LMM

• Warehousing


  The part of a firm's logistics system that stores products (raw materials, parts, finished goods) at and between points of origin and points of consumption
• The role of warehouses in logistics


  • Storage
  • Movement
• Warehousing processes


  1. Receiving: accepting goods and verifying them against shipping docs

  2. Put-away: storing received goods in their designated place

  3. Sortation: organizing goods as per specifications or orders

  4. Order picking: collecting items from storage to fulfill orders

  5. Marshalling: preparing orders for dispatch

  6. Dispatch: shipping orders out
• Operation of warehousing


  1. Receive goods (inbound logistics)

  2. Identify goods

  3. Dispatch Goods to Storage

  4. Hold Goods

  5. Pick Goods

  6. Marshal Shipment

  7. Dispatch Shipment (Outbound Logistics)

  8. Operate an Information System
• Types of warehousing


  • Private warehousing
  • Public warehousing
  • Multiclient warehousing
• Private warehousing


  Owned and operated by the same company that owns the goods
• Public warehousing


  Operated as a business offering storage and handling services to clients
• Multiclient warehousing


  A shared facility used by several clients
• The role of warehousing in logistics


  • Inventory holding
  • Consolidation centre
  • Sortation centre
  • Cross-dock centre
  • Assembly facility
  • Transshipment point
• Inventory holding


  Holds inventory until they're needed
• Consolidation centre


  Combines smaller shipments, into larger ones for easier, more efficient and cheaper transportation
• Sortation centre


  Sorts products into groups or categories based on quality or customer requirement
• Cross-dock centre


  Transfers goods directly from delivery truck to shipping truck; to minimize storage and speed distribution
• Assembly facility

  Used as a final assembly point to reduce inventory costs
• Transshipment point


  Transfers goods from large transport vehicles to smaller ones for quick delivery
• Warehouse layout


  • The planned design of a warehouse to optimize and streamline the flow of freight
  • Improves flow of production and distribution
  • Reduces costs
  • Improved customer service
  • Safe working conditions
• Elements essential for designing an effective warehouse layout

  • Convert units to cubic footage
  • Allow for growth
  • Provide storage space
  • Secure order-picking space
  • Develop a demand forecast
  • Include area for damaged goods
  • Allow aisle space for material handling equipment
  • Leave space for loading and unloading
  • Gauge each item's order quantity
  • Organize office space
• Warehouse cost breakdown


  • 50% staff
  • 25% building
  • 15% equipment
  • 15% building services
  • 10% IT
• Factors influencing warehouse location


  • Proximity to suppliers
  • Proximity to the business
  • Proximity to customers
  • Resources availability
  • Free trade zones
  • Labor availability
• Objectives of efficient warehouse operations


  • Timely customer service
  • Items tracked for easier finding
  • Minimize physical effort and cost of moving goods
  • Maintain communication channels with customers
• Cube Utilization


  Utilize the cubic space of the warehouse, not just the floor area, to maximize storage capacity
• Accessibility

  Organize inventory to facilitate easy access and minimize handling effort
• Stock locating systems


  • Group physically similar items
  • Group functionally related items
  • Group fast moving items
  • Separate working stock and reserve stock
• Staging area


  • Used to break bulk loads into smaller customer deliveries
  • Is seen as a way of adding value to a product
• Types of storage areas


  • Fixed location
  • Floating location
  • Point of use storage
  • Central storage
• Fixed location


  • Enhanced accuracy, easier to locate items
  • Inflexibility, space inefficiency
• Floating location


  • Flexibility (use any free area)
  • Improved space utilization
  • Potential misplacement, training challenges unless they have strong tracking systems
• Point of use storage


  • Reduced movements, reduces physical strain on workers
  • Security concerns & clutter
• Central storage


  • Ease of control, easier stock inventory checks
  • Increased movement, vulnerable to fire/theft
• Warehouse Management System (WMS)


  A software tool designed to optimize the day-to-day operations in a warehouse. It manages and coordinates inventory, data, and communication throughout the warehouse environment, from the receipt of goods to their shipment.
• Functions and Benefits of a WMS

  • Provides real-time tracking of inventory levels, locations, and movements, reducing the risk of overstocking or stockouts
  • Streamlines processes like receiving, putaway, picking, and shipping, improving operational speed and accuracy
• Critical Perspective: Implementing a WMS


  • Can be costly and complex, requiring significant upfront investment in software and possibly hardware
  • Reliance on a WMS means that any technical failures can disrupt the entire operation, potentially leading to downtime and delivery delays
  • Staff must be highly trained to use the system, which can involve significant time and resources
• Order Picking Systems


  A critical process in warehouse management, involving the retrieval of goods to fulfill customer orders. Various systems are tailored to different operational needs.
• Zone Picking


  The warehouse is segmented into different zones, with each picker responsible for collecting items within a specific area. Reduces the travel distance for pickers, enhancing speed and reducing fatigue. Each picker can become highly familiar with their zone, increasing picking accuracy. Can create bottlenecks if some zones are busier than others or if the zoning is not well balanced.
• Batch Picking


  Pickers collect items for multiple orders in a single pass through the warehouse using a cart that separates each order into different compartments. Increases picking efficiency by reducing the number of trips back to dispatch areas. Ideal for high-volume environments. Requires advanced organizational skills and technology to ensure accuracy across multiple orders, which can complicate training and execution.
• Examine and evaluate the significance of warehousing in logistics
• Give a definition for each and discuss the relationship between 'safety stock' and 'service level' within the warehouse function
• Discuss the advantages and disadvantages of warehousing in logistics
• Which factors need to be considered for the decision of the number and location of a warehouse?
• What strategies can be used for effective warehouse management?