CHAPTER 14: OPERATION OF

A WAREHOUSE

COMPILED BY: MASHILOANE MW

 WAREHOUSE FUNCTIONS
• To receive goods into the facility
• To store these goods and
• When required to dispatch the goods.
 WAREHOUSE PROCESSES
• There are 13 different flow processes in a warehouse
• Each of these must be provided for and performed precisely
• Each flow need to happen at the right time and must be recorded
correctly
• Failure to do so will result in faulty stock records.
 ERRORS IN OPERATION

• The main purpose of any warehouse is to be able to manage the stock in storage, the
stock received and the stock dispatched in such a way that the warehouse can supply
the right stock at the right time and place.

• An operational error occurs when the wrong items are delivered; can affect both
financial performance of the warehouse and the service delivery to the customers
 STOCK MANAGEMENT
• Stock is the central point of all the processes in the warehouse
• Every process affects the stock and every process is affected by stock;
• For these reasons having the wrong stock in the facility or having stock that cannot be
found immediately is a big problem
• If the stock is not available to be sent to customers, the processes cannot be completed
and the result is dissatisfied customers.
 TYPES OF WAREHOUSES AND
FACILITIES
• Terminal harbour: receives a product from a production facility inland and loads it into
a ship for export

• Distribution Centre (DC): where finished goods are accumulated and sent to the store
or customer

• Manufacturer’s warehouse: generally has to cater for the receipt of large batches of
products as they come from the production
 CROSS-DOCK OPERATIONS

• A cross-dock is a particular type of facility in the supply chain

where goods are received from suppliers, sorted without storage
of the goods and the efficiently moved to downstream
customers.
 CROSS-DOCK OPERATIONS Cntnd
• Factors that determine whether utilisation of a cross-dock is appropriate:
 Products have a continuous flow to all the stores
 The suppliers are highly reliable
 There are no unpredictable fluctuations in the sales and hence the amount of product
moving through the cross-dock
 The products have uniform handling methods.
 TYPES OF CROSS-DOCKS
• Cross-dock-managed load (CML)
A CML has the identification and the sort of the items done within the DC.
• Joint-managed load (JML)
A JML is where the supplier labels the individual items and delivers them to the cross-
dock, where the individual items are then sorted to build a load.
• Supplier-managed load (SML)
An SML is where the supplier identifies, labels the items and sorts them into downstream
customer groups.
 PROCESSES AND OPERATIONS
• Stock purchasing: For a facility to perform its function it must possess the correct
stock, otherwise the purpose of the facility namely to provide a cost-effective and
efficient means to supply customers is no longer tenable
• Transport arrival and identification of loads: Transport must be scheduled, this
is essential for the successful operation of any facility
• Receiving bay: Once the receipt of transport has been arranged, the orders can be
unloaded
• Transfer of stock into storage: The goods must be moved into the designated
storage place
 PROCESSES AND OPERATIONS Cntnd
• Replenishment and let-down of stock to pick face: The pick face is the place where the
selection or pick of a product for dispatch occurs
• Order processing: A customer submits an order, this order must be processed to check
products’ availability
• Stock picking or picking goods from storage: taking and collecting stock in a specified
quantity to satisfy customer orders
• Dispatch assembly area: Goods from all the sections in the facility are accumulated into
suitable loads of transport
• Delivery of goods and obtaining proof of delivery: There must be a positive means of
confirming the transfer of the goods to the customer
 PROCESSES AND OPERATIONS Cntnd

Proof of delivery and billing: The POD authorises a facility to bill for the
service it renders
•Return of unwanted goods: Goods might be returned to a facility because
stock was delivered in error, over-ordered or damaged
•Write-off of stock: Damaged stock has to be removed from the stockholding
in the facility
•Stock counting: Counting stock is imperative to eliminate stock errors
 BARCODING, SCANNING & RFID
TECHNOLOGY
• Practical operation of a warehouse management system requires significant amount
of data capturing and therefore every movement of goods must be recorded
• Scanning and barcodes; reduce the delays associated with data capturing, increase
the accuracy of data capturing and provide detailed information of where goods are
in the process than manual capturing
• Radio frequency identification devices are relative newcomers to the world of
logistics. RF tags broadcast a signal with information about the product they are
attached to and about the location of the product in the warehouse.
QUESTIONS???
Nothing worth having comes easy..