Students:

•María José Bazurto•Gabriela García•Cristina Medina•Karla Pacheco•Bryan Baldeón•Luis Ordoñes•Teresa Revelo

Lecturer: Max Galarza02/09/2015

Grade: 9

LOGISTICS

WAREHOUSING

WarehousingA large building used for temporarily storing goods until they are sold and transported to stored or customers

warehouse management system is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, putaway and picking.

Warehouses are usually large plain buildings in industrial areas of cities, towns and villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports.

Types of Warehouse 

Manufacturing Support

•Stock room providing raw material and work in process items to manufacturing operations •Contains many small orders

 

Factory

•Interface production with wholesalers •A Comparatively small number of orders are picked up on daily basis •Advance information about the order composition is required  

Retail Distribution•Serves a number of captive retail units •Advance info about order composition is needed •Carton and item picking is done from a forward area

Catalog Retailer•Fills orders from catalog sales •A large numbers of small, frequently single –lines orders are picked up   

NEED FOR WAREHOUSE• Warehouse is necessary due to the following reasons:• 1.-)Seasonal Production:• There is a need for proper storage or warehousing for these commodities from where

they can be supplied as and when required.

• 2.-)Seasonal Demand:• There are certain goods,which are demanded seasonally, like woolen garments.

• 3.-)Large-scale Production:• Nowadays production takes place throughout the year to meet the existing as well as

future demand of products.

• 4.-)Quick Supply:• Its essential to stock these goods near the place of consumption.

• 5.-)Continuous Production:• Continuous productionof goods in factories requires adequate supply of raw

materials.

WAREHOUSE INVENTORY ISSUESDamaged inventory, inaccurate inventory counts and other inventory-related issues occur everywhere

Inaccurate Quantities• Inaccuracy remains one of the biggest problems facing all

warehouses. Inaccuracy takes shape in many forms, such as inaccurate quantities, inaccurate storage locations, inaccurate pricing and inaccurate identification. At some point in time, most companies experience an inaccurate quantity of one or more products in their warehouse.

Capacity• For warehouses large and small, capacity issues often equate to inventory issues. Often

when a warehouse becomes crowded with pallets and cases of inventory, basic rules for managing the warehouse get overlooked. In an attempt to store more inventory, products often get damaged, lost and not accounted for in the inventory management system. Storage problems can also create obsolete inventory issues.

Damage• Inventory typically gets handled multiple times in a warehouse. Each time it gets touched

or moved it becomes susceptible to damage. Many companies try to recoup some of the financial lose of damaged inventory by selling it at substantial discounts to the public--think about those furniture liquidation centers that sell scratch and dent merchandise.

Product Identification• Warehousing inventory issues occur when inventory arrives with incorrect labels,

barcodes, or packaging. The warehouse personnel accept the barcode scan without verifying the box contents. This act creates an immediate inventory discrepancy.

Training• Unfortunately, a large number of warehouse inventory issues results from improper or a

complete lack of employee training. Typically, issues involving inventory accuracy, damage and product identification can get traced back to human error.

Warehouses play many vital roles in the supply chain: 

• Raw material and component warehouses hold raw materials at or near the point of induction into a manufacturing or assembly process.

• Work-in-process warehouses hold partially completed assemblies and products at various points along an assembly or production line.

• Finished goods warehouses hold inventory used to balance and buffer the variation between production schedules and demand.  For this purpose, the warehouse is usually located near the point of manufacture and is often characterized by the flow of full pallets in and full pallets out assuming that product size and volume warrant pallet-sized loads.  A warehouse serving only this function may have demands ranging from monthly to quarterly replenishment of stock to the next level of distribution. 

• Distribution warehouses, distribution centers accumulate and consolidate products from various points of manufacture within a single firm, or from several firms, for combined shipment to common customers.  Such a warehouse may be located central to either the production locations or the customer base.  Product movement may be typified by full pallets or cases in and full cases or broken case quantities out.  The facility is typically responding to regular weekly or monthly orders.

• Fulfillment warehouses, fulfillment centers receive, pick, and ship small orders for individual consumers.

• Local warehouses are distributed in the field in order to shorten transportation distances to permit rapid response to customer demand.  Frequently, single items are picked, and the same item may be shipped to the customer every day.

• Value added service warehouses serve as the facility where key product customization activities are executed including packaging, labeling, marking, pricing, and returns processing.

FACTORS TO DETERMINATE THE LOCATION OF WAREHOUSE

• Satisfaction of transport requirements and facilities available in the from of rail, road vehicles.

• Transportation rates prevailing in the area and distribution cost per unit.

• Availability of power, water, gas sewage disposal and their costs.

ADVANTAGES OF PUBLIC WAREHOUSING

CONSERVATION OF CAPITAL IS MORE IN PUBLIC WAREHOUSE.IT HAS GOT ENOUGH SPACE TO HANDLE PEAK REQUIREMENTS.HAS REDUCED RISK IN THEIR

OPERATIONS.

DISADVANTAGES OF PUBLIC WAREHOUSING• Problems in communication due to system incompatibility.• Specialized services may not always be available whenever it is

needed.• Adequate space may not always be available for end users.

Advantages of private warehousing1. offers better monitoring systems over the handling and storage of products.

2. There is less likelihood or error in the case of private warehousing since the company’s products are handled by its own employees who are able to identify the products of their own company.

3. If there is sufficient volume of goods to be warehoused, the cost of private warehousing comparatively less than that of public warehousing.

4. Is the best choice for some of the locations and the products handled because of the non-availability of the public warehousing.

Disadvantages of private warehousing1. Lack of Corporate flexibility which increases the complexity

in the operation.

2. Financial issues

3. Low rate of return.

4. Tax issues are complicated.

Netgraphy• http://ciilogistics.com/coursware/sem2/Warehousing.pdf• http://

www.oracle.com/us/products/applications/jd-edwards-enterpriseone/warehouse-mgmt-system-presentation-1741531.pdf