Today warehouses are not used to store things but rather to receive. Warehouses are used by manufacturers. customs etc. repackage and distribute components to a manufacturing location or finished products to customers . Wholesalers. importers. exporters. breakdown. retailers. They are usually large plain buildings in industrial areas of cities and towns.Warehouse A warehouse is a commercial building for storage of goods.


  The warehouse is where the supply chain holds or stores goods. Storing Buffer stock for customers – retail or commercial Stockpiling (Seasonal. Bulk-Buy) Postponement ( Parts and components are stocked at strategic locations and final assembly is kept on hold till the customer places or modifies the order) ◦ Packing (Labelling & Packaging) . Functions of warehousing include ◦ ◦ ◦ ◦ Receiving.

Manufacturing Support Supplier A Supplier B Warehouse Supplier C Plant Supplier D .

 Mixing Warehouse: A warehouse is used as a product mixing point. Each plant manufactures only portion of the total product offering of the firm..g. It involves multiple plant locations (e. of plants manufacturing different components. no. are combined at a convenient place to make the final product. . B and C) to a central warehouse. plant A. Products are assembled at common mixing point and dispatched to the customer. products A.g.. plant B and plant C) that ship products (e.

Customer 1 A Plant A Customer 2 A Plant B Mixing Warehouse Customer 3 A Plant C Customer 4 B C C B C B C .

Consolidation ensure potential cost saving on freight. it is economical to collect these small shipments at one centre. to combine them and make into a larger shipment to send it to a customer. Consolidation: Supplies are originating from various sources in small quantities. .

Consolidation Warehouse Consolidation Warehouse .

Material that has arrived in bulk is divided into small shipments to deliver to the end customer. it is broken down into smaller shipments and orders are sorted which are sent to customers in different geographical area. . oil and chemicals coming from manufacturers is broken into smaller consignments. As the shipment is received at warehouse. Break-Bulk: It is directly opposed to that of the consolidation warehouse. Bulk cargo of fertilizers.

Break-Bulk Warehouse: Break-Bulk Warehouse .

..or.Inbound materials are – Directed to outbound doors and are directly loaded into outbound trucks ..  – “Staged” for a very brief time period before loading   Can accomplish significant reductions in total costs and in lead times in a supply chain “Cross dock facilities (CF)” act as transfer points  ..

optimal vehicle use and low handling costs.CROSS-DOCK = No storage(?) Cross-dock (from multiple suppliers): ● goods sorted as they arrive. ● benefits . ● Avoids placing goods into storage . ● goods moved across dock and loaded onto trailers.

Cross Docking .



It is given on rent or lease. They allow companies to store goods under one roof. . • Contract Warehouses: Contract warehouses are also owned by a third party.• Private Warehouses: Private warehouses are company owned and operated. long term commitment and good relationships. It offers unique and specially tailored warehousing and logistics services exclusively to one client. Based on mutual benefits. • Public Warehouse: Public warehouses are owned and operated by a third party.

• Minimize the total physical effort & thus the cost of moving goods into & out of storage. • Provide communication links with customers . • Keep track of items so they can be found readily & correctly.• Provide timely customer service.

• • • Receive goods Identify the goods Dispatch goods to storage •  Hold goods Pick goods   assemble shipment Dispatch shipment .

Receive goods • Accepts goods from ‒ Outside transportation or attached factory & accepts responsibility • Check the goods against an order & the bill of lading • Check the quantities • Check for damage & fill out damage reports if necessary • Inspect goods if required .

Identify the goods ‒ items are identified with the appropriate stockkeeping unit (SKU) number (part number) & the quantity received recorded Dispatch goods to storage ‒ goods are sorted & put away Hold goods ‒ goods are kept in storage & under proper protection until needed .

order records are updated .Pick goods ‒ items required from stock must be selected from storage & brought to a marshalling area assemble the shipment ‒ goods making up a single order are brought together & checked for omissions or errors.

quantity received. shipping documents are prepared. & goods loaded on the vehicle Operate an information system ‒ a record must be maintained for each item in stock showing the quantity on hand. quantity issued. & location in the warehouse .Dispatch the shipment ‒ orders are packaged.

RECEIVING INP UT •Schedule Carrier •Unload Vehicle •Inspect for damage WAREHOUSE PROCESS Put-away •Identify Product •Identify Product Location •Move Products •Update Records Storage •Equipment •Stock Location – Popularity / Significance – Unit Size Shipping Preparation •Packing •Labeling •Stacking Order Picking •Information •Walk & Pick •Batch Picking Shipping •Schedule Carrier •Load Vehicle •Bill of Lading •Record Update OUT PUT .

there is some location analysis techniques that could assist company in selecting a general area for warehouse location. .Before selecting site.

 Location The location factor rating technique may be used when many sites are available. and each site has some appealing characteristics. The purpose of the technique is to "score" each site to be somewhat objective about the location decision. The steps in using the technique are: Factor Rating .

22 65 70 - 67 65 .08 0.FACTORS Weight (Relative importance to Org.1 0.4 65 30 50 - Pak 55 65 50 Education & Health Proximity to Suppliers 0.2 0.) Scores out of 100 India Labor Availability Proximity to market Tax Structure 0.

LOCATION STRATEGY (FACTOR RATING METHOD) FACTORS INDIA PAKISTAN Labor Availability Proximity to market Tax Structure Education & Health Proximity to Suppliers (.22)(65)=14.08)(65)=5.08)(67)=5.22)(70)=15.36 (.40)(50)=20 (.4 56.20)(55)=11 (.10)(65)=6.20)(65)=13 (.16 .40)(50)=20 (.6 (.10)(30)=3 (.2 (.5 (.3 57.

transportation costs are a function of distance. weight. In general.Center-of-Gravity Technique  The center-of-gravity technique can be used when multiple suppliers or customer bases exist at different geographic locations. and it is economically sensible to locate centrally to service all of them. and time. .


a specific building site must be selected.   Site Selection  The primary factors in site selection are the availability of services and cost.Once location analysis is completed. Beyond procurement cost. 35 . taxes. insurance rates. and highway access require evaluation. The cost of procurement is the most important factor governing site selection. setup and operating expenses such as utility expenses.

The soil must be capable of supporting the structure. and the site must be sufficiently high to afford proper drainage 36 .Several other requirements must be satisfied before a site is purchased   Site Selection Necessary utilities must be available.

Use one-story facilities Move goods in a straight line Use efficient materialshandling equipment Use an effective storage plan Minimize aisle space .

Number of stories in the facility  The ideal warehouse design is limited to a single story so that product does not have to be moved up and down.  38 . The use of elevators to move product from one floor to the next requires time and energy.

 Most warehouses have 20.  39 . the design should maximize the usage of the available cubic space by allowing for the greatest use of height on each floor. such as forklifts. although modern automated facilities can effectively use ceiling heights up to 100 feet.Height Utilization:  Regardless of facility size. Maximum effective warehouse height is limited by the safe lifting capabilities of material-handling equipment.to 30-foot ceiling.

It is also desirable to determine the total size and weight of the average order processed through the warehouse.  . weight. and packaging. stability of demand.Product-Mix Considerations  The design and operation of a warehouse are related directly to the character of the product mix.  Each product should be analyzed in terms of annual sales.

 Benefits of Warehouse Management ◦ Provide a place to store & protect inventory ◦ Reduce transportation costs ◦ Improve customer service levels  Complexity of warehouse operation depends on the number of SKUs handled & the number of orders received & filled.  Most activity in a warehouse is material handling. .

COSTS OF OPERATING A WAREHOUSE • Capital costs — Costs of space & materials handling equipment • Operating costs — Cost of labor — Measure of labor productivity is the number of units that an operator can move in a day .

• Maximize use of space – space is the largest capital cost • Effective use of labor & equipment – labor is the largest operating cost – material handling equipment is the second largest capital cost .


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