Definition

• Warehousing refers to the activities involving

storage of goods on a large-scale in a systematic
and orderly manner and making them available
conveniently when needed.
• Generally, larger the number of warehouses a
firm has the lesser would be the time taken in
serving customers at different locations, but
greater would be the cost of warehousing. Thus,
the firm has to strike a balance between the cost
of warehousing and the level of customer service.
 Need and Importance For
Warehousing Management
TO REDUCE INVENTORY

TO REDUCE LABOUR COST

TO INCREASE STORAGE CAPACITY

TO INCREASE CUSTOMER SERVICES

TO INCREASE INVENTORY ACCURACY

FOR PERISHABLE GOODS

FOR CONTINUOUS PRODUCTION

 Characteristics of Ideal Warehouses

Convenient location

Availability of mechanical appliances to load and unload goods

Adequate space

Cold storage facilities

Proper arrangement for protection

Sufficient parking space

Round the clock security arrangement

Latest fire fighting euipments

 Warehousing Functions

Functions

Material Material Information

Storage Handling Handling
Functions Functions Functions
Material Storage Function

Hold
Consideration
Break Bulk
Cross - Docking
Mixing
Postponement
Packing
 Hold
• Depending on the demand or order booking
pattern and the delivery schedule promised to
the customer by the marketing department, the
goods are dispatched from the warehouse.
• At the warehouse there is a continues inflow and
outflow of material. A proper record of the
material, which gets in and out, has to be
maintained to know the inventory levels at any
point of time.
Consolidation occurs when a warehouse
receives materials from a number of sources and
combines them into exact quantities for a
specific destination
Break-bulk occurs when a warehouse receives a
single large shipment and arranges for delivery
to multiple destinations
• Cross-docking combines inventory from
multiple origins into a pre-specified
assortment for a specific customer
• Products are received, selected, repackaged,
and loaded for shipment w/o storage
• Mixing combines inventory from multiple
origins (like cross-docking) but also adds
items that are regularly stocked at the mixing
warehouse
 Postponement
• Warehouse can also be used to postpone or delay
production by performing processing and light
manufacturing activities.
• The strategic suppliers in the supply chain are
asked to postpone the delivery of parts till other
critical items required for assembly arrive in the
manufacturing plant.
• The postponement function of a warehouse
reduces the risk of finished goods and space
blockage.
 Packing
• The repacking of the material as per the
ordered quantities of the individual customer
is done.
• The packs are labelled and marked as per the
packaging regulations or as per requirements
of the customer.
Material Handling Functions
Information Handling Functions

Inspection Goods
Good Inwards
and Auditing Outwards

Stock Outs Excess Stocks Invoicing

Transit
Warehouse Consignment
Damages and
Expenses Tracking
Breakages
 Warehouse Option- A Strategic
Decision
Private Warehouse Public Warehouse Contract Warehouse

• warehouse • Service company • The product

operated by the owns warehouse specific warehouse
firm owning the and hires out space facilities acquired
product and services for use for a
• A production • Designed for specific period
oriented captive handling the most against fixed
warehouse or a general packaged charges.
distributive products or • This facility
warehouse located commodities, provides the
in the field for which do not economies of scale,
customer services. require specialized flexibility and
storage or handling customizes a
arrangement. facility.
Advantages of Private Warehouses
• Better control over movement and storage
• Chances of errors and mistakes are less as
products are handled by its own employees
who have full knowledge
• Designing is done according to suitability of
owner
• Greater flexibility with respect to storage and
material handling needs
 Advantages Of Public Warehousing
• More efficient and less expensive
• Cost easily and exactly ascertained
• Fixed cost distributed among many users
• Strategically located and immediately
available
• Flexible to meet space requirements of
different users
• Companies have a wide choice of locations
and warehouse types
Major decision in Warehousing

Location of warehousing facility

Number of warehousing

Size of warehouse

Design of the building

Ownership of the warehouse

 Warehouse decisions that determine
handling and storage efficiency
• Site Selection
• Design
• Product-Mix Analysis
• Expansion
• Materials Handling
• Layout
• Sizing
• Warehouse management system
• Accuracy and audit
• Security
• Safety and maintenance
 Site Selection

Infrastructure Market Access

Primary
Transportation Availability Product
Cost

Regulations Local Levies

• Warehouse management systems (WMS) integrate
procedures and software support to standardize
storage and handling work procedures
• One main use of WMS is to coordinate order
selection
– Discrete selection is when a specific customer’s order is
selected and prepared for shipment as a single work
assignment
– Wave or batch selection is when orders are processed
through zones of the warehouse assigned to specific
employees
• Inventory accuracy is typically maintained by
annual physical counts or counting portions of
inventory on a planned basis
• Audits are common to maintain safety, assure
compliance to regulations and help improve
procedures
• Security issues involve protection from
pilferage and damage
• Accident prevention
– Comprehensive safety programs and training,
accident investigation and follow up
• Maintenance
– Scheduled maintenance of building, material
handling equipment, and collision damage
prevention
Warehouse Design Principles

Design Handling
Criteria of material

Storage
Plan
 Design Criteria
• Number of floors: Ideally there should be a single floor as
more than one floor would result in movement of goods
upward and downward from one floor to another. This
would result in wastage of time and energy. But if land is a
scarce and costly then more then one floor as storage
would be justified in terms of cost.
• Height utilization: As far as possible ail space should be
utilized even the vertical space as each space costs money.
Height should be utilized as much as it is safe to lift and
store the material.
• Product flows: Product flow should be straight. This means
that goods should enter from one door and exit from
another door ensuring that the path of entrance and exit
don’t cross each other.
 Handling of material
• Movement continuity: This principle’ states that
it is better for the material handler to make small
number of larger movements than large number
of smaller movements. For too much of exchange
of material from one hander to another handler
could lead to delay as well as spoilage of goods.
• Movement scale economics : The material
handler should move or handle the largest
quantity possible. This reduces per unit cost of
handling of material.
 Storage Plan
• Sales: Fast moving goods or the goods whose
sales are high should travel the minimum
distance and should be easily accessible. This will
reduce travel distance and save time.
• Weight: Relatively heavier items should be
stored near the ground level, whereas lighter
items could be stored at a higher level.
• Volume: Bulky material may require a open
space for storage, whereas smaller goods may
require drawers or shelves.
 Company: Amway India
Business Profile

Amway India is the country’s leading direct selling

FMCG-company which manufactures and sells
world-class consumer products. Established in
1995, Amway India commenced commercial
operations in May 1998 and has emerged as the
largest Direct Selling FMCG Company. The Company
has its headquarters in the National Capital Region
of India - New Delhi. Amway India is a wholly
owned subsidiary of US $ 10.9 billion Amway
Corporation, Ada, Michigan, USA.
 Business Scenario
In thirteen years of commercial operation, Amway India has
established a nation-wide presence of over 135 offices and
55 city warehouses and four regional mother warehouses.
The distribution and home delivery network set up with the
support of independent logistics partners is spread across
over 5500 locations.“ Over 5,50,000 active independent
Amway Business Owners and Online shopping users have
login information to access the data warehouse. When
these users want information and transactions in real-time,
they want it “then and there,”. To enable faster, better
business intelligence analysis the existing hardware and
software infrastructure was a hurdle. “Amway needed to
break through database and platform barriers.”
 Business Challenge
Amway India needed a solution that would
enable them to manage their enormous volume
of data to run its business effectively and
profitably in real-time without interrupting
important transaction processing
 Solution
Vision Solution’s Double-Take Share, makes information
available to the people who need it, when they need it. It
provides real-time, on-demand access to data between any
applications, regardless of database format or operating
system. Amway Business Owners and Online shopping users
needed to access data including Shopping, events,
discounts manufacturing orders, purchase orders, stock,
and supplier invoices and other information regarding
clients, suppliers, articles. One of the biggest benefits of
Double-Take Share is that users can make rapid information
queries without affecting the performance of the System i
server. It all happens independently of the transaction
system’s processing capacity.
 Result

 Quicker, better-informed business decisions.

Ability to make rapid information queries
without interrupting
 The efficiency of rest of the system.
 Real-time data replication between the main
production.
 Platform and data warehouse server.
 Immediate online retails users access and
sharing of current business data.