Warehouse

Operations
Training Session
By Omar Youssef
Business Consultant
E-mail: Omar.youssef5@hotmail.com
 Mission Statement

“The warehouse is our strongest asset.

Dedication, accountability and reliability
are at the heart of our business
philosophy. Focussed on our business
units needs, we provide integrated
logistics of outstanding product quality,
Product quantity, and delivered on time.
we are the extension of your business.”
 Warehouse Goals

1. Maximize effective use of space.

2. Maximize effective use of equipment.
3. Maximize effective use of labor.
4. Maximize accessibility of all items.
5. Maximize protection of all items.
6. Maximize effective use of information.
7. Maximize the protection of company’s assets.
8. Minimize goods Handling.
9. Minimize the company operating Cost.
 Warehouse Functions

1. Unloading
2. Receiving & Checking inbound goods
3. Internal product movement
4. Storing
5. Order-picking
6. Stock Sortation
7. Stock Rotation
8. Packing
9. Loading & Shipping
10. Cycle Counting
11. Replenishement
12. Handling Returns
13. Maintenance & Loss Prevention
 Operational Process

Receiving Put-away Storage Picking Packing Shipping

Inbound Process Outbound

Activities Activities Activities

1 - Unloading 7 – Put aw13ay–Stocking 18 – Routing 22 – Confirmation

2 - Counting 11 – Produ1c4t– Cycle Counting 19 – Directing 23 – Invoicing
3 - Identifying Categ1o5r–yReplenishment 20 – Zoning 24 – Sealing
4 - Marking 12 – Pallet1i6ze–Stock Rotation 21 – Dunnaging 25 – Staging
5 - Quality Control
17 – Space Planning 26 – Loading
6 - Registering goods
Receiving

• Receiving Objectives

• Right Product
• Right Quality
• Right Quantities
• Right Weight
• Right PPB.
• Right Condition
• Right Standards
• Right Time
 Receiving

• Receiving Procedures

• Prepare to receive goods and materials

• Check Temperature
• Unload the product (manual or
automated)
• Count the product
• Check the product (quality, quantity &
expiry)
• Check Methods(100 % accept,100
%check, 10% sample check)
• Identify the product
• Mark the product
• Enter the product on the receipt
register
• Transfer the product to stage area
• Enter the product in stock
• Re-Stack the product
Put away & Stacking

• Stack according to First in First out

• Stack according to standards
• Method of stacking

- Manual Stacking
- Automated Stacking
• Keep stacked goods neat
• Boxes to be stacked evenly
• Keep Identity sticker visible
• Keep expiry date visible
• Stack goods in a safe way
 Picking Time Consumption

Paperwork and
Pickers Time Breakdown
other activities
20%

Traveling
Searching
Extracting
Extracting
Paperwork
10%

Traveling
Searching
55%
15%

Source: John J. Bartholdi, III, Steven T. Hackman, 1998

 Picking

• 50-60% of time spent traveling

• - Optimize picking workload

• - Optimize work force assignm
• - Optimize picking route
• - Use of labor standards

• Apply First in First out

• Use the right picking equip
• Pick the right item (accuracy)
• Picking the right qty (accuracy)
This is wrong
• Keep the Picking area neat
• Picking Method
This is Right
• - Manual Picking
• - Automated picking
 Shipping

• Invoicing
• Staging
• Categorizing
• Checking
• - the right product
• - in the correct quantity
• - in good condition
• - and on scheduled time
• Confirming
• Loading
 Cold Storage Standards

• Proper Storage Temperature

• - Dry Storage from 55 to 70 F(13-21 C).
• - Refrigerator from 34 to 38 F(1-4 C).
• - Freezers from 0 to -22 F(-18 - -30 C).

• A relative humidity of

• - 50-60 % in the storeroom

• - 75-85 % in the refrigerators for meats, fish,
chicken, dairy products
• - 85-95 % for fruits and vegetables

• Good ventilation provides clean air at the

required temperatures and humidity.
 Unit Load Racking
• 3-6” between unit loads
• 3-6” between unit load and bay
40” 40” 40”
member
• 4-6” between unit load and wall
• 18” between unit load and first

3-6”
ceiling obstacle
• 6” off the floor

40” 40” 40”

44-48”

132”
 Location & Aisle Numbering for
Ground Storage
A B C

018 016 014 012 010 008 006 004 002

Aisle 12
017 015 013 011 009 007 005 003 001

001 003 005 007 009 011 013 015 017

11-A-L1-001 11-A-L1-003 11-A-L1-005

Aisle 11
11-A-L1-002 11-A-L1-004 11-A-L1-006

002 004 006 008 010 012 014 016 018

 Location and Aisle Numbering
for Rack Storage

02-L-01D 02-L-03D 02-L-05D 02-L-07D 02-R-08D 02-R-06D 02-R-04D 05-R-02D

02-L-01C 02-L-03C 02-L-05C 02-L-07C 02-R-08C 02-R-06C 02-R-04C 02-R-02C

Left Right
02-L-01B 02-L-03B 02-L-05B 02-L-07B 02-R-08B 02-R-06B 02-R-04B 02-R-02B

02-L-01A 02-L-03A 02-L-05A 02-L-07A

20- ELSIA 02-R-08A 02-R-06A 02-R-04A 02-R-02A

Aisle Entry
 Drivers Duties

• Loyalty to company is very important

• To implement all job description
• Cars, daily check up for maintenance
• Cars, Cleaning on weekly basis
• Cars, Damage resulting of omission
• No eating or drinking while driving
• Complying w/warehouse rules & regulations
• To execute information delivered to you
• Smoking is not allowed in warehouse
• Cooperation w/colleagues and direct managers
• Deal w/rests. representative Like the only customer
• Handling returns as per policy
 Key Inventory Terms

• Lead time. Time interval between ordering and

receiving the order
• Holding (carrying) costs. Cost to carry an
item in inventory for a length of time, usually a
year
• Ordering costs. Costs of ordering and receiving
inventory
• Shortage costs. Costs when demand exceeds
supply
 Inventory Costs

• Ordering costs.
• Includes monitoring costs, order preparation.
order transmittal, order receipt (unpacking,
shelving, loss and damage).
• Holding (Carrying) costs.
• Includes interest, insurance, depreciation,
obsolescence, deterioration, spoilage, pilferage,
breakage and warehousing costs.
• Warehousing costs.
• Energy, Space, Labor, Equipment security
• Stock out costs.
• Includes opportunity cost of not making a sale
(lost profit), lost customer goodwill, backorder
costs, lateness charges.
COMPONENTS OF CARRYING COSTS

• Capital Costs. Cost of Money.

• Storage Costs. Is the cost of

space, personnel, and equipment.

• Risk Costs. It is the costs of obsolescence,

Damage, pilferage, insurance, etc.

• Records & Handling costs.

 Total Cost

Annual Annual
Purchasing
TC = Holding
cost + ordering
cost + cost

Q D
TC = H + S + DC
2 Q
TC Total annual cost D Annual Demand
C Cost per unit Q Order quantity
S Cost of placing an order
H Annual holding and storage cost per unit of inventory
 Cost Minimization Goal

The Total-Cost Curve is U-Shaped

Annual Cost

Holding Costs

Ordering Costs

Optimal Order Quantity

 Re-ordering Point

Reorder point Reorder point Reorder point Reorder point

Quantity

S Safety Stock(SS)

L L L L
R = Reorder point = L*D + S Time Q = Economic order quantity
L = Lead time D = Demand per Unit of Time
S = Safety Stock
 WD Cost Breakdown

Average Company

% of Sales
Transportation & Maintenance ………………………… 0.19%
Warehousing ………………………………………………………0.61%
Salaries & Wages………………………………………………. 1.07%
Total WD Cost ……………………………... 2.72%
Figures based on October 31, 2005
 WD Opportunity

• To be Improved
• Inventory Accuracy
• Picking Accuracy
• Picking & Replenishment Efficiency
• Control of Products
• Space Utilization
• Stock Rotation
• Backorder Handling
• Resource Planning & Scheduling
• Labor & Equipment Productivity
• Performance Management
 WD Opportunity

• Reduced
• Inventory
• Workforce
• Damage / Shrinkage Product
• Lost Stock & Safety Stock
• Search Times
• Paperwork / Human Error
• Physical Inventory Taking
• Labor, Equipment & Utility Costs
• Driver / Delivery Costs
• Worker Accidents
• Warehousing Costs
• Outside Warehousing
 Warehouse Controls

•Personnel Safety and Health

• Reduce all risks
• Follow procedure for security risk
• Report all accidents
• Handle any accident
• Report any security risk
• Promote good housekeeping
• Maintain a clean, neat personnel hygiene
• Maintain a clean workplace
• work according to standards
• Dispose of waste in timely way
• Effectively mark aisles & maintain their
• integrity
• Have adequate lighting
• Apply all rules adopted in your organization
 Warehouse Controls

Fire Prevention and Protection

Is smoking permitted in the

warehouse?
 Warehouse Controls

•Theft and Pilferage

•Product Damage & Contamination

•Storing Hazardous Materials

Equipment & Tools
Any Questions?