WAREHOUSING MANAGEMENT

Part of firms logistics system that stores products at and between point of origin and point of consumption
Term Warehousing is referred as transportation at zero miles per hour
Warehousing provides time and place utility for raw materials, industrial goods, and finished products, allowing
firms to use customer service as a dynamic value-adding competitive tool.

The Role of the Warehouse in the Logistics System

The warehouse is where the supply chain holds or stores goods

Functions of warehousing include
1. Transportation consolidation
2. Product mixing
3. Docking
4. Service
5. Protection against contingencies

Type of warehousing

Public Warehousing
Private Warehousing
Contract Warehousing
Multi-client Warehousing

Design Consideration

Facility should be as narrow as possible

Receiving door
Shipping door

Principles of Warehouse Layout Design

Use maximum height of the building

Minimize aisle space
Use an effective storage plan
Use efficient materials-handling equipment
Move goods in a straight line
Use one-story facilities

Structure

RECEIVING:
o Schedule Carrier
o Unload Vehicle
o Inspect for damage

WAREHOUSE PROCESS:
1. Put away
a. Identify product
b. Identify product location
c. Move product
d. Update record
2. Storage
a. Equipment
b. Stock Location
i. Popularity
ii. Unit Size
iii. Cube
3. Order picking
 a. Information
b. Walk & Pick
c. Batch Picking
4. Shipping preparation
a. Packing
b. Labeling
c. Stacking
SHIPPING
o Schedule Carrier
o Load Vehicle
o Bill of Loading
o Record Update

Objectives Of Efficient Warehouse Operations

Provide timely customer service

Keep track of items so they can be found readily & correctly
Minimize the total physical effort & thus the cost of moving goods into & out of storage.
Provide communication links with customers

Benefits of Warehouse Management

Provide a place to store & protect inventory

Reduce transportation costs
Improve customer service levels

Complexity of warehouse operation depends on the number of SKUs handled & the number of orders received &
filled.
Most activity in a warehouse is material handling.

COSTS OF OPERATING A WAREHOUSE

Capital costs
o Costs of space & materials handling equipment
Operating costs
o Cost of labor
o Measure of labor productivity is the number of units that an operator can move in a day

WAREHOUSE ACTIVITIES

1. Receive goods
a. Accepts goods from outside transportation or attached factory and accepts responsibility
b. Checks the good against an order and BL
c. Checks the quantities
d. Check out damage and fill out damage reports
e. Inspect good

2. Identify the goods

a. Items are identified with the appropriate SKU number (part number) and quantity received is
recorded
3. Dispatch goods to storage : goods are sorted & put away
4. Hold goods : goods are kept in storage & under proper protection until needed
5. Pick goods : items required from stock must be selected from storage & brought to a marshalling area
 6. Marshal shipment : goods making up a single order are brought together & checked for omissions or
errors; order records are updated
7. Dispatch shipment : orders are packaged, shipping documents are prepared, & goods loaded on the
vehicle
8. Operate an information system : record must be maintained for each item in stock showing the quantity
on hand, quantity received, quantity issued, & location in the warehouse

Maximize productivity & minimize cost, warehouse management must work with the following

Maximize use of space : space is the largest capital cost

Effective use of labor & equipment : labor is the largest operating cost, material handling equipment is the
second largest capital cost

FACTORS INFLUENCING EFFECTIVE USE OF WAREHOUSES

Cube utilization and accessibility

o Goods stored not just on the floor, but in the cubic space of the warehouse; warehouse capacity
depends on how high goods can be stored
o Accessibility means being able to get at the goods wanted with a minimum amount of work
Stock location
o Objectives
To provide the required customer service
To keep track of where items are stored
To minimize effort to receive, put away, and retrieve itemsing and assembly
o Basic Stock Locating Systems
Group functionally related items together
Group fast-moving items together
Group physically similar items together
Locate working stock and reserve stock separately
o Fixed Location
SKU assigned a permanent location, & no other items are stored there
Fixed-location systems usually have poor cube utilization
Usually used in small warehouses; throughput is small, & there are few SKUs
o Floating (Random) Location
Goods stored wherever there is appropriate space
Advantage is improved cube utilization
It requires accurate and up-to-date information
Warehouses using floating-location systems are usually computer-based
o Two other systems sometimes used are
Point-of-use storage
Inventory stored close to where it will be needed
Used in repetitive manufacturing & JIT systems
Central storage
o Contains all inventory in one central location

Order Picking and Assembly:

When an order is received, items must be obtained from the warehouse, grouped, & prepared
for shipment, systems used
Area system : Order picker circulates throughout warehouse selecting items on an
order -- order is ready to ship when order picker is finished
Zone system : Warehouse is divided into zones, & each picker works only in an assigned
zone -- order is divided by zone, & the items from each zone are sent to the marshaling
area
 Multi-order system : Same as the zone system, except that each picker collects items
for a number of orders at the same time

o Advantages of Central Storage

Ease of control
Inventory record accuracy is easier to maintain
Specialized storage can be used
Reduced safety stock, since users do not need to carry their own safety stock
Stock Location continued

Physical Control & Security Elements

o Good part numbering system
o Simple, well-documented transaction system
Identify the item
Verify the quantity
Record the transaction
Physically execute the transaction
o Limited access
Inventory must be kept in a safe, secure (locked) place with limited general access
o Well-trained workforce

SEA TRANSPORTATION

Ocean carriage is the most cost-effective way of transporting high-bulk commodities over long
distances and is therefore the most widely used international shipment method.
It is used for both inbound and outbound shipments, although there is usually an unbalanced flow of
freight.
The development of large bulk carriers has enabled sea transport to assume a vital role in the
transportation of bulk materials such as ores and minerals, grains, and timber products; and especially
coal, crude oil, and petroleum products between energy-producing and energy-importing countries
Water transport is often limited to international deep-sea transport and coastal shipping between local
ports.
Inland water carriers are dependent on the availability of navigable lakes, rivers, and canals. I
North America, Europe, and Asia, for example, a significant portion of the total intercity freight tonnage is
transported on inland waterways by river barges and small vessels.
Shipping has become highly specialised since the 1960s, each type of specialist ship being designed to be
more productive than the ship it replaces.
Specialisation has resulted in ships becoming complementary to other modes of transport in the Logistics
chain.
They are therefore often designed for a specific trade route and commodity type, with little prospect of
employment on other trade mutes.
Bulk carriers carry cargoes with low value-to-weight ratios, such as ores, grain, coal, and scrap metal.
Tankers (mostly crude oil vessels) carry the largest amount of cargo by tonnage.
Roll-on/roll-off (Ro-Ro) ships carry cargo that is driven directly onto the ship, and allow for standard road
vehicle trailers to load and unload cargo.
Oil-bulk-ore (OBO) vessels are multi-purpose bulk carriers able to carry both liquid and dry bulk products.
Container ships have greatly expanded the use of sea transport for many commodities. Most
international shipments involve the use of internationally standardised containers suitable for intermodal
carriage.

Typical strengths of Sea Transport

A low-cost service can be supplied.
Large volumes of high-density freight can be conveyed over long distances.
Standard intermodal containers can be utilised to facilitate freight handling and transhipment.
Traffic congestion is virtually non-existent on the open sea.
Sea transport offers a very safe and secure service.

Typical limitations of Sea Transport

Service can only be rendered to and from sea-ports that have the facilities to receive the ship and conduct
the required transhipment. A door-to-door service is therefore not possible.
Because transhipment is unavoidable at both ends of a voyage, more freight handling takes place than
with other surface transport modes.
Ships are vulnerable to inclement weather and stormy sea conditions. This can delay delivery and in some
cases prevent it altogether.
Sea transport offers a slow and low-frequency service.
Freight characteristics
Almost any kind of freight can be conveyed by ship at a relatively low cost.
Short delivery times are not of critical importance as far as the vast majority of commodities that are
transported by ship are concerned.
Clients make a trade-off between long transport times and the relatively low tariffs offered by sea
transport.
Competition within Sea Transport
Ocean shipping competition range from open competition, as in the case of tramp shipping (individual
ships seeking cargo), to oligopolistic cartels, as in the case of liner shipping conferences.
A liner shipping conference is a number of ships from various shipping lines working on a route in
conference, or sharing the loads on the route.
 As is the case with air transport, economies of scale are possible with large individual vessels and not
necessarily with large fleet operations.
Single-ship operators, for example owners of tramp ships, are therefore able to compete with larger
scheduled conference liners
Sea Transport Cost Structure
The cost structure of sea transport is similar to that of air transport.
It is characterised by a high proportion of variable costs due to the fact that the way the means of
transport involved (the sea) does not require investment and seaports are not owned or supplied by
shipping firms.
Expenses in ports can be as high as forty per cent of sea transport costs.
However, these obligations only arise when a port is visited
Fixed costs
Overhead costs
general overheads (management, administration, and office commitments);
marketing costs (advertising, sales costs, and agents commission); and
marine costs (land administration directly involved in shipping activities).

Standing costs
maintenance and repairs;
vessel inspection and check-ups (usually every four years);
insurance;
depreciation;
fixed crew costs (unless contracted for individual voyages);
radio and communication dues; and
auxiliary stores aboard.

Variable costs
Variable costs of shipping are voyage-specific and include:
fuel;
crew costs (when contracted for individual voyages);
port and other terminal costs;
insurance to cover risks on the water,
maintenance relating to motion;
freight (all costs associated with freight storage, loading, stowing, and unloading); and
miscellaneous sailing costs.

Special risks in sea transport: Deck cargo

Must be in accordance with a particular right

Contract of carriage, custom of the trade, statutory rules
Loss or damage; ordinary rules on liability (Negligence with a reversed burden of proof)
Unit limitations applicable
Unlawful loading on deck (no legal base)
Special rules on liability
Strict liability
Unit limitations applicable
Loading on deck despite otherwise agreed
Unit limitation rules can not be invoked
Live Animals
Liable under ordinary rules and not under special risks

Cargo inherently dangerous

Definition is difficult
More than everyday risk

The International Maritime Dangerous Goods (IMDG) Code

Developed as a uniform international code for the transport of dangerous goods by sea covering such matters as
packing, container traffic and stowage, with particular reference to the segregation of incompatible substances.
Lists of dangerous cargoes issued by United Nations Committee of Experts on the Transport of dangerous goods
Explosives
Gases
Flammable liquids

Introduction to Automotive Aftermarket Def: The automotive aftermarket is the secondary market of the automotive
industry, concerned with the manufacturing, remanufacturing, distribution, retailing, and installation of all vehicle parts,
chemicals, equipment, and accessories, after the initial sale of the automobile by the original equipment manufacturer
(OEM) to the consumer.
Solutions Provided by Aftermarket Solutions provided by aftermarket can be categorized into :
Automotive spare parts and accessories automotive parts built or remanufactured to replace damaged
OE parts parts made for comfort, convenience, performance, safety, or customization Services
Vehicle Reconditioning- diagnostics Aggregate Reconditioning - engine, gear box reconditioning Service
Repairs - body shop repair, warranty management Value added services- internal and external
beautification, music systems etc

Products in the After-market Sector The products marketed by the aftermarkets division include Diesel
and Gasoline Fuel Injection System & Components Alternators Starter Motors Spark Plugs
Automotive Filters Automotive Batteries Automotive Belts Wiper Blades, Horns, Lighting, Automotive
Lubricants 2 & 3 wheeler Clutch Plates Diagnostic Equipments, and Automotive software.

Trends in the Auto Aftermarket - Logistics Ship-direct delivery - shipping parts directly to the dealer - they
may ship to a primary distribution center or field DC, bypassing the national distribution center. Same-
day delivery suppliers place high-velocity parts in various select locations ship to dealers in multiple
daily deliveries High-velocity distribution centers High-velocity DCs ship original equipment
manufacturer (OEM) parts every day to most or all of the automaker's dealerships

Logistics Issues Inventory Issues Freight Issues Damage to products Warehousing Issues High
Overall Cost