Warehousing Operations Guide: Part 1
Warehousing processes and activities can be divided into three (3) major groups:
A) Movements
B) Storage
C) Information Transfer
Note: This guide will be updated regularly as I keep covering more topics on the subject.
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This article is divided into different parts.
For Part 2 — Click?HERE.
For Part 3 — Click?HERE.
For Part 4 — Click?HERE.
For Part 5 — Click?HERE.
For Part 6 — Click?HERE.
For Part 7 — Click?HERE.
A) Movements
Consist of a wide range of activities and processes. These depend on the following:
Just to name a few...
They vary from business to business depending on the above-mentioned factors.
Movement includes the following processes
1) Receiving
2) Quality Control / Checking
3) Cross-docking
4) Put-away/Transfer
5) Order Picking
6) Work in Process (WIP)
7) Value-adding Services (VAS)
8) Order Assembly
9) Order Checking
10) Order Packing
11) Order Consolidation
12) Shipping/Dispatching
13) Returns
????????: Your Warehouse/Distribution Centre (DC) may not necessarily have all the above processes.
(1) Receiving
Receiving is the first process in warehousing and is very important. The process includes accepting goods into a Warehouse or a Distribution Centre (DC).
Goods must be checked against the purchase order (PO) for accuracy and condition.
Follow the 5 R framework to help you do this properly.
The five (R)s are:
1> Right Product
2> Right Quantity
3> Right Condition
4> Right Specification
5> Right Time
If the goods received match the above criteria, then you can proceed to the next step and acknowledge them in your Warehouse Management System (WMS) or Enterprise Resource Planning (ERP) System.
If you do not get this right, it will have an impact on the rest of your operations.
It is important to check the inventory for faulty and damaged products, raise the issue with your suppliers as soon as you find discrepancies in orders received.
Otherwise, the liability will fall on the business once the goods are accepted.
By being vigilant, it will save you a lot of time and effort.
NOTE: Receiving involves the transfer of responsibility for the goods to the warehouse.
In other words, the company or the business managing the warehouse is responsible for
Until they are shipped to their customers for order fulfilment.?
(2) Quality Control
Quality Control includes checking the products against
?? ISO standards
?? Compliance with Health and Safety laws and legislations
?? Contractual Obligations
?? Specific requirements for different product types
This process should be taken seriously, items should be:
for accuracy and conformance.
It becomes even more important if the business is dealing with health, food, and pharmaceutical products.
When doing Quality Control, you can follow these guidelines:
?? Visual inspection
To see if the products are damaged or if the wrong type and specification
?? Testing
Checking the goods against standards or specified terms with your suppliers.
?? Checking for expiries
To ensure you aren't putting people's lives at risk.
?? Ensure the goods meet your quality standards
The process will vary from business to business, depending on the nature of their business.
(3) Cross-Docking
Cross-docking is a warehousing practice where
Freight / Cargo / Inventory
is unloaded at ?????????????? ?????????????????? (receiving),
staged and
sorted for ???????????????? ???????????????? (despatch) to be shipped towards their final or next destination.
???????? ????????????????
?? Careful planning
?? A high level of organisation
?? Coordination and collaboration between teams
?? Enough storage space at inbound and outbound areas (terminals)
?? Availability of having the right
Warehouse Management System (WMS) and Enterprise Resource Planning (ERP) systems in place
?? Support from your suppliers
?? Adequate types of machinery and the right kind of tools in place
Inventory is stored for a short time before leaving the distribution centre to final destination.
This helps businesses to reduce operation and storage costs and save money.
Note:
Inventory can include raw materials, partial components, or finished products headed for retailers, businesses, or the end-users (consumers).
This practice is ideal for products that have
?? Short shelf life
?? Quick turn over
?? Pre-packaged, scanned, tagged and ready for sale
?? High-value items that are in demand
?? Seasonal and promotional products
Benefits of Cross Docking
? Reduce storage costs due to quick-moving inventory
? Ready for dispatch in a short period
? Uses fewer resources
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? Reduces the risks for your business as you do not hold onto inventory for a long time
? Saves you valuable time, resources, and money
? Increases customer satisfaction
? Improves efficiency
? Improves your speed to market
? Reduces material handling
? Can save you in transportation costs
? Eliminates many processes compared to traditional warehousing such as picking, packing, labelling, etc
? Loads can be transported as a full load when going to a similar destination. This helps in maximising load utilisation
? Through optimisation of full loads, helps reduce your distribution costs
? By bundling loads together, reduces frequent back and forth trips to your final customer and saving you money ($$) in transport costs
Types of Cross Docking
Cross-docking can be divided into two main groups:
A) Based on Arrangements / Design
B) Based on the Type of Operation / Business
(3-A) Based on the Arrangements / Design
(3-A1) — Continuous Cross-Docking
This is a straightforward type. A central place is selected for products so that they can be transferred almost immediately from an inbound truck to an outbound truck.
Trucks/carriers that arrive late or early, will have to wait for their turn.
(3-A2) — Consolidation Cross-Docking
In this type, several smaller loads are combined to form one big load to be shipped as a Full Truck Load (FTL).
This is ideal for big retail stores. Fully loaded trucks help you save in transportation costs, shorter lead time, and improve your speed to market for your products.
(3-A3) — Deconsolidation Cross-Docking
This type is the opposite of consolidation. Here big loads are broken into smaller loads at the docks usually to be shipped directly to the end customer.
This is ideal for manufacturing companies who wish to send the goods to their end/final customers.
(3-B) Based on the Type of Operation / Business
There are five types based on the nature of the business/operations.
(3-B1) — Manufacturing Cross-Docking
This method can be used to consolidate inbound goods and supplies such as raw materials required by the manufacturing plant. This can help them in supporting their Just-In-Time (JIT) assembly for their manufacturing operations.
(3-B2) — Distributor Cross-Docking
This method is used by distributors where products from different vendors and suppliers are consolidated into a mixed product pallet.
(3-B3) — Transportation Cross-Docking
This method uses consolidation of shipments from different suppliers which are often in Less-Than-Truckload (LTL) to achieve Full-Truckload (FTL).
This is very useful as companies can use backhauling (when a transport vehicle is returning to its point of departure from the destination).
Transport vehicles can pick up consignment and loads from different suppliers on their way back to the distribution centre.?
An empty truck is not going to make or save you any money, so companies should take this opportunity and use it to their advantage to save on transport costs.
(3-B4) — Retail (Hub and Spoke) Cross-Docking
This type is used by big retailers. Here products from multiple suppliers are received into one central location. Then they are sorted for delivery to different stores or destinations.
(3-B5) — Opportunistic Cross-Docking
This one is easy and simple and can be used in any warehouse.
In this type, products are transferred directly from the receiving dock to the outbound shipping dock to fulfil a customer’s sales order.?
Note:
As good as cross-docking is, it also comes with risks and disadvantages.
Businesses need to do their due diligence and risk assessments to see if using these methodologies will help their operations.
(4) Putaway / Transfer
Putaway is the process of putting goods into assigned locations.
These places or locations can be
1. Fixed
Location doesn't change or has a fixed position.
2. Dynamic
Location changes based on the needs of the business or inventory loads in the warehouse.
3. One-offs
These could be temporary locations used one time and they have arbitrary locations in the warehouse management system (WMS).
Why do we put away goods in a warehouse?
This process helps us simplify the sorting of items/goods in a warehouse or distribution centre based on
? Their demand
? Value
? Nature and composition of goods
? Safety-related requirements (Compliance with Work Health and Safety laws)
For example:
Heavy items must be stored on the ground or close to it, to avoid injuries to employees.
By using this process, it allows us to
? Reduce the risk of losing inventory
? Organise inventory items and not misplace them
? Helps in keeping your Warehouse/DC organised
? Makes it easy to track down items and can help improve the process of picking
This process must be managed correctly in an efficient way. Otherwise, you could be losing on money and time by:
?? Having an inefficient process to start with
?? Losing inventory items due to mishandling
?? Products getting damaged due to improper handling
This process does not get as much attention as it should, but here is where you can improve things.
By improving this process, it will help improve other processes such as picking, packing and despatch.
This could mean faster picking, packing, and shipping for orders, resulting in happy customers while lowering operations costs.
This article is divided into different parts.
For Part 2 — Click?HERE.
For Part 3 — Click?HERE.
For Part 4 — Click?HERE.
For Part 5 — Click?HERE.
For Part 6 — Click?HERE.
For Part 7 — Click?HERE.
LAST UPDATED: 02/12/2021 at 12:54 AM
LinkedIn Growth Strategist & Fractional CMO | Trade Show Sales Strategy | AI Prompt Pro | LinkedIn Profile Optimization | Rescue Dog ?? Momma
3 年Excellent insights on warehouse operations. Well done Imtiaz.
Matt Asphar
Delivering Human Centric Change Management and ERP Training with Passion and Excellence
3 年Sam Hartley
Logistical supply chain, Distribution and Warehousing Executive
3 年Good work Imitaz. one point in there I would like to point out that receiving into an ERP directly would be a big mistake for so many companies. if the want to follow all the fundamentals ERP systems aren’t made for warehouses hence they hamper the operations .
Corporate Trainer
3 年Congratulations Imtiaz, you ROCK!!!