WAREHOUSING MANAGEMENT

WAREHOUSING MANAGEMENTAnkit Kumar Moonka|Sugun Subudhi|Akhilesh Mewada

INDIAN INSTITUTE OF TOURISM & TRAVEL MANAGEMENT CONCEPTNeed for storage arises both for raw material as well as finished productsSTORAGE involves proper management for preserving goods from the time of their production or purchase till actual use.When this storage is done on a large scale and in a specified manner it is called WAREHOUSING.MEANING AND DEFINITIONPlace where goods are kept is called WAREHOUSEThe person in-charge of warehouse is called WAREHOUSE-KEEPERA commercial building for storage of goodsUsed by manufacturers, importers, exporters, wholesalers, transport business, customers etc.DefinitionWarehousing refers to the activities involving storage of goods on a large-scale in a systematic and orderly manner and making them conveniently when needed.Means holding or preserving goods in huge quantities from the time of their purchase or production till their actual use or sale.Creates time utility by bridging the time gap between production and consumption of goods BASIC FUNCTIONS PERFORMEDNEED AND IMPORTANCEREGULAR SUPPLYQUALITYSTOCK OF TRADEPRICE STABILISATIONSEASONAL PRODUCTSPERISHABLE GOODSCONTINUOUS PRODUCTIONSEASONAL DEMANDLARGE-SCALE PRODUCTIONQUICK SUPPLYPROTECTION AND PRESERVATION OF GOODSEASY HANDLINGUSEFUL FOR SMALL BUSINESSESCREATION OF EMPLOYMENTFACILITATES SALE OF GOODSAVAILABILITY OF FINANCENEED AND IMPORTANCE (contd.)BASIC REASONS FOR NEED OF WAREHOUSECHARACTERISTICS OF IDEAL WAREHOUSESCONVENIENT LOCATIONAVAILABILITY OF MECHANICAL APPLIANCES TO LOAD AND UNLOAD GOODSADEQUATE SPACECOLD STORAGE FACILITIESPROPER ARRANGEMENT FOR PROTECTIONSUFFICIENT PARKING SPACEROUND THE CLOCK SECURITY ARRANGEMENTLATEST FIRE FIGHTING EUIPMENTS

FUNCTIONSSTORAGE OF GOODSPROTECTION OF GOODSRISK BEARINGIDENTIFICATION OF GOODSFINANCINGPROCESSINGWAREHOUSE PROCESSPut-awayIdentify ProductIdentify Product LocationMove ProductsUpdate RecordsStorageEquipmentStock LocationPopularityUnit SizeCubeShipping PreparationPackingLabelingStackingOrder PickingInformationWalk & PickBatch PickingShippingSchedule CarrierLoad VehicleBill of LoadingRecord UpdateRECEIVINGSchedule CarrierUnload VehicleInspect for damageINPUTOUTPUTPRIVATE HOUSESOPERATED by a company for shipping and storing its own productsOWNED AND MANAGED- manufacturers or tradersCONSTRUCTION- Farmers near their fields, Wholesalers and Retailers near their business centre's and Manufacturers near their factoriesCOMPANIES Stable inventory levels and long run expectations SUITABILITY- Firms that require special handling and storage features and want to control design and operation of the warehouseAdvantages of private warehousesBetter control over movement and storageChances of errors and mistakes are less as products are handled by its own employees who have full knowledge Designing is done according to suitability of ownerGreater flexibility with respect to storage and material handling needs

PUBLIC WAREHOUSESProvide storage and physical distribution services on rental basisUsed by SMALL FIRMS and LARGE FIRMS Organizes to provide storage facilities to traders, manufacturers, agriculturists in return for a storage chargeLicensed by Govt. In India OWNED and OPERATED Central Warehousing Corporation and State Warehousing CorporationSUITABILTY seasonal production or low volume storage needs, companies with inventories maintained in many locations, firms entering new marketsOWNER stands as an agent of good.ADVANTAGES OF PUBLIC WAREHOUSINGMore efficient and less expensiveCost easily and exactly ascertainedFixed cost distributed among many usersStrategically located and immediately availableFlexible to meet space requirements of different usersCompanies have a wide choice of locations and warehouse typesPRIVATE OR CONTRACT FACILITIES used to cover basic year round requirementsPUBLIC FACILITIES used to handle peak seasonsFULL WAREHOUSE UTILIZATION throughout the year is a remote possibility. It will be fully utilized between 75% to 85% of the time15% to 25% of time to meet peak requirements is not utilizedIn such situations, more efficient to build PRIVATE FACILITIES to convert 75% requirements and PUBLIC WAREHOUSES to accommodate peak demand

WAREHOUSE OPERATIONSDelivery of goods takes place either by truck, rail, or boat on a dock or loading areaGoods are received, processed, and then sent into the warehouse for storage.Products are placed on pallets.INVENTORY CONTROL Ability to locate and track a given product within the warehouse to facilitate quick selection and loading for order fulfillment.METHODS of tracking inventory PERPETUAL, ANNUAL, PHYSICAL, CYCLE COUNTING

AUTOMATION IN WAREHOUSESSystem where goods are placed into and removed from store by remote control with assistance of electronic data processing equipment.Reasons due to which company opts are:Reduce total cost of distribution Raise customer service by prompt delivery and accurate order fillingMore control distribution operations as a wholeModern trendsJUST IN TIME (JIT) system promotes product delivery directly from suppliers to consumers without the use of warehouseRetailing trends led to development of WAREHOUSE-STYLE RETAIL STORESINTERNET BASED STORES do not require physical retail space but still require warehouse to store goodsWarehousing Companies are transforming into third-party logistics providers or 3PLs .RADIO FREQUENCY IDENTIFICATION (RFID)TRANSPORTATION MANAGEMENT SYSTEMSPICK-TO-LIGHT TECHNOLOGYVOICE-ACTIVATED RECEIVING ANG PACKAGING

Merits and DemeritsMeet demand fluctuations at short noticeNo dangers of stock outTransport facilities optimally usedBulk transportation cheaperLess warehousing costsReduction in requirement of personnelReduction in administrative costPoor market coverageDistant market demand not met in short noticeTransport cost maximum unless in bulk quantityIncreased material handling costPossibility of bottlenecks and resultant delaysGreater danger of loss by fireDelay in customer service Maximum market coverageIncreased salesMaximization of customer servicesModerate transportation costBetter controlEffect savings in freight charges Maximum time utilityHuge investment in inventoryChances of stock-out situation is highHuge warehousing developments costsShortage of goods at one warehouse from another require additional transportation costsMerits and Demerits (contd.)

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WAREHOUSING MANAGEMENT