1. Warehousing –
An Overview

2. Packaging
A & B Items
Components
Warehousing

3. WAREHOUSING - WHAT Supply Chain Consists of Nodes & Links to Move
Material From Point of Origin To Point of Consumption
Warehouses Are Nodes & Transportation Systems are
Links in the Supply Chain
Warehouse Provides Space for Storage & Holding of
Raw Material/ Consumables
Work-in-Process
Finished Goods/ Merchandise
Warehousing Function Responsible for Managing
Storage/ Holding/ Preserving Material
Material Handling Within Warehouses
Storage & Handling Absorbs 20% of Distribution Costs

4. WAREHOUSING - WHY To Reduce Production/ Transportation Costs
Producing Economic Batch Quantities Reduces Production Cost
Offsetting Higher Cost of Warehousing & Inventory
Reducing Transportation Cost Using TL by Combining Different
Customers’ Deliveries
To Coordinate Supply & Demand
Matching Highly Seasonal Product Supply (Fruits) To Meet
Round the Year Demand for Canned Fruit Juices
To Assist in the Production Process
Wine/ Liquors/ Cheese Production Includes Ageing in Storage
Storing Products in ‘Bonded WH’ To Delay Paying Excise Tax
Value-Adding Activities - Special Packaging/ Private Labeling/
Custom Product Preparation Before Sending To Retail Outlet
To Assist in the Marketing Process
Storing Goods/ Merchandise Close to Market for Quick Delivery
Improved Customer Service Through Faster Delivery Helps
Increase Sales

5. WAREHOUSING - WHY
Creates TIME Utility for Raw Material/ Industrial Goods/
Finished Products/ Merchandise
Market-Oriented Warehouses Situated Close to Market
Allows Firms to Serve Customers Faster
Warehousing Increases Utility of Goods for Prospective
Customers by Broadening their Time Availability
Warehousing Allows Company’s to Provide Higher
Customer Service By Making Goods Available WHEN
and WHERE Customers Demand Them
Importance of Warehousing Increasing as Companies
Use Customer Service As A Dynamic/ Value-Adding
Competitive Tool

6. BASIC WAREHOUSING OPERATIONS
Warehouse Management
Material Handling/ Movement of Material
Inventory Holding/Storage
Material Handling Activities
Loading/ Unloading
Moving Product To/ From Various Locations Within Warehouse
Order Picking
Order Assembly
Storage/ Inventory Holding Activities
Accumulation of Inventory Over Time
Different Locations/ Lengths of Storing Time Based On Purpose
of Storage
Short-Distance Product Movement in W/H Operations
Receiving – Bringing in Goods from Transport Network
Put Away - Moving From Receiving Dock to Pre-Storing Area
Order Picking – Selecting Products For Filling Customer Order
Collating - Staging/ Packaging/ Preparing for Shipping
Shipping - Loading Goods for Shipping To Customer

7. Sorting & Cross-Docking
WAREHOUSE FUNCTIONS
Secondary
Sorting V E N D O R
Goods
Receiving
Reserved
Storage
Order
Picking
Replenishment
Collate/ Packing C U S T O M E R
Sorting & Cross-Docking
Dispatch
Flow Of Goods

8. MOVE-STORE ACTIVITES SHIPPING/DISPATCH WAREHOUSING PROCESSES Input
RECEIVING
Schedule Carrier For Unloading
Unload Vehicles
Inspect for Damage
Compare To Purchase Order
Put-Away
Identify Product
Identify Storage Location
Move Product
Update Records
Input
Order Picking
Information
Walk & Pick
Batch Picking
Automated Storage
& Retrieval Process (AS/R)
Storage/ Binning
Material Handling Equipment
Stock Location
Fast Moving
Unit Size
Cube size
Collating
Packaging
Labeling
Staging
SHIPPING/DISPATCH
Schedule Carrier For Loading
Load Vehicles
Lorry Receipt (LR)/
Consignment Note (C/N)
Compare To Purchase Order
Output
WAREHOUSING
PROCESSES

9. WAREHOUSING - ROLES
Warehousing Serves Several Value-Adding Roles in the
Supply Chain
Trade-Off Areas
Value-Adding Roles
Consolidation
Product Mixing
Service
Contingency Protection
Smooth Operations
Transportation
Order Filling
Lead Times
Stock Outs
Production
Warehousing Involves Costs But Often Adds More Value
Warehousing of Goods Recommended Only If Trade-Off
Possible in Other Areas

10. TRANSPORT CONSOLIDATION
Physical Supply System
Supplier
Volume
Shipment
Supplier
Distribution
Warehouse
Plant
Supplier
Supplier
LTL for
Short Distances
TL for
Larger Distances
TL – Truck Load Rates – Lower
CL –Car Load Rates – Lower
LTL – Less-Than-Truck Load Rates – Higher
Consolidating Small Inbound Into Larger Outbound Shipments
Reducing Transport Cost By Consolidating Shipments at the
Distribution Warehouse

11. TRANSPORT CONSOLIDATION
Physical Distribution System
Plant
Retailers
Distribution
Warehouse
Volume
Shipment
Retailers
Plant
Distribution
Warehouse
Retailers
Plant
TL for
Larger Distances
LTL for
Short Distances
TL – Truck Load Rates – Lower
FCL – Full Car Load Rates – Lower
LTL – Less-Than-Truck Load Rates – Higher
Product Mixing/ Bundling
Preparing Floor-Ready Merchandise
Ticketing/ Labelling
Marking - Apparel on Hangars

12. DISTRIBUTION CENTRE (DC)
Product Mixing/ Bundling
Customer 1
Plant 1
Products
A & B
A B C
Customer 2
B C F G
Plant 2
Products
B & C
Distribution
Warehouse
A G
Customer 3
Plant 3
Products
D & E
A B C D E
Customer 4 SC
(Small Carriers)
Plant 4
Products
F & G TL
(Large Trucks)

13. CROSS-DOCKING DC Plant DC Cross Docking Plant (DC) DC Plant Retailer 1
Inbound
Dock
Outbound
Dock DC
Cross Docking
(DC)
Retailer 2
Plant DC
Retailer 3
Plant
Cross Docking Justified By Reduction in Transportation Costs & Time
for Product Mixing
Supplies Packed & Invoiced as Per Retailers’ Orders at Suppliers’ End
Supplies From Different Sources Combined as per Retailer-Orders at
Cross-Docking DC & Sent To Respective Retailer-DC in Shorter Time/ Cost
Goods Transferred Directly from Inbound to Outbound Docks
No Storing in Cross-Docking DC
Goods Along with Respective Invoices Leave DC Within 24 Hours

14. SUPPLY MIXING WAREHOUSE
Raw
Material A
Raw
Material B
Supply Mixing
Warehouse A B C D
LTL
Plant TL
Vendor
Source C
Vendor
Source D
Consolidation of Supplies from Different Sources

15. WAREHOUSING SYSTEM Storage Functions Material Handling Functions
Accumulation of Inventory Over Time
Depending on Purpose of Storage & Different Lengths of
Time a Product Required to Remain in the Warehouse
Different Locations in the Warehouse Chosen for
Storing Product Based on Purpose of Storage
Material Handling Functions
Loading & Unloading Activities
Moving Products To and From Various Locations Within
the Warehouse
Order Picking
Identification of Major System Activities Promotes
Understanding of the System as a Whole & Helps
To Provide a Basis for Generating Design Alternatives

16. STORAGE FUNCTIONS Consolidation
Holding (Providing Protection & Orderly Holding of Inventory)
Holding Time/Storage Requirement Drives Store Configuration/ Layout
Long-Term Specialized Storage (Ageing Liquors/ Wines)
General-Purpose Merchandise Storage (Seasonal Goods)
Temporary Holding of Goods (Truck Terminal)
Consolidation
Transportation Rate Structure/Breaks Influences Use of Storage Facilities
Collection Point (Warehouse/ Freight Terminal) Used for Small
Shipment-Consolidation To Avail More Economical TL Rates
Bulk-Breaking (Opposite of Consolidation)
TL Supplies Received from Long Distance Factory Broken into
LTL Loads (Order) & Sent To Short-Distance Retail Outlets
Distribution/ Terminal Warehouses Used to Break-Bulk
Mixing
Products From Different Suppliers Mixed to Assemble Retailer’s Orders
For Delivering to Different Short-Distance Retail Outlets

17. STORAGE EXAMPLES Pallet Tote Box Storage/ Binning
Storing & Retrieval Using Reach Truck

18. MATERIALS HANDLING FUNCTIONS
Loading & Unloading
On Arrival at Warehouse Goods Are Unloaded from Trucks
Packed Goods are Loaded on Outgoing Trucks
Often Special Equipment are Required for these Operations
Involves Various Activities of Checking Order Contents/ Order
Sequencing etc.
Movement Within Warehouse
From Unloading Point to Storing Area
Storing Area to Picking Area
Picking to Staging Area
Staging to Packing Area
Packing to Docking Area
Order Filling/ Picking
Selection of Stocks From Storage Areas To Build Customer Order
Order Selection May Take Place Directly From Semi-Permanent/
Bulk Storage Area (Order Picking Areas)
Often the Most Critical Material Handling Activity due to Small-
Volume Orders

19. LOADING/ UNLOADING
Dockside Counter Balance Truck

20. SEMI MECHANIZED PICKING

21. WAREHOUSING DECISION TREE
Ownership
Private
Public
How Many
Centralized
Decentralized
What Size
Where (Warehouse Location)
Warehouse Layout
What Products Where
(Product Location)
Warehousing Decisions Made in a Trade-Off Framework

22. WAREHOUSING OBJECTIVES
Achieve Maximum Efficiency in Organizing and Handling Flows
at Minimum COST
Balance COST/ Utility by Adjusting Following Variables
Number of Warehouses in the System
Warehouse Building Size
Width & No. of Aisles for Easy Movement of Material/ Men/ Equipment
No. & Size of Shelves
Internal/ External Material Handling Equipment
Computer Systems
Manpower
Design Layout/ Equipment/ Organisation/ Systems to Facilitate
Savings on Labour & Time
Increase Speed of the 3 Flows
No. Of Warehouses Decided in Trade-Off With Logistics Costs
As Number of Warehouses Increase
Cost of Transportation & Lost Sales Decline
Cost of Warehousing & Inventory Increases

23. CONTRIBUTIONS Enhancing Customer Service Offerings Customizing
Guaranteed Delivery Lead Time at Optimal Cost
Multi-Product Order Servicing
Assembling Multi-Sourced Products
Single Point Delivery
Desired Delivery Time (JIT)
Customizing
Re-Packaging as per Customers’ Specification
Bulk Packaging
In Re-usable Eco-Friendly Pallet boxes
Own Packaging for Saleable Spares
In Sets for Delivery at Point of Assembly

24. Warehouses Increasingly Becoming
CHANGED WAREHOUSING OBJECTIVES
Warehouses Increasingly Becoming
VALUE ADDING CENTRES
In the FLOW of Goods
Rather than Just STORING
This is Achieved by Bringing in Goods
Just In Time for JIT Deliveries