Module- 6

(Warehousing)
Logistics and Supply Chain Course
Level – 3

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
Physical Supply & Distribution
Definition:
Physical Supply and Distribution include all the activities involved in moving goods.
The activities involved are as follows:
 Transportation
 Warehousing
 Distribution
 Packaging
 Material handling
Stock Out:
The deficit in inventory quantity which is required to fulfill the customer demand.
Functions of Inventory:
The basic purpose of inventory is to decouple supply and demand. Inventory serves as buffer between:
 supply and demand
 Customer demand and finished goods
 Finished goods and component availability
Prepared by Umair Samad (Instructor - Logistics & Supply
Chain)
 Requirements for an operation and output from preceding operations.
 Parts and materials to begin production & the supplier of material.
Objectives of Inventory Management:
• Maximize customer satisfaction.
• Low Cost Plant Operation.
• Minimum Investment in Inventory.

Warehouse Management:
Function:
To store Goods/inventory/material efficiently and effectively.

Objective:
The objective of warehouse is to minimize cost and maximize customer satisfaction.
To achieve this level of service, warehouse operations should perform the following:

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
 Provide timely customer service.
 Keep track of items so that they can be found readily and correctly.
 Provide communication links with customer
Warehouse Activities:
 Receive Goods: The Warehouse accepts goods from outside transportation or an attached factory and accepts
responsibility for them. This means
I. Check the goods against an order and the bill of lading.
II. Check the quantities.
III. Check for damage and fill out reports if necessary.
IV. Inspect goods
 Identify the Goods: Items are identified with the appropriate SKU , its number and quantity received is recorded.
 Dispatch Goods: Goods are sorted and put away.
 Hold Goods: Goods are kept in storage and under proper protection until needed.
 Pick Goods: Items required from the stock must be selected from storage and brought to consolidating areas.
 Consolidate the Shipment: Goods making up a single order are brought together and checked for errors.
 Dispatch the shipment: Order packaged, shipping document made and goods loaded on the right vehicle.
 Record the information: A record must be maintained
Prepared by Umair Samad for each- item
(Instructor Logisticsin& stock
Supply showing Qty in hand & received.
Chain)
Stock Location:
Stock location or warehouse layout is concerned with the location of individual items in the warehouse.
Following are the basic systems pf locating stock:
Group Functionally related items together: group together items similar in their use.
Group Fast moving items together: If fast moving items are placed closed to receiving and shipping area, the work
of moving them in and out is reduced.
Group Physically items together: physically similar items often require their own particular storage and handling
equipment.
Cube utilization:
Goods are stored not just on floor but on cubic space of the warehouse racking system.
Accessibility:
Accessibility means able to get the goods wanted with minimum amount of work.

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
Types of Warehouse Operations:
• Raw Material Storage.
• Intermediate Storage
• Finished Goods Storage.
Raw Material Storage:
It is type of inventory which is in raw form and is used to make finished products by
value addition.
These warehouses store materials and components either close to the point of extraction or
manufacturing facility.
Intermediate Storage:
These warehouses are used to store products temporary or at WIP stage.
Finished Goods Storage:
These warehouses store products that are ready for sale or in products that are in finished form.

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
Types of Warehouses:
• Consolidation or transit warehouse.
• Break bulk centers.
• Sortation Centers
• Fulfillment Centers
• Cross Dock Centers.
Consolidation or Transit Warehouse: Consolidation centers received products from different sources and
amalgamate them for onward delivery to the final customer or onto production line.
Break Bulk Centers: Transshipment centers received products in large quantities from suppliers and break
them down into manageable quantities for onward delivery to various locations.
Fulfillment Centers: These warehouses have been designed and equipped specifically to manage large
volume of small orders.
Sortation Centers: Sortation centers are used in the main by letter, parcel and pallet distribution
companies. Goods are collected from all parts of the country, delivered into hubs or sortation centers, sorted
by zip or post codes, consolidated and delivered over night.
Cross Dock Centers: Cross dock center are seem as the beginning for the warehousing. Efficient consumer
and quick response with in retail required operations to be able to move goods quickly through the SC.
Typically cross-dock products are perishable items
Prepared by Umair such
Samad as meat,
(Instructor fruits
- Logistics etc.
& Supply
Chain)
Warehouse Location:
Locating a warehouse is a strategic decision which may affect cost of SC. Following are the specific
factors that must be taken into account when deciding a warehouse location.
1. Cost of land, rents / rates.
2. Access to transport network.
3. Skilled labor availability.
4. Availability of utilities in the area.
5. Proximity of ports / airports.
6. Locating supplier and manufacturers.

Specialized Warehouse:
Refrigerated Warehouse: The key function of a refrigerated warehouse is to maintain the
temperature of products at the level which they were received or desired.

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
Warehouse Location:
In Handling: One of the main challenges for the warehouse manger is to match labor hours with work.
Handling a product the least amount of time will result is reduced labor hours and cost.
Preparation: Prior to the actual receipt a no of processes need to take place the first step is to
ensure that supplier deliver into the warehouse when you decide, not when its suits tem. Initially you
need to decide on when you are going to receive products into the warehouse.
Off-Loading: Upon arrival of shipment the vehicle details need to be checked against the booking
reference and the vehicle allocated a loading bay or location. Vehicle seals need to be checked against
the paper work.
Checking: Once the goods are offloaded, you need to decide weather they need to be checked or put
away.
Cross – Dock: The goal of most warehouses is to increase throughput and reduce the amount of
stock held. It requires system to identify the product that needs to be cross docked.
Recording: Depending on the product or service their could be a requirement to record more than just
a standard data, such as product code, quantity on arrival etc.
Put Away: in order for this system to work properly and effectively, a great deal of information needs
to be programmed, size, weight, height of goods. etc.
Prepared by Umair Samad (Instructor - Logistics & Supply
Chain)
Warehouse Handling Equipment:
Trolley: it is mechanically operated trolley to move goods in warehouse. Normally for small
movement and medium to low weight can be used.
Hand pallet Truck / Trolley: it is mechanical stacker that has two forks horizontal direction which can
raised or lowered using hydraulic movement of piston. Medium to high weight can be moved easily with
lot of energy .
Fork Lifter: Most common type of handling equipment used in warehouses is fork lifter. It is operated
either of battery or on engine using fuel and can move and uplift heavy to very heavy goods with
considerable speed.

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
ORDER PICKING:
1. Pick y list.
2. Pick by label.
3. Pick by voice
4. Bar code scanning
5. RFID or Automated Picking.
Pick by List: a paper pick list will normally detail the order number, location, product code, description
and quantity can be easily picked.
Pick by label: in this system pick lists have the series of labels placed on a sheet which are printed in
pick order. The picker attached the label of each item picked and re turns any unused label to the
supervisor office. Any discrepancies are checked immediately and additional labels printed if the stock is
available elsewhere in the warehouse.
Pick by Voice and Lights: The use of voice technology is gearing grounds in warehouses globally,
particularly in order picking.
Bar code Scan: A bar Code consist of a series of vertical bars varying widths that represents letters,
numbers and other details. Bar code are used to identify products, locations in the warehouse, container
number, serial number and batch numbers etc.
Prepared by Umair Samad (Instructor - Logistics & Supply
Chain)
ORDER PICKING:
RFID Radio Frequency Identification Device: A mean of uniquely identifying products or an items
using radio waves. Data is exchanged between tags and readers and depending on the frequent, may or
may not require a line of sight.

Benefits of WMS System:

• Real time visibility.
• Improved productivity or output.
• Accurate stock numbers.
• Reduction in returns
• Accurate reporting
• Minimize paperwork.
• Improved customer service and replenishment.

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
Warehouse Layout:
• U Flow Layout:
• This layout warehouse is very
common these days as this had
many advantages over the throw
flow.

• Items inbound and outbound are

performed on the same side of
warehouse to avail the cross
dock operations.

• This warehouse has the capacity

to deal with different processes
like sortation, packing or
consolidation.

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
Warehouse Layout:
• Throw Flow Warehouse:
• In this layout the inventory flow is in the
form of a typical flow in a system, in which
the items inbound are from one end of the
warehouse and the outbound operations
are carried out at another end of
warehouse.

• Fast moving or high usage items are placed

in the center of warehouse so that they can
be easily retrieved or stored.

• Slow moving or dead stock items are

placed behind the fast moving items for
maximum utilization of warehouse.

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
Warehouse Layout:
• Utilization Calculations
Þ Space Used X 100 / (Total Space)

• Aisle Width:
Distance between two racking system or distance between pallets placed in opposite racks.
The distance between pallets in adjacent racks

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)
Warehouse Layout:
• EOQ Economic Order Quantity:
The stock level at which the order is replenished to avoid stock outs.
• LIFO (Last In First Out):
In this arrangement the inventory in warehouse is maintained on the basis of last in and first out basis.
This means that the item which is received at the last will be dispatched first. The items are tagged and
placed in such a way so that they can be easily retrieved and shipped.
• FIFO (First In and First Out):
in this arrangement the stock in warehouse is maintained on first come first out basis. This means that
the items which is received first will be shipped first and so that tagging is done accordingly.

Prepared by Umair Samad (Instructor - Logistics & Supply

Chain)