🚚Logistics Management Unit 5 – Warehousing and Materials Handling

Key Concepts and Definitions

• Warehousing involves the storage and management of goods and materials in a designated facility before they are sold or distributed
• Materials handling encompasses the movement, protection, storage, and control of materials and products throughout the manufacturing, distribution, consumption, and disposal processes
• Inventory management is the process of overseeing and controlling the ordering, storage, and use of components that a company uses in the production of the items it sells or the materials it purchases for use in its activities
• Cross-docking is a logistics technique that eliminates the storage and order picking of materials by directly transferring incoming shipments to outgoing trailers
• Cycle counting is an inventory management technique where a small subset of inventory is counted on a specific day to verify inventory accuracy and identify discrepancies
• Stock keeping unit (SKU) is a unique code assigned to each distinct product and service that can be purchased
• ABC analysis is an inventory categorization method that divides items into three categories—A, B, and C—based on their consumption value and importance to the business

Warehouse Design and Layout

• Warehouse design and layout should optimize space utilization, minimize material handling, and facilitate efficient product flow
• Factors to consider when designing a warehouse include product characteristics, order profiles, throughput requirements, and storage needs
• Layout types include U-shaped, through-flow, and fishbone layouts, each with their own advantages and disadvantages depending on the specific requirements of the operation
  • U-shaped layouts have shipping and receiving docks located on the same side of the building, which can reduce material handling and traffic congestion
  • Through-flow layouts have shipping and receiving docks on opposite sides of the building, allowing for a straight-line product flow and minimizing travel distances
• Aisle width and orientation should be optimized based on the material handling equipment used and the product dimensions to maximize storage density while ensuring accessibility
• Designated areas for receiving, staging, storage, picking, packing, and shipping should be clearly defined and strategically located to streamline processes and minimize travel distances
• Value-added services such as kitting, labeling, and customization may require dedicated areas and specialized equipment within the warehouse
• Mezzanines and vertical storage systems can be used to maximize cube utilization in facilities with high ceilings

Storage Systems and Equipment

• Pallet racking is a common storage system that uses horizontal beams and vertical uprights to store palletized goods at multiple levels
  • Types of pallet racking include selective, double-deep, drive-in, and push-back racking, each with different accessibility and storage density characteristics
• Shelving systems are used for storing smaller, hand-picked items and can be configured as static shelving or carton flow racks
• Automated storage and retrieval systems (AS/RS) use computer-controlled machines to store and retrieve items from high-density storage locations, reducing labor requirements and increasing accuracy
• Mezzanines are raised platforms that create additional storage space by utilizing vertical space within a facility
• Vertical lift modules (VLMs) are enclosed storage systems that use an extractor to retrieve trays of stored items, providing high-density storage and ergonomic access for operators
• Conveyors, including roller, belt, and overhead conveyors, are used to transport materials within a warehouse, reducing manual handling and increasing efficiency
• Forklifts, pallet jacks, and order pickers are common material handling equipment used for moving and accessing stored items

Inventory Management Techniques

• First-In, First-Out (FIFO) is an inventory valuation method where the oldest inventory items are sold first, minimizing the risk of obsolescence
• Last-In, First-Out (LIFO) is an inventory valuation method where the newest inventory items are sold first, which can be advantageous for tax purposes in certain jurisdictions
• Just-In-Time (JIT) inventory management aims to minimize inventory holding costs by receiving materials just as they are needed for production or order fulfillment
• Economic Order Quantity (EOQ) is a formula used to determine the optimal order quantity that minimizes the total cost of ordering and holding inventory
• Safety stock is a buffer of extra inventory held to mitigate the risk of stockouts due to unexpected demand or supply chain disruptions
• Vendor-managed inventory (VMI) is a collaborative approach where the supplier is responsible for maintaining agreed-upon inventory levels at the customer's location
• Consignment inventory is a strategy where the supplier owns the inventory until it is sold or used by the customer, reducing the customer's inventory carrying costs

Order Picking and Packing Strategies

• Discrete order picking involves picking items for one order at a time, which is simple but can be inefficient for large order volumes
• Batch picking involves picking items for multiple orders simultaneously, reducing travel time and increasing picker productivity
• Zone picking assigns pickers to specific zones within the warehouse, and orders are passed from zone to zone until complete, reducing congestion and enhancing productivity
• Wave picking schedules order picking activities in waves throughout the day based on factors such as order priority, shipping deadlines, and resource availability
• Pick-to-light and put-to-light systems use light indicators to guide pickers to the correct locations and quantities, improving accuracy and efficiency
• Voice-directed picking uses voice commands and speech recognition to guide pickers through the picking process, allowing for hands-free operation
• Packing strategies include single-order packing, multi-order packing, and batch packing, each with different implications for efficiency and shipping costs
  • Single-order packing involves packing each order individually, which is simple but can be time-consuming
  • Multi-order packing involves packing multiple orders into a single box or container, reducing packaging costs but requiring additional sorting
• Packing optimization software can help determine the most efficient packing configurations and box sizes based on order contents and dimensions

Material Handling Technologies

• Automated guided vehicles (AGVs) are driverless vehicles that follow predetermined routes to transport materials within a facility, reducing labor costs and increasing consistency
• Robotic picking systems use robotic arms and vision technology to pick individual items from bins or shelves, improving accuracy and productivity in e-commerce fulfillment operations
• Conveyor systems, including roller, belt, and overhead conveyors, are used to transport materials within a warehouse, reducing manual handling and increasing efficiency
• Sortation systems, such as pop-up wheel sorters and tilt-tray sorters, are used to automatically sort and route products to their designated locations based on barcode or RFID data
• Automatic identification and data capture (AIDC) technologies, such as barcodes, radio-frequency identification (RFID), and voice recognition, are used to track and manage inventory in real-time
• Wearable technologies, such as smart glasses and wrist-mounted devices, can provide workers with hands-free access to information and guidance, improving productivity and accuracy
• Drones are being explored for use in warehouse inventory management, allowing for faster and more efficient cycle counting and inventory tracking in hard-to-reach areas

Warehouse Management Systems (WMS)

• A warehouse management system (WMS) is a software application that supports the day-to-day operations in a warehouse by managing inventory, orders, and resources
• Key functions of a WMS include inventory tracking, order management, receiving and putaway, picking and packing, shipping, and labor management
• Advanced WMS capabilities may include slotting optimization, cross-docking, kitting, and value-added services management
• WMS systems can integrate with other supply chain management systems, such as transportation management systems (TMS) and enterprise resource planning (ERP) systems, to provide end-to-end visibility and optimization
• Cloud-based WMS solutions offer scalability, flexibility, and reduced IT infrastructure costs compared to on-premise systems
• Mobile WMS applications allow workers to access real-time information and perform tasks using mobile devices, improving efficiency and accuracy
• WMS analytics and reporting capabilities provide insights into warehouse performance, enabling continuous improvement and data-driven decision making

Safety and Compliance in Warehousing

• Warehouses must comply with various safety regulations, such as those set by the Occupational Safety and Health Administration (OSHA) in the United States, to ensure worker safety and well-being
• Common warehouse safety hazards include slips, trips, and falls; forklift accidents; ergonomic injuries; and hazardous materials exposure
• Proper training and certification of workers, particularly for equipment operation and handling of hazardous materials, is essential for maintaining a safe warehouse environment
• Regular safety audits and inspections can help identify and address potential hazards before accidents occur
• Implementing a comprehensive safety management system, including policies, procedures, and performance metrics, can help foster a culture of safety and continuous improvement
• Proper storage and handling of hazardous materials, such as flammable or corrosive substances, requires special precautions and compliance with regulations
• Ergonomic considerations, such as proper lifting techniques and workstation design, can help reduce the risk of musculoskeletal disorders among warehouse workers
• Emergency preparedness plans, including evacuation procedures and first aid training, should be in place and regularly reviewed to ensure effective response in case of incidents