WAREHOUSING

Krishnadeep Gupta Bhupesh Chetan

Anchal Gautam Gautam Sood
 Warehousing - Definition

• Storage of goods.
• Includes a wide spectrum of facilities and locations that provide
warehousing, including
 the storage of finished goods in the production facility;
 the storage of raw materials, industrial goods, and finished
goods while they are in transport.
• APICS dictionary defines warehousing as the activities related to
receiving, storing, and shipping materials to and from production or
distribution locations.
 Warehousing – Role of IT

Material direction and tracking - Warehouse Management System (WMS)

Logistics personnel use the WMS to improve warehouse efficiency.

SAP® has WMS module which can be installed as a standalone system or

can be integrated with other systems.

Oracle 12i also has WMS which is enhanced by acquisition of TMS system
from G-Log and has been rechristened as Oracle Transportation
Management.
 Modern trends & value addition

Modern trends:
• Just In Time (JIT)
• Warehouse-style retail stores
• ASRS
• RFID
• Kiva Systems
• 3 PL
• 4 PL

Value addition by warehousing:

• Transportation consolidation
• Product mixing
• Cross-docking
• Service
• Protection against contingencies
• Smoothing
 Some Activities of Warehouse.

Transportation consolidation
 Some Activities of Warehouse.

Product mixing
 Some Activities of Warehouse.

Cross Docking.

Under a cross docking system, pallet loads can be moved directly across the warehouse
floor from receiving to shipping (left). Boxes, however, first must pass through a sorting
system (right)
Manufacturing
Overview and Trends
 Definitions of Manufacturing

Manufacturing is the use of machines, tools and labour to make

things for use or sale.
Or
The transformation of raw materials into finished products, usually
on a large scale
Or
The action or process of making goods systematically or on a
large scale
Or
Chemical, mechanical, or physical transformation of materials,
substances, or components into consumer or industrial goods.
 Stages of Manufacturing

Package
Procur Fabri Asse Testi and
Distributio
ement cation mbly ng n

• Warehousing plays an important role in various stages mentioned

above
• Acts as a vital linkage between all the stages
 Manufacturing Sector in India – Growth Trends

• Robust growth of 16 per cent in the manufacturing sector for February 2010 as

compared to February 2009.

• Large number of companies shifting their manufacturing base to India

• India has the largest number of companies, outside of Japan, that have been

recognised for excellence in quality.

 How is growth assessed for manufacturing?

• Trends and issues in manufacturing and investment around the world

focus on such things as:

 Nature and sources of the considerable variations that occur cross-
nationally in levels of manufacturing and wider
industrial-economic growth;
 Competitiveness; and
 Attractiveness to foreign direct investors.
 Reasons for the current growth

• India has a rich talent pool of scientists, researchers, and engineers

along with its vast, educated English-speaking workforce and the democratic

administration

• Possesses requisite skills in product, process and capital engineering

• Rapidly expansion in India’s capabilities in engineering design and embedded

software development, Leverages modern-day manufacturing

 Leading Industries in India

• Basic metals
• Electrical machinery and apparatus
• Transport equipment, other than motor vehicles
• Textiles
• Trailers and semi-trailers
• Leather
• Leather products and footwear;
• Coke, refined petroleum products, nuclear fuel;
• Chemicals and chemical products.
US Toy Industry
A general outlook
 US Toy Industry

• Dolls, Action figures, Stuffed toys, Game sets, mechanical toys

• Toy and hobby stores – 9000 - revenue - $15 billion
• Top 50 companies generate about 85 percent of revenue
• Population growth among young children (under 12)
• Top two – Mattel (1st), Hasbro (2nd)
• Net revenues - $5.918 billion and $4.021 billion (2008)
• Large scale production shifted abroad – reduction in employment
in toy industry – from 42000 to 15000 in last 16 years
• Mostly exported to Canada and Mexico – almost 45%
• Mostly imported from China – almost 90%
Warehouse management system- Case Study 1
Hasbro
 Hasbro - Introduction

• US based multinational toy and board game manufacturing

company.
• Formed in 1923 by Hassenfield brothers in Pawtucket, Rhode
Island, USA
• Outsources much of its manufacturing to Chinese companies.
• Manufacturing facilities in Ireland and Longmeadow,
Massachusetts.
 Hasbro - Warehousing

• Raw material receiving warehouse that handles inbound shipments

in East Longmeadow, Massachusetts
• Also store the finished toys here.

• Total area under these two warehouses >250000 sq feet

• More than 50 personnel have been employed for operations.
• It implemented SAP warehouse management module in 1998 for
its RM and WIP warehousing operations.
• Hasbro further integrated SAP’s WM to RF system by Teklogix Inc.
• The RF system communicates with modules on vehicles as well as
the ones with the workers handheld units.
 Hasbro - Advantages

• Workers were now able to update inventory counts in real time via
RF transmissions. The WMS was also updated real time.
• This boosted efficiency of the inbound warehouse operations.
• Paperless processes have saved 16 man hours of labor per shift.

• CSF of the WMS and RF integration

– Teknologix’s training and field support
– “In house experts” trained by Teknologix

– Implementation of project in phases

– Adequate Human Resources deployment
Indian Automobile Industry
A General Outlook
 Indian Automobile Industry

• Seventh Largest in the world

• annual production of over 2.6 million units in 2009
• By 2050, the country is expected to top the world in car volumes

• Rankings (sales wise) Maruti Suzuki, Hyundai, Tata Motors

• Electric Car manufacturers – Mahindra, REVA, Tata
• Recent trends – Rs. 1 L range cars – Tata Nano
Average Annual Growth Rates in Major Automobile
Companies
Warehousing Management System- Case Study
Maruti Udyog Limited
 Maruti Udyog Ltd

• Largest passenger car manufacturer in India

• Annual capacity of 1 Million cars - Turnover of $5 billion

• Ability to rollout a car in 45 min

• Exporting Cars to various countries

• Single Spares Distribution Center for the entire country- Annual spares

turnover of $300 million

• Heavy Inbound and Outbound material flow

• In-house developed ERP System

 Maruti Udyog Limited - Challenge

• A system to manage their end to end spares supply chain execution

• Highly scalable supply chain to meet the peaks in market demand
• Sub optimal Warehouse Layout - Long Process to bin a material
• High rate of Inventory discrepancies
• One Part-one Location
•Not having any systematic Process in Material Handling
• High rate of Manual errors
• Discrepancy between items ordered and items shipped to dealers
• Absence of real time data during binning and picking operations
• Pack list not available – content of shipping carton not verifiable
• Long Order execution time
 Maruti Udyog Limited – The Solution

Decided to revamp its spares distribution operations and implement

MARC™ Warehouse Management System
• Floor Wise Implementation
• Fast-break Approach for initial phase
• Thin Client Installation
• Barcode and Dot Matrix Printers
• Re-printing option for all the reports on a specified printer using MARC
Run SQL Procedures
• One Hub and one print server for each floor
• Wedge Scanners to scan Barcodes
 Maruti Udyog Limited - Benefits

• Well organized Warehouse Layout

• Systematic Process to bin a material
• Group Picking, Accurate Inventory Control
• One Part-one Location (Fixed Bin) along with Dynamic Location
allocation and Replenishment concepts
• System Driven Processing/Material Handling/Containerization
• Quick Order execution time (6-8hrs REG & 2-3 hrs VOR)
• Minimal scope of Manual errors & Inventory discrepancies
• Real time inventory status visibility
• High accuracy in order shipping
THANK YOU