November 2021
Gary Bilsbarrow
Storage and Warehousing Techniques
WMG Full-time Master’s
Programme

ES9X3-10 A2FT Nov-21
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SWT Background Information
• On Line.
• Please arrive on time for every session.
• You are expected to attend every session – if a session is missed you will be given extra
written work or asked to re-attend.
• If you are constantly late for sessions you will lose in-module marks.
• Sign the on Register.
• Module Assessment:
• Post Module assignment – 80%
• In module exercises throughout the week – 20%
• Group marks awarded.
SWT Information
• Moodle Resources:
• Lecture Slides PDF
• Reading List
• Individual Articles and Info
• Teaching in MS Teams – ES9X3 – 10 – SWT A1FT, A2FT etc.
• House Rules
• How the week will run
• This is your week……make the most of the
experience
• Group Work and the IMM / PMA
• Help Me To Help You…….Team Work
• Any Questions?
• [email protected]
• [email protected]
Gary – Background

Assessment process
The PMA will be marked by Gary Bilsbarrow and Tutors
The marking criteria used follow WMG’s standard
marking process for PMA’s –
https://warwick.ac.uk/fac/sci/wmg/ftmsc/postmodulew
ork/pma/marks/
As per university regulations the PMA will also be
second marked. Details of the process and rationale are
available on the university web site
https://warwick.ac.uk/services/aro/dar/quality/categori
es/examinations/moderation
PMA

PMA – Word Count
Both questions are required to be answered and each question carries 40 marks in total.
Write 3,000 words in total, 1,500 words per question + or – 10% (150 words).
Word count includes everything in the main body of the text (including headings, citations,
quotes, lists, etc). Any title page, table of contents, table of tables, table of figures, content
within figures/tables, list of references and any appendices are excluded.

PMA – Guidance
A good PMA generally requires you to answer the question and to include.
1. A title, with your student number, module, lecturer’s name and any other documentation required by the
university.
2. A table of contents and no abstract.
3. Evidence of an appropriate level of background reading of relevant texts.
4. Evidence of systematic and clear thinking, indicative of good planning and organisation.
5. Writing which makes sense, is clearly and carefully presented (proof-read and grammar checked).
6. A critical style of writing which compares and contrasts the main theories, concepts and arguments with
conclusions that are based in evidence presented.
7. High levels of accurate academic referencing.
8. A logical and well-defined structure with headings and subheadings.
9. Clearly labelled and well-presented diagrams and other graphics that are discussed in the text.
10. Adherence to usual academic standards including length and a timely submission.
11. A reference list in which every source that is cited in the text is listed.
PMA – Guidance
Where to get help:
1. Talk to your module tutor if you don’t understand the question or are unsure as to exactly what is
required.
2. Study, Professional and Analytical Skills (SPA) Moodle site – we have a lot of resources on this website with
workbooks, links and other helpful tools. https://moodle.warwick.ac.uk/
3. The university Academic Writing centre provides workshops and useful tools to help you in all aspects of
your work. https://warwick.ac.uk/services/skills/academicwriting/
4. Avoiding Plagiarism, the university’s site to help you to reference properly
https://moodle.warwick.ac.uk/course/view.php?id=42224
5. Wellbeing support services https://warwick.ac.uk/services/wss
6. Numerous online courses provided by the University library to help in academic referencing, writing,
avoiding plagiarism and a number of other useful resources.
https://warwick.ac.uk/services/library/students/your-library-online/
PMA – Help

Module Changes – You Said, We Did.
For On Line

Terminology

Introduction and Background
What are the roles of a warehouse in your
view?
“Warehouses are typically viewed as a temporary place to store
inventory and as a buffer in supply chains.
They serve as static units matching product availability to consumer
demand and as such have a primary aim which is to facilitate the
movement of goods from suppliers to customers, meeting demand
in a timely and cost effective manner”.
Primarily a warehouse should be a trans-shipment area where all
goods received are despatched as quickly, effectively and efficiently
as possible.
Van den Berg (2012)
Warehouse definition
Whether they’re old….
Or ultra-modern
they have the majority of processes in common
◼ The primary objective of warehousing is to maximize the
effective use of the operational resources while satisfying
customer requirements.
◼ Match product availability to customer demand
◼ Maximum customer satisfaction at Minimum cost
◼ Ensure visibility and accuracy of stock
◼ SIX BASIC PRINCIPLES
Accuracy, Cost Control, Cleanliness,
Efficiency, Safety & Security
The Objectives of Warehousing
Warehouse trade-offs
Accuracy
Space
Service
Accuracy
Responsiveness
Storage costs
Speed
Time
Cost
Cost
Efficiency
Volume purchases
V
Exercise 1
What do you think are the challenges facing
companies today in terms of warehousing?
List as many as you can……
Class exercise
Challenges
Shelf life – perishable items
Security of product
Challenge of new technology –
3D printing, AI (Artificial
Intelligence)
Forecast accuracy,
procurement issues
Product life cycle
Where and how many
warehouses
Increased cost of land
Capacity
Gap between required levels
and actual performance levels
Governmental intervention
Safety aspects
Environmental challenges
Natural disasters
Business peaks
Outsource or retain in-house
Stock visibility and tracking
Battle of trade-offs e.g. speed v accuracy
Warehouse layout – no of doors, racking
Temperature control
Whether to automate
Unionised environment
Maintenance
Training in automation, IT etc
Overall challenges (cont’d)
Human resources – work isn’t attractive
Rising labour costs
Ageing populations
Shortage of skilled labour
Shortage of management knowledge and expertise
Low efficiency in some countries
Increased energy and transport costs
Lack of nationwide warehouse distribution centres in certain
countries
Poor or non-existent IT systems in some countries
Poor road infrastructure and congestion leading to delays
Poor communication between Ministries/local Governments in
charge of infrastructure
Local regulations and protectionism
Challenge Operational Requirements
Improve productivity, increase accuracy, improve handling
Achieve the Perfect Order and invest in systems
Increase productivity, improve utilisation of space, staff and
equipment
Cost reduction
Sales via multiple channels and increase in
smaller orders
Shorter order lead times
Proliferation of SKU
Fluctuations in demand
Increasing cost of energy and
environmental challenges
Labour cost and availability
Data accuracy and speed of transfer
Improved picking strategies such as bulk picking and greater
use of technology
Improve processes and increase productivity
Improved use of equipment such as carousels, A Frames and
flow racks
Flexible working hours and improved forecasting
Manage energy more efficiently, better use of waste
Staff retention through excellent working conditions,
flexible hours, training and improved productivity
Introduce Warehouse management system and real time
data transfer
Key Warehouse Challenges (Adapted from Dematic)
Role of the Warehouse in today’s Supply Chain
Raw materials
Component manufacture
Product assembly /manufacture
Wholesalers/Dealerships
Consumers

Retailers

Disposal
Re-process
– Warehouse requirement
Warehouses in the supply chain
Role of the warehouse
To facilitate getting the product to the customer:
On time (OT)
In Full (IF)
To the right place
In the right condition
With the right paperwork / information / data
At the right cost
As environmentally friendly as possible
Retail logistics evolution (JLL.com)
Samsung Video
Why do we need to hold stock?
Why do you think companies need to hold stock?
List as many reasons as you can……
Why do we need to hold stock?
Buffer in the supply chain or manufacturing process
Satisfy demand – can be erratic
Buy low sell high – precious metals, oil, coffee etc.
Shortage or unreliability in supply
Cope with peak demand – seasonality
Maintenance parts
Quality control cover
Customer and supplier lead times
Sub assembly
Holding stock in numerous locations
Ability to increase production runs
Humanitarian storage
Archive storage
Smooth the flow of goods
Packaging material
Store returns
Promotions and Product launch
Cover for production shutdowns
Lower unit cost if bought in large quantities and if transported in large quantities
Production breakdown
Ripening products, cheese, meats, whiskies
Delay taxation payments
Seasonality/demand uncertainty
Finished Goods storage
0
2000
4000
6000
8000
10000
12000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Week number
No. of pallets
C1
C2
C3
C4
Total FG
July 2009 February 2010
Construction company Sales and stock
Warehouse Location
Exercise
30%
volume 70% volume
20 40 60 80 100 80 60 40 20
(Kilometres)
Customer area A
Customer Area B
Where would you site a distribution centre to economically supply both customer areas?
200 kms
Richards (2005)
Warehouse location
Warehouse location
Richards (2005)
Exercise
30%
volume
Cost of transport = $5 per kilometre
70 loads per day into Customer area A
30 loads per day into Customer area B
200 Days per annum
20 40 60 80 100 80 60 40 20
(Kilometres)
Customer area A
Customer area B
70% volume
Where would you site a distribution centre to economically supply both customer areas?
What if it costs an additional $350,000 to operate a warehouse within 10 kms or less of
customer area A? Minimum distance away is 1 km.
Calculations

Answers
Richards (2005)

Exercise (continued)
What other factors do you need to take
into account when making this decision?
Factors affecting warehouse location
Of importance to Local Government Planners
Utilisation of brown field sites
Build in areas of high unemployment
Appropriate mix of industry
Companies
Access to transport networks e.g. parcel and pallet hubs
Availability of trained labour
Transport links for staff
Availability of funding, grants etc
Use of suitable existing buildings
Availability of utilities including telecoms
Availability of finance and resources
Goods traffic flows
Proximity to ports and airports
Where are our suppliers and manufacturing points?
No weather issues such as flooding
Warehouse location criteria
Best location selection criteria for warehouse location
Cost
Land cost
Labour costs
Transportation cost
Tax incentives
Tax structures
Financial incentives
Handling costs
Macro environment
Government policies
Industry regulations
Enterprise Zones and
construction plans
Labour characteristics
Labour availability
Skilled labour
Transport links for
staff
Infrastructure
Existence of modes of
transport
Telecommunication
systems
Energy and water
utilities
Quality and reliability
of modes of transport
Proximity to ports
and airports
Existing sites
Environment
Geography
Weather
Markets
Proximity to
customers
Proximity to
supplier/producer
Lead times and
responsiveness
Demirel et al
Overall costs rank comparatively
low in importance when weighed
against other factors.
Proximity of labour (e.g., in
Western Europe, with the
Netherlands a key example) and
cost of labour (such as in Poland)
have a direct influence on
customer logistics decisions.
Logistics Manager Top logistics locations revealed. Published Monday 9 October 2017 4:26 pm
Prologis – 5 major factors for Warehouse location in Europe:
BREXIT
Port centric Logistics
“The provision of distribution and other value adding logistics
services at a port.”
Advantages:
Faster unloading (emptying) of containers as long journeys from
ports to DCs eliminated.
Subsequent empty running between the DC and the port
eliminated.
Lower demurrage fees
No need to worry about landside weight restrictions on
imported containers allowing them to be filled to capacity.
Faster repositioning of ‘empties’.
Reduced carbon footprint.
Example: Asda Walmart at Teesport, General Mills at Liverpool
UK DCs
Centre of Gravity
◼ Volume Centre of Gravity
Locates warehouse at the centre of supply & demand by
minimizing distances to customers
◼ Cost Centre of Gravity
Locates warehouses at the centre of supply or demand
by minimizing transportation costs
Location determination
Warehouse location based on number and size of orders
Potential for consignment stock
Key Factors for Choosing a Warehouse
Location in China –
Score
China Warehousing & Distribution Survey 2006
Jones Lang LaSalle & China Supply Chain Council has anything changed?
Strategic placement of Chinese warehouses
53
Courtesy of Transport Intelligence
JD.com Chinese DC network
Distribution Depots Geographic areas covered
Beijing Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia, Shandong
Shanghai Jiangsu, Zhejiang, Shanghai, Anhui, Diaoyu Island
Guangzhou Guangdong, Guangxi, Fujian, Hainan
Chengdu Sichuan, Chongqing, Guizhou, Yunnan, Tibet
Wuhan Hubei, Hunan, Jiangxi, Henan
Shenyang Liaoning, Jilin, Heilongjiang
Xi’an Shanxi, Gansu, Qinghai, Ningxia, Xinjiang
Jdcorporateblog.com
Plus 166 bulk warehouses in 44 cities and 4,142 cross dock centres
JD.com v Amazon DC locations – China
MANY WAREHOUSES
◼ Inbound transport is expensive (to
supply warehouses)
◼ Outbound transport is cheaper (to
deliver to customers)
◼ Closer to customers so quicker to react
◼ Cost of maintaining many warehouses
is expensive
◼ Cost of keeping many buffer stocks is
expensive
How many warehouses?
How many warehouses?
FEWER WAREHOUSES
◼ Inbound transport is
cheaper
◼ Outbound transport is
more expensive
◼ Less responsive to
urgent orders
◼ Less cost to maintain &
equip warehouses
◼ Less cost of buffer stock
Total logistics cost
Major Cost Relationships
Number of DCs / depots
Cost
Local delivery cost
Systems cost
Storage cost
Inventory holding cost
Primary transport cost
Rushton, Croucher and Baker (2010)
Evans & Castek in Gattorna (1998)
Cost to Serve Customer Service quality
Satisfaction
Business Profit
Perfect service = High cost Low cost = Lower service
Cost versus Service
European manufacturer – 16 distribution centres
European manufacturer – 3 distribution centres
Maister’s Rule
Reducing the number of warehouses from y to x,
reduces the total amount of safety stock in the system
by:
1 – [ √x ]
[ √y ]
Multiply the result by 100 to find the percentage
reduction
Exercise: Maister’s rule
Use the data from the European manufacturer
example to test Maister’s rule:
◼ From 16 to 3 warehouses
◼ Original safety stock in the system was $16M
◼ By how much will the stock be reduced?
1 – [ √x ] =
[ √y ]
Answer
Reducing from y to x
y = 16 16 = 4
x = 3  3 = 1.732
% Reduction = 1 – 1.732 = 56.7%
4
56.7% of $16M = $9M
Maister’s rule – grid

Types of Warehouse Operation
Health and Safety
Functions of a warehouse
Inventory holding point – Stock is held to fulfil orders / demand.
Provide a buffer stock, preparation for a new
product launch, facilitate long production runs
Storage of Customs and excise goods under bond
Other types
Sequencing centre – Just in time related techniques
Consolidation centre – Product lines from various locations are
consolidated into complete customer orders.
Cross-dock centre – Goods are received and shipped onwards without
storage.
Sortation centre – Goods are sorted by customer or region.
(parcels/pallets)
Sub-Assembly facility – Final assembly of goods prior to distribution e.g.
postponement or labelling.
Trans-shipment point – Goods are sorted into smaller vehicle loads for
delivery to the customer – break-bulk centre.
Fulfilment centre e-commerce and catalogue sales
Returned goods centre – To handle returned / faulty goods.
Warehouse Types
• Local, regional, national, international stock holding points
Cross dock operation
Ambient storage (room temp storage)
Hazardous Goods storage
Photo – EDIE
Photo – Transmare – chemie

There are nine classes, some
with divisions, as follows:
Having packed the product the package has to be labelled, this is not about the
product labelling or CLP labelling which has health and safety advice for the user, but
a rather simple class warning symbol. On small packages a 100 mm square coloured
diamond with a symbol, these can be larger on IBCs (Intermediate bulk container) and
road tankers. I have illustrated a couple of examples below:
The consignor is responsible for ensuring that the packaging conforms to the regulations
for the product. The packaging can be as simple as a cardboard box or paper bag for low
risk powders in small quantities to very sophisticated double skinned stainless steel
packages for more complex high risk products. In general the package needs to be UN
approved and compatible with the product but for every UN number there is a list of
packaging options available to the packer.
Packaging and Labelling
New Haz chem codes – GHS
Temperature controlled storage
Photo by fordsproduce.com
Photo by Texas ice house
CO-OP Storage
Bulk storage – non-palletised
Garment storage
Photo by Asda Walmart
Photo by Transformer
Archive Storage – Abandoned Salt mines
Types of e-commerce facilities (JLL.com)
Fulfilment Centres
Photo by BBC News – Amazon
Amazon FC
i-Herb.com
Other Warehouse examples
84
Open spaces can also be classed as
warehouses if products are stored for a period
Returns/Recycling warehouse
Frazer Direct http://your.asda.com/sustainability-storewaste/waste-not-want-not-2
Customs warehousing or Free Trade areas
advantages
Customs warehousing is a procedure that enables
the suspension of Import Duty and/or VAT.
Delay paying import duty and/or VAT and excise
duty on your stocks of imported goods.
If you want to re-export you don’t pay import tax
If you do not know the ultimate destination of the
imported goods and want to delay having to declare
imported goods to another customs procedure, for
example release for free circulation
HM Revenue and Customs requirements
• The warehouse will be used primarily for the storage
of goods
• There is a genuine economic need
• Your stock records are adequate to verify the
receipt, storage, handling and disposal of the goods
and they must be able to show at all times the
current stock of goods that are held under the
customs warehouse procedure.
• You must be solvent and have a compliant revenue
record
• You must use it regularly
Health and Safety
UK Warehouse Legislation
Health and Safety at Work Act 1974 (HASWA)
Management of H & S at Work 1999
LOLER 1998
Provision and Use of Workplace Equipment Regulations 1998
Reporting of Injuries, Diseases, and Dangerous Occurrences Regulations
1995 (RIDDOR)
Workplace (Health, Safety and Welfare) Regulations 1992
Machinery Safety Directive
Work Equipment Directive
Manual Handling Directive
Personal Protective Equipment 1998
Display Screen Equipment 1992
Control of Substances Hazardous to Health Regulations (COSHH). 1999
CLP Regulations (Classification, labelling and packaging)
Fire precautions
Working at height
Working Time Directive
◼ Manufacturers’ duty
Ensure product is safe to use and fit for purpose
◼ Employer duties:
Provide:
✓ Safe plant & systems of work
✓ Safe handling, storage, etc.
✓ Information, instruction & training
✓ Safe place of work
✓ Safe environment & welfare
◼ Employee duties:
✓ Look after their own H&S
✓ Not endanger others
✓ Co-operate with employers on H&S
✓ Not interfere with or misuse items supplied for H&S purposes
◼ Remember that individuals can be prosecuted under this legislation as well as companies
HASWA responsibility for Health & Safety
MHE – Mechanical handling equipment
Select responsible staff to be trained
Ensure staff are trained by a competent trainer
Follow the manufacturer’s handbook
Undertake pre-operational checks as per the handbook
– Undertake daily and weekly checks and record any
defects – ensure supervisor countersigns the check list
Only allow suitably trained staff to operate the
equipment
Fork Lift Accidents
Top 10 FLT Accidents
Racking disasters
Nene
DMD.com
Safety Surveys
The Accident Pyramid
Continually undertake Risk Assessments!!!
www.hse.gov.uk
Record, Investigate, Action, Train, Review
1 fatal accident
30 property
accidents
600 near misses
10 serious injuries
Risk assessment and duty of care
N.B. More litigation than ever before
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Causes of major injury
Causes of 3+ days absence from work
•Any company with 5 plus staff needs to carry out
risk assessments under the Management of Health &
Safety at Work Regulations 1999
•These Regulations are law under the Health & Safety
At Work Act 1974
•Risk assessments are designed to measure the risk of a
hazard causing harm (its likelihood and severity)
weighed against the cost of the measures necessary to
avoid that risk (including money, time, trouble, effort &
sacrifice)
•They must be “suitable and sufficient” and carried
out by a competent person
The principles of risk assessment
◼ Hazards – things with the potential to cause harm
◼ Risks – the harm that the hazard could cause
◼ Those affected – people who could be harmed
◼ Existing controls – things already in place to prevent harm
occurring
◼ Likelihood – score out of five relating to the chance of the harm
occurring (1 very unlikely, 5 very likely)
◼ Severity – score out of five relating to the worst possible
outcome (1 is minor injury, 5 is death)
◼ Risk factor – the 2 scores multiplied together to get a score out
of 25
◼ Risk levels – High risk 16-25, Medium risk 5-15, low risk 1-4
◼ Remedial actions – things which can be done to avoid the risk
(NB – avoiding the risk is the best remedial action; physical
barriers/segregation are next then lastly providing information
and training and protective equipment).
◼ Action plan – This identifies who has to do what, by when, in
order to reduce the risks to an acceptable level
Risk assessments explained
• You will be working in areas of vehicle movement
including LGVs and Fork Lift Trucks.
• Seventy people a year are killed in workplace
transport accidents.
• Avoid staying in these areas longer than is
necessary.
• Always wear your high visibility jacket and safety
boots
• Take these dangers seriously
Risk assessments explained (cont’d)
Warehouse Processes Part 1
Section 4
Lean Warehousing
Kaizen = Continuous Improvement
Standardise
Maintain and make the 1st
three ‘s’ habitual so that 5S
becomes part of the regular
work routine
Shine
Cleaning the warehouse and
maintaining its appearance
daily. Establish preventative
measures to ensure ongoing
cleanliness
Set in Order
Find a place for everything
and put everything in its
place. Organising, arranging
& storing material,
equipment & information
Sort
Divide items in the
warehouse into 3
categories: retain,
return and rid
Sustain
Ongoing application of
knowledge, skills and
abilities gained from the 5S
process in order to improve
effectiveness
Two phases.
1) Get rid of the ‘junk’
2) Create a system so there is a place for
everything and everything is in its correct
place
5S methodology is
establishing an orderly
flow, eliminating waste
and organizing the
workplace.
TIM WOODS
Shadow boards and parking spaces
104
Warehouse processes and flow

Despatch
Reserve storage
and full pallet pick

Item
picking

Replenishment Direct movement
To pick faces
Cross-docking
Adapted from Schmidt & Follert 2011
Warehouse functions
Goods inward/receipt
Inward sortation and Cross-docking
Storage
Replenishment
Order picking
Secondary sortation
Collation
Postponement
Value adding services
Despatch
Housekeeping
Stock counting
Returns processing
Cranfield University
Pre-receipt
Agree specifications with supplier
Inform supplier of requirements regarding:
– Size and type of delivery vehicle
– Size and type of pallets
– Size of cartons
– Labelling requirements
– Delivery documentation
– Pre-notification
– Delivery procedures
• Unloading requirements
• Role of the driver
Pallets
Pallet rental companies
– Charged on a pence per day basis
– E.g. Chep, IPP, LPR
– Pallets are normally in very good condition
– Does require both suppliers and buyers to be part of
the rental scheme
– Removes requirement to collect pallets from
customers
V
Receiving
Allocate the supplier a time for delivery
Estimate time to unload, check and put-away
Allocate sufficient labour and MHE for unloading
Check if load requires special handling
Check for any special handling instructions (Hazardous, fragility etc)
Unload and check quantities and quality of delivery
Record variances – possible quarantine
Check status of goods

Clear dock area and ensure goods are on system and available to pick – dock
to stock time is crucial!
Locate – Quarantine, cross dock, pick face, reserve storage
Booking in sheet
110

Reverse Logistics
Definition:
“The process of planning, implementing, and controlling the
efficient, cost effective flow of raw materials, in-process
inventory, finished goods, and related information from the
point of consumption to the point of origin for the purpose of
recapturing or creating value or proper disposal”.
Rogers and Tibben-Lembke (1999)
• Packaging can also be included in this process
Reverse Logistics
Motivations:
•Government policy and legislation (e.g. Waste Electrical and
Electronic Equipment Directive, (WEEE) 2007).
• Economic Considerations
• Environmental Considerations
Challenges:
• Variability of process: Volume of returns and quality of what is
returned makes process more difficult to manage.
• Ensuring the correct recovery option is chosen.
• Cost
Rahman (2012) in Mangan etal (2012)
Recovery Options
Recycle – Extract material from used produces or by-products
from manufacturing and use them to produce new products.
Remanufacture – Restoration of used products to “new”
condition, to be used in their original function, by replacing worn
or damaged parts.
Reuse – Use product or material again for the same function, in
its original form or with little enhancement or change.
Refurbish – Make changes to the appearance of a product by
cleaning, painting, etc. Structural parts remain intact.
Recondition – Change and restore to a previous normal
condition, make new or as if new again.
Repair – Fix the fault and use.
Reprocess – Use again after process.
Emmett and Sood, (2010)
Degree of change in the original product
• The final option is ‘disposal’
In-handling equipment
Dock Equipment
Dock Levelers
– Hydraulic
– Air Bag
– Mechanical
– Power Assisted
Bumper Pads
Dock Shelters
Dock Lights
Safety lights/warnings
Operating procedures
Signage in different languages
Labelling and Put-away
Ensure supplier has labelled products correctly
Produce own labels although not as efficient
Scan labels
System determined put-away
Location allocation by system or manual
Take into account size, weight, velocity, compatibility
Quarantine areas
Fixed or random locations?
Check stock rotation policy
Consolidate stock if FIFO rules allow
Record stock against the location
Task interleaving or dual cycling – put-away and retrieve
in same movement
Location I.D.
4 A 2 C 1 or
04.01.02.03.01

C (03) = Level
1(01) = Pallet, Shelf or bin position

Fixed v Random storage

Random locations
Fixed locations total = 453
Inbound check
Location verification
and put-away
Inbound and put away processes
WMS
Warehouse Processes Part 2
Section 5
Picking systems
Picking is paramount to any warehouse
operation
– It is the most labour intensive
– It is fundamental to customer service
– There are often extensive floor space
requirements
– There may be limited scope for automation
On average up to 65% of the warehouse operating expenses
can be attributed to the Picking function.
On average travel time accounts for 50% of the total picking
time (Petersen C.G. 2002).
The pick process and likely errors
43
15
12
12
11
7
Order process
Travel
Pick
Pack
Check
Paperwork
Error
correction
23
45
30
2
Order errors
Quantity
misread
Item omitted
Wrong item
picked
Misscounting
Pick volumes
Picking – The set up
Pareto or the 80/20 rule
Sales (80% of sales from 20% of product lines)
Sales (20% customers provide 80% of sales)
Suppliers (80% of volume from 20% of suppliers)
Value of product (20% of product lines – 80% of value)
Cost of servicing clients (20% of clients – 80% of problems)
Labour (20% of staff – 80% of problems)
Labour (80% of efficiency from 20% of staff)
Why is ABC Analysis Important?
Take an example:
200 full pallet, ground floor pick positions
5 aisles
Why is ABC Important ?
Apply sku –
ABC Analysis
Why is ABC Important?
Generate a 10 Item Pick
Why is ABC Important?
Add the Route Travel Time: 209 seconds
Why is ABC Important?
Apply a Slotting Strategy
Why is ABC Important?
Shorter
Distances
Reduced Travel Time
116 sec vs 209 sec
% Benefit

24%
Reduction
Courtesy of
ABC layout
Despatch
C B A B C
C Zone
Slow movers
45% SKU,
5% frequency
B Zone
Medium movers,
35% SKU,
15% of frequency
A Zone
Fast movers, 20%
SKU, 80% of order
frequency
Actual example (1350 stock items in total)
135

270 stock items produced 80% of the orders!
Ac – products sold less frequently but with high impact on sales
Ca – Products sold often but in fewer quantities

Sales
Frequency
ABC Analysis – volume and frequency
Exercise 1 ABC categorisation
See sheet
ABC/Pareto Analysis

Slotting Optimization scientifically determines the best picking profile
for your warehouse, and enables you to make timely, intelligent
decisions as ordering trends change.
➢Are fast-moving items in the most accessible locations?
➢Are slots allocated in the most efficient manner according to
product size and weight?
➢Are pallets allocated to the correct height slot
➢Is your storage capacity optimized for your current stock?
➢Are items that sell together close to each other
As input data changes, such as seasonal ordering trends or new or discontinued
products, Slotting Optimization can revise its recommendations incrementally, to
keep your warehouse at maximum efficiency without costly overhauls.
Product location tool – Slotting
Pick face examples
Copyright © John J. BARTHOLDI, III. All Rights Reserved
Pick sequence and aisle numbering
Theoretical Pick route layouts
142
Roodbergen 2011
Picking procedures
➢ Pick by order
➢ All lines are collected for a specific customer order
➢ Minimal handling, order sizes are typically high.
➢ Pick by label
➢ All lines are collected for a specific customer order and labels attached to each item during
the picking process
➢ Minimal handling, order sizes are typically high.
➢ Cluster picking
➢ Take several individual orders out at the same time
➢ Can be confusing without technology
➢ Pick by batches
➢ Products collected for a large number of orders with the same product lines
➢ Fewer runs but increased handling and sortation, mainly large quantities of small orders
➢ Pick by zones
➢ Products are categorised into specific groups and picked from defined areas
➢ Reduced walking distance, increased sortation
➢ Pick by waves
➢ Large batches of orders are collected for defined time periods e.g. arrival of vehicle
Order Release
Point Dispatch Area

VanDerLande Industries
Area picking / U path picking
ORDER PICKING – individual
Paper, label, voice, scan, vision
Pick by label
Each operator is given a
batch of labels detailing location,
quantity etc – once all labels are
attached to the products and placed in
a carton or onto a pallet the individual
order pick is complete
Cluster Picking method
146
(Photos by QAD, Kardex Remstar and Vanderlande)
Zone picking
Order Release
Point
Dispatch Area
orders
Products
Products
Products
Courtesy of VanDerLande Industries
Can be simultaneous or sequential
Each person is allocated their own area
Batch picking
– Pick by line
– Pick to zero
Oracle.com
Wave picking
There are two basic planning elements and benefits of
wave picking.
To organize the sequence of orders and assignment to
waves, consistent with routing, loading and planned
departure times of shipping vehicles or production
requirements, etc., to reduce the space required for
shipping dock handling to assemble orders and load; and
To assign staff to each wave and function within a wave,
with the expectation that all the work assigned to each
wave will be completed within the wave period and thus
more effectively utilize the staffing throughout the shift.
Order distribution System (ODS) is a dynamic goods-to-person
solution. It is especially strong in business processes where a
large numbers of order lines are fulfilled from relatively low
numbers of articles. Totes or cartons are transported by a
conveyor system to operators who place goods into order totes
controlled by put-to-light displays.
Goods to person
Courtesy of VanDerLande Industries
Increased use of automation – goods to person
What affects picking performance?
The human factor
Safety first
Ergonomic design of storage system and equipment
Light loads (max 25 kgs men, 15 kgs women)
Adequate lighting
Comfortable temperature
Clear instructions
Clear labelling
Adequate breaks
Good communication with team
Good supervision
Replenishment
When using pick or forward locations
Replenishment is the replacement of goods picked from the forward
locations
Goods are transferred from bulk or reserve locations
This can be done overnight, at the beginning or end of a shift or during
the picking process depending on the urgency – however try not to
replenish at the same time as you are picking
Ensure sufficient items in pick location for duration of shift if possible
Biggest error is to have an empty pick location
Value Adding Services
Labelling
Kitting
Sub-assembly
Testing
Packing
Shrinkwrapping
Tagging
Kimballing
Promotional work (e.g. BOGOF)
Gift wrapping
Call centre support
Despatch
Random quality checks on exit depending on product
value
Pack products securely and safely
Weigh product as an alternative to physical count
Recording of batch numbers, serial numbers etc.
Load manifest compilation
Loading in sequence
Load optimisation (e.g. Cubiscan)
Smooth the flow of despatches
Vehicle sealed and recorded
Load optimisation
Pallet configuration – no overhang
– Optimum number of cartons
Vehicle load configuration –
Optimum number of
pallets/cartons
http://onpallet.com/
Packing on despatch
Stretch-wrap machine
Stretch-wrap by hand
Shrink-wrap tunnel
(Courtesy logismarket) Packing station, (courtesy Cisco Eagle)
Automatic carton erector and sealer
Pallet straps (courtesy of Velcro)
Housekeeping/Supervision
If you have a large warehouse you may have separate teams
for the following:
Provision, allocation and maintenance of equipment
Replenishment of fast moving items
Dealing promptly with non-conforming, lost or found
stock
Security of high value or hazardous stock
Identification of non-moving stock
Ensuring efficient space utilisation
Work flow and congestion
Cleanliness of warehouse
Review of procedures
Minimising Theft
Staff training and awareness
Use of CCTV
Use of lockable cages or Carousels for high value goods
Parking of cars away from the warehouse
Random searches
Regular cycle counts
Staff vigilance
– Especially in dark, less accessible areas of the warehouse. These are prime areas from which product will
disappear. Same goes for inventory near exit doors. Staging areas for both incoming and outgoing shipments
may be too close to the dock doors. If no one is around to keep an eye out, it would be easy to take
something and put it in a truck.
Conduct security surveys/audits (Independent)
Use security tags for vehicles leaving the warehouse
Stock counting
Perpetual inventory or cycle counting
– Use ABC analysis to determine how many and how
often you count which items of stock e.g. 8% of A, 4%
of B and 2% of C items
Monthly, quarterly, annual stock checks
– Depends on what you agree with your auditors
N.B. You need to be organised:
Who’s counting, are they trained and motivated, what are you counting,
when do you count, what tools do you need.
Inventory drones
161
Stock turn
How often stock turns over in a warehouse
How to calculate:
– Divide the total throughput of items by the average
number of items in stock
Or
– Divide the total cost of sales by the total average cost
of goods stored at a particular time
Examples of stock turn
100+: Japanese manufacturing company
30-100: Good European manufacturing or distribution
10-30: Typical European manufacturing
10 – 35: Retailer
<10: Poor European manufacturing
<2: Maintenance stores
Stock turn
163
The following table provides data regarding sales and average stock holding
per month for ACME products.
Calculate the stock turn.

Days stock in hand
164

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