Chapter 2:

WAREHOUSE MANAGEMENT
Chapter 1: Overview of Warehouse and Yard Management
CONTENTS
Chapter 2: Warehouse Management

Chapter 3: (Container) Yard Management

Chapter 4: Applying ICT to Warehouse/Yard Management

Chapter 5: Security and Safety in warehouse management

Chapter 6: Efficiency and risk management in yard/warehouse

management

Chapter 7: Warehouse Manager

 Chapter 2: Warehouse Management

 Objectives
1. Understanding activities of warehouse management
2. Analyzing the content of warehouse management
3. Understanding warehouse processes and design consideration
4. Understanding the processes of controlling and checking the warehouse
5. Understanding of Warehouse activities
 Chapter 2: Warehouse Management

 Content
1. Concepts, roles, and benefits of warehouse management
2. Classification of Warehouse Management
3. Activities of Warehouse Management
 Receiving
 Put away
 Storage
 Order Picking
 Shipping preparation
 Shipping
4. Warehouse processes and design consideration
5. Control and Check in the Warehouse
6. Documents of Warehouse Activities
 Chapter 2: Warehouse Management
 Concepts, roles, and benefits of warehouse
management
Being a warehouse manager of a big/large warehouse is a very challenging position requiring a range of skill
sets. The warehouse manager is now a high-level position in many companies, recognizing the high costs and
investment involved in the facility, as well as the key role that warehouses play in the provision of high
customer service levels

• Provide timely customer service.

• Keep track of items so they can be found readily & correctly.
• Minimize the total physical effort & thus the cost of moving goods into & out
of storage.
• Provide communication links with customers
 Concepts, Roles, benefits of warehouse
management
  Concepts, Roles, benefits of warehouse
management

WAREHOUSE MANAGEMENT SYSTEMS

 Manages warehouse inventory, space, equipment, and labor resources to direct

the flow of materials and information from receiving and put away to light
assembly, order picking, value-added processing and shipment.
  Concepts, Roles, benefits of warehouse
management

 Benefits of Warehouse Management

 Provide a place to store & protect inventory
 Reduce transportation costs
 Improve customer service levels
 Complexity of warehouse operation depends on the number of SKUs (Stock Keeping Units)
handled & the number of orders received & filled.
 Most activity in a warehouse is material handling.
 Concepts, Roles, benefits of warehouse
management

COSTS OF OPERATING A WAREHOUSE

• Capital costs
— Costs of space & materials handling equipment
• Operating costs
— Cost of labor
— Measure of labor productivity is the number of units that an operator can
move in a day
 Activities of warehouse management

• Receive goods
• Identify the goods
• Dispatch goods to storage
• Hold goods
• Pick goods
• Marshal shipment
• Dispatch shipment
• Operate an information system
 Activities of warehouse management

Receive goods
• Accepts goods from
‒ Outside transportation or attached factory
& accepts responsibility
• Check the goods against an order & the bill of
loading
• Check the quantities
• Check for damage & fill out damage reports if
necessary
• Inspect goods if required
 Activities of warehouse management

Identify the goods

‒ items are identified with the appropriate
stock-keeping unit (SKU) number (part
number) & the quantity received recorded
Dispatch goods to storage

‒ goods are sorted & put away

Hold goods

‒ goods are kept in storage & under proper

protection until needed
 Activities of warehouse management

Pick goods

‒ items required from stock must be selected from storage &

brought to a marshaling area
Marshal the shipment

‒ goods making up a single order are brought together & checked

for omissions or errors; order records are updated
 Activities of warehouse management

Dispatch the shipment

‒ orders are packaged, shipping documents

are prepared, & goods loaded on the vehicle
Operate an information system

‒ a record must be maintained for each item

in stock showing the quantity on hand,
quantity received, quantity issued, &
location in the warehouse
Warehouse Processes and Design Consideration
Activities of warehouse management
Activities of warehouse management

Sơ đồ quá trình công nghệ kho hàng

Activities of warehouse management
 Activities of warehouse management

From no-class (Stage 1) to world-class warehousing (Stage 5)

 Warehouse Processes and Design
Consideration

Ideal Facility for Pure Supplier Warehouse Space

Consolidation Requirements
(Full Pallet Movement)
Warehouse Processes and Design Consideration Ownership?

Private? Public?
DECESIONS RELATED
WAREHOUSE MANAGEMENT How many?

Centralized? Decentralized?

Size and scale?

Location?

Design and internal arrangement

Allocation and Arrangement

Structure and Management

Warehouse Processes and Design Consideration

DECISIONS RELATED WAREHOUSE MANAGEMENT

 If the amount of regular
inventory is always greater than
Q*, the enterprise should build
its own warehouse, and vice
versa, it should be rented.
 In fact, the decision's hiring or
self-build depends on many
other factors, specifically:
+ The stability of demand- Density
of the market
+ The need for security and
quality control
+ The need to serve customers
+ Necessity for other business
purposes
 Warehouse Processes and Design Consideration

Example of warehouse
structure and location
identification
Warehouse Processes and Design Consideration
Warehouse Processes and Design Consideration
Warehouse Processes and Design Consideration
 Warehouse Processes and Design Consideration

WAREHOUSE DESIGNING
Processes of warehouse designing
Purpose of warehouse design: Step 1: Define business requirements (conditions and design
1. Minimize time of an order constraints)
2. Maximize usable space Step 2: Identify and collect data.
Step 3: Build the basis for planning.
Step 4: Determine the rules of operation
Step 5: Evaluate the device types.
Step 6: Prepare the internal and external arrangements.
Step 7: Develop high-level procedures and information system
requirements
.Step 8: Evaluate design flexibility.
Step 9: Calculate the number of devices.
Step 10: Calculate the number of employees.
Step 11: Determine investment and operation costs
Step 12: Re-evaluate business requirements and design
constraints.
Step 13: Finalize the design.
 Warehouse Processes and Design Consideration

WAREHOUSE DESIGNING

Principles of Layout in the Warehouse

0. FIFO - LIFO
1. Use of a one-story warehouse
2. Move goods in the warehouse in a straight
line
 Warehouse Processes and Design Consideration

WAREHOUSE DESIGNING

Principles of layout in the Warehouse

3. Use appropriate loading and unloading equipment
4. Minimize path in the warehouse
Warehouse Processes and Design Consideration

The size of the warehouse is calculated by its volume

 Warehouse Processes and Design Consideration

WAREHOUSE DESIGN_ The notice

1. Warehouse design should strike a balance between space utilization and warehouse handling
costs
2. Warehouse design should follow Process-oriented, to be able to transport large and easy
flows of goods
3. Warehouse design should facilitate the smooth movement of goods from receiving to storage.
4. The optimal warehouse layout depends on:
+ Types of goods to be stored
+ Time and quantity of goods taken away
+ The degree of automation of the warehouse
+ Level of investment in equipment and warehouse infrastructure
 Warehouse Processes and Design Consideration

WAREHOUSE DESIGN_ Some basic equipment

Warehouse Processes and Design Consideration

WAREHOUSE DESIGN_ Some basic equipment

Warehouse Processes and Design Consideration

GUIDELINES FOR CALCULATING DEMAND FOR WAREHOUSE

Input factors:
Type of goods to be stored
Forecasting the number of goods to be stored in stages
Ways to store goods: by pallet; tanks; ….
Conditions of storage of goods
The level of cargo movement

Caculate the space for warehouse?

 Warehouse Processes and Design Consideration

CASE STUDY FOR CALCULATING SPACE FOR WAREHOUSE

Hoang Lam Trading Joint Stock Company received a request to rent a warehouse
with the following specific information:

Items Unit Good A Good B Good C

Ton 200
Quantity Barrel 12,000
Pieces 35,000
Quantity/pallet /1 pallet 1 42 400
Pallet Specification 1.2 *1.2 *0.15 m

Q1: Calculate the need for pallets to use

Q2: Calculate the demand for warehouse space knowing the area for the road, the office area, and the
other area accounts for 35% of the warehouse area.
Q3: If the existing warehouse area is 600 m2, the company does not want to expand the warehouse
space but invests in a racking system, how many more pallet positions are needed?
 Warehouse Processes and Design Consideration

Description JUN JUL AUG SEP OCT NOV DEC

WH Demand (m2) 4,027 3,807 3,807 4,067 4,067 4,067 3,807

WH area
Carton 691 691 691 691 691 691 691
calculation
Preform 2,384 2,164 2,164 2,340 2,340 2,340 2,164

Closure 792 792 792 876 876 876 792

Crowns 160 160 160 160 160 160 160

WH actual tandard (m2) 2,236 2,236 2,236 2,236 2,236 2,236 2,236

Shortage (m2) (1,791) (1,571) (1,571) (1,831) (1,831) (1,831) (1,571)

Adding - Inves ted racking 798 798 798 798 798 798 798

Shortage (m2) after

inves ted racking (993) (773) (773) (1,033) (1,033) (1,033) (773)

Rent external WH Invest in Racking

Cost/year 1,105,000,000 1,100,000,000

Payback calculation 1 year rental 800m2*60000VND/m2/month * 12
months save 1 B VND from Year 2
490 pallets * 30.000VND/pallet * 3
times/month * 12 months= 529 million
Transaction cost of external WH VND No transaction cost
 Control and Inventory Count in Warehouse

• Importance of controlling and counting inventory in warehouse

• Types of controlling and counting inventory in warehouse
• Processes of controlling and counting inventory in warehouse
• Ways of controlling and counting inventory in warehouse easily
and exactly
 Control and Inventory Count in Warehouse

 The importance of controlling and inventory count in warehouse

• It allows you to know how much inventory is on shelves at that given moment
(Physical Inventory = Tồn kho vật lý)
• Preventing stockouts or overstocking: Keeping regular count of your inventory
gives you more information for demand forecasting. Better planning leads to
optimized stock levels, meaning less revenue lost.
• Identifying and preventing loss: Understanding what’s on your warehouse shelves
helps you identify not only when stock is past its shelf life, but also in the event
some of your inventory goes missing.
• Better accuracy: Knowing your stock levels provides more clarity for your entire
supply chain.
 Control and Inventory Count in Warehouse

 The types of controlling and counting inventory in warehouse

• Periodic inventory: is the process of accounting stock valuation and it is done at particular
intervals. Periodic inventory means to count the entire stock weekly or monthly.
• Perpetual Inventory: The perpetual system keeps track of inventory balances continuously, with
updates made automatically whenever a product is received or sold/or delivered
• ABC Inventory: This involves ranking your products by priority based on their price and
popularity
• Just – In – Time Inventory: coordinates receiving raw materials from the supplier as a customer
purchases it, reducing waste in the form of inventory housing costs.
 Control and Inventory Count in Warehouse

The types of controlling and counting inventory in warehouse

• What Are the Advantages and

Disadvantages of a Periodic Inventory
System?
• What Are the Advantages and
Disadvantages of a Perpetual Inventory
System?
• What Are the Differences Between the
Periodic and Perpetual Inventory
System?
 Control and Inventory Count in Warehouse

The types of controlling and counting inventory in warehouse

Example of ABC Inventory

 Control and Inventory Count in Warehouse

The types of controlling and counting inventory in warehouse

Example of Just-In-Time Inventory

Processes of controlling and counting inventory in warehouse

Reporting Implementing

Preparing

Solving the Planning

issues of gap

https://www.youtube.com/watch?
v=Ue8oCPQjU8o
Processes of controlling and counting inventory in warehouse

https://www.youtube.com/watch?
v=Ue8oCPQjU8o
Ways of controlling and counting inventory in warehouse
Ways of controlling and counting inventory in warehouse
 Documents for Warehouse Management

 Import/Receiving Notes – Phiếu nhập kho

 Export/Delivery Notes – Phiếu xuất kho/giao hàng
 Documents for Warehouse Management

 Report of checking goods – Biên bản kiểm tra hàng hóa

 Documents for Warehouse Management

 Report of counting goods – Biên bản kiểm kê hàng hóa

 Documents for Warehouse Management

 Documents from warehouse management systems

 Documents for Warehouse Management

 Documents from warehouse management systems

https://www.lomag.eu/
InstructionsDocuments/