Chapter 2:
WAREHOUSE MANAGEMENT
Chapter 1: Overview of Warehouse and Yard Management
CONTENTS
Chapter 2: Warehouse Management
Chapter 3: (Container) Yard Management
Chapter 4: Applying ICT to Warehouse/Yard Management
Chapter 5: Security and Safety in warehouse management
Chapter 6: Efficiency and risk management in yard/warehouse
management
Chapter 7: Warehouse Manager
Chapter 2: Warehouse Management
Objectives
1. Understanding activities of warehouse management
2. Analyzing the content of warehouse management
3. Understanding warehouse processes and design consideration
4. Understanding the processes of controlling and checking the warehouse
5. Understanding of Warehouse activities
Chapter 2: Warehouse Management
Content
1. Concepts, roles, and benefits of warehouse management
2. Classification of Warehouse Management
3. Activities of Warehouse Management
Receiving
Put away
Storage
Order Picking
Shipping preparation
Shipping
4. Warehouse processes and design consideration
5. Control and Check in the Warehouse
6. Documents of Warehouse Activities
Chapter 2: Warehouse Management
Concepts, roles, and benefits of warehouse
management
Being a warehouse manager of a big/large warehouse is a very challenging position requiring a range of skill
sets. The warehouse manager is now a high-level position in many companies, recognizing the high costs and
investment involved in the facility, as well as the key role that warehouses play in the provision of high
customer service levels
• 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
Concepts, Roles, benefits of warehouse
management
Concepts, Roles, benefits of warehouse
management
WAREHOUSE MANAGEMENT SYSTEMS
Manages warehouse inventory, space, equipment, and labor resources to direct
the flow of materials and information from receiving and put away to light
assembly, order picking, value-added processing and shipment.
Concepts, Roles, benefits of warehouse
management
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 (Stock Keeping Units)
handled & the number of orders received & filled.
Most activity in a warehouse is material handling.
Concepts, Roles, benefits of warehouse
management
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
Activities of warehouse management
• Receive goods
• Identify the goods
• Dispatch goods to storage
• Hold goods
• Pick goods
• Marshal shipment
• Dispatch shipment
• Operate an information system
Activities of warehouse management
Receive goods
• Accepts goods from
‒ Outside transportation or attached factory
& accepts responsibility
• Check the goods against an order & the bill of
loading
• Check the quantities
• Check for damage & fill out damage reports if
necessary
• Inspect goods if required
Activities of warehouse management
Identify the goods
‒ items are identified with the appropriate
stock-keeping 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
Activities of warehouse management
Pick goods
‒ items required from stock must be selected from storage &
brought to a marshaling area
Marshal the shipment
‒ goods making up a single order are brought together & checked
for omissions or errors; order records are updated
Activities of warehouse management
Dispatch the shipment
‒ orders are packaged, 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 received, quantity issued, &
location in the warehouse
Warehouse Processes and Design Consideration
Activities of warehouse management
Activities of warehouse management
Sơ đồ quá trình công nghệ kho hàng
Activities of warehouse management
Activities of warehouse management
From no-class (Stage 1) to world-class warehousing (Stage 5)
Warehouse Processes and Design
Consideration
Ideal Facility for Pure Supplier Warehouse Space
Consolidation Requirements
(Full Pallet Movement)
Warehouse Processes and Design Consideration Ownership?
Private? Public?
DECESIONS RELATED
WAREHOUSE MANAGEMENT How many?
Centralized? Decentralized?
Size and scale?
Location?
Design and internal arrangement
Allocation and Arrangement
Structure and Management
Warehouse Processes and Design Consideration
DECISIONS RELATED WAREHOUSE MANAGEMENT
If the amount of regular
inventory is always greater than
Q*, the enterprise should build
its own warehouse, and vice
versa, it should be rented.
In fact, the decision's hiring or
self-build depends on many
other factors, specifically:
+ The stability of demand- Density
of the market
+ The need for security and
quality control
+ The need to serve customers
+ Necessity for other business
purposes
Warehouse Processes and Design Consideration
Example of warehouse
structure and location
identification
Warehouse Processes and Design Consideration
Warehouse Processes and Design Consideration
Warehouse Processes and Design Consideration
Warehouse Processes and Design Consideration
WAREHOUSE DESIGNING
Processes of warehouse designing
Purpose of warehouse design: Step 1: Define business requirements (conditions and design
1. Minimize time of an order constraints)
2. Maximize usable space Step 2: Identify and collect data.
Step 3: Build the basis for planning.
Step 4: Determine the rules of operation
Step 5: Evaluate the device types.
Step 6: Prepare the internal and external arrangements.
Step 7: Develop high-level procedures and information system
requirements
.Step 8: Evaluate design flexibility.
Step 9: Calculate the number of devices.
Step 10: Calculate the number of employees.
Step 11: Determine investment and operation costs
Step 12: Re-evaluate business requirements and design
constraints.
Step 13: Finalize the design.
Warehouse Processes and Design Consideration
WAREHOUSE DESIGNING
Principles of Layout in the Warehouse
0. FIFO - LIFO
1. Use of a one-story warehouse
2. Move goods in the warehouse in a straight
line
Warehouse Processes and Design Consideration
WAREHOUSE DESIGNING
Principles of layout in the Warehouse
3. Use appropriate loading and unloading equipment
4. Minimize path in the warehouse
Warehouse Processes and Design Consideration
The size of the warehouse is calculated by its volume
Warehouse Processes and Design Consideration
WAREHOUSE DESIGN_ The notice
1. Warehouse design should strike a balance between space utilization and warehouse handling
costs
2. Warehouse design should follow Process-oriented, to be able to transport large and easy
flows of goods
3. Warehouse design should facilitate the smooth movement of goods from receiving to storage.
4. The optimal warehouse layout depends on:
+ Types of goods to be stored
+ Time and quantity of goods taken away
+ The degree of automation of the warehouse
+ Level of investment in equipment and warehouse infrastructure
Warehouse Processes and Design Consideration
WAREHOUSE DESIGN_ Some basic equipment
Warehouse Processes and Design Consideration
WAREHOUSE DESIGN_ Some basic equipment
Warehouse Processes and Design Consideration
GUIDELINES FOR CALCULATING DEMAND FOR WAREHOUSE
Input factors:
Type of goods to be stored
Forecasting the number of goods to be stored in stages
Ways to store goods: by pallet; tanks; ….
Conditions of storage of goods
The level of cargo movement
Caculate the space for warehouse?
Warehouse Processes and Design Consideration
CASE STUDY FOR CALCULATING SPACE FOR WAREHOUSE
Hoang Lam Trading Joint Stock Company received a request to rent a warehouse
with the following specific information:
Items Unit Good A Good B Good C
Ton 200
Quantity Barrel 12,000
Pieces 35,000
Quantity/pallet /1 pallet 1 42 400
Pallet Specification 1.2 *1.2 *0.15 m
Q1: Calculate the need for pallets to use
Q2: Calculate the demand for warehouse space knowing the area for the road, the office area, and the
other area accounts for 35% of the warehouse area.
Q3: If the existing warehouse area is 600 m2, the company does not want to expand the warehouse
space but invests in a racking system, how many more pallet positions are needed?
Warehouse Processes and Design Consideration
Description JUN JUL AUG SEP OCT NOV DEC
WH Demand (m2) 4,027 3,807 3,807 4,067 4,067 4,067 3,807
WH area
Carton 691 691 691 691 691 691 691
calculation
Preform 2,384 2,164 2,164 2,340 2,340 2,340 2,164
Closure 792 792 792 876 876 876 792
Crowns 160 160 160 160 160 160 160
WH actual tandard (m2) 2,236 2,236 2,236 2,236 2,236 2,236 2,236
Shortage (m2) (1,791) (1,571) (1,571) (1,831) (1,831) (1,831) (1,571)
Adding - Inves ted racking 798 798 798 798 798 798 798
Shortage (m2) after
inves ted racking (993) (773) (773) (1,033) (1,033) (1,033) (773)
Rent external WH Invest in Racking
Cost/year 1,105,000,000 1,100,000,000
Payback calculation 1 year rental 800m2*60000VND/m2/month * 12
months save 1 B VND from Year 2
490 pallets * 30.000VND/pallet * 3
times/month * 12 months= 529 million
Transaction cost of external WH VND No transaction cost
Control and Inventory Count in Warehouse
• Importance of controlling and counting inventory in warehouse
• Types of controlling and counting inventory in warehouse
• Processes of controlling and counting inventory in warehouse
• Ways of controlling and counting inventory in warehouse easily
and exactly
Control and Inventory Count in Warehouse
The importance of controlling and inventory count in warehouse
• It allows you to know how much inventory is on shelves at that given moment
(Physical Inventory = Tồn kho vật lý)
• Preventing stockouts or overstocking: Keeping regular count of your inventory
gives you more information for demand forecasting. Better planning leads to
optimized stock levels, meaning less revenue lost.
• Identifying and preventing loss: Understanding what’s on your warehouse shelves
helps you identify not only when stock is past its shelf life, but also in the event
some of your inventory goes missing.
• Better accuracy: Knowing your stock levels provides more clarity for your entire
supply chain.
Control and Inventory Count in Warehouse
The types of controlling and counting inventory in warehouse
• Periodic inventory: is the process of accounting stock valuation and it is done at particular
intervals. Periodic inventory means to count the entire stock weekly or monthly.
• Perpetual Inventory: The perpetual system keeps track of inventory balances continuously, with
updates made automatically whenever a product is received or sold/or delivered
• ABC Inventory: This involves ranking your products by priority based on their price and
popularity
• Just – In – Time Inventory: coordinates receiving raw materials from the supplier as a customer
purchases it, reducing waste in the form of inventory housing costs.
Control and Inventory Count in Warehouse
The types of controlling and counting inventory in warehouse
• What Are the Advantages and
Disadvantages of a Periodic Inventory
System?
• What Are the Advantages and
Disadvantages of a Perpetual Inventory
System?
• What Are the Differences Between the
Periodic and Perpetual Inventory
System?
Control and Inventory Count in Warehouse
The types of controlling and counting inventory in warehouse
Example of ABC Inventory
Control and Inventory Count in Warehouse
The types of controlling and counting inventory in warehouse
Example of Just-In-Time Inventory
Processes of controlling and counting inventory in warehouse
Reporting Implementing
Preparing
Solving the Planning
issues of gap
https://www.youtube.com/watch?
v=Ue8oCPQjU8o
Processes of controlling and counting inventory in warehouse
https://www.youtube.com/watch?
v=Ue8oCPQjU8o
Ways of controlling and counting inventory in warehouse
Ways of controlling and counting inventory in warehouse
Documents for Warehouse Management
Import/Receiving Notes – Phiếu nhập kho
Export/Delivery Notes – Phiếu xuất kho/giao hàng
Documents for Warehouse Management
Report of checking goods – Biên bản kiểm tra hàng hóa
Documents for Warehouse Management
Report of counting goods – Biên bản kiểm kê hàng hóa
Documents for Warehouse Management
Documents from warehouse management systems
Documents for Warehouse Management
Documents from warehouse management systems
https://www.lomag.eu/
InstructionsDocuments/
