UNIT 2:

Warehousing & Inventory

AO/HLCP/0186 V3.0
Introduction .......................................................................................................................................... 4

2.1 The Function of Warehouse & Inventory Management ..................................................... 5

2.1.1. Warehousing & INventory in Humanitarian Supply Chains ................................................ 5
2.1.2. The Functions of Warehouse and Inventory Management ..............................................14
2.1.3. Procedures & Policies ...............................................................................................................17

2.2 Identifying Warehouse Requirements ................................................................................ 20

2.2.1. General Requirements ..............................................................................................................20

2.3 Selecting Equipment & Working Methods.......................................................................... 31

2.3.1. Planning Work Phases ...............................................................................................................31
2.3.2. Selecting Handling Equipment ................................................................................................33
2.3.3. Selecting Storage Equipment ..................................................................................................37
2.3.4. Defining Work Methods ............................................................................................................39

2.4 Planning Space & Layout ...................................................................................................... 45

2.4.1. Sizing the Bulk Storage Area ....................................................................................................45
2.4.2. Sizing the Goods Receipt Area ................................................................................................49
2.4.3. Sizing the Goods Dispatch Area..............................................................................................50
2.4.4. Sizing the Picking Area ..............................................................................................................50
2.4.5. Warehouse Flow & Layout .......................................................................................................51
2.4.6. Goods Location in the Bulk Storage Area .............................................................................52

2.5 Planning Resource Requirements ....................................................................................... 55

2.5.1. Work Cycles .................................................................................................................................56

2.6 Managing Warehouse Operations ...................................................................................... 62

2.6.1. Planning the Workload ..............................................................................................................62
2.6.2. Allocating Resources..................................................................................................................65
2.6.3. Receiving Goods .........................................................................................................................67
2.6.4. Storing Goods .............................................................................................................................71
2.6.5. Assembling Consignments .......................................................................................................73
2.6.6. Dispatching Consignments ......................................................................................................74
2.6.7. Disposal of Goods ......................................................................................................................75
2.6.8. Pest control..................................................................................................................................76
2.6.9. Defining the Control Requirements .......................................................................................78

2.7 Care of Warehouse Resources ............................................................................................. 82

2.7.1. Planned Maintenance ...............................................................................................................82
2.7.2. Maintain Equipment ..................................................................................................................83

AO/HLCP/0186 V3.0
 2.7.3. Maintain Building ........................................................................................................................84
2.7.4. Complete Maintenance Records ............................................................................................84

2.8 Managing Inventory Levels .................................................................................................. 85

2.8.1. Types of Inventory ......................................................................................................................85
2.8.2. Stock Time Curve ........................................................................................................................86
2.8.3. Using Forecasts...........................................................................................................................88
2.8.4. Push & Pull Inventory Policies .................................................................................................90
2.8.5. Ordering Systems .......................................................................................................................90

2.9 Stock Control & Movements ................................................................................................ 96

2.9.1. Monitoring Goods in Transit ....................................................................................................96
2.9.2. Controlling Stock Movements .................................................................................................97

2.10 Stock Records ...................................................................................................................... 101

2.10.1. Stock Identification .................................................................................................................. 101
2.10.2. Stock Cards ............................................................................................................................... 102
2.10.3. Bin Cards ................................................................................................................................... 103
2.10.4. Stock Checks ............................................................................................................................. 104
2.10.5. Stock Loss ................................................................................................................................. 105
2.10.6. Reporting Stock Levels ........................................................................................................... 105

2.11 Managing the Working Environment ................................................................................ 107

2.11.1. Health & Safety Requirements in Supply Chain Activities ............................................. 108
2.11.2. Security Factors & Risks That Can Affect Supply Chain Operations ............................ 117

AO/HLCP/0186 V3.0
Welcome to the Warehouse and Inventory Unit of the Certification in Humanitarian
Logistics course. During this Unit, you will be looking at the function of warehouse
and inventory management.

The unit will look at the need to set up and to manage warehouse operations
appropriate to the situation, environment, and resources available, as well as
explain the short- and long-term needs to store and to manage inventory.

AO/HLCP/0186 V3.0
This section introduces the role of warehouse and inventory management in
humanitarian organizations. We will look at what warehouses and inventory
management are, how they function, as well as associated procedures and policies.

In the first Unit of the course, we

explored the purpose of humanitarian
supply chain activity. You will recall
that this purpose is to deliver goods to
beneficiaries at the time and place
where they are needed.

The role of warehouse and inventory

management is to make the goods
available to be delivered. To help with
making the goods available,
warehouses are used to store goods
between the times of delivery from
suppliers until the goods are required
to be delivered onto the next stage in
the supply chain and, ultimately, to the
beneficiaries.

The map shows an example of a humanitarian supply chain. The global warehouse is the start of
two supply chains illustrated by the red and white arrows.

A simple definition of a warehouse is:

A warehouse is a planned space for the storage and handling of goods and material.

However, in humanitarian supply chains, warehouses vary greatly in terms of their roles and their
characteristics.

AO/HLCP/0186 V3.0
Global warehouses are relatively permanent operations, and they tend to be housed in large,
purpose-built buildings. They are run by permanent staff members who have been trained in all the
skills necessary to run an efficient facility. The information systems are computer-based and they
may use the most sophisticated software to help in the planning and the management of the
warehouse. The operating situation is relatively stable and management attention is focused on the
efficient and cost-effective running of the warehouse operation.

Warehouses in the field, catering directly to beneficiaries, tend to be very different. They tend to be
smaller and temporary. They may be housed in buildings that were not designed to be used as
warehouses, or in a temporary buildings, sometimes little more than tents in a field. The staff may
be volunteers who have never worked in a warehouse before, and any system is more likely to be
paper-based. The situation may be chaotic and dangerous, and the humanitarian need may be very
urgent. Therefore, the management style must be practical and action-oriented, with a focus on
meeting the daily program needs.

Although the operational situation varies dramatically in humanitarian supply chains, the basic
principles of warehouse and inventory management are the same throughout. Therefore, the role
of the warehouse/inventory manager is to adapt and to apply these principles as much as possible,
given the operational situation, in order to best achieve the objectives of that particular operation,
whatever they might be.

We will explore, in detail, what happens in a warehouse but, before doing so, we need to understand
why we need warehouses and why we need inventory.

First, consideration of this question will doubtlessly lead to the conclusion that a warehouse is
needed to be able to store things. While this is true, there are also other uses. These include usage:
 As a transit point
 For dividing bulk deliveries
 For combining different goods
 To provide speedy response
 To protect inventory

Let’s look at each in turn.

Warehouses act as places to hold goods between the time of delivery from suppliers and the time of
the onward journey to the next stage in the supply chain and, ultimately, to the beneficiaries.

AO/HLCP/0186 V3.0
In general, goods are delivered from suppliers in bulk/large quantities, and these quantities are
often much larger than the size of consignments required for onward delivery to beneficiaries.
Therefore, warehouses act as places for dividing bulk deliveries into smaller quantities for onward
delivery.

In order to meet the needs of beneficiaries, it is normal that a range of goods is required, and that
these are purchased from a number of different suppliers. However, beneficiaries normally require
a mixture of the goods which have been purchased, e.g. a selection of foodstuffs, together with
some cooking equipment. Therefore, we typically need to combine a selection of different goods to
make up consignments which are ready for delivery to beneficiaries.

Sometimes, a number of different items may be packaged together into kits before being delivered
to beneficiaries. This is sometimes referred to as kitting. In other instances, kits may be
disassembled; this is referred to as de-kitting.

In responding to a humanitarian need, the speed of response is often important. Since the
transportation time can form a large part of the response time, it may be necessary to store
inventory physically close to the beneficiaries. So, for humanitarian organizations which have a large
geographical coverage, it may be necessary to store inventory in a number of warehouses, in various
locations around the world.

Warehouses provide a physical barrier, which helps to protect inventory from theft, and keeps the
inventory in good condition by preventing damage from pests and weather. Within the
humanitarian environment this is a particularly important role, since it provides a secure place for
storage in potentially unsafe surroundings. Not only does this provide safe conditions for the goods,
but it also provides safe working conditions for the people performing warehouse tasks.

In answering the question of why we need a warehouse we discovered that all of the uses involved
activities related to goods. This then suggests we explore why we need the goods, which we more
commonly term inventory. Again there are several reasons:
 To decouple supply and demand
 In anticipation of an increase in demand
 To protect against uncertainty in supply and demand

AO/HLCP/0186 V3.0
Keeping inventory is, essentially, about balancing supply and demand. This job would be very easy in
a situation where:
 We know exactly in advance what humanitarian goods will be required
 There is enough time to order goods from suppliers and have the goods in stock ready to
meet the need
 Suppliers deliver exactly when we need it and in full

In such a situation there would be no need for buffer stock, since we could order from a supplier
and ship it on to beneficiaries in time to satisfy their need.

Of course, this ideal situation does not exist in most cases. For some goods, supply is seasonal,
perhaps as a result of a harvest, but the associated demand is constant throughout the year. In
other situations it may be that supply is constant, but that the demand is erratic, and the required
time to supply is too short to allow us to make or to acquire the items.

In these cases, inventory must be kept to allow the beneficiaries’ needs to be satisfied.

Anticipation stocks are built up to meet a planned or expected increase in demand. The most usual
example of this would be the occurrence of a humanitarian event. In such a situation, speed of
response is important and, in most cases, the humanitarian need does not allow time for stocks to
be purchased before being distributed to the places where they are needed.

The level of demand for humanitarian goods in the future cannot be known with absolute certainty.
At the same time, the availability of goods is always uncertain to some extent. Therefore, given that
the purpose of humanitarian supply chains is to meet the demand for humanitarian goods,
inventory is held as a buffer in case demand is higher than expected, or in case goods are late or
quantities less than expected, or both.

Now that we understand reasons for keeping

inventory, let’s examine what happens inside
the warehouse. A warehouse operation can be
broken down into four main processes:
 Goods receipt
 Bulk storage
 Picking, kitting, and repacking
 Goods dispatch

AO/HLCP/0186 V3.0
These four processes occur in the order in which they are written. First, goods are received and,
after checking, they are placed into storage. After a period of time they will be retrieved (picked) and
then dispatched. Sometimes, at the retrieval stage, goods can be combined together and repacked
to form kits. These kits can then be dispatched immediately or returned to storage until they are
required. The diagram above illustrates this process flow. Next we will examine each process in
more detail.

The most important feature of the goods receipt area is the ability to receive, check, and distribute
the goods into the main storage areas as quickly and as efficiently as possible.

Often, the goods receipt area can be very busy with lots of people present, including drivers. As this
photograph shows, controlling the movement in an orderly manner can, therefore, be a challenge.

The extent to which this activity can be planned and managed depends on the visibility which the
warehouse manager has of the arrival of goods at the warehouse. Visibility of arrivals depends on
good communication with the sender about the quantity and timing of goods deliveries.

In the ideal situation, there will be a system where deliveries are allocated time slots to arrive at the
warehouse, and the warehouse manager will plan the space and the people required to achieve an
orderly arrival and handling of the goods. This is known as pipeline management in some
organizations. Ideally, reports from spreadsheets or systems are used to provide this visibility.
 Receive
 Unload
 Check
 Make available for storage

However, it is possible for goods to arrive without warning, and at unexpected times. Also, the
quantity of goods which are received may be much larger than expected. In these situations there is
a risk of congestion in the goods receipt areas, in both the control of the vehicles bringing in the
product and on the goods receipt bays in general.

Therefore, the warehouse manager must adopt a flexible approach to the use of space in the
warehouse and of warehouse resources, both people and equipment.

Typical activities involved in goods receipt are:

 Establish the correct unloading area and ensure it is safe and suitable for the operation.
 Record the arrival of the vehicle and, if applicable, note the number on the security seal.
 Break the seal with the driver present whenever possible.
 Check the documentation and record each item against the consignment note.
 Ensure that the vehicle is safely parked before unloading.
 Assemble the goods if necessary in a goods receipt assembly area.

AO/HLCP/0186 V3.0
  If necessary, transfer from delivery pallets and cages to internal means of moving and
handling the goods.
 Check the goods for condition, possible damage and where appropriate carry out required
quality checks.
 Report discrepancies and condition/quality problems at once.
 Determine the location in which the goods are to be stored and move them out of the
goods receipt area as quickly as possible.
 Update the warehouse’s automated/manual system to record entry of the goods into the
warehouse and add any necessary identification labels and paperwork needed to manage
the goods in the warehouse.

The goods receipt working area must have sufficient space for the above processes. A quarantine
area might also be required for holding goods awaiting quality control clearance. An area might also
be needed to hold goods which have been rejected, and are waiting to be sent back or destroyed.

The prime objectives of the receiving area should be to:

 Receive materials/goods from internal/external suppliers, unload the vehicle as quickly and
as efficiently as possible, and make ready for storage.
 Check that the quantity, type, and condition of the materials/goods are as specified in the
order.
 Make provision for any quality control activity required by the organization.

The factors that will influence the level of labor requirement are:
 The frequency of the deliveries and the volumes of the goods to be received
 The methods used to receive the goods and make them available for storage
 The certainty of operations and the availability of labor

The frequency and volume of goods to be received can be established by analyzing the past and
forecast demand for goods, and this information can be used to calculate the labor requirements
for the goods receipt operation. In situations where the timing and the volume of receipts is
uncertain, labor for goods receipt operations will have to be allocated at short notice. This labor can
come from other parts of the warehouse operation, from temporary workers, or from permanent
employees who are on stand-by. The best approach depends on the availability and the cost of local
labor, and it will also be influenced by the labor policy of the organization.

Often, there can be a great deal of uncertainty

surrounding the receipt operation. The timing and
the volumes of receipts are often dictated by other
people, and by the nature of the humanitarian
situation for which the goods are required.

Consequently, it may be beneficial to have a surplus

of people, enabling uncertain peaks of activity to be

AO/HLCP/0186 V3.0
handled. In many locations, labor may be a cheap resource enabling this to be done without too
high a cost penalty.
 Hold as bulk.
 Replenish picking area.

The bulk storage area will normally occupy the majority of space in the warehouse. Some
warehouses may have a smaller picking area set-up where a limited quantity of the different items in
the warehouse is made available for easy access.

Sometimes goods will go straight into the picking area, but this will only be in times of shortage or
when there are special, fast-moving lines.

Occasionally, goods will be received which

are unexpected and are not actually
required for beneficiaries, e.g. donations in-
kind. These must be stored somewhere, at
least temporarily. Care must be taken to
avoid unwanted goods causing a bottleneck
in the operation, if possible.

The number of different goods will

determine the strategy for the size and the
operation of the bulk store. There are
circumstances when the bulk area will be located immediately above or adjacent to the picking area.

Generally, however, the bulk area will be the main area, separate from picking, and the area in which
all goods received will be held for varying lengths of time.

Within the storage area there are two main considerations. First, attention will need to be placed on
making the best use of space. As well as using the floor area, we must also think about using the
vertical space. Second, thought needs to be directed to handling times, and how easy it will be to
access goods. One key to providing both good use of space and quick handling times, is the use of
pallets. Pallets enable several items to be moved at once, and they also facilitate the stacking of
product to use the height of the warehouse.

The photograph above illustrates the issues of balancing the use of space and handling time. You
will see that high space utilization has been achieved at the expense of access to all pallets. In this
case it is likely the product is of one sort so that a last in, first out (LIFO) rotation policy would be
acceptable.

Putting product away into storage is one task, but later on we must be able to find it again.
Consequently, it is helpful to identify locations or spaces in the warehouse by some form of coding
which identifies a unique position. As product is put away, the location should be recorded. This

AO/HLCP/0186 V3.0
recording can be as simple as a blackboard on the warehouse wall or, in bigger warehouses, it might
be held on computer in a warehouse management system.

Depending upon the characteristics of goods, the warehouse may have to be separated into zones
to accommodate goods under different conditions. Goods, such as medicines, may have to be kept
in a temperature-controlled zone or, perhaps, in a high-security zone where they are locked away.

Once again, the impact on the labor requirements will be dependent on the methods and processes
which are employed. The flow of materials/goods from the receipt area in terms of volumes,
frequency, and content, will determine the basic requirements.

The other main factor to consider is the average distance traveled when moving through the bulk
storage area. The larger the area, the longer it will take to move goods into and out of the area, and
the more resources will be required for a given workload. Therefore, the layout of the bulk storage
area, and decisions about where to put the goods in that space, will have an impact on the total
resource requirement.

The tasks concerned with the bulk storage operation include the following:
 Obtain instructions on where to put the goods.
 Move to that location.
 Place materials/goods in that location.
 Record the location used.
 Consolidate partly filled locations by
moving cartons/bags from one
location to another.
 Obtain instructions for replenishing
goods to the picking areas.
 Replenish the picking areas.
 Report/remove damaged goods.
 Return to the pick-up point.
 Report actions.
 Picking Methods.
 Picking Techniques.
 Picking Path.

In operations where some goods are stored and moved on pallets, the following tasks are also
normally undertaken:
 Consolidate partly-filled pallets by moving cartons/bags from one pallet to another and
move the empty pallet to a holding area.
 Move/tidy pallets from the bulk storage area.

AO/HLCP/0186 V3.0
In the bulk storage area of a warehouse operation, each of the items being stored is allocated a
different physical area to be stored. However, if the consignments which are dispatched from the
warehouse include more than one type of item, a picking operation is required to bring these
different items together to one location from different locations around the bulk storage area. In
other words, the picking operation involves the preparation of orders by picking items from storage
to make up consignments. These consignments can then be taken to the goods dispatch area.

As well as being called picking, this activity is also referred to as selection, retrieval, or assembly.

This operation is often labor-intensive as it involves handling individual items, whereas other
activities often involve handling of bulk. As well as adding value, it is one of the highest cost
activities.

The tasks concerned with consignment picking include the following:

 Collect picking documents.
 Collect equipment for transporting.
 Locate inventory location.
 Check and pick appropriate quantity.
 Travel to subsequent picking faces.
 Advise discrepancies/damaged goods.
 Travel to sorting, consolidation, packing, and dispatch area.
 Prepare kits and repack.
 Advise replenishment requirements.
 Complete and pass on documentation.

In some operations, kits are created by picking and packing together different items from bulk
storage. After the kits have been created, they may be returned to bulk storage for picking at a later
date, or they may be moved to goods dispatch for immediate, onward delivery to beneficiaries.

 Orders Consolidated
 Packed
 Sequenced
 Loaded

In most circumstances Goods Receipt and Goods Dispatch may utilize the same area. This requires
strict disciplines and controls.

In these circumstances, receipt and dispatch of product should be carried out at different times in
the working day. Once again, like in goods receipt, goods dispatch provides an interface with the
outside world. Control can, therefore, be difficult.

AO/HLCP/0186 V3.0
 As with goods receipt, the calculation of space must take into
account the free movement of labor and equipment, including
parking zones for equipment.

It is vital that volumes are accurately anticipated and that adequate

allowances are made for peaks, etc. There must be sufficient
loading bays. As in the goods receipt area, it is often difficult to fully
utilize the height which is available, unlike in the main storage
areas.

As with the goods receipt area, the goods dispatch area is always at
risk of congestion. The control of the waiting vehicles and trailers is most important: hold ups
caused for whatever reason (e.g. shortage of the right sized trailers) can quickly lead to congestion,
as the picking operations will normally have to continue if the day’s work is to be completed.

The tasks to be undertaken in the dispatch area include the following:

 Check notes/goods picked  Confirm load/documentation
 Re-pack/re-palletize  Load vehicle in sequence
 Record batch/serial numbers  Seal vehicle/obtain signature
 Prepare documentation  Arrange vehicle movement
 Label consignments  Open/close shutters or doors
 Compile load
The prime objectives of the dispatch area should be to:
 Ensure that all consignments have been consolidated and packed correctly.
 Ensure that all consignments are held in correct sequence for loading.
 Ensure that all consignments are available for loading into transport vehicles.

The functions of warehouse and inventory management are different. In essence, the function of
warehouse management is concerned with all of the activities which take place in the warehouse, as
described above. The function of inventory management is to manage the stock levels in the supply
chain by managing inventory supply to meet demand.

The functions of warehouse and inventory management may or may not be combined into a single
job. In many organizations, the functions of warehouse manager and inventory manager are
separate. Often, warehouse management has no influence or control over the level of activity in the
warehouse. This is true of both goods receipt and goods dispatch, where the program management
will often influence what is arriving and when, and to where it should be sent. The definition of the
precise function will depend upon the needs and the funding available for the program. For

AO/HLCP/0186 V3.0
example, it is common for the program management to perform the inventory management
function.

For clarity, the functions of warehouse and inventory management are described separately, as
below:

In general, the warehouse management is responsible for the management of all the warehouse
activities described above, in order to achieve the specific objectives of the organization. In doing
so, they are also responsible for ensuring that the policies and procedures of the organization are
followed.

In seeking to achieve the objectives, the warehouse management has three types of resource
available:
 Space
 People
 Equipment

These resources represent a cost to the organization. Therefore, the warehouse management’s job
is to achieve the objectives of the organization at the lowest possible cost.

Warehouse management will typically have the following responsibilities:

 The planning and the day-to-day management of all of the major warehouse activities
(goods receipt, bulk storage, picking, goods dispatch)
 The efficient use of space, labor, and equipment
 Adherence to the organization’s policies and procedures
 The security of the warehouse for the prevention of theft
 Protection of the goods from damage by pests and the weather
 The rotation of stock and the monitoring of stock which is at or near its expiration date
 Maintenance of the building and equipment
 The health and safety of all warehouse staff
 The recording of warehouse activities and the provision of reports for the organization and
for use in reports to donors

In essence, the inventory management’s objective is to meet the demand for humanitarian goods by
ensuring an adequate supply, i.e. balancing supply and demand.

AO/HLCP/0186 V3.0
The diagram illustrates the
relationship between the rate of
supply, the level of inventory, and
Rate of
the rate of demand. The rate of Supply

demand “pulls” the products from

inventory. If the rate of demand
exceeds the rate of supply, the
level of inventory will decline and
eventually it will reach zero.

The rate of supply “pushes” Rate of

product into inventory, and if this Demand

exceeds the rate of demand the

inventory level will increase, therefore, requiring a bigger place to store it.

In the early phases of an emergency situation, there will be a heavy emphasis on the push of
product into inventory, in anticipation of clear, defined needs and of the high demand later. The
level of this “push” activity is likely to be outside of the control of the inventory or warehouse
manager. As the scale of the situation becomes clearer, the “pull” activity will then start to move the
product into the places where it is required, and the level of inventory will stabilize at an appropriate
level. Again, the decision of when to move the goods will likely rest with others.

At the beginning of an aid situation, there can also be issues surrounding donations which “push”
more goods than requested, and which sometimes are not really needed, into the supply chain.
Also, issues can occur in procurement and transport, creating a different level of flow than would be
ideal. For example, head office might be short of funds so that goods cannot be procured until the
funds become available.

This interaction between push and pull activities will create a fluctuating level of inventory, which
poses challenges for inventory management to account for it all and for warehouse management to
store it safely.

The rate of demand will depend on the characteristics of the humanitarian aid situation. Different
situations will, of course, have demands for different goods, but it is likely that some similarity will be
displayed by similar events.

On the other hand, the supply of goods can also vary over time. For example:
 The supply of foodstuffs depends on the timing of growing seasons.
 Manufacturers schedule production in batches in order to minimize production costs.
 Donors make contributions only when funds are available.

Therefore, inventory management’s job is to vary the rate of supply, in order to maintain a stock
level which allows the varying demand for humanitarian goods to be met.

AO/HLCP/0186 V3.0
In doing so there is a balance to be made:
 If the rate of supply is too low, there is a risk that the stocks will be used up and that some
beneficiaries will not receive aid. This can result in a loss of lives and/or increased suffering.
 If the rate of supply is too high, there is a risk that stock levels will rise, which could lead to
overflowing warehouses, the deterioration of product because of being kept in stock too
long, and stock write-offs. It also means that the organization has spent more money than
necessary and/or the donor’s contribution is not being utilized to the best extent i.e. a
financial cost.

Inventory represents a significant cost in humanitarian supply chains. This cost includes the cost of
buying goods from suppliers plus the cost of storing these goods in warehouses. However, there is
also an exceptionally high cost if the goods are not available for delivery to beneficiaries. Of course,
this cost is one of human suffering and, possibly, of lost lives, rather than a financial one. Usually,
this humanitarian cost will outweigh the financial considerations.

Therefore, inventory management must minimize the human cost by optimizing the level of
availability of humanitarian goods for delivery to beneficiaries, and achieve this at an acceptable
supply chain cost.

In order to achieve this balance, inventory management is responsible for the following activities:
 Analyzing the demand for goods and forecasting the demand in the future
 Placing orders with suppliers in order to replenish stock and maintain an adequate stock
level to meet demand
 Monitoring the delivery performance of suppliers and taking action in the case of any
supplier problems
 Monitoring the levels of stock in order to decide what to order, when to order and how
much
 Maintaining stock records and ensuring the accuracy of these records
 Keeping records of these activities and providing reports on inventory management
performance

To operate a warehouse with any degree of efficiency and consistency, it is necessary to define the
procedures which will be used in all activities and the policies which will govern these procedures.
These procedures and policies will normally be documented by the humanitarian organization, and
it is the responsibility of the warehouse/inventory manager to make sure that these are followed.

AO/HLCP/0186 V3.0
The procedures document defines how the activities in the warehouse will be carried out, and it can
be thought of as the best practice of the organization. The advantages of creating and using a
procedures document are as follows:
 The effectiveness and efficiency of all warehouse operations across the organization can be
controlled.
 By reasons of standardization, staff can be trained more quickly and efficiently.
 The performance of warehouse operations across the organization can be compared.
 The procedures can be agreed on and aligned with other functions in order to optimize the
performance of the whole organization.
 The procedures provide visibility of the operations for donors.

However, in creating such procedures, care must be taken to avoid constraining the use of local
initiative which might be required to deal with local conditions. This is generally achieved by limiting
the level of detail which the procedures document defines; therefore, allowing more flexibility and/or
by arranging dispensations to allow departure from the procedures, in order to optimize local
performance.

The procedures will normally cover the following activities:

 The method of stock checking
 How to deal with stock losses
 How receipts will be controlled
 How inspection will be undertaken
 How rejected material will be controlled
 How issues will be controlled
 How to deal with unwanted material and scrap
 Stock recording

The document will also typically contain copies of standard documents and forms to be used in the
warehouse activities, such as stock record cards and a goods receipt register.

Policies define the general conduct of the warehouse operation. Examples of the types of policies
that organizations will define are as follows:
 Health and safety
 Human resources management
 Security
 Pest control
 Warehouse maintenance and cleaning

AO/HLCP/0186 V3.0
  Quality control
 Record keeping and reporting

As with procedures, policies are generally documented, and copies are kept at each facility for
reference.

AO/HLCP/0186 V3.0
In this section, we will explore the basic requirements which govern the selection and
design of warehouses, and the design and management of warehouse operations.

The design and management of a warehouse operation is driven by the purpose and the need for
that operation.

First, the position of the warehouse in the humanitarian supply chain will affect the requirements for
the operation. A permanent global warehouse can be set up and operated, much like any
commercial operation, and it can take advantage of the current best practices, equipment, and
systems in warehouse management.

A temporary field warehouse, however, is unlikely to be able to take advantage of the same kinds of
equipment and systems which are available to a permanent global warehouse. Simplicity and
flexibility, combined with a heavy dose of common sense are likely to be the main features of a
successful approach to managing such an operation.

However, there is a range of factors which must be taken into account in any kind of warehouse
operation:
 The storage time requirements, i.e. short term or long term
 The quantity of goods to be stored
 The characteristics of the goods to be stored
 The need for other activities, e.g. packaging, labeling

The characteristics of the goods to be stored will have an impact on the selection of a new
warehouse facility, the design of the layout, the selection of any equipment, and the working
methods. The key characteristics, which should be considered, are as follows:
 Volumes of goods to be stored i.e. tons, cubic meters
 Size and weight of the goods in their packaging
 General environment

AO/HLCP/0186 V3.0
  Temperature sensitivity
 Type of packaging
 Hazardous materials
 High-value or easily stolen goods

The volume of goods to be handled includes:

 The frequency and size of deliveries to be received at the warehouse
 The quantity to be stored
 The frequency and size of dispatches to be made from the warehouse

These factors will have an impact on the space required for goods receipt, bulk storage, and goods
dispatch activities; and also on the manpower requirements to operate the warehouse.

In most cases, the bulk storage area dominates the warehouse space, usually taking up around 80%
of the total floor area. This is mainly determined by the size, weight, and quantities of the goods to
be stored.

Of course, some goods are relatively light, but take up more space. Others are small but heavy.

As a guide, the table below gives the average storage volumes in cubic meters per metric ton for a
range of goods.

3
Vegetable oil in tins 1.7 m
3
Flour, rice, sugar 1.5 m
3
Grain 2.0 m
3
Blankets in pressed bales 5.0 m
3
Canned goods 1.5 m
3
Milk powder in tins 3.0 m
3
Blankets in un-pressed bales 10.0 m
3
Tents 5.0 m
3
Clothing 10.0 m
3
Kitchen utensils 4.5 m
3
Medical supplies (average of miscellaneous) 4.0 m

Source: ICRC Logistics Field Manual

In calculating the volume of bulk storage area which will be required, we have to take into account
the fact that we will require access to the goods for storage and retrieval, and that the storage
equipment (if used) will also take up space.

AO/HLCP/0186 V3.0
 It is important that the warehouse environment provides conditions which ensure that there is no
deterioration in the quality of goods during storage. While temperature is an important
requirement which is dealt with below, there are other, environmental considerations.

One of these relates to keeping the goods dry. This can pose challenges when trucks have to be
loaded outside of the warehouse building. Humidity can also cause deterioration in the goods.

When goods are received in bags and the temperature is high outside, the goods can increase in
temperature. This is particularly true if the goods are left in the sun for an extended period of time.
If the bags are then stacked in the warehouse, the heat generated in the confined space can lead to
spontaneous combustion. Careful monitoring is, therefore, required.

Other goods can produce dust which, in the absence of appropriate ventilation, can create an
explosive environment.

Some goods can also deteriorate if they are exposed to sunlight for too long.

Medical warehouses pose special requirements. They have to protect the items from physical
damage, moisture, excessive heat or cold, sunlight, dust, dirt, and pests. The cleanliness in the
medical warehouse is of even more importance than it is for other commodities.

All of these restrictions can be accommodated if appropriate planning is done. However, there will
be times that the operating environment is chaotic; usually as activity levels are high, placing space
and equipment under extreme pressure. It is at these times that the condition of goods can
deteriorate quickly, often unmonitored, and with the subsequent impact of severe problems further
down the supply chain.

There is one special requirement for ventilation which relates to the area used for recharging
battery-powered handling equipment. During the recharging process, hydrogen gas is produced
which, in a confined space, is highly flammable with frightening consequences! This also suggests
that there needs to be a strict, non-smoking policy observed in the warehouse.

Storage recommendations for food and non-food items are given in the table below.

Grain (cereal) Dry, non-infested, Dry, cool, ventilated Approx. 6 months Approx. 2 x Check for moisture
without impurities, on pallets, relative level, odor, and live
moisture content: humidity of the air: parasites.
13.5% maximum 70% maximum
Flour (cereal) Dry and not lumpy As above 6 months Approx 1.5 x As above.
to touch, sweet maximum
odor, moisture
content: 14%
maximum

AO/HLCP/0186 V3.0
Canned Products Can neither rusty To be stacked on 6-12 months – see Approx 1.5 x Distorted cans
nor bulging, cartons pallets if possible. expiration date (bulging lids) or
in good condition, Be careful of height. gases whistling out
no leakage, when can is opened
expiration date. signify contents are
inedible.
Blankets Dry, packaging Dry, ventilated, for 8 – 10 x Damp blankets must
undamaged. stacking. be dried
immediately.
Watch for moths.
Clothing Package, Dry, ventilated, for 7 – 10 x As above.
cleanliness. stacking.
Milk Powder in Can neither rusty For stacking. 18 months 3x -
Tins nor bulging, cartons
in good condition,
no leakage,
expiration date.
Powdered Dry, clean odor, Dry, cool, 1 year 2.5 x Powdered skimmed
Skimmed Milk in ivory color. ventilated, in shade. milk can be kept for
Bags 2-3 years in the dark
and at a
temperature of
about 15C.
Powdered Full Dry, clean odor, Dry, cool, 8-9 months 2.5 x Milk powder
Cream Milk in ivory color. ventilated, in shade. sometimes
Bags becomes hard. This
does not alter its
value provided that
its color and odor
do not change.
(Also valid for
skimmed milk
powder).
Crystalized Sugar Dry, granulated, no Dry, ventilated, for Several years 1.5 x Sugar quickly
lumps, shiny stacking (see absorbs humidity.
crystals. cereals) Dry the sugar in
loose layers.
Damp sugar in
blocks is fit for
human
consumption.
Tents Dry, packaging Dry for stacking. - 5x Damp patches to be
undamaged. dried.

Source: ICRC Logistics Field Manual

AO/HLCP/0186 V3.0
Some goods require temperature-controlled storage in order to prolong their useful life. Indeed,
most goods are likely to be degraded or damaged by extremes of temperature. The main
classifications of temperature requirement are chilled, frozen, and ambient, and many goods have
specific storage temperature ranges which are defined by the manufacturer.

Chilled and frozen goods obviously require special refrigeration equipment, and they should be
handled with care. Care should also be taken with the ambient area of the warehouse to avoid
temperature extremes, e.g. ensuring adequate ventilation and avoiding excessive exposure to direct
sunlight.

Examples of temperature-sensitive goods include many medicines and foodstuffs. These goods
must be kept within a certain temperature range from the time of manufacture to the point of
consumption. As an example, many vaccines need to be kept at a temperature between 0 and 8
degrees Celsius. If temperature limits are not respected it often means the vaccine will lose its
efficacy or that original expiration dates cannot be guaranteed. In such a warehouse, there must be
a clear temperature procedure which checks temperature twice per day. Also, where high stacking
of goods is performed, temperatures need to be monitored both at the top and the bottom. The
warehouse must be equipped with a maximum/minimum thermometer.

A supply chain which deals with such temperature-sensitive goods is known as a cold chain. In a
cold chain, measurements are taken and checks are made, to confirm that the goods have remained
within the specified temperature range throughout the chain. Cold chain defects are a frequent
cause of problems in immunization programs.

From a warehouse perspective, the vulnerable part of the cold chain is the unloading and loading
operations. Often, these involve moving goods from one area to another, which poses a challenge
to ensure that the product stays within its allowed temperature range.

Standard storage temperatures are normally defined as follows:

 Deep freeze: below -15C
 Refrigerator: +2ºC to +8ºC
 Cooled: +8ºC to +15ºC
 Room temperature: +15ºC to +25ºC

Packaging types include boxed, bagged, bulk, and loose. The type of packaging will have an impact
on the way in which the goods must be handled and stored. Therefore, the variety of packaging
types will have an impact on the variety of handling methods and equipment required. It will also
have an impact on the design and layout of the bulk storage area, including the storage method
(block stacked, binned, racking, etc.) and the access space required for storage and retrieval
operations. If possible, the warehouse manager should liaise with procurement on the specification
of packaging types used, in order to minimize the impact on the warehouse operations.

AO/HLCP/0186 V3.0
This is an area which sees constant innovation in the types of materials available. In particular, there
are many different ways of restraining and protecting product which is palletized. The most
common of these is using stretch wrapping or shrink-wrapping. Shrink-wrapping uses either heat or
vacuum technology to “shrink” a giant plastic bag to the shape of the product.

Stretch wrapping is like the cling film that we use at home. If a pallet is wrapped around the top
layers with this, it prevents movement in transit.

Other forms of restraint are adhesive tape or metal banding. Care needs to be taken in using all of
these, as they can damage the goods if used inappropriately. They can also produce a hazardous
work environment if not disposed of correctly.

Not only are these packaging materials important for protecting the goods while they are in the
warehouse, but also for their onward journey to their destination. Out of sight should not mean out
of mind! Damaged-in-transit goods usually end up back at their source, creating even further
problems for the warehouse manager.

Shrink wrapping the pallets - http://creativecommons.org/licenses/by-nc-nd/2.0/

Hazardous materials, such as pesticides, compressed gases, and fuels, require special handling and
storage. They will normally be stored in an area separate from other materials, and extra space will
often be required. Ideally they should be stored in a separate building.

It is the responsibility of the warehouse manager to ensure that the operation complies with local
rules and regulations. As ignorance is no defense, the manager must proactively identify those
regulations that apply to the operation and take steps to ensure that the operation and all its
employees comply with these regulations.

AO/HLCP/0186 V3.0
The following is a list of regulations that are often encountered:
 Employment regulations  Storage of dangerous materials
 Health and safety rules  Storage of drugs
 Rules that govern the operation of forklift trucks  Building regulations
 Food hygiene  Financial accounting rules
Regulations on these and other subjects vary around the world, and the warehouse manager must
not assume that rules in one location also apply in others.

Whether selecting a location for a temporary building, or selecting one from a number of existing
buildings, there is a range of factors to consider when deciding on the location of a new warehouse
facility:
 Proximity to ports of entry and beneficiaries  Access
 Existing buildings  Services
 Security  Temporary warehouses
 The context  Bonded warehouses
 Site condition

First, consider the geographical location of the port of entry to the humanitarian region, compared
to the location(s) of the beneficiaries of the aid. If the beneficiaries of the aid are geographically
close to the (air) port of entry to the humanitarian area, then the warehouse location should
obviously be in the same area. However, if the beneficiaries are distant from the port of entry, we
must consider the warehouse location, in order to minimize the total costs and to maximize the
effectiveness of the transportation links to and from the warehouse.

The simplest method for choosing a location, from this point of view, is to plot the port and
beneficiary locations on a map and to use common sense in deciding the best location.

Sometimes, however, a common sense or analytical approach might not produce the best option.

Frequently, major disasters can put port operations under extreme pressure, with the volume of
activity significantly exceeding what they were designed to handle. In such cases the obvious port of
choice could lead to a bottleneck situation, and a consequent breakdown in the supply chain.

Ideally we want to choose a location which minimizes the total time that the goods take from their
source to their ultimate destination. This might entail selecting a site away from the usual
transportation routes, which results in an increase in movement time, but offset by quicker port
clearance.

In such cases it can, therefore, be helpful to consider all the options, even those which wouldn’t
make sense under normal circumstances.

AO/HLCP/0186 V3.0
Where the situation dictates that an existing building should be used for the new warehouse facility,
there are a number of factors to consider when assessing suitability.

The construction should be generally sound, waterproof, and well-ventilated. The inside walls
should be clean and painted, preferably white. Check for broken windows and doors, and make
repairs where necessary. Look for signs of pest infestation, e.g. droppings and holes in the walls or
floor.

The available space should normally be on the ground floor, with doorways which provide adequate
access to the warehouse space, taking into account the method of moving the material which will be
used.

An assessment should be made of the warehouse size and shape and, therefore, its capacity to
accommodate the quantity of material which will be handled. Given a choice, it is usually better to
select a larger space rather than a smaller one: cramped conditions are difficult in which to operate
and keep tidy, and increases in stock or activity may be difficult to accommodate.

The floor area should be flat and made of a stable material, ideally concrete. The floor must be
capable of supporting the weight of the material to be stored and, if applicable, the weight of any
vehicles which will enter the building. Floor capacity will normally be expressed in kilograms per
2
square meter (kg/m ). A typical, ground-floor building will have a floor capacity of 1000 – 3000
2
kg/m , but floors with basements or sanitary installations underneath will generally have a lower
capacity.

If food is to be stored, it may be necessary to have the building disinfected or fumigated by a

professional cleaning company.

Check the ownership of the building and assess the sensitivity of this, considering all of the parties
involved in the humanitarian situation. This is especially important in a conflict situation, where the
organization’s neutrality may be compromised.

Security is a very important aspect of a warehouse facility. The security perimeter of the building
and compound should provide adequate protection for the warehouse contents, vehicles, and the
equipment used at the facility.

Consider the suitability of the location to be guarded and/or protected by physical barriers, such as
walls or fences. Electronic security systems or guards should also be employed, as necessary and
available.

Safety begins with a clean work environment, so it is important to have cleaning tools and materials
(e.g. mops, buckets) on-hand as well as material for absorbing and cleaning up spills, (e.g. saw dust).
Warehouse staff should be trained on how to operate machinery, and minimum safety equipment

AO/HLCP/0186 V3.0
to wear, (e.g. safety boots). Training in how to properly lift and move heavy items should also be
provided to minimize the risk of injury to staff.

Where appropriate, signs in the warehouse should be in local languages and should include
diagrams and illustrations to assist those who may be illiterate. Finally, appropriate, additional safety
equipment should be available in the warehouse, including first aid kits and flashlights (torches).

In addition to physical security, we must also consider measures to protect the building in the event
of accidents, such as fire. The warehouse must be equipped with fire extinguishers, sand buckets,
and other, appropriate equipment. It is important to refer to local legislation. The local fire brigade
is usually a source of good advice. Warehouse staff must be trained how to use such equipment.

There may be political, cultural, or security considerations to take into account when selecting a
location. For example, if a low-profile operation is required in the context of the humanitarian
situation, then a highly visible warehouse building is likely to cause problems. Difficult security
situations may require a concentration of humanitarian operations, and may restrict the choice of
location. Therefore, it is important to gain a good understanding of the context before making a
decision on the warehouse location.

It is also important to consider the condition of

the site during the whole of the year. In particular
this relates to access into and around the site. For
example, a site might look fine in the dry season,
but during the wet season it could become
flooded or impossible to move vehicles around.

In the photograph, while it may be possible to

conduct operations on this surface in the dry
season, it will be much more difficult when it is
wet.

Consider the access to the site and make sure that suitable vehicles can reach the site easily and
safely. Also ensure that there are adequate links to the local transport infrastructure i.e. roads,
ports, airports.

Also consider the access to services such as water, electricity, and communication links.

AO/HLCP/0186 V3.0
This is a general list of factors to consider. In any particular humanitarian situation, it is likely that
some of these factors will be more important than others. In making any decision on the warehouse
location, decide which factors are most important, and then select the location which best meets the
requirements of the particular situation.

Emergency or short-term needs can be met using a range of temporary storage locations, including:
 Bulk storage containers  Ships’ holds
 Railway wagons  Tent or tarpaulins
 Barges
However, many of these types of accommodation
are likely to be located at transport hubs, such as The photographs here show tent, hospital,

ports or railway heads. Therefore, they are often Rubbhall 5.5 x 16m, steel.

expensive to use and should be used for as short a

time as possible.

Special precautions against solar heating must be

taken with closed containers, such as railway
wagons. Ensure that there is adequate shading
from direct sunlight.

Check barges and ships’ holds to see that bilge

water is kept at a low level and check that hatch
covers are waterproof.

Tents should only be erected on a raised, prepared

surface, ideally a concrete slab, or a layer of gravel,
surrounded by ditches for water drainage. Place
goods on pallets or ground sheets and cover with
plastic sheets for added protection.

So, although these types of temporary locations can

meet short-term needs, there are significant problems associated with them and it is usually better
to seek a suitable building, if possible.

The photograph above shows a temporary warehouse in the initial stages of construction:

Bonded warehouses can be used for temporary storage where goods enter a country, but are due
to be re-exported to another country, thus avoiding the payment of import duty.

The local government must authorize a bonded warehouse and there are usually strict controls to
be aware of and followed. In addition to bonded warehouses, local governments may also create a

AO/HLCP/0186 V3.0
specially designated free zone. This is a controlled area where a number of bonded warehouses are
operating.

Therefore, the organization must have a good relationship with the local government and the
warehouse operation must be carefully managed and controlled.

A bonded warehouse can be an expensive operation, but this cost can be traded off against the
import duty which would otherwise be paid.

In emergency situations, where a temporary warehouse is required, these are normally leased, and
not purchased.

In this situation, there is often a shortage of suitable buildings or locations for warehouse space, and
this can often cause the costs to increase significantly. Therefore, it is often necessary to utilize
temporary warehouse space for as short a time a possible.

Nevertheless, care must be taken with the drawing up of the lease agreement with the owner. The
following items must normally be included and checked in such a lease agreement:
 The cost of the leased space
 The period of the lease agreement
 The period of notice required for terminating or extending the lease period
 Confirmation of the existence of property insurance, covering third-party, fire, water
damage, window breakage, etc.
 Details of any security arrangements
 A detailed inventory of any equipment, fixtures, and fittings included with the building and a
detailed description of their condition
 Confirmation of either sole tenancy or details of other tenants
 Information about the ground or floor strength per square meter
 The weight capacity of any equipment such as forklifts, racks and shelves

Finally, in situations where neutrality is important, care must be taken to establish the actual owner
of the building, which might be different from the leaser of the building, e.g. the military, religious
groups or government.

AO/HLCP/0186 V3.0
So far in this unit, we have explored what a warehouse is, and why we need one. We
have also considered some general requirements for its design and the characteristics of
goods stored within. In this section, we will consider the design of the warehouse in more
detail.

In the first module we considered the key work phases in a warehouse. These were:
 Goods receipt
 Put away (placing goods in the bulk storage area)
 Picking of goods from the bulk storage area
 Goods dispatch

Planning these work phases involves deciding on the timing and sequences of these activities, which
must be done taking into account the constraints and the limitations of available time and
resources.

The timing of the arrival of goods depends on the scheduling of the inbound transport operation.
This inbound transport is sometimes referred to as primary transport. Often, the warehouse is the
staging post between primary and secondary transport. Primary refers to movement, usually in
bulk, between one or a few supply points to one destination. Secondary transport then connects
the warehouse to the next stage in the supply chain, and a typical feature of this is the delivery of
smaller quantities to several locations.

Ideally, this schedule would be known in advance, which would allow the resources and equipment
necessary for goods receipt activity to be planned and made available. However, we have described
situations in the first two modules which can lead to uncertainty in this information.

AO/HLCP/0186 V3.0
Once the goods have been unloaded, checked, and prepared for storage, they must be moved into
the storage area. They will then stay in storage until they are required for dispatch.

This activity must be done in a timely manner to ensure that the goods receipt area is cleared
quickly, thus preventing bottlenecks, and so that the goods are placed into a more secure location.
Once the product is in the storage area it is likely that the environmental conditions will be more
appropriate for its safekeeping.

When the goods have been put away, their location must be recorded so that they can be found
again.

The picking activity must be timed in such a way that consignments are available in time for the
goods dispatch activity. Any delay in picking will have an impact on the transport of goods to the
beneficiaries. Also, if picking takes place at the same time as put away, there is a risk of congestion
in the bulk storage area, which may slow down operations and increase health and safety risks.
Finally, this activity must be planned in such a way that avoids a buildup of goods in the goods
dispatch area which may cause congestion.

The timing of goods dispatch operations must be

linked to the secondary transport schedule. As
stated above, there is also a dependency on the
timing of the picking activities. Finally, if goods
dispatch and goods receipt overlap, there is a risk
of congestion in the vehicle docking/parking area
and goods receipt/dispatch area, depending on
the layout of the warehouse facility.

The objectives of planning the work phases are:

 Minimize the total people resources
required by Julien Harneis (http://creativecommons.org/licenses/by-
sa/2.0/)
 Minimize the total handling equipment
and time required
 Optimize the use of space in the warehouse
 Minimize unnecessary handling of goods
 Minimize congestion and health and safety risks

AO/HLCP/0186 V3.0
Any equipment selection for warehouse operations must achieve a balance between the operational
efficiency and the cost of the equipment. At the same time, there is a need to meet the overall
requirements of the operation, within the constraints imposed by warehouse size, warehouse
layout, products, and processes.

However, in some circumstances, the use of handling equipment may be traded off with the use of
manual labor. Many humanitarian organizations prefer to make use of local labor, rather than to
use handling equipment. This provides some employment as part of managing relations with local
people. Also, in many parts of the world, local labor is inexpensive compared to the cost of handling
equipment. Local labor also may not have the skills and licenses required for handling equipment
and, finally, the warehouse itself may not be able to accommodate the equipment.

The other benefit from using labor is that it tends to be more flexible and does not require
specialized maintenance. If an operation becomes dependent on mechanical handling equipment,
then it must ensure suitable reliable maintenance facilities can be provided.

In considering handling equipment, the decision process revolves around the key principles of
materials handling:
 Simple equipment tends to be more reliable and is easier to maintain
 Moving larger loads tends to be cheaper and faster
 Standardization (using a small number of different types across the organization) reduces
the costs of training and maintenance
 Mechanization improves efficiency, but at the expense of flexibility
 Gravity is cheap

In the selection of handling equipment, the objectives will be to:

 Reduce unit material handling costs
 Reduce handling time
 Reduce overheads
 Conserve/utilize floor space
 Ensure workers’ safety

The range of materials handling equipment has developed significantly over the past few years. It is
now possible to obtain a piece of equipment to meet almost any requirement.

It must be recognized that, with advances in technology, the sophistication in equipment tends to
increase the cost.

The selection process must be one which recognizes the requirements to do the current job,
together with a longer-term view that it will meet future requirements.

AO/HLCP/0186 V3.0
Handling equipment may be classified under the following headings: Sack Truck
 Horizontal movement
 Storage and retrieval
 Order picking

The main equipment options in each classification are described below.

The selection of horizontal movement equipment depends up on the

volumes and the variety of lines to be handled. As volumes and the
complexity of the operation increases, the type and sophistication of
equipment will increase accordingly.

Hand Pallet Truck

The simplest and cheapest of handling equipment,

these may be used to move loads of up to 100 kg
on smooth and level surfaces.

These may be used to move loads of up to 2000 kg

over short distances on smooth, level floors. When
goods are delivered palletized in containers and
there is no loading dock available, a HPT is the only
way to move the pallets inside the container.

Motorized Hand Pallet Truck

If the volume of goods to be moved is large and/or

the area of operation is large, a motorized hand
pallet truck could be considered. Retraining is
minimal - hand pump for lift and a motor in the
wheel provides traction. Maneuverability is easier
and the truck can cope with gradients.

These will cope with a higher rate of movement,

longer distances, and inclines.

AO/HLCP/0186 V3.0
The choice of style, capacity, and fitments for powered trucks depends on goods moved, terrain
covered, and the number of movements to be made in a working day. There is a range of standard
equipment and workshop modifications to cover virtually any situation.

Both offer considerable maneuverability and can work in small spaces with unrivaled stability. This is
a long-term consideration if growth is likely to involve an increase of fixed equipment: more racking,
more machines, or frequent loading and unloading of vehicles. Both trucks only require the
simplest upgrading of skills for operators.

Stand-On Truck Rider Seated Truck

These offer the greatest value

where speed, long distances, and
continuous movements are
required. Training is necessary
and represents a re-grading of
operators. Careful supervision
must be maintained when driving
amongst pedestrian workers.
Both these and stand-on trucks
may be used as tow trucks.

In a warehouse facility, storage capacity is Counterbalance Truck

improved by making use of headroom by stacking

one pallet on top of another. Generally, the
equipment used is the counterbalance forklift
truck. Such a truck will carry palletized goods to
and from racks 5-6 meters high but will require
aisles of 3 or more meters in width.

For outside storage and movement, this type of

truck is unequaled and its capacity range can
extend to large lifts such as containers. For use
on rough terrain, 4-wheel drive versions are available.

AO/HLCP/0186 V3.0
Reducing the aisle widths to make better use of the available floor space may increase storage
capacity. The normal width of a narrow aisle is approximately 2 meters and adds approximately
33% to storage capacity. This may be achieved in two ways:
 Support arm stackers
 Reach trucks

Support Arm Stackers can be walk-with, where maneuverability Support Arm Stacker

is critical or there is an incidence of other pedestrian traffic, or

ride-on, where speed and distance are the criteria. A further
option is to decide how the operator will ride - standing or
seated. If the operator needs to get on and off his machine
frequently, the stand-on machine is generally preferred. This
truck is also rather more maneuverable. However, if the travel
distances are lengthy and the workflow is steady, the sit-on
version is less tiring, though some upgrading of skills is required
as against walk-with machines.

This option has an additional advantage in that reach

Rider Seated Truck
trucks can lift heavier loads higher than support arm
stackers can, thereby providing extra flexibility in terms of
the unit loads that may be handled.

Reach trucks have the advantage over counterbalance

trucks in that they have a smaller turning circle. This allows
the use of narrower aisles and, thus, increases available
storage capacity.

It is possible to increase storage capacity further by

adopting an ultra-narrow aisle configuration. Width is
reduced to just over one meter and the racking height may
be raised to some 10 meters to suit the capabilities of the
equipment used. The basic choice is between Free Path
trucks, giving an additional 50% space availability over the
Reach Truck option, and Fixed Path cranes, which offer
even more storage capacity.

AO/HLCP/0186 V3.0
The factors to consider when selecting storage equipment are similar to those which are relevant
when selecting handling equipment. They primarily consist of a series of decisions which “trade-off”
the use of storage space against the handling time. Recall that maximizing the use of space and
minimizing handling time were two of our planning objectives. These two objectives work against
each other. As we improve the use of space, it will tend to increase handling time. Conversely, as
we decrease handling time, the use of space will deteriorate. As a consequence these decisions
have to be carefully considered. Typical examples of factors to consider are:
 The extent to which the product may be stacked
 The size of the warehouse
 The height of the warehouse and the possibility to make use of the space up to the ceiling
 Nature/fragility of the product
 Potential problems of stock rotation
 Speed of picking and movement
 The range of products
 The time span over which the warehouse is expected to operate i.e. permanent or
temporary

Storage equipment options, and the types of equipment in each, are covered below.

Goods are stored in silos or in piles on a floor or yard.

In binned storage, a cell in a racking or shelving system is allocated to a particular product. A

considerable variety of designs of either plastic and steel hook-on, or freestanding containers are
available.

The containers vary in size, color, and shape, and most have semi-open fronts. The use of such
equipment makes it possible to present a large variety of small components on a very compact face.

Shelving is normally used to give a very flexible system for small items. There are many different
types of shelving, most of which is adjustable with different spaces. Shelved storage will sometimes
be used with small tote pans for small manageable units.

AO/HLCP/0186 V3.0
This is the most common method of storing large
quantities of products. The goods are packed in unit
loads and stacked to their maximum safe height, Right Way…
which depends on the weight and stability of the unit
packages.

Wherever possible, stack goods on pallets (or

equivalent) and not directly on the floor. Be sure to
avoid contact between the goods and water or floor-
level humidity. Where the number of pallets is Wrong Way…
insufficient, prioritize bagged foodstuffs rather than
canned or bottled products, which are less
susceptible to water or humidity damage. Where no
pallets are available, temporarily stack bags on
plastic sheeting.

To avoid dampness and to ensure accessibility, do not stack goods directly against walls, pillars, or
partitions. Leave a corridor of about 1.2 m (also called a fire corridor) between the stacks and walls
and between the different storage stacks. Most stacks will be built using the standard stacking
method illustrated below, in which each succeeding layer of a stack contains an equal number of
packages, be they boxes or bags. Note that bagged goods are stacked in alternate, interlocking
layers. Employing a standard stacking method saves storage space, keeps packages from being
damaged and stacks from toppling over, and facilitates handling and counting, which helps to
reduce losses due to damage and theft.

In general, few items should be stacked higher

Pyramid stacking method when > 2.5 m high:
than 2.5 m to avoid damage to the goods or the
risk of the stack toppling over. However, should
this be unavoidable, the pyramid stacking
method, as shown in the diagram, should be
employed.

The actual stack height will be affected by the

type of packaging; boxes and jute bags stack
higher than woven polypropylene (PP) bags,
which have a tendency to slide. When stacking
cartons, ensure that the lower packages are
neither crushed nor torn.

Some commodities, such as those packaged in tins and plastic bottles, have significantly lower
restrictions in terms of maximum stacking heights. In addition to height restrictions, oil packages
frequently indicate a recommended maximum number of rows for stacking. Check the instructions

AO/HLCP/0186 V3.0
on packaging, where they exist, or consult with the supplier of the goods for information on
maximum stacking heights.

Source: Warehouse manual, 2008. IFRC.

© International Federation of Red Cross and Red Crescent Societies

The ability of the forklift truck to lift heavy loads to heights in excess of 6 m necessitated the
development of racking which could not only carry the imposed loading, but also withstand
accidental misuse by the forklift truck. Adjustable beam racking has three main components: slotted
uprights formed into frames, beams with connectors that allows quick fitment to frames, and base
plates for floor fixing and load spreading.

The work methods used in a warehouse depend on the phase of activity they relate to. You will
recall we have four phases:
 Goods receipt
 Storage
 Picking
 Goods dispatch

If the warehouse manager has some control and visibility of the goods delivery schedule (pipeline),
the goods receipt operations can be planned and managed to ensure a smooth flow of goods into
the warehouse. However, in many situations, the warehouse manager has very limited control and
visibility of goods deliveries. Therefore, goods receipt operations must be flexible and adaptable.

AO/HLCP/0186 V3.0
The prime objectives of the receiving area should be to:
 Receive materials/goods from internal/external suppliers, unload the vehicle as quickly and
efficiently as possible, and make available for storage
 Check the quantity, type, and condition of the materials/goods are as specified in the order
 Make provision for any quality control activity required

The factors that will influence the level of labor requirements are:
 The frequency and size of deliveries
 The methods used to receive the goods and make them available for storage

The total volume of deliveries is related to the demand which is being met for humanitarian goods
by the organization. The timing of deliveries depends on the transportation scheduling. Both of
these factors should be taken into account when planning the goods receipt operations.

The goods receipt work methods depend on the following factors:

Manual unloading by individuals or groups is

affected by weight and size constraints and by
any requirement for onward movement to
storage locations, e.g. palletizing within the
warehouse. If palletizing is required and
undertaken within, or at the rear of a vehicle,
equipment required for movement between
the vehicle and in the receipt area will be
required.

By Peter Casier (http://creativecommons.org/licenses/by-nc-nd/2.0/)

If goods are already received stacked on pallets or in units suitable for mechanical handling, side- or
tail-loading must be considered.

A variety of unloading docks are available as an alternative to unloading at floor level. These will be
part of the assessment of equipment required to support the warehouse operation.

The final component is the range of tasks to be carried out covering both the physical and
administrative activity.

AO/HLCP/0186 V3.0
A typical list of such tasks is as follows:
 Open/close shutters or doors
 Booking in of vehicle
 Park/unload instruction
 Calling in vehicle for unloading
 Document checking
 Un-sheeting/unsealing vehicle
 Contents check
 Offloading
Select those tasks that are relevant to the operation being planned.
 Break down pallets containing mixed
goods into separate items
 Goods/material check for
quantity/type/damage
 Quality control
 Sign documents for receipt
 Load goods onto pallets
 Label materials/goods/pallets
 Enter stock/advise receipt

Bulk storage will normally be the major or only storage area in a humanitarian warehouse. Some
warehouses may require a picking area where a smaller quantity of all goods is made available for
easy access. A picking area is more typical in a health or medical warehouse, with many different
items. In these cases, goods may go straight into the picking area, but this will only be in times of
shortage or when there is a special need.

The number of lines will determine strategy for the size and operation of the bulk store. There are
circumstances when the bulk area will be located immediately above, or adjacent to, the picking
area.

Generally, the bulk area will be the main and only area, separate from picking, if it exists, and the
area in which all goods received will be held for varying lengths of time.

Once again, the labor requirements will be dependent upon the methods and processes employed.
The flow of materials/goods from the receipt area in terms of volumes, frequency and content, will
determine the basic requirements, together with the handling factor in terms of manual or
mechanical movement.

The other main factor to consider is the average distance traveled when moving through the bulk
storage area. The larger the area, the longer it will take to move goods into and out of the area and
the more resources will be required for a given workload.

Therefore, the layout of the bulk storage area and decisions about where to put the goods in that
space will have an impact on the total resource requirement.

AO/HLCP/0186 V3.0
The tasks concerned with the activity include:
 Obtain location instructions  Obtain replenishment instructions
 Move to location  Replenish picking area
 Record locations used  Report/remove damaged goods
 Place materials/goods in location  Return to pick up point
 Consolidate part pallets  Report actions
 Move/tidy pallets

Picking involves the selection of products from the bulk storage area to form consignments for
transport to the next stage in the supply chain and, ultimately, to the beneficiaries.

The tasks concerned with order picking include:

 Collecting picking documents which define the products and quantities to be picked
 Collect any required handling equipment
 Locate the first picking location
 Check and pick appropriate quantity
 Travel to subsequent picking locations
 Advise discrepancies/damaged goods
 Travel to sorting, consolidation, packing, and dispatch area
 Advise replenishment requirements
 Complete and pass on documentation

In planning picking operations, there are three things to consider:

 Picking method
 Picking technique
 Picking path

There are 3 general categories of picking methods, each described below.

L O W-L E VEL The picker operates from floor level with the goods to be picked easily
P IC K IN G available. This will be either at ground and/or first storage level.
The picker is often supported by some form of manual or mechanically
operated vehicle, e.g. pallet truck, roll cage, etc., in order to pick on a
continuous basis. In other cases, labor is employed to manually pick and move
the goods.

AO/HLCP/0186 V3.0
 HIGH -L EV EL The picker operates with different equipment to higher levels within the
P IC K IN G storage area. This can be carried out, both in the bulk storage area, and in an
independent, picking area. In the former case, a balance of work between the
activities and replenishment needs to be carefully planned to avoid congestion
and ensure a safe operation.

S TA TI O N The picker remains at the same place and picks from unit loads which are
P IC K IN G transported to him.
The transportation can be in the form of movable storage racks, conveyors, or
pallets/unit loads placed adjacent to the picker.

There are also 3 common picking techniques against either single or multiple lists.

C O NS IG NM E N T The picker picks a consignment, which is usually placed directly into a

P IC K IN G transporter.
This ensures the minimum of sorting and picking time and cost.
In some cases the picking of multiple consignments into separate transporters
is undertaken, particularly where common items appear on the orders.

L INE P IC K IN G Orders are batched together and the picking is undertaken product line by
product line.
This generally achieves a saving in travel time for the picker, but creates a
requirement for a subsequent sorting operation to complete the process.

ZO NE P IC K IN G The bulk storage area is divided into zones and pickers work separately in
these zones. The greater the number of zones, the greater the degree of
sortation and consolidation of consignments at a subsequent stage in the
process.

There is a need to determine the type of picking path to follow.

The objective in planning the picking path is to minimize the travel distance for the picker. In order
to achieve this, the order of the items on the picking list should follow the sequence of storage
locations in the storage area. This will help to ensure that the performance of the picker is
controlled and optimized.

Therefore, the labor requirement for picking of goods will depend on the following factors:
 The positioning of picking locations
 The flow and pattern of work to meet dispatch schedules
 The use of any handling equipment

AO/HLCP/0186 V3.0
  The distances traveled to retrieve materials/goods from picking locations

As with the goods received area, the goods dispatch area is always at risk of congestion. The control
of the waiting vehicles and trailers is most important - delays caused for whatever reason (e.g.
shortage of the right sized trailers) can quickly lead to congestion as the picking operations will
normally have to continue if the day’s work is to be completed.

The prime objectives of the dispatch area should be to:

 Ensure that all consignments have been consolidated and packed correctly
 Ensure that all consignments are held in correct sequence for loading
 Ensure that all consignments are available for loading into transport vehicles

The labor requirements to meet the above will be influenced by:

 The volume and rate of consignment dispatch requirements
 The timing and frequency of dispatch vehicles
 The type and method of loading and related equipment

The nature of the operation, whether manual or mechanical, will have a significant impact on the
operational requirements.

The tasks to be undertaken in the dispatch area include:

 Check notes/goods picked  Confirm load/documentation
 Re-pack/re-palletize  Load vehicle in sequence
 Record batch/serial numbers  Seal vehicle/obtain signature
 Prepare documentation  Arrange vehicle movement
 Label consignments  Open/close shutters or doors
 Compile load

AO/HLCP/0186 V3.0
The main spaces which should be planned are the bulk storage area and the areas for
goods receipt, consignment picking, and goods dispatch. It is also possible that space
may be required for the following activities:
 Equipment maintenance and parking
 Charging of equipment batteries, e.g. for pallet trucks
 Refueling of trucks
 Recycling and garbage disposal
 Quarantine for rejected goods, goods to be returned, or items to be destroyed
 An employee rest area
 Washrooms
 Administration office

It is worth keeping these requirements in mind during the planning of the main operating
areas. In this section, we will determine the size requirements for each of the main
spaces as well as the flow and layout of goods.

In the bulk storage area, there are three Plan View of a Bulk Storage Area:
major factors to take into account:
 The space occupied by the goods
and the equipment on which they
are stored.
 The aisles between the goods, for
direct access to the goods
 The gangways, at right angles to the
aisles

Where goods are not palletized, the

space taken up by the goods and any
storage equipment will be determined by
the characteristics of the product, and the
volume to be stored.

AO/HLCP/0186 V3.0
Where goods are palletized, the dimensions of the pallet will be the base factor when goods are
stored within the perimeter of the pallet. If the goods overlap the pallet, the dimensions will apply to
the area occupied by the goods.

The width of the aisle will depend upon the equipment used in the bulk storage area and the
method of operation that is used.

Gangways take up potential storage space but they allow access from one aisle to the next in order
to make it easier/quicker to move around the bulk storage area. The distance between gangways
may also be dictated by fire safety regulations because they may be needed as a way of escaping the
building in an emergency.

The storage module is a useful concept for

determining the size of the bulk storage area for a
given storage requirement. The principle is to
calculate the dimensions of an area which
contains 2 storage locations, plus enough space
between them for access to store/retrieve the
goods, plus space around the outside of the
module for clearance.

To illustrate the concept, let’s consider an

example situation. We have been asked to
determine the amount of space that will be
required to store a consignment of kitchen sets.
The kitchen sets will be received in boxes. The
intention is to store these boxes in a block stack, so that there is access to each stack. The diagram
below shows how part of the bulk storage area might look. A single module is indicated.

The dimensions of the storage module are calculated as follows:

X = (2 x Block Depth) + Aisle Width + (2 x Rear Clearance)
Y = Block Width + (2 x Side Clearance)

AO/HLCP/0186 V3.0
Q: Suppose that the dimensions of the block stacks are 5m x 5m, the aisle width is 2m and the
clearances are 0.1m. What space would be required to house 10 stacks of kitchen sets?

A: First, calculate the dimensions of the storage module:

X = (2 x 5) + 2 + (2 x 0.1) = 12.2m
Y = 5 + (2 x 0.1) = 5.2m
The total floor area to house 10 stacks would be calculated as follows:
Each storage module contains 2 stacks. Therefore, we need space for 5 modules.
Therefore: Floor Area = 5 x 12.2 x 5.2 = 317.2 sq meters

Q: Using the same storage module dimensions and supposing that we have a bulk storage area
of 25 meters by 25 meters, what is the capacity of the storage area?

A: First, decide how to place the storage modules in the space available.
In this space, we can fit 2 columns of storage modules across the 25-meter width.
(2 x 12.2 = 24.4m)
The 25-meter length will allow 4 rows of storage modules. (4 x 5.2 = 20.8m)
Therefore: Capacity = 2 x 4 modules
= 8 modules
= 16 block stacks

Note: The storage module concept can be used for other forms of storage in exactly the same way,
e.g. pallets or shelving.

In situations where you are required to store different goods on pallets or in stacks which are
different sizes, this space planning becomes more complicated. Try to combine goods into size
categories. Each size category could be placed into a zone of the warehouse and the space
calculations performed for each zone.

As an example, suppose we have been asked to store not only kitchen sets, but also bags of wheat
flour, cans of cooking oil and blankets. When we consider the sizes of the four products, we decide
that the cooking oil will be stored in stacks of similar size to the kitchen sets. We decide to store
both of these in zone A of the warehouse and calculate the space requirements accordingly.

Further, we decide that the bags of flour and the blankets will be palletized upon receipt. The pallets
we will use are of the same size for both products. These will be stored in zone B and we perform
the necessary calculations to determine the space.

Of course, having to plan our warehouse like this may mean that we lose some flexibility. Ideally, we
want every product stored on pallets or stacks of the same size so that we can locate anything,
anywhere.

AO/HLCP/0186 V3.0
Sometimes, even if it takes more space, it is also a good solution to store products close to each
other which will likely be dispatched at the same time (for example, food together). Further, when
you are storing products, such as food, it helps to have them in one area so that infestation from
pests can be controlled.

The appropriate aisle width depends on whether

the goods will be handled manually or using
handling equipment.

If handling equipment will be used, the turning

circle of the equipment being used to access the
goods must be taken into account. The turning
circle or aisle width can normally be obtained
from the equipment manufacturer. Since this
quoted width will often be the minimum, it is
often wise to increase it by 150mm so as to aid
speed of maneuvering. When calculating aisle
widths, manufacturers assume that pallets will be
located as far back as possible on the forks and
also that pallets will be placed in storage locations
accurately. Further, they assume that goods will
be placed on the pallet without any overhang.

In a situation where you don’t have access to the

manufacturer’s recommendation for the aisle width, you can estimate it as follows. Place a pallet
which you wish to move/store on the forks of the forklift truck. If it is a four-way entry pallet, ensure
that you turn the pallet in the direction you will be handling it. Then park the forklift so that it is at a
right angle to a wall with the pallet front just touching the wall. Reverse the truck using maximum
steering lock, so that the pallet does not hit the wall. Reverse it until the truck is parallel to the wall.
The minimum aisle width can then be determined by measuring the distance from the wall to the
farthest side of the truck. The diagram below illustrates the process.

Note that this will give you a minimum width and that it would be best to add 150mm, as explained
above, for practical use. If you want room for trucks to pass each other in the aisle, then it will need
to be wider.

It is worth emphasizing that the aisle width will be unique to a particular forklift truck and the pallet
being handled.

If goods are stored on pallets, the main factors to take into account are the size of the pallet being
handled and where four-way entry pallets are being use;, the aisle width will depend on whether the
pallets are being handled on the long side or the short side (pallets are rectangular in shape). If the

AO/HLCP/0186 V3.0
pallets are being handled on the short side, then more space will be needed to withdraw the pallet
from the storage space before turning the handling equipment.

Where two-way traffic is in operation in the aisle, it may be necessary to increase the aisle width to
allow passing to take place.

For shelved products, the approach for designing the layout and size of the storage area is very
similar. Again, the storage module technique is utilized. The width of the aisle will depend on what
activity is to be performed, whether passing will be necessary and on the type of equipment.
Usually, replenishment of shelf space will be by hand and therefore the turning circle of any
equipment being used will not affect aisle width.

Gangways are used to gain access to aisles. They are

basically dead space, and should be kept to a minimum. The
number of gangways is frequently determined by the
requirements of the fire officer to provide fire escape routes.
It is desirable that the racks should not exceed 30-meter
lengths, as truck driver effectiveness decreases, caused by
such things as difficulty in locating pallet positions and
greater distance penalties for choosing the wrong aisle.

There are no specific formulae that can be applied to planning this area.

Type and size of vehicles to be handled will determine whether loading docks will be required and
this will have an impact on the size of the receiving area.

Space requirements for gathering goods, checking, sorting, and quality control, need to be
calculated with reference to the planned number of loads to be handled in any day.

If the goods require quality inspection or testing, then space may be required for this activity, not
forgetting that the goods being inspected must be stored pending the results of the quality checks
before release into bulk storage.

Product characteristics, unit load characteristics, and speed of throughput will determine the type of
equipment needed to handle the goods. Adequate space needs to be provided to allow this
equipment to operate correctly.

The policies established for the arrival times of vehicles will be a factor in determining the number of
unloading bays required.

AO/HLCP/0186 V3.0
The size of the goods receipt area will also be influenced by the associated working methods. If
goods are unloaded and moved straight to storage, a much smaller area will be required than if
goods are held in the goods receipt area prior to movement to storage.

In some situations, it is possible to lay out the warehouse to use the same space for both unloading
and loading.

The advantage of this type of layout is greater flexibility in the use of people and equipment, and a
reduction in the total space required in the warehouse. The disadvantage is the increased risk of
congestion if loading and unloading activities have to take place at the same time.

There are no specific formulae which can be applied to planning this area.

Type and size of vehicle to be loaded will determine whether docks will be required and this will
impact on the size of the dispatch area.

Space requirements for gathering goods and checking need to be calculated with reference to the
planned number of loads to be handled in any day.

Product characteristics and unit load characteristics will determine the type of equipment needed to
handle the goods. Adequate space needs to be provided to allow this equipment to operate
correctly.

The policies established for the departure times of vehicles will be a factor in determining the
number of unloading bays required.

The size of the dispatch area will also be influenced by the associated working methods. If goods
are picked and moved straight to the vehicle, a much smaller area will be required than if goods are
held in a pre-gathering goods area, prior to loading.

The U-flow layout (see Warehouse Flow and Layout, below) allows bays to be used both for
unloading and loading, introducing greater flexibility and potentially reducing the combined total
area.

Where the picking area is contained in the bulk storage area, but still needs to be segregated, the
number of picking slots required will be incorporated into the storage requirement calculation.

Where a separate picking area is envisaged, the number of items to be picked will determine the
size of the pick-face.

AO/HLCP/0186 V3.0
In a palletized environment, the layout of the picking area can be sized, using the storage module
technique. The picking method to be used must be considered, i.e. high-level, low-level, etc. Also,
the chosen picking path will influence the aisle width which will be needed.

If assembly of goods picked using line or zone-picking methods is required, this will require a
suitable area to be provided.

If a kitting operation is required, extra space should be planned for this activity.

Having estimated the space required for the bulk storage and other activities, the next step is to
determine the best way to use the space. The main issues to consider are:
 The layout of the space for all the activities
 The physical location of the products in the bulk storage area
 How the products will flow into and out of the warehouse facility

The objective of defining the flow and layout in the warehouse facility is to optimize the efficiency of
the flow of goods through the different operations.

The stages in the movement are:

 The receipt of goods and sortation
 Storage of goods in the bulk storage area
 Movement of the goods from the bulk area to the picking area
 Selection and reassembly of the goods into loads
 Dispatch of goods

Wherever possible, the objective should be to achieve a smooth and continuous movement through
the process, and to minimize the travel distance from one stage to the next.

The level to which this can be achieved will be directly related to the design, size, and shape of the
warehouse.

The two preferred options which best meet the requirements of the objectives stated above are
Through-flow and U-flow.

Through-flow will be used when the receiving and dispatch areas are at opposite ends of the
building. It will tend to be used under the following conditions:
 Vehicles and equipment used in receipt and dispatch are of different types
 The flow of vehicles around the site will be facilitated

AO/HLCP/0186 V3.0
U-flow will be used when the receiving and Through-flow
loading areas are next to each other on the
same side of the building. It provides the
following features:
 Because the receipt and dispatch
areas are side by side, the space can
be used flexibly, particularly if these
activities are scheduled to take place
at different times in the working day.
This can save space overall
 Similarly, personnel and equipment
can be used in a flexible way, U-flow
reducing the requirement for
resources overall
 Because the main access to the
building is in one place, access and
security are easier to manage
 The building may be extended on
three sides where this is required and
where the site allows

It is necessary to consider the location of stock within the storage areas.

Most warehouse operations receive goods in bulk quantity loads, and dispatch goods in lesser
loads. The general practice is to locate products with a high rate of movement closest to the picking
area and products with a low rate of movement in the more remote areas.

The main considerations in determining the location are:

 To minimize labor and equipment travel time
 To concentrate manpower in the most important area of operation so that optimum
utilization of labor and effective supervision can be achieved

The most important factor in making this decision is to establish product popularity.

The purpose/objective is simply to place the more popular items in the warehouse, closest to the
area where there is the highest level of activity.

Product popularity is a combination of the total demand for the product and the number of times
which the product is ordered.

AO/HLCP/0186 V3.0
For example, consider two products: tents and hygiene kits. Let’s assume that the demand for both
tents and hygiene kits is the same, say 1000 units per year.

However, tents are requested (and therefore picked) 10 times a year and hygiene kits are requested
1000 times a year. Therefore, hygiene kits are more popular than tents, because they require more
work to process the larger number of requests to meet the same level of demand.

The method used to establish product popularity is a form of ABC analysis. In this analysis, we are
interested in working out which products are picked most frequently at the highest volume.

An example of this type of analysis is given below:

Rice (bags) 200 5,000 1,000,000

Kidney Beans (bags) 50 10,000 500,000
Vegetable Oil (tins) 200 2,000 400,000
Family Tents 1,500 50 75,000
Medical Kits 10 1,000 10,000
Other 500,00
TOTAL 2,485,000

In establishing the warehouse demand, it is important to ensure that, where appropriate, the
demand as used by inventory management is converted to the unit load which is picked by the
warehouse staff, e.g. demand may be expressed as tins: warehouse demand may be expressed as
cases, with 12 tins per case.

Having established the product popularity, the final stage is to deal with the other factors that may
affect the product location decision, which are:
 Order characteristics
 Product characteristics

Order characteristics relates to:

 The number of line items in consignments
 The total number of pieces in consignments
 The mix of products in consignments in terms of the line items and quantity

The first two of these will enable us to consider either splitting consignments for picking in different
areas of the warehouse, or to batch consignments together for picking. In both cases, some degree

AO/HLCP/0186 V3.0
of sorting and/or consolidation activity may be necessary. For example, if most consignments are
for either food items only or medical supplies only, it might make sense to place all food items
together and all medical supplies together in the bulk storage area.

Product characteristics relates to the products in terms of product types, size and storage and
handling requirements. For example, heavy items, such as tinned food on pallets and clothing in
loose bales, require different storage and handling equipment.

This form of zoning of products provides some of the following advantages:

 Less walking or movement of employees
 Reduced fatigue in employees
 Higher productivity
 Simplified and quick stock management
 Speedy retrieval of stock

AO/HLCP/0186 V3.0
So far, in planning our warehouse, we have considered the work methods, equipment,
and space requirements. The task now is to plan the requirements for people and
equipment in order to operate the warehouse facility.

There is a trade-off to be made between the people and handling equipment

requirements for any given workload. In global warehouse operations, which are run
like commercial operations, the focus is on minimizing the cost of running the operation.
In this situation, it is often better to invest in handling equipment and reduce the
dependence on people resources. However, in field operations, many humanitarian
organizations prefer to hire local labor, which provides employment, instead of relying
on handling equipment.

The requirement for the total amount of resources required will be determined by the
amount of goods flowing into and out of the warehouse, as shown in the diagram
opposite. There are 4 key work activities: goods receipt, put away, picking, and dispatch.

To estimate the resource requirement for the whole warehouse, we start by estimating the
requirements for each of the key work activities, in turn. Then we combine the resource
requirements for all activities together, taking into account the way in which the activities are phased
during the working day, in order to make an estimate of the total resources required.

AO/HLCP/0186 V3.0
In order to do this, we need to understand the concept of work cycles, and then we will follow an
example of how to use them to plan the level of resources.

A work cycle is the series of steps which are carried out in order to complete a particular work
activity. Each work activity may be composed of a number of different work cycles because of the
variety of goods being handled, in terms of the size and weight of items, the way that they are
packaged, and the method being used.

For example, bulk deliveries of rice may be handled differently than cases of medical supplies, and
this will apply to all the work phases in the warehouse.

Therefore, a work cycle is defined by a combination of the following items:

 The goods to be moved
 The staff required
 The equipment to be used
 The method to be used

So, the process for estimating the resource requirements for each activity is as follows:
 Identify the key steps in the activity
 Define the work cycles required for the activity
 For each work cycle, estimate the work rate
 Calculate the resource requirement for the work cycle
 Add together the work cycle requirements to estimate the requirements for the whole work
activity

This same process can be used to find the resource requirements for all of the key warehouse
activities.

In order to illustrate the process described above, let’s look at how we would estimate the resource
requirements for the Goods Receipt activity through the use of some examples. The examples given
are typical examples. In practice, the
work cycles and work rates will depend
entirely on the situation in a particular
warehouse operation.

AO/HLCP/0186 V3.0
This example uses the concept of work cycles to plan the level of resources for a goods receipt
operation. The example works through these steps:
1. Identify key steps 4. Calculate resource requirements
2. Define work cycles 5. Calculate total resources
3. Estimate work requirements

As shown in the diagram below, we can divide the goods receipt activity into the following steps:
1. Unload the goods from the vehicle 4. Return to the vehicle
2. Move the goods to the goods receipt 5. Repeat until the vehicle has been
area unloaded
3. Place the goods in the designated area
The time to complete this activity will be dominated by the time to unload the vehicle, plus the time
to move the goods to the goods-in area. Obviously, the movement time depends on the distance
and the speed of movement.

Therefore, when planning a goods receipt activity, it is likely that there will be a number of different
work cycles, which will depend upon the type of goods being unloaded and the equipment being
used to unload and move the goods.

When defining work cycles, in most cases the vast bulk of the work can be defined with just a few
work cycles; say 80% of the volume. This is normally accurate enough for planning purposes.

The table below defines three example work cycles to deal with three different types of goods in
Goods Receipt.

Goods 25 kg sacks, loose Goods on pallet, 500 kg 20 kg cartons, loose

Distance 10 m 10 m 20 m
Staff 2 manual staff 1 forklift driver 1 manual staff
1 forklift driver
Equipment Sack truck Forklift truck Empty pallet
Forklift truck
Method Load 3 sacks at a time Load pallet Load 50 cartons per
Description onto sack truck Move to goods-in area pallet
Move to goods-in area Return Load pallet
Return Move to goods-in area
Return
Work Rate Sacks or kg per hour Pallets per hour Cartons per hour

AO/HLCP/0186 V3.0
The objective is to estimate a standard time or a work rate to perform a specific work cycle.

There are three main ways to estimate the work rate:

 Use industry planning standards
 Use historical data
 Conduct a time study.

Industry Planning Standards are detailed lists of standard times to complete a whole range of
warehouse activities. The table below is an example of standard times for an operator to move a
range of products using a range of equipment.

Operator walking empty-handed or with less than 0.5kg 60m/min

Operator walking with pack less than 20kg 45m/min
Operator walking with sack truck 45m/min
Operator walking with 4-wheeled trolley 30m/min
Operator driving forklift truck 120m/min

The idea is that any work cycle can be broken down into its detailed steps, and that planning
standards can be used to calculate a Standard Time for any job. These can then be used to
calculate resource requirements.

Provided that the warehouse activity being planned is similar to the industry standard, this approach
can provide a relatively accurate estimate of work rate for any given job. However, the method is
time-consuming and any difference in practice between the actual situation and the industry
standard will decrease the accuracy of the estimate.

Information often exists within an organization, relating to times to carry out warehouse tasks in
existing situations. If so, this information can be used to provide a simple way of estimating work
cycles in new situations.

Time study is the original technique of work measurement. It is concerned with the way in which
work is done and the time it takes to complete tasks. This leads to the establishment of a target
time which, subsequently, permits results to be compared.

The amount of resource required for each work cycle depends on the work rate and the amount of
work to be done.

AO/HLCP/0186 V3.0
Suppose that we have defined a work cycle for unloading sacks of rice weighing 25kg, and we have
also estimated the work rate, as in the table below.

Goods 25kg sacks, loose

Distance 10m
Staff 2 manual staff
Equipment Sack truck
Method Load 3 sacks at a time onto sack truck
Description Move to goods-in area
Return
Work Rate 90 sacks or kg per hour

Q: What resources will be required to unload 10 deliveries of 100 sacks each in an 8-hour
period?

A: The total number of sacks to be unloaded = 10 x 100 = 1000 sacks. The number of sacks
that can be unloaded in an 8-hour period using Work Cycle 1 = 8 x 90 = 720 sacks.

This leaves 1000 – 720 = 280 sacks left to be unloaded. The time required to unload 280
sacks = 280/90 = 3.1 hours.

Therefore, the resources required are:

 1 sack truck and 2 staff for 8 hours, plus.
 1 sack truck and 2 staff for 3.1 hours.

Note: This example calculation does not take into account the timing of the deliveries. In practice,
we would have to look at the delivery schedule: if the deliveries arrive in groups then the
peak resource requirement will be higher than that calculated above.

This exercise is repeated for each work cycle defined for the Goods Receipt activity.

To make an estimate for the total resources required for goods receipt, we must add together all
the estimates of the work cycles defined.

AO/HLCP/0186 V3.0
In this example, 3 work cycles have been defined for the Goods Receipt activity and work rates have
been estimated, as shown in the table below.

Goods 25 kg sacks, loose Goods on pallet, 500 kg 20 kg cartons, loose

Distance 10 m 10 m 20 m
Staff 2 manual staff 1 forklift driver 1 manual staff
1 forklift driver
Equipment Sack truck Forklift truck Empty pallet
Forklift truck
Method Load 3 sacks at a time Load pallet Load 50 cartons per
Description onto sack truck Move to goods-in area pallet
Move to goods-in area Return Load pallet
Return Move to goods-in area
Return
Work Rate 90 sacks or kg per hour 30 pallets per hour 150 cartons per hour

Q: The Goods Receipt activity must handle the following volume of deliveries:
a) 1000 x 25 kg sacks of mixed product
b) 24 pallets
c) 500 x 20 kg cartons.
What is the minimum level of resources that will be required to handle this volume of goods
in an 8-hour period?

A: a) 25 kg sacks fall under Work Cycle 1, which require 2 manual staff and 1 sack truck
1000 sacks / 90 sacks per hour = 11.1 hours required
For all the sacks to be moved in one 8-hour shift, 2 teams will be required
> 1 team for 8 hours, the other team for 3.1 hours
b) Pallets fall under Work Cycle 2, which require 1 forklift driver and 1 forklift truck
24 pallets / 30 pallets per hour = 0.8 hours required
c) Cartons fall under Work Cycle 3, which require 1 manual staff, 1 forklift driver,
1 empty pallet, and 1 forklift truck
500 cartons / 150 cartons per hour = 3.3 hours required

To calculate the minimum resources required, we need to schedule the work cycles in the 8-
hour period. We can do this by drawing a simple chart showing when the work cycles will
take place during the period, as below:

AO/HLCP/0186 V3.0
 Time (hours)
1 2 3 4 5 6 7 8
Work Cycle 1 – 8 hours
Work Cycle 1 – 3.1 hours
W
C
2 2
0
.
Work Cycle 3–3.3 hours

4 manual staff 3 manual staff

2 sack trucks 1 FLT driver
1 FLT
1 sack truck

2 manual staff 2 manual staff

1 sack truck 1 sack truck

1 FLT driver
1 FLT

The total resources required during the 8-hour period are listed in the bottom row of the
chart. Therefore, if we assume that the forklift truck driver will also act as a manual member
of staff for Work Cycle 1, the total resources required for Goods Receipt are:
 1 FTL driver
 3 manual staff
 2 sack trucks
 1 forklift truck

When calculating and planning work cycles, be sure to also factor in, and consider time as applicable
for warehouse staff to:
 Take breaks (e.g. tea, meals, restroom)
 Start/end shifts
 Perform safety related tasks (e.g. put on special clothing)

AO/HLCP/0186 V3.0
Now that we have designed the warehouse and thought about how it will operate, we
need to consider issues around managing operations. In this section, we will consider:
 Planning the workload
 Allocating resources
 Receiving goods
 Storing goods
 Assembling consignments
 Dispatching consignments
 Disposal of goods
 Pest control
 Defining control requirements

The prompt clearance of goods received, and the prompt dispatch of consignments, requires the
correct resources to be allocated to the tasks.

The volume of workload will frequently fluctuate on a day-to-day basis. Also, the volume may be
unpredictable to some extent, especially the unexpected arrival of goods and/or the unexpected
volume of goods requested.

The tasks needed to be carried out to achieve the aims will, therefore, fluctuate on a daily basis. For
example, the receipt activity may be higher on particular days of the week.

Peak workloads can be handled using hired resources (people and/or equipment), to supplement
any permanent resources.

Planning of the workloads should be on a day-to-day basis, to enable the correct allocation of
resources to be identified and allocated to the required tasks.

If the goods to be handled vary significantly in terms of their handling requirements, for planning
purposes, they may be classified into product handling groups. This ensures that the appropriate

AO/HLCP/0186 V3.0
 resources are allocated to handling the goods. The table below gives an example of how goods
might be grouped.

001 Loose Sacks 4,000 400 2,000 Block Stack Sack Truck 1
002 Pelleted Goods 500 50 250 Rack Forklift Truck 2
003 Loose Cartons 100 10 500 Rack Pallet/Forklift Truck 3

The resource requirements are defined by the inbound and outbound workload which the
warehouse operation must handle. The total resource requirements for each of the key activities in
the warehouse are determined as follows:
 Identify the inbound workload
 Identify the storage requirement
 Identify the outbound workload

The volume to be received, by individual item, is required on a day-by-day basis, so that the
incoming workload can be planned. Supply chain visibility (pipeline) and communication with the
senders of goods are prerequisites for this.

If any goods are required to be sent immediately to the next stage in the supply chain, or onward to
the beneficiaries, they must be identified separately. These goods will not be put into stock but will
be made available immediately for goods dispatch.

Time-based schedules of inbound stock are created showing the volumes, handling groups and
immediate shipment requirements. These form the basis for the allocation of resources, and for
planning the storage requirements.

The requirements for stock location are identified before the stock arrives, so that pre-allocated
space is available for them.

Locations for the goods are allocated and recorded, in order to prevent these locations from being
allocated more than once.

The product handling groups are often the basis for identifying which storage areas the products
are to be put into. The following are examples of how this might be done:
 Fast-moving items may be grouped together. The group is allocated space close to the
dispatch area to speed up stock retrieval.
 Items on pallets to a height of only 0.5m may be allocated to an area designed to hold
pallets of this height.

AO/HLCP/0186 V3.0
  Product volumes are grouped together by storage area, and by handling group, so that the
total requirement for each category can be used to calculate the resources required.

The picking and packing operations need to be planned to ensure that consignments are available
for issue in time to meet the transport delivery requirements. Some consignments will consist of
individual items, while others will more typically be bulk orders for large quantities of the same
items.

IDENTIFYING Picking of individual items is one of the major tasks in many warehouses.
the PICKING Identifying the quantities to be picked enables the correct allocation of
QUANTITIES resources to the task.
If more than one picking method has been defined, the quantities to be picked
by each picking method need to be determined, so that the appropriate
resources can be allocated to the task.

IDENTIFYING the Some items are transported in bulk quantities and will be picked in quantities
BULK PICKING that do not require breakdown of their primary storage quantity.
QUANTITIES Prior to detailed picking by individual items, consignments can be consolidated
into bulk quantities for picking and moving to the pick area.
The total volumes of bulk pick items need to be identified.

IDENTIFYING the There may be a need to pack individual items that make up a consignment to
PACKING create a single, transportable container.
QUANTITIES The quantities for each method of packing need to be identified, so that the
correct resources can be allocated to the task.

CREATE PICKING Picking and packing are frequently the most time-consuming and labor-
& PACKING intensive operations in a warehouse.
SCHEDULES Schedules of what is to be picked and packed, at what time, and in which
order, are created to facilitate efficient operations.
The transport-loading schedule is used to determine the order and timing of
the pick and pack schedules.

IDENTIFYING Consignments need to be collated and prepared for loading onto vehicles, or
LOADING & dispatched by the selected method.
DISPATCH The quantities for loading and dispatching need to be identified so that the
REQUIREMENTS resources required to carry out these activities can be planned.

AO/HLCP/0186 V3.0
If warehouse operations are to work efficiently and effectively, the correct resources need to be
allocated to the individual functions. For example, if insufficient pickers are allocated to the picking
task, the consignments may not be available in time to meet the loading schedule.

The volume data is used to calculate the workload for inbound goods clearance, putting to stock,
picking and packing, and for dispatch.

The workload is then used to determine the number of resources required to achieve the tasks
within the required time frames. The resources can then be allocated.

The work rates identified for each of the work cycles, in the key warehouse activity areas, are used
for calculating the resource requirements. In general, the work rates for each key activity area are
defined as follows:
 Goods receipt: units unloaded and received per hour
 Put away: units moved to bulk storage per hour
 Picking: units picked per hour
 Goods dispatch: units loaded and dispatched per hour

The resource requirements are calculated by dividing the amount of work to be done in the
required time by the work rate for the relevant work cycle.

For example:
 The required output for a picking operation is 6950 cases of oil to be picked.
 The picking must be complete by 1.30pm to allow loading to take place, and the pickers start
work at 8.00 a.m.
 The work rate to be used is 120 cases picked per picker per hour.
 The total work is 6950 (the cases to be picked) divided by 120 (the work rate).
 6950/120 = 57.9 hours of work.
 The pickers are available for 5.5 hours (if the work is to be completed within the required
time frame).
 The number of pickers required is 57.9/5.5 = 10.5 pickers.
 It will then be a management judgment as to whether 11 pickers are allocated to complete
the task or 10, with an acceptance that the last consignments may not be available by
1.30pm.

AO/HLCP/0186 V3.0
In general, some resources in the warehouse operation may be full-time employees and owned
equipment. However, especially for operations that have a large variability in the volume of goods to
be handled, the organization may also use temporary staff and equipment rented (hired) to cover
peak workload periods.

Temporary staff tend be used for manual operations. The type of equipment most often rented is
handling equipment, e.g. forklift trucks.

When the resource requirements have been calculated, the specific people and equipment are
allocated to the individual tasks.

Resources allocated will probably include the following:

 Mechanical handling equipment such as forklift trucks, hand pallet transporters and picking
trucks
 Packing and palletizing equipment
 Operatives for manning the equipment
 Operatives for manual tasks
 Space for tasks that do not have a pre-allocated space, for example the breakdown of
pallets and re-palletization
 The types of resources required are determined by the tasks, and by the product handling
groups to be processed

Hired or contracted resources can be either equipment or people. They may be required to:
 Provide additional resources during peak workload periods
 Carry out one off tasks that are additional to the normal work of the warehouse
 Provide additional personnel when absence through sickness is above the planned
estimated levels
 To provide sufficient resources when recruitment is insufficient to fill permanent vacancies.

Hired labor may not have any specific knowledge of the operation, or have attained the full, specific
skills required. If so, a short induction into the tasks and operation will be required so that they can
be effective.

AO/HLCP/0186 V3.0
Labor may be hired on an individual basis, or through an intermediary, and there are pros and cons
for each approach:
ADV AN TA G ES DIS AD VA NTA G ES
 Easier to manage  More difficult to control the quality of the labor
 Faster to acquire  Need to establish the trustworthiness of the intermediary
 Possible loss of neutrality, if dealing with a local group and not
others
 Probably higher cost due to fee for the intermediary

The goods receipt activities have an impact on the operations of the whole warehouse. The most
important function of the goods receipt area is the ability to receive, check, and distribute into the
main storage areas as quickly and efficiently as possible.

There is always the risk of congestion in the goods receipt areas: in both the control of the vehicles
bringing in the product, and on the goods receipt bays in general.

Ideally, the timing of all deliveries should be planned in advance in order to ensure the orderly
arrival of goods. However, deliveries may arrive unannounced and planned deliveries may arrive
early or late.

In some organizations, the warehouse manager may not have direct responsibility for the timing of
goods deliveries. In some situations, the organization as a whole may not have full control over
goods receipts, particularly in the early phase of a response to a humanitarian situation.

Therefore, particularly for the receipt of goods, resources may have to be deployed in a flexible way
in order to cope with unplanned requirements. Aspects to be considered are:
 Checking delivery details
 Unloading of vehicles
 Moving stock to receipt area
 Quality control of receipts
 Repackaging/palletization requirements
 Clearing receipts

Before the goods are unloaded, the delivery is checked to ensure that it is correct. The following are
likely to be checked:
 Is the delivery at the correct location?
 Time of delivery
 Is the paperwork correct?

AO/HLCP/0186 V3.0
  The quality of the delivery: at this stage it is not the quality of the goods
 The location where the stock is required, as there may well be more than one goods receipt
area
 If there is a requirement to pack or palletize the goods after unloading

There will be occasions when unscheduled receipts arise. Therefore, there must be a process in
place for handling both scheduled and unscheduled receipts.

For unscheduled receipts, the reasons for the occurrence must be identified, a record made of the
receipt, and a decision made on how to handle the receipt.

When the receipt has been checked and agreed upon, the vehicle is called forward for unloading.

Vehicles which are not moving are a wasted resource, so they should be unloaded without
unnecessary delays.

Congestion in the receipts area can cause difficulties in the efficient flow through the warehouse, so
receipts should be cleared rapidly and efficiently.

If the goods are received in loose form, it must be decided whether they need to be palletized.
Sometimes, goods received are intended to be moved directly onto another vehicle for onward
transportation, without being put into storage. This activity is called cross-docking. Cross-docking is
often used in emergency situations, (e.g. aircraft to truck).

Where cross-docking requirements are identified during the planning of the inbound workload, the
goods should be moved directly from the vehicle to the cross-docking area which is allocated for
them.

In operations where cross-docking takes place, an appropriate system is required in order to

maintain accurate stock records.

As goods are physically unloaded from the vehicles they can be either:
 Moved directly to their allocated stock locations or
 Placed into a receipts area.

Some goods will be received packed, ready for storage, and with no requirements for quality checks
to be made before storage. These can be moved directly to their stock locations.

Goods which require checking or repacking can be placed into a designated receipts area to await
further action.

AO/HLCP/0186 V3.0
Quality control during physical receipt of goods will normally check the following items:
 Physical check of goods
 Quality inspection
 Goods in quarantine

Depending on the goods being received, either all the goods will need to be checked (e.g. vehicles)
or just a sample of the goods (e.g. kitchen sets). The following are two selection methods:

SY S TEM A TIC Selecting the unit to check based on a fixed count, e.g. each 50th kitchen set.

HAP HA ZA RD Select the unit to check randomly without any structured technique.

When sampling, it is also important to consider the number of samples to take. The number of
samples chosen reflects the level of risk which you are willing to accept. The more samples made,
the higher the confidence you can have in the result, but the more time and cost it takes to
complete the sampling.

An often-used calculation of sample size is the square root of the sample size plus one. So if 100
bales of blankets are received, then sample 11 of the bales (square root of 100 = 10, then add 1 =
11). If n is the total size of the shipment, the formula for doing this in Excel is:
=SQRT(n)+1

Free statistical calculators are available on-line to perform an accurate calculation taking into
account your specific level of risk and ensure that you don’t under or over sample.

When the consignment arrives at the warehouse the receiver must:

 Conduct a visual inspection
 Check the weights
 Reconcile physical count with paperwork
 Inspect the quality

The visual inspection is designed to check whether the consignment looks in good condition and has
the right quantities. In particular, the receiver should check for any damage, and for boxes or bags
which appear to have been opened. It is important not just to check those items which are in clear
sight, but also those that may be buried inside a pallet. A good visual inspection should also be able
to identify if there is the presence of insects, foreign matter, or excessive humidity.

AO/HLCP/0186 V3.0
For goods arriving from a supplier, depending on the delivery terms (Incoterms), it may be advisable
to refuse the receipt of the goods if they are damaged, and if the supplier was responsible for them
during transport. Procurement staff should be consulted as required.

To help with this visual inspection, refer to the table of Storage Recommendations in the section
Understanding the Product Characteristics in Module 2.

There are many tricks which are played with weights of product. It is important to conduct a random
check on bags and boxes to see if the weight is appropriate. Often product is removed partly from
bags or boxes, but it can appear to have been untouched.

Another way to check the weight is to weigh the truck before and after unloading, ensuring that the
same numbers of people are in the truck both times.

Clearly, it is necessary to check that the quantity received tallies with the accompanying paperwork.
It is also necessary to check if this quantity is what was expected on the original purchase order.

Checking the quality of the product may be simple in some cases, but in others it may need
specialist help. Examples would include: medicines, water and sanitation equipment. Foodstuffs
also require a specialist check.

It is common for quality control of some products, especially foodstuffs, to be tested by a quality
control company. This provides an independent assessment and such companies have the skills
and equipment to do it.

For other products, such as medicines, quality can be ensured before, and during, the procurement
process. You can minimize the need for subsequent checks by visiting and inspecting suppliers
before approval is given, and by making regular quality visits. In such cases, only a physical check is
necessary. Quality analysis requires a laboratory analysis of a representative sample against the
product specifications. A representative sample is a mix of the contents of several bags or boxes,
picked randomly throughout the receipt process. The analysis can be conducted locally if there is a
reliable provider or it will have to be sent to head office.

Goods will not be accepted until the inspection is finalized. This process could take some time, so it
will be necessary to have an area where these goods should be held while awaiting acceptance. This
area must be physically separate from the storage area, with strict controls in place to ensure that
the goods are not used.

AO/HLCP/0186 V3.0
Where numbers are incorrect, or the products damaged, the situation should be handled under
routine procedures, identified by management.

To enable the quick clearance of goods held for quality control checks, the quality department
should be notified quickly so that samples can be taken, and the remaining goods moved to their
storage locations.

If the goods are received in loose form, it must be decided whether they need to be palletized.
Should this be the case, it can be done inside the vehicle, on the floor outside the vehicle, or in a
designated area of the warehouse.

Mechanical handling equipment, operatives and palletizing equipment are identified during the
process of allocation of resources.

When the quantity and overall condition have been accepted, the receipt can be cleared and the
delivery vehicle released.

The final step in the receipt process is the clearance of paperwork and notification to stock control
of the cleared receipt.

Notification may be through an update/amendment to the stock control computer system, or by the
transfer of paperwork.

The rapid and accurate movement of goods into their allocated storage locations is a high priority in
any warehouse.

Stock not moved can cause congestion in a high-throughput facility.

Stock misplaced can result in it being unavailable when required.

Aspects that need consideration in this area are:

 Identifying required stock location
 Moving stocks to location
 Notifying inventory/stock control of the storage location

This may be part of a computer system, or it could be through the creation of manual documents.
Regardless, it is essential that the warehouse’s automated/manual system be updated to record
entry of the goods into the warehouse.

AO/HLCP/0186 V3.0
This may also be required to add any necessary identification labels and paperwork needed to
manage the goods in the warehouse.

Stock locations can be allocated by a warehouse management system or manually.

The specific location will depend on the location rules being used, but could use a combination of:
 Space available
 Distance to the empty locations
 Number of goods to be stored
 Frequency of demand
 Picking methods that will be used to retrieve the goods

Identification of the correct locations is important in maintaining a good flow through the warehouse
operation.

Recall also that we may decide to split the warehouse into zones. Different zones contain goods
with different characteristics, such as medicines and kitchen sets. They might also contain goods
stored in different sized locations.

The zones are then split into locations.

When locations have been allocated, the priority is to move the stock into them quickly to prevent
backlogs, causing delays to the system.

It is essential that the goods are placed into the correct locations to prevent them being “lost” in the
system. To this end, it is advisable to confirm the actual location used by adding this information to
the stock record system.

Once the stock has been put into location, the appropriate control system that manages the
warehouse inventory should be updated.

This may be part of a computer system or could be through the creation of manual documents.

Stock should not be available for allocation to consignments until notification has been given that
the stock is in location.

AO/HLCP/0186 V3.0
The picking of consignments is the start of the process within the warehouse which leads to a
consignment being dispatched.

Picking needs to be accurate and swift if the lead times stated by the organization are to be met.

Packing is required when the items are not stored in a condition which allows them to be moved
without damage.

Packing may also be necessary when a consignment consists of more than one item which needs to
be delivered together.

Aspects to be considered in assembly are:

 Receive pick lists
 Pick items
 Pack consignments.

Pick lists can be received through a computer order processing system or manually.

Computer-generated lists will usually be consolidated by beneficiaries, locations, or part numbers,

depending on the techniques used for the picking process.

Manual lists may simply consist of a copy of the authorized list of items to be picked. A goods
requisition form is commonly used in many humanitarian organizations when goods are requested
for dispatch. Warehouse staff can also use a copy of this form as the pick list.

The aim of picking is to select items from stock and collate them together according to the
consignment requirements.

The general principle used in picking is to minimize the time taken in traveling by the order picker.

Consignments may require packing in order to allow convenient handling, and to protect them
during transit until they reach beneficiaries. The appropriate type of protective packaging to use
depends on the products themselves, and the method by which they are being moved. The
following points should be taken into account:
 The nature of the goods, e.g. sensitivity to heat, light, moisture, and vibration/shocks
 The transport mode to be used and the handling methods
 The environment that the goods will be exposed to, e.g. temperature, moisture, dust

AO/HLCP/0186 V3.0
  The size and weight of the package to allow easy handling, e.g. no more than 50kg per unit
 The extent to which the package will be dropped or thrown during handling

Beneficiaries may require consignments of mixed goods to be palletized to their own specifications,
or to aid in handling.

Packaging requirements should be estimated, if actual details are not available, and resources
allocated to this.

Apart from people, other resources include the packaging material itself, space for the work, tables,
chairs, tape and dispensers, and any specialist equipment required for shrink wrapping, binding, or
filling.

Packages should be clearly marked or labeled with the following information:

 Reference number of the consignment
 A list of the contents and quantities
 Destination
 Weight
 Any special handling requirements, e.g. fragile or this way up
 Dangerous goods markings, if applicable

Consignments need to be dispatched in a sequence which will meet the transport load plan.

Consignments should be available when they are required, otherwise they can block warehouse
flow.

Consideration needs to be given to:

 Consolidating consignments
 Locating consignments for loading

The transport load plan will specify the consignments which are to be loaded onto the same vehicle.

The plan will also specify the sequence of loading and the time requirements.

Consignments, which have been picked, should be consolidated to form vehicle loads, in accordance
with the plan.

AO/HLCP/0186 V3.0
Vehicles sitting waiting (while consignments are being picked) are an inefficient way of managing the
loading of consignments.

It is common for consignments to be consolidated into loads in an identified area of the warehouse.

Each load is given a specified area, and consignments for that load are placed there.

When the load is complete and the vehicle ready, the consignments are loaded onto the vehicle in
the sequence determined by the transport load plan.

Careful handling of goods in stock, and proactive stock rotation, should prevent stocks expiring,
becoming obsolete, or being damaged in the warehouse.

Warehouse management should monitor information on stocks with expiration dates. When the
expiry is short, this information should be shared within the organization and even outside, so that:
 Items in stock can be transferred to another operation
 Items can be loaned or donated (with adherence to organization procedures)
 Items can be sold (with adherence to organization procedures)

Sometimes, it will be necessary to dispose of stock, or even warehouse tools and equipment. The
disposal of the goods has to be arranged as soon as possible. Spoiled or damaged goods have to
be separated from usable supplies to avoid further damage. The disposal of goods requires:
 Strict compliance with your organization’s or donor’s procedures for disposal
 Discrete conducting of the disposal process
 Recording of the destruction actions

Arrangements for specific products are given below.

The disposal of expired medicines needs to take place in compliance with the national legislation,
and in a manner that does not risk public health. High-temperature incineration is the best way to
dispose of expired drugs. It is particularly important to dispose of used syringes and needles safely,
so that they are not reused or found by children. Contaminated needles can transmit infections,
such as hepatitis and HIV.

When food is expired and definitively not fit for human consumption, it may be recycled into animal
food. This way will avoid a complete loss of the food. If no recycling is possible, the best way to

AO/HLCP/0186 V3.0
dispose of food is to bury it in the ground, ensuring that neither people nor animals will dig it up.
This destruction should take place in agreement with local authorities.

Items such as blankets, tarpaulins, and damaged pallets are the easiest items to recycle. So, before
destroying such products look at the possibility of recycling. If destruction is the only solution, the
best way is to burn them.

If items need to be disposed of by burning and cannot be contracted out, be sure to consider:
 Location: proximity to buildings, people and post-fire cleanup
 Direction of smoke travel
 Size of fire that may be controlled
 Tools on-hand to control the fire (e.g. water, extinguishers)
 Risk of spreading hot embers (e.g. during the dry season)
 Local legislation and rules

Preventive measures are the first steps to be taken

with regard to pest control. These measures are not
always sufficient to prevent pests from infesting
products. It is considered that 5% to 10% of the
world cereal production is damaged by a multitude
of pests during storage.

The aim of pest control is to protect and to preserve

the goods stored, either by killing the insects
(curative measures) in all their stages of
By Houston Museum of Natural Science
development (eggs, larvae, chrysalis, adults) or (http://creativecommons.org/licenses/by-nc-sa/2.0/)
preventing infestation (preventive measures).

Inspections should take place on a regular basis. Workers should look at shelves and pallets daily
for signs of theft, pests, or water damage, and for deterioration due to climatic conditions.

If an infection is found, isolate the infested goods from the ones which are not infested and refer to
an expert, so that the best solution can be identified. The choice of the optimum product, dosage,
and method of application is decisive and should be left to an expert.

Any serious infestation should be reported.

AO/HLCP/0186 V3.0
Chemical methods are the most widespread at present, but it must be remembered that chemicals
may be dangerous to people and care needs to be taken in the use of such substances.

The purposes of each treatment is as a preventive measure to eliminate any possibility of infestation
of cereals or warehouses by parasites, or as a curative measure to reach and kill as much of the
parasite population as possible.

Different methods of application exist:

 Spraying of warehouse: preventive treatment with lasting effects
 Treatment of the surroundings: curative treatment without lasting effect
 Direct spraying of foodstuffs: preventive treatment with lasting effect; given their LASTING
EFFECT, the toxicity of some products is lengthy and careful surveillance must be kept on
the frequency of treatment so as to avoid accumulating DANGEROUS DOSES
 Fumigation: curative treatment with no lasting effect

Rats destroy packaging, consume foodstuffs and medicine, and contaminate them with their feces
and urine. The infestation of the warehouse by rats must, therefore, be avoided at all costs.

Taking measures, such as improving the state of the warehouse itself and the area around it, to
eliminate places where rats can breed can prevent infestation. Traps can be used or bait laid down
containing rat poison.

To evaluate the degree of infestation one must attempt to establish:

 Whether it is limited to the depot or whether it extends over a wide area
 Where in the surrounding area the rats can obtain their food and water
 How they gain entrance. Rats seldom move about in an open space but prefer to stay near
a hiding place. Look for their traces, the damage caused by their teeth and their excreta.

Rat poison should be in the form of bait, and be capable of remaining intact for a long time before
being eaten. It must remain appetizing, clean, and fresh, and be similar to the food rats normally
eat. Rat-poison should be placed in a shaded, covered, peaceful, and quiet location. Rats don’t like
to eat in the open where they are exposed. A simple piece of wood, or a panel, is enough to cover
the bait.

The use of poisoned bait must be handled in conjunction with local food practices, or bush rats
poisoned within the warehouse may escape and be eaten, in turn, by a local with terrible
consequences.

Another effective measure is the use of rat or mink traps and to move them frequently.

AO/HLCP/0186 V3.0
Cats can be kept within the compound of the warehouse but they are NOT allowed inside the
warehouse.

On top of traditional solutions, new techniques using the principle of the Scarecrow and the sound
of Pray Birds have been developed recently, and can be used against birds and rodents. These have
the advantage of being long-lasting, often cheaper for durable setups, and are more environmentally
friendly. Such a solution could possibly be the one you need, according to your warehouse set-up
and situation.

The warehouse operations should be planned and managed in such a way as to maintain control of
the flow of goods and materials from the point of receipt to the point of dispatch.

The operational controls should be linked to a system of documents that facilitate the control and
act as a record of the activities and the flow of goods through the operation.

The documentation and information system may be paper or computer based, or a mixture of both.

The system should encompass all the warehouse activities and cover:
 Operational performance measurements
 Identification of the control requirements for each operating area

Operational management requires feedback in the form of operational performance

measurements, in order to determine the effectiveness of management actions. There are two
kinds of measurement that are important in a humanitarian warehouse operation:
SE RV IC E -L EVE L Remembering that the objective of the warehouse operation is to make
M EA SU REM EN T S humanitarian goods available for delivery to beneficiaries, we need
measurements that indicate the efficiency of the operation in this respect.
This is the principle measurement of the supply chain performance in a
humanitarian situation. Examples of this kind of measurement are as follows:
 On-time consignments (% of consignments loaded on time).
 The fill rate of the consignments (% of goods present in consignments
compared to requirements/orders), e.g. Suppose that 100 items have
been ordered but that only 95 items are delivered. The fill rate = 95/100
= 95%.
 Picking accuracy (% of items picked according to the picking list).

AO/HLCP/0186 V3.0
UT IL IZ A TI O N OF In humanitarian supply chains, the money required to deliver goods to
RE S OU RC E S beneficiaries is important because it represents the cost-efficiency of the
humanitarian supply chain. In terms of a warehouse operation, the following
are examples of utilization measurement:
 Productivity of resources measures the output of the operation divided
by the input, e.g. items handled per person day, items picked per person
day. The normal approach is to establish a productivity standard and to
compare individual performance with this standard.
 Utilization of resources, e.g. % of warehouse space used compared with
the space available. A warehouse has been well planned if the utilization
reaches 100% at times of peak demand. If the utilization is consistently
far below 100% then this may indicate that a smaller warehouse could be
used.
 Goods wastage (% of items lost due to damage, theft or out of date). The
target is minimum wastage.

The most appropriate measurements to use depend upon the situation of the warehouse operation
and upon the objective of the humanitarian organization, and they must be defined by warehouse
management. The importance of such information relates to improvement. If measurements are
being made, it enables improvement activity to be evaluated. This is much more useful to
operational management than comparing their operation with an entirely different one.

Each operating area has unique control requirements. The requirements need to be managed
separately within that operating area.

Also, the interfaces and the overall flow of goods through the warehouse need to be controlled.

The requirements should be controlled by one overall system for maximum efficiency.

Savings and benefits accrue from:

 Increased productivity of resources
 Accuracy of paperwork and task instructions
 Better quality of management information
 Reliable stock information to aid location, rotation, quality assurance, and stocktaking

The following lists the control requirements for the main operating areas of:
 Goods receipt  Picking and load assembly
 Bulk storage  Goods dispatch

 Goods receipt schedules require suppliers to book in deliveries.

AO/HLCP/0186 V3.0
  The schedule information will include arrival time, items and quantities, and the type of load
(i.e. palletized or needing palletizing).
 Receipts will interface with the purchase order and inventory systems in order to reconcile
items and quantities.
 Movement to bulk storage will be recorded.
 The schedule will allow an estimate of the labor hours to be calculated in order to determine
the resource required to unload and put away to storage.
 Strictly managing the schedule allows peaks and troughs in the goods receipt operation to
be leveled out.
 Where there are quality control checks required and perhaps quarantining of goods for a
period of time, the system needs to manage this.
 Volume data and resource hours are required to allow utilization and performance of
resources to be calculated.

Control information is required to:

 Facilitate prompt put away of incoming stock
 Identify opportunities to move product direct to the picking locations
 Find the stock when it is needed for picking area replenishment or dispatch.
 Correctly rotate stock
 Assist in the detection, tracing, and reconciliation of errors, which might occur

In a mixed storage environment, the system should hold product and unit load information to
enable:
 The avoidance of crushing through block stacking
 The selection of correct slot heights to optimize space utilization
 The adherence to quality control requirements
 The identification of goods requiring special storage arrangements, e.g. flammables,
temperature-sensitive products, etc.

The system should record and allocate space, so as to maximize the utilization of storage space and
to provide for rapid and efficient retrieval.

The system should manage activity in the bulk storage area so as to minimize travel time for labor
and equipment.

Volume data and resource hours are required to allow utilization and performance of resources to
be calculated.

 Order picking is the most challenging activity to control.

AO/HLCP/0186 V3.0
  The stock location system should include picking locations as well as the bulk storage
locations and should control transfers between locations.
 The system will capture consignment requirements and translate information into pick lists.
 These pick lists should be sequenced so as to minimize travel time whilst maximizing the
volume picked on each picking run.
 The system should be able to differentiate and control differing types of picking method, i.e.
consignment, line, and zone picking.
 Information on the volume of orders to be picked is required to plan the required labor and
equipment resource.
 The system needs to show when replenishment of the picking location is needed.
 Volume data and resource hours are required to allow utilization and performance of
resources to be calculated.
 An interface is required with the load planning system to determine the sequence in which
orders should be picked and the loads assembled.
 Consolidation of orders into loads should be controlled. The system needs to interface with
the goods dispatch to ensure loads are picked and assembled to meet dispatch schedules.

 Load planning schedules are required to define the number, size, and type of vehicles
required to deliver the consignments.
 The schedule will also stipulate loading times and sequence load assembly in order to
ensure vehicles leave at the right time to meet customer delivery windows.
 The schedule should calculate an estimate of resources required for the loading activity.
 Strictly managing the schedule allows peaks and troughs in the goods dispatch operation to
be leveled out.
 Volume data and resource hours are required to allow utilization and performance of
resources to be calculated.

AO/HLCP/0186 V3.0
Warehouse equipment is maintained to prevent accidents and breakdowns.

Maintenance activities consist of inspections, regular servicing, and monitoring

performance for failure trends, as this will enable symptoms to be recognized before
failure occurs. It is important that the operating budget for your warehouse includes a
provision for these maintenance activities.

Equipment maintenance has a strong health and safety bias. Often, health and safety
legislation will impose on management an obligation for safe systems of work. Ensuring
safe policies and procedures of work will require an examination of men, machinery,
methods, materials, and environmental aspects.

The purpose of planned maintenance is to prevent breakdowns from occurring; partly by

inspections and servicing, but also by monitoring performance for failure trends, so that symptoms
can be recognized before failure occurs.

A planned approach to maintenance is required, which includes inspections, lubrication, minor

adjustments, planned repairs, and overhauls.

For each item of equipment which requires maintenance, a maintenance schedule should be drawn
up, indicating dates in the future when maintenance and/or inspection should take place and the
actions which should be taken at each point in time. If a blank space is left next to each item, a
confirmation signature can be added when the maintenance is conducted to provide an audit trail
that the maintenance has taken place.

AO/HLCP/0186 V3.0
The diagram below shows an example of a simple maintenance schedule:

MAINTENANCE SCHEDULE
Piece of Equipment Serial Number

Date Planned Action Date Completed Signed Remarks

There are four things to consider in maintaining equipment: inspection, servicing, repairs, and
own/contract operations, i.e. who does the work.

IN SP EC TI O N The purpose of inspection is to establish the condition of components, and is

usually carried out at regular intervals of time and/or distance used.
The components that require inspection are defined by the maintenance plan.
Repairs that are required can be undertaken at the next service or as dictated
by the identified fault.

SE RV IC I NG Servicing is also a routine activity, e.g. oil changes, lubrication, oil filter changes
(on diesel engine lift trucks), etc. Truck manufacturers usually provide a
suggested schedule.

REP AI R S Repairs can be categorized as planned or breakdown. The former covers

those identified by inspections, the latter covers failures during work.
Planned repairs enable efficient scheduling and minimizing down time.
Breakdowns affect work patterns and can be a major disruption, especially
when spare parts availability can influence the repair.
For the more specialized piece of equipment, breakdowns can be a major
operational headache; hence planned repairs are more important.

O WN o r It is often the case that operating staff undertake inspections and routine
C O N TR AC T servicing, with major repairs undertaken by makers/dealers. Alternatively,
OP E R A TI ON S maintenance can be contracted out to dealers or specific lift truck hire
companies.
The own or contract out decision involves considering finance, operational
aspects and supplier aspects, i.e. the ease with which the contractor can be
managed. Typically, contractor performance is specified and controlled
through a contract that will specify the cost and service level, e.g. turn-around
time for equipment maintenance.

AO/HLCP/0186 V3.0
Regular inspection and maintenance of the warehouse building will help to prevent damage to the
goods stored and reduce the risks of accidents.

The roof and walls should be checked for leaks or damage and repairs made quickly.

Door locks should be checked for security and any fire exits should open easily from the outside.
Fire extinguishers and smoke detectors should be regularly checked, and fire drills should be
informed to all staff. Local legislation and insurance requirements often dictate this area.

Replace any broken light bulbs quickly to avoid accidents.

The goods should be checked regularly for signs of pest damage and prompt action taken.

A simple way to ensure that the building is checked regularly is to keep a site diary, and to enter
dates in advance when building inspections should take place. Make someone responsible for the
inspections and signing the diary pages to confirm that the inspections have taken place. Space may
also be left to make notes about any items that may require special attention in the future, e.g.
deterioration of a concrete floor or wearing of locks.

Records are needed to indicate the following information:

 Maintenance tasks in priority order
 Schedule of the tasks (time)
 Resources used (people and equipment)
 Monitor the quality of work done
 Cost of work done (labor, materials, equipment)

For each individual piece of equipment, the data to record should include:
 Equipment description, capacity, etc., with manufacturer’s references and drawing numbers
 Driver defect reports
 Type and frequency of inspections
 Type and frequency of servicing
 History of all work carried out. For each task this should include:
o Planned date/nature of fault/work done/reason for work
o Scheduled breakdown/date completed/hours taken/materials used/hours downtime
o Analysis of this data will show trends in failure rates, high cost areas, changes in
inspection, servicing frequency and areas of excess maintenance

AO/HLCP/0186 V3.0
In the first section, we stated that the role of inventory management is to ensure that
stock is available to meet the needs of the beneficiaries.

Inventory represents a large cost to the humanitarian supply chain. This is made up of
the cost of the inventory itself, plus the cost of transporting the goods and keeping the
goods in warehouses. Therefore, the inventory manager’s job is to make inventory
available at the lowest possible cost. In order to achieve this, the inventory manager
must achieve a balance between supply and demand.

This section looks at types of inventory and inventory policies, stock time curves and
using forecasts, as well as ordering systems.

There are three types of inventory, and they exist in the warehouse for different purposes.

WORKING STOCK The purpose of working stock is to meet the normal, or expected, demand
for humanitarian goods between deliveries from suppliers. Therefore, the
amount of working stock required depends upon the level of demand and
the order frequency.

SAF E TY S T OC K The purpose of safety stock is to manage the risk of stock-outs (also
sometimes called ‘pipeline breaks’) during the period between deliveries
from suppliers. Stock-outs can occur for two reasons:
 Actual demand is higher than expected (planned or forecasted)
 Supplier lead-time for new stock is longer than expected
Safety stock protects from these scenarios. The amount required depends
on three factors:
 Unpredictability of demand
 Reliability of suppliers
 Level of risk the organization is willing to take
Safety stock quantities are often expressed in time increments of normal
demand, e.g. 2 weeks’ or 3 months’ stock.

AO/HLCP/0186 V3.0
 ANTICIPATION or Anticipation stocks are built up to meet anticipated increases in demand, e.g.
EMERGENCY STOCK pre-positioning stock prior to a rainy season.
These stocks are an example of disaster preparedness. The most usual
example of this would be the occurrence of a humanitarian event. In such a
situation, speed of response is important and, in most cases, the
humanitarian need does not allow time for stocks to be purchased before
being distributed to the places where it is needed. The amount of
anticipation stock held is a policy decision made by management.

The stock time curve is a useful tool for

understanding how inventory management
works and the purpose of the working
stock and safety stock – anticipation stock
is not shown, as this is reserved for special
purposes and is not included in routine
inventory management.

The graph shows how the cycle stock is

depleted at a rate that depends on the rate
of demand. The higher the rate of demand,
the more steeply the curve falls.

The vertical lines represent the arrival of

new stock from suppliers.

AO/HLCP/0186 V3.0
When demand is at the expected rate, we receive new stock just as the cycle stock is used up. In
this case, no safety stock is required (see diagram below).

If demand is greater than expected, then all the cycle stock is used up and some of the safety stock
too. The safety stock is protecting us from the higher than expected rate of demand (see diagram
below).

If the supplier lead-time is longer than expected, then again, all the cycle stock is used up and some
of the safety stock too. The safety stock is protecting us from the unreliability of the supplier (see
diagram below).

AO/HLCP/0186 V3.0
If demand is lower than expected and/or the supplier delivers early, then some of the working stock
is left over when we receive new stock from the supplier (see diagram below).

Demand is sometimes above the expected level and sometimes below. Suppliers will sometimes
deliver late and sometimes early. Therefore, the amount of cycle stock and safety stock remains the
same, on average, over time. When this is the case, supply and demand are in balance.

Inventory managers must use forecasts of demand when placing orders for new stock, in order to
decide how much to order.

The time horizon of the forecast must be linked to the supplier lead-time. For example, if the
supplier lead-time is three months, then a forecast of demand three months or more into the future
will be required, in order to decide how much to order.

There are three sources of forecast information that the inventory manager may use:
 Long-term forecasts/stockpiling strategy.
 Initial assessment reports.
 Short term forecasts/on-going operation.

In seeking to develop a stockpiling strategy, each and every organization is trying its utmost to be as
efficient as possible. One of the main factors of efficiency is to be able to send the right goods at the
right time.

As we have seen earlier, many operations are unpredictable in terms of size and location. So it is
difficult to be fully prepared everywhere, anytime.

AO/HLCP/0186 V3.0
A way to improve the speed of the response is to be able to obtain the needed goods as soon as
possible, at least to initiate the response. For that, many humanitarian organizations have put in
place a stockpiling strategy which provides access to these goods.

A stockpiling strategy not only holds stocks all around the world, but also provides quick access to
the goods. For example, agreements have been made with suppliers (after a clear and fair bidding
process) to have stocks available in the supplier warehouse ready to be shipped.

Organizations may need to still have their own stocks.

One approach is to have a global warehouse, which allows a better quality control of the products, a
quick response, and a better follow up. It also has a significant cost. These warehouses are used for
emergency, but also for on-going operations. Annual consumptions and buffers for emergency
determine the level of stocks needed. Products in stock are defined by the operational needs.
Usually, they are the most used items in an emergency for different types of programs.

Regional warehouses are more likely to be used to hold emergency stocks. The types of products
which are stored are well-known by organizations. The limiting factors are: having the funds to
initially acquire the stocks, the cost of maintaining such stocks, and the ability to rotate products
which have a shelf-life. Many organizations try to avoid keeping emergency stocks of products with a
shelf-life, such as food or pharmaceuticals.

The criteria for the locations of these regional warehouses are:

 Close to existing and/or potential operational areas
 Good transport links to and from that location (availability and cost)
 Acceptance and support from local authorities

An example of such stocks could be to have basic equipment for housing 20,000 people, meaning:
 4000 tents
 8000 tarpaulins
 4000 kitchen sets
 4000 jerry cans

Typically, the cost to acquire this level of inventory is approximately $900,000 USD.

The first people on the ground at the scene of a humanitarian event make initial assessment
reports. Such reports contain information on the number of people involved in the event, and their
short-term needs. This allows the inventory manager to make supply decisions, in order to meet the
humanitarian demand.

Initial assessment reports are used to make decisions on the replenishment of emergency stock and
can have an impact on the levels of cycle stock and safety stock, depending on the nature of the
event and the policy of the organization.

AO/HLCP/0186 V3.0
Short-term forecasts are forecasts made of demand, resulting from an ongoing operation. Short-
term forecasts are used to make decisions on the replenishment of cycle stock and safety stock.

When the program is up and running; it is necessary to have regular supplies. The demand is
received from the field (Inventory Manager/ Program Manager), according to consumption and new
needs.

Examples of this are:

 Hospital: When an organization is running a hospital, the organization is in charge of the
pharmacy of the hospital. Replenishment is done according to consumption and lead-time.
Reordering is sent from the field operation (Inventory Manager/Program Manager).
 Refugees or Internally Displaced Persons (IDPs) need to receive hygiene parcels. The
reordering is done by the field operation according to the number of people (which can
change), the distribution cycle= and the lead-time.

There are two different types of inventory policy: push and pull.
PU S H A push inventory policy is one where inventory is pushed into the supply
INV EN T O RY chain from the supply side, i.e. from the headquarters of the humanitarian
P OL IC Y organization out to the warehouses in the field.
A push policy is typically used at the start of a humanitarian event, when the
need is great but uncertain, and when there is often a shortage of goods. In
this situation, all available goods are often ‘pushed’ directly to places where
they are needed, without being stored for any significant amount of time.
The amount of inventory which is pushed into the supply chain is driven by:
the initial assessment reports of humanitarian events, or by the availability of
the goods, whichever is the smaller.

PU L L A pull policy is one where inventory is pulled through the supply chain from
INV EN T O RY the demand side, i.e. from the operatives in the field. This policy is used
P OL IC Y when there is a relatively stable and known demand situation. The amount
of inventory which is pulled through the supply chain in this situation.

Placing an order to replenish stock is a major decision, although a routine one, in all inventory
management systems. Placing an order involves making two decisions.

AO/HLCP/0186 V3.0
The first one requires us to think about the time when we need to place an order. This will require
us to think about how long it will take to receive goods once we have ordered them and, during this
time, how much will be required.

The second decision, once we have decided when to order, involves determining the size of the
order quantity.

There are three different systems available to make these decisions:

 2 Bin System
 Periodic Review System
 Continuous Review System

All three of these systems operate on the basis of comparing what is called the Free Stock Level with
a calculated point. The calculation of free stock is as follows:

Free Stock is the amount of stock available for use. Physical Stock in the warehouse is not the same
as free stock.

Free stock level is calculated as follows:

physical stock on hand
+
stock on order from suppliers
+
stock in transit
-
stock allocated to consignments
-
stock reserved for special purposes

This is a simple ordering system typically used for replenishing low-value items. These could include
stationery, box cutters, cleaning materials, etc.

The stock is kept in two separate bins or locations, in a storage cupboard, for example. When the
main stock is used up, a replenishment order is placed. Stock from the second bin, or location, is
used during the replenishment lead-time.

In the Periodic Review System, the amount of free stock is checked at regular intervals, e.g. weekly or
monthly. In between these times, the stock situation is not checked.

AO/HLCP/0186 V3.0
The review period is usually determined arbitrarily. However, for high usage rate items, or for items
which are relatively important for some reason, it might be sensible to review these items more
frequently.

In this system, orders are placed at predetermined times. This has the following advantages:
 Ordering activities can be planned into the work schedule, allowing better use of staff
 Transportation of the goods can be coordinated to maximize utilization of the transport
capacity

There are two versions of the Periodic Review system:

 The top-up system
 The minimum stock system

The Top-Up system is best used when the usage rate of the items is high compared to the order
quantities, which means that orders will need to be placed at every review period.

In the Top-Up system, a Maximum Stock

Level is defined. At the review point, the
order quantity is calculated by subtracting
the Free Stock from the Maximum Stock
Level.

The diagram to the right illustrates the

Periodic Review Top-Up System.

Notice that the order quantity (Q) can vary

each time an order is placed.

The Maximum Stock Level is calculated by adding the average amount of stock that is used during
the review period, plus the lead-time to the safety stock level, i.e.:
Maximum Stock Level = Safety Stock + Average Demand x (Review Period + Lead Time)

Example:
 Review Period = 4 weeks.
 Lead-time = 2 weeks.
 Average demand = 200 per week.
 Safety stock = 2 weeks stock = 400 units.

AO/HLCP/0186 V3.0
Therefore:
Maximum Stock Level = Safety Stock + Average Demand x (Review Period + Lead Time):
= 400 + 200 x (4 + 2)
= 400 + 1200
= 1600 units

The Minimum Stock system is best used when the usage rate is low compared to the order
quantities, which means that orders will not be placed at every review period.

In the Minimum Stock system, a Minimum Free Stock Minimum Stock Level
Level
Stock Level is defined. At the review point,
the free stock level is compared with the
Q
Minimum Stock Level.

If the Free Stock is less than the Minimum

Stock level, an order is placed.
Safety stock
If the Free Stock is more than the Minimum
Stock level, no further action is taken.
Time
The diagram to the right illustrates the Review Periods
Periodic Review Minimum Stock system:

The Minimum Stock Level is calculated in the same way as the maximum stock calculation in the
Top-Up system, i.e.:
Minimum Stock Level = Safety Stock + Average Demand x (Review Period + Lead Time)

Example:
 Review Period = 4 weeks
 Lead time = 2 weeks
 Average demand = 20 per week
 Safety stock = 2 weeks stock = 40 units

Therefore:
Minimum Stock Level = Safety Stock + Average Demand x (Review Period + Lead Time)
= 40 + 20 x (4 + 2)
= 40 + 120
= 160 units

AO/HLCP/0186 V3.0
In the Continuous Review System, the amount of free stock is checked every time stock is allocated
to a consignment. In practice, the routine may be to check the free stock on a daily basis.

The free stock level is compared with a Minimum Stock Level; often call the Re-Order Point (ROP). If
the free stock is less than the ROP, an order is placed. In this system, the order quantity is always
the same. If the free stock is more than the ROP, no further action is taken until the next time that
stock is allocated.

The Continuous Review System is most suitable for the highest usage rate items, and it has the
following advantages:

The ordering process is simplified because the order quantity is fixed.

Compared to the Periodic Review system, less stock is required. This is because the free stock is
checked more frequently so that the stock level more closely matches the demand pattern.

A feature of this system is that the frequency of orders automatically varies, depending on the usage
rate. If usage increases, orders will be placed more frequently, and vice versa.

The diagram below illustrates the Continuous Review System:

Re-Order Point
Free Stock
Level

Q
LT

Q LT = Lead time
LT

Safety stock

Time

The Re-order Point is calculated by adding the average amount of stock that is used during the lead-
time to the Safety Stock level i.e.:
Re-Order Point = Safety Stock + Average Demand x Lead Time

Example:
 Lead time = 2 weeks
 Average demand = 2000 per week
 Safety stock = 1 weeks’ stock = 2000 units

AO/HLCP/0186 V3.0
Therefore:
Re-Order Point = Safety Stock + Average Demand x Lead Time
= 2000 + 2000 x 2
= 2000 + 4000
= 6000 units

It is important when determining the re-order quantity to also be aware of procurement

considerations. Notably, these are:
 Quantity discounts: purchasing more may cost less per unit.
 Transport costs: the cost of shipment may be the same or only slightly higher for a much
larger quantity of goods, e.g. ocean container that is only partially filled.

These possible savings need to be balanced with the reality of space available in the warehouse and
ultimately beneficiary demand. It is important to work together with procurement staff to
understand these opportunities and constraints.

AO/HLCP/0186 V3.0
The warehouse/inventory manager is responsible for monitoring the movement of goods
as they are transported from the supplier and for the control of stock movement in the
warehouse facility.

There are two important areas for the inventory manager to understand:
 The order lead-time;
 Tracking orders for goods.

The order lead time is the time between placing an order and the goods being available for use.
Therefore, the total time is made up of a number of components:
 The time to create and process the order in the organization
 The time to send the order to the supplier
 The time for the supplier to process the order
 The time for the supplier to get the goods ready for shipment
 The shipping time, including any time for customs clearance
 The time for the goods to be received, recorded, put away, and ready for use

The correct definition of lead time is important for the inventory manager to know and to
understand because it determines the timing of replenishment orders. The supplier may quote a
‘lead time’ but often, the supplier does not take all of these steps into account.

Given the possible complexity involved in supply lead time, it is not surprising that lead times may
vary from delivery to delivery. The degree of variation will mostly depend on the supplier reliability
and to some extent, variations in the transportation time.

If the degree of lead time variation is small (say plus or minus a few days), safety stock can be built
into the stock plan to protect against late delivery compared to the expected date. For example, if

AO/HLCP/0186 V3.0
the lead time is 1 month, but deliveries can sometimes be up to 3 days late, an extra 3 days’ supply
can be built into the safety stock.

If the lead time variation is large, it is better to assume the worst case lead time and order earlier.
This is because large amounts of safety stock will be required to protect against late deliveries.

From the time of placing an order, the status of the goods delivery should be monitored for two
important reasons:
 The stock on order must be included in the free stock calculation, as part of replenishment
decisions.
 Should something go wrong in the order processing, or in the transportation, the inventory
manager may need to initiate actions in order to expedite the order. Common problems
range from shortages at the supplier to blockages at customs clearance.

The control of stock movements covers:

 Goods receipt quality inspection
 Physical stock control
 Control of specialized items
 Releasing stock from storage

The warehouse/inventory manager is responsible for the physical control of stock in the warehouse.
This activity depends on accurate and timely information on the physical location and status of the
stock.

To avoid accumulation of obsolete stock and expiration of perishable items, stocks should be
rotated as frequently as possible. This means that stock levels should be managed at the lowest
level possible, consistent with providing the level of stock availability that the organization requires
i.e. managing the frequency of stock-outs.

In addition to this, stocks should be stored and issued on a FEFO (First Expired First Out) or FIFO
(First In First Out) basis, according to the following guidelines:

The FEFO system is used for all goods with an expiration date. This is because sometimes newly
arrived stock has an earlier expiration date than previously received batches of the same item. If an

AO/HLCP/0186 V3.0
FEFO system is used, this stock should be promoted so that it is issued before later-expiring stock.
This is particularly important for medical items.

The FIFO rule ensures stock rotation and prevents expiration by assuming that newer stock always
has a later expiration date than older stock.

The stock control system must record and follow-up the expiration date and the date of receipt. A
spreadsheet with expiration dates as a column can easily be sorted by date on a regular basis, in
order to check expiration dates against the current date. The inventory manager can then ensure
that items with a short shelf-life can be promoted, in order to minimize stocks from expiring in the
warehouse.

Stocks should be stored in such a way that earliest expiring, or first delivered, items are picked and
issued first. Stock nearing its expiration date at goods receipt should not be accepted unless it can
be used before that date.

Stocks which have passed their expiration date must normally be destroyed.

It is the warehouse/inventory manager’s responsibility to manage and report the amount of expired
stock.

Dead stock is defined as stock that has not rotated over a significant period of time, often defined as
12 to 18 months. To monitor this situation, the stock control system must record the dates on
which stock is issued. As above, if this information is recorded in a spreadsheet, it is a simple task to
sort by issue date in order to identify dead stock items.

Provided that a check is made to confirm that there is no foreseeable requirement for the stock, it is
good practice to remove dead stock from the warehouse by donating, transferring, selling, or
destroying it, in order to free up space in the warehouse for active stock.

It is the warehouse/inventory manager’s responsibility to manage and report the amount of dead
stock.

Some types of goods require special storage and handling, primarily medicines and combustible
materials.

Because of their particular sensitivity, the storage of medicines and medical materials requires
special attention and care and, sometimes, security. Environmental factors, such as temperature,
humidity, air, and light are all factors which influence the storage of medicines.

AO/HLCP/0186 V3.0
Temperatures reached in vehicles, containers, and railway cars during transport may be very high.
This may mean that medicines lose their effectiveness or that the original expiration date cannot be
guaranteed. Therefore, heat-sensitive medicines require special conditions for transportation and
storage.

The effectiveness and shelf-life of vaccines, sera, test kits, and many other types of items, depend
upon being kept in a temperature-controlled environment from the point of manufacture to the
point of administration. Some items are sensitive to both high and low temperatures. In all cases,
the manufacturer’s information should be checked.

To ensure the consistency of temperature storage, power supplies for refrigerators should be
backed up with standby generators in case of a power failure. Max/min thermometers should be
used to monitor the temperature and these should be checked regularly.

Narcotics and other substances are controlled under the provision of the International Conventions,
in particular the Vienna Conventions of 1988, or under the local national laws. These laws dictate
that these substances should be kept in a secure room or in a safe.

Entry to the secure storage should be controlled by restricting the number of people authorized to
hold keys and enter the store.

In most countries, there is a legal obligation to keep a ledger, which records the movements of
controlled substances into and out of the store, the destinations, the date of the movement and the
names and signatures of the authorized people. Any local requirements should be checked and
followed.

Ideally, flammable goods should be stored in separate buildings to reduce the risk of fire spreading
to the main storage area. The flammable store should be well ventilated, fireproof and equipped
with fire-fighting equipment, such as extinguishers, hoses, sand, etc.

Substances like pesticides and fertilizers must not be stored together in the same place. In case of a
leak, these substances may create an explosion, extremely corrosive gas, or toxic fumes. The
packaging will normally give recommendations for storage, and these should always be followed.

AO/HLCP/0186 V3.0
The most common cause of inaccurate stock records is the unauthorized removal of goods from
stock.

In general, a formal authorization system should be in place which controls the release of goods
from stock and from goods dispatch. The basis for such a system is as follows:
 A limited number of people should have the authority to release goods.
 The release of goods should be confirmed by a signature or stamp on a document or an
electronic authorization in the case of a computer based system.
 The authorization of goods release should also trigger an update of the stock records.

AO/HLCP/0186 V3.0
The warehouse/inventory manager is responsible for keeping accurate records of stock
and stock movements. This allows reports to be created which show the effectiveness of
the stock control activities, and provide visibility of the warehouse and inventory
management process, for management and donors.

Stock records can be paper-based, computer-based or a mixture of the two. The

principles discussed here apply, no matter how the stock record system is implemented.

The principles of any stock record system are as follows:

 Each item stored has a unique identification number assigned to it
 The core document that allows visibility of stock levels and movement is the Stock
Card
 A Bin Card is the document that relates to a specific batch of an item in stock
 Stock checks are the method to reconcile the stock records with the physical stock
in the warehouse
 Most organizations require regular reporting of stock levels and movements

In addressing these items, six things need to be considered:

1. Stock identification 4. Stock checks
2. Stock cards 5. Stock loss
3. Bin cards 6. Reporting of stock levels

The unique identification (ID) number assigned to each item usually follows a prescribed format that
is defined by the organization. A record of the ID numbers assigned is kept, along with certain other
details about the item. These details will normally include the following:
 Item name  Details of the supplier
 The cost of the item  The quantity contained in each pack
 A description of the item  The packaging method

The above is not a comprehensive list, as the detail required will be dependent upon the nature of
the product and the stock record system in use.

AO/HLCP/0186 V3.0
Every item held in stock has a stock card associated with it.

The stock card may be a physical paper record or a file in a computer system and is administered by
the inventory manager.

The stock card will typically contain the following information:

 Item ID and description
 Pack quantity
 Storage location in the bulk storage area
 Inventory control information, e.g. re-order level or maximum stock level

In addition to this information, the stock card will record each movement of the item into and out of
stock plus the current stock balance.

For movements into stock, the source of the stock will be recorded by referencing a purchase order
number and/or the name of the supplier.

For movements out of stock, the destination will be referenced by a number that identifies the
consignment and/or the destination location.

In each case, the date and the quantity of the movement are recorded.

For time sensitive material, e.g. medicines, the batch number, and the expiration date may also be
recorded to aid in stock rotation.

The diagram below shows an example of a stock card:

STOCK CARD
DATE ITEM INFORMATION
Item Code Stock Max. Stock Min.

Storage Location Description Pack Quantity

DATE Document Sender/ PO Expiry Batch In Out Balance

Ref. Destination Number Date No.

AO/HLCP/0186 V3.0
 BIN CARD
Purchase Order No. ITEM INFORMATION

Item Code Batch/Serial No. Expiry Date

Storage Location Description Pack Quantity

Quantity (in unit of measure) Storekeeper

DATE Stock Requisition/Ref. In (+) Out (+) Balance Initials Signature
No. (=)

The diagram above shows an example of a bin card. A bin card is the most specific document
related to one batch of an item in stock. It is the ID card of a specific batch of an item, and a new
one is created for each new purchase order, batch, or new expiration date of an item.

Bin cards are placed physically next to the item in the storage area so that the identity of the item
can be read in the storage area.

Bin cards are required for all items which must be rotated on a first in, first out basis, and for items
with expiration dates. Items that do not require rotation do not require a bin card.

The column IN is used to record increases in stock. This happens when goods are received from
suppliers against a purchase order, or when in-kind goods donations are received from donors.
More than one row will be used when part orders are received, e.g. 100 units are ordered, 50 units
are received in one week, and 50 units are received the following week.

The column OUT is used to record decreases in stock against a Stock Requisition number.
Decreases in stock will occur until there is zero balance of this batch of items.

When this happens, the bin card is removed from the storage location and is normally kept in an
archive file.

AO/HLCP/0186 V3.0
Stock checks involve the physical counting of the stock in the warehouse. The purpose of a stock
check is to reconcile the balance in the stock records with the physical stock present in the
warehouse.

The reasons why an accurate stock balance is required in the stock records are as follows:
 Stock replenishment decisions are taken based on the free stock, some of which is
represented by stock on hand. If the records are inaccurate, this could lead to either too
much stock (wasted money) or not enough stock to meet beneficiaries’ needs.
 The activities related to investigating discrepancies in the records do not contribute to the
objective of the warehouse operation (making stock available for delivery to beneficiaries)
and is therefore wasted resource.
 The organization has an obligation to donors to ensure that goods are delivered to the
beneficiaries specified and that a minimum of wastage occurs in the supply chain. The
demonstration of this depends on accurate records.

There are a number of possible reasons for a discrepancy between the physical stock count and the
balance in the stock records:
 Stock may be incorrectly labeled or identified, indicating inadequate inspection in goods
receipt. This can lead to a negative discrepancy for one item but a positive discrepancy for
another.
 Stock may be stored in the wrong location in the bulk storage area and, as a result, is lost
from the stock management point of view because it is not available for issue.
 Stock may be incorrectly stored in the location, perhaps placed behind other items, or
dropped behind shelving. This is an indication of poor discipline in the storage areas.

The discrepancy may be due to theft. This is more likely to be the case for valuable items and it may
indicate a need for improved security measures for these items.

A large proportion of discrepancies can be due to human errors in the writing or typing of
information into the stock records. This can indicate a need for better training of staff or a need for
the review of document layouts or computer system functions. In the case of computer-based
systems, a certain amount of automatic checking can be built in, e.g. checking of item ID numbers
against a list of approved items.

Whatever the nature of the discrepancy, the source should be checked and prompt corrective
action should be taken.

Most organizations require that all stock be checked on a regular basis, perhaps yearly. But some
stock should be checked more frequently than this.

AO/HLCP/0186 V3.0
Items which are dispatched frequently have a larger number of transactions recorded, which leads
to a higher chance of errors.

High-value items are more at risk of theft. Stock counts at random times, and counting by staff from
outside the warehouse, can also be helpful at detecting issues quickly.

For organizations with a large number of items in store, it may not be possible to count all the stock
in a single exercise. In this case, the stock should be divided into stock-checking groups, so that
each group can be checked in rotation. For example, the stock may be divided into 12 groups and
each group assigned a month of the year for an annual stock check.

Most organizations have a specific policy on stock checking. The inventory manager is responsible
for implementing this policy. It is good practice, when counting stock, to not provide the stock levels
from the control system to the person counting. This ensures that the physical stock is actually
counted.

In the case of discrepancies between stock records and physical stock, the following actions should
be taken:
 Record the discrepancy.
 Report the discrepancy.
 Investigate the reason.
 Take action to avoid further discrepancies in the future.

Stock may be lost for reasons other than those listed above:
 Goods may be damaged while being handled or stored in the warehouse.
 If bulk items are to be packaged, then some of the items may be damaged or lost during the
repackaging process, e.g. bagging of bulk grain.

In either case, the loss must be recorded in the appropriate way. Damaged goods should be
removed and stored in an appropriate area to await disposal.

Most organizations require regular reporting on the stock management status. This will normally
include the following information:
 Stock on hand in the warehouse
 Stock on order

AO/HLCP/0186 V3.0
  Average stock during the period
 Quantities received and dispatched over the last period
 Changes in the stock on hand over the last reporting period
 Discrepancies in the stock records
 Stock that has become obsolete during the last period
 The expiration status of remaining stock and an estimate of any stock that will expire during
the next period

In addition to this, a number of ratios may be calculated from this information that gives an
indication of the performance of the warehouse/inventory management process, as follows:

Stock record inaccuracy = [(total quantity on hand) – (total quantity recorded)] /

(total quantity on hand) %

Stock expiration or loss rate = (quantity expired or lost) / (total quantity) %

Both stock record inaccuracy and stock expiration rate should be zero. Anything above this needs
to be investigated and the reasons found. This will then enable improvements to be made.

The diagram below shows an example of a stock report:

STOCK REPORT PERIOD

WAREHOUSE MANAGER

Item Description Opening In Out Closing Count Diff. Remarks

No. stock stock

AO/HLCP/0186 V3.0
It is important to remember that providing a safe and secure working environment will
safeguard our resources and cause fewer problems in the longer term.

As a manager, you have a responsibility for the safe and secure operation through all
areas of activity. From the outset, we need to consider putting the right procedures in
place to ensure that things are done safely and securely, and that we have the right
people nominated to be responsible for safety.

In the early stages of an emergency, the working environment is likely to be quite chaotic
and disorganized. There may not be permanent facilities available and working
practices initially could be makeshift. Even in these circumstances, we will need to ensure
that the people working with us can do so in a safe and secure environment. The danger
of shrinkage (through waste and theft) will be strong and we will need to put in place
robust procedures and processes to safeguard the agency’s property and donations so
that we can meet the beneficiaries’ needs.

Many countries have some health and safety legislation or regulations in place but this is
not universal, and deployment on humanitarian projects could mean that operations
take place without any legal requirements from the host nation. However, where local
regulations exist, these must be adhered to and you should ensure that you follow your
own organization’s rules for providing a safe working environment.

There are two critical areas to consider when thinking about the working environment:
 Health and safety requirements in supply chain activities.
 Security factors and risks that can affect supply chain operations.

AO/HLCP/0186 V3.0
Awareness of health and safety is important in all of the activities carried out in supply chain
operations, and it needs to be considered in all the areas of operation, be it in the warehouse, in
offices or transporting goods.

Warehouses can be dangerous environments: accidents will happen if everyone is not alert to the
dangers or doesn’t understand their responsibilities in this area. On the road, driving is a tiring job
which requires concentration and conscientiousness. If we do not consider safe driving practices,
accident rates will increase and this will add cost to our supply chain operation.

Successful management of health and safety will provide the following benefits:
 Increased employee awareness of health, safety, and security issues
 Improved relationships with our employees
 Improved morale and operator performance
 Reduced incidents, accidents, and damage levels
 Reduced defects or error rates
 Reduced absenteeism
 Reduced staff losses
 Reduced training costs
 Reduced equipment costs

To ensure we can manage this aspect, we need to look at the following areas:
 Best practice in health and safety
 Management of health and safety in supply chain operations
 Humanitarian organizations’ own procedures and policies
 Injury and sickness in the workplace

In any circumstances, employers have a particular responsibility to ensure that they provide a safe
working environment for the people whom they employ.

For employees, there is also a responsibility to their employer to ensure that they maintain this safe
working environment through the use of laid-down procedures and practices. These responsibilities
ensure that protection is provided for the health and safety of all who may be affected by work
activity.

AO/HLCP/0186 V3.0
In some countries, this responsibility can extend to the keeping and use of any dangerous or
harmful substances (for example, medicines, narcotics, etc.) including emissions of such substances
or of noxious and/or offensive fumes or particles from work premises.

The following areas need to be considered:

 Duty of employers
 Duties of employees at work
 Specific local regulations

As stated earlier, there is a duty upon us, as an employer, that we will:

“Ensure in so far as is reasonably practicable employees’ health, safety, and welfare at work”

This should be done by ensuring and maintaining a safe working environment by:
 Safe plant and machinery
 Safe systems of work
 Information, instruction, training, and supervision as necessary to perform their tasks safely
 Safety in the use, handling, storage, and transportation of articles and substances
 A written health and safety policy statement – this should follow the policy laid down by your
own agency, adapted where necessary for local purposes
 A process for consulting and receiving feedback from employees on health and safety

In support of best practice, employers should ensure that wherever possible and allowed by the
circumstances of the supply chain operation at the time:
 Adequate security, warning signs, and visitor registration are in operation
 All persons must report to reception before proceeding on a site
 All persons invited on site must be adequately supervised
 All persons invited on site are provided with adequate information to enable them to avoid
hazards and exposure to risk
 All persons invited on site will be adequately equipped and provided with PPE (Personal
Protective Equipment) where necessary and where required

Employees also have duties while at work:

 Duty to take reasonable care of themselves and of other persons who may be affected by
their acts or omissions at work
 Duty to co-operate with you as the manager so that any legal requirements can be
performed or complied with
 Not to intentionally or recklessly interfere with, or misuse, anything provided in the interests
of health, safety, and/or welfare

AO/HLCP/0186 V3.0
While in the field, this may not seem high priority, but the good manager will understand the
principles of health and safety, and seek to establish best practice in the working environment.

Best practice may include some or all of the following:

 Assessment of health and safety risk exposure in the work environment
 Arrangements for planning, organization, control, monitoring, and review of preventative
and protective measures in the workplace and working practices
 Monitoring of the health risks to staff
 Managers should themselves be competent in health and safety issues and should assist
employees to have a similar competence (you will recall that we defined competence as
having the knowledge and skills to apply best practice and knowing of one’s own limitations).
 Procedures of restricted access to serious, imminent danger and danger areas
 Sharing information with employees on the risks, preventative measures, procedures, etc.
 Adequate (not just sufficient) health and safety training; for new employees or for existing
employees where new issues that require special attention are introduced into the working
environment. For example, new Mechanical Handling Equipment in the Warehouse, or
goods that require special handling or transportation arrangements.
 Procedures for employees to report unsafe conditions or lack of information and/or training
 The employer must provide temporary workers or locally employed staff with information.

Best practice would include all of the following where appropriate. It should be noted that these are
only outlines of possible risk areas:
 Workplace: both within the warehouses and in the use of vehicles
 Personal protective equipment (PPE)
 Provision and use of work equipment
 Manual handling operations
 Substances hazardous to health
 Drivers’ regulations

There is in effect a hierarchy of control measures that should always be considered in order of
priority. These are:
 Eliminate the hazard  Control exposure/contact with the hazard
 Reduce the hazard  Personal protective equipment
 Isolate the hazard  Discipline

Engineering controls and safe systems of work should always be considered first. It should
therefore be considered that PPE is considered as a last resort in consideration of risk management.

Risk means any risk to health and safety, including wet or extreme temperatures caused by adverse
weather or otherwise; in fact, most of the conditions which you will encounter during the operations.

AO/HLCP/0186 V3.0
While not all of the issues below will apply in the humanitarian supply chain situation, for example,
where you have tented warehouses, these are general guidelines and in those areas where you can
apply these they should be applied to provide a safe and comfortable working environment.

W O RK IN G Including temperature, ventilation, lighting including emergency lighting,

ENV IR O NM E N T room dimensions, suitability of workstations and seating, and outdoor
workstations (e.g. weather protection)

SAF E TY Including safe passage of pedestrians and vehicles, windows and skylights
(safe opening, closing and cleaning), glazed doors and partitions (use of safe
material and marking), doors, gates and escalators (safety devices), floors
(their construction), obstructions and slipping and tripping hazards, falls
from heights and into dangerous substances, and falling objects

FAC IL I T IE S Including toilets, washing, eating, and changing facilities, clothing storage,
seating and appropriate staff rest areas

HO US EK EEP I NG Including maintenance of the workplace, equipment and facilities,

cleanliness, and removal of waste materials

In practice, what does this mean? Some general guidelines on managing your workplace are given
below.

You will need to review these guidelines and identify those that can sensibly be applied in your
working environment. As the manager, you will need to make that decision. You should not assume
that your local staff are used to working in certain conditions and that the points below do not need
to be considered.

Workplaces need to be adequately ventilated. Fresh, clean air should be drawn from a source
outside the workplace, uncontaminated by discharges from flues, chimneys or other outlets, and be
circulated through the working areas.

Ventilation should also remove and dilute warm, humid air and provide air movement which gives a
sense of freshness, without causing a draught. If the workplace contains process or heating
equipment or other sources of dust, fumes, or vapors, more fresh air will be needed to provide
adequate ventilation.

Windows or other openings may provide sufficient ventilation but, where necessary, mechanical
ventilation systems should be provided and regularly maintained.

AO/HLCP/0186 V3.0
Comfort depends on air temperature, radiant heat, air movement, and humidity. Individual personal
preference makes it difficult to specify a thermal environment which satisfies everyone.

For workplaces where the activity is mainly sedentary, for example, offices, the temperature should
normally be at least 18°C. If work involves physical effort, it should be at least 13°C (unless local laws
require differently).

Assessment of the risk to your employees’ health from working in either a hot or cold environment
needs to consider two sets of factors: personal and environmental. Personal factors include body
activity, the amount and type of clothing, and the duration of exposure. Environmental factors
include ambient temperature and radiant heat; and if the work is outside, sunlight, wind velocity, and
the presence of rain or snow.

Therefore, we also need to consider the extremes of temperature:

HO T The risk to the health of your employees increases as conditions move
ENV IR O NM E N T S further away from those generally accepted as comfortable.
Risk of heat stress arises, for example, from working in high air
temperatures, exposure to high thermal radiation or high levels of humidity,
such as those found in many of the environments and countries where
humanitarian operations are taking place.
Any risk assessment needs to consider measures to control the workplace
environment, in particular heat from any source. Minimizing the risk of heat
stress may mean using local cooling by increasing ventilation rates and
maintaining the appropriate level of humidity. If work rates cause sweating,
employees will require a supply of potable water to rehydrate, and may need
frequent rest pauses for changing into dry clothing.

C OL D Cold stress may arise, for example from working in cold stores, food
ENV IR O NM E N T S preparation areas, or outside in winter.
If it is not possible to avoid exposing workers to cold environments, consider
using local environmental controls, for example, cab heaters in fork lift trucks
used in cold stores; restriction of exposure by, for example, re-organizing
tasks to build in rest periods or other breaks from work. This will allow
workers to rest in an area where the environment is comfortable and, if
necessary, to replace bodily fluids to combat dehydration or cold.

You may also need to consider use of suitable clothing (which may need to be heat resistant or
insulating, depending on whether the risk is from heat or cold); acclimatization of workers to the
environment in which they work; training in the precautions to be taken; and supervision, to ensure
that the precautions identified by the assessment are taken. You may also need to consider the
medical pre-selection of employees to ensure that they are fit to work in these environments
through the person specification.

AO/HLCP/0186 V3.0
Lighting should be sufficient to enable people to work and move about safely. If necessary, local
lighting should be provided at individual workstations and at places of particular risk such as
crossing points on traffic routes. Lighting and light fittings should not create any hazard.

Every workplace and the furniture, furnishings and fittings should be kept clean and it should be
possible to keep the surfaces of floors, walls, and ceilings clean. Cleaning and the removal of waste
should be carried out as necessary, by an effective method. Waste should be stored in suitable
receptacles.

‘Traffic route’ means a route for pedestrian traffic, vehicles, or both, and includes any stairs, fixed
ladder, doorway, gateway, loading bay, or ramp. There should be sufficient traffic routes of sufficient
width and headroom to allow people and vehicles to circulate safely and with ease. Floors and
traffic routes should be sound and strong enough for the loads placed on them, and for the traffic
expected to use them.
 The surfaces should not have holes, be uneven or slippery, and should be kept free of
obstructions.
 Restrictions should be clearly indicated.
 Where sharp or blind bends are unavoidable or vehicles need to reverse, measures such as
one-way systems and visibility mirrors should be considered.
 Speed limits should be set.
 Screens should be provided to protect people who have to work where they would be at risk
from exhaust fumes, or to protect people from materials likely to fall from vehicles.
 Additional measures need to be taken where pedestrians have to cross or share vehicle
routes. These may include marking of routes, provision of crossing points, bridges, subways,
and barriers.
 Open sides of staircases should be fenced with an upper rail at 900 mm, or higher, and a
lower rail. A handrail should be provided on at least one side of every staircase and on both
sides if there is a particular risk.
 Access between floors should not be by ladders or steep stairs.
 Loading bays in warehouses should have at least one exit point from the lower level or a
refuge should be provided to avoid people being struck or crushed by vehicles.

PPE means all equipment designed to be worn or held by people at work to protect them against
one or more risks, and any addition or accessory designed to meet this objective. This may include
the provision of safety boots, hard hats, and work gloves.

AO/HLCP/0186 V3.0
Work equipment may be defined as any machinery,
appliance, apparatus, or tool, and any assembly of
components, which, in order to achieve a common
end, are arranged, and controlled so that they
function as a whole. Or more simply “an assembly
of parts of which one moves”.

Use includes starting, stopping, programming,

setting, transporting, repairing, modifying,
maintaining, servicing, and cleaning, etc., of work
equipment. In this context, transporting includes,
for example, using a forklift to move goods in a
warehouse, as well as the actual transport
operation.

All work equipment should be inspected to ensure

that it is working in the way in which it is intended,
and that all required safety aspects are fitted.

There should be clear instructions, not only made

available to the workforce, but which are brought By Ell Brown (http://creativecommons.org/licenses/by/2.0/)

to their attention regularly. Ensure that

instructions are provided in the local language as required, and where literacy rates are low, include
clear, step-by-step diagrams or pictures of what should or should not be done.

You will need to ensure that the instructions for the safe operation of all equipment within your
functional area are understood by all of the users and that they have received the appropriate level
of training to operate the equipment safely. You will also need to ensure that you have in place a
system to monitor the use of work equipment to ensure that only trained operators are using the
equipment and that they are operating it in the right way. Where equipment is not being used
correctly, the employee should not be permitted to use the equipment until re-training has been
given. Keeping records of who is qualified to do what, and when they qualified, is an important part
of controlling the safe use of work equipment.

Before undertaking manual handling operations there are three measures that can be considered.
These are:
 Avoidance: so far as is reasonably practicable (eliminate or do differently or can it be
automated or mechanized?).
 Assess: assess the operation that cannot be avoided.
 Reduce: reduce the risk of injury in so far as is reasonably practicable.

AO/HLCP/0186 V3.0
Where it is not possible to avoid a
manual-handling task, we must make
suitable and sufficient assessment of
manual handling activities ensuring DESCRIPTION RISK FACTORS
consideration of the following factors. Handling  Too heavy
You can remember these by using the Loads  Too large
mnemonic T.I.L.E., which stands for: Posture  Twisting the body
 Task  Repetitive bending
 Individual  Load has to be handled away from body
 Unstable posture
 Load
 Load has to be handled at unsafe height
 Environment
Environment  Insufficient space
Risk factors can be avoided or reduced  Variations in the level of the floor
through careful management and, in  Floor is slippery or uneven
particular, by using mechanical equipment wherever possible.

The aim of looking at these is to reduce the risk by providing the correct training in manual handling
techniques, laid down procedures and, wherever possible, using personal handling equipment.

For examples of this, the website: http://www.hse.gov.uk/pubns/indg398.pdf will help.

A substance is regarded as hazardous to health if it is hazardous in the form in which it occurs in the
work activity. The hazard can be because the substance is:
 Toxic  Harmful
 Corrosive  Irritant
This will include narcotics and medical products being stored in the warehouse, or transported
through the supply chain.

If best practice is to be implemented, you will need to consider:

 Assessing health risks created by work involving substances hazardous to health
 Preventing or adequately controlling the exposure of employees to substances hazardous
to health
 Taking all reasonable steps to ensure that employees handling these substances use the
correct procedures
 Conducting on-going monitoring of exposure where risk has been identified
 Conducting health surveillance of employees who are regularly exposed to hazardous
material
 Providing information, instruction and training for persons who may be exposed to
substances hazardous to health

AO/HLCP/0186 V3.0
There are a number of areas which can be regarded as providing best practice for safe driving
operations. This will be covered in detail in the Transport Unit, but here are important points.

Drivers’ hours should be limited. The recommendation is no more than four and a half hours before
a break of 45 minutes. The daily driving requirement should not exceed nine hours, with occasional
extensions to ten hours.

You should ensure that drivers have a substantial daily rest period of eleven hours between driving
duties, though this can be reduced to ten if the driver of a vehicle is involved in the loading or
unloading of goods, then manual handling training should be provided.

For employed drivers, records should be kept of:

 Driving qualification and dates of qualifying and retraining
 Any accidents on the road
 Where the activity involves movement in, for example, an earthquake zone, appropriate
information on the occurrence of aftershocks should be gathered before initiating the
movement activity

Each organization will have its own policies and processes in the area of health and safety, and the
following sections are intended as a prompt for you to consider your own organization’s practices in
this area.

Each organization will have its own health and safety procedures and policies, probably based on
their country of origin or main location. The organization should have a policy as to where and
when its regulations are applied, and when the host nation legislation is to be applied.

These documents should also include detailed procedures for the areas above, namely:
 Workplace: both within the warehouses and in the use of vehicles
 Personal protective equipment (PPE)
 Provision and use of work equipment
 Manual handling operations
 Substances hazardous to health
 Drivers’ regulations

We will need to ensure that we are familiar with our organization’s policies and guidelines in each of
these areas. Generic information, which you may find useful to apply in your situation, can be found
in various publications on the UK Health and Safety Executive website at www.hse.gov.uk.

AO/HLCP/0186 V3.0
We will also need to ensure that local employees of the organization are aware of the policies and
procedures, because individuals cannot follow them if they are unaware of the contents. One way of
making sure that they are read is to maintain a register, signed by the individuals when they have
read the required documents.

Since the policies and procedures may have to change as a result of amendments to the legislation
on which they are based, or the introduction of new laws, the register can be updated at regular
intervals and all personnel be required to re-read the documents. Staff may also need to be briefed,
in detail, on any changes to practice required by the change.

People at work can suffer injury or sudden illness. It is important that you have made arrangements
to ensure that employees receive immediate attention if they are injured or taken ill at work. In the
event of injury or sudden illness, failure to provide first aid could result in that person’s death.

The organization should provide adequate and appropriate equipment, facilities, and personnel to
enable first aid to be given to employees if they are injured or become ill at work. What is adequate
will depend on the circumstances in the workplace. This includes whether trained first aiders are
needed, what should be included in a first aid box, and if a first aid room is needed.

On setting up the operations, you will need to carry out an assessment of likely first aid needs to
determine this. The assessment should include consideration of workplace hazards and risks, the
size of the organization and other relevant factors, and should determine what first aid equipment,
facilities, and personnel should be provided.

Security issues which can affect the supply chain can be considered as coming under three
headings:
 Security of the individuals working in the supply chain
 Security issues concerned with threats to the operation itself
 Security of the goods passing through the supply chain

The threats to individuals are many, and come from different sources. They can include a range of
threats, from disease through to intimidation and murder. All must be treated seriously. Even when

AO/HLCP/0186 V3.0
not written down in any form of contract, there is always an understanding that, if threats are felt to
be too high, the organization will provide either a higher level of security than is currently in place or,
in the last instance, withdrawal from the operation in progress.

Within humanitarian aid programs it is very often the logistician who has the responsibility to
implement the organization’s procedures in this area and you should ensure that you are familiar
with these, in detail.

You should be aware of issues surrounding local customs and cultures that could develop into
security issues if not addressed correctly. This could manifest itself through threats and intimidation
of staff, with the aim of gaining an advantage, and can chiefly occur where you are employing local
staff in the warehouse, transport, and procurement areas.

There are many guides to security that can be accessed through different humanitarian
organizations’ websites and from the Logistics Cluster at www.logcluster.org. All of them pay much
attention to individuals being aware of circumstances and at all times avoiding risk where it is
practicable to do so. These are the key points in any individual security plan.

Another useful publication that supports this area is the booklet “Staying Alive”, which is available as
a download from the ICRC website: www.icrc.org.

When looking at threats to the operation, you need to consider the following points:
 What sources of knowledge are there on local security issues? These might well include
police, other aid agencies, local staff, and local military organizations.
 What are the security risks to the operation?
 How can these risks be assessed to identify how serious they are and what are the potential
risks to the operation?
 How can the different risks be managed?

Threats to the whole operation or functional parts of it are dealt with in more detail in the Working
with Others module of this Unit.

The main threat to the goods passing through the operation is that of theft. While it may seem that
this might predominantly happen during the Emergency Relief phase of the operation, it can occur
at any time or any stage of the operation.

A culture of poor management control can lead to losses through error and waste. Indeed, a
tolerance of error can lead to an expectation of loss. This can build to a climate of waste and,
where waste and error go un-challenged by management, it will lead to a culture where theft can be
expected.

AO/HLCP/0186 V3.0
Mistakes will happen, but to what degree and are they institutionalized? They can occur in the
following areas:

S T OC K Losses may occur through incorrect delivery or stock counts. Adjustments

to stock will then cover the mistake.
This can be overcome by regular and accurate stocktaking and a full
comparison of the results against stock records carried out. It should be
known amongst the whole team that variances of stock against the stock
records are rigorously investigated and explained, before any stock
adjustment is carried out.

P AP E RW O R K Incorrect paperwork, particularly when concerned with the raising and input
of computer documents, can cause major loss. Incorrect invoices or
confusion of debit and credit notes can cause substantial financial
discrepancies.
Again, this can be overcome by regular management checks and controls on
the paperwork. We should check that physical receipts match those
recorded in the stock records, and that issues have also correctly been
accounted for. Where management is known to be diligent in carrying out
audits, loss through poor paperwork can be minimized.

SY S TEM S Finally, if systems are poor or non-existent, major error can occur. Poor
training will result in all the errors above, and so will computer error. As they
say “a computer is a device for transforming a clerical error into a corporate
disaster”. If a systematic fault exists, it will need to be resolved, fast.
If you identify failings in this area, you will need to ensure that issues around
systems are reported back up the supply chain and that you follow this up to
ensure that you can have the proper confidence in the system provided to
support the supply chain operation.
It is important to consider also that none of these areas for loss exist in
isolation. Each feeds on and adds to each other. For example, if error is not
detected and stopped, it will become deliberate and used as a cover for
theft. If systems are known to be weak, they will soon be manipulated to
cause fraud, a type of theft that can reach massive proportions. Similarly
damage can be used, if control of damaged goods and their disposal are not
carefully supervised, to become an area for theft. Consider a warehouse
containing drugs and medicines, where cases are split into individual doses
during order picking. Supposed damage can quite easily become theft and
amount to a quite large financial loss, as well as creating an illegal trade in
highly valuable and desirable products.

AO/HLCP/0186 V3.0
Prevention of errors is a fundamental task of management and requires good training and effective
systems to make sure those operations are carried out right, first time. All managers should be
aware of the costs of errors being made and the negative effect this can have on the organization’s
ability to deliver on its work with the beneficiaries.

Waste is an area caused almost exclusively by lack of management or managerial control. It can be
split into several areas:

S T OC K Wastage of stock may occur due to:

 Damage: poor unloading, handling, and storage will cause stock loss.
Poor packing and breakages may have occurred before delivery but,
if unchecked or recorded, they become your loss.
 Storage: poor stock rotation will result in out of date stock of no
value. Poor conditions may result in deterioration until items are
unsalable.
 Administration: poor stock ordering and control will result in old
stock, causing markdowns and write-offs.

RE S OU RC E S These can be a waste of people, material, or machinery. Poor staff planning

or training will result in the wrong people for the job. Fuel, heat, and light
are often wasted. Machinery may lie idle if staff is unavailable or untrained.

TI M E Bad planning results in wasted time of people or machines, through

bottlenecks or idleness, due to lack of management.

T RA NSP O R T Wastage can be particularly high in transport where poor planning of

manpower, maintenance, loads or routes leads to reduced utilization.

Prevention of waste relies on managers ensuring that correct systems are in place to:
 Prevent damage to stock
 Ensure that the correct storage methods are used appropriate to the product
 Have good stock administration procedures
 Make efficient use of resources
 Use time effectively
 Ensure that transport is correctly utilized

Diligent and observant management by walking about (MWBA) is an essential element of preventing
losses by waste.

AO/HLCP/0186 V3.0
Theft can be broken down into:
 Internal theft (carried out by those inside the operation)
 External theft (by those coming from outside)

Internal theft is that undertaken by employees. It is the major theft area, accounting for around 80%
of all theft in the commercial world, and is mainly carried out by “trusted” employees.

Much theft can be prevented if staff selection at the recruitment stage is rigorous. However, in a
humanitarian operation, this checking may be almost impossible at the operative level, particularly in
the early stages of the emergency relief phase.

Good management will prevent much theft, but there will also be people who chance their luck,
sometimes for reasons with which you might have some empathy, considering the nature of the
emergency.

However, theft can never be condoned, and if it is suspected, you may need to take early action to
prevent the problem from escalating.

One method of prevention is to instigate a policy of staff searches. Before introducing such a policy
you will need to ensure that it has been agreed upon up your chain of management.

Staff searches are a good preventative aid. They indicate your general toughness and determination
to stop theft. The search policy spills over into other areas and helps to bring a general awareness
to all. The main points are as follows:
 It needs to be a stated and clear policy.
 Searches must be random and be known not to reflect on the honesty of the individual(s)
searched.
 Searches must be carried out on a regular basis. That means that having the policy and not
using it is a waste of time.
 Searches should be for all, including managers.

External theft is theft perpetrated by a person outside the organization. It accounts for around 15%
of all theft in the commercial world. That person may act in collusion with a member of staff,
however, and this should be watched for. External theft can either be from your warehouse or from
vehicles, carrying the goods in transit from one location to another.

Theft from premises can be prevented by physical security measures, including perimeter fencing,
security patrols, access controls to the site, and use of monitoring equipment (closed circuit
television cameras).

AO/HLCP/0186 V3.0
We looked at the security of goods in transit in the transport module but, as a reminder, the theft of
goods in transit can be deterred by using physical security measures on the vehicles to protect the
goods (locks, etc.), through using different routes when possible, although this may be very limited in
aid operations, and ensuring that the vehicle is not left unattended.

There will be occasions when the prevention of external theft becomes very difficult, particularly
where the situation has moved from the normal state to one where the normal rule of law or
conventions of society have broken down. In this type of dysfunctional situation, the security of the
individuals will be of a higher consideration than the security of the goods in the supply. Goods can
be replaced; trained, competent people are more difficult.

AO/HLCP/0186 V3.0