BPMG 3133: WAREHOUSE MANAGEMENT

Instructor: Emy E A Jalil

Room: 3041 STML Building
6
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6
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ezura@uum.edu.my
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email address:
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COURSE SYLLABUS
COURSE CODE: BPMG 3133
COURSE NAME:
MANAGEMENT

WA R E H O U S E

P R E E Q U I S I T E : B P M G 2 0 1 3 T H E O RY
AND
P R A C T I C E T R A N S P O R TAT I O N

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COURSE SYNOPSIS

WA R E H O U S I N G C O N T I N U E T O P L AY A C R I T I C A L R O L E S
I N A S S U R I N G H I G H L E V E L O F C U S T O M E R S E RV I C E A N D
OVERALL LOGISTICS PERFORMANCE.
E F F I C I E N T WA R E H O U S I N G C A N M I N I M I Z E T H E E F F E C T
O F S U P P LY C H A I N I N E F F I C I E N C I E S ; C A N I M P R O V E
LO G I S T I C S A C C U RA CY A N D I N V E N T O RY M A N A G E M E N T ;
C A N A L LO W F O R P R O D U C T A C C U M U L AT I O N ,
C O N S O L I D AT I O N A N D C U S T O M I Z AT I O N .
T H I S C O U R S E W I L L A D D R E S S C U S T O M I Z AT I O N A N D
Q U A N T I F I C AT I O N ; I N F O R M AT I O N T E C H N O LO GY I N
W A R E H O U S I N G , W A R E H O U S E P E R F O R M A N C E A N A LY S I S ,
T H E R O L E O F T H E W A R E H O U S E I N T H E S U P P LY C H A I N ,
A N D WA R E H O U S E E X PA N S I O N A N D C O N T RA C T I O N
P L A N N I N G . T H E WA R E H O U S E M A N AG E M E N T C O U R S E
W I L L I N T E G RAT E B O T H G LO B A L A N D E - C O M M E RC E
ISSUES AND EXAMPLES.
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GRADING

Coursework
: 60%
Final Exam
: 40%
TOTAL
: 100%

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COURSE RESOURCES
REFERENCE:
PRICE, PHILIP M., AND N. J. HARRISON.
WA R E H O U S E M A N AG E M E N T A N D I N V E N T O RY
C O N T R O L . 2 N D E D . A C C E S S E D U C AT I O N , 2 0 1 6 .

R I C H A R D S , G . ( 2 0 1 4 ) . W A R E H O U S E M A N A G E M E N T: A
COMPLETE GUIDE TO IMPROVING EFFICIENCY AND
M I N I M I Z I N G C O S T S I N T H E M O D E R N WA R E H O U S E .
KO G A N PAG E P U B L I S H E R.

R I C H A R D S , G . ( 2 0 1 1 ) . W A R E H O U S E M A N A G E M E N T.
T H E C H A RT E R E D I N S T I T U T E O F LO G I S T I C S A N D
T RA N S P O RT ( U K ) A N D KO G A N PA G E , LO N D O N .

S A X E N A , J . P. W A R E H O U S E M A N A G E M E N T A N D
I N V E N T O RY C O N T R O L . N E W D E L H I : V I KA S P U B .
11/16/16
7
HOUSE, 2003.

ASSIGNMENT FORMAT

FONT
VERDANA, CENTURY GOTHIC,
TAHOMA
SIZE 12
PARAGRAPH
JUSTIFY
1.5 SPACING
ASSIGNMENT COVER
SHEET
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EMAIL FORMAT

SALUTATION
DEAR Madam
REGARDS
YOUR NAME AND STUDENT ID and/or GROUP NAME

ATTACHMENT

11/16/16

At the end of the course, the

graduate would be able to
understanding the fundamental
theories in warehouse
management
acquire the history, concept and
theory in warehouse
management
develop the transport
environment knowledge around
them
OBJECTIVES
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Upon completion of the course,

students will be able to

describe the scope of fundamental theories

in warehouse management
explain the history, concept and theory in
warehouse management
discuss the relationship between macro and
micro environment with warehouse
management

LEARNING OUTCOME
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THE UNDERSTANDING
Supply chain imbalance.
Warehousing management.
High-speed, zero defect supply chain.
Value-added warehousing.
Rising warehouse costs.
Confusion and crowding in the
warehouse marketplace.
The plight of the warehouse manager.
Logistics litigation.
Warehousing fundamentals.

Part of firms logistics system that

stores products at and between
point of origin and point of
consumption.
Term Warehousing is referred as
transportation at zero miles per
hour
Warehousing provides time and
place utility for raw materials,
industrial goods, and finished

THE REALITY
https://www.youtube.com/watch?v=I8vYrAUb0BQ

https://www.youtube.com/watch?v=sbIeY
aq6WO4

THE ROLE OF THE WAREHOUSE IN THE LOGISTICS SYSTEM

The warehouse is where the

supply chain holds or stores
goods.
Functions of warehousing
include

Transportation consolidation
Product mixing
Docking
Service
Protection against contingencies

TYPE OF WAREHOUSING
Public Warehousing
Private Warehousing
Contract Warehousing
Multi-client Warehousing

ANOTHER REALITY
https://www.youtube.com/watch?v=rkQ8GiDziXw

IN REALITY
Say we get an order from a European retailer to
produce 10,000 garments. For this customer we
might decide to buy yarn from a Korean producer
but have it woven and dyed in Taiwan. So we
pick the yarn and ship it to Taiwan. The Japanese
have the best zippers so we go to YKK, a big
Japanese zipper manufacturer, and we order the
right zippers from their Chinese plants. the
best place to make the garments is Thailand. So
we ship everything there. the customer needs
quick delivery, we may divide the order across
five factories in Thailand. Effectively, we are
customizing the value chain to best meet the
customers needs. (Interview of Victor Fung of Li
& Fung in HBR, Sept-Oct 1998.)

Order Size

INVENTORY MANAGEMENT ISSUES

Customer
Demand
Distributor Orders

Retailer Orders

Production Plan

Time
Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998

INVENTORY MANAGEMENT ISSUES

Some of the causes of variability that leads to
the bullwhip effect includes:
Demand forecasting Many firms use the min-max
inventory policy. This means that when the inventory level
falls to the reorder point (min) an order is placed to bring the
level back to the max , or the order-up-to-level. As more
data are observed, estimates of the mean and standard
deviation of customer demand are updated. This leads to
changes in the safety stock and order-up-to level, and hence,
the order quantity. This leads to variability.
Lead time As lead time increases, safety stocks are
increased, and order quantities are increased. More
variability.

INVENTORY MANAGEMENT ISSUES

Batch ordering. Many firms use batch ordering such as
with a min-max inventory policy. Their suppliers then see a
large order followed by periods of no orders followed by
another large order. This pattern is repeated such that
suppliers see a highly variable pattern of orders.
Price fluctuation. If prices to retailers fluctuate, then they
may try to stock up when prices are lower, again leading to
variability.
Inflated orders. When retailers expect that a product will
be in short supply, they will tend to inflate orders to insure
that they will have ample supply to meet customer demand.
When the shortage period comes to an end, the retailer goes
back to the smaller orders, thus causing more variability.

INVENTORY MANAGEMENT ISSUES

How then can we cope with the bullwhip
effect?
Centralizing demand information occurs when
customer demand information is available
to all members of the supply chain. This
information can be used to better predict
what products and volumes are needed and
when they are needed such that
manufacturers can better plan for
production. However, even though
centralizing demand information can reduce
the bullwhip effect, it will not eliminate it.
Therefore, other methods are needed to

INVENTORY MANAGEMENT ISSUES

Methods for coping with the bullwhip effect
include:
Reducing uncertainty. This can be accomplished by
centralizing demand information.
Reducing variability. This can be accomplished by using a
technique made popular by WalMart and then Home Depot
called everyday low pricing (EDLP). EDLP eliminates
promotions as well as the shifts in demand that accompany
them.
Reducing lead time. Order times can be reduced by using
EDI (electronic data interchange).
Strategic partnerships. The use of strategic partnerships
can change how information is shared and how inventory is
managed within the supply chain. These will be discussed
later.

INVENTORY MANAGEMENT ISSUES

Other helpful techniques for improving
inventory management include:
Cross-docking. This involves unloading goods arriving
from a supplier and immediately loading these goods onto
outbound trucks bound for various retailer locations. This
eliminates storage at the retailers inbound warehouse, cuts
the lead time, and has been used very successfully by
WalMart and Xerox among others.
Delayed differentiation. This involves adding
differentiating features to standard products late in the
process. For example, Bennetton decided to make all of
their wool sweaters in undyed yarn and then dye the
sweaters when they had more accurate demand data.
Another term for delayed differentiation is postponement.

INVENTORY MANAGEMENT ISSUES

Direct shipping. This allows a firm to ship directly to

customers rather than through retailers. This approach
eliminates steps in the supply chain and reduces lead time.
Reducing one or more steps in the supply chain is known as
disintermediation. Companies such as Dell use this
approach.

WAREHOUSE CHALLENGES

Customer
Ecommerce

Inventory
Challenges

Un balanced
Bus Growth

Globalization

Product
Diversity

UE
Q

NS
O
I
ST