
• A classification system

55. Key Inventory Terms
Holding (carrying) costs: cost to carry an
Ordering costs: costs of ordering and
Shortage costs: costs when demand
Leadin inventoryinterval between ordering
item time: time for a length of time,
receiving supply
exceeds inventory
and receiving the order
usually a year

56. Auditing Inventory Records
• Checking the accuracy of inventory records
• Periodic Inventory
usually an annual count
• Cycle Counting
daily counts of items

57. Auditing Inventory Records
• To correct the on-hand balance
periodic inventory
To find the reasons for errors and
eliminate them
cycle counting

58. Periodic (Annual) Inventory
• Periodic inventory is a method by
which any inventory sold is physically
counted at the end of an accounting
period.
• To satisfy financial auditors
• Determine the value of the
inventory
• Financial auditors are concerned
with the total value
• Planners are concerned with the
• item detail

59. Cycle Counting
• A method of keeping track of inventory
by performing inventory counts constantly,
or on a frequent and regular basis, instead
of once per year or once per quarter.
• Count inventory continually throughout the year
• Predetermined schedule
some items counted frequently
depending on value
past history of problems
• Count some items every day

60. Inventory Counting Systems
Periodic System
Physical count of items made at
periodic intervals
Perpetual Inventory System
System that keeps track
of removals from inventory
continuously, thus
monitoring
current levels of
each item

61. Inventory Counting Systems
Two-Bin System - Two containers of
inventory; reorder when the first is empty
Universal Bar Code - Bar code
printed on a label that has
information about the item
0
to which it is attached
214800 232087768

62. The end