4.01.

2025

Introduction with Storage


 Storage involves proper management for preserving
goods from the time of their production or purchase
till actual use.
 Storage is a need for raw materials and also finished
products.
 Sometimes this storage has to be done on a large
scale and this is called as warehousing.

2
 4.01.2025

What Is Warehousing?

 Warehousing can be defined as follows:

«Warehousing refers to the activities involving storage

of goods on a large scale in a systematic and orderly
manner and making them available when they
needed.»


 A warehouse is normally used by manufacturers,
importers, exporters, wholesalers, transport
businesses, customs and many other industries.

4
 4.01.2025

Purpose of Warehousing

The primary role of a warehouse and distribution center is to
facilitate the movement of goods from suppliers to the
customers and by doing so while meeting to customers
demand and in a cost effective manner.
 reducing transportation cost
 achieving economies of scale in manufacturing or in
purchasing
 providing value-added processes and shorten response
time
 companies can provide tailored services for their
customers and gain competitive advantage

6
 4.01.2025

Types of Warehousing

 Public Warehouses
 Private Warehouses
 Government Warehouses
 Co-operative Warehouses
 Bonded Warehouses
 Distribution Centers or Warehouses
 Cold Storage
 Export and Import
 Climate-Controlled
 Field Warehouses
 Agricultural Warehouses

1. Public Warehouses


 1. Public Warehouses
• Definition: Storage facilities operated by independent
businesses, offering space for rent to other companies.
• Characteristics:
• Open to any manufacturer, wholesaler, or retailer who pays a
fee.
• Suitable for both short-term and long-term storage needs.
• Ideal for smaller businesses to avoid large capital investments
in their own warehouses.

4 warehouse type differs in its material handling and storage

technology as a result of the product and environmental
characteristics.

8
 4.01.2025

Public Warehouses(cont’d)


 General merchandise warehouses are designed to handIe general
package commodities such as paper, small appliances, and
household supplies.
 Refrigerated warehouses (either frozen or chilled) handle and
maintain food, medical items, and chemical products with special
temperature requirements.
 Commodity warehouses are designed to handle bulk material or
items with special handling considerations, such as tires or
clothing.
 A household goods or furniture warehouse is designed to
handle and store large, bulky items such as appliances and
furniture.
 Of course, many public warehouses offer combinations of these
operations.

2. Private Warehouses


 2. Private Warehouses
• Definition: Storage facilities owned and operated by a single
company for its exclusive use.
• Characteristics:
• Typically used by large manufacturers, retailers, or wholesalers.
• Provides full control over storage conditions and operations.
• Best suited for long-term, high-volume storage requirements.
 The actual facility, however, may be owned or leased.
 The decision as to which strategy best fits an individual firm is
essentially financial.
 Often it is not possible to find a warehouse for lease that fits the
exact requirements of a firm.

10
 4.01.2025

3. Government Warehouses

 3. Government Warehouses
• Definition: Warehousing facilities owned and
operated by government entities.
• Characteristics:
• Often used for strategic commodities (e.g., grains,
petroleum reserves).
• Support public interest, emergency relief, and supply
stabilization during crises.
• Terms and fees (if applicable) are usually regulated by
government policies.

11

4. Co-operative Warehouses

 4. Co-operative Warehouses
• Definition: Storage facilities jointly owned and managed
by a group of producers, farmers, or businesses.
• Characteristics:
• Pooling resources lowers storage costs and increases market
competitiveness.
• Encourages efficiency through shared knowledge and best
practices.
• Commonly used by smaller enterprises to gain collective
bargaining power.

12
 4.01.2025

5. Bonded Warehouses

 5. Bonded Warehouses
• Definition: Warehouses under customs supervision
where imported goods can be stored without immediate
payment of duties and taxes.
• Characteristics:
• Allows importers to defer duty and tax payments until the
goods enter domestic circulation.
• Goods remain under customs control, ensuring compliance
with trade regulations.
• Essential for businesses engaged in international trade and
supply chains.

13

6. Distribution Centers


 6. Distribution Centers
• Definition: Facilities designed for short-term
storage, order processing, and the rapid movement
of products to markets or end customers.
• Characteristics:
• Enhance product flow and inventory turnover.
• Provide value-added services such as order picking,
packaging, and labeling.
• Employ strategies like Just-in-Time (JIT) and cross-
docking to streamline the supply chain.

14
 4.01.2025

7. Cold Storage

 7. Cold Storage
• Definition: Temperature-controlled warehouses that
preserve perishable items (e.g., food, pharmaceuticals).
• Characteristics:
• Maintain cold or frozen conditions to extend product shelf
life.
• Require specialized insulation, refrigeration units, and
quality monitoring.
• Essential for industries reliant on consistent quality and
freshness.

15

8. Export and Import Warehouses


 8. Export and Import Warehouses
• Definition: Facilities located near ports or customs
borders to facilitate the smooth movement of goods in
international trade.
• Characteristics:
• Simplify import/export processes by handling customs
documentation, inspections, and temporary storage.
• Reduce transit times and shipping costs.
• Serve as consolidation points for mixed loads destined for
various global markets.

16
 4.01.2025

9. Climate-Controlled Warehouses

 9. Climate-Controlled Warehouses
• Definition: Warehouses where temperature, humidity,
and other environmental factors are carefully regulated.
• Characteristics:
• Suitable for products sensitive to heat, moisture, or dust
(e.g., electronics, artwork, wine).
• Require sophisticated HVAC systems and environmental
monitoring tools.
• Protect product integrity, maintain quality, and prevent
spoilage or degradation.

17

10. Field Warehouses


 10. Field Warehouses
• Definition: Temporary storage facilities set up near
farms, construction sites, or production facilities.
• Characteristics:
• Provide storage solutions close to the source of
materials.
• Reduce transportation costs and handling time.
• Commonly used in agricultural or construction sectors
to store raw materials or harvested goods before
processing.

18
 4.01.2025

11. Agricultural Warehouses


 11. Agricultural Warehouses
• Definition: Warehouses specifically designed to store
agricultural products such as grains, seeds, and produce.
• Characteristics:
• Often equipped with systems to maintain controlled
atmospheres for longer product shelf life.
• May include pest control measures and proper ventilation.
• Help stabilize market supply by allowing farmers to store
crops and release them according to demand cycles.

19

Warehouse Decisions

 Site Selection
 Design
 Product-Mix Analysis
 Expansion
 Materials Handling
 Layout
 Sizing
 Warehouse management system
 Accuracy and audit
 Security
 Safety and maintenance

20
 4.01.2025

1. Site Selection

• What It Involves: Choosing the geographical
location(s) for a warehouse.
• Key Considerations: Proximity to suppliers,
customers, transportation hubs (ports, highways,
rail), labor availability, and local regulations.
• Impact: A well-chosen site reduces transportation
costs, improves lead times, and enhances service
quality.

21

Site Selection

 Several other requirements must be satisfied before a
site is purchased.
 The location must offer adequate room for
expansion.
 Necessary utilities must be available.
 The soil must be capable of supporting the structure,
and the site must be sufficiently high to afford
proper drainage

22
 4.01.2025

2. Design

• What It Involves: Determining the physical structure
and architectural aspects of the warehouse.
• Key Considerations: Building height, ceiling
clearance, insulation, docking stations, and
construction materials.
• Impact: Proper design supports efficient layout,
smooth traffic flow, and optimal space utilization for
storage and handling.

23

3. Product-Mix Analysis

• What It Involves: Identifying the types and volumes
of products stored.
• Key Considerations: Inventory turnover, seasonal
demand, product dimensions, and storage
requirements.
• Impact: Understanding the product mix ensures that
storage methods, handling equipment, and picking
strategies align with inventory characteristics for
efficiency and cost-effectiveness.

24
 4.01.2025

4. Expansion

• What It Involves: Planning for future growth or
increased capacity.
• Key Considerations: Forecasted demand, scalability
of infrastructure, flexibility in design, and
investment costs.
• Impact: Having a strategy for expansion prevents
bottlenecks, minimizes disruptions, and ensures the
warehouse can adapt to changing business needs.

25

5. Materials Handling

• What It Involves: Selecting equipment and methods
for moving goods within the warehouse.
• Key Considerations: Type of forklifts, conveyors,
automated guided vehicles (AGVs), and ergonomic
tools.
• Impact: Efficient materials handling reduces labor
costs, enhances safety, speeds order fulfillment, and
improves overall productivity.

26
 4.01.2025

6. Layout

• What It Involves: Arranging storage racks, aisles,
workstations, and equipment within the warehouse.
• Key Considerations: Maximizing storage density
while maintaining accessibility, designing efficient
pick paths, and minimizing travel time.
• Impact: A well-planned layout streamlines
operations, reduces handling time, and improves
order accuracy and throughput.

27

Layout(cont’d)

 Layout of a warehouse depends on the proposed
material handling system and requires development
of a floor plan to facilitate product flow.
 It is difficult to generalize about warehouse layouts
since they must be refined to fit specific needs.
 If pallets are to be utilized, the first step is to
determine the pallet size.
 The second step in planning a layout involves the
pallet positioning.

28
 4.01.2025

7. Sizing

• What It Involves: Determining the correct
warehouse size based on inventory levels and
operational requirements.
• Key Considerations: Peak inventory volume, safety
stock, and growth projections.
• Impact: Optimal sizing ensures the warehouse is
neither too large (leading to excessive costs) nor too
small (causing congestion and inefficiencies).

29

9. Accuracy and Audit


• What It Involves: Ensuring inventory records match
physical stock and operational processes comply
with standards.
• Key Considerations: Regular cycle counts, barcode
scanning, RFID tagging, and reconciliation processes.
• Impact: High accuracy reduces stockouts,
backorders, and mis-shipments, leading to increased
customer satisfaction and reduced costs.

30
 4.01.2025

10. Security

• What It Involves: Protecting inventory and
infrastructure against theft, vandalism, and
unauthorized access.
• Key Considerations: Surveillance systems,
controlled entry points, employee screening, and
alarm systems.
• Impact: Strong security measures safeguard
company assets, maintain product integrity, and
ensure a safe work environment.

31

11. Safety and Maintenance


• What It Involves: Keeping the warehouse
environment safe for workers and well-maintained.
• Key Considerations: Compliance with occupational
health and safety standards, routine equipment
inspections, regular facility upkeep.
• Impact: Ensuring safety and maintenance reduces
accidents, prevents downtime, and fosters a
productive working environment.

32
 4.01.2025

8. Warehouse Management System (WMS)


• What It Involves: Implementing software to manage
inventory, workflows, and data within the
warehouse.
• Key Considerations: Integration with ERP systems,
scalability, user-friendliness, and real-time analytics
capabilities.
• Impact: A robust WMS improves inventory
accuracy, provides operational visibility, supports
efficient picking strategies, and enhances decision-
making.

33

8. Warehouse Management System (WMS)


 Traditionally warehouses are used for:

 receiving of goods from a source

 storing of the goods until they are required
 picking of the goods when they are required
 shipping the goods to the appropriate users

34
 4.01.2025

8. Warehouse Management System (WMS)


 Today, a warehouse is no longer a stand alone part
but an integral part of the supply chain. To achieve
such level of efficiency and effectiveness, there are
several solutions and assistance to this and they are
called information technology systems such as
Warehouse Management System (WMS),Electronic
Data Interchange(EDI), Radio Frequency
Identification (RFID), Enterprise Resource Planning
(ERP)

35

Warehousing Management
System

 Warehouse Management System (WMS) have been
available since the earliest computer systems were
introduced and it allowed simple storage location
functionality.
 From then on, it kept on improving until what it is today.

 A warehouse management system or WMS primarily

aims to control the movement and storage of materials
within a warehouse and process the associated
transactions, including shipping, receiving, put-away and
picking.

36
 4.01.2025

WMS Implementation

 Data on the physical dimensions and characteristics
of each item in the warehouse are required to be
collected and entered into the WMS system. The
physical size and weight of the items are to be
calculated, can the items be stored separately, can it
be stacked, all this information are to be fed into the
WMS system correctly.
 Hazardous material information needs to be
collected so that the item is not stored in certain
areas. This information is only part of the
requirements of the WMS implementation.

37

WMS Implementation(cont’d)

 WMS system requires decisions or configuration to
be made on how items are to be placed or removed
from the system, in what order, for what types of
materials and what methods of placement and
removal should be used.
 The implementation requires significant input from
the resources that operate the warehouse on a day to
day basis and this can be a strain on warehouse
operations.

38
 4.01.2025

Modern Warehousing Design



39

Benefits of Using WMS


 Faster Inventory
 More Efficient Use of Available Warehouse Space
 Reduction in Inventory Paperwork
 Improved Cyclic Counting
 Enhanced Customer Service
 Improved Labour Productivity
 Reduced Dependency on Warehouse Personel

40
 4.01.2025

1. Faster Inventory

A WMS can reduce lead times by limiting inventory
movement and improving the accuracy of inventory
records, thereby supporting a JIT environment. As a
result, the need for safety stock is reduced, which
increases inventory turnover and working capital
utilization.

41

2. More Efficient Use of Available Warehouse

Space

WMS can often increase available warehouse space by
more efficiently locating items in relation to receiving,
assembly, packing, and shipping points. This increase
defficiency can both improve productivity and lower
inventory holding cost.

42
 4.01.2025

3. Reduction in Inventory Paper Work


Implementation of a real time WMS can significantly
reduce the paperwork traditionally associated with
warehouse operations, as well as ensure timely and
accurate flow of inventory and information. Receiving
reports pick tickets, move tickets, packing lists, etc.,
which are typicallymaintained as hard copies, can all be
maintained electronically.

43

4. Improved Cyclic Counting


Companies can use WMS to capture relevant data (e.g.,
frequency of movement, specific locations, etc.) to
systematically schedule personnel for cycle counts.
Such cycle counts not only can improve the accuracy
of inventory records for planning purposes, but also
can eliminate or reduce the need for complete, costly
physical inventories.

44
 4.01.2025

5. Reduced Dependency on Warehouse

Personnel

Implementing a comprehensive WMS facilitates
standardization of inventory movements, picking
methods, and inventory locations. This standardization
helps to minimize reliance on informal practices,
resulting inreduced training costs and lower error rates.

45

6. Enhanced Customer Service


By streamlining processes from order to delivery,
companies can more accurately determine product
availability and realistic delivery dates. WMS can
automatically identify and release back-ordered
inventory and also can reduce returns as a result of
increased shipment accuracy.

46
 4.01.2025

7. Improved Labour Productivity


WMS helps optimize material flow, typically by
incorporating several inventory picks into one or by
"cross docking".

47

Cross-Docking


Cross docking is a process that routes incoming
shipments to the location closest to the outbound
shipping dock, thereby reducing warehouse handling.

48
 4.01.2025

When is cross-docking used?


Some of the main reasons cross docking is implemented
is to:

 Provide a central site for products to be sorted and

similar products combined to be delivered to
multiple destinations in the most productive and
fastest method. This process can be described as
“hub and spoke”

49

When is cross-docking used?(cont’d)


 Combine numerous smaller product loads into one
method of transport to save on transportation
costs. This process can be described as
‘consolidation arrangements’

 Break down large product loads into smaller loads

for transportation to create an easier delivery process
to the customer. This process can be described as
‘deconsolidation arrangements’.

50
 4.01.2025

Advantages of Cross-Docking

 Reduces material handling.
 Reduces need to store products in warehouse.
 No need for large warehouse areas
 Reduced labour costs (no packaging and storing).
 Reduced time to reach customer.
 Transportation has fuller loads for each trip therefore
a saving in transportation costs while also being
more environmentally friendly.

51

Advantages of Cross-Docking(cont’d)


 Products are moved more quickly through a cross
dock.
 Easier to screen product quality.
 Elimination of processes such as ‘pick-location’ and
‘order picking’
 Cross docking terminals are less expensive to
construct than your average warehouse.

52
 4.01.2025

Advantages of Cross-Docking(cont’d)


 High turnover of products with everything moving
quickly through the cross docking
terminal. Products usually spend less than 24 hours
here.
 Products destined for a similar end point can be
transported as a full load, reducing overall
distribution cost.

53

Disadvantages of cross-docking

 Much management attention, time and planning is
necessary to make it work effectively.
 Setting up the cross docking terminal structures
would take quite a bit of time and capital to start
with.
 Some suppliers would not be able to deliver
customer ready products to the cross docking
terminal.

54
 4.01.2025

Disadvantages of cross-docking(cont’d)


 A sufficient number of transport carriers are necessary for
the cross docking terminal to run smoothly, therefore is
mainly dependent on trucking.

 A high volume of product is necessary to be cost effective.

 The organisation has to have a confortable reliance that

their suppliers will deliver the right product in its right
amount to the cross docking terminal on time which
doesn’t leave too much room for error.

55

Types of WMS

 Based on warehouse control system, literature
distinguishes three types of warehouse management
systems:

 Basic WMS
 Advanced WMS
 Complex WMS

56
 4.01.2025

Basic WMS

 It is apt to support stock and location control only.
 It mainly used to register information.
 The warehouse management information is simple
and focuses on throughput mainly.

57

Advanced WMS

 It is able to plan resources and activities to
synchronize the flow of goods in the warehouse.
 The WMS focuses on throughput, stock and capacity
analysis.

58
 4.01.2025

Complex WMS

 With a complex WMS the warehouse or group of
warehouses can be optimized.
 Information is available about each product in terms of
where it is located (tracking and tracing), what is its
destination and why (planning, execution and control).
 Further, a complex system offers additional functionality
like transportation, dock door, and value added logistics
planning which help to optimize the warehouse
operations as a whole.

59

Warehousing Management System


 Warehouse management systems can be stand alone
systems or modules of an ERP (Enterprise Resource
Planning) system or supply chain execution suite.
 The primary purpose of a WMS is to control the
movement and storage of materials within a
warehouse.
 The WMS can be deployed as a paper-based,
RF/wireless based or combination of both.

60
 4.01.2025

Warehousing Management
System(cont’d)

 Early warehouse management systems could only
provide simple storage location functionality.

 Current WMS applications can be so complex and

data intensive that they require a dedicated staff to
run them.

 High-end systems may include tracking and routing

technologies such as Radio Frequency Identification
RFID and voice recognition.

61

Types of Warehouse Management

Systems

There are several types of Warehouse Management
Systems, each with it’s own pros and cons. Here are the
most popular types:

 Standalone System
 ERP Modules
 Cloud Based

62
 4.01.2025

Standalone Warehouse Management

System

 A standalone warehouse management system is
your typical on premises type system which is
deployed on the native hardware and network of the
business.

63

Standalone Warehouse Management

System

 Most WMS systems are third-party, standalone
packages that must be integrated with the rest of
your business management software (such as ERP).
While integration of external programs can work, the
process is often fraught with challenges such as
duplicate data entry, information delays and silos,
interface issues and customization expenses.

 These systems are often the lowest long term cost

option, but lack the benefits of a more integrated
WMS option.

64
 4.01.2025

Cloud Based Warehouse

Management System

 A cloud warehouse management system is a web-
based software as a service (SaaS) model utilizing
enterprise cloud technology.

65

Cloud Based Warehouse

Management System(cont’d)

 The benefits of cloud based WMS software include
better flexibility, disaster recovery, scalability, and
security. Cloud computing also offers users the
ability to receive automatic software updates
without additional capital expenditures, providing
better technology competitiveness.

66
 4.01.2025

ERP Modules

 Some ERP vendors, such as IQMS, offer a warehouse
management system that is built into their ERP
solution. This type of solution provides
embedded EDI, accounting, sales
orders, MRP and shipping management with no
messy non-real-time interfaces.

67

Benefits of an Integrated WMS and

ERP System

 With a native WMS program, you gain business-
wide traceability, employee accountability and real-
time speed and responsiveness.

 Through scan guns and barcodes, you can move

from pen and paper to a digital WMS environment
that eliminates re-keying of data and the
unavoidable human entry error that accompanies it.

68
 4.01.2025

Benefits of an Integrated WMS and

ERP System (cont’d)

 There many more differences that fully define an
ERP hosting model and should be taken into
consideration before deciding what deployment
option is best for your business.

69

Benefits of an Integrated WMS and

ERP System (cont’d)

The benefits of a comprehensive warehouse
management system include:

 Reduced fulfillment time

 Increased inventory accuracy
 Improved customer service
 Greater space utilization
 Increased warehouse productivity
 Reduced labor cost

70
 4.01.2025

How to Choose the Right Warehouse

Management System (WMS)

 Software fit and functionality – above all else!
 Purchase agreement (perpetual or subscription
licensing)
 Implementation and training
 Backup & redundancy

71

How to Choose the Right Warehouse

Management System (WMS)

 Customization
 You philosophy on IT and internal IT footprint
 Software update control
 Data access and ownership
 Total cost of ownership

72
 4.01.2025

Warehousing Management System


 No matter how simple or complex the application is,
the goal of a warehouse management system
remains the same -- to provide management with the
information it needs to efficiently control the
movement of materials within a warehouse.

73

WMS Features

 Carton Recommendations
 Carton Serialization
 Repack/Cartonization processing
 Automatic or Manual Replenishment
 Wave Picking
 User-defined rules based processing •
 System-directed putaway and picking •
 Interactive or Batch movement confirmations
 Lot/serial/date control
 License Plating
 Supports RFID Processing

74
 4.01.2025

WMS Features(cont’d)

 Fixed/Random Locations
 Multiple units of measure per item
 Zone Management
 Move-path sequencing
 Proximity determination
 Cross-docking
 Location Reservation
 Stacking limits

75

With WMS you can…


 Define rules for stock movement
 Manage license plates
 Set up fixed and random locations for efficient stock
movement
 Set up automatic shipping carton recommendation during
picking and carton reorganization
 Review warehouse contents up to nine levels of detail
 Perform manual or automatic putaway, picking, and
replenishment of stock
 Perform cross-docking from receiving area to shipping
area

76