WAREHOUSING:- Warehousing is that part of a firm s logistics system that stores products (raw materials, parts, goods-in-process, finished goods) at & between point-of-origin & point-of consumption, & provides information to management on the status, condition, disposition of items being stored. CONCEPT OF WAREHOUSING:- Warehouses stored inventory in the logistics pipeline, serving to coordinate product supply & consumer demand. Initial Warehouses provided a necessary bridge between production and marketing.
IMPORTANCE OF WAREHOUSING IN WHOLESALE & RETAIL In the distributive industries such as wholesaling & retailing, it was traditionally considered best practice to dedicate a warehouse containing a full assortment of inventory to every sales territory. As forecasting & production scheduling techniques improved, management questioned such risky inventory deployment. Thus progressive wholesalers & integrated retailers developed state-of the art warehouse systems to logistically support retail replenishment. Thus focus on warehousing shifted from passive storage to strategic assortment.
FUNCTIONS & IMPORTANCE OF WAREHOUSING:- Receiving Put Away Storage Cross Dock Support Functions Shipping Sort & Accumulate Order Picking
Functions:- Receiving:- a collection of activities involving receipt of materials, quality assurance & disbursing of materials to appropriate places. Prepackaging:- to break bulk & pack for single unit delivery in merchandisable quantities with other parts to form assortments. Put away:- for placing the merchandise in storage. Storage:- physical containment of merchandise. Order picking:- process of removing items from storage to meet specific demand. Packaging & pricing: Sortation & accumulation: Packing & shipping:-it include checking for completeness, containerization, documentation, weighing, loading of trucks.
Importance of warehousing:- The capability to receive mixed product shipment offers customers two specific advantages:- 1. the logistical cost is reduced, 2. inventory of slow moving products can be reduced. An important goal on warehousing is to maximize flexibility. Flexibility is facilitated by information technology. Benefits realized from strategic warehousing are classified as economic & service. Strategic warehousing serves to satisfy requirements related to local presence. The underlying belief is that a local warehouse can respond faster to customer needs. It is anticipated that local warehouse presence will increase market share & potentially profitability.
ECONOMIC BENEFITS OF WAREHOUSING:- Four basic economic benefits are:- 1. Consolidation & break bulk, 2. Sorting, 3. Seasonal storage, 4. Reverse logistics. 1. Consolidation & break bulk:- The economic benefits of consolidation & break bulk are to reduce transportation cost by using warehouse capability to group shipments. Benefits of consolidations :- The realization of the lowest possible freight rate Timely & controlled delivery, Reduced congestion at a customer s receiving dock.
A break bulk operation receives a single large shipment & arranges for delivery to multiple destinations. Economy of scale is achieved by transporting the larger consolidated shipment. Supplier A (Motherboard) Supplier B (Graphics card) Supplier C (CPU) Consolidated warehouse DELL production plant
2.Sorting:- Benefit:- to reconfigure freight as it flows from origin to destination. Three types of assortment Cross-docking, Mixing, Assembly are widely performed in logistical system. Cross-docking- it is the transfer of goods & materials from an inbound carrier to an outbound carrier, without goods or product actually entering the warehouse or being put away into storage. Cross docking scenarios:- Distributor cross-docking, Retail cross-docking, Manufacturing cross-docking
Product Mixing:- Product mixing for customer order means mixing products from multiple supplier/production facilities to shipment to a single customer. Example:- meeting customer s order. Supply mixing for manufacturing activities means mixing required materials or subassemblies from multiple suppliers to shipment to a plant. Example:- meeting production order. Cross docking has the same effect as mixing & typically serves as distribution mixing center. Example :- receive- sort-ship action. The basic benefit of mixing is to reconfigure transportation as it flows from origin to destination. Mixing activities are carried out at distribution level.
3.Seasonal storage:- For companies that experience seasonal demand for their products, the supply of temporary building structures can be a cost effective, flexible method of storage to cope with the peaks in business. 4. Reverse Logistics processing:- Both products & packaging return for a variety of reasons, but returns can be broadly divided between, Unplanned & undesired, Planned & desired. The reverse logistics of unplanned returns are particularly difficult because organizations do not known what will be arriving when. An advantage of planned returns it is much easier for the organization to know what is coming back when disposing of returns.
Various ways to maximize the value of returned products:- Reuse, Repair/repackage, Return to supplier, Resell, Junk, Recycle, renew. WAREHOUSE STORAGE:- Types of storage policies:- Dedicated storage, Randomized storage, Class- based storage
Storage:- Slots- specific assigned locations for material storage. Product velocity:- it refers to the quantity & frequency of the SKU picked over a designated period of time. Rule of thumb when considering the velocity of a SKU:- 1. Determine fast, medium & slow movers & place them in the appropriate storage medium. 2. Examine both average & peak-picking days. 3. Store high velocity SKUs in a really accessible & ergonomically friendly area for ease of both picking & replenishment. 4. Establish whether individual SKU velocities are affected by seasonality or special promotions.
Active Storage:- Storage for basic inventory replenishment is referred to as active storage. Active storage must provide sufficient inventory to meet the periodic demands of the service area. Concept:- includes flow-through or cross-docking distribution, which uses warehouses for consolidation & assortment while maintaining minimal or no inventory in storage. Flow through distribution is most appropriate for high-volume, fast moving products where quantities are reasonably predictable. Extended storage:- When inventory is held for periods in excess of that required for normal replenishment of customer stocks, it is referred to as Extended storage.
Reasons for extended storage:- Erratic demand items, Product conditioning, Speculative purchases, Discounts. TYPES OF WAREHOUSING:- Private warehousing, Public warehousing. Contract warehousing, Private warehousing:- It is typically operated by the firm owing the product. Benefits:- control, flexibility, cost & a range of intangibles. Both the fixed & variable cost components of a private warehouse may be lower than for-hire counterparts. The use of private warehousing is declining because of an increasing managerial interest in reducing capital invested in logistical assets.
Public warehousing:- Public warehouses have traditionally been classified based on operational specialization:- 1.General merchandise, 2.refrigerated, 3.Special commodity, 4.Bonded, 5.Household goods & furniture. 1.General merchandise:- theses warehouses are designed to handle package products such as electronics, paper, food, small appliances. 2.refrigerated warehouses:- it offer frozen or chilled capacity designed to protect food, medical & chemical products. 3.Special commodity warehouses:- these are designed to handle bulk material or items requiring special handling such as tires or clothing.
4.Bonded warehouses:- these are licensed by the government to store goods prior to payment of taxes or import/export duties. 5.Household goods & furniture warehouses:- specializes in handling & storing large, bulky items such as appliances & furniture. Benefits of public warehouses:- To achieve lower operating cost than private facilities. Not requirement of capital investment, It offers flexibility concerning size & number of warehouses. It can have the potential to share scale economies since the combined requirements of users can be leveraged.
Contract warehousing:- It combines characteristics of private & public operations. A long term contractual relationship will typically result in lower total cost than a public warehouse. Benefits of contract warehousing:- Expertise, Flexibility, Scalability, Economies of scale. Contract logistics firms, typically called integrated service providers (ISPs), are capable of performing the total logistics responsibility for an enterprise.
WAREHOUSE DESIGN:- Three factors to be considered during the design process; 1. the number of floors to include in the facility, 2. a cube utilization plan, 3. product flow. The ideal warehouse design is a one floor building that eliminates the need to move product vertically. Warehouse design must maximize cubic utilization. Warehouse design should facilitate continuous straight product flow through the building. This means that product should be received at one end of a building, stored as necessary in the middle, & shipped from the other end.
WAREHOUSE LAYOUT:- The layout of a warehouse should be planned to facilitate product flow. There are five areas which are necessary to the functionality of the warehouse:- 1.receiving, 2.storage, 3.warehouse operations, 4.staging, 5.Vehicle load out.
PRODUCT-MIX ANALYSIS:- The design & operation of a warehouse are both dependent on the product mix. Each product should be analyzed in terms of annual sales, demand, weight, cube & packaging. MATERIALS HANDLING:- It is the basic driver of warehouse design. It is important to stress that the materials handling system must be selected early in the warehouse development process. WAREHOUSE MANAGEMENT SYSTEMS (WMS):- It is a software application that supports the dayto-day operations in a warehouse. WMS programs enable centralized management of tasks such as tracking inventory levels & stock locations.
WMS systems may be standalone applications or part of an Enterprise Resource Planning (ERP) system. Current WMS applications can be so complex & data intensive that they require a dedicated staff to run them. High end systems may include tracking & routing technologies such as RFID (Radio Frequency Identification) & voice recognition. Benefits of WMS :- Placement & removal cycle times be reduced, Inventory accuracy should be improved, Increased storage capacity, More organized storage of materials, Greater flexibility of warehouse operations.
WAREHOUSE SAFETY & SECURITY:- A warehouse may have more potential for accidents than areas with more limited functions. So, it is especially important to pay close attention to safety in the warehouse. Safely storing materials:- Make sure that stacked loads are straight, & even, to prevent them from toppling over. Heavier loads should be stored on lower or middle shelves, so they create center of gravity for shelving units. Keep the aisles & surrounding areas free from obstruction. When removing objects from shelves, only do so one item at a time.