E – PROCUREMENT PRINCIPLES

CODE:- PLT 05203

BY
ELIAICHI J. KYARA
 Sub Enabling outcomes

1. Describe e-procurement
2. Use e-procurement tools to obtain goods in an
organization
3. Apply e-procurement procedures to acquired
goods in an organization
4. Use warehouse management system to keep
materials in store
3
4
 TOPIC ONE:

INTRODUCTION TO E -
PROCUREMENT
Introduction to e - procurement
E-procurement is the electronic integration and
management of all procurement activities
including purchase request, authorization,
ordering, delivery and payment between a
purchaser and a supplier.
E procurement, also known as supplier exchange, is
the term used to describe the process of obtaining
goods and services through the internet.
Introduction to e - procurement
 Electronic Procurement System (EPS) is a system
used to automate all or part of the procurement
function or activities.
 EPS do automate all or part of procurement
activities by enabling scanning, storage and
retrieval of invoices and other documents,
management of approval, routing of authorization
requests, interfaces to other finance systems, and
matching of documents to validate transactions.
Drivers of E - procurement
i. Cost reduction e.g. administrative costs,
etc.
ii. Shortening the order fulfillment cycle time
iii. Lowering inventory levels and the price
paid for goods
iv. Need for greater flexibility in ordering
goods / services from different suppliers.
v. Preparing firms for increased technological
collaboration and planning with business
partners.
Drivers of E - procurement
vi. Give buyer more time on value adding activities
e.g. Deal with key supplier for delivery and costs
improvements

 Take home……Read more on drivers of e-

procurement………………
Benefits of E - procurement
i. Reduced purchasing cost
ii. Enhanced budgetary control (achieved through
rules to limit spending and improving report
facilities)
iii. Elimination of administrative errors (correcting
errors is traditionally a major part of buyer’s
workload)
iv. Increased buyer productivity (enabling them to
concentrate of key value adding/strategic
purchasing activities
Benefits of E - procurement
v. Improved information management (better
access to price from alternative suppliers and
summaries of spending)
vi. Improved the payment process (comparison of
invoice, purchase order copy and
receiving/delivery report is done quickly and fund
transferred immediately)
vii. Transparency and visibility across the process
Challenges of E-procurement
1. Budget related challenges
 Expensive Hardware
 Necessary software
 software Licenses
 Staff Training
 Equipment Maintenance
2. Security related challenges
 Data loss
 Unauthorized Access
 Impersonation Information Leakage
 Back up Recovery
 Hacking
 Challenges of E-procurement
cont…….
3. Legal infrastructure challenges
 Lack of Aligned Jurisdiction information
 Confidentiality
 Legal liability
 Repudiation Contract
 Authentication
4. Supplier Enablement
 Internet connection
 Lack of system integration
 Lack of trained personnel
 Lack of computers

Read more on the benefits and challenges of e-procurement

 The Five Rights of E-Procurement
(5RS of E-procurement)
i. Right Quantity

ii. Right Quality

iii. Right place

iv. Right Time

v. Right Price

The five rights are a traditional formula expressing the basic objectives of

procurement, and the general criteria by which procurement

performance is measured
While making the electronic procurement both

buyer and seller have to consider

i. Inputs of the right “Quality”.

ii. Delivered in the right “Quantity”.

iii. To the right “Place”.

iv. At the right “Time”.

v. For the right “Price”.

1. The “Right Quality”:

E-procurement is one way to ensure that the goods that

organizations want to buy is in good quality. Joining an e-
procurement from big companies is a golden opportunity so for
sure this supplier doesn’t want to ruin the opportunity by selling
poor quality products

2. The “Right Quantity”:

Sometimes when we order a certain products from our supplier,

they make errors in the quantity. If this happen, each parties will
blame each other. E-procurement will prevent this error to occur.
By avoiding this types of error, company can reduce cost and also
at the end increase profitability.
3. The “Right Place”:

 Conducting an e-procurement will enable company to

make sure that the goods they're about to order come from
the right source. Usually when it comes to purchasing,
companies especially those big companies have strict
policies to buy goods only from reliable sources. Sometimes,
those big companies saying that they don’t mind to pay a
little bit higher than usual but they know where their product
are coming from rather than getting a cheaper price but
they don’t know where it come from.

 This happen because big companies will have an auditing

team that will checking and clarify all the purchasing
documents including checking the background of the stores
that we're buying those goods from

.
 4. The “Right Time”:

Another benefit from e-procurement is that an

organization will have their good on time. Joining
an e-procurement especially from big
companies will have a quite big impact for the
winning supplier. It’s like catching the "Big Fish" so
it is important for them to deliver the good at the
right time
5. The “Right Price”:

 By conducting an e-procurement, companies

are able to have an idea for a right price. By
having e - procurement, companies should be
able to look around which price is suitable for
their budget and big possibilities of getting the
specific products with a cheap price.
Companies who join the e-procurement are
enthusiastic bidding to win the procurement.
The lowest evaluated bidder will win the
procurement.
 Assignment
1. We now have 7 Rs of e-procurement, and we have
covered 5 of them find the remaining 2.
2. Apart from the drivers coved in this topic what are
the other drivers of e-procurement in todays
organization?
3. Currently in Tanzania we have a system used in e-
procurement, what is the name of that system?

DEADLINE: 06/05/2021
 TOPIC TWO:
E – PROCUREMENT TOOLS
E – Procurement Tools
There are so many tools that facilitate e-procurement, these
includes;
i. Electronic Data Interchange (EDI)
ii. E-hub
iii. E-exchange
iv. E - Market place
v. E - Catalogues
vi. E-Auctions
vii. Internet
viii. E-tendering
ix. ERP
EDI – Electronic Data Interchange
EDI is the computer-to-computer
exchange of business documents in a
standard electronic format between
business partners.
 How EDI – works
 Company A creates a purchase order using its internal
business software.

 EDI software translates the order.

 Company A sends the purchase order to company B over

third party value added network internet in EDI standard
format.

 Then company B receives the order document and will

translate it from EDI to its proprietary format and, typically,
company B will send an acknowledgement intervention.
 EDI – Electronic Data Interchange

For instance, EDI at the supermarket, when a product is

purchased, the checkout operator scans bar code on its label,
which automatically registers the price on the cash till.

The same signal also triggers a computer process that re-orders

the item from the manufacturer, set off a production cycle, and
arranges invoicing, payment, and transportation of the new
order.
EDI – Electronic Data Interchange

EDI effectively puts the product back on shelf with no paperwork

and a minimum of human involvement .

Assignment – 2

a. Explain e-tendering process and outline its merits and

demerits

Deadline 12/05/2021
 Advantages of EDI
i. Replacing the paper documents
ii. Reduction in lead time
iii. Reduction in the cost of inventory and release of
working capital
iv. Promotion of strategies such as JIT
v. Better customer service
vi. Facilitation of invoice payments by the computer – to
– computer transfer of money which eliminates the
need for the preparation and posting of cheque
vii. The integration of functions particularly marketing,
purchasing, production and finance
viii. It tends to promote long – term buyer – supplier
relationships and increase mutual trust
Disadvantages of EDI
Limitations of EDI
Expensive
 Initial setup is time consuming
 EDI standard changes
 System electronic protection is
needed
 Staff training cost
Its need a proper backup
 It limit your trading partners
 E-hubs, exchanges, and
marketplaces.

• E-hubs, e-exchanges, and e-marketplaces.

These are virtual locations with facilities to enable

trading between buyers and sellers.
 E-hubs
Electronic hubs (e-hubs) is a device that connects several
networks together. Normally, it is a control computer (server)
that holds databases and program for many personal
computer workstations or terminals, which are called client.

The client of the information hub may be internal customers

or external organizations, such as suppliers.

So by means of this server, all the players get real information

at any time whether suppliers, buyers, production or finance
guys regarding department related transactions
 E-exchange
 Electronic exchange (e-exchange) is a
business to business (B2B) website where
purchasers and suppliers meet to transact
business. We have private and public
exchanges.

 Private exchange can be either one-to-one

(1T1) or one-to-many connections (1TM). 1T1 is
direct connections while 1TM connect all
actors through the central Internet hub.
 E-exchange
Private exchanges are normally specified by a single
operation and available by invitation only to the
organizations' suppliers and trading partners.

 Public exchanges-often referred as a portal-extend

outside the boundaries of the company and involve
many-to-many (MTM) interactions.

Public exchanges may be run either by a consortium of big

players within a specific industry (consortium portals) or by
an independent entity starting up its business as an
intermediary (independent portals).
 E-markeplace
 Electronic marketplace (e-marketplace) is
website that enables purchasers to select from
many suppliers.

 With e-marketplaces, the buyer is in control as

open marketplaces enable purchasers to
evaluate all potential suppliers for a particular
product or service and make informed
decisions regarding what and where to buy.
 E-catalogues
Electronic catalogues (e-catalogues)

• It is a web page that provides information on products and

services offered and sold by a vendor/supplier, and
supports online ordering and payment capabilities.

• Catalogues provide current information about products in

an electronic form. Online catalogues supports cost
comparisons and incorporate voice and video clips, making
the process efficient for both buyers and sellers.
E-catalogues
Types of e-catalogues
• 1-Sell side catalogues which provide potentials purchasers
with access to online purchasing facility. These catalogues
provide purchaser with access to information and ease of
ordering.
• 2-Buy side catalogues which are created by purchasing
organizations. These catalogues are confined/restricted to
goods covered by prior negotiated prices, specifications
and terms and run by a program that is integrated into the
purchasing organization's intranet
 3-Third-party catalogues which are those catalogues that
administered by an external independent organization. It is
normally done by linking in-house e-procurement
catalogue to a master catalogue controlled by the
marketplace.
Advantages of e – catalogues
i. Facilitate real – time two – way communication
between buyers and sellers
ii. Allow for the development of closer purchaser –
supplier relationships due to improved vendor services
and by informing purchasers about products of which
they might otherwise be unaware
iii. Enable suppliers to respond quickly to market
conditions and requirements by adjusting prices and
repackaging
iv. Virtually eliminate the time lag between the
generation of a requisition by a catalogue user and
the issue of the purchase order
v. Off – contract purchasing is reduced because it is
simpler and quicker to purchase from contracted
suppliers than to go outside the official system
 E-auctions
Electronic auctions (e-auctions)
• E-auction is an electronic market where sellers
offer goods or services to buyers through a
website with a structured process for price setting
and fulfillment.
• Web auctions may follow English, Dutch, sealed-
bid and reverse-bid process.
• i. In English bid process, bids are successively
replaced by higher bids to obtain the highest
price for a given items.
 E-auctions
ii. In Dutch auction process, the auctioneer starts at a high
price and then descends by steps until a bid is received. The
successful bidder then decides whether to buy the whole or
a portion of the items on offer at that price. The auctioneer
increases the offer price for any items remaining in the
current lot and then again descends by steps and continues
in this manner until either all the items comprising the lot are
sold or a reserve price is reached.
iii. Sealed-bid process-A potential buyer issues a request for
bids to be submitted by a prescribed date and time
according to a sealed format. At a specified time and date,
the purchaser’s representatives will evaluate and compare
the bids according to a rating grid. The winning bid is the one
that achieves the maximum score. Should several bids obtain
the same score, the bid offering the best price is the winner.
 E-auctions

iv. Reverse-bid process-In reverse auction, buying

organizations post the item(s) they wish to buy and price
they are willing to pay while suppliers compete to offer
the best price for the item(s) over a prescribed time
period. The buying organization posts all the required
things like dimensions, quality, performance, and
delivery requirements. Normally the bids prices are
visible to all competitors, but the origin of bids is, of
course, confidential.
Internet tools
 E-sourcing is using internet to make decisions and form
strategies regarding how and where services or products
are obtained. OR is the process of finding and selecting
supplier electronically.

 It covers the parts in the buying process which includes

knowledge, specification, request for quotation/e-
tendering/e-auction and evaluation/negotiation of
contract.

 E-mail – is a method of exchanging messages from one

author in an electronic form.
 E-tendering is an internet based process wherein the
complete tendering process; from advertising to
receiving and submitting tender-related information
are done online. This enables firms to be more efficient
as paper-based transactions are reduced or
eliminated, facilitating for a more speedy exchange
of information.
 E-ordering it is a method of collecting orders from
customers through internet.
 Web Based ERP-(Enterprise Resource Planning) is a
complete web based Accounting, IT and Business
management system that requires only a web-browser
to use. It has a wide range of features suitable for
many businesses and likely to distributed businesses in
wholesale, distribution and manufacturing. The feature
set is continually expanding as new businesses and
developers adopt it.
 A web-based ERP system is simply providing access
to the desired modules of an ERP solution or the
entire ERP solution over the internet, without actually
having any kind of hardware or software at the user’s
end.
 The ERP system is accessed within a web browser by
HTTPS link through the username and password given
by the service provider. Location of web application
and database is absolutely immaterial, as it can
either be located on-premise at the company’s
facility, or it may reside at vendor’s data centre.
 A web-based ERP solution requires NO application or
communication software to be downloaded on the
local system. Any client can access the application
from anywhere, by simply following the link, just similar
to a web page.
 The World Wide Web (WWW) is a network of online
content that is formatted in HTML and accessed via HTTP.
 The term refers to all the interlinked HTML pages that can
be accessed over the Internet.
 The World Wide Web is most often referred to simply as
"the Web."
 OR The World Wide Web (WWW), commonly known as the
Web, is an information space where documents and
other web resources are identified by Uniform Resource
Locators (URLs, such as https://www.example.com/),
which may be interlinked by hypertext, and are
accessible over the Internet.[1]
 The resources of the WWW may be accessed by users by
a software application called a web browser.
 ERP(Enterprise resource
planning) -system
 Enterprise resource planning (ERP) is business
process management software that allows an
organization to use a system of integrated
applications to manage the business and automate
many back office functions related to technology,
services and human resources.
 ADVANTAGES OF ERP SYSTEMS
i. ERP can improve quality and efficiency of the
business. By keeping a company's internal
business processes running smoothly, ERP can
lead to better outputs that may benefit the
company, such as in customer service and
manufacturing.
ii. ERP supports upper level management by
providing information for decision making.
iii. ERP creates a more agile company that
adapts better to change. It also makes a
company more flexible and less rigidly
structured so organization components
operate more cohesively, enhancing the
business—internally and externally.[61]
vi. Efficiency: An ERP system eliminates repetitive processes and
greatly reduces the need to manually enter information. The
system will also streamline business processes and makes it
easier and more efficient for companies to collect data.
vii. Integrated Information: Instead of having data distributed
throughout a number of separate databases, all information
is now located in a single location. Data is also kept
consistent and up-to-date
viii.Better reporting system: ERP software helps make reporting
easier and more customizable. With improved reporting
capabilities, your company can respond to complex data
requests more easily. Users can also run their own reports
without relying on help from IT.
ix. Better customer service: It’s easier to provide high-quality
customer service using an ERP system. Sales and customer
service people can interact with customers better and
improve relationships with them, through faster, more
accurate access to customers’ information and history
Assignment
I. Find the advantages of each e-procurement tool
II. Try to acquire goods by using any of the above
tools
 TOPIC THREE:
E-PROCUREMENT CYCLE /
PROCEDURES/PROCESS
E-Procurement Cycle /Procedures
 E-procurement cycle/Process/procedure refers to sequential
or series of activities or steps followed when acquiring goods
or services electronically or over the internet.

 The manual procurement cycle may not be the same as that

of e-procurement in stages/steps because under e-
procurement some steps may be combined and reduce the
length of the process.
E-Procurement Cycle /Procedures
E-procurement cycle / Stages

Need recognition (Specification description)

At this stage, items or services to be bought are described or

defined clearly and registered into ERP system of the company in
case of new requirement. The need is described in terms of
colours, dimensions, functions, shapes, etc.

But in case the purchase is repetition, then specification can be

altered or improved or remain as it is if not required.
E-Procurement Cycle /Procedures
E-procurement cycle / Stages cont.…….

1. E-requisition

Here the users/originators fill the electronic requisition into the e-

procurement/ERP system by selecting specification of the
items/services required and route it to the person responsible for
approving it. After the requisition being approved, will
automatically go to procurement department for further process.
E-requisition should include, at a
minimum:
i. Item number and description of goods and services
sought, based on selection from the Procurement
Catalog
ii. quantity of inputs to be procured
iii. unit of measure
iv. required delivery date
v. delivery location or location of civil works/services to
be performed
vi. estimated price or cost
vii. Supporting documentation such as the Terms of
Reference (TOR) or specifications.
E-Procurement Cycle /Procedures
E-procurement cycle / Stages cont.…..

2. E-sourcing

E-sourcing is using internet to make decisions and form strategies

regarding how and where services or products are obtained. OR
is the process of finding and selecting supplier electronically

The buyer may employ tool like e-quotation, e-tendering, e-

auction to get the suppler.
3. E-Evaluation

E-Evaluation is a systematic determination of a supplier merit, worth

and significance, using criteria governed by a set of standards
which is done though the use of internet.

 It can assist a procurement organization in decision-making; or

to ascertain the degree of achievement or value in regard to
the aim and objectives and results of any such action that has
been completed.[1]

 The primary purpose of E-evaluation, in addition to gaining

insight into prior or existing initiatives, is to enable reflection and
assist in the identification of future change
E-Procurement Cycle /Procedures
E-procurement cycle / Stages cont.….

The buyer will then select the supplier offered the best price and
terms and conditions.

4. E-negotiation

Whenever necessary, buyer can bargain with potential suppliers

on issue regarding delivery schedules, payment terms and
means, delivery means, warranties but these discussion should be
done over the internet.
E-Procurement Cycle /Procedures
E-procurement cycle / Stages cont.……

5. E-ordering

The buyer fills an order over the ERP system and send it to the
selected supplier electronically. Several information will be
provided but the key one is specification of the product or
services required to be supplied.

In order e-ordering to happen, the suppliers’ system need to be

integrated with that of buying organization.
E-Procurement Cycle /Procedures
E-procurement cycle / Stages

6. E- receiving

Supplier will make and deliver goods or perform required services

and handover to buyer. Buyer will inspect the goods or assess
service provided and once conform to the specification prior
issued to supplier, buyer will accept the delivery.

Supplier send documents over the ERP system to buyers like

invoice, delivery note, packing list, etc.
E-Procurement Cycle /Procedures
• E- receiving cont.……..

Buyer/store keeper captures/post receipt information over the

ERP system of the firm and generate electronic receiving report.
The system may have option during receiving like full receipting,
partial receipting, over delivery, under delivery, full rejection or
part rejections and cancellations.
E-Procurement Cycle /Procedures
8. E-payment

After buyer obtains documents from supplier, he will then transfer

them to account department for payment. Accountants will
compare the receiving report against purchase order and
supplier’s invoice using the ERP system and then process
payment. After confirming delivery and accuracy of claims
made suppliers, accountant will transfer fund from his firm’s
account into suppliers account electronically.
 ASSIGNMENT 2

QN 1. With samples explain at least 5 important

documents involved in e-procurement cycle.
QN 2. What are the advantages of using e-
procurement cycle as compared to manual
procurement cycle?
QN 3. Explain how e-procurement cycle differ
from the manual procurement cycle
QN 4. What are the challenges of using e-
procurement cycle over the manual procurement
cycle?
Deadline 26/10/2020
 TOPIC FOUR:
E- WAREHOUSING AND
STORAGE
Warehouse Management System
Warehouse Management System (WMS)

 This is the computerization of all of the activities

involved in the storage goods through designated
software.

 The WMS normally interfaces with the company’s main

transaction system (such as an ERP) to access
information such as purchase order, customer orders,
etc. WMS in turn, feedback into ERP the information
such as goods received and dispatched.
 Warehouse Management System
 The WMS is used to control all the operations in the warehouse
and issues to subsidiary systems, for example equipment
control systems.

 Thus, a WMS will issue an instruction to an Automated Storage

and Retrieval Systems (AS/RS) control systems for a crane to
move a specific pallets from a pick-up and deposit station at
the end of aisle to a particular location in the racking.

 The equipment control system will then direct the crane and
provide feedback and diagnostics if the crane cannot fulfill
this operation (e.g. owing to mechanical failure).
76 E-warehousing and storage
(WMS)
COMMON CAPABILITIES OF A WMS
 Receiving Inventory
 Locating Inventory (Referred to as Put-away)
 Inventory allocation
 Picking inventory
 Replenishment
 Shipping confirmation
 Cycle counting and physical inventory
77 E-warehousing and storage
(WMS)
WMS Benefits
 Can Manage Complex Warehouse structure
 Optimize warehouse activity
 Increase in trace and track ability of materials
in W/H
 Mobile Data Entry
 Increase in Efficiency
 Increase in accuracy
 Reduce Customer complain
78 E-warehousing and storage
(WMS)
 Two Key Elements of WMS
i. Use of Portable Computer Terminals
connected to server and
ii. Bar Codes that are used to reduce amount of
information to be entered directly into
terminals through scanning
 A computer terminal
79
 A computer terminal is an electronic or electromechanical hardware
device that can be used for entering data into, and displaying or printing
data from, a computer or a computing system.
Read more: https://en.wikipedia.org/wiki/Computer_terminal
80
 Server
81
 a computer or computer
program which manages
access to a centralized
resource or service in a
network.
 Data capture and transmission
BAR CODE
 A barcode (also bar code) is an optical, machine-
readable representation of data; the data usually
describes something about the object that carries the
barcode
 Bar codes are the most common form of capturing
data by automation. It comprises of a number of
vertical or horizontal bars of varying thickness which
represent a letter or number. The bar codes are read
by scanners for direct input into computer system.
 Bar codes assist to check location and confirm
products location when picking and read labels
automatically on sorters in the store,
83 Scanners used to scan the
bar/QR codes
 84 E-warehousing and storage
(WMS)

 Linear or 1D Barcodes:
Barcodes representing data in the widths (lines) and
the spacing of parallel lines such as Code128, Code 39,
and UPC, are referred to as Linear or 1D (one-
dimensional) barcode symbologies.
86 E-warehousing and storage
(WMS)
 2D Barcodes
Two-dimensional (2D) barcodes, such
as Data Matrix, PDF417, and QR Code,
may have patterns of squares, dots,
hexagons and other geometric patterns.
While maintaining a fairly small size, these
barcode types hold much more data than
linear barcodes. 2D barcodes can hold
hundreds of characters.
QR code Data Matrix
87
88 Different between 2D and ID
Data capture and transmission
Bar code
 Bar codes to be used must be recognized internationally
to aid product tracking within the distribution chain.
 Can be used in
i. The healthcare and hospital settings
ii. keeping track of objects and people;
iii. keeping track of rental cars, airline luggage, nuclear
waste, registered mail, express mail and parcels
iv. Barcodes are also used in some kinds of non-contact 1D
and 2D position sensors
Assignment-deadline 10/11/2020
Explain the advantages and disadvantages of bar
codes.
Data capture and transmission

Radio Frequency Identification (RFID)

 This technology enables automatic identification through

the use of radio frequency tags data readers and
integrating software.

 A tag has a microchip and an antenna that can store

and transmit data and it can be fixed to an individual
product or unit load. It can be active (send a signal) or
passive (respond to a signal).
Data capture and transmission
Some benefits of RFID
 It is used in tracking of goods in manufacturing, DCs, shops,
customers. This reduces labour time and cost through
automated check in, order shipment verification, and stock
checking.
 It is used in tracking re-usable assets such as pallets, roll cages.
This enable good asset management.
Data capture and transmission
Some benefits of RFID cont...
 It is also used to track the movement of human
beings like prisoners or patients under special
care where tags are put on clothes.
 Provide accurate and timely information required
e.g. stock balance on hand, etc
 It allow rapid checking of stocks in the
warehouse as the receiver and transmitter do not
need to be in same sight of one another.
E-warehousing and storage
Warehouse Management System
WMS functionality covers all the activities
of the warehouse like the following;
 Receiving
 Put-away
 Replenishment
 Picking
 Added value services
 Packing
E-warehousing and storage

 Sorting
 Dispatch
 Stock counting
 Automated handling
 Etc
WMS Operations
 E-receiving: Once goods arrive at the
storage units, their information is taken and
captured into the WMS. Capturing of data
into the system is done by scanning the bar
codes on products for those that have these
numbers. It depends on the technology on
hand because others may use RFIDs and
information automatically transmitted into
the system once goods pass the area with
that network.
 Automated Truck
Loading/unloading Systems - ATLS
 Automated Truck Loading Systems - ATLS has
been commonly used in the material handling
industry to refer to the automation of loading or
unloading trucks and trailers with product either
on or without pallets, slip sheets, racks,
containers, using several different types of
automated guided vehicle systems (AGV) or
engineered conveyor belt systems that are
integrated into vehicles, automating the shipping
/ receiving and logistics operations
 Sorting
Sorting refers to the process of
arranging the inventory systematically in
groups; separate according to type,
and movements frequency. Heavy
materials are placed near to the door
stacked with light materials, slow
moving material are arranged far as
compared to fast moving materials
Assignment-deadline
10/11/2020
1. Explain the advantages and disadvantages of bar
codes.
2. Explain the advantages and disadvantages of RFID
 Stock handling and retrieval)

AN AUTOMATED STORAGE AND RETRIEVAL

SYSTEM (ASRS OR AS/RS)
ASRS OR AS/RS consists of a variety of
computer-controlled systems for
automatically placing and retrieving loads
from defined storage locations
Automated storage and retrieval systems
(AS/RS) are typically used in applications
where:
i. There is a very high volume of loads
being moved into and out of storage
ii. Storage density is important because
of space constraints
iii. No value is added in this process (no
processing, only storage and transport)
iv.Accuracy is critical because of
potential expensive damages to the
load
 What is Automated Storage?

Is a varied number of computer-

controlled systems to place and retrieve
loads from defined storage locations
automatically is called the automated
storage and retrieval system (ASRS or
AS/RS).
WMS Operations
 E-issuing: This involves receipt of demand, picking
required goods and handing over to users. Users will
fill stores requisition in the system and route it to
storage units. Stores staff will then identify what is
required from the requisition and instruct picking
machines to move inside the store to pick and bring
the items at the dispatching bay. The picked items
will be sorted, packaged, labeled and
consolidated by a machine. Then handover or
dispatch will be carried out to the customers.
 E-picking slip generation
 Picking slip is the document created online
through the use of designed software like ERP or
EDI which shows the item`s amount, location and
the nature of the material to be picked, it is used
as a directory in the warehouse when someone
wants to pick material.
 This document is generated automatically from
the ERP system upon a command given to the
systems by the user.
 E-store requisition
 E-store requisition; is the document created
online through the use of designed software
like which shows the item amount, to be
issued to users, it is used as a directory by the
store keeper to know the need of user
department
 This document is generated automatically
from the ERP system upon a command given
to the systems by the user
 E-picking
Picking methods

 Voice directed picking (VDP) – refers item selection

system where by the person to pick goods is
informed through voice from the system telling him
where the product located, quantity needed. After
picking, staff tell the VDP device what items picked,
quantity and task performed. Then the speech is
transformed into data which is them sent to VDP
server for verification.
WMS Operations
 Each user wears a device that he has taught to
recognize his speech patterns. To each device is
attached earphone and microphone.

 The main ERP system transmit to the VDP server data

about each order ready to pick and the server
stores the data.
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WMS Operations
 Pick to Light (PTL) – It works as follows, LCD display
device is located next to the pick slot for each item.

 The main ERP system transmit to the PTL server data

about each order ready to pick, and the server stores
this data.

 When a picker want to pick items, he press the

button on LCD device to indicate his readiness.

 The PTL server turn on light on the display on each

item involved in the order and in that picker’s zone,
the quantity to pick is displayed on each LCD.
WMS Operations
 Once the picking exercise completed, the picker
confirm to the device by pressing special button and
turn off light. There is a room for the picker to indicate
actual quantity performed if the quantity differed
from the quantity displayed first.

 This is the fastest and accurate way of picking items

in the store especially with populous stocks
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Pick to light
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ERP system

 Therefore, with this system, warehouse or distribution

manager is able to see the stock balances, sales, in
transit delivery (both inbound & outbound),
allocated stocks and to whom (customer), truck
and driver details moving the orders, in any of their
facility locations in any geographical area.
e-transfer of picking order to
storage point
E-labeling
 E-kitting
 Kitting is a Process in which individually separate but
related items are grouped, packaged, and supplied
together as one unit. For example, in ordering a PC
online, a customer may select memory, drives,
peripherals, and software from several alternatives.
The supplier then creates a customized kit that is
assembled and shipped as one unit.
 E-invoicing
 Electronic invoicing (also called e-invoicing) is a form of
electronic billing. E-invoicing methods are used by trading
partners, such as customers and their suppliers, to present and
monitor transactional documents between one another and
ensure the terms of their trading agreements are being met. These
documents include invoices, purchase orders, debit notes, credit
notes, payment terms and instructions, and remittance slips.

 E-invoicing includes a number of different technologies and entry

options and is used as an umbrella term to describe any method
by which an invoice is electronically presented to a customer for
payment
 Dispatch
 Inducement paid by a vessel operator to a
shipper, consignee, or charter for completing
the loading/offloading operations in less than
the allotted time. Also spelled as dispatch.
THE END