Warehouse Operations
What is Warehouse ?
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• A warehouse is a large building where goods are
stored, and where they may be catalogued,
shipped, or received, depending upon the type.
Though in the past, many warehouses, often
located in industrial areas sometimes next to
major shipping ports, were teeming with workers,
the modern warehouse may be either completely
or totally automated depending upon how
advanced the company is.
What is Warehouse ?
• Warehouses have existed for several
centuries, and the word itself is not hard
to understand. “Wares” were the things
possessed by a seller and to house these
in a central location meant your were
storing your wares.getting in new
products, and shipping out products
already stored.
What is Warehouse ?
• Another important part of maintaining a
good warehouse is keeping inventory of
what products are presently in the
warehouse, what has been shipped and
what has been received.
Warehouse Functions
• Provide temporary storage
• Put together an order
• Serve as a customer service facility
• Protect goods
• Perform value added services
• Inventory
The Value Chain
Firm Structure
Human Resource Development
Supporting
Activities
Technology Development
Procurement
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
and Sales
Services
Warehouse Functions
- Warehouse organizes and repackages
product
- Product arrives packaged on a large scale
and leaves packages on a smaller scale
“The smaller the handling unit, the greater
the handling cost”
Processes of reorganization of product
• Inbound Processes
– Receiving
– Put away/Storage
• Outbound Processes
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Processing customer orders
Order-picking
Checking
Packing
Shipping
Receiving
• Unloading and staging for put away
• Inspection (Sampling and/or 100%)
• Scanned for registering to
– Confirm its availability
– Confirm ownership
• Normally, receiving is accounted for
about 10% of W/H operations cost.
Put-away
“Before product can be put away, an
appropriate storage location must be
determined”
“Where the product is stored is directly
related to how quick and what cost to
retrieve it later”
Put-away
• W/H manager must know at all time that:
– Which storage locations are available
– How large they are
– How much weight they can take
After product is put away, its location must be recorded
Cost of put away is about 15% of W/H operating
expenses
Process of customer orders
• On receipt of customer orders the warehouse
must perform checks such as to verify that
inventory is available to ship
• The warehouse must produce a “pick list” to
guide the order picking
• The order picking include assigning operators
and sequence of order picking and shipping
Order Picking
• Order picking account for 55% of
warehouse operations cost, it can be
broken down to:
– Traveling
– Searching
– Extracting
– Paper work and other
*% of total order picking
55%
15%
10%
20%
cost
Order Picking
• Depend on type of storage and retrieval system
– Person-to-item
– Item-to-person
– Manual or ASRS
• Terminology used in order picking operations
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Pick-sheet or pick line
Pick/visit
Pick face
Pick density (# of picks per foot of travel)
Order Picking
• Flow time is a main indicator for picking
performance
• Short flow time can lead to better service
and responsiveness
• Flow time depend on
– how large the unit load, serial or parallel
pickers
– Number of pickers
Order Picking
• If the total work to pick and load a truck is
small, one picker may be assign to each
order
• If the orders to pick and load are large or
span distant region, several pickers are
needed to shorten the flow time
Order Picking
• For a warehouse that move a lot of small
products for each of many customers,
such as shipping to retail stores, order
picking may be organized as an assembly
line
• The assembly line needs to be balance
using some line balancing techniques
Checking and Packing
• Packing can be very labor intensive
• Every item needs to be handled but with
minimal walking
• Then, checking can be performed
simultaneously to make sure completeness
of order
• Incomplete order leads to return which is
expensive
Checking and Packing
• Packing must aim at minimizing broken
space when shipping
• Also, customers want orders in as few
containers as possible to avoid excessive
handling cost
Shipping
• Shipping generally handles larger units
than picking
• Less labor intensive
• Goal is to
– minimize transportation cost
– Protect goods
– Ease load and unloading
Warehouse Management
Systems
-Highly automated system that runs day-to-day
operations of a DC
-Controls item putaway, picking, packing, and
shipping
-Features
transportation management
order management
yard management
labor management
warehouse optimization
10-21
A WMS
10-22
Vendor-Managed Inventory
Manufacturers generate orders, not distributors or
retailers
Stocking information is accessed using EDI
A first step towards supply chain collaboration
Increased speed, reduced errors, and improved
service
10-23
Warehouse Management System
(WMS)
• The main function of WMS are to track all
product arriving and shipping out
• It most fundamental capability is to record
receipt of inventory into the warehouse
and register its shipment out (including
financial transaction)
Warehouse Management System
(WMS)
• Another important function are:
– Ability to do storage allocation
– Routing of material handling equipment
– Track every place that product can be stored
– Known as stock locator system
Manu Features of WMS
• Basic features
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Appointment scheduling
Receiving
Quality assurance
Put away
Location tracking
Work-order management
Picking
Packing and consolidating
Shipping
Manu Features of WMS
• High-end features
– Cycle counting
– Replenishment
– Yard management
– Labor management
– Value-added service
– Etc.
Manu Features of WMS
• WMS’s are extending their functionality to
support activities in supply chain both upstream
and downstream like:
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EXE technologies
Manhattan Associates
MARC Global System
Swisslog Software
etc
Materials Handling
Materials Handling
• Material handling is an activity that uses
the right method to provide the right
amount of the right material at the right
place, at the right time, in the right
sequence, in the right position and at the
right cost
Materials Handling (Cont)
• Systems perspective
• 20-70% of product cost attributed to
material handling
Unit Load
• Unit load - number of items or bulk
material arranged so they can be picked
up and delivered as one load
• Large or small?
• If large, cost/unit handled decreases
• But, depending upon
– cost of unitizing, de-unitizing
Unit Load (Cont)
– space required for material handling
– material handling carrier payload
– work-in-process inventory costs
– storage and return of empty pallets or
containers used to hold the unit load
• smaller unit load may be desired
Unit Load (Cont)
• Seven steps to design a unit load
– Unit load concept applicable?
– Select the unit load type
– Identify most remote source of load
– Determine farthest practicable destination for
load
Unit Load (Cont)
– Establish unit load size
– Determine unit load configuration
– Determine how to build unit load
Material Handling Device Types
• Conveyors
• Palletizers
• Pallet Lifting Devices
• Trucks
• Robots
Material Handling Device Types
(Cont)
• AGVs
• Jibs, Cranes and Hoists
• Warehouse MHSs
Conveyors
• Accumulation
• Belt
• Bucket
• Can
• Chain
Conveyors (Cont)
• Chute
• Gravity
• Pneumatic or vacuum
• Power and free
• Roller
Conveyors (Cont)
• Screw
• Skid
• Slat
• Tow line
• Trolley
• Wheel
Trucks
• Hand truck
• Fork-lift truck
• Pallet truck
• Platform truck
• Counterbalanced truck
• Tractor-trailer truck
• AGV
Robots
• Point-to-point
• Contouring or continuous path
• Walkthrough or teach
• Lead through or teach pendant
• Hydraulic
• Servo-controlled
MHSs in Action
• Europe Combined Terminals (ECT)
• ECT - one of largest in world and largst in
Europe
• Goods shipped from and to Europe
• Built on reclaimed land in the North Sea
• Large and Small containers
MHSs in Action (Cont)
• Trucks wait to be off-loaded by straddle
carrier
• Carrier takes container to holding area
• Shipped in approximately 2 days
• Mobile gantry cranes on tracks deposit
containers in forward area
MHSs in Action (Cont)
• Mobile gantry cranes hold containers in
top four corners and deposit on waiting
AGVs
• Fleet of AGVs in forward area take
containers to tower cranes
• Tower cranes deposit load on ship bed
• Procedure reversed for off-loading ship
AGVs
• Classification of MHS
– Synchronous systems
– Asynchronous systems
• Synchronous systems, e.g. conveyors,
used in continuous processes or heavy
traffic, discrete parts environments
AGVs (Cont)
• Asynchronous systems, e.g., AGV, AS/RS,
fork-lift trucks, monorails, cranes and
hoists used in light traffic, discrete parts
environments when material handling
flexibility desired
Design and Control Problems in
AGVSs
• Material flow network
• Location of pick-up/drop-off (P/D) points
• Number and type of AGVs
• AGV Assignments to material transfer
requests
• AGV routing and dispatching
Design and Control Problems in
AGVSs (Cont)
• Strategies for resolving route conflicts, so
AGV throughput rate is maximized, an
other costs (purchase, maintenance and
operating costs of AGVs, computer control
devices, and the material flow network, as
well as inventory costs and production
equipment idle costs incurred due to
excessive material transfer and wait
times), are minimized