SUBJECT: Warehouse Operation

CERILA D. CADIZ
LCB, DPSM
 Course Objectives:
1. Describe the different types of warehouse and material
handling systems.
2. Manage warehouse operations and documents efficiently
and effectively.
3. Improve supervisory skills and deal more effectively
with warehouse staff issues.
4. Develop better skills for housekeeping and safety within
the warehouse.
5. Perform warehouse and other activities using ergonomic
techniques.
 WHAT IS A WAREHOUSE?
• Warehouse – “a planned space for the efficient
storage and handling of goods and materials”.
It is a physical structure under which roof are
stored a company’s finished products before
they are shipped to the end-user, the customer.
LG OR SAMSUNG
 Need for warehousing?
• While warehousing is an unavoidable cost of
doing business, it is a necessary service to our
customers.

• The only question is who should handle

warehousing needs: should the company do its
own or let someone else do it? Either way the
effectiveness of warehousing operations
certainly will contribute to how your
customers perceive your organization. You can
publish great books, but for them to receive
 Warehouse classified
(a) Production warehouse –
A production warehouse are warehouses that
aside from being used as storage facilities of raw
materials, work-in progress and finished goods
as well as packaging materials are also
authorized to manufacture their products in the
same place. Enterprises inside the Export
Processing Zones are examples of this type of
warehouse.
Production warehouse
b. Distribution Centers
• Distribution Centers (DCs) on the other hand
are product storage and shipping building that
stores goods a company produces.
• Distribution centers are a key part of
the distribution chain for products, order
fulfilment, and storing produced goods prior to
their shipment to wholesale, retail or
customers.
Distribution Center
 Classification of warehouses
In terms of ownership, warehouses can be
classified as :
• Company-owned
• Public warehouses
• Leased warehouses
 Company-owned warehouse-
• requires a capital investment in the storage
space and in the material handling equipment.
They usually represent the least expensive
solution in the long run in the case of
substantial and constant demand. They are
more preferable when a higher degree of
control is required to ensure a high level of
service or when specialized personnel or
equipment are needed. They can be employed
as depot of the company.
Advantages
 Public warehouse
• operated by firms providing services to other
companies on a short-term basis. As a rule,
Public Warehouses have standardized
equipment capable of handling and storing
specific types of merchandise (bulk material,
temperature-controlled goods). Here, all
warehousing costs are variable, in direct
proportion to the storage space service
required.
 Advantages:
The advantages of a public warehouse are:
Storage facilities can be availed at desired
locations as and when required, and at a known
cost. ... The goods can also be insured against all
risks like fire, flood, thefts, etc. at nominal cost
and the depositor is indemnified against such
losses.
 Leased Warehouse space
Leased Warehouse Space is an intermediate
choice between short-term space rentals and the
long-term commitment of a company-owned
warehouse. The entire warehouse is leased by a
company for their own use.
 Advantages:

•Affordable, Flexible Lease:

Large industrial space is
usually less expensive to rent
than finished commercial
office spaces or building – by
far. The industrial spaces can
be used for a variety of
 Classification of warehouse
• Picker-to product, wherein a team of human
order pickers travel to storage locations. This
can be further classified according to the mode
of travel inside the warehouse :
i) Person board Automated Storage and
Retrieval System (ASRS), where pickers are
delivered to storage locations by automated
devices which are usually restricted to a single
aisle;
Picker to product
 Classification of warehouse
• ii) Walk/Ride and Pick System, where pickers
travel by foot or motorized trolleys and may
visit multi-aisles.
 Classification of warehouse
• Product-to picker, wherein automated device
delivers items to stationery order pickers.
• Or
• Goods to person, where the picker remains at
his station and the goods are brought to him.
Product to picker
 Classification of warehouse
Picker–to belt system where the items are
retrieved by human order pickers and then
transported to the order assemblers by a belt
conveyor.
Picker to belt
 Classification of warehouse
Another classification of a warehouse may be
based on the special needs:
1. General purpose warehouse
2 Special purpose warehouse which may be :
• Refrigerated for perishable goods (cold
storage)
• Storage for flammable/ dangerous goods
• Secured storage for highly valuable goods
• Shed or semi-covered storage space
• Open storage space
 General Purpose warehouse
• A general purpose zone is a warehouse,
industrial park or port that has been designated
as an FTZ. ... In addition, general purpose
warehouses offer companies services such as
packaging, inventory control and other
logistics services
General purpose warehouse
 Special Purpose
Refrigerated for perishable goods (cold
storage)
- used to store goods at certain temperature
to keep them fresh
- refrigerated helps eliminate sprouting,
rotting or insect damage.
Refrigerated warehouse
Refrigerated or Cold Storage
Flammable / hazardouse
Storage for flammable goods
Flammable/ hazardous
Chemicals/ hazardous
Storage for Highly Valuable Goods
Shed or semi-covered storage space
Open storage space
Key Aspects of Warehouse Management

Physical Facilities –
• The floor must have the load capacity to
handle the systems and equipment you
plan to use.
• Your plans need to accommodate the
fixed locations of the structural support
poles and if possible to protect them
from damage.
• Interior obstructions such as heaters,
drain lines, gas lines, water lines,
electrical lines, and lighting fixtures must
 Choosing a Warehouse Location
Choosing the right warehouse location can make all
the difference in how effective, efficient, and
profitable a company is. Leasing or purchasing a
warehouse is a major decision, and choosing the right
location can significantly enhance a company's ability
to compete and effectively serve customers.  In
choosing the warehouse location, the following
criteria may be considered:
1.    Rent Rates & Taxes
Cost will remain a key criterion when selecting the
right location of a warehouse, but it must not be the
only one. Hidden costs could offset any savings on
cheap rental rates and therefore must be considered.
 
1. Workforce Availability, Labor Skills & Costs
  
 
3.    Roads, Highways & Traffic
Flow
Accessibility to roads and highways
as well a local traffic density must
also be considered, especially if
trucking is the main mode of
transportation.
Transportation costs are affected by
some or all of these variables and
4.    Proximity to Airport, Railway Stations & Ports
• In this case, the main mode(s) of transportation
used to receive or ship goods to and from the
warehouse must be prioritized. For example, if
most of the cargo is imported/exported via air,
then you will want to be as close as possible to the
airport. If this is not possible, you should at least
explore facilities with easy access to highways and
roads that offer a direct connection to the airport.
• You want to be as close as possible to the point of
the most predominant transportation mode in order
to control drayage costs and have the highest
possible velocity level – the maximum number of
containers per month.
5.    Markets & Local Environment Factors
• Proximity to suppliers, producers and the market(s) being served
• Any new warehouse should be as close as possible to major suppliers,
producers, and/or customers. This will help reduce lead times, decrease
transportation costs, and enhance responsiveness.
• The factor to consider here is who is/are the major supply chain
partner(s) and how you can make the supply chain more efficient
• Local environmental factors such as weather conditions and risk of
exposure to natural disasters
• Would the warehouse be exposed to hurricanes, tornadoes, or
earthquakes? Is it in a flood zone?
• Proximity to neighbors (warehouses can be noisy – avoid disputes), traffic
congestion, and peak traffic hours. Consider how these variables could
affect regular operations.
 
6.    Building Availability & Utility Costs
• If the business grows or shrinks, you will
need to adjust accordingly. If this is the
case, you will want to minimize
your need to re-evaluate all these factors
if moving to a new warehouse is your only
option. By moving within the same area,
you will be able to retain your workforce,
utilities, etc., and minimize the
frustrations of carriers/truckers and
customers trying to find the new
location. 
 Layout Planning

Planning a warehouse layout design can be a complex

process due to the various factors involved. This process
includes strategically planning a facility layout that can
properly utilize the space available, facilitate the smooth
functioning of operations, and increase efficiency.
 
Warehouse layout planning determines to a large extent
how efficiently operations are performed because the
layout generally influences the pace, the motions, efforts,
and safety with which the employees work.
Objectives of Layout Planning:
➢ Use space efficiently
➢ Allow the most efficient materials handling
➢ Provide the most economical storage in relation to
cost of equipment, use of space, damage to
material, and handling
➢ Provide maximum flexibility in order to meet
changing storage and handling requirements
➢ Make the warehouse a model of good
housekeeping.
  
Characteristics of Effective Warehouse Layout:
➢ Storage effectiveness
➢ Space utilization
➢ Safety and housekeeping
➢ Working conditions and employee satisfaction
➢ Ease of supervision
➢ Material handling effectiveness
➢ Ease for future expansion
➢ Adaptability and versatility
➢ Flexibility
➢ Appearance, promotional value,
➢ Community relations
 Principles to Consider While Designing
Your Warehouse Layout
1.    Budget Considerations
Before starting with the design of your warehouse layout, it is essential to
assess all your business requirements, review associated budgets, and then
plan the layout accordingly. During this process, you might come across some
layout designs that are more comprehensive and expensive than others, but it
is recommended that you consider the most suitable and cost-efficient
solution for your warehouse.
 
2.    Space Available
Effectively utilizing the warehouse space available can help improve
inventory visibility, reduce travel time, and increase overall operational
efficiency. When designing your warehouse layout, it is crucial to allocate
maximum space to storage and inventory processing purposes while
minimizing space for office areas, empty pallets, charging stations, etc.
Additionally, how you decide to allocate space will impact shelving designs,
installation capacity, and placement of goods inside your facility.
3.    Flow
Ensuring the uninterrupted flow of goods,
personnel, and equipment is vital to
consider in the design layout for the
smooth functioning of your warehouse. You
can avoid inefficient routes and disruptions
by strategically planning your warehouse
layout design so as to facilitate each
operation in a sequential manner.
 
4.    Accessibility
While planning your warehouse layout, it is
5.    Personnel
Knowing the number of people required, their
current levels of training and shift timings, and
other related factors can help you design your
warehouse layout in a way that doesn’t limit
your workforce’s productivity. Also, the layout
must be planned in a manner that can safely
accommodate new employees and their needs
in the future.
 
6.    Authority Guidelines
While designing your warehouse layout, it is
5. Equipment
The use of different types of equipment in your
warehouse, such as lifting & packing tools, pallet
racks, or conveyors, can influence the layout
design. By identifying the equipment needed, you
can evaluate and design the most suitable layout
according to your requirements and boost the
productivity of your facility.
6.    Throughput
Throughput in a warehouse refers to the number
of products that are processed and moved
through various warehouse processes such as
receiving, putaway, storage, picking, packing,
Summary
Selecting the most suitable warehouse layout
design for your facility is crucial to ensure the
optimal utilization of resources. The best way to
make sure that this task does not get
overwhelming for you is to consider the factors
mentioned in this article. This can help you
design your layout in an efficient manner, which
in turn lets you utilize your warehouse space
better, boost productivity, and improve order
fulfillment rates.
•  
 Major factors for effective
warehouse layout
• Commodity factor : relating to characteristics
of the materials:
- perishable?
- Valuable/ expensive?
- hazardous?
- Oddly shaped?
- etc
 Major factors for effective
warehouse layout
Capacity factor:
- Floor load capacity
- Ceiling height
- Doors
- Upright columns
Warehouse layout
 Group Project
• You have a 50m. X 50m lot where you want to construct
a 9 meter high warehouse. Your plan is to design a 5
high racking system storage module of 1.5m x 1.5m
space to accommodate a standard pallet size of 1.0 m x
1.2 m. Included in the layout is a forklift to support your
operation which requires a minimum aisle width of 3.0
meters based on its turning radius.
• Other space requirements are the following:
- Office for admin & Staff of 50sqm
- Receiving area for incoming of 30sqm
- Shipping/ outgoing area of 30sqm
- Toilets for men and women at 10sqm (5 sqm. each)
• Required:
• Compute the total area of the space (50m x 50m)
• Design the warehouse layout
• Deduct all other space requirements i.e. office admin
and staff , receiving, outgoing and CR; the rest of the
space will be for storage are and aisles.
• State the total number of pallets racks that can be
accommodated inside the warehouse.
What is a rack?
Pallets
Pallets racks
forklift