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Warehouse Management Final Project Report
Warehouse Management Final Project Report
Warehouse Management Final Project Report
• Abstract
• Objective
• Literature Review
• Interpretation
• Conclusion
• Recommendation
• Bibliography
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Abstract:
Inside the walls of the warehouse, the utilization of every component—space, people,
inventory and equipment—will impact the bottom line in profound ways over time.
Warehouse Management enables us to analyze these components continually, so we can
conserve effort, fill orders faster and more accurately, save space and reduce inventory.
Objective
The Objective of the project is to understand the world class operations and procedures in
the warehouse; and how efficiently the warehouses are managed throughout the world.
Warehouse Management:
Warehouse Management provides the insight into your inventory and the warehouse
management tools to help you increase customer satisfaction and reduce costs.
Warehouse Management exchanges information with many other functional areas in the
solution including Logistics, Production and Trade, to help improve your overall business
performance.
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Literature Review:
Warehouse:
A warehouse is a planned space for the storage and handling of goods and material. Its
main purpose is to keep the goods for the longer time and whenever there is a demand for
the product, it will be supplied as fast as possible and reaches the customer in its original
position.
1. Seasonal Production :
The agricultural commodities are harvested during certain seasons, but their consumption
or use takes place throughout the year. Therefore, there is a need for proper storage or
warehousing for these commodities, from where they can be supplied as and when
required.
2. Seasonal Demand:
There are certain goods, which are demanded seasonally, like woolen garments in winters
or umbrellas in the rainy season. The production of these goods takes place throughout
the year to meet the seasonal demand. So there is a need to store these goods in a
warehouse to make them available at the time of need.
3. Large-scale Production:
In case of manufactured goods, the production takes place to meet the existing as well as
future demand of the products. Manufacturers also produce goods in huge quantity to
enjoy the benefits of large-scale production, which is more economical. So the finished
products, which are produced on a large scale, need to be stored properly till they are
cleared by sales.
4. Quick Supply:
Both industrial as well as agricultural goods are produced at some specific places but
consumed throughout the country. Therefore, it is essential to stock these goods near the
place of consumption, so that without making any delay these goods are made available
to the consumers at the time of their need.
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5. Continuous Production:
6. Price Stabilization:
To maintain a reasonable level of the price of the goods in the market there is a need to
keep sufficient stock in the warehouses. Scarcity in supply of goods may increase their
price in the market. Again, excess production and supply may also lead to fall in prices of
the product. By maintaining a balance in the supply of goods, warehousing ensures price
stabilization.
◼ Spot stock,
◼ Assortment,
◼ Mixing,
◼ Production support, and
◼ Market presence
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ORGANISATION STRUCTURE OF STORES DIVISION
Stores manager
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Warehousing – World class Practices
Using the best practices in managing the stocks of the industry becomes the part of world
class practices. Using most efficient methods for controlling the product inventory and
adopting outsourced techniques in order to control warehouse activities, including
receiving, storing, assembling, kitting, picking and the dispatching of customer’s/ user’s
orders. Some of the points need to be kept in mind in relation to the world class practices.
They become a platform for the adaptation of the world class practices in the
organization. They are,
• Receipt of material: The materials on receipt are taken to their allotted spaces in
the warehouses. The delivery slip and the bill copy are filed in the warehouse for
reference. The original bill reaches the accounts department for the payment to be
made.
• The materials are then Unloaded from the delivery trucks. The materials are
handled carefully while unloading. Old worn out truck tires are used to provide a
cushioning effect while unloading heavy materials.
• The materials are then inspected for any defects against the required and standard
specifications. This is done by inspection controller in large organizations. The
quality controller also plays a vital role in material inspection.
• The Control samples or standards are kept separately to check the materials to be
inspected.
• The Storekeeper documents the accepted materials.
2. Issue of Materials
The procedure for the issue of stock items includes that the materials are to be issued, to
authorized persons only and upon presentation of completed and approved store
requisition and issue note.
In large organizations the distribution of issue notes is done by authorized persons. They
issue different colored slips to the different departments when a stock item is issued.
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3. Stock & Inventory Management
The biggest problem comes when we keep too much stock with us, so we need a proper
check on getting and sending the material. Stock within the warehouse need to taken care
which will surely increase the cost of the organization and finally, it will increase the
price of the product.
• Stock Control is used to evaluate how much stock is used. Stock taking is
done by the Store Keeper. It is also used to know what is needed to be
ordered. Stock control can only happen if a stock take has taken place. Stock
rotation must be put into use with stock control by using the oldest products
before the newer products.
• Periodic Stock Checking: There must be proper check over the stock; it must
be evaluated from time to time. The task of the operation manager is to make
a proper flow of stock as when it is required. From time to time it must be
checked that how much of goods are with them and give the required
information from time to time to the production department, so that none of
the stock will remain stand still.
To ensure a proper check on the product that is with us, we need to use tools, such as;
When carrying out an ABC analysis, inventory items are valued (item cost multiplied
by quantity issued/consumed in period) with the results then ranked. The results are
then grouped typically into three bands. These bands are called ABC codes. It divides
inventory into three classes based on annual cost volume
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Cycle Counting
To conduct efficient and accurate cycle counts, many organizations use some
form of software to implement an inventory control system, which is part of a
warehouse management system. These systems may include mobile computers
with integrated barcode scanners that allow the operator to automatically identify
items, and enter inventory counts via keypad. The software then transmits data to
a database on a host system which can generate inventory reports.
Product coding:
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Material Storage & Handling:
Handling the material is one the most important part of warehousing. Material Handling
is the movement, storage, control and protection of materials, goods and products
throughout the process of manufacturing, distribution, consumption and disposal.
The focus is on the methods, mechanical equipment, systems and related controls used to
achieve these functions. The material handling industry manufactures and distributes the
equipment and services required to implement material handling systems.
Material handling systems range from simple pallet rack and shelving projects, to
complex convey or belt and Automated Storage add Retrieval Systems (AS/RS).
Hydraulic jacks, Dump trucks, Wheel Barrows, Trolleys, Forklift Truck (Diesel/ Battery
operated ), Damaged tires used for providing cushion support for heavy materials during
unloading; Iron bars, Slings and ropes, Chain Pulley Blocks, Hammers, Spanners, Pliers,
Wooden Blocks, pallets (Wooden, plastic)
In world class warehouses the responsibilities assigned such a staff group may
well include:
1. Determining all new methods for the handling of new materials or
products and selecting the equipment to be utilized.
2. Conducting research in materials handling methods and equipment.
3. Conducting education and training for all manufacturing personnel in
good Material handling practices.
4. Establishing controls of current materials handling costs by analysis of
costs and comparison to budgets of either unit or total materials handling
costs.
5. Initiating and conducting a continuing materials handling cost-reduction or
cost improvement program.
6. Determining measurements for effectiveness of materials handling that
can become the yard – sticks for progress in this activity.
7. Developing and conducting a preventive maintenance program for all the
materials handling equipment.
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Material Handling Time:
Reducing handling increases the productivity and lowers costs. If we are putting the
product into the store and picking from store it will raise its handling time and will prove
to be cost ejective for the firm.
Again and again putting the resources on a material; whether in its transportation,
packaging, storing, etc will raise the expenses of the firm which is not acceptable in any
form.
If we are putting our men, material and money in sending the good to the customer again
and again it will finally affects the overall expenses of the business concern.
In a world class warehouse the materials are inspected before they are shipped, to ensure
the quality and life of the product.
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Location & Layout of the Warehouse:
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Warehouse Location:
There is no limit on the number of warehouses that may be defined within an entity, and
there is no limit on the number of locations that may be defined within a warehouse.
Warehouse locations have many synonyms including bins, zones and storage area, among
many others, but in there must be a location is a specific storage area, which may
constitute a rack/bin type of entry, or a larger bulk storage area. The locations can also
identify shop floor areas where inventory is held prior to “pull” type material issues.
Shop floor locations of this type are considered by the system to be a part of the
warehouse. A separate location classification can also be given to shipping and/or
receiving locations.
A location can also be used to track the inventory of vendor and/or customer distributors.
A single location of the “distributor” type will be used to cover an entire customer
distributor or vendor distributor inventory.
If the user does not wish to maintain location control in the inventory, both a default
warehouse and a default location must be defined in the facilities parameters. An entry of
these two default values will indicate to the system that only the default location is to be
used for all types of inventory transaction.
Location Flexibility:
• Location flexibility refers to the ability to quickly adjust warehouse location and
number in accordance with seasonal or permanent demand changes.
• For example, in-season demand for agricultural chemicals requires that
warehouses be located near markets that allow customer pickup.
• Outside the growing season, however, these local warehouses are unnecessary.
• Thus, the desirable strategy is to be able to open and close local facilities
seasonally.
• Public and contract warehouses offer the location flexibility to accomplish such
requirements.
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Warehouse Layout and Design:
The Warehouse
• Provides for the transportation interface.
• Provides for order-picking space.
• Provides storage space.
• Provides recouping, office, and miscellaneous spaces.
• Determines each item’s order quantity.
• Converts units into cubic footage requirements.
• Allows room for growth.
• Allows adequate aisle space for materials handling equipment.
Zones:
The zones are specific locations inside a warehouse that has common properties.
• A Zone ID used to represent a group of locations that share common properties
(refer zone, shipping zone, returns zone)
• Used to manage product flows into and out of groups of locations
• Used to determine users’ work assignments in the zone
• May represent a physical area
• A location can belong to only one Zone
Locations:
They are various physical areas inside a warehouse
• A Location ID is given to a space in a location where inventory is placed for any
length of time
• Always associated with a zone and a location
• Primary mechanism used for tracking and processing inventory as it is received,
stored, retrieved, and shipped
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Example Locations:
o “STOR1-01020401” = at Aisle 1, Bay 2, Level 4 Bin 1
o “RECEIVE-1” = Receiving Dock 1
o “V1-000001” = Value Added Services Station 1
Equipment:
Stations:
• A physical location that is used as a work space in order to perform a specific
activity or a group of activities
• A Station is unique for a Node
• Used for:
o Creating tasks
o Recording location where work is being performed
o Associating devices that may be used at the station level
Examples:
o Receiving Station
o Ship/Sort Location
o Value Added Services Station
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Warehouse Design Criteria
Warehouse design criteria address physical facility characteristics and product
movement. Three factors to be considered in the design process are:
◼ The ideal warehouse design is limited to a single story so that product does not
have to be moved up and down.
◼ The use of elevators to move product from one floor to the next requires time and
energy.
◼ The elevator is also often a bottleneck in product flow since many material
handlers are usually competing for a limited number of elevators
Height utilization
◼ Regardless of facility size, the design should maximize the usage of the available
cubic space by allowing for the greatest use of height on each floor.
◼ Most warehouses have 20- to 30-foot ceilings; although modern automated and
high-rise facilities can effectively use ceiling heights up to 100 feet.
◼ Through the use of racking or other hardware, it should be possible to store
products up to the building's ceiling.
◼ Maximum effective warehouse height is limited by the safe lifting capabilities of
material-handling equipment, such as forklifts
Product flow
◼ Warehouse design should also allow for straight product flow through the facility
whether items are stored or not.
◼ In general, this means that product should be received at one end of the building,
stored in the middle, and then shipped from the other end.
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Operational standards needed:
2. Performance of activities :-
A number of activities are to be performed within the organization or the
warehouse. Every activity to be looked in a better way and should taken care.
From lifting the material from the trucks to taking it to the store, care should be
taken, to save the goods or product from breakage or damage. A machine has to
be checked from time to time for its smoothness of working. Projects need to be
handled carefully, while planning and there execution.
3. Accuracy of activities :-
The orders that are to be given must be dispatched as per the guidelines and in a
complete way. Whenever there is order for the product, as the product is
demanded, guidelines are forward to the production department and as per the
specification goods are delivered.
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Warehouse Safety and Security:
Warehouses deals with large amount of inventory that need to be kept under proper
observation and must undertake the most efficient check system. Goods must be safely
loaded and must be taken care when they are taken out of the vehicle until it reaches the
store where it has to be kept.
• Entry to warehouse must be limited to authorize personnel.
• Operations Manager should hold the warehouse keys at the closing of the
warehouse.
• Issue of stock and inventory to authorized personnel.
• There should be adequate safety from fire and the materials are to be stored under
their required storage conditions.
World class warehouses have multitasked work force; who are able to perform several
tasks within the warehouse. Work force must be active in order to take the decisions as
per their talent in difficult situations. Certain things that need to be considered are as
follows;
Communication
In warehousing a message is transferred from one person to another by the means of
communication, which need to be taken care for accuracy.
Managing Change
To be successful with any change initiative - such as a warehouse reconfiguration, a
change in processes or in ways of working - getting the direct input of the warehouse
team to your work at all stages is of paramount importance. These are the people who
will be most affected by the change and involving them early and at all stages enables
them to become most efficient.
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Warehouse Management Systems (WMS)
It is a key part of the supply chain and primarily aims to control the movement and
storage of materials within a warehouse and process the associated transactions, including
shipping, receiving, put away and picking. The systems also direct and optimize stock put
away based on real-time information about the status of bin utilization.
The primary purpose of a WMS is to control the movement and storage of materials
within a warehouse – you might even describe it as the legs at the end-of-the line which
automates the store, traffic and shipping management.
In its simplest form, the WMS can data track products during the production process and
act as an interpreter and message buffer between existing ERP and WMS systems.
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Warehouse Management monitors the progress of products through the warehouse. It
involves the physical warehouse infrastructure, tracking systems, and communication
between product stations.
Warehouse management deals with receipt, storage and movement of goods, normally
finished goods, to intermediate storage locations or to final customer. In the multi-
echelon model for distribution, there are levels of warehouses, starting with the Central
Warehouse(s), regional warehouses services by the central warehouses and retail
warehouses at the third level services by the regional warehouses and so on. The
objective of warehousing management is to help in optimal cost of timely order
fulfillment by managing the resources economically.
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Interpretation:
Companies are constantly trying to find ways to improve performance and warehouse
operations is area where supply chain managers can focus to gain maximum efficiency
for minimum cost. To get the most out of the operation, a number of best practices can be
adopted to improve productivity and overall customer satisfaction. Although best
practices vary from industry to industry and by the products shipped there is a
number of best practices that can be applied to most companies.
When considering the level of effort involved in warehouse operations, the greatest
expenditure of effort is in the picking process. To gain efficiencies in picking the labor
time to pick orders needs to be reduced and this can achieved in a number of ways.
Companies with the most efficient warehouses have the most frequently picked items
closest to the shipping areas to minimize picking time. These companies achieve their
competitive advantage by constantly reviewing their sales data to ensure that the items
are stored close to the shipping area are still the most frequently picked.
Warehouse operations that still use hard copy pick tickets find that it is not very efficient
and prone to human errors. To combat this and to maximize efficiency, world class
warehouse operations had adopted technology that is some of today’s most advanced
systems. In addition to hand-held RF readers and printers, companies are introducing
pick-to-light and voice recognition technology.
Voice picking systems inform the operator of pick instructions through a headset. The
pick instructions are sent via RF from the company’s ERP or order management
software. The system allows operators to perform pick operations without looking at a
computer screen or to deal with paper pick tickets. Many world class warehouse
operations have adopted voice picking to complement the pick-to-light systems in place
for their fast moving products.
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Although many companies will not be able to afford new technologies for picking, there
are a number of best practices that can be adopted to improve efficiency and reduce cost.
Conclusion:
Warehousing clearly has a critical part to play, in all aspects of supply chain
management. It also needs to be involved in the strategic aspects of a business and this
will involve being aware of the development of the business in terms of the future
production, product, suppliers, customers, and all the associated product volumes and
throughputs.
Each and everyday new technology is being evolved, so in warehousing with the help of
these world class technological innovations, we can make it more technically competent
and innovative; thereby increasing the efficiency of the business operations.
Bibliography:
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