WAREHOUSE MANAGEMENT

Industrial Logistics (BPT 3123)Industrial Technology Management Programme

Faculty of Technology

Chapter Outline• Introduction• Need for Warehousing Management• Primary Functions of Warehouse• Types of Warehouse• Warehousing Strategies• Warehousing Functions

Lesson Outcomes• Understand warehouse management concept or

approach• Explain the role and major activities of

warehouses and distribution centers

Introduction

• Nowadays, warehouse are more properly viewed as places where products may be stored and assortments of products created in accordance with customer requirements

• Distribution Center term are being used to emphasize the difference between the storage activity and the strategic role of warehouses

• For an ideal logistics system – storage is held to a minimum and inventory moves continuously throughout the supply chain on its destination to fill customer needs

Warehousing Management• Primary purpose of a warehousing management is

to control the movement and storage of materials within an operation and process the associated transactions.

• Warehousing is viewed as a place to store inventory as well as a facility for switching the inventory.

• Need for warehousing management:a. Reduce inventoryb. Reduce labor costc. Increase storage capacityd. Increase customer servicee. Increase inventory accuracy

1. Trans-Shipment Point– A facility where products are received, sorted,

sequenced and selected into loads consistent with the customers’ needs

2. Stockpiling– The storage of inventories in warehouses to protect

against seasonality either in supply or demand3. Production Support– A warehouse dedicated to storing parts and

components needed to support a plant’s operations

Warehouse ManagementPrimary Functions of

Warehousing

4. Break-Bulk

– Splitting a large shipment into individual orders and arranging for local delivery to customers

5. Warehouse Consolidation

– Combining shipments from a number of sources into one larger shipment going to a single location

6. Cross-Docking

– Combines break-bulk and consolidation warehouse activities

Warehouse Management

Warehouse Management

7. Reverse Logistics Support– The logistics needed to send products or

packaging materials back to disassembly, reclamation or disposal sites

– Returned products can be remanufactured or updated for resale

8. Value-Added Services– Any work that creates greater value for

customers– Services may change the physical features or

configuration of products so they are presented to customers in a unique or customized manner

Warehouse Management

1. Receiving and Unloading– Inbound shipments must be received and unloaded

from the transportation vehicles– Part of this activity may also involve checking the

shipment for the correct quantities and for potential damage to products

2. In-Storage Handling– Once unloaded the goods must be moved to the

desired destination within the facility, whether this is an actual storage location or a shipping area in the case of a cross-dock facility

Warehouse ManagementWarehouse

Functions

3. Storage– Products are held, even if for only a few minutes in a

storage area

4. Order-Picking– The products are removed from storage and

assembled into appropriate quantities and assortments to fill customer orders

5. Staging– The assembled orders are moved to an area in the

warehouse in readiness for loading into a transportation vehicle bound for customer locations

6. Shipping– Involves verifying that the assembled orders are

correct and the actual loading of the transportation vehicles

Warehouse Management

1. Private Warehouse– Facility that is owned and operated by the firm

that own the products2. Public Warehouse– A firm that offers warehouse services to the public

for a fee based on the amount of spaced used and the number of shipments into or out of the facility

3. Contract Warehouse– Companies offer to build, own and operate

warehouse facilities for the benefit of clients who do not want to undertake those responsibilities themselves

Warehouse Management Types of

Warehouse

• A private or contract facility may be used to cover basic year round requirements

• Public facilities are used to handle peak seasons• Public and contract warehouse have

demonstrated more responsiveness as they offer location flexibility

• Public and contract warehousing increases the potential for industry synergy

• Public and contract warehouses are able to design operations and facilities to meet higher volumes of multiple clients

• Public warehousing facility can provide complete logistical support ......

Warehouse Strategies

Summary• Warehouse are more properly viewed as places

where products may be stored and assortments of products created in accordance with customer requirements

• Warehouses perform several functions over and above storage. It also provide benefits through consolidation, break-bulk, cross-docking and assortment activities