Just Enough About Retail Domain

Authors: TESCO TRAINEES

Date: 29 April - 2005
RETAIL
Introduction to Retail Business

Components of Retail Business

Terminologies with respect to Warehouse

Warehouse Management System

Introduction to Retail Business
What is Retail?

The business activities involved in selling goods and services to consumers for their
personal or household use comes under the sector called retail.

It includes every sale of goods and services to the final consumer.

It is the intermediary step in the distribution merchandise from manufacturer to the

customer.
Who is a Retailer?

A Retailer is someone or a business that sells products and services to consumers

for their personal or family use.

Retailers are the intermediary link between consumers and manufacturers.

Retailer add value to product by making it easier for manufactures to sell and for
consumers to buy.
Role of a Retailer

The retailer has several distinct roles to play:

Providing Assortments.
Breaking Bulk.
Providing Services.
Holding Inventory.
Providing Assortments

When a retailer receives merchandise he normally receives in large quantities and

he takes on the responsibility of breaking it up into smaller quantities.

This process is known as breaking bulk.

Providing Services

Retailer also provide services which makes the customers shopping experience a
comfortable and convenient one.

Many retailers have sales people available at the store to demonstrate about the
qualities and advantages on purchase of the product.
Holding Inventory

A retailer keeps every item of merchandise in an inventory.

Each different item of merchandise is known as Stock Keeping Unit (SKU).

By keeping different SKU in an inventory the retailer can provide merchandise as

per the customers requirements, which relieves the customer of the task of storing
goods.
Formats of Retailing

There are several retails that exist today. Among the more common ones are

Ownership
Store-based
Services Vs Goods
Non-store
Ownership Retail Format

Retailers are classified based on their ownership of the store. Ownership can be
different types like

Independent Stores

Chain Stores

Franchise Stores

Lease Department Stores

Vertical Marketing System

Consumer Cooperative
Chain Stores

Retail chain stores would have number of stores under its banner.

These enable it to cover a wider population.

Tesco, Sainsbury are some examples.

Food World, Shopperstop are chain stores in Indian context.

Franchise Stores

In case of a franchise store the outlet ids independently owned.

Here an arrangement is made where in the supplier, franchiser (owner) of the

brand grants a dealer franchise the right to sell products in exchange of some type
of consideration.

McDonalds operate through this form of arrangement.

Lease Department Stores

Leased departments are areas in a retail outlet, where they are rented or leased to
another retailer.

The retail store takes a percentage of profit as a charge for the space provided.

For example starbucks is a leased department in Barnes & Noble.

Vertical Marketing System

In a vertical marketing system, the entities in the distribution chain lay dual roles
and act as a unified system.

For example Adidas and Apple are manufacturers and retailers as they have of
their own retail outlets.
Consumer Cooperative

Consumer cooperative are owned and operated by customers.

Customers have a share in the ownership and profits of the store, through
reductions or dividends.

Amway , Herbal life are well known consumer cooperatives.
Store Based Retail Format

Retail stores here are categorized into two main types of stores

Food Retailers.

General Merchandise Retailers.

Food Retailers

Food store retailers focus mainly on food products such as ready to eat products
and food preparation items. Some food retailers are

Convenience Store

Conventional Supermarket

Combined store

Box ( limited-Line ) Store

Warehouse Store
Convenience Store

Convenience stores are those stores that are located in towns, cities or suburban
locations.

They are stores which provide a limited variety in segment of merchandise.

They generally have extended opening hours.

Conventional Supermarket

Supermarkets are large self service stores that have a complete line of food
products.

Here the customer gets a view and choice of different food product of different
range of price.

In other words it can be referred to as one stop shop for all food products.
Combined store

Combined stores have a combination of foods and another product like medicine
etc.

Hannaford is an example of combined store as they provide customers with food

and medicines.
Box Stores

Box stores are large stores that dominate just one area of merchandise like toys,
bicycles etc.

Warehouse store:

Warehouse stores are large scale members only stores which combine cash and
carry wholesaling with discount retailing.
General Merchandise Retailers

General merchandise retail stores are stores which sell a variety of merchandise
such as apparel and accessories, furniture and home furnishings, small wares and
hard wares, and food.
General Merchandise Retailers (Contd..)

Some of the formats of general merchandise are explained here

Specialty store : These stores provide a specific type of merchandise.

Variety store : These stores sell a variety of merchandise in low and discounted
price ranges.
General Merchandise Retailers (Contd..)

Traditional Department Store : These stores are large stores that are divided into
different departments. They offer a large variety of products from clothing to
accessories.

Full-Line Discount Store : These stores offer discounts on a entire range of

products.

Off-Price Chain Retailers : These retailers are retailers that find exceptional deals
on well known brand name clothing and resell them at low prices.

Factory Outlet : These stores are company owned through which merchandises are
sold at low prices than at a regular store.
General Merchandise Retailers (Contd..)

Membership Club : These are part of a store where the customer possess a
membership card which entitles him to discounts, loyalty points etc.

Flea Market : These stores that are placed in flea market (Mostly Asian Markets)
are also considered as retailers and are generally temporary.
Services And Goods

Retail businesses also include services providers, like hotels, hair salons, etc.

Transactions take place between the service providers and the customer where the
customer does not purchase or acquire ownership of a tangible product.
Services And Goods (Contd..)

Service retailing is of three types

Rented Goods Services : This area of service retailing is provided when consumers
lease and use goods for specified period of time.

Owned Goods Services : Here goods owned by consumers are repaired, improved
or maintained by service retailer.

Non-Goods Services : when intangible services other than goods are offered to
consumers leading to them experiencing a service is known as non-goods services.
Non-Store Retailing

Selling to consumers by retailer could be done outside the store as well. So

retailing that takes place outside a retail outlet is known as non-store retailing.
Non-Store Retailing (Contd..)

Direct Retailing : Here a sales person directly contacts a customer, makes a

product demonstration and completes the sale. For example eureka fobes mostly
operates like this.

Vending Machines : Here products are sold through vending machines as in the
case of Pepsi, Coca-Cola, Nescafe etc.

Web Based Retailing : Here products are retailed out to customers by online
shopping through the world wide web. For example Amazon. com is popular site
for online shopping.

Catalogues : Here the customer purchases merchandise on viewing catalogues or

brochures giving details about the product advertised by the retailers.
That was an overview about Retail Bus
Components of Retail Business
Vendor/Supplier/Manufacturer

Vendor/Supplier/manufacturer is the one who produces the product and supplies it

the customer through the retailer who works as a middle-man between the vendor
and the customer.

The retailer sits in between the vendor and the customer and adds value to the
product manufactured by the vendor in order attract the customer to buy the
product.

The supply chain well describes the relation in between.

What is a Supply Chain?

A supply chain is a network of facilities and distribution options that performs the
functions of procurement of materials, transformation of these materials,
transformation of these materials into intermediate and finished products and the
distribution of these finished products to the customers.

Now lets see how does a retail industry work?

How does the Retail Industry Supply Chain
work?

The customer demand for products is noted by the retailer.

The retailer issues a purchase order to the manufacturer or vendor.

This purchase order may at times be based on the forecasting of demand for
products.

Production is planned according to the purchase order received.

Classification of Goods

Based on the longevity of the goods, they can be broadly classified into two types:

Perishable Goods

Non-Perishable Goods
Perishable Goods

These goods or products generally have very short life time or in other words these
products are needed to sold out in short duration of time after being supplied by
the vendor.

The retailers main target is to sell these products as soon as possible to the end
user.

Bakery, food items, fruits fall in this category.

Non-Perishable Goods

These goods or products generally have longer life time and can be stored in the
depots for a longer time before it is supplied to the store.

These products have a time limit known as shelf life by which the retailer knows the
time limit within which he has to sell the product to the end customer.
Depot or Warehouse

After the vendor supplies the goods according to the purchase order the goods are
placed in a temporary storage house known as depot or warehouse by the
retailer before sending it to the store to sell it to the end user (customer).

There are different types of depots owned by vendors, retailers and private
personnel.
Types of Depots

There are various kinds of depots but some generally used are listed below

Regional Distribution Center (RDC) : These depots are owned by retailers in order
to stock the merchandise, categorize it and ship it to its final destination (store).
These are located geographically to supply goods to stores within its range.

The following slide has a pictorial Representation of a typical RDC.

Types of Depots (Contd..)

Automated Regional Distribution Center (AUTO) : These depots are similar to

RDCs but use automated mechanical instruments for operation in the depots for
stocking and shipping goods.

Primary Consolidated Center (PCC) : These depots are generally owned by

vendors to supply non-perishable goods to retailer in case of emergency. PCCs are
used for backup purpose by the vendors and are used to minimize lead time.
Flow of Goods in The Supply Chain
Types of Depots (Contd..)

Hub : These are privately owned depots. They collect goods from different vendors
and supply goods on demand of a specific retailer. The hub plays an intermediary
role between small scale vendors and retailers. In other words hub owners are
retailers for retailers.
 That was a brief explanation
about the components of retail
business
Terminologies with respect to Wareho
 General Layout of a Warehouse

From
Vendors Reception
Reserve / Storage Area
Area
Trucks

Shipping
Area Picking Area
To
Customers

Reception & Putaway

Flow of Goods: Replenishment & Putaway
Picking & Shipment
General Layout of a Warehouse

Area
A part of the Warehouse Will have a Name
Identified by the type of function carried out there
Contains Aisles
Aisle
Long rows of Locations
Can be subdivided into Bays, Slots, Levels & then Locations
Location
A place where the Cartons / Materials are stored
Full Palette, Half Palette, Mono-carton etc
A typical Aisle
Details of an Aisle

Le A Aisle
B Bay
S Slots
Le Levels
Loc - Location
S
S S
S
Some Warehouses
B may not use the
Loc Slots at all. i.e., One
Bay = One Slot
A The Aisle shown in
the picture is a
Static Aisle
A Dynamic Aisle

Mainly used for

Picking purpose
Cartons Loaded
from backside will
roll forward as soon
as the empty carton
is removed
Used for highly
selling articles, i.e.,
frequently picked
articles
A Palette

Cartons are placed

on the Palette
Palette is placed in
a Location
Holds 8 / 12
Grooves for Cartons, generally
Fork lifter
Ranging:

Ranging is a method or an exercise practiced in super market industry to decide the

best range of commodities that can be sold in any store.
It is the range of products that retailer stores in order to cater the needs of different
customers.
There are two concepts :
Width: Refers to the range or different types of one particular product. Example:
Mobile phones: Sony Ericsson/Nokia/LG
Depth: This refers to the number of different models/ varieties available under one
particular
Ranges will be different @ stores and depots depending on the requirements.
Ranging (Contd.):

A range is divided into modules. Commodities in a range are ranked first based on
sales performance and then sub-divided into modules.

Core Module - contains the commodities that every store would carry if space were
available.

Non-Core Module - contains commodities that are not in general distribution.

Could be some store specific products (i.e. Indian, Chinese). Non-core module
always follows Core module 1.

Contingency space - some space reserved for future activity. This could be used
later to add more non-core or any new lines. Contingency space is normally
allocated as a percentage of line number of a department along with minimum and
maximum limit or it can also be set as a whole line no. It can be set either by Dept
or by Profile or by Store. The contingency space by Store would override
contingency space by Dept or by Profile
Demand Forecasting

Demand Forecasting is a method used to predict each SKUs

future replenishment needs based on historical performance.

The word Demand means what is shipped or sold and the

word Forecast indicates what is expected to be shipped or
sold.

Demand Forecasting helps one to estimate what could be

sold in the future
Necessity of Demand Forecasting/Planning

Why do we need to Forecast the Demand?

Improved Customer Service Levels

Reduced Manufacturing Costs
Reduced Storage and Transportation Costs
Balanced Inventory Levels
Improved Supply Chain Performance
Purchase Order

Once the vendor get finalized for procuring the merchandise, Purchase Orders are
raised to the required vendors to procure the items

A Purchase Order (PO) is a letter of contract between retailer and vendor

on the merchandise to be procured. It has the following information mentioned on
it.
Type of merchandise item
Quantity/Number of items
Unit cost price/total cost for merchandise
Details of the vendor/distributor (like Name, Address, payment terms)
Location where merchandise need to be shipped to
Information on who will be paying for the logistics involved.
 Purchase Order (Contd.)
In addition to this a purchase order has two important entities on it :
1. Not before date
2. Not after date
The above two dates are important because the time gap between these dates
give a direct pointer to the time window available for the vendor to ship the merchandise
requested by the retailer to the location desired.

Once the purchase order has been sent, it is usually acknowledged by the
vendor in some form.

Classification of Purchase Order

POs can be classified in a number of ways. On the basis of vendor location

they can be classified as:
Foreign PO
Local PO
Purchase Order (Contd.)

On the basis of Supply Chain and Logistics involved, they can be classified as:

Direct to Store PO (DTS) For this PO, a vendor sends a merchandise requested
by the retailer directly to the store location specified on the PO

Direct to Customer PO (DTC) For this PO, a vendor sends a merchandise

requested by the retailer directly to the customer location specified on the PO

X-Dock PO For this PO, a vendor sends a merchandise requested by the

retailer to a Distribution Centre (at a location X) and from here the merchandise gets
transferred to the stores (which is at location Y). The receiving and quality checks are
done at the warehouse itself.
Advance Shipment Notification

It is a notification released by the vendor in advance to retailer in order to convey

the information regarding the shipments to be sent to that particular retailer.

Advance Shipment Notification (ASN) is required to ensure the proper receipt of

goods into the inventory.

ASN number should be unique and can be created against single or multiple
purchase orders.
ASN Contd..

It enables the sender to describe the contents and configuration of a shipment in

various levels of detail .

ASN includes the contents of a shipment of goods as well as additional information

relating to the shipment, such as :

Order information
Product description
Physical characteristics
Type of packaging
Marking
Carrier information
Configuration of goods within the transportation equipment.
Invoice

The purpose of the Invoice transaction set is to provide for customary and established
business and industry practices relative to the billing for goods and services provided.

Each invoice may contain description of

Item

Quantity

Price of the product/service for which customer is being invoiced

This was something about Retail Domain Terminologies
Warehouse Management System
Warehouse Management System

WMS is a system which help business systems to efficiently track and mange
inventory in a warehouse.

Warehouse management system plays a vital role in retail business.

Moving the right product to the market at the right time, with low stocking costs, is
the key to success in retail business.
Warehouse Management System

Purchase Order Stores

warehouse
Send to
vendor WMS
Stores

Ship Products
Warehouse Management System (Contd.)..

Warehouse operations :

WMS functions are broadly classified into four steps

Receiving

Picking

Inventory control

Shipping
Receiving & Stocking

Receiving is done against a Purchase Order. When a trailer arrives at the warehouse,
the receiving clerical assigns a dock door in the system, associates a PO with that
trailer and starts receiving the cartons.

PO contains the SKU (Stock Keeping Unit It is the smallest measure of item in
inventory) and number of units expected for each of the SKU.This is also supported by
the ASN (Advance Shipment Notification) sent by the vendor.
Picking

Host system downloads the allocation to the warehouse, and picking is done against
this Allocation or Sales order.

Objectives of order picking are

Accuracy

Increased productivity and

Reduced cycle time.

Inventory Control

Lot of factors such as accuracy in operations, attitude, process definition, affect the
inventory figures. One of the ways to keep inventory accurate is, periodic counting
process.

WMS system can control the counting process, schedule locations for counting, and
generate count jobs when there is a discrepancy in what system thinks and what
physically is.
Shipping

Cartons with outbound labels are delivered at the shipping location. A trailer is setup at
the shipping dock, for a matching in-store date (the date of arrival at store) and pool
(logical grouping of stores).

Once the trailer is fully loaded, it is closed, and a Bill of Loading (BOL) is generated.
ASN is sent to the host describing the contents of the trailer. BOL will have carton
information grouped by store. It will have the carton count, the contents and the qty for
each store. Tracking of a carton within WMS ends here.
Transport Planning
After the retailer determines the products/quantity to be supplied to each store comes
the need for transport planning.

Routes decided so that the optimum utilization of transport facility can be made.

Store 2
Store 1

DEPO

Store 4 Store 3
Transport Planning

Various parameters are taken into account while planning. They Include :

Kind of goods. (are they perishable?)

Is the demand immediate or it can be delayed

Are the vehicles loaded to optimum?

Routes to be taken by vehicles

Transport plans are generally generated by an application that optimizes all the
parameters.
Transport Planning

Once the transport plan is generated all the stores and depots are informed.
The stores now know the details of products that they will receive and when.

Planning will also take care of

Transhipment : When the depot does not stock a particular item ordered.

Inter depot Transfer: When the depot does not have sufficient quantity of an
ordered item
Store Delivery

The goods are received by the stores according to plan.

The retailer is informed of the goods received and discrepancy if any.

The retailer is also informed of the goods sent back.

Goods are then sorted to display in store racks.

Store Replenishment

Once the store realizes that it needs a certain product it sends the requirement to
the retailer.

The retailer then based on his own forecast and availability allots the product to
the store.

The retailer also informs the store when to expect the product.

This is called as store replenishment.

Warehouse Management System
Warehouse

Definition

Warehouses are used by manufacturers, importers, exporters, wholesalers, transport

businesses, customs, etc. They are usually large plain buildings in industrial parts of
towns. They come equipped with loading docks to load and unload trucks; or
sometimes are loaded directly from railways, airports, or seaports. They also often
have cranes and forklifts for moving goods, which are usually placed on ISO standard
pallets.

Warehouse is an entity in a Retail Supply Chain where the merchandise is stocked,

categorized and shipped to its final destination.

Its functions are to consolidate product, to realize economies of scale and to provide
value added processing.

Many warehouses act as virtual stores where orders are taken either thru internet,
phone, mail or fax and picked, packed and shipped from a warehouse directly to
customers.
Warehouse (Contd..)
Why are they required?

The storage and shipment of goods is a vital part for the growth of any retailer/state
economy. The following are the importance of warehousing:

Trade: Without warehouse facilities it would be very difficult to ship goods

produced in one part of the country, such as agricultural commodities, out of
the state. Warehouses are also essential to importers.

Storage/Distribution of Goods: Warehouses are utilized by retailers and

wholesalers for the goods that they buy and sell. Manufacturers use
warehouses to store raw materials and finished products.

Expansion of Markets: By locating warehouse facilities in different parts of

the state , firms can expand beyond their own local markets.

Small Firms: The use of warehouse facilities gives small firms the opportunity
to grow without large capital investments and one warehouse can service
many small firms.
For the effective use of the warehouses, Warehouse Management Systems (WMS) is used.
Warehouse Management

The evolution of warehouse management systems (WMS) is very similar to that of

many other software solutions .

Warehouse Management Systems can be defined as the software that integrates

mechanical and human activities with an information system to effectively manage
warehouse business processes and direct warehouse activities. These systems
automate receiving, put away, picking, and shipping in warehouses and can prompt
workers to do inventory cycle counts.

The primary purpose of a WMS is to control the movement and storage of materials
within an operation and process the associated transactions.

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.
Warehouse Management (Contd..)

At a bare minimum, a WMS should:

Have a flexible location system.

Utilize user-defined parameters to direct warehouse tasks and use live

data/information to execute these tasks.

Have some built-in level of integration with data collection devices

Warehouse Management (Contd..)
Processes in a warehouse

All warehouse processes are divided into inbound processes and outbound
processes. Inbound processes include the receiving and putting away of goods,
quality checking and approval and the outbound processes include
order processing, picking, replenishment and shipping.
Warehouse Management (Contd..)
Receiving

It begins with the arrival of advance shipment notification ( ASN), which is sent by
the vendor to the host informing the detailed shipment information in advance of
delivery, designating the contents and nature of the shipment.

Receipt and uploading at carrier docks( A platform where trucks or trains can be
loaded or unloaded).

Quality and Vendor Audits

Vendor audit is done to check that the goods have arrived in perfect condition. It is
used to decide as to how much percentage of merchandise got from vendor should
be audited.

Value added processing like labeling, adding price tag et al.

Stage for Put away.

Receiving accounts for about 10% of total warehouse operating expenses

Warehouse Management (Contd..)
Receiving( Contd..)

The merchandize goods are delivered by the vendor to the warehouse/depot

generally through the trailers.

The goods are unloaded at the docks and are kept in cases. A case is a portable
container for carrying several objects.

The cases are generally unloaded into the pallets. A pallet is a flat transport
structure made of wood or plastic (and in a few cases metal) which can support a
variety of goods in a stable fashion while being lifted by any mobile forklift device.
The goods are placed on top of the pallet, and can be secured to it by straps or
stretch-wrapped plastic film.

An important point here is the existence of a proper flow path among the carriers,
buffer/staging and storage areas. High congestion or idleness are not favorable
conditions as they reduce the efficiency which in turn increases the operating cost.
Warehouse Management (Contd..)

Receiving( Cont.)

The business or facility requirements to receive goods will include:

Sufficient area to stage and spot carriers.
Dock boards to facilitate carrier unloading.
Sufficient area to palletize or containerize goods.
An efficient put away plan in place.

The system requirements to receive goods will include:

ASN information from vendor/carrier.
Interface with carrier systems.
PO information and ability to generate reports.
Warehouse Management (Contd..)
Receiving (Contd..)

Quality Audit

The arrived goods are audited for quality, labeling and other parameters.
Various industries have their own standards defined for quality.
Apart from the quality, the retailer must check the conditions of receivables like
check for damaged merchandise, wrong merchandise, merchandise being shipped
to wrong location etc so that no expenses related to mistake of vendor/carrier are
borne by warehouse.

Vendor Audit

Is used to decide how much percentage of merchandise got from vendor should be
audited. For new vendors this might be as high as 100% and in long run helps in
determining the vendor reliability and performance.
Warehouse Management (Contd..)
Put Away

Determining appropriate storage locations for the incoming merchandize such

that the movement of goods from the docks to its location area is efficient and
fast.

This is done based on a put away rule which determines if a certain product has
to be stored at a certain temperature or if a package can be put on a conveyor
belt etc.

An efficient put away plan will be to:

Maximize space utilization.
Maximize equipment utilization.
Maximize labor utilization.
Maximize accessibility of all merchandise.
Maximize the protection of the merchandize.

SKU (Stock Keeping unit) profile should be considered while creating a put away
plan. Its basically done for the easy access.
Warehouse Management (Contd..)
Replenishment

Within a warehouse, it is the process of moving inventory from secondary storage

areas into fixed storage locations. Within a supply chain or a multi-plant
environment, replenishment is the process of moving inventory between facilities to
meet demand.

Normally warehouses have two kinds of locations:

Reserve locations are used for long storage of merchandise .
Active locations are used for unit or case picking.

When there is shortage of merchandize to fulfill an order from active location,

merchandize is transferred from reserve to active locations.

Any item which is not present in the active location can result in delay of shipment
of order which in turn has direct customer impact thus resulting in financial loss of
the retailer.
Warehouse Management (Contd..)
Replenishment( Cont.)

Two kinds of replenishment methods are used .

Fill-to-full replenishment
It ensures that all items currently stocked at active locations in warehouse will be
stocked to their maximum capacity before start of first picking cycle on any given
day and hence reduces the chances of an item not being present at its location.

On-demand replenishment
As the name suggest, the replenishment is done as and when there is demand for
that particular good. It is also known as Stock pulls. It takes care of the earlier
replenishment method when a situation can arise due to heavy volumes for any
particular item on a given day.
Warehouse Management (Contd..)
Flow through

Unlike the non-perishable goods, which are stacked and stored in the reserve or the
active locations, the same process is not performed for perishable merchandize. All
perishable goods have a small life time and hence they need to be sent to the stores as
soon as they arrive at the depot. Perishable goods are not stored in the depots . After
the goods arrive and the value added operations like adding price tags, best before etc
have been performed, they are sent for shipment to the various stores.
Warehouse Management (Contd..)

Picking

Picking is based on pick list, which list the stock-keeping units to be picked, in what
amount and where they are to be found.

The SKUs are listed in which order they will normally be encountered as the picker
moves through the warehouse.

Picking can be manual or RF based.

Picking generally accounts for around 55% of warehouse operating cost.

 Warehouse Management (Contd..)
Picking (Contd..)

Tools that increase picking efficiency are:

Use of case picks to Conveyors

Case picking operations are less complex as most of the orders have less
SKUs and higher number of picks per SKU. It helps reduce handling and
traveling expenses.

Batch Picking
Refers to picking where in multiple orders are grouped in small batches and
each picker goes around with his cart/tote and picks one batch at a time.
Usually the WMS must run the waves so that orders containing similar
items are grouped together in one batch and hence increase
efficiency.
Examples :Pallet Picking, Multi Order pick to sorter
Warehouse Management (Contd..)
Picking (Cont.)

Use of advanced equipments:

Robotic Picking
Mainly used in pharmacies where filling up of bottles according to prescription
is done by robots.

Pick cars

Carousels.
Are shelves that move and the rotor, which is picking, stays at one place and can
pick up different items as per requirement.

Print and Apply ( Tunnel Scanner)

Conveyors/ Scanners.
Warehouse Management (Contd..)
Picking (Cont.)

Picking is done according to the demands of the stores.

After picking, sorting takes place.
In sorting, items picked differently are grouped together in a staging area
and consolidated together as per as the order. Nowadays automatic sorters
are used as they reduce cycle time of the order.
These consolidated items forms the Delivery Units (DU).
A delivery unit is unique for a particular shop.
Delivering these DUs to the shop/stores is known as journey. And for every
store/shop along the journey, there will be a drop.
DUs are uploaded into the trailer through the marshalling area ( Lane).
In the marshalling area, the DUs are uploaded into the trailer according
to drop itinerary of the trailer. DUs loaded first are dropped last. The dock
door can be assumed as the interface between the marshalling area and the
trailer.
Warehouse Management (Contd..)
Shipping

Shipping activities includes the following:

Dock Scheduling / Trailer Appointment.
It decides which trailer is coming at which dock or at which dock is a trailer
going to pick up another shipment without wasting time.
Stage Freight for optimal transportation.
Each freight schedule is in plan in such a way that there is optimal
transportation.
Dock Loading.
Generate bill of loading.

Shipping help warehouse to save a lot of money since based on volumes shipping
charges can be negotiated with carriers that can result in huge savings.
Warehouse Management (Contd..)
Inter Depot Transfer

Inter Depot Transfer is the process in which one depot orders the stock from other
depot as it might not have sufficient quantity and if it cannot meet the demand
immediately through the vendor. Here the depot stores the stock to fulfill its future
requirements.

Transhipment

Transhipment is a process in which if one depot does not stock a type or certain types
of goods then that depot fulfills the demands of the store / stores under it by getting
That particular good from another depot which stocks that product. Here the stocks are
merely stored by the depot instead it acts as a channel for the movement of the goods .
Warehouse Management (Contd..)

Invoicing

Invoicing is issued by the vendor to the retailer upon the receipt of the merchandize.

An Invoice is a commercial document issued by a Seller to a retailer, indicating the

products, quantities and agreed prices for products or services that the Seller has
already provided the retailer with. An Invoice indicates that, unless paid in
advance, payment is due by the retailer to the Seller, according to the agreed terms.

Other than the Invoice, sometimes an Invoice dating is also used.

Invoice dating is the period allowed by vendors for the payment of bills.
Warehouse Management (Contd..)

Value Added Services

The various kinds of value added operations that takes place are:

Ticketing
Refurbishment of damaged goods.
Kitting
Handling return merchandise
Final configuration.
Warehouse Management (Contd..)
 Warehouse Management (Contd..)
Current Trends

Third party Logistics

It involves the outsourcing of a certain function within a warehouse. For example,
transportation to a 3rd party.

Cross Docking
It is a distribution system in which merchandise arriving at a manufacturing
plant is delivered to the customer little or no storage in between. It reduces
handling and storage overheads.

Warehouse activity profiling

Labor planning / productivity.

Both the above involves the source planning within a warehouse which is
connected to labour planning and productivity.
Warehouse Management (Contd..)

Examples of Warehouse Management Systems:

Some of the major WMS used in todays retail industry are:-

PkMS by Manhattan Associates

Retek distribution management
RedPrairie
Radcliffe WMS
MARC WMS
Acknowledgements/Sources Referred for
Information:

The information and images in this document has been compiled after
referring/extracting relevant material from the following sources:

Retail Domain CBT Level 0

Sparsh -> KSHOP -> Search Knowledge Assets -> Application Domain / Industry
Verticals ->Retail & Distribution
Thank YOU