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Table of Contents
•
Abstract
•
Objective
•
Literature Review
•
Organization Structure Of Stores Division
•
Warehousing – World Class Practices

Receipt and Inspection of Materials

Issue of Materials

Stock & Inventory Management

Material Storage & Handling

Material Handling Time

Storing the product in relation to flow/ rate of movement

Location & Layout of the Warehouse

Warehouse Design Criteria

Operational standards needed

Warehouse Safety and Security

Multitasking work force
•
Warehouse Management Systems (WMS)
•
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 canconserve 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 inthe warehouse; and how efficiently the
warehouses are managed throughout the world.
Warehouse Management:

Warehouse Management provides the insight into your inventory and the warehousemanagement tools to help you increase customer
satisfaction and reduce costs. WarehouseManagement exchanges information with many other functional areas in the solutionincluding
Logistics, Production and Tr.e, to help improve your overall business performance
.
Warehouse Management is used to optimize:
•
Inventory: With our complete inventory management capabilities, track data onevery unit utilizing the latest technologies.
•
Labor: Make people more efficient by managing their tasks and improving their processes. Plan and balance worklo. and
monitor activities with integration toLabor Management.
•
Physical Space: Cross-docking and flow-through capabilities, plus integration withYard Management, reduce the need for warehouse
space.
•
Time: Automate picking, packing and shipping, and minimize the number of moves per order 3

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Literature Review:Warehouse
:
A warehouse is a planned space for the storage and handling of goods and material. Itsmain 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.

NEED FOR WAREHOUSES

1.
SeasonalProduction:
The agricultural commodities are harvested during certain seasons, but their consumptionor 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
whenrequired.2.
SeasonalDemand:
There are certain goods, which are demanded seasonally, like woolen garments in wintersor umbrellas in the rainy season. The
production of these goods takes place throughout theyear to meet the seasonal demand. So there is a need to store these goods in a
warehouse tomake them available at the time of need.3.
Large-scaleProduction:
In case of manufactured goods, the production takes place to meet the existing as well asfuture demand of the products. Manufacturers
also produce goods in huge quantity to enjoythe 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 bysales.4
4.
QuickSupply:
Both industrial as well as agricultural goods are produced at some specific places butconsumed 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 m.e
available tothe consumers at the time of their need.5.
ContinuousProduction:
Continuous production of goods in factories requires .equate supply of raw materials. Sothere is a need to keep sufficient quantity of stock
of raw material in the warehouse toensure continuous production.6.
Price Stabilization:
To maintain a reasonable level of the price of the goods in the market there is a need tokeep sufficient stock in the warehouses. Scarcity in
supply of goods may increase their price in the market. Again, excess production and supply may also le. to fall in prices
of the product. By maintaining a balance in the supply of goods, warehousing ensures pricestabilization.Five basic service benefits are
achieved through warehousing:

Spot stock,

Assortment,

Mixing,

Production support, and

Market presence5

ORGANISATION STRUCTURE OF STORES DIVISION

Storesmanager
6Engineer, InventoryControl
InventoryControl&StockRecordsRoom
Officer 1
(Warehouse1)
Officer 2
(Warehouse2)
Warehousing–WorldclassPractices
Using the best practices in managing the stocks of the industry becomes the part of worldclass practices. Using most efficient methods for
controlling the product inventory and.opting outsourced techniques in order to control warehouse activities, includingreceiving, storing,
assembling, kitting, picking and the dispatching of customer’s/ user’sorders. Some of the points need to be kept in mind in relation to the
world class practices.They become a platform for the .aptation of the world class practices in the organization.They are,1.
Receipt and Inspection of Materials :
The following procedures are .opted in a warehouse on receipt of materials;
•
Receipt of material: The materials on receipt are taken to their allotted spaces in thewarehouses. 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 bem.e.
•
The materials are then Unlo.ed from the delivery trucks. The materials arehandled carefully while unlo.ing. Old worn out truck tires are
used to provide acushioning effect while unlo.ing heavy materials.
•
The materials are then inspected for any defects against the required and standardspecifications. This is done by inspection controller in
large organizations. Thequality controller also plays a vital role in material inspection.
•
The Control samples or standards are kept separately to check the materials to beinspected.
•
The Storekeeper documents the accepted materials
.
7

InventoryControl
InventoryController 1InventoryController 2Material Clerk Clerk/Typist/DataEntry Operator
Records
Stock RecordController Material Clerk
WarehouseA
Store Keeper 1Store Keeper 2Clerk/TypistFork LiftOperator Labour
Inspection
InspectionController MaterialsInspectorsLabour
2.
Issue of Materials
The procedure for the issue of stock items includes that the materials are to be issued, toauthorized persons only and upon presentation
of completed and approved store requisitionand issue note.In large organizations the distribution of issue notes is done by authorized
persons. Theyissue different colored slips to the different departments when a stock item is issued.Pink Copy – User Green Copy – Finance
DepartmentOriginal (White) – Stores Division
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 carewhich will surely increase the cost of the organization and finally, it will increase the priceof the
product.
•
StockControl
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.
•
PeriodicStockChecking
: 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 bechecked that how much of goods are
with them and give the requiredinformation from time to time to the production department, so that none of thestock will remain stand
still.To ensure a proper check on the product that is with us, we need to use tools, such as;
ABC(OrPareto)Analysis
ABC analysis is an inventory categorization technique often used in materials managementsystem. It is also known as Selective Inventory
Control. ABC analysis provides amechanism for identifying items which will have a significant impact on overall inventorycost whilst also
providing a mechanism for identifying different categories of stock thatwill require different management and controls8

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 arethen grouped
typically into three bands. These bands are called ABC codes. It dividesinventory into three classes based on annual cost
volume
ClassA-highannualcostvolumeClassB-mediumannualcostvolumeClassC-lowannualcostvolume

CycleCounting
A cycle count is aninventorymanagement procedure where a small subset of inventory is counted on any given day. Cycle counts are less
disruptive to dailyoperations, provide an ongoing measure of inventory accuracy and procedureexecution, and can be tailored to focus on
items with higher value or higher movement.To conduct efficient and accurate cycle counts, many organizations use some formof
software to implement aninventory control system, which is part of awarehousemanagement system. These systems may
includemobile computerswith integrated barcode scannersthat allow the operator to automatically identify items, and
enter inventory counts via keyp.. The software then transmitsdatato adatabaseon ahost systemwhich can generate inventory reports.
Productcoding:
Product code is a unique identifier, assigned to each finished/manufactured productwhich is re.y, to be marketed or for sale. It enables
easy method of tracking the product until it reaches the customer or end user. The various Codes used are:
•
Universal Product Code, common bar code used to identify products
•
Electronic Product Code
•
Serial number, a number identifying an item9

Qualityrecords
are maintained for the materials/stock specification.These include
•
Procedures to be followed in handling material/stock
•
Detail specifications of every item.
•
Inspection reports.
•
Quality reports.
•
Descriptive reports.
•
Details of approval period of retention of various documents.
Material Storage & Handling:
Handling the material is one the most important part of warehousing. Material Handling isthe movement, storage, control and protection
of materials, goods and products throughoutthe process of manufacturing, distribution, consumption and disposal.The focus is on the
methods, mechanical equipment, systems and related controls used toachieve these functions. The material handling industry
manufactures and distributes theequipment and services required to implement material handling systems.Material handling systems
range from simple pallet rack and shelving projects, to complexconvey or belt and Automated Storage .d Retrieval Systems (AS/RS).
Equipmentsusedforhandlingmaterialinclude
:Hydraulic jacks, Dump trucks, Wheel Barrows, Trolleys, Forklift Truck (Diesel/ Batteryoperated ), Damaged tires used for providing cushion
support for heavy materials duringunlo.ing; Iron bars, Slings and ropes, Chain Pulley Blocks, Hammers, Spanners, Pliers,Wooden Blocks,
pallets (Wooden, plastic)
Effective Materials Handling
•
Good materials handling practice is the responsibility of all members of themanufacturing team, form the top management down to the
trucker working in theaisle of the plant.10

•
Optimum effectiveness of materials handling procedures can only be attained if each individual recognizes and plays his part. Education
and training in materialshandling are prerequisite to minimum materials handling costs.In world class warehouses the responsibilities
assigned such a staff group may wellinclude:
1.
Determining all new methods for the handling of new materials or productsand 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 goodMaterial handling practices.
4.
Establishing controls of current materials handling costs by analysis of costsand 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 thematerials handling equipment.
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 anyform.If we are putting our men, material and money in sending the good to the customer againand 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 ensurethe
quality and life of the product
.
Storing the product in relation to flow/ rate of movement:
11

Demand will not remain same for all of the year, there will be rise and fall in the demandfrom time to time. For whole of the year there will
be variations in the demand and supplyof the product, so as per this demand we need to maintain the flow of material within
thewarehouse.Demand forecasting is the way of estimating the quantity of a product or service thatconsumers will purchase.Demand
forecasting involves techniques including both informal methods and quantitativemethods, such as the use of historical sales data or
current data from test markets.Demand forecasting may be used in making pricing decisions, in assessing future
capacityrequirements.The Operations manager forecasts the demand and accordingly the stock and inventoriesare stocked in the
warehouse.

Location & Layout of the Warehouse:

•
A proper zoning of the warehouse must be ensured.
•
Each and every product must be identified very easily when it is required.
•
They must be assigned with the numbers and sign marks in order to identify themeasily and save time.
•
We must prepare record of item quantity, time and arrival location, storagelocation, quantity balance, and ultimate location.
•
Maintain Real-time information on the quantity, location, status, and history of every inventory item within the warehouse. Check
inventory availability across allwarehouses during order creation.
•
Support your complex needs with multi-location inventory, kits and assemblies,multiple units of measure, lot tracking, serialized inventory
and specific costing,matrix items. Provides real-time indicators of material received on status ok,discrepancy material, or part per million
statistics
.
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WarehouseLocation:
There is no limit on the number of warehouses that may be defined within an entity, andthere 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, amongmany
others, but in there must be a location is a specific storage area, which may constitutea rack/bin type of entry, or a larger bulk storage area.
The locations can also identify shopfloor areas where inventory is held prior to “pull” type material issues. Shop floor locationsof this type
are considered by the system to be a part of the warehouse. A separate locationclassification can also be given to shipping and/or
receiving locations.For warehouse picking purposes, a location sequence number can be assigned to locationsand will be used as an
optional method when defining the order in which sales orders or production material is to be picked.13
A location can also be used to track the inventory of vendor and/or customer distributors. Asingle 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 defaultwarehouse 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 beused for all types of inventory transaction.
Location Flexibility:
•
Location flexibility refers to the ability to quickly .just warehouse location andnumber 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 facilitiesseasonally.
•
Public and contract warehouses offer the location flexibility to accomplish suchrequirements.
WarehouseLayoutandDesign:
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 .equate aisle space for materials handling equipment.Warehouse layout includes:
o
Zones
o
Locations14

o
Equipment
o
Stations
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 anylength 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 shippedExample Locations:
o
“STOR1-01020401” = at Aisle 1, Bay 2, Level 4 Bin 1
o
“RECEIVE-1” = Receiving Dock 1
o
“V1-000001” = Value .ded Services Station 1
Equipment :
Equipment defines a vehicle or piece of machinery used to perform a processing activitysuch as receive, move, pick, pack, or ship within a
warehouse
Stations:
•
A physical location that is used as a work space in order to perform a specificactivity or a group of activities
•
A Station is unique for a Node
•
Used for:
o
Creating tasks15

o
Recording location where work is being performed
o
Associating devices that may be used at the station levelExamples:
o
Receiving Station
o
Ship/Sort Location
o
Value .ded Services Station
Warehouse Design Criteria
Warehouse design criteria .dress physical facility characteristics and productmovement. Three factors to be considered in the design
process are:

the number of stories in the facility,

height utilization, and

Product flow.
N umberofstoriesinthe facility

The ideal warehouse design is limited to a single story so that product does nothave to be moved up and down.

The use of elevators to move product from one floor to the next requires time andenergy.

The elevator is also often a bottleneck in product flow since many material handlersare usually competing for a limited number of
elevators
H eight utilization
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
Regardless of facility size, the design should maximize the usage of the availablecubic space by allowing for the greatest use of height on
each floor.

Most warehouses have 20- to 30-foot ceilings; although modern automated andhigh-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
Productflow

Warehouse design should also allow for straight product flow through the facilitywhether 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.

Straight-line product flow minimizes congestion and confusion.
Operational standards needed:
1.Costs & utilization of Resources :-
Resources are always limited, so we need to utilize them at the optimum level andmake maximum benefit out of them. Whether it men,
material or labor, resourcesare always scarce in nature, which demands for its best utilization. Whenever theresources are fully utilized,
the cost will naturally come down.
2.Performance of activities :-
A number of activities are to be performed within the organization or thewarehouse. Every activity to be looked in a better way and
should taken care. Fromlifting the material from the trucks to taking it to the store, care should be taken, tosave the goods or product from
breakage or damage. A machine has to be checkedfrom time to time for its smoothness of working. Projects need to be handledcarefully,
while planning and there execution.17

3.Accuracy of activities :-
The orders that are to be given must be dispatched as per the guidelines and in acomplete way. Whenever there is order for the product,
as the product is demanded,guidelines are forward to the production department and as per the specificationgoods are delivered.
4.Le. time for activities :-
The time taken from the receipt of order till the time of dispatching of goods isknown as le. time.In the manufacturing environment, Le.
Time has the same definition as that of Supply Chain Management, but it includes the time required to ship the product tothe purchaser.
The shipping time is included because the manufacturing companyneeds to know when the parts will be available for Material
requirements planning.It is also possible for le. time to include the time it takes for a company to processand have the part re.y for
manufacturing once it has been received. The time ittakes a company to unlo. a product from a truck, inspect it, and move it intostorage is
non-trivial. With tight manufacturing constraints or when a company isusing Just in Time manufacturing it is important for supply chain to
know how longtheir own internal processes take.
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 safelylo.ed and must be taken care when they are taken out of the vehicle until it reaches thestore 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 thewarehouse.
•
Issue of stock and inventory to authorized personnel.
•
There should be .equate safety from fire and the materials are to be stored under their required storage conditions.
Multitasking work force:
18

World class warehouses have multitasked work force; who are able to perform severaltasks 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.
ManagingChange
To be successful with any change initiative - such as a warehouse reconfiguration, a changein 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 mostaffected
by the change and involving them early and at all stages enables them to becomemost efficient.
Warehouse Management Systems (WMS)
It is a key part of thesupply chainand primarily aims to control the movement and storageof materials within awarehouse and process
the associated transactions, includingshipping, receiving, put away and picking. The systems also direct and optimize stock putaway based
on real-time information about the status of bin utilization.Warehouse management systems often utilize
AutoIDDataCapture(AIDC) technology
, such as
barcodescanners
,
mobilecomputers,wirelessLANs
and potentially
R.io-frequency identification (RFID)
to efficiently monitor the flow of products. Oncedata has been collected, there is either batch synchronization with, or a real-time
wirelesstransmission to a central database. The database can then provide useful reports about thestatus of goods in the warehouse.The
objective of a warehouse management system is to provide a set of computerized procedures to handle the receipt of stock and
returns into a warehouse facility, model andmanage the logical representation of the physical storage facilities (e.g. racking
etc),manage the stock within the facility and enable a seamless link to order processing andlogistics management in order to pick, pack
and ship product out of the facility.Warehouse management systems can be stand alone systems or modules of anERPsystemor supply
chain execution suite.19

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..

The primary purpose of a WMS is to control the movement and storage of materials withina warehouse – you might even describe it as
the legs at the end-of-the line which automatesthe store, traffic and shipping management.In its simplest form, the WMS can data track
products during the production process andact as an interpreter and message buffer between existing ERP and WMS
systems.Warehouse Management is not just managing within the boundaries of a warehouse today;it is much wider and goes beyond
the physical boundaries. Inventory management,inventory planning, cost management, IT applications & communication technology to
beused are all related to warehouse management. The container storage, loing andunlo.ing are also covered by warehouse management
today.Even production management is to a great extent dependent on warehouse management.Efficient warehouse management gives
a cutting edge to a retail chain distributioncompany. Warehouse management does not just start with receipt of material but it
actuallystarts with actual initial planning when container design is m.e for a product. Warehousedesign and process design within the
warehouse is also part of warehouse management.Warehouse management is part of Logistics and SCM.Warehouse Management
monitors the progress of products through the warehouse. Itinvolves the physical warehouse infrastructure, tracking systems, and
communication between product stations.Warehouse management deals with receipt, storage and movement of goods,
normallyfinished goods, to intermediate storage locations or to final customer. In the multi-echelonmodel for distribution, there are levels
of warehouses, starting with the CentralWarehouse(s), regional warehouses services by the central warehouses and retailwarehouses at
the third level services by the regional warehouses and so on. The objectiveof warehousing management is to help in optimal cost of
timely order fulfillment bymanaging the resources economically.20

Interpretation:
Companies are constantly trying to find ways to improve performance and warehouseoperations 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.opted to
improve productivity and overall customer satisfaction. Although best
practicesvary 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 greatestexpenditure of effort is in the
picking process. To gain efficiencies in picking the labor timeto pick orders needs to be reduced and this can achieved in a number of ways.
Companieswith the most efficient warehouses have the most frequently picked items closest to the21

.
.

shipping areas to minimize picking time. These companies achieve their competitive.vantage by constantly reviewing their sales data to
ensure that the items are stored closeto the shipping area are still the most frequently picked.Warehouse layout is also important in
achieve greater efficiencies. Minimizing travel time between picking locations can greatly improve productivity. However,
to achieve thisincrease in efficiency, companies must develop processes to regularly monitor pickingtravel times and storage
locations.Warehouse operations that still use hard copy pick tickets find that it is not very efficientand prone to human errors. To combat
this and to maximize efficiency, world classwarehouse operations h. .opted technology that is some of today’s most .vancedsystems.
In .dition to hand-held RF re.ers and printers, companies are introducing pick-to-light and voice recognition technology.In a pick-to-light
system, an operator will scan a bar-coded label attached to a box. .igital display located in front of the pick bin will inform the operator of
the item andquantity that they need to pick. Companies are typically using pick-to-light systems for their top 5 to 20% selling products. By
introducing this system companies can gainsignificant efficiencies as it is totally paperless and eliminates the errors caused by
pick tickets.Voice picking systems inform the operator of pick instructions through a he.set. The pick instructions are sent via RF from the
company’s ERP or order management software. Thesystem 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 .opted voice picking to complement the
pick-to-light systems in place for their fast moving products.Although many companies will not be able to afford new
technologies for picking, thereare a number of best practices that can be .opted 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 beingaware 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 competentand
innovative; thereby increasing the efficiency of the business operations.