Warehouse Operation

Management
LESSON 2:
The Warehousing Cycle
Problems and Challenges in Warehousing
Types of Warehouse
Warehousing costs and Inventory costs
Customer service in Warehousing
Warehouse Cycle
It is the total time it
takes to complete a
warehouse process,
such as receiving,
put-away, storage,
picking, packing,
or shipping.
Warehouse Cycle

Receiving
Receiving is the first warehouse process and
one of the most crucial. To perform the
receiving process properly, the warehouse
should be able to verify that it has received the
right product, in the right quantity, in the right
condition, and at the right time.
Warehouse Cycle

Put-Away

Put-away is the second warehouse process and it is the

movement of goods from the receiving dock to the
most optimal warehouse storage location. Failing to
place goods in their most ideal location can impair the
productivity of warehouse operation. When goods are
put away properly, there are several benefits:

•Cargo is stored faster and more efficiently

•Travel time is minimized
•Safety of goods and employees is ensured
•Warehouse space utilization is maximized
•Cargo is easier and faster to find, track, and retrieve.
Warehouse Cycle
Storage

Storage is the warehouse process in which goods

are placed into their most appropriate storage
space. When done properly, the storage process
fully maximizes the available space in your
warehouse and increases labor efficiency.
Warehouse Cycle

Picking
Picking is the warehouse process that collects
products in a warehouse to fulfill customer
orders.
Warehouse Cycle

Packing

Packing is the warehouse process that

consolidates picked items in a sales order and
prepares them for shipment to the customer. One
of the primary tasks of packing is to ensure that
damages are minimized from the time items leave
the warehouse.
Warehouse Cycle

Shipping
Shipping is the final warehouse process and the start
of the journey of goods from the warehouse to the
customer. Shipping is considered successful only if
the right order is sorted and loaded, is dispatched to
the right customer, travels through the right transit
mode, and is delivered safely and on time.
 PROBLEMS AND
CHALLENGES
IN WAREHOUSING
 Top Warehouse Management Challenges

 Inaccurate Inventory Information

 Inefficient Space Utilization
 Improper Labor Management
 Following Rudimentary Processes
 Adapting to Seasonal Demand
 Substandard Picking Process
 Flawed Order Management
 Managing Heaps of Data
 Variety in Products Stored
 Poor Quality Control
 Inaccurate Inventory Inefficient Space
Information Utilization
Inaccurate inventory management A poorly configured warehouse
can be one of the several can cause challenges in inventory
warehouse challenges. It causes management for the warehouse
picking problems as workers can manager. Warehouse setup
go to a location where the product mistakes can also lead to
isn't available. The same can unnecessary time wastage in
happen while storing products in a searching for high-frequency and
location that's already full. fast-moving items.
 Improper Labor
Management
Laborers are an integral part of
the warehouse and managing
them effectively can improve the
overall productivity of different
warehouse processes. Warehouse
managers have to make important
decisions for getting the most out
of the available workforce.
Following Rudimentary
Processes
While warehouse digitalization is picking up
speed in several industries, most warehouses
are still following obsolete paper-based
processes. Challenges in warehouse
management like manual data entries,
excessive handling of products, and passing
the same ticket among different workers can
be time-consuming and costly. Using
modern warehousing technologies such as
barcode scanners helps in streamlining
warehouse processes and counter problems in
a warehouse. Automated
warehousing systems move fast, complete
tasks more efficiently, and eliminate
duplication of efforts.
 Adapting to Seasonal
Demand
Changing customer demands is something the
warehouses can't control, but it is one of the
key challenges of warehousing. Seasonal
changes, economic cycles, trending products,
and other factors lead to fluctuations in
customer demand. Keeping a balance between
demand and supply is very essential for
the fulfillment process. There shouldn't be any
gaps between the warehouse and other aspects
of the supply chain, especially procurement and
transportation.
Substandard Picking
Process
Picking is one of the most important
steps in any warehouse. It causes some of
the biggest problems in warehousing as
well. As soon as an order is placed, a
picker is assigned with the responsibility
of completing the full order. If picking isn't
done efficiently, a lot of time would be
wasted in fulfilling a single order.
Proper data capture and storage also
make it easier for pickers to identify
which product is placed where.
 Flawed Order Managing Heaps of Data
Management Warehouses can generate a lot of data while
executing different processes. While this
With the advancement in technology, data can be too large to manage and analyze
consumers have multiple sources for manually, it holds valuable insight for
ordering a product. managing improving warehouse productivity and
customer orders coming from multiple making it more efficient.
channels can be a tedious task and Tracking goods movement through the
complete warehousing challenge. Pen- supply chain, managing logistics operations,
and-paper-based methods can give multiple delivery channels, and dealing with
rise to several errors in the returned or damaged products can be a
order management and fulfillment. herculean task for warehouse managers,
especially for the small and medium-sized
warehouses that don't have a lot of budget at
their disposal.
 Variety in Products Poor Quality Control
Stored
Incorrectly forecasting customer With hundreds of orders coming in and
demand and ordering large stocks of a going out every day, quality control can
product that end up staying on the sometimes end up taking a backseat. Due
shelves can hurt the warehouse’s to the pressure of fulfilling orders quickly,
(Return on Investment) ROI. workers can sometimes overlook key
Similarly, having less stock of a fast- details during picking, packing, or
moving product will lead to shipping. This can lead to customers
warehouses missing out on customer receiving poorly packaged, incorrect, or
orders due to unavailability.. damaged products and having a forgetful
shopping experience.
 TYPES OF
WAREHOUSING
What is Warehousing?
 it is the process of storing goods until
they're ready for transport to retailers,
distributors or customers.

 the act of storing goods that will be sold or

distributed later.

 is a planned place for storing goods safely

and efficiently until they are required for
consumption.
 Types of a Warehouse
 Public Warehouse
 Private Warehouse
 Smart Warehouse
 Cooperative Warehouse
 Consolidated Warehouse
 Bonded Warehouse
 Government Warehouse
 Cold Storage Warehouse
 On-Demand Warehouse
 Distribution Centers
Types of a Warehouse
 Public Warehouse

A public warehouse is a warehouse owned

by governmental entities that are available
to private sector companies. These types of
warehouses can be rented out for business
or personal use. Public warehouses are
commonly used by new or growing
businesses, such as e-commerce companies
and startups, due to their affordability
versus a private warehouse.
Types of a Warehouse
 Private Warehouse

Another popular warehouse option is a

private warehouse, oftentimes referred to
as proprietary warehousing. private
warehouses are owned by a company
division. Private warehouses are a popular
option for wholesalers, distributors, and
manufacturers.
Types of a Warehouse
 Smart Warehouse

A large building in which raw materials and

manufactured goods are stored that uses
machines and computers to complete
common warehouse operations previously
performed by humans.

An increasingly popular warehouse option

is a smart warehouse, which is a warehouse
where the storage and fulfillment processes
are automated with AI, such as robots and
drones. The AI is responsible for packing,
weighing, transporting, and storing raw
materials, with many incoming orders
being automated to be fulfilled immediately.
Types of a Warehouse
 Cooperative Warehouse

is a type of warehouse owned and

operated by a group of businesses. A
cooperative warehouse allows
member businesses to share resources
and save money. To join a cooperative
warehouse, a business must be
approved by the other members.
Types of a Warehouse
 Consolidated Warehouse

are warehouses that collect small

shipments from numerous different
suppliers into one geographical
location to combine them into a bigger,
thus more economical, shipping load
to one area.
Types of a Warehouse
 Bonded Warehouse

A bonded warehouse is a site where

shippers can store imported goods
before customs have processed them.

A bonded warehouse is a type of

warehouse that stores imported goods
before customs duties are completed
and paid for the products.
Types of a Warehouse
 Government Warehouse

is a storage facility owned and

operated by a government entity,
typically at the federal, state, or local
level. It is a dedicated space where the
government stores and manages a
wide range of items, including
supplies, equipment, resources, and
assets.
Types of a Warehouse
 Cold Storage Warehouse

A large refrigerated room or building

designed for storage of goods in an
environment below the outdoor
temperature.
A cold storage warehouse is a
warehouse used for the storage of
temperature-sensitive products. Cold
storage warehousing might include an
entire building or even a specific
portion of a warehouse that can
accommodate these goods.
Types of a Warehouse
 On-Demand Warehouse

On-demand warehousing, or on-

demand storage, is warehousing
provided to businesses that need to
connect to companies with an excess
of warehousing space. A platform that
connects businesses that need to store
inventory and fulfill orders on a
temporary basis with warehouses that
have excess space.
Types of a Warehouse
 Distribution Warehouse

These types of warehouses are a point

in the supply chain where products
are received from suppliers, then
rapidly shipped out to customers. An
example of a distribution center is a
warehouse that handles perishable
products.
Warehousing Cost and
Inventory Cost
What is Warehousing Cost?
 refer to the fees associated with operating a
warehouse, such as rent, utilities, labor,
insurance, maintenance, and taxes. It also
includes the cost of goods stored in the
warehouse, including the cost of inventory
control, order fulfillment, and other related
services.
Factors that Influence
Warehousing Costs
 Location
 Size
 Storage and Handling
 Labor costs
 Technology
 Insurance
 Security
 What is Inventory Cost?
 Inventory costs are costs that arise from the
movement of product goods in the
warehouse or distribution center.
5 Types Of Inventory Costs
 Ordering Costs
 Inventory Holding Costs
 Shortage Costs
 Spoilage Costs
 Inventory Carrying Costs
 5 Types Of Inventory Costs
 Ordering Costs  Shortage Costs
Shortage costs, also known
Ordering costs include as stock-out costs, occurs
payroll taxes, benefits and when businesses become out  Inventory
the wages of the of stock for various reasons. Carrying Costs
procurement department,
labor costs etc.  Spoilage Costs This is the lesser-known aspect of
inventory cost. nventory carrying
Perishable inventory stock can rot costs refers to the amount of
 Inventory or spoil if not sold in time, so
Holding Costs interest a business loses out on the
controlling inventory to prevent unsold stock value lying in the
spoilage is essential. Products that warehouses.
This is simply the amount of expire are a concern for many
rent a business pays for the industries. Industries such as the
storage area where they hold food and beverage, pharmaceutical,
the inventory. healthcare and cosmetic industries,
are affected by the expiration and
use-by dates of their products.
Customer Service in
Warehousing
What is Customer Service?
 it is the assistance and advice provided by a
company to those people who buy or use its
products or services.
5 Ways to Improve Customer
Service Through Effective
Warehousing
 Clear communication.
 Faster and accurate delivery of products.
 Greater visibility in operations.
 Anticipate changing trends.
 A back-up plan.
Thank you!