SOUTHWESTERN INSTITUTE OF BUSINESS AND TECHNOLOGY
DISCIPLINE…ACCOUNTABILITY…PROFESSIONALISM…HUMILITY
Nautical Highway, Panggulayan, Pinamalayan, Oriental Mindoro
Contact Nos.: +63917-127-8500/ +63912-448-6518
WAREHOUSE OPERATIONS MANAGEMENT
HANDOUT No.1
PREPARED BY: SHERYL S. SABEDA, LPT.
NAME: __________________________________________
COURSE/YEAR & SECTION: __________________________
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INTRODUCTION
The field of supply chain management relies heavily on the study of storage to
maintain the efficient movement of items through the logistics system. This handout
provides an overview of the nature and importance of warehousing, the different types
of warehousing, the functions they serve, and the decision criteria for selecting the
appropriate warehousing types.
LEARNING OBJECTIVES:
At the end of the lesson, the students are able to:
1. Understand the nature and importance of warehousing in the logistics system.
2. Familiarize with different types of warehousing.
3. Comprehend the functions of warehousing.
TOPICS:
I. Concept of Warehousing
a. Defining warehousing
b. Kinds of warehouses
II. Warehouse Logistics
a. Challenges of warehouse logistics
b. How to improve warehouse logistics
c. Warehouse Management System (WMS) and Warehouse Logistics
d. Benefits of Warehouse Logistics
III. Functions and Objectives of Warehouses
a. Primary Functions of a Warehouse
b. Secondary Functions of a Warehouse
c. Objectives of Efficient Warehousing Operations
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“My mind is a warehouse of carefully organized human emotions. I lock
away the things that do not serve me.”
- Tahereh Mafi
Something to Think About…
A warehouse is a storage of goods. Do we really need a sophisticated one?
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CONCEPT OF WAREHOUSING
Defining Warehousing
A warehouse is a structure intended for storing goods. Goods may either be:
Raw Materials
Industrial goods
Finished products
Warehouses are used mostly by:
Manufacturers Wholesalers
Importers Transport Businesses
Exporters Customs
They are typically large, unadorned structures in industrial parks on the outskirts of cities, towns
or villages.
Assuming responsibility for storage of goods, warehousing affords not only the place but
more on time, releasing goods as and when they are needed. Warehousing is the act of storing
goods that will be sold or distributed later. It creates time utility, granting firms to use customer
service as a dynamic value-adding competitive tool.
In short, a warehouse is stereotypically viewed as a place to store inventory.
However, in a much broader perspective, warehousing is denoted as transportation at zero
miles per hour. It is a segment of a firms' logistics system that stores products at and between
point of origin and point of consumption. In many logistical system designs, the role of the
warehouse is more suitably regarded as a switching facility as contrasted to a storage facility.
Evolution of Warehousing
Traditionally viewed as a place to
hold or store inventory.
Contemporary view is the warehouse functions
to mix inventory assortments to meet customer
requirements.
Warehousing types evolved to accommodate the following dynamic aspects:
Distribution Centers
Consolidation Terminals
Break-Bulk facilities
Cross-docks
“The growth in e-commerce has transformed warehouse and
distribution centers to mega fulfillment centers. The global shift
toward e-commerce is changing how the retail and logistics
industries operate.”
- Victor Coronado
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The degree of change brought about by e-commerce and technology in the warehouse
industry is said to be so far and wide that the word "revolution” might be the more fitting term
instead of an "evolution"
The most obvious warehouse changes that had taken place during the last
two decades include the following:
Innovative, ground-breaking, and advanced storage systems
Better tracking configurations
Comprehensive training and modern technology
Kinds of Warehouses
E-commerce has also prompted modifications in the types of warehouses that are used. The
new kinds of warehouses include:
Centralized return centers High ceiling facilities
Customer facing On demand warehouses
Flow warehouses Pop-Up warehouses
Futuristic facilities
The outcome of e-commerce and technology to warehousing are both evolutionary and
revolutionary.
The degree and speed of change amidst supply chains is gaining momentum and does not
show any signs of slowing down. The "shocks" and "budges" in the industry are being felt by all
players - from producers, merchants, logistics service providers, wholesale distributors and,
most considerably, by consumers. Such impacts are a global sensation.
WAREHOUSE LOGISTICS
A strategic component of logistics management, warehousing affords businesses the
management of the transportation and storage of their inventories.
Difference between Warehousing and Logistics
Warehousing is referred to as the safe storage of goods, inventory, and information within
an identified structure, building, or area.
Logistics, on the other hand, is the predominant and all-embracing principles and function
of:
Transportation
Warehousing
Internal movement of the goods, inventory, and information to manufacturing line
and/or back to the firm from the customer.
Warehouse Logistics
Logistics definition includes:
Detailed planning
Organization
Management
Implementation of complex operations
Logistics is not limited to the flow of tangible goods. It also extends to the flow of
information and time.
Warehouse logistics incorporates all the wide-ranging, complex aspects involved in
warehousing such as:
Organization Movements Management
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This includes:
The flow
Shipping
Receiving Of physical inventory
As well as that of more abstract goods, including
Information and
Time
Warehouse Logistics may also stretch to cover issues ranging from any or all of the
following:
Warehouse Pest Control
Damaged Goods Handling
Safety Policies
Human Resources Management
Customer Returns
Challenges of Warehouse Logistics
Among the many proverbial and recognizable encounters in warehouse management
includes the following:
Pinpointing the precise whereabouts of a definite item of inventory
Locating goods that are about to expire (NearEx or Near Expiry products)
Isolating the pallet that carted a supposedly expired and/or damaged items
Determining the truck that transported an item that was damaged during shipment and
handling
Identifying the goods that should be released first – following the First-in First Out (FIFO)
system.
How to improve Warehouse Logistics
Advanced Warehouse Management Systems
- One of the most sought-after tools that is an integral part of Manufacturing and
Distribution processes.
- It works in conjunction with the Inventory Management and Shop Floor Control systems
to manage your inventory and the products that you produce and ship.
- It controls many aspects of warehouse operations; Receiving, storing items, Retrieving
and Shipping.
With the right vision and forecast, one can actually design a warehouse to optimize its
available space, manpower time, and the unique storage requirements of the goods that you
store such as:
Perishable vs. Non-Perishable goods
Food and Non-Food items
Advanced Warehouse Management Systems offer the following;
Gives real-time insight into your warehouse, and equip you - and all your employees -
with the necessary tools to effectively, efficiently and profitably manage your warehouse.
Create a logical model of your warehouse in as much detail as you need by specifying
such characteristics as location, dimensions, temperature, humidity, and lighting.
Create a logical model of each item in your warehouse to allow. the system to match
items to storage locations based on the characteristics of the items and settings.
Control how stock is stored, picked, and replenished by setting up rules for the system to
follow.
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Move stock to and from specific locations using manual input or automatic system-
generated suggestions.
Use random locations for storage by allowing the system to track inventory for you.
Generate an audit trail of reports for each stock movement.
Sequence your employees' trips through the warehouse to maximize their productivity.
Confirm stock movement with minimal data-entry keystrokes.
Salient Features of Advanced Warehouse Management System
User-defined rules for stock movement
User-defined parameters for items and locations to control stock movement
Fixed and random locations for more efficient stock movement .
Automatic shipping carton selection during picking
Ability to review warehouse contents using up to nine levels of detail
Manual or automatic storage, picking, and replenishment of stock
Audit trail reporting of inventory movement
Warehouse Management Systems (WMS) and Warehouse Logistics
Implementing a solid Warehouse Management System (WMS) to control your warehouse
logistics is probably the best thing you could do for you operations.
Advantages of incorporating WMS in Warehouse Logistics:
Ensure accurate, real-time inventory counts.
Decrease returns.
Auto-replenish stock.
Maximize warehouse space.
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Benefits of Warehouse Logistics
Simple observation and analogy states that when…
Warehouse operations run smoothly
Inventory is properly accounted for. All the people, process
and systems fall into
place as they should.
The right item is then sent at the right time and place
Fewer operating errors
Stock is replenished when needed. occur
Warehouse operates more efficiently
Fewer errors = Fewer problems
MAXIMIZED REVENUE
Other WMS benefits extend to the following factors that boil down to reduced operational
expenses and more revenue:
Better demand planning Improved visibility & transparency
Stock traceability Efficient labor allocation
Fewer picking errors Improved customer services
Optimized processes
Warehouse Considerations Affect Warehouse Logistics
Possible changes that might influence warehouse logistics:
All concerned in the operations - from warehouse managers to all personnel involved -
must be well trained in using the tools and apps applied in the system.
Transportation, third-party logistics, suppliers, related contractors and sub-contractors
must coordinate with your logistics efforts.
Any external or internal changes in warehousing operations including physical lay-out,
new racking, and updated organization set-up.
FUNCTIONS AND OBJECTIVES OF WAREHOUSE
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Primary Functions of a Warehouse
1. Storage of goods
the most familiar and customary function of a warehouse is to act as
accommodation space for supply, tools or other items.
Goods may either be perishable or non-perishable.
Goods are sheltered from various elements including heat and rain.
a. Planned Storage – simply refer to storage required as planned for the purpose of
meeting regular customer demand.
b. Extended Storage – is an inventory that is excess of usual warehouse operation.
Reasons for extended storage requirements may be any of the following:
Seasonality in demand Speculative purchases
Erratic demand Discounts/Promos
Product conditioning Price change expectations
2. Shipping Hub – Movement of goods; receiving shipments and holding the items until
they are loaded onto the trucks and shipped elsewhere. Movement of goods consist of
the following:
a. Inbound activity
b. Transfer to storage
c. Order selecting
d. Outbound activity
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3. Information Management – This ensures data transparency in stock control
management.
A Warehouse Management System (WMS) is a software application used to monitor
and control warehouse operations and materials basically from receiving, storing, and
shipment or up until it reaches its final destination. Their core functions include:
Receiving of goods
Tracking stock
Dispatching goods
Ensuring efficiency in storage
Picking and hipping
Providing information to manager
Secondary Functions of a Warehouse
1. Protection of Goods – warehouse safeguards from loss or damage due to heat, dust,
wind and moisture.
2. Risk Bearing – Warehouses are constructed in such a way as to minimize risks and it
takes all precautions to prevent any mishap.
3. Processing – Certain commodities are not consumed in the form they are produced.
Processing is required to make them consumable.
4. Grading and Branding/Packing – warehouses offer additional services to perform the
functions of grading and branding of goods on behalf of the manufacturer, wholesaler or
the importer of goods. These are usually intended for special promotions and sometimes
for export transactions. It also provides facilities for mixing, blending and packaging of
goods for the convenience of handling and sale
5. Transportation – Warehouses usually provide delivery services to their clients –
wholesalers and retailers alike.
Objectives of Efficient Warehousing Operations
1. Simple Storage
2. Ease of Access
3. Improved Turnover
Two common methods used in warehousing and distribution to better manage inventory
turnover. These are:
a. FIFO (First-In First-Out) model which helps keep inventory from becoming
obsolete.
b. JIT (Just in Time) model which reduces the amount of time inventory sits.
4. Enhanced Inventory Production Processes
5. Reduced Problematic Circumstances
6. Optimal Safety
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WAREHOUSE OPERATIONS MANAGEMENT (SCM2)
Handout 1
NAME:____________________________ DATE: _________________
YEAR & SECTION: __________________ SCORE: _______________
ACTIVITY 1
DIRECTION: Compare and contrast traditional warehouse management systems with advanced
automated systems. Assess the advantages and disadvantages of each and determine which would
be more suitable for a large-scale e-commerce warehouse.
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ASSESSMENT
DIRECTION: Please answer all the questions to the best of your knowledge. Write your answer
inside the box.
1. Give at least three (3) challenges or problems encountered in warehouse logistics and propose
innovative solutions to address each problem effectively.
2. Discuss the benefits of implementing automated technologies, such as Warehouse
Management System. How do these technologies enhance productivity, reduce costs, and
improve customer satisfaction?
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3. Explore the various functions and objectives of warehouse logistics, such as inventory control,
space utilization, order fulfillment, and returns management. How do these contribute to supply
chain management and overall business success?
4. Analyze the impact of globalization on warehouse logistics. How do international trade,
customs regulations, and cross-border transportation influence warehouse operations, and
what strategies can be employed to mitigate associated challenges?
