Principles of Warehousing Management and Operations

Question 1

Definition of Warehousing

Answer 1

The storage of products, raw materials to finished goods in between the origin and consumption. It also provide information on product status, condition and nature of the item.

Question 2

Centralized VS Decentralized Warehouse

Answer 2

Centralized:
- Product value, product line and specialized equipment required

Decentralized:
- Customer service, shipment size and sustitutability

Question 3

Economic Benefits of Modern Warehousing

Answer 3

1. Consolidation
   - LCL to FCL
   - Lower transportation cost per unit and freight rate, congestion
2. Break-bulk
   - Sort or split orders to individual orders
   - More efficient transportation, economic of scales
3. Cross- docking
   - Immediate, short time
   - combine inventory from multiple origin to customized assortment, precise information
4. Mixing
   - inbound goods is unload and sort
   - mixing with regular stock
   - customized assortment and lower transportation cost and overall inventory
5. Assembly
   - Just in time
   - Sort, sequence and deliver
   - Deliver based on manufacturer production schedule
6. Seasonal storage
   - As inventory buffer: allow production efficiency within constraints
   - As inventory storage
7. Reverse Logistics Processing
   - Remanufacturing, remarketing, recycling and disposal

Question 4

Service Benefits of Modern Warehousing

Answer 4

1. Spot-stocking Warehouse
   - Position seasonal goods close to market
   - Increase responsiveness
2. Full-line stocking
   - Provide one stop capabilities
3. Value-Added Service
   - Activities that create higher value
   - Highly customized service

Question 5

Warehouse types

Answer 5

1. Public Warehouse
   - Do not have large inventory or only store seasonal goods
   - Higher flexibility: rent for short term
   - Lack of control
   - General Merchandized WH, Refrigerated WH, Bonded WH, Household WH
2. Private Warehouse
   - Long term rental, stable demand pattern
   - Lack of flexibility and high fixed cost
   - Better control of storage
3. Contract Warehouse
   - Long-term mutually beneficial agreement, tailor made service
   - Higher flexibility and control
   - Risk of sharing confidential information of customer with WH

Question 6

Warehouse Classification (7)

Answer 6

Stages in SC, geographic area, usage, product type, function, ownership, area/height/equipment

Question 7

Product Handling Flow

Answer 7

1. Pre-receipt
   - ready specific vehicle or equipment for unloading
   - pre-advice what will be receiving
   - Pallet Exchange Agreement: ready required pallet
2. Yard Management
   - ensure sufficient and correct space to park vehicle
   - Allocate dock to specific area
3. Receiving
   - Unitization of unloaded SKUs
   - Ensure physical receipt match with bill-of-lading
   -Report Over, shortage and Damage for commercial reconciliation
4. Off-loading
   - Check against Advanced Shipping Notification
5. Checking
   - Random checking
   - Utilize RFID tags and barcode
6. Put-away
   - Flow rack, rack, Floor- stacking product, block-stacking product
7. In-storage product handling
   - Production consolidation: create storage efficiency by grouping the same SKUs
   - First-In First-Out: move secondary to primary storage
8. Picking

9.Dispatch and shipping
- Order Verification: accuracy and product condition
- Outbound Transportation equipment loading: standard pallet and dunnage
- Document the process by photo and archive

10. Replenishment
    - Right product, right quantity at right location
    - Make use of WMS: real-time updates and identify
11. Return Processing
    - Handling product return, transit package and surplus item

Question 8

Picking strategies

Answer 8

1. Picker to goods
   - discrete picking: one order per travel
   - cluster picking: few order pick in different container
   - batch picking: consolidate to one pick list
   - zone picking: picker in specific zone
   - wave picking: group order in waves, pick in bulk, packer pack individually
2. Goods to picker
   - Increase accuracy
   - Lower error, handle one SKU per time
   - Product Security: less access by labor, lower theft

Question 9

Storage characteristics (3)

Answer 9

1. Product weight
   - the heavier the lower
2. Product velocity
   - faster moving product (high volume) , near to dock
   - minimize movement distance

3, Special storage requirement
- bulky/ heavy: ground or cubic space
- smaller item: bin or shelf or drawer

Question 10

What is Active storage and Extended Storage

Answer 10

1. Active storage
   - For daily inventory replenishment, required quick movement and flexibility
   - Can integrate with Flow-through distribution, suitable for high volume product
2. Extended Storage
   - For seasonal, speculative and obsolete product
   - also product conditioning

Question 11

Equipment for storage (6)

Answer 11

1. Mobile racking
2. Adjustable pallet racking
3. Narrow Aisle racking
4. Pallet-live racking (FIFO)
   - for perishable or product with expired date
   - quick access to product but low storage density
5. Drive-in racking (LIFO)
   - high storage density but low visibility to inventory at back
6. Non-racking: tote pans/ bins/ drawer/ pallet

Question 12

Other Warehouse operation (5)

Answer 12

1. Audit and accuracy
   - Annual Physical Cycle Count: Verify the physical amount against system qty
   - Cycle count: selectively audit
2. Safety and Maintenance
   - Periodic check for all handling equipment
   - traffic pattern efficiency/ dock levelling equipment/ fir suppression system
3. Environment concerns and regulatory environment
   - code of conduct with supplier: environment protection and social compliance
4. Security - pilferage
   - only authorized personnel can enter WH/ enter the WH in single gate/ cannot bring merchandize out without released document
5. Security - damage
   - pallet stacked in great height/ humidity or temperature causing collapse/ incompatible goods putting tgt