An Introduction to Warehousing

Private & Confidential

Table of Contents

• Warehouse and Its Need

• Warehouse Set - Up
– Warehouse Site Selection
– Warehouse Management Processes
– Warehouse Process Flow Schematic
I. Types of Material Flow
II. Types of Inspection
III. Put – Away Process
IV. Types of Storage
V. Picking and Packing Process
– Warehousing Support Needs
• Designing Warehouse
– Warehouse Site Selection and Layout Design - Understanding Business Needs
– Usual Challenges
– Designing Layout
– Parameters to be considered while designing
– Sample Layout
• Implementation
• O-Links’ Solution
 Warehouse and Its Need
Definition – A designated place where goods are stored to balance demand & supply uncertainty, to serve
customers in much better way, to consolidate upstream flow and distribute downstream flow as per requirement,
to do last mile value addition such as packaging, kitting etc. and to reduce last mile distribution cost.
Manufacturing Support
• Stock room providing raw
material and work in process
items to manufacturing
operations
• Contains many small orders
• Only Statistical information
available about order
composition
• Stringent time requirement
for response time
• Primary focus on response
time but accuracy and cost
also are important
Types of Warehouses
Factory Retail Distribution Catalog Retailer
• Serves a number of captive • Fills orders from catalog
• Interface production with
retail units sales
wholesalers
• Advance info about order • A large numbers of small,
• A Comparatively small
composition is needed frequently single – lines
number of orders are
• Carton and item picking is done orders are picked up
picked up on daily basis
from a forward area • Item and, sometime,
• Advance information
• More orders per shift than carton picking
about the order
consolidation/shipping lanes • Daily compositions of
composition is required
• High focus on cost, accuracy, orders are usually
• High focus on cost and
and fill rate of the packages unknown
order accuracy
• Responsiveness depends heavily • Only statistical
• Responsiveness heavily
on truck routing schedules information available
depends on production
• The only critical point is that if • High focus is on cost and
schedules
the retails units are not captive response time
then responsiveness becomes a
crucial issue
Warehouse Set-up

Private & Confidential

Warehouse Site Selection

Key Criteria (Cost vs. Service Reliability) Additional Factors

Cost Availability of Transportation

(Warehouse
Operations Infrastructure
and
Maintenance) • Roads
• Power
• Water
• Other utilities

Availability of Skilled Manpower

Serviceability
(Proximity to
Customers or Government Regulations
Ports)
Strategic Factors – monitoring & control, pre-
determined sites, future plans

Environmental Factors
 Warehouse Site Selection
Sample comparative analysis of possible Sites for a Customer needing warehouse closer to Port in the West Zone
Factors Zone 1 Zone 2 Zone 3 Zone 4 Zone 5
Infrastructure cost Low cost Higher as compared Higher than Very High – attributed to High cost as compared
to Zone 1 but much Zone 1 and 2 high land cost to zone 1 and 2
lower than Zone
3,4 and 5
Transportation Lowest – Close Low Very High – High High
cost (Inbound ) proximity to attributed to
port distance

Distance (Port to 0 km 17 km Inbound 100+ km 66 km 32 km

Wh.)

Connectivity Good Very good for Average Good Average

Inbound and
Outbound
Availability of Good Good – due to Average Good – due to Good
Manpower (Other warehousing hub warehousing hub
facilities)

Probable JNPT Panvel Vasai Bhiwandi Kalamboli

Locations

Here the comparison is based on few key parameters. Similar analysis can be done taking in to consideration critical
parameters, as mentioned in the earlier slide.
From the comparative analysis Zone 2 is the best option and the warehouse can be set up in this Zone to cater to
Customer requirement of having the warehouse strategically closer to the Port
Warehouse Management Processes

13 4 6
11
2 3 8 7
9
10

12
1
7 - Order picking
1 - Inbound
8 - Value-added services (Kitting)
2 - Dock / Unload
9 - Rework
3 - Receipt of goods
10 - Packing line
4 - Create GRN
11 - Dispatch
5 - Putaway

6 - Picklist Creation 12 - Tracking

13 - MIS & Documentation

Warehouse Process Flow Schematic

The general flow of material in the

warehouse is as depicted in the
adjacent figure

The logical flow of the process is:

1. Receipt
2. Inbound Inspection
3. Putaway
4. Storage
5. Order Picking
6. Order Sorting and Packing
7. Dispatch/Shipping

Each Process itself can be

performed in a number of ways.

For example there are numerous

ways in which the materials can be
stored – Racks, On ground, Pallets,
etc. These topics are further
explained in the following sections
Typical Warehouse Process Flow
 Type of Material Flows: U Flow

A 'U' flow occurs when the goods receipt and dispatch functions are located at the same end of a warehouse building
Products flow in at receiving, move in to storage at the back of the warehouse, and then to shipping, which is located
adjacent to receiving area, on the same side of the building
Fast moving items are located closer to the loading bays

Advantages of 'U' Flow

Excellent utilization of dock resources because the receiving and shipping

processes can share dock doors
Facilitating cross-docking because the receiving and shipping docks are
adjacent to one another and may be co-mingled
Excellent lift truck utilization because put away and retrieval trips are
easily combined and because the storage locations are closest to the
receiving and shipping docks, they become natural locations to house fast
moving items
Yields excellent security because there is a single side of the building
used for entry and exit
 Types of Material Flow: Straight or Through Flow

Through' flow happens when separate loading bay facilities are available for Inbound and shipping are provided, often
at opposite ends of warehouse
Products flow in at receiving, move into storage, picking area and then the staging area and despatch area in a
straight line
Items with a higher throughput level are located at the centre of the warehouse because the total distance travelled
would be shorter

The major disadvantage of a 'Through' flow layout is goods

need to travel the full length of the warehouse, even for
goods that are fast moving
It is also harder to control and less flexible

When is it better to adopt a 'Through' flow?

When there is a risk of interference or confusion between
Goods In and Goods Out
When goods inwards vehicles and dispatch vehicles are very
different; for example differences in platform height or
nature of unit load
When the warehouse is connected to a production Plant
Types of Inspection
Sampling
Sampling Inspection is a process in which parts of the
Inbound material is checked for consistency and expected
quality
This process is followed in case of materials, which come in
good number per batch. The underlying principle is that the
quality of a small representative parts, is good enough to
gauge the quality of the entire batch
This type of Inspection is usually used for material like
automobile components, Spares, toys, etc.

Complete Count
Complete Count is a process in which the quality of each
component/material or part coming in has to be checked for
quantity, quality and consistency
This process is followed in case of materials, which come in
small lot sizes per batch OR even if they come in large
numbers per lot, there exists no way to say that there would
be consistency of quality. The underlying principle is that the
quality of a small representative may not indicate the quality
of the whole batch
This type of Inspection is usually used for materials like
apparels, electronic products, etc.
Put – Away Process

The allocation of the cartons to the

Label products with Incoming date
In the Put away “Add” function, The location will also follow the logic of
to facilitate FIFO / FEFO are stuck on
Part to Location Mapping is done load clustering and rack
the carton and pallets and
based on the logic optimization and Pick balancing and
converted into palletized loads.
routing

Multiple Putaway run sheets are

The pallets and Cartons are then
In the automated system, the RF created based on the putaway
physically transported to the Stage
handhelds reflects the putaway in methodology – Batch putaway,
for Putaway location which is at end
their specific zones. Zone wise putaway for GRN clusters
of the rack columns.
etc.

Once the Putaway confirmation is

The Put away team which works in done, the material is available in the
The Pallet label is scanned and then
the rack columns puts away the ATP (Available to Promise) Stock.
the location label is scanned and
pallets and cartons to the racks,
confirmed which acts as a trigger to
Single rivet slotted angle racks as
the WMS to confirm the Putaway
per the part to location mapping in
list.
the Putaway run-sheet.
Types of Storage System

Drive – In Racking Pallet Racking Broad Aisle Installation

Block Stacking Push Back

Types of Storage System

Dedicated Storage
Product is assigned a designated slot. With multiple product storage, the space required is the
sum of the max storage requirements for each of the product

Randomized Storage
Product is randomly assigned a storage location close to the input/output point. The space
requirement will be equal to the max of aggregate storage required for the products. Dj is the
space location, Summation dkj where k=1 to m (no I/O ports )

Class-Based Storage
A mixed policy where products are randomly assigned within their fixed class. The
classification is done based on the movement of the SKU
1. The 20% items which have 80 % Storage/Retrieval activity are termed as Class A
2. The next 30% items which have 15% Storage/Retrieval activity are termed as Class B
3. The next 50% items which have 5% Storage/Retrieval activity are termed as Class C
 Selection of Storage System
Storage System Selection through Comparative Analysis

Parameter Push Back Racks Drive Through Racks

Storage Density Offers high storage density coupled Can store large amount of inventory
with selectivity in a smaller area increasing Storage
Density

Selectivity of Inventory Ideal for selectivity – up to 400% Selectivity is sacrificed

improvement in selectivity

Type of Goods Can store a variety of inventory Ideal for large amount of similar
items (like seasonal goods) that move
quickly - Not ideal for an inventory of
wide variety
Picking and Packing Process

Pick List Creation

Receive shipment authorization document / label in the system

The shipment orders are sorted by customer and geography and then converted into Picklists.

There are multiple possibilities of a picklist – 1) Batch/ Wave Picks for the Bulk Pick area 2) Pick for Kitting
– Batch Picking 3) FIFO Model

The Pick Zone wise picklists are created.

The Print copy of the Picklist will also have the Carton Labels (Packing list) for full carton picks.

Batch picking is done for Kitted part IDs.

Picking and Packing Process
Picking

The Picks are done by reach Stacker /Retriever from the Storage area

Manual picking with Picking trolleys are used in the Slotted angle area

All completed picks are signaled by sticking the picklist to the pallet/Carton

These are then moved to the Packing Zone for further process

The carton/material is scanned along with the location scan and confirmed to complete the
activity of picking
Picking and Packing Process

Kitting/Rework

The batch picked materials are sorted and re-assembled.

The re-assembled materials are scanned and cartonized

The cartonized packs are then moved to the Packing line.

Picking and Packing Process

Packing

The cartons from the bulk pick is transferred to the Packing line for
taping/Strapping.

Picklist ID is selected and Dispatch Labels are generated and stuck to the Cartons

The loose picks are cartonized by scanning the individual material and Packing list is
created and the Dispatch labels created and stuck to the Cartons.

The high value material picked loose are shrink wrapped for safe transit.
Support Requirements

Private & Confidential

Warehousing Operational Needs

Material Handling Equipment and Parking Area Policies

Men’s
Room

Fire Extinguishers CCTVs

Sprinklers

Office Space Space for Employee Needs Safety Equipments

Designing Warehouse

Private & Confidential

Warehouse Site Selection and Layout Design (Understanding
Business Needs)

1. What is the need for the Warehouse?

2. What business is it catering to?
3. Where should the warehouse be located?
4. Is the warehouse location well connected?
5. Is there good telecommunication connection?
6. What should be the size of the Warehouse?
7. What should be the height?
8. How many bays should the Warehouse have?
9. What are the different SKUs expected to be stocked up at the Warehouse?
10. What are the markets or locations that the Warehouse would be catering to?
11. How to segregate the SKUs?
12. What should be the stocking policies?
13. What should be the replenishment policies?
14. What should be the Health and Safety policies?
15. What should be the Security arrangements?

The answer to these questions will give us a strategic perspective to the need for the Warehouse and the Layout
Design, thereafter.
Usual Challenges to be Handled while designing

1. Product information in terms of throughput and storage level is uncertain or not

available
2. Need to minimize the existing cost of establishing and operating the warehouse
3. Setting the Inventory Policy to store and maintain stock of Inventory of all SKUs, ready
for distribution, at all time to meet demands of all items
4. Assemble product batches prior to delivery, to stockpile critical parts, and to facilitate
regional distribution network for quick and cost-efficient delivery
Designing Layout

Objective
1. Ensuring Maximum utilization of space
2. Maintaining a balance between Service and Operating Cost
3. Using the most suitable unit load
4. Minimizing movement
5. Planning and controlling movement and location
6. Providing Safe, Secure and Environmentally sound conditions

Designing Basics
In case of existing warehouse
• Analyzing current and projected data on the activities in each of the areas of receiving, shipping
and inventory levels.
• The data should be supported by other considerations such as process flows, material handling
equipment, type and styles of racking equipment, special handling requirements, and personnel

In case the New Warehouse

• The designing will start for the Strategy document of the Organization and then further drill down
to the Need and possible benefits of the Warehouse
• Once this is established only then the designing of the new Warehouse begins
Layout Designing Process

Cost Considerations
 Parameters to be Planned when Designing

Material Handling Equipment Number of Docks

1. Picking Equipment
• Static Shelving
• Carton Flow Rack
• Carousels
• Automatic storage and retrieval system
• Automatic picking machines
• Pick to Light
• Voice directed picking
• Automated Conveyor and Sorting systems
2. Receiving/Shipping Equipment
• Conveyors
• Industrial Vehicles
• Automated Storage and
Machines
• Automated Guided Vehicles
• Number of Receipts and Shipments
• Type of Loading and Unloading
• Types and sizes of vehicles
• Number and timing of carriers
• Different areas in which materials will be
utilized, stored, prepared for shipment
Type of Docks
• Saw Tooth Dock
• Straight dock
• Open Dock
• Interior dock
Location of Docks
Retrieval
• Traditionally at the rear end of facility and out
of sight
• Receiving/Shipping at the same area generally
• However Multiple docks drastically reduce the
flow of material with in a facility
Designed Layout (Illustration)
OptiWare – OLinks’ Solution for Warehouse Optimization

Private & Confidential

 Warehouse Optimization and Simulation
Challenges Warehouse Owners Face
 Warehouse Space Utilization
 Un-optimized Layout
 Higher Cost of running warehouse
OptiWare – Warehousing Simplified
Optiware is a 3-D warehouse Design, Simulation and
Optimization product which helps you handle the warehousing
challenges, while achieving your strategic and operational
goals.

 Sub – optimal throughput in warehouse Optiware helps you in:

 Challenges in implementing warehouse Processes • Optimal Layout Design
• Planning the number of MHEs and
 Managing Peak hours Inbound and Outbound Material Resources
Flow • Designing the Process and
Material Flows
 Resource planning • Scenario Analysis
 Ensuring DIFOT ( Delivery In Full on Time)
Leading to:
Questions That Need to be Answered? • Customer Satisfaction
• Utilization of Space,
 What should be the Layout Design of the warehouse? Equipment and People
• Employee Safety and
 Is the Flow Streamlined?
Morale Building
 How can I improve the throughput of the warehouse?
 How can I plan and support multiple customers from the
same warehouse?
 How is the inbound and dispatch scheduling being
Result:
planned?  Economic Layout
 Optimal Space
 How many MHEs do I require?
Utilization
 Efficient Operations
Thank You

Contact Us : +91 22 41232770

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