Managing Transfers & Dispatches

SCM 503

(Level 5)
 Table of Contents

Objectives and Outcomes...............................................................................................................2

1. Unit One - Processing Material Requests...............................................................................5
1.1. Introduction:........................................................................................................................6
1.2. Elements of Issuance...........................................................................................................6
1.3. Material Requests: Concept, Process & Sop.......................................................................7
1.4. Work Instructions for Processing Material Requests & Issuance.......................................7
1.5. Test Your Knowledge.......................................................................................................10
2. Unit Two - Storage Equipment Preparation..........................................................................12
2.1. Introduction.......................................................................................................................13
2.2. Work Instructions for Picking Operation..........................................................................15
2.3. Picking Work Instruction..................................................................................................15
2.4. Conclusion:........................................................................................................................17
2.5. Test Your Knowledge.......................................................................................................17
3. Unit Three - Order Picking Methods....................................................................................19
3.1. Introduction.......................................................................................................................20
3.2. Popular Order-Picking Methods........................................................................................20
Following systems have made their way in Store and Warehouse operations.............................20
3.3. Replenishment & Issuance................................................................................................22
3.4. Test Your Knowledge.......................................................................................................23

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 Objectives and Outcomes

Unit Aim & Objectives Hours

 Elements of Issuance Process
 Factors affecting Picking Process
Unit 1
Processing  Elements of a Material Request
10
Material
 Standard Operating Procedure to follow for Processing MRF
Requests
 Appreciate the importance of store function

 Picking Considerations that Influence Performance

 Picking Strategies
Unit 2  Introduction to Material Handling Equipment
Picking
Consideration  Work Instruction for the Picking Activity 10
s and
Strategies  Efficiency Improvement Methods Such as Slotting
 Appreciate the importance of Picking Activity

 Pick to Light and its application

 Put to Light and its contribution to efficiency
Unit 3
Order Picking  RFID and its use 10
Methods
 Concept of Replenishment
 Importance of Correct & Timely Replenishment

3
 Unit One

Processing Material Requests

4
 1. Unit One - Processing Material Requests

Objectives:
On successful completion of this course and associated tasks, the trainee will be able to
 Elements of Issuance Process
 Factors affecting Picking Process
 Elements of a Material Request
 Standard Operating Procedure to follow for Processing MRF
 Appreciate the importance of store function

Required Performance Level:

The trainee will acquire knowledge about Elements of Issuance Process and Elements of a
Material Request.

Expected training time: 10 Hours

Educational Means & Resources:

Study and understand all the concepts and definitions contained in this training material, and
practicing all activities with the trainees.

 Use of some modern methods in training Example:

 Role representation
 The power point program;
 Collaborative working groups.
 Use of recorded videos.

Level of required Knowledge

Read the training material carefully and focus on the activities in this training material,
worksheet classwork and homework sheet and keeping the time of each activity so that trainees
learn through their interaction with each other

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1.1. Introduction:

Raw Materials come to store, stay there for a while and then are issued to the user department.
These three functions of a store - Receipt, Storage, and Issuance – are the Core Processes of a
store.
Focus of this material is Issuance. Issuance is the activity of handing over required goods from
Store to the authorized person of the requesting department and recording transaction as an
internal transfer from store to the relevant department. In some cases, the goods are not handed-
over at the stores but are moved to the designated area agreed with the requesting department. It
is to be noted that the term Raw Material Stores is used in this material but also includes spares
store, packaging store etc., as applicable.

1.2. Elements of Issuance

The process of Issuance is composed of a number of concepts and a series of actions. These
could be listed as:
1. Pick Preparation
a. ABC Analysis
b. Order Frequency
c. Layout
2. Picking Strategies (At execution level, Picking Strategy is dependent upon Material
Handling and Storing Equipment).
a. Picker to Goods
b. Goods to Picker
c. Automated Picking
d. Material Handling Equipment
e. Storage Equipment
3. Order Picking Methods
a. Paper Pick List
b. Pick by Label
c. Pick by Voice

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 d. Bar Code Scanning
e. Radio Frequency Identification (RFID)
f. Pick by Light / Pick to Light
g. Put to Light
4. Replenishment & Issuance
a. Replenishment
b. Issuance
Each of these topics shall be discussed in the relevant chapter. Let’s first look at a typical
standard operating procedure for Issuance.

1.3. Material Requests: Concept, Process & Sop

Accuracy in processing material requests is at the heart of discussions in the warehouse setting.
The subject starts as soon as the requests are received at the Stores. There are new ways being
introduced in fulfilling Material Requests. One such way is referred to as Kitting where
components and subassemblies are delivered in Kits instead of all SKUs being delivered
separately these save shop floor working time in searching and looking for the SKUs from
different bins in the lineside stores at the shop floor. Section below reviews the standard process
involved in servicing a Material Request.

1.4. Work Instructions for Processing Material Requests & Issuance

SCOPE:
These Work Instructions (WI) are for processing material requests for raw material, packaging,
consumables, spares etc. from the raw material stores. This WI excludes finished goods.

1.0 Processing Material Requests from User Departments:

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1.1 The Material Request Form (MRF) Received from the user department is to be cross
checked for the name of the user department, the Finished Good (FG) for which the Raw
Material (RM) is required, the requested Raw Material Description and code, its unit and the
quantity so as to detect any inconsistency.

1.2 Material Request Form received from the user department should be checked first for due
approval.
1.3 Satisfied with the correctness and authenticity of the request, the in-store availability of the
quantity of the Item requested is to be checked from the system.
1.4 It is to be kept in mind to check only for un-marked inventory i.e. inventory NOT held for
any specific order / customer or inventory that is NOT put on hold for any other reason.
1.5 If the inventory is not available, the Logistics & Purchase Department is to be immediately
informed of the non-availability of stock requested by the user department.

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1.6 Issuance is to be marked pending till the availability of stock.
1.7 Upon arrival of delayed stock, immediate transfer of the requested quantity is to be arranged
directly to the floor, in coordination with QC for quality check.
1.8 Depending on the level of operations, stores may receive multiple MRFs of the same item or
of different items, at the same time, for the same end product or for different end products
from the same department or from different departments.
1.9 Collection and preparation for the transfer of available requested material is to be arranged
in the most efficient and effective manner.

In addition to the above analysis, following actions are to be completed:

1.10 Material is to be issued against Material Issue Note (MIN) based on Material Request Form
(MRF) from Production / Factory.
1.11 Rejected Material is to be returned after intimation from purchase for Replacement /
Repair.
1.12 Returnable Dispatch Note is to be prepared and goods sent as ‘Material on Loan’ as
directed.
1.13 Non-Returnable Dispatch Note is to be prepared & borrowed goods are to be sent back,
when advised.
1.14 Goods with Dispatch Note, Tax document where applicable & Invoice as Sold Material are
to be sent, when so directed.
1.15 Fast-moving SKUs are to be identified and watched for to maintain service levels.
1.16 Slow-moving SKUs are to be identified for best location and eventual disposal.

This brings us to the topic of Picking activity and the options available that shall be discussed in
Chapter 2.

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1.5. Test Your Knowledge

Choose or fill in the right answer:

1 – MRF stands for:

a – Material Request Form
b – Maintenance Requirement Format
c – Multiple Requests Form
d – Material Requirement Formatting

2 – Kitting concept is exactly same as Picking. (True / False)

3 – Pick by Voice is a Picking Strategy. (True / False)

4 – Which of the following can be classified as Core Process(es) of a Store:

a – Receipt
b – Storage & Issuance
c – Both A & B
d – None of the Above
5 – Kitting is a way to reject wrong material requests. (True / False)

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 Unit Two

Picking Considerations and Strategies

11
 2. Unit Two - Picking Considerations and Strategies

Objectives:
On successful completion of this course and associated tasks, the trainee will be able to:

 Picking Considerations that Influence Performance

 Picking Strategies
 Introduction to Material Handling Equipment
 Work Instruction for the Picking Activity
 Efficiency Improvement Methods Such as Slotting
 Appreciate the importance of Picking Activity

Required Performance Level:

The trainee will acquire knowledge Picking Strategies and Work Instruction for the Picking
Activities
Expected training time: 10 Hours

Educational Means & Resources:

Study and understand all the concepts and definitions contained in this training material, and
practicing all activities with the trainees.

 Use of some modern methods in training Example:

 Role representation
 The power point program;
 Collaborative working groups.
 Use of recorded videos.

Level of required Knowledge

Read the training material carefully and focus on the activities in this training material,
worksheet classwork and homework sheet and keeping the time of each activity so that trainees
learn through their interaction with each other

12
2.1. Introduction

Issuance of material is composed of one Core and one Support function. Picking can be
categorized as the Core process while Replenishment of depleted stock forms the Support
function. With a variation in reality, Picking in raw material stores and shop floor, is sometimes
also referred to as Kitting.
Picking deals with the activity of collecting goods, requested by the users, from different parts
of the store and bringing them in a form ready for issuance to the requesting department. A
variation of the Picking activity is Kitting. For the purpose of this material, the term Picking and
Kitting will be used interchangeably, implying Picking in the Raw Material Context. However,
as explained earlier, the definition of Kitting should be understood and may be expressed in the
real sense of the word when asked for. Strictly defined, the practice of delivering components
and sub-assemblies to the shop floor in predetermined quantities that are placed together as kits
in specific containers is generally known as kitting. This is against the traditional issuance of
material asked for on the lineside stores at the shop floor on an individual basis.
The Picking process is affected by following factors at the execution level. Knowledge of these
shall help the store personnel to look for these factors so as to improve efficiency.
1. Pick Preparation Considerations

a. ABC Analysis: How ‘Much’ of consumption is resulting from How ‘Many’ SKUs is
observed to focus on the big ticket items. The general rule is that 20% of SKUs affect 80% of
sales, production, consumption, space etc. Another 25% of items affect 15% while remaining
55% affect 5%. An analysis is done in stores to ascertain presence of such trends for the
purpose of optimizing on Picking activity and space utilization.
b. Order Frequency: In the process of generating the above sales, production, consumption or
any other parameter focused, how many times is the item asked for by the users. This again
directly affects the Picking personnel activity plan for preparing the goods for issuance.
c. Layout: Ideally, the Design or layout of a warehouse is planned based on the findings of the
above analysis. Sometimes however, the permanent facilities or the basic design is not ideal
but has to be lived with due to factors like investment involved in adjusting these. For

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 example, presence of structures such as the shipping docks or a cold structure may affect
access or reach to one SKU or the other which may increase or decrease the time spent in
reaching an item significantly.
d. Slotting: The placement of items with some special consideration is called Slotting. This
could be coupling same size of nuts and bolts racks adjacent to each other instead of having
all sizes of nuts together followed by all sizes of bolts. Similarly, trends sometimes change
and allowing raw material for products being manufactured more frequently easier reach than
those not been produced so much, helps. Production of heaters and Air conditioners and
placement of their raw materials in stores could be swapped or changed between them from
winters to summers.

2. Picking Strategies
a. Picker to Goods: Majority of the stores operate with minimalist automation and goods are
collected manually by the responsible staff. The options include picking on an order to order
basis, dividing store in clusters and picking in each cluster one after the other, picking many
orders together in batches, or picking only in a particular part of the store by dividing store in
Zones.
b. Goods to Picker: The SKUs are picked automatically and travel on a conveyor belt to
picker’s workstation for consolidation with other parts. This type is called Compact Picking
System. A variation called Order Distribution System works where there are a few SKUs
serving many Order Lines Requests by means of filling ‘Order Totes’ through ‘put-to-light’
operation. Order Totes are constructed from SKU Totes brought by conveyor belts to the
workstation automatically.
c. Automated Picking: Automated Picking may make a case with issuance of volumes higher
than 3,000 cartons per day. Under the Automated Case Picking (ACP) system, the bulk
pallets are unloaded for issuance on a layer by layer basis onto a Mini AS/RS system instead
of carton by carton unloading.
d. Material Handling Equipment: Following is the most commonly used equipment for
handling. Each of these has its specifications and is to be used according to the nature of the
goods to be handled.
i. Trolleys / Cages
ii. Hand Pallet Truck, Powered Pallet Truck, Manual Stacker Truck

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 iii. Forklift Trucks
iv. Low-level Order Pickers (LLOP) and Towing Tractors
v. High-level Order Pickers (HLOP)
vi. Conveyors
vii. Mini-load AS/RS
e. Storage Equipment: The types of storage equipment used in a store will vary according to the
size, weight, the required order pick rate and the available investment, both for reserve and
pick face storage. The Storage Equipment types are discussed in Module ‘SCM 202 - Internal
Processes L5’.

2.2. Work Instructions for Picking Operation Quiz 2

SCOPE:
These Work Instructions (WI) are for the Picking of raw material, packaging, consumables,
spares etc. from the raw material stores. This WI excludes finished goods.

2.3. Picking Work Instruction

 Availability of the requested item(s) in stock, free from claim or restriction by any other
user or department, is to be checked.
 When available, the exact location of the inventory is to be checked and noted.

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 The applicable picking strategy for the requested item(s) is to be chosen.
 Combined approach for all the items is to be prepared. In case of combination of items
involving Picker to Goods and Goods to picker, picker to goods should be attended first.
 The best route plan for getting to the item(s) in the Picking Journey Cycle (PJC) is to be
decided.

 The Starting point should be the front of the racks nearest to dispatch bays and the end
point should be closest to the issuance area.
 Heaviest items should be picked first.
 Picking should be planned from both sides of the rack moving up and down the aisle.
 Short-cut routes must be known and built into the picking journey cycle (PJC).
 Knowledge of all multiple pick locations would help in reducing travelling and standing
in queues.
 Full cartons and pallets should be taken from Reserve Storage and not from Pick face
points as that would generate requirement of replenishment at the same time.
 Once through with the Picker to Goods Items, Goods to Picker items must be
approached and prepared for issuance along with the picker to goods items as per
available technology used in the store.

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2.4. Conclusion:

The aim of an efficient picking operation is to complete an error-free Picking Operation in the
least possible time. This is supported by our knowledge of items, their availability status,
knowledge of the process, best route plans, presence of mind and highest level of alertness
during the picking operation.

2.5. Test Your Knowledge

Choose or fill in the right answer:

1 – Order Frequency is one of the picking considerations. (True/False)

2 – When nuts & bolts of the same size are placed together instead of all nuts of different sizes
being placed together, this is referred to as ____________.

3 – Conveyor Belt is an example of:

a – Automated System
b – Picker to Goods System
c – Material Handling Equipment

4 – Order Frequency plays an important role in determining an SKUs position in store.

(True / False)
5 – Full Carton loads should be taken directly from the Reserve Storage. (True/False)

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Unit Three

18
Order Picking Methods

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 3. Unit Three - Order Picking Methods

Objectives:
On successful completion of this course and associated tasks, the trainee will be able to:

 Pick to Light and its application

 Put to Light and its contribution to efficiency
 RFID and its use
 Concept of Replenishment
 Importance of Correct & Timely Replenishment

Required Performance Level:

The trainee will acquire knowledge commonly used of rfid and its use, and the importance of
correct & timely replenishment

Expected training time: 10 Hours

Educational Means & Resources:

Study and understand all the concepts and definitions contained in this training material, and
practicing all activities with the trainees.

 Use of some modern methods in training Example:

 Role representation
 The power point program;
 Collaborative working groups.
 Use of recorded videos.

Level of required Knowledge

Read the training material carefully and focus on the activities in this training material,
worksheet classwork and homework sheet and keeping the time of each activity so that trainees
learn through their interaction with each other

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3.1. Introduction

Order Picking has significantly improved over time in terms of order accuracy and productivity.
Advances such as bar coding, voice technology and pick-by-light system have not only
improved the picking activity but have resulted in servings, profits and the return on investment
can.

3.2. Popular Order-Picking Methods

Following systems have made their way in Store and Warehouse operations.

1. Paper Pick Lists

2. Pick by Label
3. Pick by Voice
4. Bar Coding Scanning
5. Radio Frequency Identification (RIFID)
6. Pick by Light / Pick to Light
7. Put to Light

1 Paper Pick Lists

A paper pick list, as the name denotes would have on paper Order Number, Item code,
item description, its location, and quantity to be picked.

2 Pick by Label
The Pick by Label method gives to the Picker, a sheet with labels for each item. The
picker upon collecting the item, sticks the label onto the item collected and returns any
left-over stickers at the issuing office.

3 Pick by Voice

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 Operators are equipped with headset, microphone and a small computer attached to a
belt or worn on wrist. This helps in voice communication between the Warehouse
Management System (WMS) and the operator.

4 Bar Code Scanning

A barcode consists of series of vertical bars of varying widths that represent letters,
numbers and other symbols. These are used to identify products, locations in the store,
containers, serial and batch numbers etc. Unfortunately, there is no uniformity in bar
codes globally or across organizations. In other words, bar code is an organization
specific feature for improving accuracy and productivity. Both one and two-dimensional
barcodes are now available, enabling greater amount of data storage.
5 Radio Frequency Identification
Radio Frequency Identification Device or RFID is a means of tagging and tracking
products through radio waves. Data is exchanged between Tag on the product and the
Reader, and depending on the frequency, may or may not require line of sight. Multiple
items can be read simultaneously as against bar codes which read one by one.
6 Pick by Light / Pick to Light
To start the process, a barcode on the shipping carton or pick tote is scanned indicating
the system the readiness of the picking person and the next order to be picked. In return,
the system sends a message to the location where the Picker is present and all Pick
Locations in the zone light up at the same time, indicating item locations in the given
zone to be picked for that particular order. This enables the Picker to know all relevant
locations before starting the picking process and planning the best path becomes easier.
Light on each item pick face is turned off as the item is picked. The Pick Tote filled with
items in the zone is passed to the next zone.
7 Put to Light
The requirement for different items are consolidated by the system and separate Order
Totes are prepared. Item Totes are prepared and sent to the workstation through
conveyor against all the Requests or Requirements. As the item Tote is handled, flashing
light on all the Order Totes requiring that particular item lighten up, indicating quantity

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 requirement. WMS is updated as soon as correct item quantity is put in the correct Order
/ Request Tote.

3.3. Replenishment & Issuance

In order to be able to maintain efficiency targets and service levels, it is essential that the stocks
are moved from the Storage Areas to the Pick Face areas in the right quantity and the correct
pick face. This has to be done at about the same time as issuance. Timing in the Replenishment
operation is critical since an early action could result in facing filled Pick Faces since material
has not been picked by the Pickers, and a delayed action could result in Pickers looking for
quantity which is yet to be replenished. Planning of the task such that presence of replenishing
forklifts does not become a safety hazard for the pedestrian Pickers is also important.
Real time WMS would send signal keeping in view the issuance and the orders and the Pick
faces will be filled immediately. Other systems may update periodically and would target the
pick faces where picking instruction has been issued. This may result in situation where the
refill team reaches the pick face even before the picking team or vice versa due to an out of
sequence picking by the pickers.
In the absence of an efficient real-time system, the store staff needs to be alert in terms of both
picking and replenishment requirements in order to keep the picking costs and service levels
under control.
During the entire process, the personnel involved need to keep an eye on the traffic and
congestion in the store and be able to perform tasks avoiding delays. Availability and
workability of the necessary equipment and operators including forklifts must also be ensured
so that personal objectives are not hampered due to dependence on others and synergies in
teams is optimized.
Issuance is the result of all activities so far discussed. Once the right SKUs in the right quantity
are ready, they are handed over to the requesting department, either at the stores or at the
designated location requested.
The status of Inventory changes from Raw Material Stores Inventory to Work in Process
Inventory once it is transferred from the Store books to the Production books of accounts.

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This concludes the discussion on the subject of Managing Transfers and Dispatches. We have
studied in this Module in Pick Preparation, Picking Strategies, Picking Methods, and
Replenishment & Issuance.

3.4. Test Your Knowledge

Choose or fill in the right answer:

1 – In the real time WMS, stock position is immediately updated in the system. (True/False)

2 – RFID stands for _____________________________________.

3 – Pick by Light involves picking by a Picker. (True / False)

4 – Goods Travel to the Picker under the following method:

a – Put to Light
b – Pick to Light
c – RFID
d – Bar Coding
5 – Timing in Replenishment is NOT critical. (True / False)

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