STORAGE &

WAREHOUSING
BY:
PROF. MARIA NIEVES D. ELARCO
 Warehousing & Storage
“Warehousing and Storage is an act of storing and assorting the finished goods so as to create maximum
time utility at minimum cost”
Storage involves proper management for preserving goods from time of their production or purchase
till actual use.
When this storage is done on a large scale and in a specified manner it is called Warehousing.
Warehouse is the place were goods are kept.
Warehouse-Keeper the person in-charge of the warehouse.
Warehousing refers to the activities involving storage of goods on a large-scale in a systematic and
orderly manner and making them available conveniently when needed.
Warehouse Management
Is a key part of supply chain
AIMS: To control the movement and storage of materials within a warehouse
The systems also direct and optimize stock put away based on real-time information about the status
of bin utilization
A WMS monitors the progress of products through the warehouses.
It involves the physical warehouse infrastructure, tracking systems and communication between
product stations.
Classification of Warehouses
1. General warehouse where goods are stored for long periods and where the prime purpose
is to protect goods until they are needed. There is minimal handling, movement, and
relationship to transportation. Furniture storage or a depository for documents is an
examples of this type of storage. It is also the type used for inventories accumulated in
anticipation of seasonal sales.
2. Distribution warehouse has a dynamic purpose of movement and mixing. Goods are
received in a large-volume uniform lots, stored briefly, and then broken down into small
individual orders of different items required by the customer in the marketplace. The
emphasis is on movement and handling rather than on storage. This type of warehouse is
widely used in distribution systems. The size of the warehouse is not so much its physical
size as it is the throughput, or volume of traffic handled.
Function of Warehousing
1. Receiving is the collection of activities involved in-
a. Orderly receipt of all materials coming into the warehouse.
b. Providing the assurance that the quantity and quality of such materials are as ordered, and
c. Disbursing materials to storage or to other organizational functions requiring them.
2. Prepackaging is performed in a warehouse when products are received in bulk from a
supplier and subsequently packaged singly, in merchandisable quantities, or in combinations
with other parts to form kits or assortments. An entire receipt of merchandise may be
processed at once, or a portion may be held in bulk form to be processed later. This may be
done when packaging greatly increases the storage-cube requirements or when a part is
common to several kits or assortments.
3. Put-away is the act of placing merchandise in storage. It includes transportation and
placement.
Cont’d
4. Storage is the physical containment of merchandise while it is awaiting a demand. The form
of storage will depend on the size and quantity of the items in inventory and the handling
characteristics of the product or its container.
5. Order picking is the process of removing items from storage to meet a specific demand. It
represents the basic service that the warehouse provides for the customer and is the
function around which most warehouse designs are based.
6. Packaging and/or pricing may be done as an optional step after the picking process. As in
the prepackaging function, individual items or assortments are boxes for more convenient
use.
7. Sortation of batch picks into individual orders and accumulation of distributed picks into
orders must be done when an order has more than one item and the accumulation is not
done as the picks are made.
Cont’d
8. Packing (Unitizing) and Shipping may include the following tasks.
a. Checking orders for completeness
b. Packaging merchandise in an appropriate shipping container.
c. Preparing shipping documents, including packing list, address label and bill of loading
d. Weighing orders to determine shipping charges.
e. Accumulating orders by outbound carrier.
f. Loading trucks (in many instances, this is a carriers responsibility
9. Cross-docking inbound receipt from the receiving dock directly to the shipping dock

10. Replenishing primary picking locations from reserve storage locations.

Objectives of Storage Layout Planning
The layout planning objectives for a storage department or a warehouse are:
1. To utilize space effectively.
2. To provide efficient materials handling
3. To minimize storage cost while providing required levels of service.
4. To provide maximum flexibility
5. To provide good housekeeping
Principles of Storage Layout Planning
1. Popularity this is the most popular items (fast moving) should be positioned
as close to the receiving/shipping point along the most direct route between
the entrance and departure points.
2. Similarity for laying out a storage area relates to the similarity of the item
stored. Namely, “items that are received and shipped together should be
stored together”. Even if items are not received together, it is almost always
wise to stored them together if they are shipped together. By storing similar
items in a common area, travel times for order receipt and order picking may
be minimize.
3. Size in general, heavy, bulky, hard-to-handle items should be stored close to
their point of use. Assignment of space should be based on ease of handling
and popularity of the items.
Cont’d
4. Characteristics Characteristic of materials to be stored often require that they be stored and
handled contrary to the method indicated by their popularity, similarity, and size. Some
important materials characteristics include:
a. Perishable materials
b. Oddly shaped and crushable items
c. Hazardous materials
d. Security items
e. Compatibility
5. Space Utilization
Factors to be considered while developing the layout:
a. Conservation of space b. Limitation of space c. Accessibility
Factors Influencing Effective Use of
Warehouse
• Cube utilization and accessibility

• Stock location

• Order picking and assembly

• Physical Control & Security - Elements

Cube utilization and accessibility
‒Goods stored not just on the floor, but in the cubic space of the
warehouse; warehouse capacity depends on how high goods can
be stored
‒Accessibility means being able to get at the goods wanted with a
minimum amount of work
Stock Location
• Objectives
– To provide the required customer service
– To keep track of where items are stored
– To minimize effort to receive, put away, and retrieve items
• Basic Stock Locating Systems
– Group functionally related items together Group together items similar in their use.
– Group fast-moving items together Fast-moving items are placed close to the receiving and shipping area.
– Group physically similar items together Physically similar items often require their own particular storage
facilities and handling equipment.
– Locate working stock and reserve stock separately Allows order picking to occur in a compact area and
replenishment of the working stock in bulk by pallet or container load.
Order Picking and Assembly
• When an order is received, items must be obtained from the warehouse, grouped, & prepared
for shipment, systems used
– Area system Order picker circulates throughout warehouse selecting items on an order --
order is ready to ship when order picker is finished
– Zone system Warehouse is divided into zones, & each picker works only in an assigned zone --
order is divided by zone, & the items from each zone are sent to the marshaling area
– Multi-order system Same as the zone system, except that each picker collects items for a
number of orders at the same time
PHYSICAL CONTROL & SECURITY - ELEMENTS
• Good part numbering system
• Simple, well-documented transaction system
– Identify the item
– Verify the quantity
– Record the transaction
– Physically execute the transaction
• Limited access
– Inventory must be kept in a safe, secure (locked) place with limited general access
• Well-trained workforce
Types of warehouses
1. Private Warehouses are owned and operated by big manufacturers and merchants to fulfill
their own storage needs.
2. Public Warehouses is a specialized business establishment that provides storage facilities to
the general public for a certain charge. It may be owned and operated by an individual or a
cooperative society. It has to work under a license from the government in accordance with
the prescribed rules and regulations.
3. Government Warehouses
 Owned, Managed and Controlled by Central or State Government or public corporation
 If customer cannot rent within specified time authority can recover rent disposing goods
Cont’d
3. Co-operative Warehouses
 Owned Managed and Controlled – Co-operative societies
Facilities at most economical rates to members
4. Bonded warehouses are licensed by the government to accept imported goods for storage
until the payment of custom duty. They are located near the ports. These warehouses are
either operated by the government or work under the control of custom authorities.
5. Cold Storage Warehouses
 Preserve perishability of goods against payment of a storage charge
Temperature variation is controlled to degree necessary for certain sensitive items
Cont’d
6. Distribution Centers/Warehouses
Design to move goods
Large and highly automated
Received goods from various plants and suppliers, take orders, fill them efficiently deliver to
customer quickly
Located near the market owned or leased by manufacturers
7. Export and Import Warehouses
 Location – near ports where international trade is undertaken
Storage facilities for goods awaiting onward movements
Facilities-packaging, inspection, marking etc.
Cont’d
9. Climate-Controlled Warehouses
 Handle storage of many products including need special handling conditions
Freezers for frozen products, humidity controlled environment for delicate
products, produce or flowers, etc.
10. Field Warehouses
 Managed-Public Warehousing Agency in the premises of a factory or company
which need facility for borrowing from a bank against certification of goods in
storage or in process by an independent professional warehouse man.
Cont’d
11. Agricultural Warehouses
 Storage agricultural produce grown in a certain area
Location – Assembling or regulated markets
Receive agricultural commodities either directly from farmers or through their
commission agents or from wholesalers
Encourage speculative trading