PSM-602:

Storage and distribution

Engr. Md. Enamul Huque, MCIPS

MBA (Marketing), Dhaka University;
MPSM, BRAC University;
B. Sc. Eng. (Civil), BUET.

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 Chapter 4

Management of stock

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 Principles of stock positioning
▪ Popularity of demand – most frequently requested items are
located conveniently for picking. Could be based on ABC analysis
▪ Similarity – storing similar goods together will make it easier to
remember where items are located
▪ Size or weight – large or bulky items may be kept together
▪ Special characteristics – items with similar characteristics such as
high value or inflammable can be kept together

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ABC classification of stock

Graphical representation
of the Pareto principle in
ABC categorisation of
stock

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 Coding systems
▪ Systems for product coding:
• Own product code system
• Manufacturer’s product code system
• Customer product code system
• Industry standard code system
• Multiple codes
▪ Codes can be -
o Numerical
o Alphabetical
o Alpha-numerical
o Random generated or created
o Sequential
o Structured
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 Coding Standards
▪ The coding systems can be:
▪ significant
▪ sequential
▪ Self-validating codes (e.g. check digits)
▪ Bar codes
▪ European Article Numbering (EAN)
▪ Interleaved 2 of 5 (ITF)
▪ Code 39
▪ UPC

 Cartons of some products, while the products inside are labeled with
UPC or EAN.
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Product codes examples

• Bar coding

• RFID technologies
• QR-Codes (2-D bar code)

RFID Tag

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Use of Product coding

Summary of
common usage of
product codes

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 Benefits of coding systems
▪ Avoids repeated use of long titles
▪ Accurately identifies all items
▪ Prevents duplication of items
▪ Assists standardisation and reduction of varieties
▪ Provides a foundation for efficient purchasing
▪ Convenient basis for recording and storing documents
▪ Simplifies mechanical recording
▪ Convenient for central analysis of unit storehouse records
▪ Can be employed as a basis for stock control accounts
▪ Simplifies pricing and costing
▪ May be used as a storehouse location system
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Product Labelling
• Labelling on packaging should include the following.
• Handling instructions
• Standard symbols – refer to the symbols on the slide
• Specific hazardous goods labelling, together with UN codes for
transportation of hazardous goods
• Goods for import and export may need specific wrapping and packaging
and outer boxes or pallets will need to be labelled for customs clearance
and/or documentation by showing the harmonized item description and
coding system (abbreviated to HS for harmonised system)

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Labelling symbols

Figure: Standard symbol set seen on outer packaging

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Packaging Objectives
Objectives of packing/packaging include the following:
• To protect the product from damage in transit through to the final user
• To protect other products being damaged by the product itself
• To protect the handlers of the product from harm
• To comply with transport and/or legal requirements
• To meet an organisation’s image and marketing objectives
• To meet an organisation’s environmental commitment
• To meet a cost target in order to maintain profitability

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 Unit load
▪ Unit load: a grouping of different items into a convenient stack which make them
easy to handle, transport or store.
▪ Unitization is the act of consolidating multiple smaller units into a larger unit for
improved warehouse efficiency, quicker packaging and arranging, and more
efficient handling and transportation.
▪ Unit load principles:
• Principle of Unit Load states that, “it is quicker and economical to move a lot of items
at a time rather to move each one of them individually”.
• To create a stable and secure, easy-to-move group of stock that is fast to load and
unload from a vehicle
• Unit load should be as large as possible within the constraints of building, equipment
etc.
• There should be minimum number of handlings.
• Standardisation is an important theme of unit load system design
• The preparation of a single product and delivery by the full unit load makes life very
simple in the warehouses and for logistics 56
Unit loads

The five tiers of unit loads

Palletisation
• Pallets – Platform structures designed to support a load and be lifted
using forklift or other equipment. Different types of pallets are used to
pile up, store, assemble, or transport goods.
• Palletisation - Palletization is the logistics process consisting of placing
goods together on top of a pallet to consolidate the load, making it
easier for the handling equipment to transport it.
• Four basic approaches of palletization: manual palletization, semi-
automated palletization, automated palletization and robotic
palletization.
• Advantages:
• Faster loading and unloading
• Reduced labor requirement
• Less risk of product damage
• Can optimize operations across supply chains

Further reading: https://packagingrevolution.net/why-palletize/

 Tote boxes

▪ Tote (meaning carry) bins are merely small containers usually

stackable and made of wood or plastic
▪ Designed for carrying small items and items of low weight
▪ Typically used in retailing operations
▪ Allow small items to be kept together in transit
▪ Can be locked or sealed to prevent pilferage of individual items

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