Warehouse

Management
May 2013 Manila
 Section 1
Introduction

Name
Company
Warehouse experience
What are your expectations?
What is a warehouse?
Warehouses are typically viewed as a temporary
place to store inventory and as a buffer in supply
chains.
They serve as static units matching product
availability to consumer demand and as such
have a primary aim which is to facilitate the
movement of goods from suppliers to
customers, meeting demand in a timely and cost
effective manner.
Primarily a warehouse should be a trans-
shipment area where all goods received are
despatched as effectively and efficiently as
possible.
3
4
5
 Terminology
ABC Activity based costing
ABC Method of prioritising items
AIDC Automatic Identification and Data Collection
AS/RS Automated storage and retrieval system
CMI Co-managed inventory
CPFR Collaborative Planning, Forecasting and
Replenishment
EDI Electronic Data Interchange
EPOS Electronic Point of Sale
ERP Enterprise Resource Planning e.g. SAP, Oracle
FLT Fork lift truck
JIT Just in Time
OTIF On time in Full
PPT Powered pallet truck
RFID Radio Frequency Identification
SAP A well-known ERP system
SKU Stock keeping unit
VMI Vendor Managed Inventory
WMS Warehouse Management System

6
The Objectives of Warehousing

The primary objective of warehousing is to

maximize the effective use of the operational
resources while satisfying customer
requirements.
FIVE BASIC TENETS
Accuracy and Efficiency
Safety, Security, Cleanliness

7
 Warehouse management issues
I need to get the product to the customer:

On time (OT)
In Full (IF)
To the right place
In the right condition
With the right paperwork
At the right cost

8
Discussion

What are the challenges facing your companies

today in terms of warehousing?

9
 Warehouse Challenges (Adapted from Dematic)
Challenge Operational Requirements
Increase productivity, improve utilisation of space, staff and
Cost reduction
equipment

Improve productivity, increase accuracy, improve handling and

Achieve the Perfect Order
invest in systems

Shorter order lead times Improve processes and increase productivity

Sales via multiple channels and Improved picking strategies such as bulk picking and greater
increase in smaller orders use of technology

Fluctuations in demand Flexible working hours and improved forecasting

Improved use of equipment such as carousels, A Frames and

Proliferation of SKU
flow racks

Staff retention through excellent working conditions, flexible

Labour cost and availability
hours, training and improved productivity

Increasing cost of energy and

Manage energy more efficiently, better use of waste
environmental challenges

Data accuracy and speed of Introduce Warehouse management system and real time data
transfer transfer
10
Role of the
Warehouse in todays
Supply Chain
Section 2
 Warehouses in the supply chain
Raw materials
Disposal

Re-process Component manufacture D

i
r
e
Product assembly /manufacture c
t

s
R c a
e e Wholesalers/Dealerships Retailers l
t n e
u t s
r r
n e
s s

Consumers

- Warehouse requirement

12
How many warehouses?

MANY WAREHOUSES
Inbound transport is
expensive (to supply
warehouses)
Outbound transport is
cheaper (to deliver to
customers)
Cost of maintaining many
warehouses is expensive
Cost of keeping many
buffer stocks is expensive

13
How many warehouses?

FEW WAREHOUSES
Inbound transport is
cheaper
Outbound transport is
more expensive
Less cost to maintain
warehouses
Less cost of buffer
stock

14
 Major Cost Relationships
Cost

Total logistics cost

Primary transport cost

Inventory holding cost

Storage cost

Systems cost

Local delivery cost

Number of DCs / depots

Rushton, Croucher and Baker (2010)

15
 Cost versus Service

Business
Profit

Cost to Customer Service

Serve Satisfaction quality

Perfect service = Low cost = Lower service

High cost

Evans & Castek in Gattorna (1998)

16
Maisters Rule

Reducing the number of warehouses

from y to x, reduces the total amount of
safety stock in the system by:

1 - [ x ]
[ y ]
Multiply the result by 100 to find the
percentage reduction

17
 Maisters rule - grid
Inventory for "n" warehouses = Inventory for one warehouse x square root of number of
warehouses "n"
Start
number of Percentage extra stock or reduced stock for change in number of warehouses
warehouses
New number of warehouses

1 2 3 4 5 10 15 20
1 0% 41% 73% 100% 124% 216% 287% 347%
2 -29% 0% 22% 41% 58% 124% 174% 216%
3 -42% -18% 0% 15% 29% 83% 124% 158%
4 -50% -29% -13% 0% 12% 58% 94% 124%
5 -55% -37% -23% -11% 0% 41% 73% 100%
10 -68% -55% -45% -37% -29% 0% 22% 41%
15 -74% -63% -55% -48% -42% -18% 0% 15%
20 -78% -68% -61% -55% -50% -29% -13% 0%
18
Types of Warehouse
Operation

Section 3
 Functions of a warehouse
Inventory holding point Stock is held to fulfil orders / demand.
Provide a buffer stock, preparation for a new
product launch, facilitate long production runs
Storage of Customs and excise goods under bond

Sequencing centre Just in time related techniques

Consolidation centre Product lines from various locations are

consolidated into complete customer orders.

Cross-dock centre Goods are received and shipped onwards without

storage.

Sortation centre Goods are sorted by customer or region.

Assembly facility Final assembly of goods prior to

distribution e.g. postponement or labelling.

Trans-shipment point Goods are sorted into smaller vehicle loads for
delivery to the customer break-bulk centre.

Fulfilment centre e-commerce and catalogue sales

Returned goods centre To handle returned / faulty goods.

29
Cross dock operation
Hazardous Goods storage

Photo - EDIE

Photo Transmare - chemie

22
 Classification of Dangerous Goods
In order to promote the safe storage and transportation of dangerous
goods, an International System of Classification has been introduced.
(The UN Classification System).

The system divides the different types of dangerous goods into classified
groups, each group identified by a code marking.

The CLASS Number

The code marking, which is part of the UN Classification System is
made up of 2 numbers followed by a letter which appear, printed in
black on an orange coloured label. The system places all potentially
dangerous goods into 9 specific classes according to the degree of
danger they present.

23
There are nine classes, some with divisions, as follows:

UN Class Dangerous Goods Division(s) Classification

1 Explosives 1.1 - 1.6 Explosive
2 Gases 2.1 Flammable gas
2.2 Non-flammable, non-toxic
gas
2.3 Toxic gas
3 Flammable liquid Flammable liquid
4 Flammable solids 4.1 Flammable solid
4.2 Spontaneously
combustible substance
4.3 Substance which in contact
with water emits flammable
gas
5 Oxidising substances 5.1 Oxidising substance
5.2 Organic peroxide
6 Toxic substances 6.1 Toxic substance
6.2 Infectious substance
7 Radioactive material Radioactive material
8 Corrosive substances Corrosive substance
9 Miscellaneous dangerous Miscellaneous dangerous
goods goods
24
Storage of dangerous or hazardous materials
Under the Control of Substances Hazardous to Health
(COSHH) Regulations 2002:

You must ensure chemicals and dangerous

substances are stored and handled so that people's
exposure to them is minimised.

You need to assess the risks of storing and handling

dangerous substances - including the possibility of
environmental damage caused by leaks and
spillages

You should then implement any precautions needed

to control risks.

25
 These include:
storing chemicals according to the manufacturer's instructions
on the safety data sheet

keeping the minimum quantity of hazardous substances

necessary

storing incompatible substances separately

taking steps to prevent release or leakage of dangerous

substances

cleaning up any leaks or spills that occur

26
 These include (contd):

using appropriate precautions when handling substances -

wearing protective clothing or ensuring adequate ventilation,
for example
ensuring employees who store and handle dangerous
substances are properly trained
checking containers used for short-term storage are properly
labelled
If you store chemicals or dangerous substances that could
create a fire or explosion, you must also comply with
the Dangerous Substances and Explosive Atmospheres
Regulations 2002. (DSEAR)

27
 Packaging and Labelling
The consignor is responsible for ensuring that the packaging conforms to the
regulations for the product. The packaging can be as simple as a cardboard box
or paper bag for low risk powders in small quantities to very sophisticated
double skinned stainless steel packages for more complex high risk products.

In general the package needs to be UN approved and compatible with the

product but for every UN number there is a list of packaging options available to
the packer.

Having packed the product the package has to be labelled, this is not about the
product labelling or CHIP labelling which has health and safety advice for the
user, but a rather simple class warning symbol. On small packages a 100 mm
square coloured diamond with a symbol, these can be larger on IBCs and road
tankers. I have illustrated a couple of examples below:

28
Haz chem codes

29
Temperature controlled storage

Photo by fordsproduce.com

Photo by Texas ice house

30
Fulfilment Centres

Photo by BBC News - Amazon

31
 Outsourced warehouses

Contract warehouses
Shared use/multi-user/public warehouse

Fulfilment centres
Reverse logistics centres
Re-work
Repair
Disposal

32
 Customs warehousing

Customs warehousing is a procedure that enables

the suspension of Import Duty and/or VAT, for
imported non-EU goods
Delay paying import duty and/or VAT and excise duty
on your stocks of imported goods.
If you want to re-export goods
If you do not know the ultimate destination of the
imported goods and want to delay having to declare
imported goods to another customs procedure, for
example release for free circulation

46
 Revenue and Customs requirements
The warehouse will be used primarily for the storage
of goods
There is a genuine economic need
Your stock records are adequate to verify the receipt,
storage, handling and disposal of the goods and they
must be able to show at all times the current stock of
goods that are held under the customs warehouse
procedure.
You must be solvent and have a compliant revenue
record

34
 Just in Time (JIT) and Lean

JIT warehouses or sequencing centres attempt to

process orders on a daily basis through improved
information transfer
Timely and accurate data is required about products,
resources and processes
Lean warehouse operations look to reduce waste
idle time, idle space etc
Japanese methodolgy used in warehousing today
Kanban replenish/produce only when you need to
Kaizen continuous improvement

35
Lean Warehousing
The 6S concept which underpins lean thinking
can be easily applied to the warehouse as follows:

Sortation separates required or fast moving stock from stock

that is slow moving or obsolete.
Straightening is organising items in the warehouse to make it
easier to locate
Shining is ensuring the warehouse is clean and obstruction free
at all times. Excellent housekeeping is a sign of a well run
warehouse.
Standardization is all about having the correct procedures and
systems in place to operate efficiently
Sustaining is ensuring that processes are constantly reviewed
and improved
Safety is ensuring that all staff and equipment are safe from
injury and damage in the warehouse
36
Warehouse
Processes
Section 4
 Warehouse processes and flow
Item
picking
Reserve storage Replenishment Replenishment
Case picking
and full pallet pick

Direct movement
To pick faces

Sortation, Consolidation and packing

Direct put-away
to reserve stock

Receiving Despatch

Cross-docking

Adapted from Schmidt & Follert 2011

38
 Warehouse functions
Goods inward/receipt
Inward sortation and Cross-docking
Storage
Replenishment
Order picking
Secondary sortation
Collation
Postponement
Value adding services
Despatch
Housekeeping
Stock counting
Returns processing

Cranfield University

39
 Pre-receipt
Agree specifications with supplier

Inform supplier of requirements regarding:

Size and type of vehicle
Size and type of pallets
Size of cartons
Labelling requirements
Delivery documentation
Pre-notification
Delivery procedures
Unloading requirements

Role of the driver

40
 Pallets
Pallet rental companies
Charged on a pence per day basis
E.g. Chep, IPP, LPR
Pallets are normally in good condition
Does require both suppliers and buyers to be part
of the rental scheme
 Packaging

Be involved when initially discussing new products

Its not all about the product!! think about the packaging!
Nature of the product size, selling quantities, hazard, cost
Arrival packaging, returnable plastic pallets, stillages etc
Labeling
Nature of storage medium
Despatch quantities
Recycled packaging

The protective packaging company

42
Unit loads many different types

43
 Receiving

Booking in procedure
Allocate the supplier a time for delivery
Estimate time to unload, check and put-away
Allocate sufficient labour and MHE for unloading
Check if load requires special handling

44
 Receiving contd

Receiving procedure
Inform security re. unloading dock number
Provide safety instructions to the driver
Ensure vehicle cannot be moved until unloading is completed
Check for any special handling instructions (Hazardous, fragility etc)
Unload and check quantities and quality of delivery
Record variances possible quarantine
Check status of goods
Quarantine, cross dock, pick face, reserve storage
Label or ID tag
Record quantities
Clear dock area and ensure goods are on system and available to pick
dock to stock time is crucial!

45
Returns

Non-used products, packaging, waste.

Raw material Manufacturing Distribution Consumer

products
Used
Repair Test

Refurbishment

Service Disassembly

Remanufacturing
Recycling Disposal

46
 Importance of returns
A greater environmental awareness by customers (Waste
Electrical & Electronic Equipment (WEEE) directive)

Increasing legislation on the disposal of hazardous materials

More stringent packaging waste directives

Increasing awareness of the economic value of re-using

products

The development of catalogue retailing and e-commerce

THEY COST MONEY!!

47
In-handling equipment

48
 Labelling

Ensure supplier has labelled products correctly

Produce own labels although not as efficient

Scan labels

System determined put-away

49
 Put away

Location allocation by system or manual

Take into account size, weight, velocity, compatibility
Quarantine areas
Fixed or random locations?
Check stock rotation policy
Consolidate stock if FIFO rules allow
Record stock against the location
Task interleaving or dual cycling put-away and retrieve in
same movement

50
Inbound and put away processes

Inbound check
Location verification

WMS

51
 Fixed v Random storage
Fixed locations total = 453

Code Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

1 100 155 100 140 100 120 120 100 100 120 150 150

2 50 20 51 30 30 30 40 50 50 40 40 50

3 10 5 12 17 10 10 5 10 10 5 5 10

4 90 80 80 75 75 75 80 80 95 90 80 90

5 40 40 50 50 135 130 130 130 50 40 40 40

SUM 290 300 293 312 350 365 375 370 305 295 315 340

Random locations
52
 Location I.D.

4 E 14 B 1 or
04.05.14.02.01
Where 4 (04) = zone
E (05) = Aisle
14 = Bay
B (02) = Level
1 = Shelf or bin location

53
Rack labels
 Picking systems
Picking is paramount to any warehouse operation
It is the most labour intensive
It is fundamental to customer service
There are often extensive floor space requirements
There may be limited scope for automation

On average 65% of the warehouse operating expenses

can be attributed to the Picking function.

On average travel time accounts for 50% of the total picking

time (Petersen C.G. 2002).

55
 The Importance of Order Fulfilment

Error
Correction
Replenish
ment
Paperwork
Travel
Check

Picking

Storage
Pack
Receiving
Despatch
Pick

Accuracy issues Quantity

misread

Miscount

Wrong Item
Item omitted

56
Pareto or the 80/20 rule
SKU - sales pareto

100%

90%

80%

70%

60%
% of sales

50%

40%

30%

20%

10%

0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% of SKU
Courtesy of VanDerLande Industries
cum % lines cum % eaches cum % weight cum % cube

57
 ABC/Pareto Analysis
Ranking (by Throughput in Cumulative Cumulative % of Cumulative % of Category
throughput) period throughput total throughput number of stock
lines

1 300 300 30 5 A

2 225 525 52.5 10 A

3 150 675 67.5 15 A

4* 125 * 800 * 80 20 A

5 40 840 84 25 B

6 30 870 87 30 B

7 25 895 89.5 35 B

8 25 920 92 40 B

9 15 935 93.5 45 B

10 15 950 95 50 B

11 10 960 96 55 C

12 8 968 96.8 60 C

13 6 974 97.4 65 C

14 5 979 97.9 70 C

15 5 984 98.4 75 C

16 4 988 98.8 80 C

17 4 992 99.2 85 C

18 3 995 99.5 90 C

19 3 998 99.8 95 C

20 2 1,000 100 100 C

58
 Exercise ABC categorisation
See sheet

59
 ABC picking

Receiving
C Zone
Slow movers
45% SKU,
5% volume

B Zone
Medium movers,
35% SKU,
15% of volume

A Zone
Fast movers,
20% SKU,
80% of volume

Despatch

60
 ABC layout

C Zone
Slow movers
45% SKU,
5% volume

B Zone
Medium movers,
35% SKU,
15% of volume

A Zone
Fast movers,
20% SKU,
80% of volume

C B A B C
Despatch

61
What to do with SLOB slow and obsolete
Recognise and start to write down
then
Redistribution internally,
Rework,
Return to Vendor,
Sales incentive,
Sell to a global user (jobbers) with an active market,
Sell online through a 'media e.g. e-bay
Salvage the usable sub assemblies,
Sell for scrap,
Donate to a recognised charity (a business expense), and
Write off by burning or burying.

62
 80/20 rule - other uses in the warehouse
Suppliers (80% of volume from 20% of suppliers)

Value of product (20% of product lines 80% of value)

Cost of servicing clients (20% of clients 80% of

problems)

Labour (20% of staff 80% of problems)

Labour (80% of efficiency from 20% of staff)

Stock counting cycle counts based on ABC

63
Product location tool - Slotting
Slotting Optimization scientifically determines the best picking
profile for your warehouse, and enables you to make timely,
intelligent decisions as ordering trends change.

Are fast-moving items in the most accessible locations?

Are slots allocated in the most efficient manner according to
product size and weight?
Are risks to your employees reduced or eliminated?
Is your storage capacity optimized for your current stock?
Are items that sell together close to each other

As input data changes, such as seasonal ordering trends or

new or discontinued products, Slotting Optimization can revise
its recommendations incrementally, to keep your warehouse at
maximum efficiency without costly overhauls.

64
 Picking methods
Method Equipment Approx. Speed Order size
Picks per (lines)
hour
Picker to goods Low level with hand pallet 150 Med. Large
Pick faces truck or roll cage
Picker to goods Low level with powered 200 Fast Large
in aisles pallet truck
Picker to goods High level with operator 100 Slow Small
riser picking truck

Method Equipment Picks per Speed Order size

hour (lines)
Bulk Pallet to picker *By PPT, CBT or FLT Med.
pre-pick followed by Open floor, ground level 150 - 250 to Various
Picker to pallet
HPT, PPT or roll cage Fast
* PPT = Powered Pallet Truck; CBT = Counter-balanced fork lift truck, FLT = Fork lift
truck; HPT = Hand Pallet Truck

Method Equipment Picks per Speed Order size

hour (lines)
Goods to picker Carousel station picking 100300 Fast Large
Mainly
automated Picker to goods Conveyor/sorter 300500 Fast Large
or goods to
picker
Picker to goods Sorter e.g. Parcels 5001,000 Fast Large
or goods to
picker

65
 Picking procedures
Pick by orders
All lines are collected for a specific customer order
Minimal handling, order sizes are typically high.

Pick by label
All lines are collected for a specific customer order and labels attached to each item
Minimal handling, order sizes are typically high.

Cluster picking
Take several individual orders out at the same time

Pick by batches
Products collected for a large number of orders with the same product lines
Fewer runs but increased handling and sortation, mainly smaller orders

Pick by zones
Products are categorised into specific groups and picked from defined areas
Reduced walking distance, increased sortation
Pick to belt

Pick by waves
Large batches of orders are collected for defined time periods
66
 Pick face examples

Copyright John J. BARTHOLDI, III. All Rights Reserved

67
Order picking individual and cluster
Area picking / U path picking

Courtesy of VanDerLande Industries

Order Release
Dispatch Area
Point

68
Advance cluster pick

Photo courtesy of LPC

69
 Pick by label

Each operator is given a

batch of labels detailing location,
quantity etc - once attached to
the products and placed in a carton
or onto a pallet the individual
pick is complete

70
 Zone picking
Can be simultaneous or sequential
Dispatch Area

Products
Products
orders

Order Release
Point
Products
Courtesy of VanDerLande Industries
71
 Batch Picking
Multiple orders consolidated
Order No: 100023 Customer :JJ retail Order No: 100027 Customer :ACME retail
Picker I.D. Bulk Desp loc: A33 Picker I.D. Bulk Desp loc: A33
Item code Desc Location Quantity Item Desc Location Quantity
code
32345 AA battery A100201 500 32345 AA battery A100201 1500

32465 AAA battery A 100601 1000 32465 AAA battery A 100601 300

47001 Watch battery B 111101 200 62101 Remote C 150101 500

control LG
53007 Calculator B 171301 100 71202 RC holder C 150501 300
battery universal
Pick ref:: AS177791 Customer :Bulk
Picker I.D. James 101 Desp loc: A33
Item code Desc Location Quantity

32345 AA battery A100201 2000

32465 AAA battery A 100601 1300

47001 Watch battery B 111101 200 Pick to Zero

53007 Calculator
battery
B 171301 100 Or
62101 Remote
control LG
C 150101 500 Pick and return
71202 RC holder
universal
C 150501 500 to stock 72
 Wave picking

There are two basic planning elements and benefits of wave

picking.
To organize the sequence of orders and assignment to waves,
consistent with routing, loading and planned departure times
of shipping vehicles or production requirements, etc., to
reduce the space required for shipping dock handling to
assemble orders and load; and
To assign staff to each wave and function within a wave, with
the expectation that all the work assigned to each wave will be
completed within the wave period and more thus effectively
utilize the staffing throughout the shift.

73
Order Distribution System (ODS)

Order distribution System (ODS) is a dynamic goods-to-man

solution. It is especially strong in business processes where a
large numbers of order lines are fulfilled from relatively low
numbers of articles. Totes or cartons are transported by a conveyor
system to operators who distribute goods into order totes
controlled by put-to-light displays.

Courtesy of VanDerLande Industries

74
Random picking

Zone 1 Zone 2 Zone 3 Zone 4

75
 Pick rate comparison
Velocity in order lines selected per paid person hour
SKU 0 100 200 300 400 500 600 700 800 900 1000 1100 1200
velocity
Category

A Automated/semi-automated pick technologies

A Horizontal carousels
Movement category

A&B Pick to light

ABC Voice picking

ABC Visual
picking
C&D RF picking

C&D Paper pick

0 100 200 300 400 500 600 700 800 900 1000 1100 1200

Rack and static Pick to belt carton Carousels and semi-automated systems
shelving and pallet flow

76
 The human factor

Safety first
Ergonomic design of storage system and equipment
Light loads (max 25 kgs men, 15 kgs women)
Adequate lighting
Comfortable temperature
Clear instructions
Clear labelling
Adequate breaks
Good communication with team

77
What affects picking performance?
Pick location
identification Replenishment
Product processes
identification Operating
processes

Order Warehouse
release management
strategy software

Picking Stock
technology availability

Pick location Walk

appropriate to distances
product size
and dynamics

Product Picker
and/or Pick face Handling training
pack size quantity unit (pallets,
and weight and stock totes, etc.)
cover
Courtesy of The Logistics Business

78
 Replenishment
When using pick or forward locations

Replenishment is the replacement of goods picked from the

forward locations
Goods are transferred from bulk or reserve locations
This can be done overnight, at the beginning or end of a shift or
during the picking process depending on the urgency

79
 Value Adding Services

Labelling
Kitting
Assembly
Packing
Tagging
Kimballing
Promotional work (e.g. BOGOF)

80
 Despatch

Random quality checks depending on product value

Pack products securely and safely
Weigh product
Recording of batch numbers, serial numbers etc.
Load manifest compilation
Loading in sequence
Load optimisation (e.g. Cubiscan)
Smooth the flow of despatches
Vehicle sealed and recorded

81
 Load optimisation

Courtesy of MaxLoad pro

Courtesy of Able Plastics

Vehicle load configuration

Pallet configuration no overhang
Optimum number of
- Optimum number of cartons
pallets/cartons

82
 Packing on despatch

Stretch-wrap by hand
Pallet straps (courtesy of Velcro)
Stretch-wrap machine

Automatic carton erector and sealer

Shrink-wrap tunnel
(Courtesy logismarket) Packing station, (courtesy Cisco Eagle)

83
 Housekeeping

Provision, allocation and maintenance of equipment

Replenishment of fast moving items
Dealing promptly with non-conforming, lost or found stock
Security of high value or hazardous stock
Identification of non-moving stock
Ensuring efficient space utilisation
Work flow and congestion
Cleanliness of warehouse
Review of procedures

84
 Minimising Theft
Staff training and awareness
Staff vigilance
Use of CCTV
Use of lockable cages or Carousels for high value goods
Parking of cars away from the warehouse
Random searches
Regular cycle counts
Especially in dark, less accessible areas of the warehouse. These are prime areas from
which product will disappear. Same goes for inventory near exit doors. Staging areas for
both incoming and outgoing shipments may be too close to the dock doors. If no one is
around to keep an eye out, it would be easy to take something and put it in a truck.

Conduct security surveys/audits (Independent)

Use security tags for vehicles leaving the warehouse

85
 Stock counting
Perpetual inventory or cycle counting
Use ABC analysis to determine how many and how often
you count which items of stock e.g. 8% of A, 4% of B and
2% of C items
Monthly, quarterly, annual stock checks
Depends on what you agree with your auditors

N.B. You need to be organised:

Whos counting, are they trained and motivated, what are you counting,
when do you count, what tools do you need.
86
 Stock turn
How often stock turns over in a warehouse
How to calculate:
Divide the total throughput of items by the average number
of items in stock
Or
Divide the total cost of sales by the total average cost of
goods stored at a particular time
Examples of stock turn
100-500: Japanese manufacturing company
30-100: Good European manufacturing or distribution
10-30: Typical European manufacturing
<10: Poor European manufacturing
<2: Maintenance stores

87
Warehouse Costs

Section 5
 Logistics Cost factors

16%

38%
6%
Transport
Warehouse operation
8% Order processing
Administration
Cost of inventory holding

32%

Holding cost includes loss, obsolescence, interest, insurance and depreciation

89
 Warehouse costs

UK Chartered Institute of Logistics and Transport

Survey stated that between 24% and 35% of Logistics
costs relate to warehouse activity and can be between
2% and 5% of the cost of sales

EQUIPMENT 10 - 15%

LABOUR 48-60%

SPACE 25 - 42%

90
Cost of Service improvement

Cost of service ()

60 70 80 90 100
Level of Service (%)

The cost of providing a given service is markedly higher

the nearer it reaches the perfect service (100%).
Rushton, Croucher and Baker (2010)

91
Warehouse Cost tree
Rent/Lease costs
Rates, building insurance
Space -
Electricity, Gas, Water STORAGE
25%
Building and racking depreciation
Repair and maintenance
Cleaning, security, other equipment depreciation

Wages, on costs, Safety wear, welfare Labour 60%

*Overtime, bonuses
Handling equipment depreciation/rental HANDLING
Equipment 15% TOTAL COST
*Running costs e.g. Fuel, tyres etc

Salary, on costs
Company cars
Management and administration
Salary, on costs
Company cars
Advertising Sales and marketing
OVERHEAD
Telephone
Postage
Bank charges
Insurance
Miscellaneous
Legal and professional fees
Office equipment and furniture depreciation
Information Technology (hardware & software) Office costs

* Variable costs

92
 Methods of allocating costs

Traditional
Overhead allocation by %

Activity Based Costing

93
 Traditional costing methods
Traditional costing models tend to allocate overhead costs
arbitrarily.
The following table shows a typical warehouse cost structure.
Space Costs 1,677,000
Space as a % of total warehouse cost 54%
Direct Labour costs 1,200,000
Labour as a % of total warehouse cost 39%
Equipment costs 215,000
Equipment as a % of total warehouse
cost 7%
Total Direct costs 3,092,000
Overheads costs 742,000
TOTAL COST 3,834,000
Overhead as a % of direct cost 24.00%

94
 Activity based costing in the warehouse
In activity-based costing, systems are designed so that any costs that
cannot be attributed directly to a product, flow into the activities that make
them necessary. The cost of each activity then flows to the product(s) that
make the activity necessary based on their respective consumption of that
activity.

Activity Based Costing looks to allocate indirect costs to processes which

accurately reflect the way the costs are actually incurred. This is in contrast
to traditional costing methods.

When looking to introduce an ABC model you need to have a

comprehensive knowledge of the company, its operations and the roles of
each of the staff members. This is normally carried out by observing the
operation for a period of time and recording how long it takes for each
activity.

95
 Return on Investment

Calculation
Gain from investment (or savings made) cost of investment /
Cost of investment x 100

A similar calculation is the payback period. This basically

measures how long an investment takes to pay for itself. It does
have drawbacks however as it does not properly take into
account finance costs and opportunity costs. Opportunity cost
being what must be given up (the next best alternative) as a
result of the decision.

96
 Payback period example
During a recent voice picking trial a client calculated that their ROI, by replacing
barcode scan picking was approximately 25.4% in the first year with a payback period
of nine and a half months.
The figures were as follows:
Pick productivity savings - 52,800
Increased accuracy - 33,600
Total savings (TS) - 86,400
Investment in voice (I) - 68,900

Therefore (86,400 - 68,900)/68,900% = 25.4%

Payback period = 68,900/86,400 x 12 months = 9.6 months.
This isnt a totally accurate picture as no account was taken of the extra training costs,
effect on the business during the early stages of implementation etc.
However this does give the company a reasonably accurate picture of the potential
ROI for other similar investments.

97
Warehouse
Technology
Section 6
 Warehouse Technology

Warehouse Management Systems

Automatic Identification and Data Capture (AIDC)
RFID Radio Frequency Identification
Voice technology
Pick to/by light technology

N.B. Dont automate a mess you just get to the mess quicker!!

99
 Results of effective I.T. systems
Quality of
Information

Minimise Improved Improved

Reduced Lead
Reduced Errors Unproductive Space Equipment
Times
Labour Utilisation Utilisation

Improved Reduced
Customer Operating
Service Costs
Increased
Sales

Courtesy of Tompkins inc

Increased
profitability

100
101
 Warehouse Management System (WMS)

Optimum stock location and control

Order processing
Directed put away
Slotting
Routeing and planning of pick operations
Replenishment
Task interleaving/dual cycling
Tracking and location of products from source to end user
Stock rotation
Productivity reporting
Control multi-site operations

102
 Typical Warehouse Management System
Receipt Advice (manual or EDI)

Receipt

Automatic Receipt Handling

Inbound Area Stock Monitoring

Handling of standardised or client

defined Logistical Unit (LU) identifiers:
SSCC (EAN 128), Sequential ID, etc.
Tracking of LU id.
Product/Stock Statuses
Generation of new LU ids
Package Variants
Automatic block/time block for
Quality Control Tracking of several properties (Lot, Batch,
etc.)
Quarantine
Etc. Interface to automated material handling
equipment (conveyors, cranes, etc.)
Serial numbers handling

Vendor Managed Inventory

103
Stock visibility via Internet

104
 Types of WMS Jacobs (1997)

Three levels of WMS

BASIC ADVANCED COMPLEX

Stock and location control Additionalfacility to plan Optimisation of warehouse or
only resources and activity group of warehouses
Storing and picking Enables synchronisation of Full product tracking
instructions activities
Simple information Focus on throughput, stock Complex storage
focussing on throughput and capacity analysis replenishment, picking and
cycle counting strategies
Possible links to RF Interfaceswith other systems
(Route planning, RFID, Freight
systems, Customs and Excise
Value added logistics support

105
 Choosing a WMS
Criteria Weight Vendor 1 Vendor 2 Vendor 3 Vendor 4

Rate Score Rate Score Rate Score Rate Score

Software standard 25 3 75 2 50 5 125 3 75

function
Software Custom 20 4 80 3 60 4 80 4 80
function
Ability to interface 15 4 60 2 30 4 60 4 60

Hardware also supplied 15 2 30 3 45 3 45 4 60

RF System 10 3 30 2 20 5 50 4 40

Development/ 5 3 15 2 10 4 20 3 15
Implementation service
Annual support/ 5 3 15 2 10 4 20 3 15
Maintenance
Multi-site cost 5 2 10 2 10 3 15 2 10

Total 100 3.15 2.35 4.15 3.55

1 = Does not meet minimum requirements; 2 = Does not meet performance requirements by one or more factors

3 = Expected performance; 4 = Exceeds one or more requirements; 5 = Significantly exceeds performance

Tomkins Associates 106

 Automatic identification (AIDC) methods
TECHNOLOGY
Optical Character Recognition (OCR)
Readers
Bar code readers and scanners
Radio Frequency Identification
Voice recognition systems
Vision systems
DESCRIPTION
Use optics to scan characters that are
also readable by man
Use optical methods to read reflected light
from a barcode label
Use radio transmission to collect data.
The radio waves can travel through most
mediums except metal. Dont require line
of sight
Instruction relayed direct to operative thus
allowing hands free picking
Use camera images to identify
characteristics. Able to compare items as
well as codes and numbers
107
Bar code and reader

2D image
108
 Advances in scanning
Finger scanners

109
 Radio Frequency IDentification

Transponder chip holds data

Tag antenna used to power and transmit/receive data

High frequency ID tags

110
RFID tag readers

Hand Held

Portal

Flatbed
Portable
Industrial

111
 RFID Applications

Closed Loop
Inventory Management

Asset Management
Any object that has
value and needs to be
tracked to ensure
operational uptime.

EPCglobal Compliance
RFID with Trading partners
outside 4 walls. Slap n Ship
for Suppliers.

112
Use of RFID tags

113
 RFID - Popular beliefs

Tags cost pence each

Tags cost 0.15 minimum (Cheaper tags are in experimental stage but wont
be available for an estimated 3 years minimum.)
Multiple tags will read in any orientation
Tags need to matched to an aerial and generally square to the aerial for best
results
RFID will replace barcodes in the next few years
RFID will only replace 10% barcodes by 2015 (Source AIM Intl. 2003)
All tags can be read from any distance
Most tags read from 5mm 2 Metres unless you are paying over 5 per tag.
Tags can be applied to most items
Most tags have difficulty reading when attached or in the proximity of liquids
or metals - A tin of beans is the worst case scenario!

114
 Comparison RFID v Barcodes

25 trays per dolly

36 dollies per vehicle Portal

Barcode Scanning = 36 x 29 secs = 1044secs = 17.4 mins

Portal Scan = 36 x 5 secs = 180secs = 3 mins

Reduction in data recording time = 83%

115
 Voice recognition
At start
of a new
task

Warehouse Voice Server

Management
System FTP server
Main Voice tasks and
applications Voice profiles
Orders,
Substitutions,
Stock
Voice interface updates, etc. Stateless
programs Socket task

Application
Intermediate database
Database

116
Voice demonstration

Vocollect

117
 Why Voice Outperforms Scanning

Elapsed Time

Free
Press
Hands
Read Next Travel Scan Read Qty Perform Locate Buttons
Place
Location to Location Location on Screen Task Device to
Device
Confirm
Elsewhere

Speak Check
Hear Next Hear Next
Digits, Hear
Location; Location,
Instructions,
Travel Travel
Perform Task

No manual entry, no extra steps,

no wasted time =
better productivity + improved accuracy

118
 Know the Benefits
Benefit Business Impact

Improves Accuracy Reduces order fulfillment errors

Can increase accuracy up to Increases customer satisfaction
99.99% Reduces cost of resolving issues & processing returns

Improves Productivity Reduces labour required to accomplish new levels of

Can increase productivity by 10-25% throughput. Helps accommodate seasonal increases without
increasing headcount.
Reduces Training Time Time to full productivity for a new worker for scanning is
Cut Training Time by 50% typically 2-3 weeks; voice is 3-4 days.

Reduce Operating Costs Reduction in annual cost of scanner equipment, maintenance

of systems, (e.g. pick to light), paper/labels/printer costs.

Improves Safety Eases worker compensation claims leading to reduced

insurance costs, etc.

Reduced Administrative Support and Auditing Need for secondary audits are eliminated
Functions

119
KNAPP Picking Solutions - Pick To Light

120
Put to light - Dematic

121
 Comparing technologies
Pick-To-Light Voice Picking

Cost per Location Cost per Picker

Low number of Products High Number of Products

Fast Movers Slow & Medium Movers
100-350+ picks per hour 100 200 picks per hour
Limited flexibility Highly Flexible
High accuracy High accuracy
Simultaneous and sequential picking
Possible 2 stage operation

122
 Contingency Planning
Equipment down time
Labour problems
Significant changes in demand
Supply problems
Information Technology down time
Other emergencies

Managers must formulate a plan of action to avoid crisis management and

significantly reduce the time taken to employ some form of corrective action

123
 Contingency Planning

Assess the main issues to be covered in a

contingency plan for a critical failure of the
information technology in a warehouse
operation

124
Warehouse
Automation
Section 7
Warehouse automation
STORAGE
Bar code/
Carousels/ High stackers
scanning
A Frames Cranes

Inventory control RETRIEVAL

Terminals Automated storage
& retrieval systems
WAREHOUSE
AUTOMATION
REPLENISHMENT
Warehouse
Conveyors
Management
Automated guided
systems
vehicles

Radio data Pick by Light

Terminals Put to light ROBOTICS
Voice terminals
Semi-Automated picking
Support systems systems Automated systems

126
 Warehouse automation
Case study Tele Danmark site

Introduction of very narrow aisle miniload crane system.

Consolidated stock from 3 distribution centres and 60 small local sites into a
Single warehouse of 7,200 square metres. This handling system supported
13,500 lines and an annual throughput of 7,000,000 items.

Other benefits included:-

Handling costs reduced by 75%

Order accuracy improved from 62% to 96%
Duplicate stock was almost eliminated
Flexibility improved same day order despatches
Reduced labour costs

Warehouse of the month Modern Materials Handling Online

127
 Advantages of Automated systems
Increased Space Utilisation
High bay narrow aisle systems (up to 30 metres high)
Random storage
Improved Control
Pallet tracking through enhanced warehouse management system
Labour and Energy Savings
No heat and light requirement
Minimum supervision required
Continuity
24 hour, 7 days per week operation
Product Security
High bay areas, Use of First in First out principles, less human intervention
Safety
Elimination of manual handling
Reduction in accidents
Can cope with hazardous/harsh environments
Integration
Coordination of product flows, avoiding bottle necks
Constant performance levels
Continuous review

128
 Disadvantages of Automated systems

High investment costs

Building, equipment, Information technology
System failure, operations are entirely reliant on technology
High opportunity cost
Require standardised unit loads
Anomalies not accepted and need to be handled
separately
More quality control required
High cost of disposal of equipment
Lack of flexibility

129
 AUTOMATED GUIDED VEHICLES (AGVs)

COMPUTER CONTROL OR BY HAND

MORE DURABLE THAN PEOPLE
LONG DISTANCE &/OR HIGH DENSITY TRAFFIC
SECURITY-SENSORS & GUARDS
LIMITED POTENTIAL FOR DAMAGE
RELIABLE
INDUCTION WIRE, INFRA RED & ULTRA SONIC

130
Automated guided vehicle

131
A Frame automatic pick

Courtesy of Knapp and SSI Schaeffer

132
 Conveyors
Power or gravity
Single or multi-floor
Provide continuous goods flow
Buffer for loading bays or for work in progress

Example applications:
Order pick, assembly, parcel sortation

Problems:
Barriers, Detours, Bridging, Requires fixed floor space

133
Mechanical
Handling Equipment
Section 8
 Influencers on the selection of MHE
Functions to be performed
Health and Safety requirements
Type of product stored and unit load to be handled
Store layout and height, including aisle width
Travel distance and speed relationship
Building constraints and environmental issues
Equipment flexibility and cost
Reliability, efficiency and ergonomics
Security
Product value
Vendors and costs
135
 Choice of pallet movers
Degree of use shift length, work patterns, pallets per shift, seasonality,
peaks and troughs, special handling requirements
Travel distances and lift height, inside and/or outside the warehouse,
private/public roads, working conditions (freezer, chill, ambient,
hazardous).
Type of fuel, diesel, LPG, Electric. Available ventilation, noise level, space
for re-charging and storing batteries
Floor condition
Aisle gangway space at front and between racks can the truck turn 90
degrees. Also needs additional 200mm to its normal turning circle
Delivery and collection vehicles
Access doors, bays, overhead pipes (sprinklers)
Rack heights
Method of acquisition and maintenance
Budget

136
 Vertical movement

(Courtesy of Atlet, Toyota, Central Training and Flexi),

137
 Horizontal movement

Courtesy of Demag, Linde, AS Conveyor Systems and Seegrid),

138
 Pallet movers
Type of truck Minimum Aisle Space v Maximum Maximum Put-away Flexibility - Additional Purchase Approx.
Aisle width Storage space Lift height weight at rate internal feed truck cost total
(millimetres) maximum Pallets and required pallets
lift height per hour external stored
usage

Reach Truck 2,700 53%/47% 12250mm 1000kg 26 No No 25,000 10,080

Counter Balance 3,200 6800mm 1000kg 18 Yes 19,000 6,048

(Electric) 60%/40% No

Counter Balance 3,800 60%/40% 6800mm 1000kg 18 Yes No 19,000 5,376

(ICE)

Pedestrian or Stand 2,400 56%/44% 6000mm 1000kg 18 No No 7,000 to 6,720

on Stacker 12,000

Very Narrow Aisle 1,600 43%/57% 12500mm 1250kg 23 No Yes 60,000 12,096

Articulated fork lift 2,000 48%/52% 10000mm 800kg 20 Yes No 35,000 11,088

Double deep 2,900 36%/64% 10000mm 1100kg 24 No No 30,000 12,600

racking with Reach
truck

139
Special equipment - Slip sheets

140
141
Truck attachments

Courtesy of Linde
Courtesy of Bridgestone

Courtesy of easy rack

Courtesy of Bluewater Forklift

142
 Automation in handling equipment

Jungheinrich Narrow aisle truck navigation

143
Warehouse Layout and
storage equipment

Section 9
 Warehouse layout
Five fundamental process objectives

1. Warehouse designs should be based on throughput not storage

i. Look at forecasted growth over the next five years
ii. Evaluate the number type and physical features of the products
iii. Understand the potential changes in product profiles over the period
iv. Evaluate type and variability of demand and order profiles
2. Emphasis is placed on eliminating time, space and movement
3. Material and information flow should be properly integrated to avoid
delays and uncertainty
4. All issues should be linked to wider business issues
i. Understand long term market strategy
5. Solutions should be aligned to customer requirements
i. Potential use of warehouse as postponement centre
Ballard 1994

145
 Warehouse layout - considerations

The efficient utilisation of space, equipment and

labour
Accessibility to all inventories
Protection of all items from shrinkage
Health and safety considerations
Possible need for segregation

146
 Space consumption in the Facility
Dock Doors

Storage Mediums

Personnel Support areas

Cafeteria

Restrooms

Shipping and staging areas

Pre-process and handling areas

Battery charging, packaging and pallet storage

147
 Calculating Dock Requirements
Using heuristics

Space =
{ Roundup (Number of loads x Hours/load) } X (size of Load x space/pallet)
time of shift

= receiving 20 loads per day

- each load is 26 pallets
- each pallet is 1m x 1.2 m
-45 minutes per load to unload vehicle
- 30 minutes per load to stage prior to put-away
- 8 hours per day work shift

Additionally
Office space required
Empty pallet and sundry space requirements

148
 Calculating Dock Space Requirement

{Roundup (20 x 1.25)/8} x (26 x (1.2 x 1.0))

= 3.125 (4) x 31.2 = 124.8 square metres
Dock space = 124.80 sq. metres

Add double space for working and travel area = 249.60

Total space = 374.40 square metres

149
 Warehouse layouts

Inverted T Warehouse Flow

Low usage Advantages

Items Better utilisation of loading docks
Reduction in total area required
Bulk Medium usage Increased flexibility
Storage Items Unified management of
merchandise flow
High usage Better security control
items Ability to extend warehouse
Improve employee comfort and
reduce heat loss
Pick area
Disadvantages
Congested central area
Potential friction between inbound
and outbound teams
Goods inwards Despatches

150
 Warehouse layouts

Advantages
Cross flow or U flow Warehouse Better utilisation of loading docks
Reduction in total area required
Low usage items Integration of bulk and picking
stocks
C Unified management of
merchandise flow
Medium usage items Better security control
B
Disadvantages
Congested aisle areas
High usage items Potential friction between inbound
and outbound teams
A
Grouped product may not be
stored in the same area

Goods inwards Despatches

151
 Warehouse layouts

Corner Warehouse Advantages

Less disruption at the loading bays

Low usage items Disadvantages

More difficult to expand without major
changes internally
Medium usage items Increase security required

High usage items

Despatches

Goods inwards
152
 Warehouse layouts

Through Flow Warehouse Advantages

Less disruption at the loading bays
Natural flow of goods

Low usage items Disadvantages

Goods inwards

More difficult to expand without

major changes internally
Medium usage items Increase security required
Possibility of requiring 2 exits from
the yard
High usage items

Medium usage items

Despatches

Low usage items

153
 Battery
charging
C
C C C C

Item picking

Short cut through racking with reserve storage above B

B B B B

A
Packing area

A A A A
Empty pallet Full carton pick at floor level, reserve storage above Flow rack with reserve storage above
storage

154
Warehouse layout diagrams
1 2 3 4 5 6 7

MHE Charging Area

Office & Mezz Floor Despatch Overspill

Despatch Area
Damages

66 m

115 m

Goods Receipt

8 9 10
 The Right Answer?

Typically there is
no one definitive
answer for your
warehouse
Travel
Design is a trade Handling
Storage
off between
travel, handling
and Storage

Finally dont forget about the outside of the building!

156
 External areas
N.B. At large DCs over 60% of the site area can be allocated
to roadways, parking, and external activities.

Make sure that:-

The site has a secure perimeter
Employee car parking is secure and separated from the warehouse
Proper routes are defined and marked for commercial vehicles
Adequate parking is provided for commercial vehicles and cars
All access and egress is security controlled
Pallets, cages, waste items are stored neatly in a designated area
Pedestrian routes are properly defined with safety in mind
Ensure there is enough room to manoeuvre all the vehicles without
causing congestion

Courtesy of LPC
157
 Calculating Storage Space Requirement
Determine the type of storage medium and the sq.m./pallet configuration

Determine the Height of the storage chamber and the max lift height of the
MHE

Include Aisle spacing and work space requirement for the end of the aisle

H = H1 + H2 + ..... + Hn + (n-1) * Z
H2

H1

W1 W2 T T
W = W1 + W2

158
 Pallet quantity calculations - width
Module Width = width of aisle + 2 pallet length (short side) + 100
mm
Aisle = 2,500mm (variable with type of MHE used)
Two pallets = 2,000mm (2 x 1,000mm)
Clearance = 100mm between back to back pallets
Aisle Aisle Aisle

Therefore:
Width of module = 4,600 mm (the sequence is pallet aisle
pallet - clearance)

159
 Pallet quantity calculations - length
Module Length = width of upright + clearance +2 pallets (long
side)
Rack upright plus clearance = 420 mm (120 mm + 3 x 100 mm)
Two pallets (long side) = 2,400 mm (2 x 1,200mm)

Therefore:
Length of module = 2,820 mm
(the sequence is
upright/clearance/pallet/clearance/pallet/clearance)

160
 Pallet quantity calculations - height

Module Height = Height of goods on pallet (e.g. 1.20 metres)

+ 150 mm (pallet height)
Total Pallet height = 1,350 mm

Clearance above pallet = 150 mm

APR beam width of 140 mm

Therefore:
Height of module = 1,640 mm

161
Pallet calculation
Total pallets stored within cubic capacity of a
warehouse section, excluding receiving and
despatch areas, gangways and other areas

(No. of width modules x pallets in module width) x (No. of length modules

x pallets in module length) x (No. of height modules) = No. of pallets into
cube volume of warehouse.

So for a warehouse section with a width of 48 metres, a length of 120

metres and a height of 10 metres.
Width = 48/4.6 = 10
Length = 120/2.82 = 42
Height = 10/1.64 =6

Therefore total = (10 x 2) x (42 x 2) x (6) = 10,080 pallet locations in this

warehouse storage space

162
 Pallet storage
Long-side handling, (where the longest side of the pallet is picked up by
the forklift truck) helps to prevent pyramid picking from the pallet.
The picker has to reach in only up to a maximum of 1 metre (instead of 1.2
metres if short-side handling is used).
Short-side handling, however, allows more pallets to be fitted into a given
run of racking. For example, a run length will hold 30 pallets if short-side
handling is used but only 25 pallets if long-side handling is used.
Short side handling of UK pallets also means that Euro pallets can also be
stored in the same locations.
Introduce an access tunnel for long runs of racking

163
 Space calculation

H = H1 + H2 + ..... + Hn + (n-1) * Z
H2

H1

W1 W2 T T
W = W1 + W2

Y1

Y2

Y3
Y = Y1 + (2*Y2) + Y3

164
 Capacity utilisation

Warehouse managers are tasked with making use of the

whole cubic volume of the warehouse taking into account
accessibility, practical utilisation limits, cost and accountability
Consider introduction of mezzanine floors for example e.g.
space above dock doors

Courtesy of AWS Ltd and Cisco Eagle

165
Main types of storage systems

Block stacking
Wide aisle racking
Cantilever racking
Narrow aisle racking
Automated
Manual
Drive-through/ Drive-in racking
Sliding or Mobile racking
Double deep racking
Flow or Live racking
Mezzanine
Carousels

166
 Storage Equipment
Bulk Storage/Block Stack
High density storage on the warehouse floor.
Unit loads stacked on top of each other
Best for large quantities of a single SKU (stock keeping unit)
Allowable stack heights (3 or 4)
Low utilization threshold

167
 Storage Equipment
Adjustable Pallet Rack APR
Consists of uprights, beams and back supports
Anchored to floor with adjustable beams
Must know weight capacity, width of rack opening and the distance
between load bearing beams
Flexible and easily reconfigurable

168
 Storage Equipment
Cantilever Rack
Storage of long materials such as piping or wood products
High capital cost per square foot
Higher density for multiple SKUs

169
 Warehouse storage methods
Narrow aisle racking
Consists of uprights, beams and back supports
Anchored to floor with adjustable beams
Requires less space than APR
Must know weight capacity, width of rack opening and the distance
between load bearing beams

170
 Storage Equipment
Automated Storage/ Retrieval Systems
High capacity
Great for high value items

171
 Storage Equipment
Drive-in/Drive Through Rack
Similar to pallet racking but the forklift can drive into the rack
High density storage medium for large quantities of single
SKUs
Need good quality pallets
LIFO - Drive In
FIFO - Drive Out

Courtesy of LPC
172
 Storage Equipment
Sliding Rack or Shelving
Mounted on guides or rails
Highly space efficient
Very effective for small parts and high SKU
Strong medium for slow moving parts

173
 Storage Equipment
Double Deep Rack
High Density Storage medium
Must use reach truck only
Use of longer forks
Requires multiple pallets of Single SKUs

174
 Storage Equipment
Flow or Live Rack
Great for carton flow and piece pick
Many SKUs in small footprint
Supports high speed and slow moving product
Needs same product in the line
Designed for High speed picking

175
Gravity flow versus static shelving

Courtesy of Cisco Eagle

176
 Storage Equipment
Satellite/Shuttle racking
No aisles
Many pallets in small footprint
Supports high speed and slow moving product
Good utilisation of space at the loading bay
Continuous flow

177
 Automation in storage
Proctor and Gamble pallet sequencer

178
 Warehouse Capacity Planning Graph UK Pallet

1200 mm Entry x 1000 mm Deep

Note: This chart includes an allowance for marshalling areas and cross aisles. 179
 Mezzanine

Utilises the cube of the building

Spare parts storage
Value adding services
Position above loading doors
or internal offices where feasible

180
 Storage Equipment
Carousel
High capacity storage for pick and pack
Brings parts to operator
High speed picking solution if multiple carousels used
Reduction of travel by SKU

181
 Decision table
Wide Narrow VNA Drive Double Live Mobile
aisle aisle in deep storage racking

Floor space utilisation 2 3 4 5 3 4.5 4.5

Cubic space utilisation 3 4 5 3.5 4 3.5 4
Access to each pallet load 5 5 5 1 3 4 3.5
Speed of access 4 3 3 2.5 3 5 2
Stock rotation 4 4 4 1 3 5 3
Stock control and mgt. 4 4 4 2 2 5 3
Specialised mhe (in terms No Yes Yes No Yes No No
of cost) 5 2 1 5 3 5 4
Ease of re-location 5 4 2 3 3 1 1
Speed of installation 5 4 2 3 4 3 1
Beam adjustments 5 4 1 1 2 1 3
Total 42 37 31 27 30 37 29
Advantages/disadvantages marks out of 5 182
Sequence of simulation activities

Planning Realisation Experimentation

WHY Collect Data Define scenarios

WHAT Perform flow analysis Run scenarios
WHEN Specify model Analyse outcomes
WHO Create (simulation) model Document results
HOW Verify and validate model

183
Performance
Management
Section 10
 Performance and Productivity Standards

Why do we need performance and productivity

standards?

Discuss.

185
 Performance monitoring
You cannot manage what you cannot measure.

You need to monitor performance against the criteria that are

important to your customers

You need to monitor performance against the criteria that are

important to you (costs).

186
Operational Approach to Performance Monitoring

1. Determine the scope of logistics activities.

2. Identify the organisation and departmental
objectives.
3. Determine operating principles and methods.
4. Set productivity and performance goals.
5. Measure and monitor performance.
6. Benchmark if possible
7. Take corrective action if necessary.
Rushton, Croucher and Baker (2010)

187
What to measure against?

Historical data
Budget
Engineered standards
External standards and benchmarking

Rushton, Croucher and Baker (2010)

188
Good practice in Performance Monitoring

Accuracy of data
Validity / completeness
Hierarchy of needs / targeting of correct
audience
User ownership
Reactivity to changes in business activity
Timeliness
Ease of maintenance
Cost-effectiveness Rushton, Croucher and Baker (2010)

189
 SMART

A performance monitoring system needs to be

SMART

S Specific
M Measurable
A Achievable
R Relevant
T Timely

190
 Traditional warehouse productivity measures
MEASURE CALCULATION
Man hours Labour hours used
Labour hours available x100

Warehouse floor area Space used

Space available x 100
MHE utilisation MHE hours used
MHE hours available x 100
Picker utilisation Actual case picks achieved
Expected case picks per picker x 100
Cost per activity Actual cost
Expected (budgeted cost) x 100

Need to be as close to 100% as possible with one exception.

191
 Traditional warehouse benchmarks

MEASURE CALCULATION
Orders per hour Orders picked and packed
Total warehouse labour hours

Lines per hour Lines picked and packed

Total warehouse labour hours
Items per hour Items picked and packed
Total warehouse labour hours
Cost as a % of sales Total warehousing costs
Total revenue
Cost per order Total warehouse Cost
Total orders shipped

192
 Direct Labour Cost per Item

0.50

0.45 0.43
0.41
0.40
0.37

0.35
0.31
- 42%
0.30
0.27
0.25 0.25 0.25
0.25

0.20

0.15

0.10

0.05

0.00
Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Mar-03

193
 Productivity Examples
Items per man hour

90

82
79 80
80
75
71
70
63
59
60
55

50

40

30

20

10

0
Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Mar-03

194
 The perfect order

On time in full, damage free and all the correct paperwork

Example:
On time 98%
In full 97%
Damage free 99.5%
Correct paperwork 91%

Perfect order % = 86.1%

195
 Integrated Performance Models
Category Target rating Weight Target Rating Actual score
Score
Customer service 5 40 200 12345 120
Safety 5 40 200 12345 200
Inventory accuracy 5 30 150 12345 150
Space utilisation 5 20 100 12345 60
Labour productivity 5 20 100 12345 80
IT Downtime 5 20 100 12345 100
Equipment maintenance 5 10 50 12345 30
Equipment utilisation 5 10 50 12345 40
Building facilities 5 5 25 12345 25
Housekeeping 5 5 25 12345 20
TOTAL 1000 825
Performance Index 82.5%

Adapted from Tomkins Associates 2002

196
 Order Fulfilment Measures

MEASURE DEFINITION CALCULATION

On-time delivery Orders delivered as per customers Total orders shipped on time
requests Total orders shipped
Order fill rate Orders filled completely on first Orders filled completely
shipment Total orders shipped
Order accuracy Orders picked, packed and shipped Orders shipped without
perfectly errors
Total orders shipped
Line accuracy Lines picked, packed and shipped Lines shipped without errors
perfectly Total lines shipped
Order cycle time Time from order placement to Actual ship date customer
customer shipment order date
Perfect order Orders delivered without changes, Perfect delivery orders
completion damages or invoice errors Total orders

197
 Inventory Management Measures
MEASURE DEFINITION CALCULATION

Inventory Accuracy Inventory quantity compared to system- Actual quantity by SKU

reported quantity
Damaged Inventory Damage measured as a % of inventory
value/throughput
Days on Hand Average sales days of inventory on
hand based on historical sales
Storage Utilisation Occupied locations as a % of total
available locations
Dock to stock time Average time from carrier arrival to
available for picking
Inventory Visibility Time from physical receipt to customer
service notice of availability
Reported quantity by SKU
Total damage ($)
Total inventory or sales value
Average inventory value
Average daily sales (past
month)
Average no. locations occupied
Total available locations
Average dock to stock hours per
receipt
Time of host system receipt data
entry time of physical receipt

198
 Warehouse best practice WERC metrics
Measures Best in class Median Typical Opportunity
On time 99.8% 98.5% 98 and <99.1 <95.7%
shipments
Order cycle <5.4 hours 33.5 hours 22.9 and <48 > 72 hours
time
Dock to stock <2 hours 6 hours 4 and < 8 >18.1 hours
time
Lines pick and 81 lines 29.9 lines 25 and <43 <14 lines
shipped per
hour

Order pick 99.5% 98% 99.1 and <98.3%

accuracy < 99.7
Inventory 99.8% 98.8% 97.5 and <93.4%
count accuracy < 99.1

WERC Watch Spring 2012

199
 Measures that matter to Senior Management

Measures Best in class Median Typical Opportunity

Cost as a % of 1.6% 3.7% 2.9 and <4.7 >8.9%
sales
Workforce <1% 5% 4.2 and <8.7 >15.1%
turnover
Inventory days <21.2 days 37.4 days 32.8 and >100.4
of supply <50.7
Perfect order 99% 95.3% 94.8 and <83.6%
completion <97.3

WERC Watch Spring 2012

200
 Average Days of Sales held in inventory- USA

DIO means how many days of sales a company is holding in inventory, and which REL defines as:
End of Year Inventory Level/[total revenue/365] Data compiled by Supply Chain Digest from info received from REL.
201
 Exercise

What are the consequences of poor service in

terms of sending the either the wrong product
or wrong quantity of product to a customer?

202
 Effects of sub-standard service

Finance department is affected by delayed payments and possible

penalties
Inventory department has to provide extra stock cover
Sales department has to handle complaints and authorise returns
Transport department has to effect extra deliveries and collections
Warehouse has to re-pick, re-pack and duplicate activities
Returns procedure has to take place
Possible product disposal/write-off
Review of processes needs to take place
Potential additional training required
Loss of product if client retains over delivery of product
Potential loss of customer

203
 Cost of a warehouse error
Volume Occurrence Approx. cost Total cost
per occurrence

Despatch 50,000 orders 4.0% error rate $45 $90,000

errors (96%
accuracy)
Shrinkage/loss $7,000,000 in stock 1.0% 0.1% x $7m $70,000
in inventory

Data entry 100,000 4% $10 per entry $40,000

error transactions

Miss-placed 50,000 orders x 5 2% $2.50 $12,500

product in lines per order Based on 10
warehouse minutes
searching at $15
per hour
Total $212,500

(Adapted from Red Prairie 2010) 204

 Customer service
Ensure KPI are aligned customers perception
could be totally different to yours

E.g. 100% despatch of whats available from the warehouse

doesnt mean its what the customer ordered.
Despatch within 24 hours of the warehouse receiving the
order from sales may not been 24 hour despatch to the
customer!

205
 Performance management

Regular operational meetings

Weekly, monthly, quarterly
Post results on Notice Boards
Team targets and achievements
Bonus schemes
Internal and external, team and individual
Penalties
Gain share if outsourcing

206
Health and Safety
and Legislation
Section 11
 Fork truck accidents

Call for regular maintenance following near-fatal accident

Directors fined after worker loses leg in forklift accident
Easilift loading bay management system prevents accidental
drive-offs
Global storage firm fined for forklift accident
Lidl fined for forklift accident
Major retailers fined over flt accidents
Serious fork lift truck accidents on the rise says FLTA
Serious forklift accidents on the rise says Mentor
Thorworld safety aids help prevent loading bay accidents
UPDATE: Forklift driver killed in town centre accident
UPDATE: Forklift mechanics death was accidental
UPDATED: Man dies in forklift accident
Vinyard loses third of production in forklift accident

208
 HASWA responsibility for Health & Safety
Manufacturers duty
Ensure product is safe to use and
fit for purpose

Employer duties:
Provide:
Safe plant & systems of work
Safe handling, storage, etc.
Information, instruction & training
Safe place of work
Safe environment & welfare

Employee duties:
Look after their own H&S
Not endanger others
Co-operate with employers on H&S
Not interfere with or misuse items supplied
for H&S purposes

Remember that individuals can be prosecuted

under this legislation as well as companies

209
 MHE Mechanical handling equipment

Select responsible staff to be trained

Ensure staff are trained by a competent trainer
Follow the manufacturers handbook
Undertake pre-operational checks as per the handbook
Undertake daily and weekly checks and record any defects
ensure supervisor countersigns the check list
Only allow suitably trained staff to operate the equipment

210
 Fork truck maintenance

Daily check or pre-shift commencement

Weekly checks or after 50 hours operation
Six monthly check or after 1,000 hours operation

Tyre pressures and condition, brakes, lights and audible

signals, fluid levels, batteries, lifting and tilting systems
Steering, lifting gear, condition of mast, fork, attachments,
hydraulic pipes
All working parts

211
Racking maintenance

Is the equipment on sound, level flooring?

Is it still installed correctly?
Are double sided runs connected properly?
Are the aisles wide enough?
Are the beam connector locks securely fastened?
Are the racks aligned properly?
Are the correct pallets being used?
Are the pallets in good condition?
Is there any visible damage?
When were they last inspected?
Are there signs on the end detailing weight
capacities?
Are staff trained properly?
Are there any receptacles for rubbish e.g. Shrink-
wrap, packaging, broken bit of pallet.

212
H & S accident pyramid

The Accident Pyramid

1 fatal accident

10 serious
injuries

30 property
accidents

600 near misses

Record, Investigate, Action, Train, Review

www.hse.gov.uk
Continually undertake Risk Assessments!!!
213
 Risk assessment and duty of care
50%

45%

40%

35%

30%

25%

Causes of major injury

20%
Causes of 3+ days absence from work
15%

10%

5%

0%
Slip or trip Manual Falls from Hit by Hit by Hit Other
handling height moving, moving something kinds of
falling vehicle fixed or accident
object stationary

N.B. More litigation than ever before

214
The principles of risk assessment

Any company with 5 plus staff needs to carry out

risk assessments under the Management of Health &
Safety at Work Regulations 1999
These Regulations are law under the Health & Safety
At Work Act 1974
Risk assessments are designed to measure the risk of a
hazard causing harm (its likelihood and severity)
weighed against the cost of the measures necessary to
avoid that risk (including money, time, trouble, effort &
sacrifice)
They must be suitable and sufficient and carried
out by a competent person

215
 Risk assessments explained

Hazards things with the potential to cause harm

Risks the harm that the hazard could cause
Those affected people who could be harmed
Existing controls things already in place to prevent harm
occurring
Likelihood score out of five relating to the chance of the harm
occurring (1 very unlikely, 5 very likely)
Severity score out of five relating to the worst possible outcome (1
is minor injury, 5 is death)
Risk factor the 2 scores multiplied together to get a score out of 25
Risk levels High risk 16-25, Medium risk 5-15, low risk 1-4
Remedial actions things which can be done to avoid the risk (NB
avoiding the risk is the best remedial action; physical
barriers/segregation are next then lastly providing information and
training and protective equipment).
Action plan This identifies who has to do what, by when, in order
to reduce the risks to an acceptable level

216
 Risk assessments

You are working in areas of vehicle movement

including LGVs and Fork Lift Trucks.

Seventy people a year are killed in workplace

transport accidents.

Avoid staying in these areas longer than is necessary.

Always ensure staff wear high visibility jacket and

safety boots

Take dangers seriously

217
Resource Planning &
Labour Management

Section 12
 Organisation Chart

General Manager

Warehouse Manager

Early Controller Late Controller Stock Controller

Goods-In Picking Outbound Inventory Administration

Foreman Foreman Foreman Clerks

Operatives Operatives Operatives

219
 Resource Planning

Balance warehouse throughputs between days

Maximise the utilisation of resources and avoid idle
time or additional costs through overtime
Normally daily or weekly planning

220
 Controlling labour productivity

Time and motion studies

Determine time period
Determine number of pallets/cases/units handled
during the period
Determine total hours worked in the period for all
activities
Divide total number of cases by total number of
minutes to determine case per minute throughput

221
 Establishing timings
Manual operations Time taken
Pick up and put down small pallet 10 seconds
Pick up and put down carton 20 seconds
Walking empty handed 61 metres per minute
Walking with hand pallet truck 30.5 metres per minute

Fork truck operations 65 seconds

Pick up and put down pallet (PU/PD) 20 seconds per metre
Hoist up and down (HU/HD) 120 metres per minute
Travelling

Also need to take into account

1. preparation (collecting, equipment, pallet, paperwork)
2. Human factors (Skills, motivation, fatigue)
3. Mechanical factors (battery changing, attachment changes, re-fuelling)
4. Operational factors (location system, product placement, congestion)
Can be up to 75% of total time

222
 Timed events

Daily volume (Average)

Activity Description Productivity Hours MHE Other
Activity Unit of standard required type equipment
(units) measure (units per hour)

Put-away
Collect pallets, put- 198 Pallets 24 8.25 FLT RFS
away in wide aisle
racking
Collect pallets, put 300 Pallets 16 18.75 FLT
away in drive-in racking

Collect pallets, put- 2 Pallets 5 0.4 PTE RFS

away in pick locations

223
 Activity profiling

Main Warehouse: Daily Activity Profile

25%

20%

15%

10%

5%

0%
Ave Peak Ave Peak Ave Peak Ave Peak

Intake - Plts Intake - Loose Despatch Other

Day 1 Day 2 Day 3 Day 4 Day 5 Day 6

224
Staff management hours of work
The classic shift pattern is as follows:

Shift 1 0600 1400 hrs

Shift 2 1400 2200 hrs
Shift 3 2200 0600 hrs Disadvantage no shift overlaps
Shift 4 0900 1700 hrs
Team 1 Team 2 Team 3 Team 4
Monday wk 1 0600 1800 1800 - 0600
Tuesday 0600 1800 1800 - 0600
Wednesday 0600 1800 1800 - 0600
Thursday 0600 1800 1800 - 0600
Friday 0600 1800 1800 - 0600
Saturday 0600 1800 1800 - 0600
Sunday 0600 1800 1800 - 0600
Monday wk 2 0600 1800 1800 - 0600
Tuesday wk 2 0600 1800 1800 - 0600

Others: School hours, twilight shifts

Match available hours to demand!! 225
 Staff management - supervision
A recent survey carried out by Cranfield University showed
the average number of operators per supervisor were as
follows:

Small warehouse (<10,000 square metres) 1 supervisor per 8 operators

Large warehouses (>10,000 square metres) 1 supervisor per 15 operators

Todays supervisor should have eight critical attributes:

Excellent communication skills

Ability to delegate effectively
Motivational
Problem solving skills
Comprehensive knowledge of company processes and procedures
Be customer oriented
Teamwork skills
Flexibility
226
Management skills - teamwork

Team-working skills and capabilities include:

Ability to work in a group

Ability to build relationships
Emotional intelligence
Ability to cope under pressure
Negotiating skills
Ability to cooperate
Coordination and allocation of tasks
Influencing skills
Ability to compromise where necessary
Ability to make decisions

227
 How to engage warehouse staff
Invest in training for all parts of the workforce - full time and temporary.
Produce worker instruction manuals in user-friendly formats and multiple
languages if the workforce mix justifies it

Provide a simple process flow map to show the end-to-end supply chain and
how each step impacts the final customer so you engage your warehouse staff
and make them feel part of the bigger process

Where possible, give your staff an opportunity to see and work through the
whole delivery centre process right up to the point of the retail store

Providing clear guidance on what you expect from your staff through visible
KPIs

Providing corporate branded items such as clothing creates a sense of

belonging, especially for third-party logistics providers

Give third-party logistics provider staff the same staff discount

Ensure communication is simple, clear and concise

228
 Staff management
"Managing and motivating our distribution colleagues is a key
priority and something we are always trying to do better. Effective
two-way communication is an important enabler for this. "We aim to
have regular discussions with colleagues on their own and their
team's performance as well as business information on Argos as a
whole. We have communication champions at each site who help
link the sites to the centre," she says.

"Walk & Talk" - where a senior manager swaps roles with an

operative - regularly. "Any improvement to the operation is
highlighted and implemented if it's felt it would help. This is an
effective way for warehouse operatives to feel that senior
management recognise what they do,"

"If you get the culture right and the atmosphere, structure and
progression right, it's not that difficult to get a motivated team,"

229
 Exercise Resource Planning

(See separate sheet)

230
Outsourcing

Section 13
 What is Outsourcing?

Outsourcing is about taking something that isnt

your organisations core competence and getting
a specialist to run it more efficiently.
Richards (2011)

232
The outsourcing decision

Partnership outsourcing Core activity.

approach Do not outsource!
Potential value to the

High
organisation

Transactional outsourcing Decision based on financial

considerations
Low

Low High

Organisational Expertise
Vitasek (2010)

233
 Advantages & Disadvantages
Advantages
Focus on core competence
Access to wider knowledge
Capital cost / investment reduction
Fixed costs converted to variable costs
Economies of scale
Operating cost savings
Improved service
Greater flexibility
Value added services
Ease industrial relations problems
Adapted from Rushton and Walker (2007)

234
 Advantages & Disadvantages
Disadvantages
Lack of appropriate experience with client products
Cultural incompatibility
Loss of control
Loss of expertise
Loss of direct customer contact at delivery
Confidentiality issues
Changeover costs
Potential overall cost increases

Adapted from Rushton and Walker (2007)

235
Process to Outsource
2A. Produce
baseline and 3. Identify
benchmark Potential Service
Providers
2. Identify Type
4. Produce RFI
of Service
and Shortlist
Required

1. Review Scope 5. Prepare and

for Outsourcing Issue RFP
Key Steps of the
Contractor Selection
10. Manage
Process 6. Tender
Ongoing Evaluation and
Relationship Comparison

7. Contractor
9. Mobilize and
Selection and
Implement 8. Contract Risk Assessment
Determination

Adapted from Rushton, Croucher & Baker (2010)

The Environment
and the future of
warehousing
Section 14
 Environmental issues
The Environment Act 1995
Noise, vibration and visual intrusion
Exhaust emission and waste management
Waste management (WEEE- Waste Electrical & Electronic Equipment)
ISO 14000- Environmental Management
Health and Safety
Hazardous product handling
Ergonomics
Absenteeism

Fatigue

High error rates

238
 Environmental Initiatives
Roof lights optimise natural daylight into the warehouse, minimise night time light
pollution and generate power for use in the building
Naturally heated air used for internal heating
Solar thermal hot water system pre heats water for use in the offices
Roof mounted photovoltaic panels supplement the buildings electrical power
supply
Under floor heating to warehouse
Energy efficient lighting in the offices linked to movement detectors
Air tightness
Utilisation of thermal mass within the offices providing heating and cooling savings
Natural ventilation within offices
Rainwater collection for re-use in offices
Low water use sanitary appliances, leak detection and enhanced water metering
Kinetic energy plates provision in the access road produce power when driven over
by vehicles entering or leaving the site

239
 John Lewis at Magna Park Milton Keynes - 2007

CO2 Emissions Saving 40% CO2 pa (1,100,000 kg)

Energy Usage Saving 18% pa (2,500,000 kwh)
Water Usage Saving 45% pa (1,500,000 litres)
Operating Cost Saving 250,000 pa

240
 Environmental improvements for all warehousing

Energy efficient lighting systems

Zonale lighting
Clean skylights and clerestory windows
Underfloor heating
Area for onsite recycling
Water conservation measures
Low-emitting sealants, adhesives and carpet
systems
Bicycle, hybrid and carpool vehicle parking
Using zoned or time-controlled thermostats Prologis 2011

241
 Warehouse energy usage
12% Warehouse lighting

3% 2% Office lighting
1%
1% Battery charging

3%
Vending machines

7% Fans and pumps

IT
65%
6%
Space heating (kerosene)

Domestic hot water - gas oil

Space heating - gas oil

Source: http://www.ukwa.org.uk/_files/23-carbon-trust-23.pdf
242
 Checklist for Potential Energy Savings
Initiative Potential Saving
Switch off all non-essential lighting out of business hours. Install timers. 10% of lighting costs

Install photocell controls to switch off some lighting on brighter days . 20% of lighting costs

Replace traditional tungsten lamps with energy efficient, compact 75% of tungsten lighting costs
fluorescent lamps (CFLs) to reduce operating and maintenance costs
Experiment with switch-on times for heating and air conditioning and 20% of heating and cooling costs
switch off well before closing
Ensure thermostats are set correctly increase temperature set-point A 1C reduction in temperature
for cooling and reduce set-point for heating during the heating season can
cut costs by 8%
Install time controls so that equipment (such as escalators and vending 15% of power costs
machines) and only run during business hours
Set a gap or dead-band between heating and air conditioning control 10% of heating costs
temperatures of about 5C to avoid them operating at the same time
Turn off unnecessary equipment during the day and especially out of 5% of energy costs
hours to reduce heat build-up
Check insulation levels and increase wherever practical to reduce 5% of energy costs
heating requirements
Walk around your site at different times of the day and during different 5% of heating costs
seasons to see how and when heaters and coolers are working. Check
time and temperature settings
Source: http://www.ukwa.org.uk/_files/23-carbon-trust-23.pdf244
 The future

An acknowledgement that reducing warehousing and storage costs is

essential
Automated stores and computerised systems make it possible to better
manage these facilities
Trade-offs between higher customer service levels, low inventory and
low operating costs need to be balanced
Changes in business practices through the implementation of JIT, Lean,
Kanban and Kaizen concepts
Better logistics systems, improved supply chain integration, visibility
and collaboration
Time compression reducing time consumed in business processes.
Elimination of non-value-added time.
Shortage of good quality staff at all levels
Ageing population
Robotics
Increasing cost of fuel
The Green agenda
245
Mega-warehouses?

Quinn Glass Liverpool - 180 x 290 x 35 metres high

250,000 pallet capacity (Courtesy of Stocklin)
246
Vision picking by Knapp

247
Robotics

248
Robo pick by Kiva

249
Automated warehouses

250
Will we need warehouses?

3D copying

251
Course review