Supply Chain Distribution refers to the movement of materials through the supply chain to the customer.

Two main areas of physical distribution management are materials handling and warehousing.

MATERIALS HANDLING Material Handling is the field concerned with solving the pragmatic problems involving the movement, storage, control and protection of materials, goods and products throughout the processes of cleaning, preparation, manufacturing, distribution, consumption and disposal of all related materials, goods and their packaging. It refers to managing the physical movement of materials into, through, and out of the firm. The primary objective of materials management is to move materials to the required location in a timely and costeffective way without affecting the primary objective of the other two materials management functions. Some factors that influence the materials handling function are - the type of plant layout, the type of production process used, the nature of the materials and the material handling equipment used. The responsibilities of a manager who looks after the materials handling function include the effective utilization of the firm's material handling equipment and convenience facilities like conveyors, and the manpower that maintain these types of equipment and facilities. There are three types of materials handling systems available categorized as manual, mechanized and automated. A manual handling system uses people to move material. This provides flexible system, but is only feasible when materials are movable using people with little assistance. An example is a supermarket where trolleys are used to assist with movement but the presence of customers and the nature of the items make the use of mechanization or automation.

Mechanized warehouses use equipment such as forklift trucks, cranes and conveyor systems to provide a more efficient handling system, which can also handle items too heavy for people. Automated warehouses use technology such as Automated Guided Vehicles (AGVs) and loading/unloading machines to process high volumes of material efficiently. Material handling equipment is of two types - fixed path equipment and variable path equipment. Fixed path equipment moves in a fixed path. For example, conveyors, monorail devices, and pulley-drive equipment come under the category of fixed path equipment. Overhead cranes also belong to this category with a slight provision for variation. Though its movement is restricted, it can move materials in any manner within a restricted area by virtue of its design. Variable path equipment does not have any restriction in the direction of movement of materials, though the size of the equipment affects its movement. Trucks, forklifts, mobile cranes and industrial tractors are examples of variable-path materials-handling equipment. The selection of the type of equipment requires careful consideration of factors like investment, labor, anticipated service hours per hour, and loading and unloading characteristics. Other considerations include the source of power, conditions under which the equipment operates and other technical aspects. A materials handling manager selects the equipment required carefully, and uses them for the physical transfer of materials from the receiving department of the firm to its warehouses. The departments that are included in the materials handling function are:

Purchasing department Receiving department

Raw materials inventory department Production department Finished goods inventory department Shipping Distribution centers, and Warehouses

The materials management function can also be referred to as a combination of three sub-functions; traffic, physical distribution and logistics. The sub-function 'traffic' deals with arranging the most economic transportation method for both the incoming and outgoing materials. The sub-function 'physical distribution' is associated with the movement of the finished products and the other materials. Finally, the sub-function 'logistics' deals with obtaining, producing and distributing materials and products at/to the desired place, at the right time. http://www.expertsmind.com/learning/materials-handling-assignment-help7342872699.aspx WAREHOUSING AND WAREHOUSE MANAGEMENT Warehousing is the storage of goods for profit. The physical location, the warehouse, is a storage facility that receives goods and products for the eventual distribution to consumers or other businesses. A warehouse is also called a distribution center. Warehouse management is the process of coordinating the incoming goods, the subsequent storage and tracking of the goods, and finally, the distribution of the goods to their proper destinations. HISTORY Warehousing's roots go back to the creation of granaries to store food, which was historically available for purchase during times of famine. As European explorers began to create shipping-trade routes with other nations, warehouses

grew in importance for the storage of products and commodities from afar. Ports were the major location for warehouses. As railroads began to expand travel and transportation, the creation of rail depots for the storage of materials became necessary. In 1891 the American Warehousemen's Association was organized to challenge the railroad companies' control over freight depots. President Theodore Roosevelt significantly strengthened the Interstate Commerce Commission with passage of the Hepburn Act in 1906. Commercial warehousing began to grow after the government placed more restrictions on railroads. World War II impacted warehousing in several ways, including the need to increase the size of warehouses and the need for more mechanized methods of storing and retrieving the products and materials. As mass production grew throughout manufacturing, the needs of efficient and effective warehousing capabilities grew with it. MODERN ISSUES The warehouse industry found itself recovering from a recession at the start of the twenty-first century, partially brought on by the hype of the dot-com bubble and the excess production created after it burst. It also coped with new methods of distribution, such as just-in-time (JIT) manufacturingwhere warehousing is unnecessary because products are shipped directly to customers. Warehousing companies are now striving to become more than simply storage facilities. They are transforming themselves into "third-party logistics providers" or "3PLs" that provide a wide array of services and functions. In addition to packing and staging pallets, contemporary warehousing facilities offer light manufacturing, call centers, labeling, and other non-storage options.

WAREHOUSE FUNCTIONS Warehousing is a key component of the overall business supply chain. The supply chain consists of the facilities and distribution options for the procurement of materials from manufacturer to customer and all points in between. It includes the production of materials into components and finished products and then the distribution to customers. Warehouse functions include:

the storage of goods to permit managing product flow or to accommodate longer production runs;

Growth of Warehousing 19972002 Warehousing and Storage Source: U.S. Department of Commerce: Department of the Census: Economic Census Establishments Revenue 1997 6,497 2002 12,637 Annual Payroll($,000) Paid employees 109,760 639,174

10,657,925 2,926,119 17,924,787 18,689,122

serving as a mixing point where products from different suppliers are mixed and then distributed to fulfill customer orders;

a sales branch and customer service location; a source of supplies for production; a staging area for final packaging or finishing.

WAREHOUSE OPERATIONS Warehouses are operated in several ways. Public warehousing involves the client paying a standard fee for the storage of merchandise. Private warehousing is storage and operations controlled completely by a single manufacturer. Leased warehousing is an option for more stable inventory. Contract warehousing clients pay fees regardless of whether they are using the space or not; the space is always there for them to use, however. According to Overview of Warehousing in North America, contract warehousing accounts for more than 60 percent of the U.S. commercial market. A warehouse stands empty without some form of product. Delivery of goods and materials takes place either by truck, rail, or boat on a dock or loading area. The goods are received, processed, and then sent into the warehouse for storage. The storage of goods has been the primary function for warehouses. Once the goods have been received from the manufacturer and/or shipper, they are compactly stored to maximize space within the facility. Products are placed on pallets, which allow for more consistent stacking and moving within the facility. Contract and public warehouses receive goods and products from a multitude of manufacturers and shippers. A crucial aspect of warehouse management is inventory control. Inventory control is the ability to locate and track a given product within the warehouse to facilitate quick selection and loading for order fulfillment. It is also the process of maintaining sufficient amounts of product to meet customer demands, while at the same time balancing the expense of

keeping product in storage. Perpetual, annual, physical, and cycle counting are all methods of keeping track of inventory. Order picking is the process of selecting products to fulfill an order. There are several types of picking methods:

Discrete or pick-by-order: Specific products are selected on a per order basis. Batch or pick-by-article: Multiples of a product are selected to fulfill multiple orders. The products are sorted in the staging area and combined with other products to fulfill the orders. Wave: Involves gathering products based on specific routing or shipping criteria. Reverse-order: Used when part of an order is held to be combined with another order.

Reverse-order picking is related to cross-docking, another function of warehouses. Cross-docking is a direct flow of goods from receiving to shipping, with little if any storage. Cross-docking is contingent on the timely delivery of products, accurate management on the loading dock, and effective ordering by the customer. Warehousing is also involved in the packaging and labeling of a product as it moves through the facility. Proper packaging is necessary for effective storage and to guard against damage. Labeling, or tagging, is an important element of the packaging. Proper labeling improves the ability to identify, track, store, and select the correct product for order fulfillment. Once the product has been selected, or picked, it is brought to a staging area for final processing and shipment. The loading dock is a hub of activity as products are arriving for storage and being staged for distribution. Effective

management of this area is crucial for warehouse success. It is here that crossdocking takes place. The final stage of warehousing is the transportation facet of delivering and shipping goods. WAREHOUSE MANAGEMENT In the past warehouse management was very paper-intensive in its coordination of a multitude of activities. This has changed with the introduction of warehouse management system software. Warehouse management systems (WMS) assist managers in tracking products throughout the entire storage and distribution process. These systems span from simple computer automation systems to high-end, feature-rich management programs that improve order picking, facilitate better dock logistics, and monitor inventory management. TRENDS According to a Warehousing Management survey, competition in warehousing has become extremely tight because businesses seek warehouse firms with extremely thin margins. Companies are succeeding by remaining flexible and investing in technology. The main issues or trends in warehousing include radio frequency identification (RFID), transportation management systems, pick-tolight technology, and voice-activated receiving and packaging. Voice-activated receiving and packaging allows for warehouse personnel to speak requests into the WMS, thus speeding the entire process. Transportation management systems provide an advanced level of detail on goods prior to their arrival and also provide a more specific time of delivery. RFID has dramatically improved the ability to effectively manage inventory and track the

location of specific goods within the warehouse. Pick-to-light technology improves order picking along warehouse conveyor belts by monitoring and identifying products for specific shipments. A significant trend is the continuing growth of 3PL providers as companies try to cut costs and management issues by outsourcing their warehouse and distribution functions. An outcome of increased 3PL activity is a wave of mergers that are consolidating the industry. Customer demands for one-stop shopping and new technologies are a driving force behind this consolidation. Warehousing is a mature industry seeking methods to maximize profits and striving to add services to compete for customers. The warehousing industry is a key component of the supply chain and will likely remain so as long as there are manufacturers and consumers.

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Warehouse Management System

Definition Warehouse management deals with receipt, storage and movement of goods, normally finished goods, to intermediate storage locations or to final customer. In the multi-echelon model for distribution, there are levels of warehouses, starting with the Central Warehouse(s), regional warehouses services by the central warehouses and retail warehouses at the third level services by the regional warehouses and so on. The objective of warehousing management is to help in optimal cost of timely order fulfillment by managing the resources economically. Warehouse management = "Management of

storage of products and services rendered on the products within the four wall of a warehouse" Warehouse Management can help you manage goods and space more effectively, reduce costs and waste, and gain control over warehouse operations. With access to real-time, accurate inventory data, your warehouse professionals save time locating items or performing physical inventories, sales representatives can keep tabs on stock availability, and buyers can maintain optimum stock levels while minimizing carrying costs. Directed pick/put-away processes, support for Automated Data Collection Systems (ADCS) and a variety of item tracking optionsincluding first expired/first out handlingcan take your warehouse management to a new level of efficiency. By tracing items by lot or serial numbers, your people can quickly identify where items were purchased, how they were consumed in your production processes, and where they were sold.

Warehouse Management System or WMS It is a key part of the supply chain and 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. The systems also direct and optimize stock put away based on real-time information about the status of bin utilization. Warehouse management systems often utilize Auto ID Data Capture (AIDC) technology, such as barcode scanners, mobile computers, wireless LANs and potentially Radio-frequency identification (RFID) to efficiently monitor the flow of products. Once data has been collected, there is either batch synchronization with, or a real-time wireless transmission to a central database.

The database can then provide useful reports about the status of goods in the warehouse. The objective of a warehouse management system is to provide a set of computerized procedures to handle the receipt of stock and returns into a warehouse facility, model and manage the logical representation of the physical storage facilities (e.g. racking etc), manage the stock within the facility and enable a seamless link to order processing and logistics management in order to pick, pack and ship product out of the facility. Warehouse management systems can be stand alone systems or modules of an ERP system or supply chain execution suite. The primary purpose of a WMS is to control the movement and storage of materials within a warehouse you might even describe it as the legs at the end-of-the line which automates the store, traffic and shipping management. In its simplest form, the WMS can data track products during the production process and act as an interpreter and message buffer between existing ERP and WMS systems. Warehouse Management is not just managing within the boundaries of a warehouse today; it is much wider and goes beyond the physical boundaries. Inventory management, inventory planning, cost management, IT applications & communication technology to be used are all related to warehouse management. The container storage, loading and unloading are also covered by warehouse management today. Warehouse management today is part of SCM and demand management. Even production management is to a great extent dependent on warehouse management. Efficient warehouse management gives a cutting edge to a retail chain distribution company. Warehouse management does not just start with receipt of material but it actually starts with actual initial planning when container design is made for a product. Warehouse design is also part of

warehouse management. Warehouse management is part of Logistics and SCM. Warehouse Management monitors the progress of products through the warehouse. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations. Warehouse management deals with receipt, storage and movement of goods, normally finished goods, to intermediate storage locations or to final customer. In the multi-echelon model for distribution, there are levels of warehouses, starting with the Central Warehouse(s), regional warehouses services by the central warehouses and retail warehouses at the third level services by the regional warehouses and so on. The objective of warehousing management is to help in optimal cost of timely order fulfillment by managing the resources economically. Warehouse management = "Management of storage of products and services rendered on the products within the four wall of a warehouse." Warehouse Management continues to be the most important factor in the supply chain execution strategy of any wholesale distributor. It can also be a source of significant competitive advantage to any distributor as it encompasses several processes like goods receipt, cross docking, yard management, bar coding , physical inventory management and outbound processes. Distributors should have greater visibility into advanced shipping notices ( ASN ) , planned receipts and dispatches to identify cross docking opportunities or optimize labor management to increase warehouse throughput and reduce investment in storage space. A distributors warehouse management system should have the ability to leverage this receiving information to determine put away processes that optimize the product flow from dock to stock . The high number of Stock keeping units ( SKU ) , vendor/ regulatory compliance ( like mandatory UPC coding) and an increasing number

of claims for perishable products force a distributors warehouse management system to capture product and transaction information that will act as inputs to financial reporting or claims management processes. A distributors warehouse should also be supported by an efficient yard management system to schedule trailer movement, remove bottlenecks, provide upstream and downstream visibility. Efficient yard management can improve a distributors customer satisfaction metrics by facilitating on time delivery or proactive delay notifications. The advent of new technologies like RFID have the potential to redefine the way distributors manage their high volume warehouses. However the unprecedented wave of consolidation in the distribution industry, changing business models , proliferation of legacy systems are preventing distributors from realizing proper return on their technology investments in the Warehouse management space.

Benefits It is found that there are overlaps in the functionality of the warehouse management and the enterprise resource planning, distribution requirements planning, transportation management systems, supply chain planning and scheduling. If all these are to have separate software the company that is using the software will get confused with the software solution provided separately. Hence there is a need for an integrated system that will have warehouse management and other related operations of the company. There are many software vendors who provide warehouse management software. Although there are many vendors the basic functionality of the warehouse management system is not changed. The primary purpose is to control the movement and storage of the materials. A good warehouse management system would have a flexible location system, get user defined parameters to direct warehouse tasks and uses live documents for execution of

the tasks. Some form of integration with other devices is possible so that the warehouse management system gets live data from other devices connected to it. Not every warehouse will need a warehouse management system. If the operation of the warehouse is continuous and very frequent with a lot of transactions per day then a warehouse management system would justify the cost involved in setting it up. A lot of initial setup is to be done to keep the data warehouse management systems to run and to keep the current operation on the run. There must be a smooth transition from the current system to the warehouse management system. Often a separate department is setup to monitor the operations of the warehouse and to use the information system related to that of the warehouse management system. Automated data collection in the warehouse management system would reduce the cost in the labor and increases the accuracy of the data. It increases the effectiveness of the service provided to the customer by reducing the cycle time. Inventory reduction and increased storage capacity are less likely. The level of safety stock can be reduced while increasing the efficiency of the system. Customer services like first-in-first-out, cross docking, order tracking and automated material handling are some of the area that finds an increase in the efficiency. The setting up of a warehouse management system is an extensive task. Similar items and locations are categorized. More details of the items are maintained such as exact dimensions, weight, rack in which it is stored, hazard classifications, whether it is a finished goods or a raw material, whether it is a fast mover or a slow mover etc. these data about an item have to be stored in a database. The given parameters are only tentative and it will vary from industry to industry. For example if you are distributor of washing machines, you may be required to have details like top loading or front loading, the weight of the dry

clothes that it can take, the make of the machine, the features provided for a particular model, the weight of the machine, etc. it is not that you will be storing only a particular type of product in the warehouse. Different types of product mix are possible in a warehouse and accordingly the warehouse management system has to be configured. Since warehouse management system is all about directed movement, the location from which the product has to be picked up and where to be delivered are also to be keyed in to the system. Hence warehouse management systems are gaining importance in logistics now-adays. Optimize warehouse space Set up criteria to guide the most efficient pick patterns, bin quantities, and put-away locations. Pick items per order or to stage, consolidate packing, and save effort by taking advantage of cross-dock opportunities. Streamline operations and increase productivity Help reduce multiple handling and bottlenecks with directed pick and put-away. Input material handling information directly from the warehouse to help increase efficiency and reduce redundant data handling. Improve order fulfillment Automatically update pick and process or pack status to help ensure timely, accurate order fulfillment and faster responses to status inquiries. Gain flexibility for growth Choose the level of sophistication you need now with confidence that your solution can scale with your business growth and easily adapt to new processes, products, volumes, or technologies.

Warehouse Management Warehouse Management (WM) is a powerful and comprehensive automated Warehouse and Distribution Solution seamlessly integrated into SAP Business One. It is designed to provide optimum flexibility, customization and visibility across your warehouse environment. Designed to reduce overhead costs and reduce inefficiencies, the solution can effectively manage and track the movement of inventory from receiving to shipping. At the heart of Warehouse Management is a robust client/server architecture based on the Windows Operating System. The use of client/server technology provides a gateway for growth unsurpassed by traditional legacy systems. As your warehouse needs change, Warehouse Management can easily adapt to those changes, and provide a solid migration path.

Its robust and powerful features is also designed to help lower warehouse costs by eliminating paper work and costly shipping errors at the same time improving staff productivity, and providing accurate inventory levels to all intercompany departments in real-time. Tightly integrate order processing, manufacturing, and warehouse functionality to help optimize layout and space utilization, manage replenishment, and handle multiple orders at once. Incorporate a variety of pick prioritization methods, including first in/first out (FIFO), first expired/first out (FEFO), or last in/last out (LILO), into directed pick, movement, and put-away decisions

Internal Pick/Put-Away Pick or put away items and debit or credit inventory records independently of purchase receipts, sales, or source documents so you can

maintain accurate inventory records even when accessing items for testing, display purposes, or other internal or operational needs. Automated Data Collection System (ADCS) Support Improve visibility into inventory, and help increase the accuracy and efficiency of your warehouse managementpicking and putting away of items, physical inventory counts, and moving items from bin to binwith ADCS. Item Tracking Trace lot or serial numbers to quickly determine where items were purchased, processed, or sold. Help reduce waste and limit carrying expired inventory with support for FEFO handling. Item Costing Understand item costs throughout the production process, including inventory, work-in-process (WIP), and cost of goods sold (COGS). Break down costs according to categories such as materials, capacity, subcontracting, and overhead. Tighten control of closing processes, improve batch job costing, and streamline reconciliation with the general ledger. Shipping Agent Management Control your distribution by relating shipping agents to the services they offer. Returns Management Process returned inventory and account for additional costs.

Automatically organize credit memos, replacement goods, returns to vendors, and partial or combined return of shipments or receipts. Exact cost reversal helps increase inventory accuracy.

Cycle counting Determine the counting frequency per item or stock keeping unit to help increase inventory accuracy and meet shipping deadlines.

Evolution of Warehouse Management

Introduction The evolution of warehouse management systems (WMS) is very similar to that of many other software solutions. Initially a system to control movement and storage of materials within a warehouse, the role of WMS is expanding to including light manufacturing, transportation management, order management, and complete accounting systems. To use the grandfather of operations-related software, MRP, as a comparison, material requirements planning (MRP) started as a system for planning raw material requirements in a manufacturing environment. Soon MRP evolved into manufacturing resource planning (MRPII), which took the basic MRP system and added scheduling and capacity planning logic. Eventually MRPII evolved into enterprise resource planning (ERP), incorporating all the MRPII functionality with full financials and customer and vendor management functionality. Now, whether WMS evolving into a warehouse-focused ERP system is a good thing or not is up to debate. What is clear is that the expansion of the overlap in functionality between Warehouse Management Systems, Enterprise Resource Planning, Distribution Requirements Planning, Transportation Management Systems, Supply Chain Planning, Advanced Planning and Scheduling, and Manufacturing Execution Systems will only increase the level of confusion among companies looking for software solutions for their operations.

Even though WMS continues to gain added functionality, the initial core functionality of a WMS has not really changed. The primary purpose of a WMS is to control the movement and storage of materials within an operation and process the associated transactions. Directed picking, directed replenishment, and directed put away are the key to WMS. The detailed setup and processing within a WMS can vary significantly from one software vendor to another; however the basic logic will use a combination of item, location, quantity, unit of measure, and order information to determine where to stock, where to pick, and in what sequence to perform these operations. Do We Really Need Warehouse Management System? Not every warehouse needs a WMS. Certainly any warehouse could

benefit from some of the functionality but is the benefit great enough to justify the initial and ongoing costs associated with WMS? Warehouse Management Systems are big, complex, data intensive, and applications. They tend to require a lot of initial setup, a lot of system resources to run, and a lot of ongoing data management to continue to run. Thats right; you need to "manage" your warehouse "management" system. An often time, large operations will end up creating a new IS department with the sole responsibility of managing the WMS. The Claims i. ii. iii. iv. v. Warehouse Management System will reduce inventory! Warehouse Management System will reduce labor costs! Warehouse Management System will increase storage capacity! Warehouse Management System will increase customer service! Warehouse Management System will increase inventory accuracy!

The Reality The implementation of a WMS along with automated data collection will likely give you increases in accuracy, reduction in labor costs (provided the labor required to maintain the system is less than the labor saved on the warehouse floor), and a greater ability to service the customer by reducing cycle times. Expectations of inventory reduction and increased storage While increased accuracy and efficiencies in the capacity are less likely.

receiving process may reduce the level of safety stock required, the impact of this reduction will likely be negligible in comparison to overall inventory levels. The predominant factors that control inventory levels are lot sizing, lead times, and demand variability. It is unlikely that a WMS will have a significant impact on any of these factors. And while a WMS certainly provides the tools for more organized storage which may result in increased storage capacity, this improvement will be relative to just how sloppy your pre-WMS processes were. Beyond labor efficiencies, the determining factors in deciding to implement a WMS tend to be more often associated with the need to do something to service your customers that your current system does not support (or does not support well) such as first-in-first-out, cross-docking, automated pick replenishment, wave picking, lot tracking, yard management, automated data collection, automated material handling equipment, etc. Setup The setup requirements of WMS can be extensive. The characteristics of each item and location must be maintained either at the detail level or by grouping similar items and locations into categories. An example of item characteristics at the detail level would include exact dimensions and weight of each item in each unit of measure the item is stocked (reaches, cases, pallets, etc) as well as information such as whether it can be mixed with other items in a

location, whether it is rack able, max stack height, max quantity per location, hazard classifications, finished goods or raw material, fast versus slow mover, etc. Although some operations will need to set up each item this way, most operations will benefit by creating groups of similar products. For example, if you are a distributor of music CDs you would create groups for single CDs, and double CDs, maintaining the detailed dimension and weight information at the group level and only needing to attach the group code to each item. You would likely need to maintain detailed information on special items such as boxed sets or CDs in special packaging. You would also create groups for the different types of locations within your warehouse. An example would be to create three different groups (P1, P2, P3) for the three different sized forward picking locations you use for your CD picking. You then set up the quantity of single CDs that will fit in a P1, P2, and P3 location, quantity of double CDs that fit in a P1, P2, P3 location etc. You would likely also be setting up case quantities, and pallet quantities of each CD group and quantities of cases and pallets per each reserve storage location group. If this sounds simple, it iswell sort of. In reality most operations have a much more diverse product mix and will require much more system setup. And setting up the physical characteristics of the product and locations is only part of the picture. You have set up enough so that the system knows where a product can fit and how many will fit in that location. You now need to set up the information needed to let the system decide exactly which location to pick from, replenish from/to, and put away to, and in what sequence these events should occur (remember WMS is all about directed movement). You do this by assigning specific logic to the various combinations of item/order/quantity/location information that will occur. Below is the list of some of the logic used in determining actual locations and sequences. Location sequence

This is the simplest logic; you simply define a flow through your warehouse and assign a sequence number to each location. In order picking this is used to sequence your picks to flow through the warehouse, in put away the logic would look for the first location in the sequence in which the product would fit. Zone Logic By breaking down your storage locations into zones you can direct picking, put away, or replenishment to or from specific areas of your warehouse. Since zone logic only designates an area, you will need to combine this with some other type of logic to determine exact location within the zone. Fixed Location Logic uses predetermined fixed locations per item in picking, put away, and replenishment. Fixed locations are most often used as the primary picking location in piece pick and case-pick operations; however, they can also be used for secondary storage. Random Location Since computers cannot be truly random (nor would you want them to be) the term random location is a little misleading. Random locations generally refer to areas where products are not stored in designated fixed locations. Like zone logic, you will need some additional logic to determine exact locations.

First-in-first-out (FIFO) FIFO Directs picking from the oldest inventory first. Last-in-first-out (LIFO)

Opposite of FIFO, I didn't think there were any real applications for this logic until a visitor to my site sent an email describing their operation that distributes perishable goods domestically and overseas. They use LIFO for their overseas customers (because of longer in-transit times) and FIFO for their domestic customers. Quantity or Unit-of-measure Allows you to direct picking from different locations of the same item based upon the quantity or unit-of-measured ordered. For example, pick quantities less than 25 units would pick directly from the primary picking location while quantities greater than 25 would pick from reserve storage locations. Fewest Locations: This logic is used primarily for productivity. Pick-from-fewest logic will use quantity information to determine least number of locations needed to pick the entire pick quantity. Put-to-fewest logic will attempt to direct put away to the fewest number of locations needed to stock the entire quantity. While this logic sounds great from a productivity standpoint, it generally results in very poor space utilization. The pick-from-fewest logic will leave small quantities of an item scattered all over your warehouse, and the put-to-fewest logic will ignore small and partially used locations. Pick-to-clear Logic directs picking to the locations with the smallest quantities on hand. This logic is great for space utilization. Reserved Locations This is used when you want to predetermine specific locations to put away to or pick from. An application for reserved locations would be cross-docking,

where you may specify certain quantities of an inbound shipment be moved to specific outbound staging locations or directly to an awaiting outbound trailer. Nearest Location Also called proximity picking/put away, this logic looks to the closest available location to that of the previous put away or pick. You need to look at the setup and test this type of logic to verify that it is picking the shortest route and not the actual nearest location. Since the shortest distance between two points is a straight line, this logic may pick a location 30 feet away (thinking its closest) that requires the worker to travel 200 feet up and down aisles to get to it while there was another available location 50 feet away in the same aisle (50 is longer than 30). Maximize Cube Cube logic is found in most WMS systems however it is seldom used. Cube logic basically uses unit dimensions to calculate cube (cubic inches per unit) and then compares this to the cube capacity of the location to determine how much will fit. Now if the units are capable of being stacked into the location in a manner that fills every cubic inch of space in the location, cube logic will work. Since this rarely happens in the real world, cube logic tends to be impractical. Consolidate Looks to see if there is already a location with the same product stored in it with available capacity. May also create additional moves to consolidate like product stored in multiple locations. Lot Sequence

Used for picking or replenishment, this will use the lot number or lot date to determine locations to pick from or replenish from. Its very common to combine multiple logic methods to determine the best location. For example you may chose to use pick-to-clear logic within firstin-first-out logic when there are multiple locations with the same receipt date. You also may change the logic based upon current workload. During busy periods you may chose logic that optimizes productivity while during slower periods you switch to logic that optimizes space utilization. Other Functionality/Considerations of Warehouse Management Wave Picking/Batch Picking/Zone Picking Support for various picking methods varies from one system to another. In high-volume fulfillment operations, picking logic can be a critical factor in WMS selection. See my article on Order Picking for more info on these methods. Task Interleaving Task interleaving describes functionality that mixes dissimilar tasks such as picking and put away to obtain maximum productivity. Used primarily in fullpallet-load operations, task interleaving will direct a lift truck operator to put away a pallet on his/her way to the next pick. In large warehouses this can greatly reduce travel time, not only increasing productivity, but also reducing wear on the lift trucks and saving on energy costs by reducing lift truck fuel consumption. Task interleaving is also used with cycle counting programs to coordinate a cycle count with a picking or put away task. Automated Data Collection (ADC) It is generally assumed when you implement WMS that you will also be implementing automatic data collection, usually in the form of radio-frequency

(RF) portable terminals with bar code scanners. I recommend incorporating your ADC hardware selection and your software selection into a single process. This is especially true if you are planning on incorporating alternate technologies such as voice systems, RFID, or light-directed systems. You may find that a higher priced WMS package will actually be less expensive in the end since it has a greater level of support for the types of ADC hardware you will be using. In researching WMS packages you may see references like supports, easily integrates with, works with, seamlessly interfaces with in descri bing the softwares functionality related to ADC. Since these statements can mean just about anything, youll find it important to ask specific questions related to exactly how the WMS system has been programmed to accommodate ADC equipment. Some WMS products have created specific versions of programs designed to interface with specific ADC devices from specific manufacturers. If this WMS/ADC device combination works for your operation you can save yourself some programming/setup time. If the WMS system does not have this specific functionality, it does not mean that you should not buy the system; it just means that you will have to do some programming either on the WMS system or on the ADC devices. Since programming costs can easily put you over budget youll want to have an estimate of these costs up front. As long as you are working closely with the WMS vendor and the ADC hardware supplier at an early stage in the process you should be able to avoid any major surprises here. Read my article on ADC. Integration with Automated Material Handling Equipment If you are planning on using automated material handling equipment such as carousels, ASRS units, AGVs, pick-to-light systems, or sortation systems, youll want to consider this during the software selection process. Since these types of automation are very expensive and are usually a core component of your warehouse, you may find that the equipment will drive the selection of the

WMS. As with automated data collection, you should be working closely with the equipment manufacturers during the software selection process. Advanced Shipment Notifications (ASN) If your vendors are capable of sending advanced shipment notifications (preferably electronically) and attaching compliance labels to the shipments you will want to make sure that the WMS can use this to automate your receiving process. In addition, if you have requirements to provide ASNs for customers, you will also want to verify this functionality. Cross Docking In its purest form cross-docking is the action of unloading materials from an incoming trailer or rail car and immediately loading these materials in outbound trailers or rail cars thus eliminating the need for warehousing (storage). In reality pure cross-docking is less common; most "cross-docking" operations require large staging areas where inbound materials are sorted, consolidated, and stored until the outbound shipment is complete and ready to ship. If cross docking is part of your operation you will need to verify the logic the WMS uses to facilitate this. Pick-to-Carton For parcel shippers pick-to-carton logic uses item dimensions/weights to select the shipping carton prior to the order picking process. Items are then picked directly into the shipping carton. When picking is complete, Dunn age is added and the carton sealed eliminating a formal packing operation. This logic works best when picking/packing products with similar size/weight characteristics. In operations with a very diverse product mix it's much more difficult to get this type of logic to work effectively.

Slotting Slotting describes the activities associated with optimizing product placement in pick locations in a warehouse. There is software packages designed just for slotting, and many WMS packages will also have slotting functionality. Slotting software will generally use item velocity (times picked), cube usage, and minimum pick face dimensions to determine best location. Yard Management Yard management describes the function of managing the contents (inventory) of trailers parked outside the warehouse, or the empty trailers themselves. trailers. Labor Tracking/Capacity Planning Some WMS systems provide functionality related to labor reporting and capacity planning. Anyone that has worked in manufacturing should be familiar with this type of logic. Basically, you set up standard labor hours and machine (usually lift trucks) hours per task and set the available labor and machine hours per shift. The WMS system will use this info to determine capacity and load. Manufacturing has been using capacity planning for decades with mixed results. The need to factor in efficiency and utilization to determine rated capacity is an example of the shortcomings of this process. Not that Im necessarily against capacity planning in warehousing, I just think most operations dont really need it and can avoid the disappointment of trying to make it work. I am, however, a big advocate of labor tracking for individual productivity measurement. productivity reporting. Most WMS maintain enough data to create Since productivity is measured differently from one Yard management is generally associated with cross docking operations and may include the management of both inbound and outbound

operation to another you can assume you will have to do some minor modifications here (usually in the form of custom reporting). Activity-based costing/billing This functionality is primarily designed for third-party logistics operators. Activity-based billing allows them to calculate billable fees based upon specific activities. For example, a 3PL can assign transaction fees for each receipt, and shipment transaction, as well as fees for storage and other value-added activities.

Integration with Existing Accounting/Erp Systems Unless the WMS vendor has already created a specific interface with your accounting/ERP system (such as those provided by an approved business partner) you can expect to spend some significant programming dollars here. While we are all hoping that integration issues will be magically resolved someday by a standardized interface, we aint there yet. Ideally youll want an integrator that has already integrated the WMS you chose with the business software you are using. Since this is not always possible you at least want an integrator that is very familiar with one of the systems. Implementation Tips Outside of the standard dont underestimate, thoroughly test, train, train, train implementation tips that apply to any business software installation, its important to emphasize that WMSs are very data dependent and restrictive by design. That is, you need to have all of the various data elements in place for the system to function properly. And, when they are in place, you must operate within the set parameters.

These are some very real examples of what you can expect when working with systems like WMSs. As you run into instances such as these, you must remember that these are not flaws with the WMS. In fact, you want your WMS to be restrictive, thats what gives you control over your operations. You should to be aware, however, that the cultural change required to work within the operational constraints provided by the WMS is often the most difficult part of a WMS implementation. When implementing a WMS, you are adding an additional layer of technology onto your system. And with each layer of technology there are additional overhead and additional sources of potential problems. Now dont take this as a condemnation of Warehouse Management Systems. Coming from a warehousing background I definitely appreciate the functionality WMSs have to offer, and, in many warehouses, this functionality is essential to their ability to serve their customers and remain competitive. Its just important to note that every solution has its downsides and having a good understanding of the potential implications will allow managers to make better decisions related to the levels of technology that best suits their unique environment.

Receiving and Shipping Operations

Problems occurring in planning Problems can occur in planning receiving and shipping facilities if the operations that interface with receiving and shipping activities are not properly considered.

The facility requirements to receive and ship goods i. Sufficient area to stage and spot carriers

ii. iii. iv.

Dock-boards to facility carrier unloading Sufficient area to palletize or containerize goods An office to house information on purchase orders and allow for report generation.

The facility requirements to ship goods: i. ii. Sufficient area to stage orders An office to house information on shipping releases and customer orders iii. iv. Sufficient area to stage and spot carriers Dock board to facilitate carrier loading

Perceiving i. A reason to be concerned with perceiving, peak loads at receiving can be reduced. ii. Another reason for being concerned with perceiving activities is the opportunity to influence the unit load configurations of inbound material. iii. A third reason, for trying to influence between the vendor and receivers information systems. Post-shipping i. Just as the receiver wishes to influence the vendor, the customer wishes to influence the shipper.

ii.

Hence, post-shipping activities must be considered. carriers, and shipping schedules

Post-shipping

activities include: returnable containers, returned goods, returning

iii.

Space required for the receiving and shipping activities can be positively affected by pre- receiving and post-shipping considerations

Some desirable attributes of receiving and shipping facilities plans include i. Directed flow paths among carriers, buffer, or staging areas and storage areas ii. iii. A continuous flow without excessive congestion or idleness A concentrated area of operation that minimizes material handling and increases the effectiveness of supervision iv. v. vi. vii. Efficient material handling Safe operation Minimizing damage Good housekeeping

Receiving Principles i. ii. iii. iv. Dont receive Perceive Cross-dock cross-dock able material Put away directly to primary or reserve locations

v. vi.

Stage in storage locations Complete all necessary steps for efficient load decomposition and movement at receiving

vii. viii. ix. x.

Prepackage in issue increments Apply necessary labeling and tags Cube and weigh for storage and transport planning Receiving and Shipping Principles

Shipping Principles i. ii. Select cost and space effective handling units Minimize product damage a. Unitize and secure loose items in cartons or totes b. Unitize and secure loose cases on pallets c. Unitize and secure loose pallets in outbound trailers iii. iv. Eliminate shipping staging, and direct-load outbound trailers Use storage racks to minimize floor space requirements for shipping staging Receiving and Shipping Space Planning i. ii. Determine what is to be received and shipped Determine the number and type of docks

Determine the space requirements for the receiving and shipping area within the facility a. Personnel convenience b. Offices c. Material handling equipment maintenance d. Trash disposal e. Pallet and packaging material storage f. Trucker's lounge (150 ft2 up to 6 docks; 25 ft2 each additional dock) g. Buffer or staging area (typically sufficient space for one full carrier for each dock) h. Material handling equipment maneuvering Cross-docking It is found that there are overlaps in the functionality of the warehouse management and the enterprise resource planning, distribution requirements planning, transportation management systems, supply chain planning and scheduling. If all these are to have separate software the company that is using the software will get confused with the software solution provided separately. Hence there is a need for an integrated system that will have warehouse management and other related operations of the company. There are many software vendors who provide warehouse management software. Although there are many vendors the basic functionality of the warehouse management system is not changed. The primary purpose is to control the movement and storage of the materials. A good warehouse

management system would have a flexible location system, get user defined parameters to direct warehouse tasks and uses live documents for execution of the tasks. Some form of integration with other devices is possible so that the warehouse management system gets live data from other devices connected to it. Not every warehouse will need a warehouse management system. If the operation of the warehouse is continuous and very frequent with a lot of transactions per day then a warehouse management system would justify the cost involved in setting it up. A lot of initial setup is to be done to keep the data warehouse management systems to run and to keep the current operation on the run. There must be a smooth transition from the current system to the warehouse management system. Often a separate department is setup to monitor the operations of the warehouse and to use the information system related to that of the warehouse management system.

Automated data collection in the warehouse management system would reduce the cost in the labor and increases the accuracy of the data. It increases the effectiveness of the service provided to the customer by reducing the cycle time. Inventory reduction and increased storage capacity are less likely. The level of safety stock can be reduced while increasing the efficiency of the system. Customer services like first-in-first-out, cross docking, order tracking and automated material handling are some of the area that finds an increase in the efficiency. The setting up of a warehouse management system is an extensive task. Similar items and locations are categorized. More details of the items are maintained such as exact dimensions, weight, rack in which it is stored, hazard classifications, whether it is a finished goods or a raw material, whether it is a fast

mover or a slow mover etc. these data about an item have to be stored in a database. The given parameters are only tentative and it will vary from industry to industry. For example if you are distributor of washing machines, you may be required to have details like top loading or front loading, the weight of the dry clothes that it can take, the make of the machine, the features provided for a particular model, the weight of the machine, etc. it is not that you will be storing only a particular type of product in the warehouse. Different types of product mix are possible in a warehouse and accordingly the warehouse management system has to be configured. Since warehouse management system is all about directed movement, the location from which the product has to be picked up and where to be delivered are also to be keyed in to the system. Hence warehouse management systems are gaining importance in logistics now-adays. Factors influencing the use of cross-docks Customer and supplier geography -- particularly when a single corporate customer has many multiple branches or using point World-Class Warehousing Freight costs for the commodities being transported Cost of inventory in transit Complexity of loads Handling methods Logistics software integration between supplier(s), vendor, and shipper Tracking of inventory in transit

Timeless Insights for Planning and Managing 21st-Century Warehouse Operations. Despite today's just-in-time production mentality, with its efforts to eliminate warehouses and their inventory carrying costs, effective warehousing continues to play a critical bottom-line role for companies worldwide. WorldClass Warehousing and Material Handling covers today's state-of-the-art tools, metrics, and methodologies for dramatically increasing the effectiveness, accuracy, and overall productivity of warehousing operations. Written by one of today's recognized logistics thought leaders, this

comprehensive resource provides authoritative answers on such topics as i. ii. iii. iv. v. vi. vii. viii. The seven principles of world-class warehousing Warehouse activity profiling Warehouse performance measures Warehouse automation and computerization Receiving and put away Storage and retrieval operations Picking and packing Humanizing warehouse operations World-Class Warehousing and Material Handling describes the processes and systems required for meeting the changing demands of warehousing. Filled with practices from proven to innovative, it will help all logistics professionals improve the productivity, quality, and cycle time of their existing warehouse operations.

Not too long ago, effective warehousing was a relatively straightforward progression of receiving, storing, and shipping. But in today's age of ecommerce, supply chain integration, globalization, and just-in-time methodology, warehousing has become more complex than at any time in the pastnot to mention more costly. World-Class Warehousing and Material Handling breaks through the confusing array of warehouse technology, buzzwords, and third-party providers to describe the principles of warehousing required for the implementation of world-class warehousing operations. Holding up efficiency and accuracy as the keys to success in warehousing, it is the first widely published methodology for warehouse problem solving across all areas of the supply chain, providing an organized set of principles that can be used to streamline all types of warehousing operations. Case studies from Avon, Ford, Xerox, True Value Hardware, and others detail how today's most innovative logistics and supply chain managers are arriving at proven solutions to a wide variety of warehousing challenges. Topics discussed include: Warehouse activity profiling For identifying causes of information and material flow problems and pinpointing opportunities for improvement Warehouse performance measures For monitoring, reporting, and benchmarking warehouse performance Storage and retrieval system selection

For improving storage density, handling productivity, and trade-offs in required capital investment Order picking strategies for improving the productivity and accuracy of order fulfillment Computerizing warehousing operations For profiling activity, monitoring performance, and simplifying operations World-Class Warehousing and Material Handling integrates global and ecommerce issues as it addresses customization, information technology, performance analysis, expansion and contraction planning, and the overall role of the warehouse in logistics management and the supply chain. Filled with proven operational solutions, it will guide managers as they develop a warehouse master plan, one designed to minimize the effects of supply chain inefficiencies as it improves logistics accuracy and inventory management and reduces overall warehousing expense.

Order Picking Operations Methods and Equipment for Piece Pick, Case Pick, and Pallet Pick Operations Of all warehouse processes, order picking tends to get the most attention. Its just the nature of distribution and fulfillment that you generally have more outbound transactions than inbound transactions, and the labor associated with the outbound transactions is likely a big piece of the total warehouse labor budget. Another reason for the high level of importance placed on order picking operations is its direct connection to customer satisfaction. The ability to quickly and accurately process customer orders has become an essential part of doing business.

The methods for order picking vary greatly and the level of difficulty in choosing the best method for your operation will depend on the type of operation you have. The characteristics of the product being handled, total number of transactions, total number of orders, picks per order, quantity per pick, picks per SKU, total number of SKUs, value-added processing such as private labeling, and whether you are handling piece pick, case pick, or fullpallet loads are all factors that will affect your decision on a method for order picking. Many times a combination of picking methods is needed to handle diverse product and order characteristics. Key objectives in designing an order picking operation include increases in productivity, reduction of cycle time, and increases in accuracy. Often times these objectives may conflict with one another in that a method that focuses on productivity may not provide a short enough cycle time, or a method that focuses on accuracy may sacrifice productivity. Productivity Productivity in order picking is measured by the pick rate. Piece pick

operations usually measure the pick rate in line items picked per hour while case pick operations may measure cases per hour and line items per hour. In pallet pick operations the best measure is actual pallets picked per hour. Since the actual amount of time it takes to physically remove the product from the location tends to be fixed regardless of the picking method used, productivity gains are usually in the form of reducing the travel time. Cycle Time Cycle time is the amount of time it takes to get an order from order entry to the shipping dock. In recent years, customers expectations of companies to provide same day shipment has put greater emphasis on reducing cycle times

from days to hours or minutes. Immediate release of orders to the warehouse for picking and methods that provide concurrent picking of items within large orders are ways to reduce cycle times. Accuracy Regardless of the type of operation you are running, accuracy will be a key objective. Virtually every decision you make in setting up a warehouse will have some impact on accuracy, from the product numbering scheme, to the design of product labels, product packaging, the design of picking documents, location numbering scheme, storage equipment, lighting conditions, and picking method used. Technologies that aide in picking accuracy include pickto-light systems, counting scales, and bar code scanners. Beyond the design aspects of an order picking operation, employee training, accuracy tracking, and accountability are essential to achieving high levels of accuracy. Piece-picking methods Piece picking, also known as broken case picking or pick/pack operations, describes systems where individual items are picked. Piece pick operations usually have a large sku base in the thousands or tens of thousands of items, small quantities per pick, and short cycle times. Mail order catalog companies and repair parts distributors are good examples of piece pick operations. Basic Order Picking In the most basic order-picking method, product is stored in fixed locations on static shelving or pallet rack. An order picker picks one order at a time following a route up and down each aisle until the entire order is picked. The order picker will usually use some type of picking cart. The design of the picking flow should be such that the order picker ends up fairly close to the

original starting point. The picking document should have the picks sorted in the same sequence as the picking flow. Fast moving product should be stored close to the main cross aisle and additional cross aisles put in to allow short cuts. Larger bulkier items would be stored towards the end of the pick flow. This basic order picking method can work well in operations with a small total number of orders and a high number of picks per order. Operations with low picks per order will find the travel time excessive in this type of picking and operations with large numbers of orders will find that the congestion from many pickers working in the same areas slows down the processing. Batch Picking / Multi-Order Picking In batch picking, multiple orders are grouped into small batches. An order picker will pick all orders within the batch in one pass using a consolidated pick list. Usually the picker will use a multi-tiered picking cart maintaining a separate tote or carton on the cart for each order. Batch sizes usually run from 4 to 12 orders per batch depending on the average picks per order in that specific operation. Batch picking systems may use extensive logic programmed to consolidate orders with the same items. In operations with low picks per order, batch picking can greatly reduce travel time by allowing the picker to make additional picks while in the same area. Since you are picking multiple orders at the same time, systems and procedures will be required to prevent mixing of orders. In very busy operations, batch picking is often used in conjunction with zone picking and automated material handling equipment. In order to get maximum productivity in batch pick operations, orders must be accumulated in the system until there are enough similar picks to create the batches. This delay in processing may not be acceptable in same day shipping operations. Zone Picking

Zone picking is the order picking version of the assembly line.

In zone

picking, the picking area is broken up into individual pick zones. Order pickers are assigned a specific zone, and only pick items within that zone. Orders are moved from one zone to the next as the picking from the previous zone is completed (also known as "pick-and-pass"). Usually, conveyor systems are used to move orders from zone to zone. In zone picking its important to balance the number of picks from zone to zone to maintain a consistent flow. Zones are usually sized to accommodate enough picks for one or two order pickers. Creating fast pick areas close to the conveyor is essential in achieving high productivity in zone picking. Zone picking is most effective in large operations with high total numbers of stocks, high total numbers of orders, and low to moderate picks per order. Separate zones also provide for specialization of picking techniques such as having automated material handling systems in one zone and manual handling in the next. Wave picking A variation on zone picking and batch picking where rather than orders moving from one zone to the next for picking, all zones are picked at the same time and the items are later sorted and consolidated into individual orders/shipments. Wave picking is the quickest method (shortest cycle time) for picking multi item orders however the sorting and consolidation process can be tricky. Operations with high total number of SKUs and moderate to high picks per order may benefit from wave picking. Wave picking may be used to isolate orders by specific carriers, routes, or zones. Piece-picking As with the picking methods, the picking equipment used will also depend on a variety of factors.

Static shelving The most common equipment for storage in piece pick operations, static shelving is designed with depths from 12 to 24. Product is either placed Static directly on the shelving or in corrugated, plastic, or steel parts bins. SKU or where parts are very small. Carton flow rack Carton flow rack is similar to static shelving with the exception that rather than shelves, there are small sections of gravity conveyor mounted at a slight angle. Product is stocked from the rear of the flow rack and picking is done from the face. Product can be stocked in cartons or small totes or bins. As a carton or tote is emptied, it is removed from the rack and another one will roll into place. Carton flow rack is most useful where there is a very high number of picks per SKU. Carousels, Horizontal Carousels Are versions of the same equipment used by dry cleaners to store and retrieve clothing, They have racks hanging from them that can be configured to accommodate various size storage bins. Generally an operator will run 2 to 4 carousels at a time avoiding the need for the operator to wait while one unit is turning. Picking is usually performed in batches with orders downloaded from the host system to the carousel software. Horizontal carousels are most common in picking operations with very high number of orders, low to moderate picks per order, and low to moderate picks per sku. Horizontal carousels provide very high pick rates as well as high storage density. Pick-to-light systems are often integrated into carousels. Vertical Carousels are frequently used in laboratories

shelving is economical and is the best method where there are few picks per

and specialty manufacturing operations and are rarely used in regular order picking operations. Automatic storage and retrieval systems (ASRS) An ASRS is a system of rows of rack, each row having a dedicated retrieval unit that moves vertically and horizontally along the rack, picking and putting away loads. ASRS systems are available in mini-load types that store and transfer product on some type of tray or in bins, and unit-load types that transfer and store pallet loads or other large unitized loads. In addition to the automation features, ASRS units can provide extremely high storage density with capabilities to work in racking up to 100 feet high. Unfortunately the high costs of ASRS equipment and the length of the retrieval times make it difficult to incorporate into a piece picking operation. Automatic picking machines Fully automated picking machines (such as A-frames) are still pretty rare and are used only where very high volumes of similar products are picked such as music CDs, or, where high volume in combination with high accuracy requirements exist such as pharmaceutical fulfillment. Pick-to-light Pick-to light systems consist of lights and LED displays for each pick location. The system uses software to light the next pick and display the quantity to pick. Pick-to-light systems have the advantage of not only increasing accuracy, but also increasing productivity. Since hardware is required for each pick location, pick-to-light systems are easier to cost justify where very high picks per SKU occur. Carton flow rack and horizontal carousels are good applications for pick to light. In batch picking, put-to-light is also incorporated into the cart or

rack that holds the cartons or totes that you are picking in to. The light will designate which order you should be placing the picked items in. Bar-Code Scanners Though very useful in increasing accuracy levels, bar-code scanners in a fast-paced piece-pick operation tend to become cumbersome and can significantly reduce your pick rates. With proper training, tracking, and accountability, you can get very high accuracy rates in order picking without scanners. I find they are better suited to case pick, pallet load, put away, and order checking operations. Voice-directed picking Voice technology has come of age in recent years and is now a very viable solution for piece pick, case pick, or pallet pick operations. Automated Conveyor and Sortation Systems Automated conveyor systems and sortation systems will be integral to any large-scale piece pick operation. The variety of equipment and system designs is enormous. Case Picking Methods Case picking operations tend to have less diversity in product characteristics than piece picking operations, with fewer SKUs and higher picks per SKU. Basic Case-Picking Method This is the most common method for case-picking operations. Rather

than product stored on static shelving, case-pick operations will have the product stored in pallet rack or in bulk in floor locations. The simplest picking

method is to use a hand pallet jack (or motorized pallet truck) and pick cases out of bulk floor locations however many operations will find that going to very narrow aisle (VNA) pallet racking and using man-up order selectors or turret trucks will provide high storage density and high pick rates. Batch picking Batch picking is rarely used in case pick operations primarily because of the physical size of the picks. You are unlikely to have enough room on a pallet to pick multiple orders. Zone Picking Zone picking can be used in case-picking operations, however, like batch picking, the size of the picks and the size of the orders in most case-pick operations do not lend themselves well to zone picking. If you do have a case pick operation where you have a large number of SKUs, and orders with small quantities per SKU, or where you have enough cases per order per zone to fill a pallet, you may find zone picking applicable. Wave picking Wave picking can be applied to case picking operations where you have very large orders with many picks per order and are looking for ways to reduce cycle time. Case-Picking Equipment Pallet rack: operations. Flow rack: Although carton flow rack rarely applies to case pick operations, pallet flow rack or push back rack can be useful. Pallet rack is the most common storage system for case pick

Carousels: Although you can incorporate unit-load carousels into a case pick operation, it tends to be an unlikely match-up. If doing batch picking where you have many picks per SKU and few pieces per pick you can pick from an ASRS unit onto a unit-load carousel. Automated Storage and Retrieval Systems (ASRS): Unit-load ASRS systems can be useful in case-pick operations, especially if you can provide storage heights of 40 to 100 feet. Pick-to-light: Pick-to-light can be used in case-pick operations, however, its application is significantly less than in piece pick operations. Bar-code scanners: Bar-code scanners are frequently used in case-pick

operations. Since the time to physically pick the product is higher in case-pick operations, the time spent scanning tends to have little impact on productivity and therefore the accuracy benefits will usually outweigh any reduction in productivity. Voice-directed picking: Voice technology has come of age in recent years and is now a very viable solution for piece pick, case pick, or pallet pick operations. Automated Conveyor and Sortation Systems: If using zone or wave picking,

automated conveyor and sortation systems will likely be a part of your system. In case picking, you may use standard conveyors to transport individual cases or unit-load conveyors to transport pallets. Lift Trucks: operations. Pallet Picking Methods As previously mentioned, motorized pallet trucks, man-up order

selectors, and man-up turret trucks are the vehicles of choice for case-pick

Full-pallet picking is also known as unit-load picking.

The systematic

methods for full-pallet picking are much simpler that either piece pick or case pick, however, the choices in storage equipment, storage configurations, and types of lift trucks used are many. Basic pallet picking: This is the most common method for full-pallet picking. Orders are picked one at a time. The order picker will use some type of lift truck, retrieve the pallet load and stage it in a shipping area in a staging lane designated for that order, or just pick and load directly into an outbound trailer or container. Batch picking: Since the nature of pallet picking is a single pick per trip, batch picking has no application in pallet-picking operations. Zone and wave picking: Although the normal definition of zone picking where an order is moved from zone to zone as picks are accumulated doesnt apply to pallet picking, pick zones are used in wave picking in pallet-picking operations. The storage area is broken into zones to eliminate multiple lift-truck operators from picking in the same aisle. The lift truck operator may pick the pallet and deliver it directly to the designated staging lane or place it on a unit-load conveyor that will deliver it to the sorting/staging area. Task Interleaving: Task interleaving is a method of combining picking and put away. Warehouse Management Systems (WMS) use logic to direct a lift truck operator to put away a pallet en route to the next pick. Pallet-picking equipment Pallet rack: There are numerous pallet rack configurations used in full pallet operations, from standard back-to-back single pallet depth configurations to double-deep rack, push-back rack, drive-in/drive-thru rack, and flow rack. The best racking configuration for your operation will be based on the total number

of pallets per sku, pallets per pick, and the length of time the product is in the rack prior to shipment. There are a lot of tradeoffs in choosing a racking configuration including storage density, picking productivity, equipment costs, and the ability to maintain first-in first-out. ASRS: Unit-load ASRS units when combined with unit-load conveyors and

sortation systems can provide fully automatic pallet picking operations. And again, the ability to store product in racking up to 100 feet high gives excellent storage density. Automated conveyor and sortation systems: Automated conveyor and

sortation systems can be combined with ASRS units or used in conjunction with manual picking with lift trucks in zone/wave picking systems. Either the ASRS or the lift truck operator delivers the pallet load to the conveyor. The conveyor system then delivers the pallet to the shipping area where it is either manually sorted by lift trucks into the designated staging lane, or a sortation system automatically sorts into a staging lane. Staging lanes can be equipped with automated or gravity fed unit-load conveyor. Bar-code scanners: Bar-code scanners are very commonly used in pallet-pick operations. Voice-directed picking: Voice technology has come of age in recent years and is now a very viable solution for piece pick, case pick, or pallet pick operations. Lift trucks: The lift trucks used for pallet picking will depend upon the storage configuration. Standard lift trucks are used in bulk floor storage and wide-aisle pallet rack storage in singe-depth, push-back, drive-in/drive-thru, and flow rack. Reach trucks are used in narrow-aisle storage in single-depth, double-deep,

push-back, drive-in/drive-thru, and flow rack. Swing mast and turret trucks are used in very narrow aisle storage in single depth pallet rack. Regardless of the product handled, or the picking method and equipment used, locating product by the frequency of picks should be incorporated into the system design. The fastest moving product should be stocked as close to the pick point as possible and at the levels that are easiest to pick from. Even if you are using an ASRS unit, the retrieval time will be less the closer the location is to the pick point, and in a horizontal carousel, the picking time will be less if the order picker does not need to bend down or reach up to pick. In fixed location picking, you designate a specific picking location for each SKU. Fixed picking locations are most commonly used in piece-pick operations; however, they may also be used in case picking and pallet picking where rack flow is incorporated. Slotting in fixed picking locations needs to be reviewed on a regular base to ensure high levels of productivity. The frequency of review will depend upon product life cycles and seasonality. location to the pick point. Operations using fixed picking locations will generally also have a reserve or overflow storage area. The overflow storage area will usually use a system of random storage. A replenishment system will need to be put in place to move product to the fixed picking locations as inventory levels drop to predetermined levels. Outbound shipments should always have some type of a check in place. The type of check will vary from operation to operation. In a high-volume lowvalue shipping operation, a simple "looking over" the shipment may be all that's feasible, while in a lower-volume high-value shipping operation, I've had as In random storage operations, a WMS system can direct fast movers to the closest open

many as three people performing redundant checks of each shipment prior to loading. Extensive data analysis is necessary in determining the best methods for order picking. Historical data on picks per SKU, quantity per pick, picks per order, total picks, total orders, orders received by time of day, etc. will be important in not only the initial plan, but also in the ongoing operation of the system. It will also be very important to project growth, especially in automated systems. While you can throw more people into a manual system when transactions increase, automated systems such as carousels and ASRS units will have capacity limits. Order-picking systems can be very simple systems in small operations or become very complex systems using a little bit of everything. In a large operation you may have totes start as batch pick in a carousel picking area for your medium moving piece-pick items, and then move individually to a manual picking area for slow moving small-parts piece picking out of static shelving (possibly in a mezzanine). Then move to a carton-flow rack area for your fastest moving items, and finally to a shipping staging/consolidation area where it is matched up with cases and bulkier items from a case-pick ASRS unit and full pallets from a racked warehouse.

Order Picking Operations in Warehouse Systems

Order picking operations in warehouse systems Designing a warehouse and defining the type of appropriate warehouse equipment is a complex decision process, being a long-term strategic decision. Between the other functions like receiving and checking, storage, packing and

shipping the orders, an important function in designing a warehouse is represented by the picking process. Developing an effective order picking operation and enhancing this in pick accuracy and speed, need to integrate new technologies combined with the adequate methods for picking the products. The classical warehouse becomes more and more a sophisticated place, determined by, the large number of problems, types and demands of customer services. An important function in designing a warehouse is represented by the picking process, between the other functions like receiving and checking, storage, packing and shipping the orders.

Key Factors In Warehouse Design Designing a warehouse and defining the type of appropriate warehouse equipment is a Complex decision process, being a long-term strategic decision. In this process, collecting Operation data is often the first step, database development being the most important part of any warehouse sizing and design process. Warehouse activity profiling is the analysis of historical sales transaction data for the purposes of projecting warehouse activity and determining storage mode, physical layout, work flow processes, and labor and equipment requirements. Using this data, the company can examine the volume of receipts and shipments, the characteristics of those shipments, projecting inventory levels, plan the number of SKU along with the associated cube, velocity, seasonality, and inventory handling characteristics that are all critical to the design, inbound shipment characteristics, number of orders per day, lines per order, and pieces per line. When designing a warehouse, the key factors need to be considered in determining the best solution between a manual or automated solution, are:

i. ii. iii.

The characteristics, size and weight of products; The product activity, the cubic velocity of a product; For storage systems, the choice is determined by the type of load units, range of products, quantity of loads for each SKU, movement rates of load units;

iv.

In the case of picking methods it is necessary to take in consideration the total number of orders, total number of transactions, the characteristics of product being value added processes and the type of pick; handled, picks per order, quantity per pick, picks per SKU, the number of SKUs, the

v.

For selecting the material equipment, directly related to the layout and selected Storage system, it has to consider factors such as product weight and volume, product fragility, productivity rates of different type of equipments and health and safety legislation;

vi.

Outlines the key principles including optimization of space, flow of materials and equipment, types of storage i.e. bulk vs. small parts etc. and appropriate combinations of Storage and handling equipment, different types of warehouses etc.

vii.

Establishing the best combination of handling and storage equipment

viii.

Outline of the key principles of warehouse automation and mechanization and key factors that influence the decision to automate a warehouse.

As general rules, it can be established two or three designing alternatives. It is recommended that these alternatives to include a simple conventional

system, a system with medium mechanization level and a system with high mechanization, automation level and technology. The growth in mechanization degree is justified for the products with high speed. Invariably, a single designing approach is not applicable for the entire range of products. To select the final option it is necessary to analyze also, the operation and investment costs, another costs involved, rate of investment recovery, the advantages and drawbacks of different alternatives, factors such as extension capacity, adaptability and simplicity of solutions. The selected elements have different influences on the overall solution. More automation may reduce the labor cost, but increase the investment cost. More storage zones may improve the space utilization, but require more control. Zone picking may improve the productivity of the stock selectors, but require more planning and control of picking. For these reasons, it could be useful to develop an optimization model that would consider the tradeoffs between all the available options and select the decisions leading to the best solution, according to the specified criterion.

Order Picking Operations Order picking processes, in classical, traditional variant, suppose the existence of some Collectors, persons who pick out the articles from storage places, based on a picking list. The process of data introduction in an informatics system is manual, like the picking process of different articles. Automatic picking of products supposes a series of methods which offer picking tools, as well as data obtained based on developing informational and communication technologies. To develop an effective order picking operation it is necessary to take in account the activity profiling, which consists in defining the product movement in terms of lines, cases or units picked. This process is essential in the present conditions, when the customers require smaller and more frequent orders.

Related to effectiveness of order picking, an important step is the selection of the most adequate picking equipment and technology. When it is involved in broken case picking, most commonly picking equipment could be static shelving, carton flow rack, vertical or horizontal carrousel, as well as mini load ASRS or automated conveyor and sorting systems. Piece picking is used especially by e-commerce or mail catalogue companies and spare parts distributors. Case picking operations know also, a large series of picking equipment, like pallet racking, configures in wide or narrow-aisle type, carrousels, automatic storage and retrieval systems. For mail order and Internet ordering for books and media, a particular picking system can be used, known as forwarding picking. This consists in a group of picking stations or access point for pickers picking from walk through shelving. A conveyor system links all the stations and the WMS controls the sequence that the product moves through the system. The effectiveness of picking can be improved using advanced picking technologies, including radio frequency terminal systems, wireless speech technology and pick/put-to-light systems. In designing an order picking process it is useful to take in considerations an effective slotting strategy, calculating the number of facings or locations required for each product. Also, it cant be neglected how the products are stored. The layout and pick zone design should be integrated with the inbound and outbound flows of products. The picking methods are established taking in account the characteristics of handled products, the number of orders and picks per orders, as well as the pick type. There is a large variety of methods in this field, from single order picking, zone and batch picking, to combinations of these and innovative methods, like cluster picking, wave picking, zone-batch wave picking. For example, batch picking is one of picking method based on the following principle:

The collection of all order within a batch in a single pass of the order picking which uses a consolidated pick list, the operator picking one group of a group of orders at the same Moment this method has two alternatives: i. The picking of products into a common tote and further manual sorting and packing at a pack station ii. Collection in different totes of the line items for transport to an automatic sorter Batch picking is a method that can be used in a single pick zone or across multiple picking zones. Cluster or Multi-order Picking is derived from discrete picking, but the difference is that the operator picks all the products for a group of orders. The collector picks the clustered line in different, distinct totes or cartons on the picking trolley. The advantage of this method is that when are reduced number of picks per order, it is possible to reduce significantly the travel time. Zone-Batch-Wave Picking can be considered a combination between Zone-Batch

Picking method and Wave-Picking method This method is based on the following principle: For each operator is assigned a zone and he collects all lines for the orders stocked in the assigned zone. In addition, he picks more than on order at a time. It is taking in consideration multiple scheduling periods per shift. In designing an order picking system the importance of selecting the right material handling equipment cannot be overstated. In this process, it has to take in account a series of factors direct related such as product weight and volume, the fragility of products, health and safety legislation, productivity rates. As consequence, this equipments for handling and transport of picked products, is

specialized for small and low cube items, like trolleys and conveyors, and equipments for large and high cube items. Key objectives in the process of design an order picking operation are represented by the increases in productivity, measured in pick rate, increasing in accuracy and reduction of cycle time. Regarding the accuracy of this process, the development of technologies, like barcode or RFID scanners, pick-to-lights systems, coupled with training and monitoring through specialized systems has a positive impact on accuracy. In designing a warehouse, between typical warehouse functions, an important role has, the order picking process in improving the warehouse performance. Developing an effective order picking operation and enhancing this in pick accuracy and speed, need to integrate new technologies combined with the adequate methods for picking the products. Benchmarking and Monitoring International Warehouse Operations in Europe We report on a cross-sectional and longitudinal comparison of European distribution centers in the Netherlands. European distribution centers are responsible for the distribution of a manufacturer's (mostly Asian or American) products over customers in a large part of Europe, the Middle East, and Africa, often with strict service-level agreements. In total, 65 physical warehouses, containing 140 European, Asian, and American European distribution center operations, in combination with different outsourcing relations (own-account, dedicated outsourced and public outsourced), were benchmarked in 2000 and monitored over the period 2000-2004. We conclude that both in 2000 and 2004, European warehouses are more efficient than Asian and American warehouses, and outsourced operations (particularly public warehouses) are more efficient than own-account operations. Over the period 2000-2004, efficiency appears to have declined substantially; the most distinct differences are to be found among public outsourced warehouses and, because many European

distribution center warehouse operations of European origin are run by public service providers, among European warehouses. This decline in efficiency also led to a decline in productivity, in spite of the fact that overall the available technology has improved. We conjecture potential causes for this decline. Benchmarking is essentially the process of identifying the highest standards of excellence for products, services, or processes, and then making the improvements necessary to reach those standards, commonly called "best practices." The justification lies partly in the question: why reinvent the wheel? Many of the Fortune 500 companies use benchmarking on a regular basis (Bhutan and Huq 1999). However, benchmarking operations is not an easy business. Usually, a number of management ratios and other performance indicators are used for comparison. In warehousing, commonly used ratios and indicators include cases or order lines picked per person per hour, picking or shipment error rates, order throughput times, percentage of orders with special requests, etc. (Forger 1998, Van Goor et al. 2003). The problem with these indicators is that they are not mutually independent and that each of them depends on multiple input indicators. The number of order lines picked per person per hour may be strongly influenced by system automation, the assortment size, and the size of the warehouse. One way to overcome this is to look at the operation's efficiency. Commonly, the efficiency of an operation is defined as a weighted sum of output indicators divided by a weighted sum of input indicators. The problem in this approach is to express the numerator and the denominator in the same unit and to determine the weights. This problem can be tackled by employing data envelopment analysis (DEA) (see Cooper et al. 2004). With DEA it is possible to measure the relative efficiency of a set of comparable decision-making units. A partial list of the many applications since its inception in 1978 is provided by Coelli et al. (2003).

This study describes an attempt, based on DEA, to assess efficiency and efficiency change of European distribution centers (EDCs): warehouses that are primarily responsible for the distribution of a multinational's products over at least five countries within the EMEA region (Europe, Middle East, and Africa). DEA is particularly appropriate for this evaluation because it integrates a variety of performance metrics and provides a structured method for evaluating warehouse performance. EDCs form the heart of the European supply chains of international (mostly American and Asian) manufacturers. These centers not only have a stock keeping responsibility but also have a prime responsibility to organize the supply chain between international suppliers and customers in the EMEA countries. Within Europe, the Netherlands has a dominant market share of EDCs. In 1997, nearly 550 EDCs were located in the Netherlands. This is more than half of all the EDCs in Europe (BCI 1997). According to Kuipers (1999), the number rose to 600 in 1999. Although we carried out survey research mainly among the Netherlands' EDCs, the EDC population in the Netherlands is sufficiently representative for the total population to develop generalizing statements about the efficiency of EDCs located in Europe. This study focuses on the efficiency of the internal operations, which are compared for two periods: the years 2000 and2004. We explicitly do not look at company or supply chain benchmarking. We have restricted ourselves to performance variables that can directly be influenced by warehouse management, albeit that some are design related and can therefore only be changed in the long run. For this reason, we exclude input and output variables of a financial nature (warehouses incur costs but are not responsible for sales) or variables measuring inventory turnover (the levels of which are determined by the company strategy). The organizations behind EDCs are all multinationals, many of them with multiple facilities worldwide. Benchmarking such

organizations is difficult, because results are only meaningful for comparable organizations and the unit of analysis cannot be defined unequivocally. Also, reliable results could only be obtained with a sufficiently large sample of such comparable organizations, which is very hard to realize. Inventory and Warehouse Management Processes in the area of Inventory Management address the recording and tracking of materials on a quantity and value basis. This includes planning, entry, and documentation of stock movements such as goods receipts, goods issues, physical stock transfers, and transfer postings as well as the performance of physical inventory (stocktaking). Warehouse Management Processes cover warehouse-internal movements and storage of materials. Warehousing and Storage Inventory Management Manages the stocks of a company in quantities and values. It is integrated with supply chain accounting and is responsible for goods receipts and goods issues, and for managing different stock categories (available, blocked stock, in quality assurance, and so on) and special stocks (including consignment stock, project stock, and so on). Enables a summarized visibility of stocks in the supply chain. Strategies SAP Warehouse Management allows you to manage your material flow, using advanced putaway and picking strategies. In the standard system, these strategies for putaway include random putaway (next empty bin), bulk storage, fixed bin, or addition to stock. The picking strategies include standard strategies first-in first-out (FIFO), last-in first-out (LIFO), picking by shelf life expiration date

(SLED), or partial quantities first. For customer-specific strategies, solutions can be self-defined in user exits. Production Supply The material supply of storage bins in production can be handled with SAP Warehouse Management. Picking for work orders is supported by advanced strategies and combined with handling unit management. It is possible to pack for a specific work order. Task & Resource Management Controls the tasks in the warehouse and optimizes the sequence in which the tasks are executed. It ensures that, in the warehouse, the right task is processed by the right resource at the right time. Helps minimize the routes in the warehouse. Is easy-to-handle and seamlessly integrates into the SAP Logistics Execution System.

Radio Frequency/Bar-coding SAP provides direct radio frequency (RF), allowing the use of mobile RF terminals and handhelds with scanning devices. This enables immediate and error-free data transfer -- setting a high standard of quality for warehouse transactions. The character-based or graphical terminals and handhelds receive data directly from the SAP system without using a middleware product and transfer results immediately to wherever they are needed. The configurable barcode setup allows you to use barcode standards (for example, EAN128 or SSCC) as well as any defined barcode systems you define yourself. Handling Unit Management

You can use handling unit management (HUM) to reflect packing-based logistics structures in SAP ERP. In SAP Warehouse Management, you can use handling units to process warehouse movements, such as putaway, picking, or stock transfers. Furthermore, handling units can be created in the warehouse, labeled, and picked for existing deliveries. HUM allows you to uniquely identify packages, for example, pallets, in the warehouse and throughout the supply chain. This includes EAN128 and SSCC18 labeling. The handling units can be nested and packed with different materials or batches.

Storage and Stock Management Serial Numbers: Handling unit management makes serial numbers known in the warehouse. Batch Management: Batch management is integrated into all SAP WM processes. This includes the handling of batches and batch determination for delivery picking, for production supply, or in internal warehouse processes. Also, active ingredient processing is integrated into the batch determination process in SAP WM.

Hazardous Materials: Although many materials that are classified as dangerous can be placed into storage along with other goods, some require special handling and placement into specially designed storage facilities. Some examples of these materials include explosives, petroleum fuels and oil, poisons, corrosive liquids, and radioactive materials. SAP WM is designed to manage the handling and storage of hazardous materials. Quality Management Integration

SAP Warehouse Management is integrated with quality management (QM), thus allowing warehouse administrators to manage and track inspection lots that are stored in the warehouse. Visibility Warehouse Activity Monitor: The warehouse activity monitor helps a manager oversee, plan, and optimize work processes in the warehouse. It provides a tool to notify those responsible if there are delays or errors in the overall system. The warehouse activity monitor also helps to identify and correct warehousing problems or critical processes soon after they occur. Radio Frequency (RF) Monitor: The monitor for RF activities lets you display the current workload and resource capacity in the entire warehouse. A graphical tool that gives an overview of the current workload status in the groups that workers are assigned to, it enables a warehouse manager to easily access and influence the work process by redistributing tasks between different work groups and prioritizing the tasks within a group. Task Monitor (available with task and resource management): The task monitor allows you to manage and control the resources and tasks in a site. It enables a manager to influence the allocation of tasks to different resources and to perform various operations (tasks and resources, for example). Compared to the RF monitor, the task monitor drills down to a more detailed view of tasks (such as picking, packing, and weighing) that can be generated from different SAP enterprise documents. Decentralized Warehouse Customers can decide to use SAP WM as a stand-alone system, connected with a central ERP system. This interface is also available as a standard interface for the connection of certified partner WM systems. The

system distributes master data and inbound/outbound deliveries automatically. All quantity-related processes, physical movements, and picking/packing operations are handled in the decentralized WMS. All financial- based functions (such as valuation, credit limit check, and ATP) are handled in the central system. An enhancement of the system communication covers the changeability of deliveries triggered centrally. Automated Workload Release Supports the control and timing of activities in the warehouse, based on progress control and the time it takes to pick, pack, and move the demanded goods to the outbound area. Activities of several picking groups can be monitored through the physical goods movement processes. Physical Inventory Manages physical inventory for your organization's own stocks or for special stocks in your warehouse. The following physical inventory procedures are supported:

Periodic inventory Continuous inventory Cycle counting Inventory sampling

Physical inventories for legal reasons, for balance sheet purposes, or for internal controlling reasons are also supported.

Planning Phase of Physical Inventory

The physical inventory process can plan which material has to be counted at which storage location on which date. Stocks can be blocked for goods movements before the beginning of counting, measuring, and weighing.

Counting Phase of Physical Inventory RF transactions support stock counting. After the results have been entered, you can monitor the differences and trigger a recount if necessary. If you post quantity differences for your locations, an update of the material valuation and financial accounting is triggered automatically.

Monitoring of the Physical Inventory Activities Detailed functions for monitoring the completeness of the physical inventory, the status of open and completed physical inventory activities, and the results of historical physical inventory activities are available. You can monitor the activities on material or location level.

Dependent Vs. Independent Demand Inventory Some inventory items can be classified as independent demand items, and some can be classified as dependent demand items. While we need to make the timing and sizing decisions for all inventory items, we must be careful in the manner in which we make those decisions for these two types of items.

Independent demand inventory item: Inventory item whose demand is not related to (or dependent upon) some higher level item. Demand for such items

is usually thought of as forecasted demand. Independent demand inventory items are usually thought of as finished products.

Dependent demand inventory item: Inventory item whose demand is related to (or dependent upon) some higher level item. Demand for such items is usually thought of as derived demand. Dependent demand inventory items are usually thought of as the materials, parts, components, and assemblies that make up the finished product.

Types of Inventory Raw materials Inventory: This consists of basic materials that have not yet been committed to production in a manufacturing firm. Raw materials that are purchased from firms to be used in the firm's production operations range from iron ore awaiting processing into steel to electronic components to be incorporated into stereo amplifiers. The purpose of maintaining raw material inventory is to uncouple the production function from the purchasing function so that delays in shipment of raw materials do not cause production delays.

Stores and Spares: This category includes those products, which are accessories to the main products produced for the purpose of sale. Examples of stores and spares items are bolts, nuts, clamps, screws etc. These spare parts are usually bought from outside or some times they are manufactured in the company also.

Work-in-Process Inventory: This category includes those materials that have been committed to the production process but have not been completed. The

more complex and lengthy the production process, the larger will be the investment in work-in-process inventory. Its purpose is to uncouple the various operations in the production process so that machine failures and work stoppages in one operation will not affect the other operations.

Finished Goods Inventory: These are completed products awaiting sale. The purpose of finished goods inventory is to uncouple the productions and sales functions so that it no longer is necessary to produce the goods before a sale can occur.

Uses of Inventory Anticipation Inventory or Seasonal Inventory: Inventory are often built in anticipation of future demand, planned promotional programs, seasonal demand fluctuations, plant shutdowns, vacations, etc.

Fluctuation Inventory or Safety Stock: Inventory is sometimes carried to protect against unpredictable or unexpected variations in demand.

Lot-Size Inventory or Cycle Stock: Inventory is frequently bought or produced in excess of what is immediately needed in order to take advantage of lower unit costs or quantity discounts.

Transportation or Pipeline Inventory: Inventory is used to fill the pipeline as products are in transit in the distribution network.

Speculative or Hedge Inventory: Inventory can be carried to protect against some future event, such as a scarcity in supply, price increase, disruption in supply, strike, etc.

Maintenance, Repair, and Operating (MRO) Inventory: Inventories of some items (such as maintenance supplies, spare parts, lubricants, cleaning compounds, and office supplies) are used to support general operations and maintenance.

Objectives of Inventory Management There are three main objectives of inventory management, as follows: Provide the desired level of customer service: Customer service refers to a

companys ability to satisfy the needs of its customers. There are several ways to measure the level of customer service, such as: (1) percentage of orders that are shipped on schedule, (2) the percentage of line items that are shipped on schedule, (3) the percentage of dollar volume that is shipped on schedule, and (4) idle time due to material and component shortage. The first three measures focus on service to external customers, while the fourth applies to internal customer service. Achieve cost-efficient operations: Inventories can facility cost-efficient

operations in several ways. Inventories can provide a buffer between operations so that each phase of the transformation process can continue to operate even when output rates differ. Inventories also allow a company to maintain a level workforce throughout the year even when there is seasonal demand for the companys output. By building large production lots of items, companies are able to spread some fixed costs over a larger number of units, thereby

decreasing the unit cost of each item. Finally, large purchases of inventory might qualify for quantity discounts, which will also reduce the unit cost of each item. Minimize inventory investment: As a company achieves lower amounts of money tied up in inventory, that companys overall cost s tructure will improve, as will its profitability. A common measure used to determine how well a company is managing its inventory investment (i.e., how quickly it is getting its inventories out of the system and into the hands of the customers) is inventory turnover ratio, which is a ratio of the annual cost of goods sold to the average inventory level in dollars. http://www.google.com.ph/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ca d=rja&ved=0CEYQFjAE&url=http%3A%2F%2Fsite.nimonweb.com%2Felearning%2Fupload%2FWARE-HOUSEMANAGEMENT.doc&ei=6Q9RUq3HDYm3rAeQg4G4Dw&usg=AFQjCNGQJBfAZ3 QlLnv1RHuWgLlv0BXF5w&bvm=bv.53537100,d.bmk

COMMON WAREHOUSING ISSUES

In todays materials handling industry, it is fundamental for companies to ensure the smooth running of their warehouses. Efficiency and organisation within every aspect of the business is essential in order to gain a competitive advantage. Today we will look at some of the most common warehousing issues and provide tips that will help in overcoming them. Problem: Insufficient Warehouse Space Providing an adequate amount of storage space and the correct planning of a warehouse is vital for the smooth running of a business. Disorganised warehouse spaces can cause unnecessary labour costs and the incorrect use of storage

systems and racking arrangements result in many companies finding their warehouse shelves full, with no space to receive new inventory. Solutions: Ensuring the most popular inventory is at the front of the warehouse, where it is readily available can save you a great deal of time through minimising travel in the warehouse. Employing narrow aisle equipment instead of counter balance machinery can increase your warehouse storage capacities. Narrow aisle reach trucks can increase warehouse storage by up to 30%, whereas in long load applications, multi-directional forklifts can increase storage by up to 40%. Utilising a professional forklift company to complete a site evaluation will allow you to gain the best equipment for your application and will ensure you are able to maximise storage space. Problem: Slow Picking Processes and Stock Discrepancies Every minute that is spent on each inventory item can add up over the day, therefore having a major impact on operating costs. When inventory location is not organised and easily available, pickers will take longer to find items that need to be shipped. This can ultimately lead to a backup in labour. Solutions: Bar code technology will eliminate multiple processes and human handling. Accurately tracking inventory will minimise any discrepancies in stocktaking and increase efficiency when order picking. Furthermore, employing handheld scanners to scan barcodes ensures that inventory is correctly identified at the time with minimal data entry errors.

 Sequenced order picking should also be considered. This gives employees a picking list, which sequences the visits to each picking location in the warehouse so overall travel time is minimised. With a more planned order picking process there will also be less wear and tear on your equipment along with a reduction in labour costs and time. Problem: Warehouse Slotting Problems Forklift operators often make multiple trips around the warehouse searching for slots in the storage racking for new inventory. This results in them slotting the pallet of inventory wherever they find an empty space. As the pallet family and size is not carefully considered in its allocation, you will eventually find a large amount of inventory slotted in an unorganised manner, with no room to reorganise due to limited warehouse space. Solutions: Pre-planning and organisation can prevent a warehouse from becoming disorganised, by identifying the most efficient location for all inventory, factoring in the products storage characteristics, family and supply needs. Re-consider your storage and racking systems for your particular warehouse needs and layouts. In previous blogs, we have discussed cantilever racking, powered mobile racking, double deep racking and drive in racking. http://www.aalhysterforklifts.com.au/index.php/about/blogpost/common_warehousing_issues

HOW TO LOWER YOUR MATERIALS HANDLING COSTS It has become more challenging in recent years to reduce the cost of materials handling without decreasing levels of productivity. A reduce in costs, means an

increase in profit, so it is therefore important to consider where you can save money. There are commonalities within many businesses, that when combined, lead to a serious loss of profit. In order to make improvements and further profit margins, it is important to consider, that one of the many benefits of improving efficiency within your business, is an increase in profit.

1. Choose application specific equipment It is important to buy equipment for the job at hand; this is significant in reducing overall costs. It is common for equipment to be used in applications in which it was not designed to be used. Work with professionals who are able to survey your applications to ensure that you are using the right equipment for each job. Using the correct equipment with the right specifications means efficient and productive results. 2. Choose the right service provider Before choosing a service provider, you must establish a consistent performance expectation. Ensure you are aware of the following: How often the technicians are trained Parts and labour rates Potential costs for a service technicians time in transit If they have GPS tracking A good service provider will know the whereabouts of each technician and will be able to dispatch the closest one in order to save their customer time and money.

3. Invest in a robust training program OSHA requires operator safety training and a daily inspection of equipment is one of their requirements. Many companies train their operators regarding safe operation, although, more often than not, this is where the training stops. If you invest in the training of your employees, to perform daily inspections and to know what to look for, you will see results. This ensures that any equipment that is in need of repair will stay off the operating floor and that small repairs will be handled before they become a major problem. 4. Reduce shift overlap Ensure that shift overlap remains at a minimum. If a business ran two shifts, five days per week with 30 operators on each shift, then two-hour overlaps of 15 operators automatically requires them to have 45 lift trucks. If there were no overlap, the business would have been able to cut that by 15 trucks. In one year, you would see a 10-45% decrease in costs. 5. Choose the right tyre for your forklifts It is easy to overlook the tyre in regards to reducing overall material handling costs. However, choosing the wrong tyre can result in a dramatic increase in fleet operating costs, as well as increased safety risks. A properly chosen tyre can last up to 40% longer. When choosing the correct tyre, aspects you must consider are: The weight of the load The type of surfaces you are operating on If the forklift is used for multiple shifts What percent of time the forklift is loaded The average speed/top speed of the forklift

If you are evaluating tyres for more than one forklift, you must be prepared to answer questions for each unit. 6. Work with a single source dealership The more work you are able to assign to a qualified and reliable supplier, the fewer calls you will have to make. In turn, the supplier will become familiar with your equipment, facility and applications. Using one company, that provides everything, from fleet management to maintenance, results in greater efficiencies for you. This allows your supplier to gain a better understanding of your operation and make logical decisions that can reduce your costs, increase your efficiency and improve your bottom line. 7. Planned maintenance You should be able to work with your service provider to determine appropriate intervals for planned maintenance. Many businesses schedule their planned maintenance based on the calendar. However, in actuality it can make more sense to schedule planned maintenance based on the hours of use. It is also important to note that before the technician begins work, a quick exchange of information can save thousands. This will allow the technician to have a better understanding of the trucks history and how they are able to complete repairs. Reducing materials handling costs can improve efficiency when improvements are implemented correctly. It is important to ensure that you do not reduce costs, through cutting corners and to realise that a safe and smart operation results in an increase in profits.

http://www.aalhysterforklifts.com.au/index.php/about/blogpost/how_to_lower_your_materials_handling_costs OBJECTIVES OF MATERIAL HANDLING Material handling relates to the loading, unloading and movement of all types of materials. Today, we have numerous ways by which material handling is done and it is generally classified according to the type of equipment used. Material handling may involve as much as 50 percent of the total production cost of a business's goods. Hence, the objectives of material handling become crucial to the organization. Cost Reduction

One of the main objectives of material handling is the reduction of production cost. Material handling can constitute as much as 50 percent of total product cost and effective handling of materials can help minimize this cost. When handling costs are reduced the overall unit cost is reduced as a direct result. Sophisticated management theories, including just-in-time production and supply chain management are primarily concerned with materials handling.

Increasing Warehouse Capacity

When materials are not stored correctly in a warehouse, much of the facility is being wasted. This wastage adds to the cost of the product. Focusing on efficient storage in terms of cubic as well as floor space becomes important. Minimizing aisle space is also necessary with respect to increasing the amount of storage space. In both cases effective use of material handling will help to reduce warehousing cost of materials.

Improving Layout to Reduce Waste

A complete analysis of the flow of materials between operations, volumes, flow paths and timing is a must for efficient material handling. When space requirements are optimized and travel times reduced through the use of efficient handling systems and equipment, material handling becomes more cost effective. Further, this will lead to enhanced productivity.

Optimal Equipment Utilization

Expensive equipment often fails to operate at full potential simply because the material handling system does not permit it to. For example, the rate at which materials are supplied or removed could cause a drop in equipment performance by simply leaving it standing idle. With a proper material handling system in place or more efficient control of an existing system, equipment utilization can soon be maximized.

Increasing Safety

Safety in any organization is a primary concern and an efficient material handling system can make a direct contribution to the safety of workers, materials and associated equipment. With an efficient system in place, accident costs, lost time and damage to materials, among other things, can be reduced.

http://www.ehow.com/info_8061689_objectives-materialhandling.html#ixzz2gvW2YDHX WAREHOUSING

Warehousing has long been a global industry; warehouses are integrally linked to commerce and transportation of goodsby rail, sea, air and road. Warehouses may be classified by the type of products stored: food products stored in dry, chilled or frozen sections; clothing or textiles; construction equipment or materials; machinery or machine parts. In the United States in 1995, for exemple, 1,877,000 workers were employed in trucking and warehousing (BLS 1996); this statistic cannot presently be disaggregated into workers by warehouse type or category. Warehouses might sell directly to external (retail) or internal (wholesale) customers, and the quantities retrieved for customers may be either full-pallet or less-than-full-pallet (one or more cases selected from a single pallet). Mechanical means (fork-lifts, conveyors or automatic storage and retrieval systems (AS/RS)) may be used to transport fullpallet or less-than-full-pallet loads; or workers, working without pallet movers and conveyors, may manually handle stored materials. Regardless of the nature of the business, the products stored or the mode of transportation servicing the warehouse, the basic layout is quite uniform, although the operational scale, terminology and technology will likely differ. (For additional information on AS/RS in warehousing, see Martin 1987.) Products are delivered by shippers or suppliers to a receiving dock, where they are then entered into either a manual or computerized inventory system, assigned a storage rack or slot l ocation (an address) and then transported to that location, usually by mechanical means (conveyors, AS/RS, fork-lift trucks or tractors). Once a customer order is received, the desired containers or cases must be retrieved from their slot location. Where full pallets are retrieved, mechanical means (a fork-lift or tractor operator) are used (see figure 1). When less than a full pallet load (one or more cases from a rack or slot) is to be retrieved, manual material handling is required, using a worker called a selector, who will choose the desired number of cases and place them either onto a mechanical pallet mover, a push cart or a conveyor. The individual customer

order is assembled onto a pallet or similar container for shipment to the customer; a label, tag or other mark containing invoice/billing and/or routing instructions is then applied. This task may be performed by the order selector or fork-lift operator, or, where conveyors are used to deliver single cases for final assembly, by an assembler. When the order is ready for shipment, it is loaded by mechanical means onto the truck, trailer, railroad car or ship. (See figure 2). Figure 1. A fork-lift truck in a warehouse in the United Kingdom being loaded with apples.

Figure 2. A dockworker in the United Kingdom using lifting machines to move quarters of beef.

Approximately 60% of the work activity in the warehouse is directly related to travel; the remainder relates to manual material handling. Aside from the important work of clerks, dispatchers, cleaners, supervisors and managers, the main work of the warehouse relating to the transporting and handling of goods is performed primarily by two classes of workers: fork-lift operators and selectors. Intense worldwide competition and the rapid entrance of new firms have created the drive for increased labour and space efficiency, spawning a new discipline called warehouse management systems (WMSs) (Register 1994). These systems are becoming increasingly less expensive and more powerful; they rely on computer networks, bar coding, computer software and radio-frequency communications systems to vastly increase management and control of warehouse inventory and operations, allowing warehouses to improve customer order response times and responsiveness while dramatically increasing inventory accuracy and reducing costs (Firth 1995). WMSs essentially computerize inventory and order dispatch systems. When incoming product from a supplier or shipper arrives at the receiving dock, bar code scanners record the product code and name, instantly updating the inventory database while assigning the incoming product an address in the warehouse. A fork-lift operator is then alerted to pick up and deliver the stock via a radio-frequency communications system mounted on the vehicle. Orders from customers are received by another computer program which looks up the product address and availability of each item ordered in the inventory database and then sorts the customer order by the most efficient travel path to minimize travel. Labels with the product name, code and location are printed out for use by the order selectors who must then fill this order. While these features clearly help improve customer service and improve efficiency, they are important preconditions for engineered work standards (EWSs), which may pose

additional health and safety hazards for both fork-lift operators and order selectors. Information about each orderthe number of cases, travel distances and so onwhich is generated by the order dispatch programme can be further combined with standard or allowed times for each activity to calculate an overall standard time for selecting a particular customer order; it would be extremely time-consuming and difficult to retrieve this information without the use of the computer hardware and databases. Computer monitoring can then be used to record the elapsed time on each order, compare the actual with the allowed time and then compute an efficiency index, which any supervisor or manager can look up by pressing a few computer keys. Warehouse EWSs have spread from the United States to Australia, Canada, the United Kingdom, Germany, Austria, Finland, Sweden, Italy, South Africa, the Netherlands and Belgium. While WMS systems themselves do not necessarily add safety and health hazards, there is considerable evidence to suggest that the resulting increased workload, lack of control over work pace and the impact of increased frequency of lifting contribute significantly to increased injury risk. In addition, the time pressure imposed by work standards may force workers to take risky short cuts and not utilize proper safe work methods. These risks and hazards are described below. Hazards In the most basic warehouse, regardless of the level of technology and computerization, there are a myriad of basic health and safety hazards; modern WMSs can be linked with a different order of health and safety hazards. Basic health hazards begin with potentially toxic materials which may be stored in warehouses; examples include petroleum products, solvents and dyestuffs.

These require proper labelling, employee education and training and an effective hazard communication programme (including MSDSs) for all affected workers, who often know little about the health effects of what they are handling, much less proper handling, spill and clean-up procedures. (See, for example, the ILO Chemicals Convention, 1990 (No. 170), and Recommendation, 1990 (No. 177).) Noise may be present from gasoline or LP-powered fork-lifts, conveyors, ventilation systems and pneumatically-actuated equipment. Additionally, workers who operate such equipment may be subject to wholebody vibration. (See, for example, the ILO Working Environment (Air Pollution, Noise and Vibration) Convention, 1977 (No. 148), and Recommendation, 1977 (No. 156).) Both fork-lift operators and selectors may be exposed to diesel and gasoline exhaust from trucks at the loading and receiving docks, as well as from fork-lifts. Lighting may not be adequate for fork-lift and other vehicle traffic or for ensuring proper identification of products desired by customers. Workers assigned to work in cold and frozen storage areas may experience cold stress from exposure to cold temperatures and air recirculation systems; temperatures in many freezer storage areas can approach 20C, even without wind chill factors being considered. Moreover, since few warehouses are air conditioned during warm months, warehouse workers, particularly those performing manual material handling, may be exposed to heat stress problems. Safety hazards and risks are also many and varied. Besides the more obvious hazards evident when pedestrians and any motor-driven vehicle are put into the same work area, many of the injuries occurring among warehouse workers include slips, trips and falls from floors not kept free of ice, water or spilled product or that are poorly maintained; a number of injuries involve fork-lift operators who slip or fall while mounting or dismounting their fork-lift trucks.

Workers are often exposed to falling product from overhead racks. Workers may be caught in or between fork-lift masts, forks and cargo, resulting in serious physical injury. Wooden pallets handled by workers often result in exposure to slivers and related puncture wounds. Using knives to cut apart boxes and cases often results in cuts and lacerations. Workers who move boxes or containers on or off conveyors may be exposed to in-running nip points. Selectors, assemblers and other workers engaged in manual material handling are exposed to varying degrees of risk of developing low-back pain and other related injuries. Weight-lifting regulations and recommended methods for materials handling are discussed elsewhere in the Encyclopaedia. Recordable injuries and lost workday cases in the US warehouse industry, for example, are considerably higher than those for all industry. Data regarding injuries (and particular back injuries) among grocery order selectors, the group at greatest risk from lifting-related injuries, are not available on a national or international scale. The US NIOSH, however, has studied lifting and other related injuries at two grocery warehouses in the United States (see US NIOSH) and found that all order selectors have an elevated risk for musculoskeletal disorders, including low-back pain, because of the combination of adverse job factors, all contributing to fatigue, a high metabolic load and the workers inability to regulate their work rate because of the work requirements (NIOSH 1995). A comprehensive application of ergonomics to the warehouse should not be confined to lifting and to order selectors. A wide focus is required, involving detailed job analysis, careful measurement and assessment (part of the job analysis begins with the job safety analyses below). A more comprehensive look at the design of racks and shelves is required, as is establishment of a closer working relationship with suppliers to design or retrofit fork-lift controls to reduce

ergonomic risk factors (extensive reaches, foot flexion and extension, winging, awkward neck and body positions) and to design containers that are less heavy and bulky, with handles or grips to reduce lifting risk. Corrective Actions Basic health hazards Employers, workers and trade unions should cooperate to develop and implement an effective hazard communication programme which emphasizes the three following fundamentals: 1. adequate labelling of all toxic substances 2. availability of detailed MSDSs that provide more detailed information about health effects, fire, reactivity, PPE, first aid, spill clean-up and other emergency procedures 3. regular and relevant worker training in proper handling of these substances.

Lack of an effective hazard communication programme is one of the most frequent standards violations cited in this industry by the US Occupational Safety and Health Administration (OSHA). Noise and vibration from mechanical equipment, conveyors and other sources require frequent noise and vibration testing and worker training, as well as engineering controls where needed. These controls are most effective when applied at the source of the noise in the form of noise insulation, mufflers and other controls (since most fork-lift operators are seated on top of the engine, vibration and noise dampening at this point are generally most effective). Lighting should be checked frequently and maintained at levels sufficient to

reduce vehicle-pedestrian accidents and ensure that product identification and other information can be easily read. Heat (or cold) stress prevention programmes should be implemented for workplaces in warm and humid climates and for selectors or fork-lift operators assigned to cold storage or freezer rooms, to ensure that workers receive adequate breaks, fluids, training and information and that other preventive measures are implemented. Finally, where diesel or petroleum-based fuels are used, exhaust systems should be periodically tested for emissions of carbon monoxide and nitrogen oxides to ensure that they are within safe levels. Proper maintenance of vehicles and restricting their use to adequately ventilated areas will also help reduce the risk of over-exposure to these emissions. Safety hazards for fork-lift and vehicle operators Vehicle-pedestrian accidents are a constant risk in any warehouse. Pedestrian lanes should be clearly marked and respected. All vehicle operators should receive training in the safe operation of the vehicle, including traffic rules and speed limits; refresher training should also be considered. Mirrors should be installed at busy intersections or at blind corners to enable vehicle operators to check for traffic or pedestrians before proceeding, and operators should sound their horn before proceeding; back-up beepers or signals may also be considered. Dockplates from loading and receiving docks to the truck, railroad car or barge need to be sufficient to support the load and adequately secured. Table 2 gives a job safety analysis for fork-lift operators, with recommendations. Table 2. Job safety analysis: Fork-lift operator. Job elements or tasks Hazards present Recommended protective actions Mounting/dismounting Slipping/tripping on floor Proper maintenance and

fork-lift

(grease, water, cardboard) during mounting/dismounting; back or shoulder strain from repeated incorrect entry/exit and bumping head on protective structure

clean-up of floors, particularly in high-traffic areas; exercising caution when mounting/dismounting; using three-point method to get in and out of fork-lift cab, being careful not to bump your head on overhead protective structure: grasping the support beams for the overhead protective structure with both hands, placing the left foot into the foot-hold (if one is provided) and then pushing off with the right foot and levering oneself into the cab.

Driving with and without loads

Pedestrian traffic and other vehicles might cross path suddenly; inadequate lighting; noise and vibration hazards; turning and twisting neck into awkward postures; steering may require wrist deviation, winging and/or

Slowing down in high traffic areas; waiting and sounding horn at all crossings with other aisles; exercising caution around other pedestrians; observing speed limits; ensuring proper lighting is provided and maintained

excessive force; brake and accelerator pedals often require awkward foot and leg posture together with static loading

through periodic inspections of illumination; installing and maintaining material that dampens noise and vibration on all vehicles and equipment; regular noise testing; operators should twist their upper torso at their waist, not at their neck, particularly when looking behind mirrors installed on the fork-lift and throughout the work facility will also help reduce this risk factor; purchasing, retrofiting and maintaining power steering and steering wheels which can tilt and raise to fit operators and avoiding winging; providing frequent rest breaks for recovery from static loading fatigue; considering redesign of foot pedals to reduce angle of foot (extension) and by hinging accelerator pedals to the

floor Raising or lowering forks with or without loads Leaning and twisting of neck in order to see load clearly; reaching for hand controls which may involve excess reach or winging Twisting or leaning from the waist, not from the neck; selecting fork-lifts which provide adequate visibility about the mast and which have hand controls within easy reach (located at side of operator, not on control console by steering wheel), but which are not so close or high as to involve winging; possibly retrofiting fork-lifts, with manufacturers permission. Filling gas tanks or changing batteries Changing LPG or gasoline tanks or batteries may require excessive and awkward lifting Using at least two employees to lift, or using a mechanical hoist; considering redesign of fork-lift to facilitate a more accessible location for fuel tank

Implementing ergonomic solutions will require closer coordination with fork-lift and vehicle manufacturers; relying solely upon operator training and traffic rules will not eliminate hazards by itself. In addition, safety and health regulatory agencies have prepared mandatory standards for the design and use of fork-

liftsfor example, requiring overhead guards to offer protection against falling objects (see figure 3). Figure 3. An overhead guard fitted to a fork-lift truck.

Safety hazards for order selectors Table 3 is a job safety analysis listing most of the corrective actions necessary to reduce the safety and lifting hazards for order selectors. However, just as improved fork-lift design to reduce ergonomic risk factors requires closer coordination with vehicle manufacturers, reducing safety and lifting hazards for order selectors requires similar coordination with designers of racking systems, consultants who design and install warehouse control systems and engineered standards systems and the vendors who store their products in the warehouse. The latter can be enlisted to design products that are less bulky, weigh less and have better handles or grips. Rack manufacturers can be very helpful in designing and retrofitting rack systems which allow the selector to stand upright during selection. Table 3. Job safety analysis: Order selector. Job elements or tasks Hazards present Recommended protective actions

Mounting/dismounting pallet jack

Slipping/tripping on floor (grease, water, cardboard) during mounting/dismounting

Proper maintenance and clean-up of floors, particularly in high-traffic areas; exercising caution when mounting/dismounting

Travel up and down aisles

Pedestrian traffic and other vehicles might cross path suddenly; lighting; noise

Slowing down in hightraffic areas; waiting and sounding horn at all crossings with other aisles; exercising caution around other pedestrians; observing speed limits; ensuring that proper lighting is provided and maintained; installing and maintaining material that dampens noise and vibration on all vehicles and equipment; regular noise testing

Select case from rack, walk to pallet, place case on pallet

Lifting injuries, shoulder, back and neck strain; bumping head on racks; heat stress; cold stress in freezer or cold rooms

Working in conjunction with vendors to reduce container weight to lowest possible levels and to install handles or better grips on bulky or heavy products; storing heavy products at knuckle height

or higher; not storing products to require significant lifting over the shoulder, or provide steps, stairs or platforms; providing turntable pallets which can be rotated when selecting products, to avoid stretching; modifying carts or pallet jacks to raise higher, to minimize bending and stooping when placing product on the cart or pallet jack; restricting the cube of the pallet so that over-theshoulder lifting is minimized; providing regular heat and cold stress monitoring; providing adequate fluids, conditioning programmes, clothing and frequent rest breaks Separate pallets to wrap, mark or drop off at loading docks Slipping/tripping on floor (grease, water, cardboard) during mounting/dismounting Proper maintenance and clean-up of floors, particularly in high traffic areas; exercising caution

when mounting/dismounting

Consultants who design and install warehouse control systems and engineered standards need to be more aware of the health and safety risks concerning the effect of work intensification on manual material-handling injuries. NIOSH (1993a, 1995) has recommended that more objective forms of determining fatigue allowance, such as oxygen consumption or heart rate, be used. They have also recommended that the height of the pallet being constructed (the cube) be limited to no more than 150 cm, and that there be an order break after one pallet has been assembled by the order selector, thus increasing the frequency of recovery periods between orders. In addition to more frequent breaks, NIOSH has recommended restricting overtime for workers based on engineered standards, considering worker rotation and installing light duty programmes for order selectors who return from injury or leave.

http://www.ilo.org/oshenc/part-xvii/transport-industry-andwarehousing/storage/item/947-warehousing

BEST PRACTICES FOR WAREHOUSING 13 TIPS FOR PRODUCTIVITY Improving a warehousing operation is a complex endeavor that can be approached from any number of angles. Here are 13 common actions you can consider in any warehouse improvement effort

1. Organize with care. Divide your facility by zones based on the pick type. This simplifies order picking and reslotting because similar items with similar storage and picking methods are grouped together. 2. Have real, actionable data. You cant make good decisions without it. Whether that means that you utilize real-time data capture systems such as RF, voice, RFID, or manual data gathering, you must understand whats happening from a high level to make effective changes. Do you utilize a WMS system? Does it provide good operational information you can parse? 3. Execute cycle counting operations to enhance inventory accuracy. You should work to create a culture of inventory control through a cycle counting process. Do it every day before orders start shipping. This sounds difficult, but accuracy, efficiency, and morale increases will be tangible. And its easier than it sounds. 4. Re-slot your pick positions as often as necessary. Up to 60% of a pickers daily activity can be involved in travel time (afoot or on a forklift or walkie), so reducing that time-spend is an excellent idea. A good product slotting strategy can reduce travel time thereby reducing picking labor. Always weigh the time and cost of a complete re-slot against the costs of it. Busy operations re-slot their fast moving, high-profit SKUs every day. Slotting the facility once and leaving it that way for years is typically a recipe for wasted time and money. 5. Automate where it makes sense but understand the ROI. Automation has become much more affordable the last decade or so in the face of just about everything else (labor, space, time) escalating. The idea of a robotic palletizer, automated stretchwrapper, or AS/RS system can be intimidating, but these methods are proven across every industry. For instance, robotic applications were once exclusive to manufacturing (in particular for welding in automotive manufacturing). Now, the same

technologies are frequently applied affordably to distribution, picking, packing, etc. But you must understand the payback, not just the benefits. The basic formula of replacing multiple shifts of workers with a $200,000 palletizer can be intimidating until you do the math. Does the robot cost more over its expected life than the labor does? One focus on automation can be for fast movers in standard sizes with high volumes. 6. Consider labor management tools to optimize performance. Labor management software can help you gain control of these costs and enable you to visualize, understand, and take command of the labor situation as it really is, not as you think it is. Handling labor resources correctly can be the difference between an adequate operation and a good oneor a good one vs. a great one. These tools are best applied in high-volume picks, not for bulk items where heavy machinery is required to deal with stock. 7. Define how to plan & pick orders in advance. What picking process are you going to use, where, and for when? See split case picking methods for more information. 8. Focus on Replenishment. This ties to slotting frequency and methodology, and is just as important as picking methods. Is inventory as easy to replenish as it is to pick? Putaway logic can help you define both the receiving process and stock locations. 9. Secure your operation. Studies have indicated that a secure supply chain is often a more efficient one. Check out our industrial security area for tips and information on warehouse and factory security. 10. Measure, measure, measure. Then do it againand ignore some of it. Dr. William Deming is often misquoted with the maxim that what cant be measured cant be improved. What he actually said was that managers must know the unknown and the unknowable. he acknowledges that you cant measure everything of importance, but you must still manage those

important things. For the things that are quantifiable, the quote still stands. Dont try to measure everything just the important things. 11. Dont work in the dark. Literally. Proper light distribution improves any operation. When a warehouse has rectangular rack rows and circular fixtures, visibility and light distribution suffers. Utilizing the correct lighting geometry can reduce picking errors on its own. Thats not to mention the energy saving benefits, tax breaks, and utility rebates that accompany (and often finance) energy-efficient lighting systems. 12. Hire an inventory manager. If your operation is of adequate size, taking that responsibility away from supervisors, customer service, or warehouse management may be one of the best ways to optimize the operation. A decision maker should be involved. 13. Train relentlessly, over and over to break bad habits and instill good ones. Employees need more training than the basics of how to run any machinery in their area, where things are, and their direct reports. How do you expect things to get done? What way does your company conduct business? What processes do you expect them to use? Whatever you teach new employees needs to be taught again and again to your veterans. This allows you to update skills for everyone and make sure your processes are always top-of-mind. Better yet, document that training and keep a file on it. Employees who are trained in safety operations are less likely to have accidents, and documentation proves that you did the training in case there is an incident. http://www.cisco-eagle.com/blog/2011/03/17/best-practices-for-warehousing13-tips-for-productivity

BEST PRACTICES IN MATERIAL HANDLING AND PUT-AWAY Most distribution professionals understand that it is not enough to know how their company performs year over year; they must also continue to improve their performance in order to stay ahead of their competition. Todays companies are in an environment where their customers continue to demand more instant availability, error free service, and customized products all at a lower cost. That is why many professionals look to adopt best practices as a way to drive improvement. In the last column, the first in a four-part series, we looked at picking and packing. This time well review key elements of the material handling and putaway processes. Material handling and the put-away function encompass all the processes that support the movement of material from the receiving area to the point of use or the storage location. Well highlight some of the common practices that best-in-class companies use within their warehouse to drive high productivity and lower costs. Material handling managing the movement of products throughout the warehouse can be as basic as using lift trucks and pallet jacks and as complex as employing fully automated systems that are made up of customized conveyor systems, automated guided vehicle systems (AGVS) and automated storage systems. Material handling can be enhanced when warehouse automation is used in line with a well thought out put-away processes. Best practice companies put in place flexible and efficient material handling processes that use appropriate automation and technology tools the meet the needs of their current and forecasted business. Common material handling automation includes radio frequency equipment in fork trucks and portable/hand held RF devices that direct warehouse personnel, automated conveyor systems with sorters and

diverters and automated storage and retrieval systems (AS/RS). Lets take a closer look at some of these automation options. RF equipment: Employing RF terminals in lift trucks and portable RF devices, which can be carried by employees, will boost productivity while reducing data entry errors. These devices when integrated with the warehouse management system (WMS) can send employees product move tasks and give information about the product that needs to be moved. Typically, systems are designed to work with bar coded labels or RFID tags. Automated conveyor systems: An automated conveyor system with sorters and diverters will route product to the appropriate put-away zones, reducing travel time and handling. Productivity and labor costs can be significantly improved by automation if the transit time from receiving areas to storage zones is considerable, or when product is moved and stored in case-size lots. Automated storage/retrieval systems: AS/RS benefits might include maximized storage space, increased put-away productivity, reduced warehouse labor and improvements to put-away accuracy. AS/RS technology is especially effective when working with narrow aisles and extremely high racks found in some larger high volume distribution centers (DC). While AS/RS solutions are capital intensive, they can be tremendously cost effective in the correct applications. Put-away practices Put-away is the process of moving material from the dock and transporting it to a warehouses storage, replenishment, or pick area. Best-practice companies manage the put-away area by calculating resource and space requirements based on expected receipts and current backlogs. Best practice is to put away product the same day its received, because not doing so affects space, causes congestion, increases transaction errors, and makes product more

susceptible to damage. In a busy warehouse, it is easy to let product put-away fall behind other tasks such as picking, replenishment, shipping, and loading. But pulling away resources from put-away tasks can affect fill rates by not having product in pick racks. This can bring about congestion in staging areas that overflow into aisles. Delaying put-away may also result in product damage as the merchandise is moved, again and again, to make way for higher priority receipts. Proper staffing of the put-away team will support down stream processes of picking and shipping, and in the long run lead to better customer order fill rates. The put-away process is typically managed by one of, or a mix of, the following methods; staging product from the receiving area, based on the purchase order, based on the part number, or based on a put-away zone or by using direct delivery (put-away) to the storage location. The most efficient practice is to put-away directly from receipt to its final location and is often the primary method used in best practice companies. This process uses the least space for staging and product is handled less and ready for use sooner. Direct put-away programs require a more sophisticated WMS system that has the ability to assign locations from an ASN or upon receipt to the dock. Assigning locations and using direct put-away can be optimized the by use of automated conveyor systems that are capable of sorting and diverting materials by zone and location. Best practice companies also use their warehouse management system (WMS) to manage travel time from receiving to storage areas, pick locations and replenishment areas; so that the best put-away route can be selected. The end result is put-away travel paths that are sequenced based on the shortest route for the product in the load, with reduced aisle conflicts and congestion. Many WMS programs also support task interleaving; most best-practice companies make use of this capability in their warehouses to reduce non-productive travel

time. The put-away process is critical and significantly affects overall warehouse efficiency. Best-practice companies identify products using some form of barcoded or RFID label. Product identification labels, zone or location labels and pallet license plates should all be utilized in the put-away process. Both bar code and RFID can work equally as well to identify product, with barcode labels far more common in todays warehouses. The advantage of RFID is that it works better in harsh environments, it has a fast read from almost any position, and the tag can hold a lot of information that can be changed as the product flows through the warehouse. Barcode labels however have been used for years, successfully, to identify and manage the flow of materials in the warehouse. Many companies have some type of process to manage expedited materials once they have been received. In a manual process the product might be flagged as hot and placed in a special expedite staging area, so that the put-away team can move the product to the required location as quickly as possible. This can be a hit or miss arrangement and is less than effective. Best practice companies the cross-docking process is managed by the WMS system. Cross-docking, as it relates to put-away and material handling, is the process of moving specific products to support an open order or replenishment request, with minimal handling and delay. The WMS system flags the product for crossdocking by matching it to an open order or replenishment requirement, at the time of receipt, or when the advance ship notice (ASN) is received. The product may still end up in a special staging area but the system is keeping track of it and will prioritize it over other material. The task to move the material is sent to the lift truck or hand held RF device for movement directly to the point of use. This is a far more effective system to get priority product moved.

Good housekeeping must be part of any best-in-class warehouse, as best practice processes cannot succeed in a workplace that is cluttered, disorganized, or dirty. Poor workplace conditions lead to waste, product damage, and safety issues; such as extra motion to avoid obstacles, time spent searching for things, delays due to defects, machine failures, or accidents. Establishing basic workplace conditions is an essential first step in creating a safe and productive warehouse environment. http://multichannelmerchant.com/opsandfulfillment_warehouse/best-practicesin-material-handling-and-put-away-01042007/

MATERIAL HANDLING STRATEGIES - 13 WAYS TO DO MORE WITH LESS IN 2013

With slow growth predicted for many industries in 2013, organizations are taking a minute to review their current material handling strategies and operations, asking themselves "how do we do more with less?". A little more of "this" and a little less of "that" can be the perfect recipe to maximize material handling efficiencies; leading to reduced operational costs and higher productivity rates. Here are 13 tips to help get the most out of your material handling operations in 2013. One: More Parts in Less Space: There aren't many organizations building new facilities these days- the trend is to do more with the existing space. Organizations trying to utilize every inch of space often consider vertical carousels and vertical lift modules (VLMs) because of the high storage density they provide- often saving up to 85% floor space.

Two: More Productivity & Efficiency with Less Manpower: If there are multiple workers crisscrossing the warehouse to pick parts, there might be an opportunity to increase productivity. By delivering goods directly to the worker, more orders can be processed in less time; allowing organizations to fill more orders using less labor. Three: More Accuracy with Less Errors: People are not perfect, however pick to light technology can improve pick accuracy up to 99.9%. Pick lights direct an operator to the exact location to pick from and displays the quantity to pick, taking the guess work out of the picking process. Four: More Picking and Less Walking: Analyze the amount of time a worker spends walking and searching through shelving for parts. This is wasted time that should be spent doing a more valuable task, such as bagging and tagging. Implementing a dynamic picking system that delivers parts to the worker virtually eliminates walking and searching time, leaving more time for picking. Five: More Orders Out the Door in Less Time: Processing orders in batches decreases picking time and increases productivity. When picking one order at a time a worker visits popular SKU locations multiple times to fill several orders, traveling to and from the location each time. When batch picking the worker visits the location one time and picks a quantity large enough to fill multiple orders, saving time. Six: More Automation with Less Manual Work: Printing and carrying a pick list around the facility throughout the picking process is a nuisance. With RF scanners, pick to light technology, and dynamic picking solutions, paper picking is becoming a process of the past. Inventory management software, such as FastPic5, can manage all transactions digitally, integrate with pick to light and

provide inventory management reporting. Seven: More Security with Less Product Shrink: Products stored on shelving and rack are at high risk for loss and theft. Vertical carousels and VLMs come equipped with doors to keep stored goods organized and secure. In addition, FastPic5 inventory management software can monitor transactions and provide detailed reports by user. Eight: More Safety with Less Product Damage: With traditional shelving and rack, goods are also exposed to the natural elements and are at risk for damage. Using vertical carousels and VLMs, goods are stored inside the unit on individual shelves, trays or bins, reducing the risk of product damage. Nine: More Revenue Generating Activities in Less Storage Space: Integrating dynamic picking systems can yield up to 85% floor space savings. Reclaimed floor space can be put to better use by expanding revenue generating activities, such as additional manufacturing or adding quality control. Ten: More Organization with Less Guess Work: It's difficult and time consuming to figure out where to store each and every part to optimize space and maximize performance. FastPic5 inventory management software manages the space, directing the operator where to put the part for maximum storage density and organization. Eleven: More Green with Less Energy: In an effort to "Go Green" organizations are looking to utilize space that already exists instead of building from the ground up. Vertical carousels and VLMs allow organizations to save up to 85% floor space providing a smaller area heat and light; reducing energy and maintenance costs.

Twelve: More Ergonomics with Less Risk of Injury: Vertical carousels and VLMs eliminate walking, bending, reaching and stooping commonly associated with shelving. Working on the "Goods to Person" principle, parts are delivered to an operator at an ergonomic height to reduce workers compensation issues and keep workers safe. Thirteen: More Success with Less Stress: With 2013 underway, it's the perfect time to review material handling strategies and operations. Vertical carousels and VLMs can offer faster, accurate, cost effective picking providing more success in 2013 with less stress! http://www.globallogisticsmedia.com/articles/view/material-handlingstrategies---13-ways-to-do-more-with-less-in-2013 WAREHOUSE & DISTRIBUTION CENTER WAREHOUSE COST SAVING IDEAS & WAREHOUSE STRATEGY 1. Benchmarking A program to set up internal benchmarks will reduce your cost per order or hold the cost in line as volumes increase. Translate these down to department and inpidual work standards. Contact us if we can help you with an independent internal benchmarking study. 2. Manage the labor force Labor is the largest controllable expense item in your distribution center. Successful practices to improve performance can lower your labor cost. 3. Hiring, retention and attrition (turnover)

Labor is your first or second largest expense after outbound freight in the fulfillment center. Review the reasons attrition is so high and work to close the gap. Review your hiring, retention and training practices. How well are you able to staff for the peaks? 4. Reduce handling and touches The fewer touches of product, the less cost of shipping an order. An effective warehouse cost reduction strategy is to streamline the operation and apply industry best practices in order to reduce the handling and cost of fulfilling an order. 5. Slotting Effective slotting practices can lower your costs for picking, replenishment, and putaway warehouse labor. 6. Team building Successful organizations take team building seriously. Take your organization to a new level and improve productivity. 7. Picking options How can you use best practices to improve picking productivity? 8. Use what you have more productively This is a mantra in fulfillment today. Our operational assessments will help you get more productivity from your layout, space/product storage utilization and staff. By not caring for the basics of fulfillment, you are adding costs to the warehouse operation. Increasing current capacity and utilizing that capacity more effectively are key objectives. We believe that getting as much productivity as

possible out of the existing layout, processes and systems will help you reduce warehouse costs. 9. Performance reporting The old adage of, "You can't improve what you don't measure" is certainly true. An effective measurement and reporting process can improve performance and lower costs. 10. Packing options How can industry best practices help you improve performance and reduce costs of one of the most labor intensive functions in the warehouse? 11. Freight management Controlling inbound and outbound freight can make the difference between a profit or loss for your business. 12. Use proper levels of qa Are you over inspecting activities to the point of diminishing returns and spending money that does not result in a return on the investment? 13. Receiving practices and cross docking Cross docking is an effective practice to reduce handling and costs while improving customer service and shipping costs. 14. Process returns more efficiently Returns cost more than orders to process. Untimely processing of customer credits, refunds and exchanges can damage customer service. Our assessments look at use of staff, people, space and systems to improve productivity.

15. Workforce software Many companies are still using Excel for their staffing software. Excel cannot save you as much money year over year as a good workforce program. Team up with your Contact Center to share a scheduling system. It will pay for itself quickly. If you have one, understand how to use it to its maximum. 16. Outsourcing option There are practical and cost effective reasons to outsource part or all of your business. It may be to deal with a peak, new product categories or when fulfillment is not a company core competency. 17. Finding the right level of automation and systems ROI analysis could put automation into your planning for cost improvement. The wrong material handling equipment can be creating hidden lost time and inefficient product flow, impacting cost and customer service. 18. Warehouse management/bar code systems This should include reviewing how bar coding throughout the warehouse, conveyance, material handling and warehouse management systems can improve productivity, increase service levels and reduce costs. See more Warehouse Management Systems Implementation Strategies . 19. Inventory management in the warehouse Effective inventory management is the single most important tool to improve customer service and reduce cost of operation. See more Inventory Management Cost Savings Strategies. 20. Replenishment practices

Effective replenishment is the basis of successful order fulfillment. Inefficient replenishment will cost huge dollars and negatively impact customer service. http://www.fcbco.com/services/warehouse-strategies/