IMPROVEMENT OF WAREHOUSE MANAGEMENT

USING 5S METHODOLOGY

Presented by
Mridu Borah
Jorhat Engineering College
Production and Industrial Engineering, Mechanical department
Roll no:M15/ME03
 INTRODUCTION

• “Warehousing” is referred as transportation at zero miles per hour.

• Warehousing provides time and place utility for raw materials, industrial
goods, and finished products, allowing firms to use customer service as a
dynamic value-adding competitive tool.
 WAREHOUSE ACTIVITIES:

• Receive goods
• Identify the goods

• Dispatch goods to storage

• Hold goods
• Pick goods

• Marshal shipment
• Dispatch shipment
• Operate an information system
OBJECTIVES OF EFFICIENT WAREHOUSE OPERATIONS:

• Provide timely customer service.

• Keep track of items so they can be found readily & correctly.
• Minimize the total physical effort & thus the cost of moving goods into
& out of storage.
• Provide communication links with customers.
 OBJECTIVES OF THE PROJECT:

• To study the concept of warehouse and its logistic management.

• To study the concepts of 5S and its implementation for improvement of

warehouse management.

• To improve warehouse management and optimization of the transportation

cost for effective and efficient logistic management.
 COMPANY PROFILE

• The venue of the project is in FOOD CORPORATION OF INDIA,

JORHAT.

• FOOD CORPORATION OF INDIA:  The Food Corporation of India was

setup under the Food Corporation's Act 1964 , in order to fulfill following
objectives of the Food Policy:
• Effective price support operations for safeguarding the interests of the
farmers.
• Distribution of food grains throughout the country for public distribution
system.
 REVIEW OF LITERATURE

• Anas M. Atieh, et al. [1], this study investigates the impact of a warehouse
management system on supply chain performance that provides less resources effort,
more efficient, and reliable inventory management system. The supply chain
procedures carried out in the warehouse were reviewed before customizing software
that can handle the necessary transactions. The software was tested for enhancing the
work flow and providing a timely and efficient handling. Data was collected from the
warehouse of a leading telecommunications service provider in Jordan.

• Anuj Sharmaa et al.[2], This paper discusses a two level hierarchical time
minimization transportation problem, in which the whole set of source–destination
links consists of two disjoint partitions namely Level-I and Level-II linksThe objective
is to find that feasible solution for Level-I decision corresponding to which the optimal
feasible solution for Level-II decision maker is such that the sum of shipment times in
Level-I and Level-II is minimum. Finally the global optimal solution is obtained by
selecting the best out of these generated pairs. Numerical illustration is included in
support of theory.
• Bruce y. lee et al. [3], this paper suggested that decision-making may want to
take into account supply chains when making key decisions. In fact,
considering supply chain issues long before a vaccine reaches the market can
help design vaccines and vaccine programs that better match the system. They
detail how vaccine supply chains may affect the work and decision making of
ten examples of different members of the vaccine community: preclinical
volcanologists, vaccine clinical realists, vaccine package designers, health care
workers, epidemiologists and disease surveillance experts, policy makers,
storage equipment manufacturers, other technology developers, information
system specialists, and funders.

• GiovanniL.LoMagno, et al. [4], this paper proposed a novel approach for

measuring seasonal amplitude. This approach is based on transportation model.
The cyclic structure of time period is taken into account. Seasonal fluctuations
characterized many natural and social phenomena. Although the impact of
seasonality are generally well documented in different study contexts. After
reviewing the main indices used for measuring seasonality in different contexts,
they proposed a new approach in which seasonality is evaluated on the basis of
the solution of a transportation problem.
 STUDY OF THE WAREHOUSE IN VIEW OF APPLICATION
OF 5S

• The Food Corporation of India (FCI) warehouse is located at Cinamora,

Jorhat. It covers an area of about 20.03 acres and mainly deals with the
storage of rice and wheat.

• 5S is a five-step organizational system that helps remove downtime and

defects in any warehouse, office or other institutions (i.e. university, hospital,
library etc). It is a philosophy or method that involves five steps that need to
be taken to create a ‘clean and organized’ workplace. 

• 5S is a Lean strategy that helps accomplish one of the basic objectives of

Lean: making problems visible. In the 1970s, Japan’s premiere automotive
company, Toyota, was notably the first company that set the standard for 5S.
 STUDY OF THE WAREHOUSE IN VIEW OF APPLICATION
OF 5S

• The 5S Methodology was developed by Sakichi Toyoda and son kiichiro as

well as Toyoda engineer Taiichi Ohno.

• The 5S movement takes its name from the first letter of the five Japanese
words-
• Seiri (sort)
• Seiton (stabilize or set in order)
• Seiso (shine)
• Seiketsu (standardize)
• Shitsuke (Sustain)
 STUDY OF THE WAREHOUSE IN VIEW OF APPLICATION
OF 5S

• During the initial visit, it was found that the 5S methodology was not
followed in the warehouse.

• From the above figure it can be seen that the Rice bags are kept in
improper condition reducing the effectiveness of the whole management
system.
 STUDY OF THE WAREHOUSE IN VIEW OF APPLICATION
OF 5S

• In the above Figure it can be seen that the rice bags are not stored in a proper
environment. The bags are kept beside the water bodies, thus reducing the
quality of the product and increasing the repetition of work.

• After visiting the warehouse it has been clearly established that the present
condition of the warehouse can be improved using 5S principle.
 5S APPLICATION AND OUTCOMES

Step1-sort(seiri):
• It means to sort out the necessary from the unnecessary items through
everything in each work area. Sorting is the first step in making a work
area tidy.

• In Food Corporation of India it was found that the unnecessary things were
disposed according to their moisture content and documentation.

• Moisture content of each and every lot at the time of receipt as well as
issues tested and documented in moisture content register.
 MOISTURE CONTENT LIMITS FOR SAFE STORAGE AND
AGRICULTURAL PRODUCE AND OTHER COMMODITIES

SL NO COMMODITY MOISTURE
CONTENTS
(percentage)
1 WHEAT 12
2 RICE 14
3 GROUND NUT OIL 10
CAKE
4 COFFEE BEANS 10-11
5 TOBACCO 10-11

From the table , the unnecessary items which are beyond the 14% moisture
content limit is scrapped and taken out of the warehouse.
 5S APPLICATION AND OUTCOMES

• From the table if the moisture contents exceed beyond 14 then the food
grains is considered as damaged stock.

• Previously, In Food Corporation of India, the principle of FIFO (first in

first out) was not maintained for liquidation of stock. Previously
approximately the number of damage bags was 4 to 6 per month. After
applying this principle the number of damage bags was reduced from 3 to
1.
 STEP 2 – STABILIZE OR SET IN ORDER (SEITON)

• It means to organize, identify & arrange everything in each work area.

Arrange the stock in each area according to their regularity of movement.

For example-

1 .Stock A category - Very fast moving

2.Stock B category - Fast moving
3.Stock C category - Slow moving
4.Stock D category - Very slow moving

Place the Stock A & B categories very close to your dispatch or stock
packing area to minimize unnecessary movements of staff and equipment.
• Rice is the fast moving food grain as compared to the wheat. So, they keep
this stock to dispatch or stock packing area.

• Wheat was kept at a distance from the workers compared to Rice, as the
demand of Rice is higher than Wheat.
STOCKING AND LOADING OF RICE BAGS FOR
DISPATCH:
 STEP 2 – STABILIZE OR SET IN ORDER (SEITON)
• Also it was found the marking of areas and paths, essential in improving
foot traffic. It eliminates confusion and now workers know exactly where
they are and where they need to go and identify the content in each storage
space to avoid wasting time looking for specific equipment or tools.

• Before applying this step the time takes for loading and unloading the bags
in a truck is 1 hour. After Appling this step the time for loading and
unloading is reduces to 50 minute.
 STEP 3 – SHINE (SEISO)

• It means to regularly clean & maintain everything in each work area.

• Regular, usually daily - but it could also be weekly or monthly – cleaning

is needed or everything will return to the way it was.
• In FCI warehouse, previously cleaning was done on random basis, like
after 15 days or 18 days.

• After the implementation of this step the cleaning process is done on

weekly basis and just before storing the new stock. Now, the waste
foodgraints are keep in “pallabag” which is a separate bag used for
disposing off the damaged products. As a result the number of waste
products has reduced from 2 to 1 bag weekly.
 STEP 4 – STANDARDIZE (SEIKETSU)

• It means to simplify and standardize everything in each work area.

• Develop a work structure that will support the new practices and convert
them into long term habits.

• Avoid old work habits and discourage employees from going back to them.
EXECUTION OF 5S:
 STEP 5 – SUSTAIN (SHITSUKE)

• It means to frequently continue with training and maintaining the standards

already achieved so far in each work area.

• Continue on a regular basis to educate your people about maintaining

standards, otherwise you will achieve rather limited success.
 SUPPLY CHAIN IMPROVEMENT WITH FOCUS ON TRANSPORTATION COST

Supply chains use a combination of the following modes of transportation:

• Air
• Package carriers
• Truck
• Rail
• Water
• Pipeline
• Intermodal
 STEPS FOLLOWED FOR ACHIEVING TARGETS

• On the basis of that survey, five regions of Assam has been selected for
transport the foodgraints. These regions are- Dergaon, Titabor, Golaghat,
Sonari, Dibrugarh.

• To distribute the foodgraints to these regions, three warehouses are

selected. These are Jorhat, Sivsagar and Tezpur and the supply of each
warehouse is 50 trucks, 45trucks and 36 trucks respectively.
LOCATION OF DEMAND REGION

SL No. Demand region

1 Dergaon
2 Titabor
3 Golaghat
4 Sonari
5 Dibrugarh
LOCATION OF THE WAREHOUSES

SL No. Warehouses
1. Jorhat
2. Sivsagar
3. Tezpur
 THE BI-MONTHLY DEMAND PER REGION IN
TRUCKLOADS

Demand region No of full truck load

Dergaon 22
Titabor 21
Golaghat 30
Sonari 28
Dibrugarh 30
 EVALUATION OF TRANSPORTATION COST

• The tables show the transportation matrix before and after implementing
5S and Supply Chain Strategies.

• The initial basic feasible solution before and after implementing 5S and
Supply Chain Strategies is evaluated using VAM method.

• The optimal solution before implementing 5S and Supply Chain Strategies

is evaluated using MODI method.
 TRANSPORTATION MATRIX BEFORE IMPLEMENTING 5S
AND SUPPLY CHAIN STRATEGIES

Dergaon Titabor Golaghat Sonari Dibrugah Supply

Jorhat 3500 1500 5000 4500 6000 50
Sivsagar 5500 3700 7000 2500 2000 45
Tezpur 6000 6300 5200 7000 7500 36
Demand 22 21 30 28 30 138
 INITIAL BASIC FEASIBLE SOLUTIONS BEFORE
IMPLEMENTING 5S AND SUPPLY CHAIN STRATEGIES
USING VAM METHOD

Dergaon Titabor Golaghat Sonari Dibrugah Supply

Jorhat 22(3500) 21(1500) 7(4500) 50
Sivsagar 15(2500) 30(2000) 45
Tezpur 30(5200) 6(7000) 36
Demand 22 21 30 28 30

Jorhat to Sonari 7 (4500) means number of trucks used for transportation

is 7 and the cost per truck is 4500. By calculating the transportation cost is
Rs 435500
OPTIMAL SOLUTION BEFORE IMPLEMENTING 5S AND SUPPLY CHAIN
STRATEGIES USING MODI METHOD

Dergaon Titabor Golaghat Sonari Dibrugarh Supply

Jorhat 22(3500) 21(1500) 7(4500) 50
Sivsagar 15(2500) 30(2000) 45
Tezpur 30(5200) 6(7000) 36
Demand 22 21 30 28 30

Transportation cost= Rs 435500

GRAPHICAL REPRESENTATION OF COST ASSOCIATED
WITH EACH WAREHOUSES BEFORE IMPLEMENTING 5S
AND SUPPLY CHAIN STRATEGIES
• Earlier in the road transportation where truck mode was used.

• The whole truck was assigned for Jorhat FCI irrespective of the full load
of the truck, but after applying 5s methodology and improving the supply
chain transportation facility by aggregating techniques .i.e., now the truck
is being shared by Jorhat FCI and Dergaon with respect to their
requirement of the demand.

• Thus all the warehouses share the cost of trucks with their respective
market regions. Hence the payment of the shipping is paid by both the FCI.
TRANSPORTATION MATRIX AFTER IMPLEMENTING 5S AND SUPPLY
CHAIN STRATEGIES

Dergaon Titabor Golaghat Sonari Dibrugah Supply

Jorhat 3000 800 4000 3000 5500 50
Sivsagar 5000 3000 6500 1500 1000 45
Tezpur 5600 5800 4300 6000 7000 36
Demand 22 21 30 28 30
INITIAL BASIC FEASIBLE SOLUTION AFTER IMPLEMENTING 5S
AND SUPPLY CHAIN
STRATEGIES USING VAM METHOD

Dergaon Titabor Golaghat Sonari Dibrugah Supply

Jorhat 16(3000) 21(800) 13(3000) 50
Sivsagar 15(15000 30(1000) 45
Tezpur 6(5600) 30(4300) 36
Demand 22 21 3 28 30

Transportation cost=Rs 318900

OPTIMAL SOLUTION AFTER IMPLEMENTING 5S AND SUPPLY CHAIN
STRATEGIES USING MODI METHOD

Dergaon Titabor Golaghat Sonari Dibrugah Supply

Jorhat 16(3000) 21(800) 13(3000) 50
Sivsagar 15(15000 30(1000) 45
Tezpur 6(5600) 30(4300) 36
Demand 22 21 3 28 30

Transportation cost=Rs 318900

GRAPHICAL REPRESENTATION OF TRANSPORTATION
COST ASSOCIATED WITH EACH WAREHOUSES
• From the table it seems that the transportation cost was higher before the
application of supply chain strategies and 5S techniques in the warehouse.
After applying it the transportation cost reduces form Rs 435500 to Rs
318900.
 RESULTS AND DISCUSSION

• After visiting the Food Corporation of India for four months it was found
that the warehouse is not properly managed. According to the present study
in FCI Jorhat warehouse, it has been clearly established that the present
condition of the warehouse can be improved using 5S.

• After implementing 5S, in Seiri (sorting), the number of damage bags of

rice was reduced from 3 to 1.

• As in Seiton (stabilize or set in order), Before applying this step the time
takes for loading and unloading the bags in a truck is 1 hour. After Appling
this step the time for loading and unloading is reduces to 50 minute.
 RESULTS AND DISCUSSION

• In Seiso (Shine), the number of waste products has reduced from 2 to 1

bag weekly.

• In Seiketsu (Standardize), after maintaining the working schedule resulting

various improvements and reduced the downtime.

• And lastly the last of 5S i.e. Shitsuke (Sustain) , it means to frequently

continue with training and maintaining the standards.

• Thus after implementation of 5s the the warehouse and its management is

found to be improved.
 RESULTS AND DISCUSSION

• Finally, transportation cost gets reduced form Rs 435500 to Rs 318900 by

improving the supply chain strategy.
 CONCLUSION AND FUTURE SCOPE

• The project was undertaken at Food corporation of India,Cinamora,Jorhat.

• Previously the number of damage bags was approximately 4 to 6 per

month.

• After applying this principle the number of damage bags was reduced to 3
to 1.

• Before applying 5Sthe time takes for loading and unloading the bags in a
truck is 1 hour. After Appling 5Sthe time for loading and unloading is
reduces to 50 minute.
 CONCLUSION AND FUTURE SCOPE

• Transportation cost gets reduced to some extent by improving the supply

chain strategy. In Jorhat the cost reduced to 25.85%, in Sivsagar cost
reduced to 46.15% and in Tezpur the cost reduced to 17.87%.
 FUTURE SCOPE

• Several assumptions are made while carrying out the project.

Omissions of these assumptions and obtaining information’s based
on the actual data will results in a realistic solution.
• Technical improvement in present warehouse by implementing
modern approaches such as warehouse management system that can
provide the foundation for dramatically enhanced productivity.
• Demand based on seasonality trend will further improve our present
study.
• Application of enhanced mode of transportation that gives priority
on cost minimization will help to drastically reduce the
transportation cost.
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THANK
YOU