Warehouse:

Raw materials from suppliers or finished goods from manufacturers come into the warehouse. The
process of storing goods in a safe and secure environment for sale or distribution is known as
warehousing. Warehouses take stock of quantity goods when they arrive, keep a track of where they are
located in the warehouse and for how long they need to be stored. There are many different types of
classification that can be adopted, for example:

• by the stage in the supply chain: materials, work-in-progress, finished goods or returned goods;

• by geographic area: for example, a global warehouse may serve the whole world, a regional
warehouse may serve a number of countries, a national warehouse may serve just one country, or a
local warehouse may serve a specific region of a country;

• by product type: for example, small parts, large assemblies (e.g., car bodies), frozen food, perishables,
security items and hazardous goods;

• by function: for example, inventory holding or sortation (e.g., as a ‘hub’ of a parcel carrier);

by ownership: owned by the user (e.g., the manufacturer or retailer) or by a third-party logistics
company;

• by company usage: for example, a dedicated warehouse for one company, or a shared-user
warehouse handling the supply chains for a number of companies;

• by area: ranging from 100 square meters or less to well over 100,000 square meters;

• by height: ranging from warehouses about 3 meters high through to ‘high-bay’ warehouses that may
be over 45 meters in height;

• by equipment: from a largely manual operation to a highly automated warehouse.

Pallet movement:
There is a wide range of equipment available for moving pallets around a warehouse, from simple
manual aids to sophisticated computer-controlled equipment. Some of the most common types are as
follows:

Hand pallet truck. This is a truck with two forks that will fit into the slots of a pallet. The forks can be
raised slightly by a simple pump action to lift a pallet off the floor. The truck can then be pulled
manually.

Powered pallet truck. This is similar to the above, except that it is battery-powered.

Tugs and tractors. For long horizontal movements, a tug may be used, towing a number of trailers.

Conveyors. The conveyors comprise a series of rollers inclined at a slight angle. When the pallet is
positioned on the conveyor, it rolls forward to an end stop.

Automated guided vehicles (AGVs). These are battery-powered computer-controlled trucks and hence
do not require a driver.
Lift trucks: Lift trucks are commonly used both for horizontal movement and vertical stacking.

Warehouse Design
Design procedure
The design of a large and modern warehouse is very complex and requires a range of skills and
disciplines. The design process is shown below as a series of steps. Suggested steps are as follows:

1. Define business requirements and design constraints

the requirements: warehouse roles (e.g., to act as a decoupling point, a cross-dock facility or a returns
centre); • throughput levels and storage capacities; • customer service levels; • specified activities, such
as production postponement and added value services.

There will also be design constraints, or considerations, to be taken into account from various other
stakeholders, such as: • government agencies, for example in terms of health and safety regulations (eg
manual handling and equipment), working time directive, packaging regulations, product recovery and
environmental legislation; • fire officer (eg requirements in terms of evacuation, fire exits and
fire/smoke containment); • insurance company (eg regarding fire detection and fire suppression –
overhead or in-rack sprinklers, etc); • local authority (eg maximum building height, working times,
noise, etc). health & safety.

2. Define and obtain data

Products, Order characteristics, Intake and dispatch patterns, Warehouse operations, External area
requirements, Site and building details (for redesign of existing facilities), Cost data,

3. Formulate a planning base

Data analysis, spreadsheets, tables, graphs, charts and drawings, presented to the project team Flow
diagram, warehouse zoning. Divided by product groups, by temperature regime, hazard, by size of
items.

4. Define the operational principles

Decoupling point, consolidation Centre, assembly Centre or returns center) Tasks: Vehicle
unloading/loading, Quality assurance, Storage, Picking, Production Postponement, added value services,
packing, crossdocking, sortation, ancillary activities as accommodating sales offices or providing vehicle
wash facilities.

5. Evaluate equipment types

There is a wide range of equipment available to warehouse designers. Some of these may be well suited
to a particular operation and some very badly suited.

Initial automation assessment. Attribute assessment. Decision trees Cost comparison. Equipment choice

6. Prepare internal and external layouts

Throughput efficiency, building utilization, safety, environmental,

Construction materials, Insulation and air tightness, Roof lights, Rainwater harvesting, Roadway design,
parking areas, fire assembly area, landscaping.

external layout considerations include: • roadway design; • parking areas for trucks, containers,
gatehouses, fences, barriers and landscaping; • vehicle wash, fueling and maintenance facilities; • fire
assembly area; • landscaping.

7. Draw up high-level procedures and information system requirements

how the operation will work, different processes, which technology, SOPs. Issuance etc.

8. Evaluate design flexibility

volume, e.g., to accommodate unexpected growth or sudden surges in demand; • time, eg to enable
rush orders to be picked and dispatched; • quantity, eg to be able to switch to item picking rather than
case picking; • presentation, eg to present different unit loads to various clients; • information, eg to
provide specific information on customer labels.

Warehouse resources. land/building, equipment, staff, processes and systems,

9. Calculate equipment quantities

Based on the warehouse flow diagrams and the equipment choices, it is normally relatively
straightforward to calculate the equipment quantities.

10. Calculate staffing levels

staffing levels have to be established as part of the design and to enable a full costing of the warehouse
to be made. Allowance needs to be made for absenteeism, sickness and holidays, as well as for shift
rotes.

11. Calculate capital and operating costs

building, Equipment's, staffing, Information systems.

12. Evaluate the design against the business requirements and design constraints

Before finalizing the design, all the details determined up to this point should be checked against the
defined business requirements and any design constraints that must be met.

13. Finalize the preferred design

Once approval is received, then the actual project implementation can begin. building, materials
handling, information systems, personnel, associated areas.
 Warehouse management and information
Large warehouse management is a very challenging position requires a range of skill sets. Warehouse
management is now a high-level position in many companies, recognizing the high costs and investment
involved in the facility, as well as the key role that warehouses play in the provision of high customer
service levels.

1. Operational management

The management of a large distribution centre is a complex task. There may be thousands of orders
received in a day, across a range of thousands of SKUs, and all requiring consolidation by individual
order, packing and dispatch in possibly hundreds of vehicles.

2. Meeting legal requirements and local regulations

Organizations have a duty of care towards their employees and there is a wide range of legislation that
must be complied with in warehouse operations, including, for example, health and safety, manual
handling, lift equipment and working hours. In addition, there are often regulations relating to the goods
themselves, such as food and hazardous goods regulations. Formal risk assessments need to be carried
out to examine potential hazards, and methods of avoiding the hazard.

3. Performance monitoring

The continuous measurement of performance is obviously essential to monitor process improvement.

Service levels: – percentage of orders dispatched on time; – percentage of orders fully satisfied (ie all
order lines supplied); – accuracy of order fill; – stock availability in the warehouse; – order lead time; –
returns and customer complaints.

Operational efficiency: – number of cases picked per person hour; – number of order lines picked per
person per hour; – equipment uptime (e.g., percentage hours equipment available, with no breakdowns
or routine maintenance).

Cost efficiency: – cost per case throughput; – cost per pallet stored; – conformance to budget (eg for
staff costs, rent, equipment maintenance, packing materials).

Personnel: – number of days skill training; – percentage of staff multi-skilled; – absenteeism and
sickness rates.

Environment: – electricity and gas usage; – water recycling; – percentage of returned goods or
packaging recycled.

4. Operational parameters

These operational parameters include: • throughput; • number of SKUs; • unit load characteristics; •
product characteristics (e.g., size and ease of handling); •lines per order; • units per order line; • added
value requirements.
 5. information technology

The use of computer-based information technology is now the norm in most warehouses, and is
essential for the management of large facilities.

Significant advantages can be achieved in terms of productivity, speed and accuracy with the benefit of
a good warehouse management system (WMS).

WMS normally interfaces with the company’s main transaction system (such as an ERP or legacy system)
to access information such as purchase orders and to download customer orders. In turn, the WMS will
feed back information such as goods received and dispatched. DIAGRAM

WMS functionality:

Covers all the activities of the warehouse,

• Receiving: yard planning, checking against electronic advance shipping notices (ASNs), checking for
dimensions and weights, quality sampling;

• Put-away: algorithms to determine the best storage location, support for all feasible storage types
(e.g., block stacking, double deep);

• Replenishment: fixed trigger point or order-based replenishment to pick locations;

• Picking: Pick route optimization, slotting (i.e., optimum location of each SKU in pick face), wave
management;

• Added value services: kitting, labelling, final assembly (requiring bills of materials);

• Packing: identification of correct carton size (by database of dimensions for all SKUs);

• Cross-docking: planning, labelling and sortation;

• Sortation: By various categories, such as by order, vehicle or geographical area;

• Dispatch: marshalling lane control, documentation, transmission of ASNs;

• Yard management: control of truck parking and dock door allocation;

• Management: Workload planning, performance measurement, productivity schemes, modelling (eg

for new product ranges or new racks), billing, pallet management, customs reporting;

• Stock counting: full count and perpetual inventory.