An Introduction to Warehousing

Private & Confidential

Table of Contents
Warehouse and Its Need Warehouse Set - Up
Warehouse Site Selection Warehouse Management Processes Warehouse Process Flow Schematic
I. II. III. IV. V. Types of Material Flow Types of Inspection Put Away Process Types of Storage Picking and Packing Process

Warehousing Support Needs

Designing Warehouse
Warehouse Site Selection and Layout Design - Understanding Business Needs Usual Challenges Designing Layout Parameters to be considered while designing Sample Layout

Implementation O-Links Solution

Warehouse and Its Need

Definition A designated place where goods are stored to balance demand & supply uncertainty, to serve
customers in much better way, to consolidate upstream flow and distribute downstream flow as per requirement, to do last mile value addition such as packaging, kitting etc. and to reduce last mile distribution cost.

Types of Warehouses
Manufacturing Support
Stock room providing raw material and work in process items to manufacturing operations Contains many small orders Only Statistical information available about order composition Stringent time requirement for response time Primary focus on response time but accuracy and cost also are important

Factory
Interface production with wholesalers A Comparatively small number of orders are picked up on daily basis Advance information about the order composition is required High focus on cost and order accuracy Responsiveness heavily depends on production schedules

Retail Distribution
Serves a number of captive retail units Advance info about order composition is needed Carton and item picking is done from a forward area More orders per shift than consolidation/shipping lanes High focus on cost, accuracy, and fill rate of the packages Responsiveness depends heavily on truck routing schedules The only critical point is that if the retails units are not captive then responsiveness becomes a crucial issue

Catalog Retailer
Fills orders from catalog sales A large numbers of small, frequently single lines orders are picked up Item and, sometime, carton picking Daily compositions of orders are usually unknown Only statistical information available High focus is on cost and response time

Warehouse Set-up

Private & Confidential

Warehouse Site Selection

Key Criteria (Cost vs. Service Reliability) Cost (Warehouse Operations and Maintenance) Additional Factors
Availability of Transportation

Infrastructure
Roads Power Water Other utilities

Serviceability (Proximity to Customers or Ports)

Availability of Skilled Manpower

Government Regulations

Strategic Factors monitoring & control, predetermined sites, future plans

Environmental Factors

Warehouse Site Selection

Sample comparative analysis of possible Sites for a Customer needing warehouse closer to Port in the West Zone
Factors
Infrastructure cost

Zone 1
Low cost

Zone 2
Higher as compared to Zone 1 but much lower than Zone 3,4 and 5 Low

Zone 3
Higher than Zone 1 and 2

Zone 4
Very High attributed to high land cost

Zone 5
High cost as compared to zone 1 and 2

Transportation cost (Inbound )

Lowest Close proximity to port 0 km Good

Very High attributed to distance 100+ km Average

High

High

Distance (Port to Wh.) Connectivity

17 km Inbound Very good for Inbound and Outbound Good due to warehousing hub

66 km Good

32 km Average

Availability of Manpower (Other facilities) Probable Locations

Good

Average

Good due to warehousing hub

Good

JNPT

Panvel

Vasai

Bhiwandi

Kalamboli

Here the comparison is based on few key parameters. Similar analysis can be done taking in to consideration critical parameters, as mentioned in the earlier slide. From the comparative analysis Zone 2 is the best option and the warehouse can be set up in this Zone to cater to Customer requirement of having the warehouse strategically closer to the Port

Warehouse Management Processes

5

13 4 6 11 8 9 7

10

12 1
7 - Order picking 1 - Inbound 2 - Dock / Unload 3 - Receipt of goods 4 - Create GRN 5 - Putaway 6 - Picklist Creation 8 - Value-added services (Kitting)

9 - Rework
10 - Packing line

11 - Dispatch
12 - Tracking 13 - MIS & Documentation

Warehouse Process Flow Schematic

The general flow of material in the warehouse is as depicted in the adjacent figure The logical flow of the process is: 1. Receipt 2. Inbound Inspection 3. Putaway 4. Storage 5. Order Picking 6. Order Sorting and Packing 7. Dispatch/Shipping Each Process itself can be performed in a number of ways. For example there are numerous ways in which the materials can be stored Racks, On ground, Pallets, etc. These topics are further explained in the following sections
Typical Warehouse Process Flow

Type of Material Flows: U Flow

A 'U' flow occurs when the goods receipt and dispatch functions are located at the same end of a warehouse building Products flow in at receiving, move in to storage at the back of the warehouse, and then to shipping, which is located adjacent to receiving area, on the same side of the building

Fast moving items are located closer to the loading bays

Advantages of 'U' Flow

Excellent utilization of dock resources because the receiving and shipping processes can share dock doors Facilitating cross-docking because the receiving and shipping docks are adjacent to one another and may be co-mingled

Excellent lift truck utilization because put away and retrieval trips are easily combined and because the storage locations are closest to the receiving and shipping docks, they become natural locations to house fast moving items
Yields excellent security because there is a single side of the building used for entry and exit

Types of Material Flow: Straight or Through Flow

Through' flow happens when separate loading bay facilities are available for Inbound and shipping are provided, often at opposite ends of warehouse Products flow in at receiving, move into storage, picking area and then the staging area and despatch area in a straight line Items with a higher throughput level are located at the centre of the warehouse because the total distance travelled would be shorter

The major disadvantage of a 'Through' flow layout is goods need to travel the full length of the warehouse, even for goods that are fast moving
It is also harder to control and less flexible

When is it better to adopt a 'Through' flow?

When there is a risk of interference or confusion between Goods In and Goods Out When goods inwards vehicles and dispatch vehicles are very different; for example differences in platform height or nature of unit load When the warehouse is connected to a production Plant

Types of Inspection
Sampling
Sampling Inspection is a process in which parts of the Inbound material is checked for consistency and expected quality This process is followed in case of materials, which come in good number per batch. The underlying principle is that the quality of a small representative parts, is good enough to gauge the quality of the entire batch This type of Inspection is usually used for material like automobile components, Spares, toys, etc.

Complete Count
Complete Count is a process in which the quality of each component/material or part coming in has to be checked for quantity, quality and consistency This process is followed in case of materials, which come in small lot sizes per batch OR even if they come in large numbers per lot, there exists no way to say that there would be consistency of quality. The underlying principle is that the quality of a small representative may not indicate the quality of the whole batch This type of Inspection is usually used for materials like apparels, electronic products, etc.

Put Away Process

The allocation of the cartons to the location will also follow the logic of load clustering and rack optimization and Pick balancing and routing

Label products with Incoming date to facilitate FIFO / FEFO are stuck on the carton and pallets and converted into palletized loads.

In the Put away Add function, The Part to Location Mapping is done based on the logic

The pallets and Cartons are then physically transported to the Stage for Putaway location which is at end of the rack columns.

In the automated system, the RF handhelds reflects the putaway in their specific zones.

Multiple Putaway run sheets are created based on the putaway methodology Batch putaway, Zone wise putaway for GRN clusters etc.

The Put away team which works in the rack columns puts away the pallets and cartons to the racks, Single rivet slotted angle racks as per the part to location mapping in the Putaway run-sheet.

The Pallet label is scanned and then the location label is scanned and confirmed which acts as a trigger to the WMS to confirm the Putaway list.

Once the Putaway confirmation is done, the material is available in the ATP (Available to Promise) Stock.

Types of Storage System

Drive In Racking

Pallet Racking

Broad Aisle Installation

Block Stacking

Push Back

Types of Storage System

Dedicated Storage Product is assigned a designated slot. With multiple product storage, the space required is the sum of the max storage requirements for each of the product Randomized Storage

Product is randomly assigned a storage location close to the input/output point. The space requirement will be equal to the max of aggregate storage required for the products. Dj is the space location, Summation dkj where k=1 to m (no I/O ports )
Class-Based Storage

A mixed policy where products are randomly assigned within their fixed class. The classification is done based on the movement of the SKU
1. The 20% items which have 80 % Storage/Retrieval activity are termed as Class A 2. The next 30% items which have 15% Storage/Retrieval activity are termed as Class B 3. The next 50% items which have 5% Storage/Retrieval activity are termed as Class C

Selection of Storage System

Storage System Selection through Comparative Analysis
Parameter
Storage Density

Push Back Racks

Offers high storage density coupled

Drive Through Racks

Can store large amount of inventory

with selectivity

in a smaller area increasing Storage

Density

Selectivity of Inventory

Ideal for selectivity up to 400%

improvement in selectivity

Selectivity is sacrificed

Type of Goods

Can store a variety of inventory

Ideal for large amount of similar items (like seasonal goods) that move

quickly - Not ideal for an inventory of

wide variety

Picking and Packing Process

Pick List Creation
Receive shipment authorization document / label in the system

The shipment orders are sorted by customer and geography and then converted into Picklists.

There are multiple possibilities of a picklist 1) Batch/ Wave Picks for the Bulk Pick area 2) Pick for Kitting Batch Picking 3) FIFO Model

The Pick Zone wise picklists are created.

The Print copy of the Picklist will also have the Carton Labels (Packing list) for full carton picks.

Batch picking is done for Kitted part IDs.

Picking and Packing Process

Picking
The Picks are done by reach Stacker /Retriever from the Storage area

Manual picking with Picking trolleys are used in the Slotted angle area

All completed picks are signaled by sticking the picklist to the pallet/Carton

These are then moved to the Packing Zone for further process

The carton/material is scanned along with the location scan and confirmed to complete the activity of picking

Picking and Packing Process

Kitting/Rework

The batch picked materials are sorted and re-assembled.

The re-assembled materials are scanned and cartonized

The cartonized packs are then moved to the Packing line.

Picking and Packing Process

Packing

The cartons from the bulk pick is transferred to the Packing line for taping/Strapping.

Picklist ID is selected and Dispatch Labels are generated and stuck to the Cartons

The loose picks are cartonized by scanning the individual material and Packing list is created and the Dispatch labels created and stuck to the Cartons.

The high value material picked loose are shrink wrapped for safe transit.

Support Requirements

Private & Confidential

Warehousing Operational Needs

Material Handling Equipment and Parking Area

Policies

Mens Room
Fire Extinguishers CCTVs

Sprinklers

Office Space

Space for Employee Needs

Safety Equipments

Designing Warehouse

Private & Confidential

Warehouse Site Selection and Layout Design (Understanding

Business Needs)

1. What is the need for the Warehouse? 2. What business is it catering to? 3. Where should the warehouse be located? 4. Is the warehouse location well connected? 5. Is there good telecommunication connection? 6. What should be the size of the Warehouse? 7. What should be the height? 8. How many bays should the Warehouse have? 9. What are the different SKUs expected to be stocked up at the Warehouse? 10. What are the markets or locations that the Warehouse would be catering to? 11. How to segregate the SKUs? 12. What should be the stocking policies? 13. What should be the replenishment policies? 14. What should be the Health and Safety policies? 15. What should be the Security arrangements?

The answer to these questions will give us a strategic perspective to the need for the Warehouse and the Layout Design, thereafter.

Usual Challenges to be Handled while designing

1. Product information in terms of throughput and storage level is uncertain or not available 2. Need to minimize the existing cost of establishing and operating the warehouse 3. Setting the Inventory Policy to store and maintain stock of Inventory of all SKUs, ready for distribution, at all time to meet demands of all items 4. Assemble product batches prior to delivery, to stockpile critical parts, and to facilitate regional distribution network for quick and cost-efficient delivery

Designing Layout
Objective
1. 2. 3. 4. 5. 6. Ensuring Maximum utilization of space Maintaining a balance between Service and Operating Cost Using the most suitable unit load Minimizing movement Planning and controlling movement and location Providing Safe, Secure and Environmentally sound conditions

Designing Basics
In case of existing warehouse
Analyzing current and projected data on the activities in each of the areas of receiving, shipping and inventory levels. The data should be supported by other considerations such as process flows, material handling equipment, type and styles of racking equipment, special handling requirements, and personnel In case the New Warehouse The designing will start for the Strategy document of the Organization and then further drill down to the Need and possible benefits of the Warehouse Once this is established only then the designing of the new Warehouse begins

Layout Designing Process

Cost Considerations

Parameters to be Planned when Designing

Material Handling Equipment 1. Picking Equipment Static Shelving Carton Flow Rack Carousels Automatic storage and retrieval system Automatic picking machines Pick to Light Voice directed picking Automated Conveyor and Sorting systems Number of Docks Number of Receipts and Shipments Type of Loading and Unloading Types and sizes of vehicles Number and timing of carriers Different areas in which materials will be utilized, stored, prepared for shipment

Type of Docks Saw Tooth Dock Straight dock Open Dock Interior dock

2. Receiving/Shipping Equipment
Conveyors Industrial Vehicles Automated Storage and Machines Automated Guided Vehicles

Retrieval

Location of Docks Traditionally at the rear end of facility and out of sight Receiving/Shipping at the same area generally However Multiple docks drastically reduce the flow of material with in a facility

Designed Layout (Illustration)

OptiWare OLinks Solution for Warehouse Optimization

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Warehouse Optimization and Simulation

Challenges Warehouse Owners Face

OptiWare Warehousing Simplified

Optiware is a 3-D warehouse Design, Simulation and Optimization product which helps you handle the warehousing challenges, while achieving your strategic and operational goals. Optiware helps you in: Optimal Layout Design Planning the number of MHEs and Resources Designing the Process and Material Flows Scenario Analysis

Warehouse Space Utilization

Un-optimized Layout Higher Cost of running warehouse Sub optimal throughput in warehouse Challenges in implementing warehouse Processes

Managing Peak hours Inbound and Outbound Material

Flow Resource planning Ensuring DIFOT ( Delivery In Full on Time)

Questions That Need to be Answered?

What should be the Layout Design of the warehouse? Is the Flow Streamlined?

Leading to: Customer Satisfaction Utilization of Space, Equipment and People Employee Safety and Morale Building

How can I improve the throughput of the warehouse?

How can I plan and support multiple customers from the same warehouse? How is the inbound and dispatch scheduling being planned?

Result:
Economic Layout Optimal Space Utilization Efficient Operations

How many MHEs do I require?

Thank You

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