Storage & Warehousing

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SUPPLY CHAIN
MANAGEMENT
Storage & Warehousing

Warehouse
A location where inventory is stored
Based on the time horizon:
short-term
extended time

Warehousing
Warehousing is management of materials
while they are in storage.
W arehousing activities include:
Storing
Dispersing
Ordering
Accounting

1

Warehousing
Record keeping within warehousing requires
stock record for each item that is carried in
inventories.
The individual item is called a stock-keeping unit
(SKU).
Stock records are running accounts that show:
On-hand balance
Receipts & expected receipts
Promises, & allocations

Warehousing
The objectives (as with other elements in a
distribution system):
minimize cost while maximize customer
service

Characteristics:
providing timely customer service
keep track of items so they can be
identified & found readily & correctly
minimize the total physical effort = cost of
moving goods
provide communication links with
customers

Types of Warehouse

Mission of Warehouse

Based on the service functions:
1. General warehouse
– To protect goods until they are needed
– Minimal handling, movement & relationship
to transportation
2. Distribution warehouse
- dynamic
movement & mixing
- goods received in large-volume lots, stored
briefly, broken down into small individual
orders
- emphasis on movement and handling rather
than on storage

A warehouse may serve any of the following:
Factory Warehouse: holds inventory that is
used to balance and buffer the variation
between production schedule and demand
located near the point of manufacture
Consolidation Warehouse: used to accumulate
or consolidate product from various point of
manufacture within a single firm or several
firm, for combined dispatch
Local Warehouse: distributed in the field in
order to shorten the transportation distances to
permit rapid response to customer demand

2

Warehouse Types
Plant 1
Store A

Plant 2

Consolidation
Warehouse

Store B
Store C

Plant 3

Sorting by Distribution Center Cross Docking

Plant 1
Store A

Plant

Break-Bulk

Store A

Distribution
Store B

Warehouse

Plant 2

Store C

Center

Store B
Store C

Plant 3

3

Sorting by In-Transit Mixing

Store A

Supplier/

Products 1, 3, 4

Plant
Producing
Product 1

Plant
Producing
Product 2

Order Assembly by Sorting/Sequencing

Vendor of
Component A
Supplier/

Transit Mixing Point
Product 4

Plant
Producing
Product 3

Store B
Products 1, 2, 3

Vendor of
Component B

Manufacturing
Plant 1
Components A,B,C

Order Assembly by
Sorting/Sequencing

Manufacturing
Plant 1
Components C, B

Supplier/
Store C
Products 1, 2, 4

Vendor of
Component C

Manufacturing
Plant 1
Components C,B,A

Warehouse Activities
1.
2.
3.
4.
5.
6.
7.
8.

Receive goods
Identify the goods
Dispatch good to storage
Hold Goods
Pick goods
Marshal the shipment
Dispatch the shipment
Operate an Information System

Warehouse Activities
1. Receive goods
accepts goods from outside transportation or attached
factory
accepts responsibility for them
it must:
check the goods vs. order / bill
check the quantities
check for damage
damage reports
Inspect goods, if required

4

Warehouse Activities

Warehouse Activities

2. Identify the goods
- Stock-Keeping-Unit Number (Part Number)
- Qty receive is recorded
3. Dispatch good to storage
- sorted & put away
4. Hold Goods
- kept in storage, protection

5. Pick goods
6. Marshal the shipment
- goods making up a single order are brought together
& checked for errors. Order records updated
7. Dispatch the shipment
- orders are packaged, shipping documents are
prepared, goods loaded to vehicles
8. Operate an Information System
items record must be maintained
(qty on hand,
quantity received, quantity issued & location)

5

Receiving and Shipping Space
Planning
The steps...
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