 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
Cross Dock
Support
Functions
Shipping
Sort &
Accumulate
Storage
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



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:


ANALYSIS:-
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.