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Warehouse Concepts
McHugh Software International
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Warehouse Basics
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What is a Warehouse?
• A facility that
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Receives items from a source
Stores items until required
Picks items when required
Ships items to the appropriate user
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Warehouse Objectives
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Improve customer service
Efficient use of space
Effective use of equipment
Efficient use of labor
Accessibility of all items
Protection of all items
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Types of Warehouses
• Manufacturing Warehouse
• Distribution Centers
– Parts/Catalog/Retail/Consumer products
• Cross-dock facilities
– LTL Break Bulk Centers/Pool Distributors/Retail Flow-Thru
Centers
• Storage Warehouses (3rd Party/Contract)
• Return Centers/Repair Centers
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Material Flow in Logistics Chain
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Raw material, parts and components
Initial processing/create subassemblies
Manufacturing process or assembly
Finished items inventory
Distribution to Warehouse and Wholesalers
Retailers
Customers
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Items
• Item Numbers
– An unique product identified by a numbering system.
– Referred to as SKU, UPC, part number, or material
number
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Locations
• Uniquely addressed position within the Warehouse
used for the storage, staging or manipulation of
product
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Storage Devices
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Pallet Storage
• Load characteristics play a big role in selection of the
type of storage
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Dimensions
Weight
Stackability
Storage limitations
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Flammable
Refrigerator
Frozen
Warm
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Pallet Storage
• Types of storage modules
– Floor storage
– Rack storage
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Selective rack (single deep)
Double deep rack
Drive-in or Drive-through rack
Flow rack
– Choice based on nature of product and volume
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Bulk Storage
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Rack Storage
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Non-Pallet Storage
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Case flow rack
Shelves
Bins
Drawers
Automated picking systems
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Shelf
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Bins
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Drawers
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Slick Rail
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Vehicles
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Vehicles
• Many variations of fork trucks
• Storage configuration and nature of picking
determines type of vehicles to use
• Discuss:
– Vehicle variations
– Configuration variations
– Options
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Vehicle Variations
• Hand truck / hand jack
– Manual or powered
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Walkie rider
Counterbalanced fork truck
Reach, double reach truck
Turret truck
Order picker
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Powered Hand Truck
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Counterbalance Fork Truck
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Reach Truck
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Turret Truck
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Stock Picker
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Warehouse Configurations
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Warehouse Physicals
• Storage systems
– Pallet storage
– Non-pallet storage
• Vehicles
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Configuration Variations
• Rack selection and layout may vary due to space
limitations
• Three standard layout variants
– Conventional - 12 foot aisle
– Narrow aisle - 8 to 9 foot aisle
– Very narrow aisle - 5 to 6 foot aisle
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Conventional Layout
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12 foot aisles
Counter balance fork trucks
Least expensive equipment
Limited to four or five levels high
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Conventional Aisles
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Conventional Aisles
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Narrow Aisle Layout
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8 foot aisles
Use reach truck
Tight turning radius
Also need fork trucks for work in other areas of the
facility
• Limited to four or five levels high
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Narrow Aisles
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Very Narrow Aisle Layout
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6 foot aisles
Use turret truck
Usually wire guided
Can get very expensive
Also need fork trucks for work in other areas of the
facility
• Limit now up to nine levels high
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Very Narrow Aisles
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Layout Comparison
• Space to hold 1000 pallets
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Conventional
Narrow aisle
NA with double deep rack
Very narrow aisle
10,000 SF
6,470 SF
5,500 SF
3,070 SF
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Options and Attachments
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Poles for carpet
Drum pickers
Slip sheet
Clamps
Double long forks
Double wide forks
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Automation
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Automation
• Five areas of automation use
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External receiving
Production receiving
Transportation
Storage and picking
Outbound
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Production Receiving Automation
• Palletizers
• Traditional (Alvey style) and robotic
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Automated Palletizer
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Manual Palletizer
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Pallet Conveyor
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Transportation Automation
• AGV’s (automated guided vehicles)
• Tugs, mules, tow carts
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AGV
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AGV
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Tug
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Outbound Automation
• Conveyors
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Belt conveyor for pick-to-belt
Extendable
Accumulation
Other
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Belt Conveyor
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Conveyors
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Accumulation Conveyor
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Extendable Boom Conveyor
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Extendable/Flexible Conveyor
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Scanners and Label Applicators
• Scanners
– Fixed position
– Omni-directional
– Raster
• Label applicators
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Fixed Scanner
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Case Label Applicator
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Pallet Label Applicator
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Barcoding
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Barcode Basics
• Barcode - The optically machine readable bars and
spaces of a symbol that contain encrypted data.
• Symbology - Code 39, UPC-A, UPC-E, Code 128,
PDF 417, Interleaved 2 of 5
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Barcode Basics
• Orientation
– Ladder - Horizontal Bars
– Picket Fence - Vertical Bars
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Aspect ratio (height/width)
Bar width
Check digits
No-reads
Mis-reads
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Standards
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Application standards (procedures)
Product identification standards
Label standards
Symbology standards
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Label Compliance
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Label format
Specific data fields
Barcode symbologies
Print quality
Label placement
Environmental considerations
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Primary Standards Organizations
• ANSI - American National Standards Institute
• UCC - Uniform Code Council
• AIM - Automated Identification Manufacturers
Association
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Benefits of Label Compliance
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Improved customer relations
Reduced mis-ships
Improved public image
Improved information availability
Reduced cost of product handling
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Product Identification Standards
• Universal Product Code (UPC-A or UPC-E)
– Individual consumer unit
– Mfg Id, product number, check digit
• Shipping Container Code (SCC-14)
– Case level
– Pack size, mfg id, product number, check digit
• Serial Shipping Container Code (SSCC-18)
– Shipping container level
– Mfg id, serial number, check digit
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Bar Coded Pick Ticket
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Bar Coded Shipping Labels
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Radio Frequency Terminal (RFT)
• A computer terminal that is not physically connected
to a computer, instead, it uses radio frequency
transmissions to communicate with the computer.
– Hand held
– Vehicle mount
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Hand Held Terminals
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Vehicle Mount Terminals
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WMS Overview
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What is a WMS?
• System in a warehouse that manages:
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Information
Inventory (Tracking, Accessibility, Protection)
Space
Labor
Equipment
• Must track and report activities
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Information Flow
Inventory
Management
Purchasing
EDI
Order Entry/
Billing
Warehouse
Manufacturing
Transportation
Planning
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Information sent to WMS
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Item, Customer and Vendor Information
Purchase Orders(PO’s)
Customer orders
Production orders or schedules
Transportation planning information
Inventory status information
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Information Received from WMS
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Receipt information
Shipment information
Inventory adjustments
Inventory status changes
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Why Implement WMS Systems?
• To improve
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Improve customer service
Space utilization
Labor utilization
Equipment utilization
Inventory accuracy and control
Information availability
Shipment accuracy
• To minimize
– Product handling
– Cost
– Errors
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Inter-Warehouse Material Flow
Warehouse
Shipments
Warehouse
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Inbound Shipments
• Purchase order receipts
• Customer returns
• Transfers
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Inbound Material Flow
Receiving
Dock Door
Quality
Assurance
Unload
Receiving
Trailer,
Container,
Rail Car
Id Product
and Stage
Sample
Putaway
Putaway
Staging
Crossdock
Damage
Damage
Damage
Damage
Raw Material
Warehouse
Finished
items
Warehouse
Putaway
Manufacturing
Staging
Damage
Customer
Returns
Area
Scrap
Shipping
Staging
Damage
Package
Materials
Warehouse
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Receiving from Internal Sources
• Production receiving
• Work order output
• Kitting output
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Receive from Manufacturing
To
Manufacturing
Manufacturing / Kitting
ID Product
Pick
Rework
Damaged
Damage
ID as
Damaged
Manufacturing
Receiving
Staging
Crossdock
Shipping
Staging
Putaway
Finished
items
Warehouse
From Customer
Returns Staging
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Outbound Shipments
• Shipment Types
– Customer shipments
– Transfer shipments
– Scrap, return to vendor, donations
• Carrier Vessels
– Trailers, Vans, Pups
– Rail Cars
– Sea Containers
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Outbound Material Flow
Finished
items
Receiving
Crossdock
Putaway
Damaged
Damage
Rework
Finished
items
Warehouse
Putaway
Pick
Shipping
Staging
Load Trailers
Shipping
Dock
Door
Customer
Returns
Area
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Delivery to Internal Sources
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Production lines
Work order areas
Kitting areas
Rework
Repack
Damage
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Deliver to Manufacturing
Raw
Material
Warehouse
Crossdock
from Receiving
Packaging
Materials
Warehouse
Pick
Pick
Return
Excess
Manufacturing
Staging
Putaway
Excess
Product
Returns
Staging
Deliver
ID Excess
Manufacturing / Kitting
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Performance Measurement
• Things to Track
– Inventory activity
– Item activity
– Location activity
• Reporting
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Detailed transactions
Summarization over Time
Comparison over Time
Resource utilization
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Warehouse Events
• Types of events
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Trailer arrivals
Trailer departures
Receipts
Shipments
Counts
Damage
• How many? How long? Resources?
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Item Activity
• Activities
– Receipts, Putaway, Counts, Picks by UOM by type of order
• Information used for profiling
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Determine cycle counting frequency
Determine storage profiles
Determine picking profiles
Determine resources needed
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Location Activity
• Track events performed at a location
• Used to adjust warehouse layout
• Adjust number of locations available for
– Storage by zone
– Storage by item
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Resource Utilization
• Equipment
– Hours of use
– Percent utilization
– Hours of downtime
• People
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Hours per day on direct activities
Percent utilization
How much accomplished per hour
Number of units per hour
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Warehouse Performance
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Percent on-time shipments and turn-around
Percent of orders shipped complete
Shipping accuracy
Inventory accuracy, shrinkage, damage
Inventory turn-over
Operating cost per unit or order shipped
Operating cost per sales dollar
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WMS Functionality
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Scheduling Appointments
• Purpose
– Control traffic to the facility
• Types of Appointments
– Inbound (deliveries)
– Outbound (pickups)
• Drop vs. Live considerations
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Inbound Appointments
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Based on requested delivery date
Shipper or carrier calls for an appointment
Drop or Live
Check authorization to deliver
– Reference purchase order number
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Inbound Appointments
• Estimate time to unload
– Floor loaded vs. palletized
– Mixed or full pallets
– Number of pallets, cartons, total weight, etc.
• Assign date and time based on capacity
– Dock calendar
– People availability
– Other arrivals already scheduled
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Outbound Appointments
• Pickup appointment based on delivery
requirements
• Warehouse calls the carrier
– EDI
• Customer pickups
– Customer normally specifies the pickup time
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Outbound Appointments
• Based On delivery appointments
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Traffic planner builds loads
Travel times are planned
Customers may impose limitations
Transportation restrictions may come into play
• Availability of trailers, etc.
– Appointment is to pick up the load based on
delivery requirements
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Outbound Appointments
• Warehouse calls carrier
– The preferred carrier is offered the load first
– Load may be tendered to multiple carriers if the primary
carrier cannot handle the load
• No appointments from ‘drop’ trailers
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Yard Management
• Yard provides storage for inbound and outbound
trailers and sea containers
• Functions required:
– Log arrivals and departures
• SCAC, trailer id, trailer contents
– Log trailers current locations and movements
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Yard Management
• Trailer arrival (Check-in)
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Verify authorization
Note trailer contents and seal (inbound)
Record arrival date/time
Record condition of the vessel
Direct driver to a dock door or yard location
• Trailer departure (Check-out)
– Verify authorization to leave
– Verify contents or seal (outbound)
– Record departure date and time
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Receiving
• Open a receipt
– One header record with vendor identified
– One or more detail records with items to be received
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Unload the trailer
Identify the product
Stage product for putaway
Close the receipt
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Open a Receipt
• Get shipping paperwork from the driver
• Determine purchase order from shipping
paperwork
• Create a Receipt (paper or electronic)
• Verify delivery on time
• “Blind” receipts
• Advanced Shipping Notice (ASN)
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Unload the Trailer
• Count the number of packages
• Compare the number of packages to the
shipping paperwork
• Check for damage
• Record damage or count discrepancies
(paper or electronic)
• Sign the shipping paperwork
• Release the driver (live load)
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Identify Product
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Sort the product, if necessary
Build pallets
Count each item delivered
Record all product identified (paper or electronic)
Compare the count to the shipping paperwork and
purchase order
• Perform any required inspection
• Divert samples to the QA area
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Stage for Putaway
• After product has been identified and is ready
to be putaway
• Organized for storage
• Optional step
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Close the Receipt
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Record any discrepancies
Send the receipt to accounts payable
Manually or electronically
Freight claims for damage product
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Putaway
• Decide whether to use product immediately
(cross-dock) or store for later use
• Select a storage location
• Putaway execution
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Decide to Use or Store
• Cross-dock?
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Need product for backorders?
Need product for manufacturing?
Use to fill a customer order (other than a backorder)?
Distributions to stores?
• Can product be used to top off a primary pick
location (pickface)?
• Putaway to secondary storage
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Select Storage Location
• Location selection based on:
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Size of product
Quantity to store
Annual product usage (velocity)
Storage requirements (flammable, refrig...)
Lot control, date control
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Putaway Execution
• Select product to be putaway
– First received
– Priority
– Area serviced by a person
• Deliver to the selected storage location
• Record product movement
– RF
– Paper
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Order Management
• Order source
– One header record with customer identified
– One or more detail records with items to be
ordered
• Special issues
• Shipment planning
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Order Source
• Source
– Order entry department
– Customer service or sales
– Directly from customers
• Method
– Phone
– Fax
– Electronic
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Order Specifics
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Sold-To, Ship-To, Ship-For
Ship Date or Delivery Date Requested
Carrier
Order Type and/or Priority
Under/Over Ship Allowed
Back Order Allowed
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Order Type / Priority
• Order type
– Customer order or Store order
– Transfer order
– Return To vendor, Scrap, Kitting, etc.
• Priority
– Rush
– Regular
– Will-call
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Special Issues
• Lot control
– Chemical, Pharmaceutical, Food, Clothing
• Inventory reservation
• Units of measure
– Standard
– Converting
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Shipment Planning
• Determine the best way to deliver an order
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When it has to be there
Carriers available
Size of order
Cost
Hazardous considerations
• Can put real pressure on the warehouse
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Best Way to Deliver
• Types of carriers
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Common (TL, LTL)
Contract
Parcel or small package (UPS, FedEx)
Air
• Cost comparison example
– LTL = $100 for first 500 pounds
– UPS = $5.50 plus $.50/pound up to 150 pounds
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Picking
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Picking methods
Picking approaches
Wave vs. Order pick generation
Sortation, Automation
Other picking considerations
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Picking Methods
• Manual
• Operator assisted (semi-automated)
• Automated
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Manual Picking
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Pick lists
Pick tickets
RF
Combinations
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Pick List
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Pick Ticket
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Operated Assisted Picking
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Carousel
Pick-to-Light
AS/RS (Automated storage and retrieval system)
Slick rail
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Carousel
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Carousel
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Pick to Light
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Pick to Light
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AS/RS
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Slick Rail
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Automated Picking
• A-Frame
• AS/RS
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A-Frame
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A-Frame
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A-Frame
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Picking Approaches
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Order picking
Independent picking
Cluster picking
Batch picking
– To pallet
– To belt
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Order Picking Approach
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Part or all of one order
By area of the warehouse (type, size, ...)
Pick and pass
Location selection
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Order entry system
Fixed
Operator
WMS
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Order Picking Approach
• Process
– RF
– List
– Labels w/ or w/o RF
• Pick sequence
– Travel
– Location number
– Operator determined
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Independent Picking Approach
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Individual picks without regard to order
Multiple people may pick for one order
Take advantage of equipment
Limited to an area of the warehouse
Based on priority
Usually full pallets
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Pallet Picks
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Pallet Picks
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Independent Picking Approach
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RF most common
Usually only used when a WMS in place
Order integrity established in shipping
Location selection by WMS
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Staging Area
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Cluster Picking Approach
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Pick multiple orders at once
Pick to tote or shipping carton
Use cart or automation
Part or all of each order
Maintain order integrity
Minimize travel
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Cluster Picking Approach
• Usually picking individual units
• Usually from pickfaces
• Process
– RF
– List
– Labels w/ or w/o RF
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Carousel
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Batch Picking Approach
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With Waves
Pick inventory, not orders
Pick one or more items
Optimize picking
Usually from pickfaces
Requires WMS for planning and execution
Requires sortation (equipment or person)
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Batch Picking Approach
• Order integrity established in shipping process
options:
– To pallet
• RF
• List
• Labels w/ or w/o RF
– To belt
• Almost always with labels
• Labels barcoded for sortation
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Pick to Belt
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Pick to Light
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Wave Generation
• A wave is a collection of picks organized to improve
picking efficiency
– Group picks by item, not order
– Use batch picking
– Requires sortation
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Wave Generation
• Wave picking is likely to be used when:
– Large number of orders
• Client 1
– 17,000 items, 1300 case pickfaces
– 1700+ orders, 70,000 -150,000 lines per day
• Client 2
– 25,000 items, 5000 case pickfaces
– 10,000 orders per day
– Case or unit picks dominate orders
152
Wave vs. Order Pick Generation
• Common wave generation rules
– Single trailer
– Same stop across all trailers
– Carrier
• Wave generation limitations
– Time
– Sortation or palletizer capacity
– Number of dock doors
153
Sortation
• Conveyors
– Powered or not
– Belts and rollers most common
• Scanners
• Diverters
• Chutes
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Sortation
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Sortation
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Merge
157
Other Picking Considerations
• Lot control
– Finding
– Recording
• LIFO/FIFO
• Serial numbers
158
Pickface vs. Secondary Storage
• Pickface
– Primary picking location for an item, assigned
– Rack, flow rack, shelf, bin
– Usually for product picked in less than largest
UOM (less than pallet or less than case)
– Replenished from secondary storage
– Make picking for orders easier and quicker
159
Pickface vs. Secondary Storage
• Secondary Storage
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Random storage, here today - there tomorrow
Rack, shelf or floor (bulk) storage
Primarily for product picked in largest UOM
Secondary source for picking less than largest UOM
160
Replenishment
• Refilling a primary storage location (pickface) with
product from a secondary storage location
• Methods
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Min/max
Top-off
Pro-active
Demand
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Packing Stations
• Repack (overpack) product for shipping
• Some product can’t be shipped in its current
package
– Too small
– Fragile
– Security
162
Packing Stations
• More economical to ship multiple products together
in one carton
– Savings in freight more than packing cost
– Make sure it all arrives at once
• Kit or combo assembled for shipment (customer
service)
163
Shipping Process
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Planning (discussed in last session)
Delivery to shipping, staging
Loading
Print paperwork
Check-out
Confirm shipment
164
Shipment Staging
• Designated area for each shipment, load or carrier
• Pickers deliver
• Final preparation for shipment
– Count verification using order or pick list
– Stretch wrapping
– Print and attach packing list or shipping label
165
Loading
• Reverse stop sequence
• Balance trailer
– Front-back
– Left-right
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Damage considerations
Hazard considerations
Security considerations
Shipper load and count
Carrier load and count
Close the trailer, seals
166
Print Paperwork
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Bills of lading
Packing list
Shipping labels
Manifest
Export
167
Bills of Lading
• Represents contract with common carrier to deliver
items
– Shipment (straight)
– Memo/stop
– Master
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Shipper assigns Bill of lading (BOL) number
Carrier assigns PRO number
Carrier signs BOL to accept load
Customer signs BOL to accept from carrier
Contents on next slide
168
Bills of Lading
Trailer
Stop 1
BOL1
Stop 2
B
O
L
2
B
O
L
3
Stop 3
B
O
L
4
Stop BOL
Master BOL
BOL5
169
Straight Bill of Lading
STRAIGHT BILL OF LADING
Shipper’s No. __________________________
ORIGINAL - NOT NEGOTIABLE
Carrier’s No. __________________________
CARRIER_____________________________________________________
SCAC_____________ Date________________
TO:
FROM:
Consignee
Shipper
Street
Street
Destination
Zip
WH
Origin
Zip
Vehicle Number
Customer Order #:
No.
Shipping
Units
HM
WEIGHT
(Subject to Corr.)
(IF HAZARDOUS -PROPER SHIPPING NAME)
Total Pallets:
Remit C.O.D. to:
Address:
City:
NOTE:
PACKING
GROUP
Kinds of Packages, Description of Articles, and Exceptions (See
NMFC Item (Rule) 360)
Loose Pcs:
U.S. DOT Hazmat Reg No.
Class or
Rate
CHARGES
(For Carrier Use)
(Informational)
Total Weight:
Pallet Weight:
C.O.D. FEE:
State:
COD
Zip:
(1) Where the rate is dependent on value, shippers are required to state specifically in writing the agreed or declared value
of the property. The agreed or declared value of the property is hereby specifically stated by the shipper to be not exceeding
$____________________________ Per _______________________________________
(2) Where the applicable tariff provisions specify a limitation of the carrier’s liability (NMFC Item 172) absent a release or a
value declaration by the shipper and the shipper does not release the carrier’s liability or declare a value, the carrier’s
liability shall be limited to the extent provided by such provisions.
Prepaid
Collect
Amt: $
Subject to Section 7 of conditions, if the shipment is to be delivered
without recourse of the consignor, the consignor shall sign the
following statement:
The carrier shall not make delivery of the shipment without
payment of the freight and all other lawful charges.
$
TOTAL CHARGES:
$
FREIGHT CHARGES
PREPAID COLLECT
________________________________________
(Signature of the consignor)
RECEIVED, subject to the classifications and lawfully filed tariffs in effect on the date of the issue of this Bill of Lading, the property described above in apparent good order, except as noted (contents and condition of contents of packages unknown),
marked, consigned and destined as indicated above which said carrier (the word carrier being understood throughout this contract as meaning any person or corporation in possession of the property under the contract) agrees to carry to its usual
place of delivery at said destination , if on its route otherwise to deliver to another carrier on the route to said destination. It is mutually agreed as to each carrier of all or any said property over all or any portion of said route to destination and as to
each party at any time interested in all or any of said property, that every service to be performed hereunder shall be subject to all of the bill of lading terms and conditions in the governing classification on the date of the shipment.
Shipper hereby certifies that he is familiar with all the lading terms and conditions in the governing classification and the said terms and conditions are hereby agreed to by the shipper and accepted for himself and his assigns.
SPECIAL INSTRUCTIONS:
EMERGENCY CONTACT:
SHIPPER:
CARRIER:
PER:
PER:
DATE:
DATE:
e:\dmplus\forms\bol.doc
170
Packing List
• Identifies to customer detail of the shipment
• Customer uses to receive
• Multiple formats possible
– Customer specific content
– Business related
– Product line related
• May be for shipment, order, pallet or carton
171
Shipping Labels
• Uniquely identify shipment for customer
• May contain bar codes
– Serialized shipping container code (SSCC)
– Item number, PO, quantity, serial number, ...
– ZIP code for carrier
• May be customer or industry specific format
• UCC 128
172
Shipping Labels
173
Manifest
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•
•
For small package carriers
List of packages shipped
Strictly for shipment reconciliation
Paper or electronic
One per day or one per pickup
174
Manifest
175
Export Paperwork
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•
•
•
Usually a special group within the company
Unique requirements by country
Constantly changing
Warehouse often ship to freight forwarder and the
freight forwarder handles the paperwork
• Canadian customs invoice
176
Canadian Customs Invoice
177
Check-Out
• Last chance to catch any problems
• Guard verifies carrier as authorized to leave
– Checks BOLs against trailer
– Checks trailer seals
• May be some time after the trailer was loaded
178
Confirm Shipment
• Send notification of shipment to billing dept
• Maybe notify customer and/or carrier
• Notification includes:
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Carrier, trailer, cost, weight and cube
Date and time shipped
Order, item, quantity, lot #’s, serial #’s
License plates (SSCC) and contents
179
Material Movements
• Staging and putaway for receipts
• Picking, staging and loading for shipments
• Movements not associated with an order
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Consolidate product
Relocate for seasonality
Take samples
Remove damaged product
For manufacturing (floor stock)
180
Physical Inventory
• Periodic count of all inventory in the warehouse to
update inventory records
• Periodically
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–
–
–
Once or twice a year
Shut down the warehouse for 1-3 days
Slow time of year
Minimize inventory on-hand
181
Physical Inventory
• Must clean up everything and put everything
away
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–
Ship or close all orders
Complete all receipts
Empty the docks
Usually reduce operations up to a week in
advance
182
Physical Inventory
• Count
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–
–
–
Go to a location and count what is in the location by item
Compare the results to what the inventory records show
Adjust the inventory records as required
Blind count
183
Physical Inventory
• Count (cont.)
– Recount vs. original count
• Quantity
• Dollar value
• Supervisor recount
– Summary vs. detail count
• 187 pallets of the 9oz size 24/case
• 187 pallets * 60 cases/pallet * 24 units/case
184
Physical Inventory
• All inventory
– Wall-to-wall
– Top-to-bottom
• Update inventory records
– Updated at a point in time
– Recognize gain or loss
– Variances grow until the next physical
185
Cycle Counting
• Regularly count a prescribed portion of the inventory
based on a formula to insure inventory accuracy
• Philosophy radically different from physical inventory
• Regularly = daily/by shift
186
Cycle Counting
• Count - same as for physical inventory
• Prescribed portion of inventory
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–
–
–
–
Certain percent of inventory each day
Plan for coverage of the entire warehouse
Balance between cost and benefit
Don’t do shipping, receiving, staging, etc.
Do storage locations, pickfaces, etc.
187
Cycle Counting
• Formula
– Simple as 1 aisle per day or x locations per day
– ABC cycle counting
• Frequency by item based on value and volume
• 30/90/180 days
• Applies effort to products of higher value
– Always exceptions based on the business
188
Cycle Counting
• Key issues for cycle counting
– Must be statistically significant sample
– Saves money!
•
•
•
•
Reduced labor
Reduced shipping errors
Improves customer service
Reduced inventory levels
– Done while the warehouse is in operation - before, during
or after regular hours
189
Kitting
• Combining two, or more, finished items together to
create a new finished item
– Examples: gift pack, sample pack, value pack, special
offer, display pack
– Combining, not changing
– Finished items items are salable separately
– May be inventoried or special order
– De-kitting
190
Value Add Operations
• Add highly variable customer specific “things” to a
product before it is shipped without changing the
basic nature of the product
– Brand labeling
– Ticketing and tagging
– Personalizing
191
Value Add Operations
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•
•
•
Reduces inventory and waste
Increases flexibility
Brings in extra revenue
May save customer money
192
Inventory Adjustments
•
•
•
•
•
•
Lost inventory
Found inventory
Scrap / damage / sample
Obsolete / aged / expired
Gifts for visitors
Employee benefit programs
193
Interfaces
194
Interfaces
• Interfaces to the rest of the organization and beyond
• May be paper based (computer, fax, or hand
written), electronic or voice
• Timing varies widely based on the sophistication of
the organization
195
Purchasing Interfaces
• Authorization to receive to the warehouse
• Confirmation of receipt to purchasing
• Confirmation of receipt to inventory management
196
Warehouse Transfer Interfaces
• Warehouse transfer group is part of the inventory
management organization
• Transfer order to the shipping warehouse
• Expected receipt to the receiving warehouse
• Ship confirm from the shipping warehouse
• Receipt confirm from the receiving warehouse
197
Customer Returns Interface
• Return authorization (RA, RMA or RGA) to the
warehouse
• Confirmation of receipt to customer returns
• Disposition of returned product to customer returns
• Confirmation of receipt to inventory management
• Product disposition to inventory management
198
Inventory Management Interfaces
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•
•
•
Corporate level inventory
Inventory adjustments to inventory management
Inventory reconciliation (WMS only)
Cycle counting adjustments to inventory
management
• Physical inventory adjustments to inventory
management
199
Order Entry and Billing Interfaces
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•
•
•
Authorization to ship (orders) to the warehouse
Order status update to customer service
Confirmation of shipment to OE/Billing
Shipment confirmation to inventory management
200
Transportation Planning
• Orders for planning to transportation
• Shipment plans to the warehouse
• Actual shipment notification to transportation
201
Manufacturing Interfaces
• Request for material to the warehouse
– Manufacturing order based
– Replenishment of floor stock
• Notify manufacturing of material deliveries
– Delivery to manufacturing
– Material returned to stock
– Historically a problem area
• Production plan to the warehouse
• Notify manufacturing of finished items receipt
• Notify inventory management of inventory
movements
202
Return to Vendor Interface
• Return authorization (RTV order) to the warehouse
• Confirmation of shipment to the RTV group
• Confirm shipment to inventory management
203
EDI Interfaces
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•
•
•
•
•
Receive ASNs from vendors
Notify customers of shipment
Notify carriers of shipment
Notify freight payment center of shipment
Receive appointment confirmations from carriers
Send appointment confirmations to carriers