efficiency and minimizing costs in the

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1 Third Edition Warehouse Management A complete guide to improving efficiency and minimizing costs in the modern warehouse Gwynne Richards A KoganPage

2 CONTENTS Acknowledgements xiii Introduction l 01 The role of the warehouse 7 Introduction 7 Types of warehouse Operation 11 Why do we hold stock? 17 Warehouse location 24 Number of warehouses 29 Supply chain trends affecting warehouses 30 The growth of e-fulfilment and its effect on the warehouse 31 Specialized warehousing 34 Summary and conclusion Role of the warehouse manager si Introduction 51 Warehouse trade-offs 54 The warehouse manager's challenges 54 Lean warehousing 61 People management 68 People challenges 69 Attracting and retaining warehouse employees 73 An ageing and constantly changing workforce 74 Operating hours 75 Training 78 Warehouse audit 79 Quality systems 79 Summary and conclusion 80

3 89) Contents 03 Warehouse processes: receiving and put-away 81 Introduction 81 Receiving 83 Pre-receipt 83 In-handling 90 Preparation 91 Offloading 94 Gross docking 101 Recording 103 Quality control 103 Put-away 103 Summary and conclusion Warehouse processes: pick preparation 107 Introduction 107 Preparation 109 Warehouse pick area layout 121 Summary and conclusion Picking strategies and equipment 128 Introduction 128 Picker to goods 131 Goods to picker 137 Types of automated picking 139 Examples of automated picking systems 140 Handling equipment 156 Storage equipment 161 Summary and conclusion Order-picking methods 178 Introduction 178 Paper pick lists 178 Pick by label 179 Pick by voice 180 Barcode scanning 188 Radio frequency identification 192

4 Contents Pick by light/pick to light 194 Put to light 197 Vision pick 200 Comparisons 200 Cost of errors 207 Deciding on type of picking system and equipment 207 Summary and conclusion Warehouse processes from replenishment to despatch and beyond 210 Introduction 210 Replenishment 210 Value-adding services 211 Indirect activities 213 Stock management 213 Stock or inventory counting 215 Cycle counting or perpetual inventory counts 216 The count itself 217 Security 219 Returns processing 220 Despatch 224 Documentation 231 Role of the driver 231 Summary and conclusion Warehouse (Management systems 233 Introduction 233 Why does a Company need a WMS? 234 Choosing a WMS 236 The process 236 Selecting the right WMS 237 What to look for in a system 240 Selecting a partner 242 Before the final decision 243 Implementation 244 Software as a service 246 Cloud Computing 249 Summary and conclusion 249

5 0^0 Contents 09 Warehouse layout 250 Introduction 250 Data collection and analysis 254 Space calculations 257 Aisle width 263 Other space 264 Warehouse layout examples 265 Finding additional space 268 Summary and conclusion Storage and handling equipment 271 Introduction 271 Storage equipment 271 Storage options 273 Shuttle technology with a difference 283 Very high bay warehouses 285 Other storage media 287 Warehouse handling equipment 292 Vertical and horizontal movement 296 Automated storage and retrieval systems (AS/RS) 307 Specialized equipment 309 Recent technical advances 311 Summary and conclusion Resourcing a warehouse 315 Introduction 315 Processing activities 316 Other factors 341 Modelling automation 342 Summary and conclusion Warehouse costs 345 Introduction 345 Types of costs 346 Return on Investment (ROI) 349

6 Contents Traditional versus activity-based costing systems 350 Charging for shared-user warehouse services 356 Logistics charging methods 361 Hybrid 362 Summary and conclusion Performance management 364 Introduction 364 Why do we need to measure? 365 What should we be measuring? 366 How to choose the right Performance measures 370 Traditional productivity measures 372 New Performance metrics 376 Hard and soft measures 379 Integrated Performance models 380 Benchmarking 381 Balanced scorecard 384 Summary and conclusion Outsourcing 389 Introduction 389 The outsourcing decision 390 Gore activity/core competence 392 Cost reduction, cost visibility and economies of scale 393 Improvement in customer Service 394 Management skills and Innovation 394 Capital Investment reduction 394 Flexibility 395 Role of third-party contractors 395 Preparing to outsource 396 Choosing the right partner 401 The transition 403 Managing a third-party relationship 403 Why contracts fail 405 The future of outsourcing 408 Summary and conclusion 414

7 Contents 15 Health and safety 415 Introduction 415 Risk assessments 418 Layout and design 423 Fire safety 427 Slips and trips 428 Manual handling 429 Working at height 430 Vehicles 430 Forklift trucks 432 Warehouse equipment legislation 434 First aid 434 Insuring against liability 435 Summary and conclusion The warehouse and the environment 437 Introduction 437 Legislation and other pressures 439 Warehouse energy usage 440 Energy production 445 The environment and waste 447 Packaging 448 Pallets 449 Stretchwrap 450 Cartons 450 Labeliing 450 Product waste 451 Waste disposal 451 Hazardous waste 451 Forklift trucks 451 Equipment disposal 452 Summary and conclusion The warehouse of the future 453 Introduction 453 Context 455 Views of the future: the landscape 456

8 Contents Views of the future: the warehouse 458 Other advances 463 Summary and conclusion 465 Appendix 1: Warehouse audit checklists 467 Appendix 2: Barcodes 482 Bibliography 485 Websites of companies tbat have contributed to tbis book and other useful Websites 493 Glossary ofterms and abbreviations 496 Index 501 Where you see the following symbol followed by a video title and a url, you will be able to access a video of the equipment or process discussed by linking to that url. (As video links online sometimes disappear or are moved, some search clues are included should the video not appear.) All the Videos are available on Gwynne Richards' YouTube Channel. PowerPoint slides can be accessed from the following Kogan Page url to aid schools and universities who have adopted the book in their curriculum: