Aung Kyaw Moe / Task 5 Warehouse and Inventory

Memo To: From: Date: RE: Francois Damba Aung Kyaw Moe
29 May 2013

TASK 5 WAREHOUSE AND INVENTORY

Chagong warehouse is a transit storage space that is necessary to keep the incoming flow of goods from Mugla warehouse and manage to distribute the supplies to the various sub-stores in the camp areas. We need it for because we surely need a temporary storage space between different phases of movement and transportation of supplies. Not only that, but for conbining and consolidating different supplies, making set packing, dividing bulky deliveries and to facilitate the speedier responses to the requirement of the field offices. To carry out these tasks, we need Human Resource since we have plenty of labours available at the warehouse and there are many labour contractors who can provide additional labours if necessary. For 500 square meter of storage space, we have to apply sack trucks and reach trucks for our ware house operation. Chagong Warehouse is short term temporary warehouse that has to support the field distribution of food items in camps which amount to 1000 Mt of food on monthly basis. The current location we have chosen allows a Through-Flow of goods. In that case we can separate and dispatch areas. By doing like this, we can be able to avoid congestion but also allows the two tasks to take place without confusion. The most frequently flowing goods in our warehouse are the food items which are distributed on daily bases, so they will be stored closer to the picking area where we can manage to combine items to form the food basket and from here they will move to the dispatch area assigned closer to it. We have four basic activities for our new warehouse. They are: 1. Receipt of goods 2. Storage 3. Picking and Packing 4. Dispatching of goods Before doing anything, we must define work cycles and resource requirement for each abovementioned activity. Therefore, we have to consider about the following points that are important to a good and effective work cycle: 1. Goods to be moved (type, weight and volume of cargo) 2. Staff required (permanent or daily wages labours) 3. Equipment to be used (Manual or mechanical) 4. Method to be used for warehouse operation

For example, we can calculate the work cycle for our 15 days transportation schedule as follows: Work Cycle Goods: Movement Distance: Staff Equipment: Method Description: Work Rate: Goods on Pallets (500 Kg) 10 Meters 1 FLT Driver Fork Lift Truck Unload and move pallets to goods-in return 30 Pallets (15 MT) per Hour

Based on this work cycle we can calculate the hours required to process receiving and dispatching of incoming and outgoing flow of goods: Incoming Cargo Volume from Mugla Day 1 Day 3 Day 5 Day 8 Day 10 Day 12 Cargo Weight 40 MT 40 MT 40 MT 140 MT 140 MT 140 MT Time Needed 2.67 Hrs 2.67 Hrs 2.67 Hrs 9.34 Hrs 9.34 Hrs 9.34 Hrs

Dispatched Cargo Volume from Chagong to the Camps Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Bagor 30 MT Nil 40 MT Nil 40 MT Nil Nator Nil 40 MT Nil 30 MT Nil 50 MT Parna 50 MT 60 MT 60 MT 50 MT 60 MT 50 MT Total 80 MT 100 MT 100 MT 80 MT 100 MT 100 MT Time Needed 5.34 Hrs 6.67 Hrs 6.67 Hrs 5.34 Hrs 6.67 Hrs 6.67 Hrs

After we can define the requirement of each work cycle, we can calculate the resource requirement which has the following steps: Identify key steps of the activity Define work cycles of the activity Estimate work rate of each activity Calculate resource requirement of each work cycle Add all recourse requirements to estimate the resource requirement of the activity Operations of warehouse. Planning the workload, receiving good, storage of goods and dispatching them are the different phases of our work cycle in the warehouse operation.

1/ Planning the workload

Planning of the workload to come is very important aspect of warehouse management based on the known volume of goods flow of past. Planning of the workloads should be on a day-to-day basis to enable the correct allocation of resources to be identified and allocated to the required tasks. Planning activities includes the following aspects of identifying workload and quantity of the goods. We have to plan ahead the volumes to be received, by individual item, based on a day-by-day basis so that the incoming workload can be planned. We have to separate any goods which are required to be sent immediately to the next stage in the supply chain or onwards to the beneficiaries. These goods will not be put into stock but will be made available immediately for goods dispatch.

We have to identify the requirements for stock location before the stock arrives, in which case pre-allocated space is available for them. Based on the identified product handling groups, we can put the goods into the respective storage areas. In this regards, the fast moving items may be grouped together and they need to have allocated space close to the dispatch area to speed up stock retrieval. Items on pallets to a height of only 0.5 meters may be allocated to an area designed to hold pallets of this height. There may be a need to pack individual items that make up a consignment to create a single transportable container. The quantities for each method of packing need to be identified, so that the correct resources can be allocated to the task.
DETERMINE THE RESOURCE REQUIREMENTS

Based on the past records of the work rates identified for each of the work cycles in the key warehouse activity areas are used for calculating the resource requirements in the future. The following key activity areas have to be emphasized: Goods receipt units unloaded & received per hour. Put away units moved to bulk storage per hour. Picking units picked per hour. Goods dispatch units loaded and dispatched per hour. We can calculate the resource requirements by dividing the amount of work to be done in the required time by the work rate for the relevant work cycle. In general, some resources in the warehouse operation may be full time employees and owned equipment. However, especially for operations which have a large variability in the volume of goods to be handled, the organization may also use temporary staff and hired equipment. Temporary staff tend be used for manual operations. The type of equipment most often hired is handling equipment e.g. fork lift trucks. We have to allocate the specific people and equipment to the individual tasks after the resource requirements have been calculated. The following Resources allocations are main functions to be included: 1. Mechanical handling equipment such as forklift trucks, hand pallet transporters and picking trucks. 2. Packing and palletizing equipment. 3. Operatives for manning the equipment. 4. Operatives for manual tasks. 5. Space for tasks that do not have a pre-allocated space, for example the break down of pallets and re-palletization. The tasks and the product handling groups to be processed determine the types of resources required. We can hire and make contract for equipment or people. They may be required to: Provide additional resources during peak workload periods. Carry out one off tasks that are additional to the normal work of the warehouse. Provide additional personnel when absence through sickness is above the planned estimated levels. To provide sufficient resources when recruitment is insufficient to fill permanent vacancies.
ORGANIZING HIRED LABOUR

Compared with the permanently recruited skillful labor, the Hired labor may not have any specific knowledge of the operation, or have attained the full specific skills required. In that case, we need to do a short induction into the tasks and operation will be required so that they can be effective.

There are both advantages and disadvantages of using hired labors: Disadvantages of hiring through an intermediary: More difficult to control the quality of the labor. Need to establish the trustworthiness of the intermediary. Possible loss of neutrality if dealing with one local group and not others. Probably higher cost due to fee for the intermediary. Advantages: Easier to manage. Faster to acquire labor. Defining and Allocating resources in Chagong Warehouse: The key staff in our new warehouse is the warehouse manager who takes responsibility for each and every task in the work cycle. Under the supervision of Warehouse Manager, we should recruit the following positions: - Warehouse clerk for receiving goods and storage - Warehouse clerk for picking and packing management - Warehouse clerk for despatching the cargo out of warehouse We will arrange to hire labours on daily wages basic and manage to move them where their work is needed. Sometimes, if necessary we can contact labour contractor and arrange manual labour for urgent purpose. 10 labours for daily use are quite enough for our new warehouse. But most of our food items are palletized; we must rely on the good working fork lift to unloading and loading pallets from the trucks. According to the transport schedule, we can see that shows that Mugla warehouse dispatch supplies day 1, 3, 5 alternatively and bulk sending are on day 8, 10, and 12 whereas the dispatched from Chagong to the camps are continuous from day 1 to day 6 and after that there is no more dispatching. Based on that schedule, we should arrange labour, evenly in the beginning of the schedule, but later we must concentrate on receiving side only. We can therefore allocate our resources accordingly by engaging the same workers for receiving and dispatch of supplies as they happen on separate days.

2/ Receiving goods
We have to plan ahead what will come to our warehouse and how we are going to receive them and check them. We have to check delivery details before the goods are unloaded, the delivery is checked to ensure that it is correct. The following are likely to be checked: Is the delivery at the correct location? Time of delivery. Is the paperwork correct? The quality of the delivery; at this stage it is not the quality of the goods. The location where the stock is required, as there may well be more than one goods receipt area. If there is a requirement to pack or palletize the goods after unloading. When unscheduled receipts arise, we must prepare a process in place for handling both scheduled and unscheduled receipts. About receiving unscheduled receipts, we need to identify the reasons for the occurrence and make a record and a decision made on how to handle the receipt. Only when the receipt has been checked and agreed, the vehicle is called forward for unloading. Unloading of vehicles If every necessary thing is OK, we should start to unload the trucks without delays. By receiving rapidly and efficiently, we can avoid the Congestion in the receipts area that can cause difficulties in the efficient flow through the warehouse. If the goods are received in loose form, it must be decided whether they need to be palletized. If goods are about to move directly to the other destination out of any storage, we have to do an activity called cross-docking which is often used in emergency situations.

In operations where cross-docking takes place, an appropriate system is required in order to maintain accurate stock records. Moving stock to receipt area After goods are physically unloaded from the vehicles they can be either: a) Moved directly to their allocated stock locations or, b) Placed into a receipts area. Some goods will be received packed, ready for storage, and with no requirements for quality checks to be made before storage. These can be moved directly to their stock locations. Goods that require checking or repacking can be placed into a designated receipts area to await further action. Physical check of goods Physical checking of the supplies is the first important thing to do when the consignment arrives at the warehouse. We have to check thoroughly the outturn conditions of the consignment in the following ways: We have to check visually whether the consignment looks in good condition and has the right quantities. Whether there are some boxes damaged or opened, is there any kind of insects. Where numbers are incorrect, or the products damaged, the situation should be handled under routine procedures identified by management. We have to conduct a random check on bags and boxes to see if the weight is appropriate or not. Another way to check the weight is to weigh the truck before and after unloading ensuring that the same numbers of people are in the truck both times. All paperwork related with the cargo such as way bill, delivery note, invoice and packing list must be cross-checked with the actual physical checking. Quality inspection Some cargo such as medicines, foodstuff and technical spare parts need to do quality inspection which is to be tested by a quality control company. Some goods as medicines can be quality inspected during the process of procurement, before approval for final payment. Technical quality inspection can be done by a third party laboratory services and we need to take some samples of product and send them to the inspection agency. To enable quick clearance of goods held for quality control checks, the quality department should be notified quickly so that samples can be taken and the remaining goods moved to their storage locations Sometimes, the goods are received in loose form, and we have to decide whether they need to be palletized or not and it can be done inside the vehicle, on the floor outside the vehicle, or in a designated area of the warehouse. We have to identify Mechanical handling equipment, operatives, and palletizing equipment during the process of allocation of resources. When the quantity and overall condition have been accepted, the receipt can be cleared and the delivery vehicle released. The final step in the receipt process is the clearance of paperwork and notification to stock control of the cleared receipt. Notification may be through an update/amendment to the stock control computer system, or by the transfer of paperwork. Receiving of Incoming Goods in Chagong Warehouse As a standard practice, our procurement section has already inspected the cargo and sullies before releasing them to send to our warehouse. In that case, we can check all incoming cargo against the specifications mentioned on our Purchase Order (type, brand, quality, quantity, measurement and any related special instruction for packing). In this regards, we have to be flexible to ensure there is no blockage of cargo in the receipt area and supplies are available for packing by borrowing workers from dispatch area or if there is no packing going on then from picking and packing area.

The Warehouse Clerk who is responsible for receipt of supplies must check the name of consignee, description of cargo and total quantity sent. After checking supplies thoroughly the goods will be offloaded and he will sign the receipts documents and discharge the vehicle.

3/ Storing goods
One of the most important issues in the warehouse management is the rapid and accurate movement of goods into their allocated storage locations because unmoved Stock can cause congestion in a high throughput facility. Stock misplaced into the wrong location can result in it being unavailable when required.
IDENTIFY REQUIRED STOCK LOCATION

The warehouse management system can be used to allocate the proper location of stock, or manually. The product handling group will usually identify the area of the warehouse into which a particular item is to be placed. The following factors must be considered for finding the specific location in warehouse: Space available. Distance to the empty locations. Number of goods to be stored. Frequency of demand. Picking methods that will be used to retrieve the goods. When the correct locations are properly identified, it is easy for maintaining a good flow through the warehouse operation. We have to decide to split the warehouse into zones. Different zones contain goods with different characteristics, such as medicines and kitchen sets. They might also contain goods stored in different sized locations. The zones are then split into locations. MOVE STOCK TO LOCATION After locations have been allocated, we have to manage to move the stock into them quickly, to prevent backlogs causing delays to the system. To prevent them being "lost" in the system, it is so important to place goods into the correct locations. To this end, it is advisable to confirm the actual location used by adding this information to the stock record system. NOTIFY INVENTORY/STOCK CONTROL The inventory management or stock control department need to be informed of the final putto-stock situation after the stock has been put into location, and the location confirmed. This recording of stock data may be part of a computer system, or could be through the creation of manual documents. Stock should not be available for allocation to consignments until notification has been given that the stock is in location. Assembling consignments In order to dispatch the consignments, we have to start with the picking of consignments. Picking needs to be accurate and swift if the lead times stated by the organization are to be met. If the items are not stored in a condition that allows them to be moved without damage we need to do a proper Packing of these consignments. Sometimes it is possible that a consignment consists of more than one item that needs to be delivered together. In that case, Packing may also be necessary. Key steps of assembling consignments are as follows: There are two forms of receiving Pick lists either through a computer order processing system, or manually. Computer generated lists will usually be consolidated by beneficiaries, locations or part numbers, depending on the techniques used for the picking process. Manual lists may simply consist of a copy of the authorized list of items to be picked. The aim of picking is to select items from stock and collate them together according to the consignment requirements.

The general principle used in picking is to minimize the time taken in traveling by the order picker. Consignments may require packing in order to allow convenient handling and to protect them during transit until they reach beneficiaries. The appropriate type of protective packaging to use depends on the products themselves and the method by which they are being moved. The following points should be considered in packing consignments: The nature of the goods, e.g. sensitivity to heat, light, moisture and vibration/shocks. The transport mode to be used and the handling methods. The environment that the goods will be exposed to, e.g. temperature, moisture, dust. The size and weight of the package to allow easy handling e.g. no more than 50kg per unit. The extent to which the package will be dropped or thrown during handling. Packages should be clearly marked or labeled with the following information: Reference number of the consignment. A list of the contents and quantities. Destination. Weight. Any special handling requirements e.g. fragile or this way up. Dangerous goods markings, if applicable. Storage of incoming supplies in Chagong Warehouse After receiving the supplies, we have to manage them to be stored in the areas already identified for the incoming goods based on the different type and categories of goods. Since most of our supplies are food items, we will store them near to the picking areas to move them very fast when it is necessary. Then the Warehouse clerk who take responsibility for storage of these supplies, has to update changes on the bin cards and finally to the inventory manager for entering in the stock report. As a temporary warehouse we will use only manual recording and Warehouse Manager should put them into a final digital records for future planning and warehouse control.

4/ Dispatching consignments
All Consignments that need to be dispatched in a sequence must be in accord with the transport load plan. Consignments should be available when they are required, if they can cause a logjam in the warehouse flow. Consolidating consignments The transport load plan will specify the consignments that are to be loaded onto the same vehicle. The plan will also specify the sequence of loading and the time requirements. Consignments, which have been picked, should be consolidated to form vehicle loads in accordance with the plan. Locating consignments for loading Vehicles sitting waiting (whilst consignments are being picked) are an inefficient way of managing the loading of consignments. It is common for consignments to be consolidated into loads in an identified area of the warehouse. Each load is given a specified area and consignments for that load are placed there. When the load is complete, and the vehicle ready, the consignments are loaded onto the vehicle in the sequence determined by the transport load plan. OTHER IMPORTANT ISSUES Disposal of Damaged/Expired Goods

In order to prevent stocks expiring, becoming obsolete or being damaged in the warehouse we need to practice careful handling of goods in stock and proactive stock rotation. Information on stocks with expiry dates must be closely monitored. If the expiry date is short this information should be shared within the organisation and even outside, so that: Items in stock can be transferred to another operation. Items can be loaned or donated (with adherence to organisation procedures). Items can be sold (with adherence to organisation procedures). Sometimes, if we find unusable/expired goods, it will be necessary to dispose of stock. We have to arrange the disposal of the goods as soon as possible. Spoiled or damaged goods have to be separated from usable supplies to avoid further damage. The disposal of goods requires: Strict compliance with organisation procedures. Discrete conducting of the disposal process. Recording of the destruction actions. Disposal of Foodstuff The expired foodstuffs which are not fit anymore for human consumption, it may be recycled into animal food. If they cannot edible even to animals, the best way to dispose of food is to bury it in the ground ensuring that neither people nor animals will dig it up. This destruction should take place in accordance with the prevailing regulations of local authorities. Pest Control Since our warehouse store a lot of food items, we must practice pest control in order to protect and preserve the goods stored. There are two ways to do it. (1) Taking curative measures by killing the insects in all their stages of development, eggs, larvae, chrysalis and adults, (2) Taking preventive measures by preventing the infestation of stocks. We have to inspect supplies on a regular basis. Workers should look at shelves and pallets daily for signs of theft, pests or water damage and for deterioration due to climatic conditions. When an infected cargo is found, we have to isolate the infested goods from the ones that are not infested and refer to an expert so that the best solution can be identified. Any serious infestation should be reported. The most widely used methods of pest control are Chemical methods but it is important to be remembered that chemicals may be dangerous to people and care needs to be taken in the use of such substances. The purposes of each treatment is as a preventive measure to eliminate any possibility of infestation of foodstuff or warehouses by parasites, or as a curative measure to reach and kill as much of the parasite as possible. Rats destroy packaging, consume foodstuffs and medicine and contaminate them with their excrement and urine. Taking measures such as improving the state of the warehouse itself and the area around it to eliminate places where rats can breed can prevent infestation. Traps can be used or bait laid down containing rat-poison.Rat poison should be placed in shaded, covered, peaceful and quiet location. Rats don't like to eat in open where they are exposed. A simple piece of wood or a panel is enough to cover the bait. Best Regards,

Aung Kyaw Moe Logistics Officer Sub-Office (SCILaid Betaland)