Warehouse

A warehouse is a commercial building for storage of goods.

Warehouses are used by manufacturers, Wholesalers, retailers, importers, exporters, customs etc.
They are usually large plain buildings in industrial areas of cities and towns. Today warehouses are not used to store things but rather to receive, breakdown, repackage and distribute components to a manufacturing location or finished products to customers

The warehouse is where the supply chain holds or stores goods. Functions of warehousing include

Receiving, Storing Buffer stock for customers retail or commercial Stockpiling (Seasonal, Bulk-Buy) Postponement ( Parts and components are stocked at
strategic locations and final assembly is kept on hold till the customer places or modifies the order)

Packing (Labelling & Packaging)

Manufacturing Support
Supplier A

Supplier B Warehouse Supplier C Plant

Supplier D

Mixing Warehouse:

A warehouse is used as a product mixing point, no. of plants manufacturing different components, are combined at a convenient place to make the final product. Each plant manufactures only portion of the total product offering of the firm. Products are assembled at common mixing point and dispatched to the customer. It involves multiple plant locations (e.g., plant A, plant B and plant C) that ship products (e.g., products A, B and C) to a central warehouse.

Customer 1 A Plant A Customer 2 A Plant B Mixing Warehouse Customer 3 A Plant C Customer 4 B C C B C B C

Consolidation:

Supplies are originating from various sources in small quantities, it is economical to collect these small shipments at one centre, to combine them and make into a larger shipment to send it to a customer. Consolidation ensure potential cost saving on freight.

Consolidation Warehouse

Consolidation Warehouse

Break-Bulk:

It is directly opposed to that of the consolidation warehouse. Material that has arrived in bulk is divided into small shipments to deliver to the end customer. Bulk cargo of fertilizers, oil and chemicals coming from manufacturers is broken into smaller consignments. As the shipment is received at warehouse, it is broken down into smaller shipments and orders are sorted which are sent to customers in different geographical area.

Break-Bulk Warehouse:

Break-Bulk Warehouse

Inbound materials are Directed to outbound doors and are directly loaded into outbound trucks ...or... Staged for a very brief time period before loading

Can accomplish significant reductions in total costs and in lead times in a supply chain Cross dock facilities (CF) act as transfer points

CROSS-DOCK = No storage(?)

Cross-dock (from multiple suppliers): goods sorted as they arrive, goods moved across dock and loaded onto trailers, benefits - optimal vehicle use and low handling costs. Avoids placing goods into storage

Cross Docking

 Private Warehouses: Private warehouses are company owned and

operated.

Public Warehouse: Public warehouses are owned and operated by

a third party. They allow companies to store goods under one roof. It is
given on rent or lease.

Contract Warehouses: Contract warehouses are also owned by a

third party. It offers unique and specially tailored warehousing and logistics services exclusively to one client. Based on mutual benefits, long term commitment and good relationships.

 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

Receive goods Identify the goods Dispatch goods to storage

Hold goods Pick goods

assemble shipment
Dispatch shipment

Receive goods
Accepts goods from Outside transportation or attached factory &

accepts responsibility
Check the goods against an order & the bill of lading 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 stockkeeping 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

assemble the shipment

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

records are updated

Dispatch the 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

RECEIVING

INP UT

Schedule Carrier Unload Vehicle Inspect for damage

WAREHOUSE PROCESS
Put-away
Identify Product Identify Product Location Move Products Update Records

Storage

Equipment Stock Location Popularity / Significance Unit Size

Shipping Preparation
Packing Labeling Stacking

Order Picking
Information Walk & Pick Batch Picking

Shipping Schedule Carrier Load Vehicle Bill of Lading Record Update

OUT PUT

Before selecting site, there is some location analysis techniques that could assist company in selecting a general area for warehouse location.

 Location

The location factor rating technique may be used when many sites are available, and each site has some appealing characteristics. The purpose of the technique is to "score" each site to be somewhat objective about the location decision. The steps in using the technique are:

Factor Rating

FACTORS

Weight (Relative importance to Org.)

Scores out of 100

India Labor Availability Proximity to market Tax Structure 0.2 0.1 0.4 65 30 50

Pak 55 65 50

Education & Health

Proximity to Suppliers

0.08
0.22

65
70

67
65

LOCATION STRATEGY (FACTOR RATING METHOD)

FACTORS

INDIA

PAKISTAN

Labor Availability Proximity to market Tax Structure Education & Health Proximity to Suppliers

(.20)(65)=13 (.10)(30)=3 (.40)(50)=20 (.08)(65)=5.2 (.22)(70)=15.4 56.6

(.20)(55)=11 (.10)(65)=6.5 (.40)(50)=20 (.08)(67)=5.36 (.22)(65)=14.3

57.16

Center-of-Gravity Technique

The center-of-gravity technique can be used when multiple suppliers or customer bases exist at different geographic locations, and it is economically sensible to locate centrally to service all of them. In general, transportation costs are a function of distance, weight, and time.

Once location analysis is completed, a specific building site must be selected.

Site Selection

The primary factors in site selection are the availability of services and cost. The cost of procurement is the most important factor governing site selection. Beyond procurement cost, setup and operating expenses such as utility expenses, taxes, insurance rates, and highway access require evaluation.

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Several other requirements must be satisfied before a site is purchased

Site Selection

Necessary utilities must be available. The soil must be capable of supporting the structure, and the site must be sufficiently high to afford proper drainage

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Use one-story facilities Move goods in a straight line Use efficient materialshandling equipment Use an effective storage plan

Minimize aisle space

Number of stories in the facility

The ideal warehouse design is limited to a single story so that product does not have to be moved up and down. The use of elevators to move product from one floor to the next requires time and energy.

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Height Utilization:

Regardless of facility size, the design should maximize the usage of the available cubic space by allowing for the greatest use of height on each floor.

Most warehouses have 20- to 30-foot ceiling, although modern automated facilities can effectively use ceiling heights up to 100 feet.
Maximum effective warehouse height is limited by the safe lifting capabilities of material-handling equipment, such as forklifts.

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Product-Mix Considerations

The design and operation of a warehouse are related directly to the character of the product mix.

Each product should be analyzed in terms of annual sales, stability of demand, weight, and packaging.
It is also desirable to determine the total size and weight of the average order processed through the warehouse.

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

 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

THANK YOU