Week 8

Warehouse management

MSc. Le Thi Thai Ha

 Main content

5.1. The role of warehouse

5.2. Types of warehousing
5.3. Warehousing process
5.4. Warehousing equipment
5.5. Warehouse layout and design
5.6. Managing warehouse activities
 What is warehousing?
• Warehousing is an integral part of every
logistics system.
• Warehousing is a part of a firm’s logistics
system that stores products (raw materials,
parts, goods-in-process, finished goods) at
and between points of origin and point of
consumption and provide information to
management on the status, condition, and
disposition of items being stored.
 5.1. The role of warehouse
• Store raw materials
• Matching supply to demand
➢ Uncertain and erratic demand patterns
➢ High seasonality

• Consolidation
• Breakbulk
 What is the difference
between warehousing and
inventory management?

5
 5.2. Types of warehousing
• Cross-Docking
➢The process of receiving goods and
shipping them out with no or little storage
in between (typically less then 24 hours)

➢ Cross-docking bypasses the storage

activity by transferring items directly from
the receiving docks to the shipping docks
 5.2. Types of warehousing
• Cross-Docking

Cross-docking should be considered when:

➢ Inventory destination is known when received
➢ Customers are ready to receive the goods immediately
➢ Large quantities of individual items are handled
➢ Inventory arrives at firm’s docks prelabeled
➢ Some inventory is time sensitive
➢ The items have uniform handling methods
 5.2. Types of warehousing
• Public warehousing
➢ Advantages:
✓ the user rents space as needed
=> avoiding the costs of unneeded space
✓ greater flexibility
✓ minimise labour dispute
✓ know exact warehousing cost
 5.2. Types of warehousing
• Public warehousing
➢ Drawbacks:
✓lack of control by the user, e.g. space may
not be available
✓ lack of specialized services
 5.2. Types of warehousing
• Contract warehousing
- Is a variation of public warehousing

- defined as “a long term, mutually beneficial

arrangement which provides unique and
specially tailored warehousing and logistics
services exclusively to one client, where the
vendor and client share the risks associated
with the operation”
 5.2. Types of warehousing
• Private warehousing
- owned by the firm storing goods in the facility

- Private warehousing is suitable when:

✓companies dealing with large volumes of inventory.
✓demand patterns are relatively stable.
 5.3. Warehousing process
• Main warehousing processes
➢ Receiving

➢ Storage

➢ Picking

➢ Packaging

➢ Shipping
5.3. Warehousing process
Receiving Storage

Cross-docking Picking

Shipping Packaging
 5.3. Warehousing process

Cross-docking video
 Stock rotation techniques
Stock retrieval strategies
• FIFO: First in, First out
✓The items first placed in inventory are removed from stock first
✓Reduces the risk of inventory obsolescence (e.g. laptops)
• FEFO: First expired, First out
✓The inventory items with the soonest expiry date are removed from stock first
✓Adapted to products with limited shelf life (e.g. food products,
pharmaceuticals)
• LIFO: Last in, First out
✓The items placed most recently in inventory are removed from stock first
✓Adapted to products with no expiry date (e.g. stones, bricks)
Stock rotation techniques
 5.4. Warehousing equipment
• Selecting equipment
➢ Must achieve a balance between operational benefits and the
cost of the equipment
➢ Must meet the storage requirements within the constraints
imposed by the size and the layout of the warehouse as well as
the products stored and handled
 5.4. Warehousing equipment
a. Warehouse handling equipment
• Objectives when selecting handling equipment
➢ lower unit materials handling costs;
➢ reduce handling time;
➢ conserve floor space;
➢ prevent injuries to staff;
➢ reduce energy consumption
 5.4. Warehousing equipment
• Horizontal movement
➢ Hand trucks (sack truck)
▪ Simplest and cheapest handling equipment
▪ To move loads of up to 100kg on smooth and
level surfaces

➢ Hand pallet truck

▪ To move loads of up to 2,000kg over short
distances on smooth and level floors
 5.4. Warehousing equipment
• Horizontal movement
➢ Motorised pallet trucks
▪ Pump for lift and motor for traction
▪ Manoeuvrability is easier + can cope with
gradients

➢ Stand-on pallet truck

▪ Can work in small places
▪ Reduces workers’ effort and risk of fatigue
 5.4. Warehousing equipment
• Horizontal movement
➢ Tow tractor
▪ Move a number of pallets at the same time
▪ Reduces workers’ effort and risk of fatigue
 5.4. Warehousing equipment
• Vertical movement: storage and retrieval
➢ Pallet stacker
▪ Can lift pallets up to 5 metres
▪ Can be pedestrian, ride-on, stand-in or seated

➢ Counter-balance forklift trucks

▪ Carries palletised goods to and from racks up to
7 metres high
▪ • Requires aisles of 3 or more metres in width
 5.4. Warehousing equipment
• Vertical movement: storage and retrieval
➢ Reach truck
▪ Maximum lift height of up to 12 metres
▪ Able to work in aisles of around 2.7 metres
▪ Can operate in single and double-deep racking
environments
 5.4. Warehousing equipment
• Mechanical systems for moving and sorting

➢ Belt conveyors / Roller bed conveyors

▪ Continuous movements of items
▪ In-line weighing and measuring
▪ In-line barcode/RFID scanners
 5.4. Warehousing equipment
➢ Diverters and sorters
▪ Arms moving or blocking items

▪ Pop-up sorters (wheels between the rollers)

▪ Tilt-tray diverters (for light items)

 5.4. Warehousing equipment
➢ Angled/Activated Roller Belt (ARB) conveyors
▪ Belts equipped with roller balls that convey, sort and orientate goods
▪ Video
 Picking technologies
➢ Pick to light
▪ Light above each of the bins from which items must be
picked
▪ Numerical display to show the quantity to pick
▪ Video

➢ Voice picking
▪ Paperless picking system using audio instructions
▪ Video

➢ Vision picking
▪ Paperless picking system using smart glasses that give
operators visual picking instructions (based on AR)
▪ Video
 Picking technologies
➢ Goods-to-person picking
▪ Automation systems supporting large-scale order fulfilment operations
▪ Boxes or shelves of inventory are retrieved and directed to the picking
operator (= zero-walk solutions)
▪ Video
▪ PopPick
 5.5. Warehouse layout and design
Warehouse trade-offs: speed, cost and capacity
 a. Block stacking
➢ Goods are packed in unit loads and
stacked on the floor to their maximum
safe height
➢ Adapted where goods and packaging are
Storage robust, and budgets are tight
options ➢ Sufficient space needs to be allocated
for forklift trucks to access each stack
➢ Uneasy access to the bottom pallets =>
can only be dispatched on a LIFO basic
Storage options
b. Racked storage
➢ Increased storage
capacity (increased
vertical storage)
➢ Increased efficiency
(easier to store and
retrieve pallets)
 Wide aisle pallet racking
➢ The most versatile of any racking without the need for any specialized
handling equipment
➢ Pallet is accessible at any time and the racking is easy to install and move
➢ Takes up more floor space
 Double-deep racking
➢ Pallets to be stored two deep
➢ Require specialist equipment in the form of extendable forks, require slightly
wider aisles
➢ Speed of access is slower
➢ Provides a highly space-efficient storage system (reduce aisles, increasing the
storage capacity
➢ Items must be dispatched on a LIFO (Last in, First out) basis
 Narrow aisle racking
➢ Utilize space, reduce aisle width to circa 1.6 metres.
➢ Require a very flat floor and specialist equipment to to deposit and
access pallets
 Drive-through racking
➢ A forklift enters the racking from one side to load/retrieve pallets
➢ Rails for the pallets to rest on
➢ Safe and efficient storage equivalent to block stacking for loads that are
too fragile or unstable to be stacked on top of each other
➢ LIFO (Last in, First out) applies
 Drive-in racking
➢ A forklift enters the system from both sides for loading and retrieval
➢ Pallets are loaded on one side of the rack and retrieved from the other
➢ Allows for independent loading and retrieval and, therefore, for a FIFO
(First in, First out) inventory management system
➢ Requires an additional aisle
 Mobile racking
➢ Units of racking are movable by being mounted on rollers
➢ Units are moved to create a way to a particular bay
➢ Floor space is saved but the loading/retrieval of pallets is slowed down
➢ Video
 Warehouse layout
• Objective: increase throughput and productivity within the warehouse,
reduce the amount of travel time and touch points, and maximize space
utilization.
• The main floor-space areas within the warehouse which need to be
calculated are as follows:
➢ Receipt and dispatch areas
➢ Storage space
➢ Aisle width
➢ Other space: packing, value-adding services, return processing, office
and restroom
 Warehouse layout
• U-shaped warehouse

Source: Richard, 2011

 Warehouse layout
• I-shaped warehouse (through-flow warehouse)

Source: Richard, 2011

 Warehouse layout
• L-shaped warehouse (through-flow warehouse)

Source: BigRentz, 2020

 5.6. Managing warehouse activities
Warehouse operations
1. Receiving goods
2. Storing goods
3. Assembling consignment
4. Dispatching goods
5.6. Managing warehouse activities

Receiving Assembling Dispatching

Storing goods
goods consignments goods
 5.6. Managing warehouse activities
1. Receiving goods
➢ Involves: preparing goods receipt, offloading, checking, and making
them available for storage
➢ Visibility of arrivals depends on good communication with the
supplier about the quantity and time of the deliveries
5.6. Managing warehouse activities

Receiving Assembling Dispatching

Storing goods
goods consignments goods
 5.6. Managing warehouse activities
2. Storing goods
➢ Involves: identifying the required stock
location, moving stock to location, and
notifying inventory control of the storage
location
➢ Goods will remain in storage until they
are required for dispatch
 5.6. Managing warehouse activities

Receiving Assembling Dispatching

Storing goods
goods consignments goods
 5.6. Managing warehouse activities
3. Assembling consignments
➢ The start of the process that leads to dispatch
➢ Involves: preparing pick lists, picking items, packaging
consignments, and preparing the shipment documentation
➢ Must be planned in such a way that avoids a build up of goods in the
dispatch area that may cause congestion
5.6. Managing warehouse activities

Receiving Assembling Dispatching

Storing goods
goods consignments goods
 5.6. Managing warehouse activities
4. Dispatching goods
➢ Involves: Consolidating consignments into loads, loading goods
➢ Ensure that product is dispatched on time and complete