OMGT2196- Warehouse and Distribution Channels

THE WAREHOUSE
DESIGN ASSIGNMENT
Assignment 1B – GROUP REPORT
Lecturer: Jay Fortenberry
Date of Submission: 10 January 2021
Student Name & ID:

Nguyen Viet Hoang– s3758250

Pham Duc Duy Minh– s3798792

Pham Duc Minh-s3884416

Vu Quynh Chi-s3821006

Nguyen Duc Tuan-s3759325

Nguyen Ngoc Quang Minh-s3827478

Wordcount: 2895 words

"I declare that in submitting all work for this assessment I have read,

understood and agree to the content and expectations of the Assessment

Declaration."
Executive Summary

This report will show the design and layout of a 20,000 square meter warehouse that holds
luggage and handbags. The primary purpose of this warehouse was created to be able to store
and distribute the mentioned product lines to different stores or retailers in different locations.
The warehouse is also designed to minimize costs, provide a good service, and warehouse
operations can be operated efficiently.To make it more detailed, the warehouse is built in U-
shape, along with the details added inside to make the most of this design. Besides, analysis of
selected locations, storage capacity, engineering software for warehouse management,
warehouse assistants, labour, and retailers' shipping methods.

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Table of Contents
Executive Summary..............................................................................................................................................2

1. Introduction .................................................................................................................................................3

2. Warehouse Location ....................................................................................................................................4

3. Warehouse Design and Facilities.................................................................................................................4

3.1. Key Features of Warehouse .................................................................................................................4

3.1.1. Stock Keeping Unit (SKU) .............................................................................................................4

3.1.2. Level of product assortment........................................................................................................5

3.1.3. Storage Capacity ..........................................................................................................................6

3.1.4. Technology Implementation........................................................................................................6

3.1.5. Material Handling Equipment (MHE) ..........................................................................................6

3.2. Warehouse Overall Layout Structure...................................................................................................7

4. Operational Flow .........................................................................................................................................8

4.1. Inbound Process...................................................................................................................................8

4.2. Outbound Process................................................................................................................................9

4.3. Value Added Services...........................................................................................................................9

4.4. Retailer’s Delivery Schedule.................................................................................................................9

5. Conclusion and Limitations........................................................................................................................11

6. References..................................................................................................................................................11

7. Appendices.................................................................................................................................................12

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 1. Introduction

In terms of warehousing, this is an integral part of the supply chain that plays a role in storing
large volumes of a company's products, sorting, packaging and shipping items to consumers.
The construction of a reasonable warehouse gives the company a significant profit and gives
consumers an affordable price. A standard warehouse will facilitate operations in the
warehouse, activities outside the warehouse such as delivery will save maximum time. In this
report, a piece of land with 20,000 square meters is given to design a warehouse to meet all the
criteria that a warehouse needs, such as appropriate geographic location to reduce delivery
time. , cost savings, critical functions such as SKUs, commodity sorting, warehouse storage
capacity, technologies applied in warehouses, specialized equipment, and import-export
operations

2. Warehouse Location

After considering many factors, including Raw Material Availability, Supply of Labour, Transport
and Communication, Climate and Geography ( WOODSIDE 2020), we pretend to choose Sai
Dong B as our desired location. First of all, the distance from the mentioned place to the centre
of HN is around 8km so that the travel time is reduced while avoiding truck ban hours since the
period for tractor-trailers is from 9 pm to 6 am ( ISUZU 2020) since our primary type of trucks
are tractor-trailers. Besides, putting a warehouse in Long Bien Province will allow the business

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to minimize the travel time in case business want to deliver by air since Sai Dong B is nearby
the Noi Bai international airport. Moreover, businesses can take advantage of labour’s supply
since the chosen location is near the industrial zone, surrounded by large numbers of labour.
Lastly, during 15 years, businesses might have a reduction in corporate income tax that the
government offers if they put their warehouse in the industrial zone.

3. Warehouse Design and Facilities

3.1. Key Features of Warehouse

3.1.1. Stock Keeping Unit (SKU)

Besides, the SKU is also used to indicate a unique location or a piece of code corresponding to
a storage unit. (QuickBooks Commerce,2018) That means, for example, if you have two
separate warehouses, each of the same products in two warehouses will have different SKUs.
This makes goods management more accurate and transparent. Besides, the SKU refers only
to goods available and available for trade, not to goods that have been placed or forwarded into
the warehouse. When a company receives an item from a supplier, they choose whether to
maintain the supplier's SKU or create a new SKU convenient and suitable for the company.
Inventory management and profitability
Inventory management error is one of the main causes of profit loss for most retailers. These
losses are due to any number of data entry and administration errors. As time goes on, small
bugs will turn into big bugs that seriously affect its bottom line. Overall, otherwise organizing the
repository using SKU codes will easily lose track due to overcrowding download. If the location
of the goods cannot be determined, we will not know which products are still available.
(corporatefinanceinstitute ,2020)Therefore, SKU management is an efficient and cost-effective
way to manage goods. At the same time, it minimizes easy errors in inventory management and
prevents company losses.
Our warehouse classifies items according to their characteristics in the following order:
manufacturer, description, material, size, colour, delivery time.

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.

3.1.2. Level of product assortment

Type Material

Luggage Carry on Hardside

Softside

Rolling spinner Hardside

Softside

Size Type

Handbag Small Frame bag

Saddlebag

Quilted bag

Middle Satchel bag

Tote bag

Hobo bag

Large Barrel bag

Doctor bag

Duffel bag

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 3.1.3. Storage Capacity

According to Tyler Payne, from T.P.Supply Co, INC, the available floor space for storing the
goods within a warehouse, this space is calculated after subtracting the space used for non-
storage purposes (Payne, 2019). Besides, to calculate the storage capacity, we have to
incorporate the available floor space with the available height of the warehouse, which means
the gap between the floor space and the overhead facilities, such as lighting, fire alarms, etc.
With our warehouse, after subtracting all the other space for non-storage purposes, we have
8,400 square meters of floor space, assuming the available height of the rack in the warehouse
is 6 meters. Therefore, we have a total storage capacity of 50,400 cubic meters. With 10 meters
in height, we have six levels of 1.2 meters storage rack. Assuming the standard dimension of
handbag boxes is 0.4m x 0.2m x 0.3m, with a storage capacity of 84,000 cubic meters, our
warehouse can store 2,100,000 boxes.

3.1.4. Technology Implementation

To manage the warehouse effectively, managers need to apply multiple technologies and
system, with warehouse management system as the main framework and other support
systems to assist as Stated in Hamburg International Conference of Logistics (HICL) no 25

As the warehouse applies wave picking to select and ship the products to the customer, it is
suitable to use the Put-to-light system for optimized order fulfilment.

The put-to-light system is suitable for a retail warehouse that handles general merchandise to
benefit from high-speed order sorting capability that matches the warehouse order, picking
model. It requires less floor space than another model such as pick to light since it helps to
organize orders directly from bulk stock.

- warehouse management system: a critical technology to support and improve the

management output and is directly related to managing inventory. The system records and
analyzes where products are allocated and make out the best route or order picking. It also
manages and performs random slotting and optimizes available space. The system can be
flexible in handling different order sizes while still maintaining their accuracy and efficiency.
Using this system will allow the manager to keep track of their product flow and have an explicit
schedule for their shipping

- Voice tasking technology: is a verbal command system that allows workers to receive
orders and accept shipment hands-free. Employees can select orders, access inventory, and be

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less confused about the information of their order. The system enables real-time data analysis
and communication and can be combined with other technology to boost order picking accuracy
and productivity.

- labour-management system: as the warehouse is not fully automated; such a system is

needed to control expenses and reduce human errors during operation. This system is also
used as training structures for new employees, combined with a warehouse management
system to lower labour costs.

- Stock Keeping Unit (SKU): is a product code designed for each product to identify and
preserve when they arrive in the warehouse. Adding SKU to products allows transparency from
damaged, missing items, whether lost products result from theft or negligent in work.
Information quantity also gets reduced when applying SKU in the product line; the system will
be notified when a stock is running low and restocked.

- RF technology: a critical technology needed for efficient order picking and order
sorting. Paired with the SKU system and WMS to direct the worker to their order location,
scanning the barcode on the products, the WMS will be notified and have more inventory control
accuracy. This system increases both the accuracy and time efficiency of order picking, as the
system continually updates and allocate the products to their respective locations.

3.1.5. Material Handling Equipment (MHE)

Conveyor belts: Conveyor belts are parts of the conveyor system that transport goods from 1
end to another end of their destined location, it will be used to deliver ordered products from the
order picking area to the packaging area and the shipping department.

- Sorters: also a part of the conveyor system, this equipment is used to separate
products from 1 source to multiple sources for sorting or packaging. In this warehouse, it will be
installed in the packaging section.

- Forklift: industrial equipment used for transportation, with a fork that can slip beneath
loaded pallets and lift/move the goods. This will be mainly used in loading and unloading goods
from trucks and racks.

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- Order picker: a small size forklift used for order picking, compare to a platform truck
this equipment can handle more weight and retrieve stacked items from racks ranging from 3-10
meters.

AVG: compact AVGS are sometimes considered oversized Roombas whose purpose
is to transport goods from one place to another automatically. Equipped with a hydraulic upper
surface to lift the product racks, it can support transporting goods in the order picking phase.

- Pallets: while a forklift can access block pallets on all four sides, most products in this
warehouse come in bulk and are rather weighty, four-way access is not needed as the racks
only require 2-way access. Therefore, the warehouse can use a wooden Double-face pallet to
load and transport products as they can handle and distribute more weight.

- Rack: use push back rack: this type offers more storage, divides each SKU in different
lanes, and is used for warehouse with a variety of SKU. ( LIFO)

- Rack: selective racking system: have the largest selection of size so are suitable for
sorting different size of goods and is budget-friendly. (FIFO)

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 3.2. Warehouse Overall Layout Structure

Figure 1. Warehouse layout created by Minh, N 2020

The warehouse layout will adopt the U-shape warehouse, the most common warehouse setup
(Bryson 2016). By sharing a single dock to handle shipping and receiving, this setup streamlines
the goods and travelling flow, while also keeping high and efficient security for all entrances.
In the total warehouse space of 20.000m2 (200m x 100m), the main warehouse area, including
the shipping and receiving area, is 16490m2 (170m x 97m) with the height, about 80% of the
total available space. Within this space, the storing area makes up a total of 8400m2 with a
height of 7.5m and consists of two storage racks for two types of goods: luggage and handbags.
The rest of the area is for facilities. The staff lounge and office is a 200m2 (20m x 10m) room
where staff eat, rest, prepare for work, and handle office paperwork. The management office is
for staff in shifts to supervise and manage the distribution and receiving process. The equipment
is located next to the forklift area for ease of access to both rooms, and finally, the medical room
is on the leftmost of the facility area. The remaining 3510m2 are used for truck drive-in area,
emergency exits, hallways, and securities. As trucks range from 3m-6m in length, a 30m long
truck drive-in area will be sufficient for turning radius of trucks (Walker 2017). The inbound and
outbound process and truck drive-in area can be expanded in the future if needed as the
company grows and receives more orders. A few cars can be parked next to security for the
staff parking area, and the rest are parked outside the warehouse. To maximize securities for

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the entrances, a security room of 150m2 (15m x 10m), is placed on the bottom right corner of
the layout, with access to CCTVs placed in the warehouse area. To comply with the
requirements of 2 fire extinguishers minimum in a facility under the law 79/2014/NĐ-CP
(Vietnam Government 2014), fire extinguishers are located around the storage area.
The warehouse staff consists of 25 staff: 8 for managing storages, 8 for inbound and outbound
processes, four office staff, two securities, two janitors and one nurse.

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4. Operational Flow

4.1. Inbound Process

 Boxed luggage and handbags from various suppliers are transported by trucks to the
inbound area's gates and become ready to be unloaded.
 Two staffs will document all the unloaded goods to sort and identify them
 Forklifts are used to unload the wood pellets' goods in the free areas as they are
identified and thoroughly checked. If there are manufacturing defects or damages, they
are reported and sent to the damaged area to be returned.
 The qualified goods will then be put on conveyor belts through the value-added area to
get tagged, given SKU barcode, polybagged and boxed.
 Two staff will then place the boxed goods according to the storage category in the main
storage area, ready to go to the outbound area, and be shipped upon receiving an order.

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4.2. Outbound Process

-Orders are received through WMS- Warehouse Management System by the staffs and
the shipment orders will be documented in the system
-The shipment orders accompanying the location are sorted through WMS by product
assortment. All this information will be put into two specific picklists, including handbag
and items of luggage. Besides, products that have the same SKUs will be combined into
a single task.
-Applying wave picking: a type of picking method that combines multiple orders and
schedules them to be picked at the most appropriate time of the day.
-Each two staff will be assigned by a specific product assortment zone or wave. Then
they go around the warehouse and pick all the required products at the same time.
-The staff will utilize a forklift during the picking process.
- Staff transferred all products to a packaging zone, and these products will be ready to
be sorted into a finished order.
-The RF system integrating with the WMS is used to scan the SKUs of the wave
-As for packaging, the staff will scan the products through SKUs to see if these products
have any errors. The product’s information will appear on the screen’s list by utilizing the
RF system, and the label will be printed.
-Product orders move to the automatic conveyor to be packed by carton boxes
-Boxes will be delivered to a free area by staff and get ready to be loaded into the trucks.

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 4.3. Value Added Services

In order to respond to consumer demand, our management system has created our stock
houses value-added to help clients get the advantage they want, the company's value-added
range from easy to advanced and offers customers with choices for their products delivery
periods so that the transportation of their goods will be saving and speedy. Another essential
element that will ensure the resolution of mistakes during development processes to gain
consumer interest is Quality assurance (QA). If the items are incorrect, the QA will take actions
for those packaged merchandises to ensure that consumers do not get these items (Margaret
2019). The business creates individual returns for the customer, a reverse logistics (RL)
operation until the customer gets certain error items. To gain strength with other rivals, Reverse
Logistics needs to pay more attention to the value-added market and the confidence of
customers ( Mach1 2017). Moreover, having an awareness of the recycling opportunities for
some plastic boxes, containers and wooden pallets, they are ordinarily thrown away for each
shipment shipped to the store before consumers receive items. The warehouse will keep them
for storing other goods, or the company will carry empty boxes and pallets, then recycle them
for different purposes.

4.4. Retailer’s Delivery Schedule

Volume Delivery Date Time Location

SAMSONITE 100 boxes/time Monday, Thursday, 2:00 Cau Giay

VIETNAM delivery Saturday am District

SAMSONITE 100 boxes/time Tuesday, Thursday, 2:00am Hai Ba Trung

VIETNAM delivery Saturday District

MIA Vietnam 150 boxes/time Wednesday, Friday 3:00am Dong Da District

delivery

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LUG Vietnam 120 boxes/time Monday, Friday 3:00am Ba Dinh District
delivery

LUG Vietnam 130 boxes/time Tuesday, Thursday 2:30am Ha Dong District

delivery

House Of Luggage 150 boxes/time Monday, Thursday 2:30am Thanh Xuan

delivery District

House Of Luggage 140 boxes/time Tuesday, Thursday, 3:30am Dong Da District

delivery Saturday

Lee&Tee 130 boxes/time Tuesday, Saturday 1:00am Phu Nhuan

delivery District

Lakii Shop 120 boxes/time Tuesday, Saturday 1:00am Binh Thanh

delivery District

Vinmart 150 boxes/time Tuesday, Saturday 2:30am District 1

delivery

LUG Vietnam 120 boxes/time Monday, Thursday 2:00am Ngo Quyen

District

Samsonite 150 boxes/time Monday, Friday 2:00am Hong Bang

IMPERIA delivery District

House Of Luggage 160 boxes/time Wednesday, Saturday 3:00am Ngo Quyen

District

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Hours of operation: Not long ago, the average factory worked five days a week and eight hours
a day. Today, all logistics facilities run 24/7, and warehouses that operate for just 40 hours are
increasingly uncommon because the conventional work schedule does not fulfil consumer
demands (Ken Ackerman 2014). The first shift runs 10 hours a day from Wednesday to
Saturday. On Sunday, a second shift begins and runs until Wednesday. Staff on both shifts
come in on Wednesday only, and one of those shifts transfers on that day only from day to
night. Besides, on Saturday and Sunday, we give part-time staff a 12-hour shift and eight-hour
work schedules for two evenings during the week or the part-time community works five days
and shifts are just six hours long (a 5/6 schedule).

5. Conclusion and Limitations

To conclude, there were some shortcomings in carrying out this report and constructing the
warehouse, creating difficulties in completing this report that matched the company's standards.
When coming up with the warehouse layout design, it was difficult to determine which flow of
warehouse and type of form could be used to be appropriate with the chosen product line. The
storage capacity measurement may also not be precise and may have mistakes since it is
dependent on secondary research and assumption of how many storage containers such as
racks, shelves, bins, etc., may fit into the stockroom. Having the point of view of Hanoi, Ho Chi
Minh, and Hai Phong city's occupation, the project study concisely suggested a factory
architecture and its working processes for the garment industry. Our stock houses primary
target is to stock and sells different luggage and bags styles to retailers and wholesalers.

6. References

Commerce, Q., 2018. SKU Meaning - What Is An SKU?. [online] Tradegecko.com. Available at:
<https://www.tradegecko.com/blog/inventory-management/managing-inventory-with-skus>
[Accessed 10 January 2021].

Corporate Finance Institute. 2020. Stock Keeping Unit (SKU) - Definition, Importance And
Example. [online] Available at:

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<https://corporatefinanceinstitute.com/resources/knowledge/other/stock-keeping-unit-sku/>
[Accessed 10 January 2021].

Lopienski, K. and Lopienski, K., 2020. Batch Picking: How It Measures Up To Other Picking
Methods. [online] ShipBob. Available at: <https://www.shipbob.com/blog/batch-picking/>
[Accessed 10 January 2021].

Clarus WMS - Cloud Warehouse Management Software. 2018. What Is A Warehouse

Management System? | The WMS Explained. [online] Available at:
<https://www.claruswms.co.uk/what-is-warehouse-management-system/> [Accessed 10
January 2021].

Vu, T., 2020. Vietnam Approves Corporate Income Tax Reduction For 2020. [online] Vietnam
Briefing News. Available at: <https://www.vietnam-briefing.com/news/vietnam-approves-
corporate-income-tax-reduction-2020.html/> [Accessed 10 January 2021].

Woodsidedunstable.com. 2021. Why Is The Location Of Industrial Estates So Important?.

[online] Available at: <https://woodsidedunstable.com/why-is-the-location-of-industrial-estates-
so-important/> [Accessed 10 January 2021].

Sunol, H., 2020. Wave Picking – What You Need To Know. [online] Articles.cyzerg.com.
Available at: <https://articles.cyzerg.com/wave-picking-what-you-need-to-know> [Accessed 10
January 2021].

isuzuhn.com. 2020. Giờ Cấm Xe Tải Hà Nội 2020 Và Khung Giờ Cấm Tải Vào TP HCM. [online]
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A%A3i%20%E1%BB%9F%20H%C3%A0%20N%E1%BB%99i&text=Th%E1%BB%9Di%20gian
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> [Accessed 10 January 2021].

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Payne, T., 2019. How To Calculate Warehouse Space & Storage Capacity | T.P. Supply.
[online] T.P. Supply Company, Inc. Available at: <https://www.tpsupplyco.com/how-to-calculate-
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2C000%20cubic%20feet.> [Accessed 10 January 2021].

Margaret, R., 2019, ‘quality assurance (QA)’, Tech Target, viewed 6 January 2021,
<https://searchsoftwarequality.techtarget.com/definition/quality-assurance >.

Mach1global, 2017, ‘ WHAT IS THE MEANING OF REVERSE LOGISTICS, AND HOW DOES
IT DIFFER FROM TRADITIONAL LOGISTICS?’, Mach1 Global Service, 22 November, viewed
6 January 2021, < https://www.mach1global.com/meaning-of-reverse-logistics/ >.

Turner, C., 2016. 7 Innovative Warehouse Management Technologies to Adopt. Available at:
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management/#:~:text=Today%2C%20warehouse%20managers%20have%20a,the%20use%20
of%20warehouse%20technologies. [Accessed January 10, 2021].

cerasis.com, 2016. Logistics Technologies: 4 Benefits of RFID, AIDC, & IoT. Cerasis. Available
at: https://cerasis.com/logistics-technologies/ [Accessed January 10, 2021].

Katie Myers, 2020. 3 Warehouse Technology Trends of 2020. [online] Flock Freight. Available
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Jan. 2021].

Ackerman, K 2014, 'Do warehouses still need 8-hour work shifts?', viewed 6 January
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Nedelea, A., 2018. What Is A Warehouse Management System? [online] The Supply Chain
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Walker, M 2017, ‘Spotlight On: Distribution Center Design‘, Logistics Bureau, viewed 6 January
2021,
<https://www.logisticsbureau.com/spotlight-distribution-centre-design/>

Bryson, T 2016, 'U-Flow or Through Flow Warehouse Systems - Which is Best?', Best Article
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Vietnam Government 2014, ‘79/2014/NĐ-CP’, Chinh Phu, viewed 6 January 2021

http://vanban.chinhphu.vn/portal/page/portal/chinhphu/hethongvanban?class_id=1&_page=1&m
ode=detail&document_id=175255

7. Appendices.

Warehouse Design Project Contribution Form

Student Name Student Number Percentage of Student Signature

Contribution
Out of 100%
Nguyen Viet hoang S3758250 16.7% Hoang

Nguyen Duc Tuan S3759325 16.7% Tuan

Vu Quynh Chi S3821006 16.7% Chi

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Pham Duc Duy Minh S3798792 16.7% Duy Minh

Pham Duc Minh S3884416 16.7% Duc Minh

Nguyen Ngoc Quang Minh S3827478 16.7% Quang Minh

Date: 10 Jan 2021

Class: Hanoi Class - Warehouse and Distribution Channel

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