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By: Ashraf Abouhashish
Are you familiar with
Lean Manufacturing
5S
SMART objective
ISO 9000
OHSAS18001
OSHA standards
KPI
SOP
SKU
Lean manufacturing, An approach that aims to get rid of all wastes that
bring BURDEN to the system.
5S, Sort, Set in order, Shine, Standardize and Sustain
SMART, specific, measurable, attainable, relevant and time-bound.
The ISO 9000, family of standards is related to quality management systems
and designed to help organizations ensure that they meet the needs of
customers and other stakeholders while meeting statutory and regulatory
requirements related to the product.
OHSAS 18001 is a British Standard for occupational health and safety
management systems. It exists to help all kinds of organizations put in place
demonstrably sound occupational health and safety performance.
Occupational Safety and Health Administration (OSHA) is a federal
organization (part of the Department of Labor) that ensures safe and healthy
working conditions for Americans by enforcing standards and providing
workplace safety training.
key performance indicator (KPI)
SOP standard operating procedure
Supply Chain
Information Flow
Product flow
Cash flow
Reverse flow
Logistics
All tasks necessary to get the right goods to the right place at the right time in
the right condition for the right price globally
Logistics Tasks:
Transportation
Warehousing
Materials handling
Packaging
Information processing
Finance
INTRODUCTION
WAREHOUSING MANAGEMENT
WAREHOUSE PROCESSES
WREHOUSE CAPAPILITIES
MATERIAL HANDLING EQUIPMENT
WAREHOUSE INFORMATION TECHNOLOGY
INVENTORY MANAGEMENT
LOGISTICS AND WAREHOUSES
SUPPLY CHAIN AND WAREHOUSES
WAREHOUSE LAYOUT
WAREHOUSE SAFETY
WAREHOUSE PRODUCTIVITY METRICS
CONTINOUS IMPROVEMENT
A very brief history of warehousing
Pre-World war ||
Post-World war ||
9
Is it only a Storage Facility?
10
The Warehouse Processes
Receiving
Put Away
Storage
Order Picking
Replenishment
Shipping
Returns
Receiving
Some of the tasks that are completed within the putaway function are:
Picking up pallets
Scanning the labels
Verifying the stacking limits
Checking the designated location
Verifying pallet label with location
Moving to storage or shipping locations
Confirming that the location is correct for the product being put there
Storage
Once the product has been accepted, the warehouse operator must
ensure the safekeeping of merchandise so it remains in acceptable
condition for delivery to customers.
The tasks involved in the storage function would include housekeeping
and cycle counting to determine current availability and comparing the
physical count to what is on the books.
Some warehouses provide temperature controlled storage, and close
monitoring of the environment is critical.
In addition, some merchandise is subject to odor contamination or
spoilage, so the operator must be sure that proper isolation and
inspection is provided.
Storage is the only warehouse function where the goods actually stop
on purpose.
All other functions theoretically should have constant movement.
Order Picking
The tasks required to select the items listed on an order and
gather them for shipment to the customer.
Consolidation occurs when a W/H receives materials from more than one
plant and combines them into shipments to a specific customer
Requires the W/H to add capabilities for assemble and training for people
Benefits:
Combining inbound or outbound shipments for economies of scale to reduce
logistics costs
Reduced congestion at receiving dock
Supplier
Supplier Warehouse
Supplier
Plant
20
Benefits of Warehousing : Break-Bulk
Benefits:
Combining inbound or outbound shipments for economies of scale to reduce
logistics costs
Reduced handling costs (no storage)
Plant A
Customer X
Break-bulk Customer Y
Warehouse
Customer Z
21
Benefits of Warehousing : Cross-dock
Items are carried from the incoming vehicle docking point to the outgoing
vehicle docking point without being stored in inventory at the warehouse
Works with JIT
Benefits:
Combining inbound or outbound shipments for economies of scale to reduce
logistics costs
Reduced handling costs (no storage)
Plant A Customer X
22
Benefits of Warehousing : Postponement
Benefits: Distribution
Efficient use of production from Center
eliminating seasonal increase and
decrease in capacity Goods released
Reduced chance of seasonal stock in season
outs
Customer A Customer C
Drawback:
More warehouse capacity than Customer B
required for JIT delivery
24
Benefits of Warehousing : Mixing
The W/H receives full vehicles shipments of different products from manufacturers
in diverse locations, with each shipment receiving the full load discount.
At the W/H shipments are broken down and assembled into the product mix
desired by each customer or market.
Benefits:
Serves customer by reducing their costs for handling storage, etc.
Increases efficient use of warehouse space
ABC Customer W
Plant A
ACD Customer X
Warehouse
Plant B
ABD
Product D
Customer Y
Plant C
ABCD
Customer Z
25
Selection of Material-Handling System
26
Equipment & Automation: Goals and Limitations
http://www.youtube.com/watch?v=GUcwtmC0Ask
Information Technology
Technology Function
Electronic data interchange Directs information electronically around
(EDI) entire SC to compatible computers
Bar coding Production ID information coded in bars and
spaces on package; scanner reads directly into
database
Radio frequency Implanted chip with product information; can
identification (RFID) track single item anywhere, sending
information through internet to SC partners
Auto ID Advanced read-write incarnations of RFID;
includes RFID plus voice transmitter for hands-
free operation on warehouse floor
Information Technology: Potential benefits of Auto ID
Reduce
inventory Increase
costs customer
Holding satisfaction
Ordering targets
Transporting Availability
On-time delivery
Quality
Inventory Management: Why Have Inventory?
A B C
80% of revenue 15% of revenue 5% of revenue
comes from 20% of comes from 30% of comes from 50% of
inventory items inventory items inventory items
Inventory Items
N.B. Sometimes called 80%
20%
the 80/20 rule or
Pareto Level 2 Level 2
Level
Level 3 3
Revenue
Inventory Management: Inventory Cost
Advantages Disadvantages
Efficient and flexible - you only have Meeting stock needs can become
what you need, when you need it complicated and expensive
Lower storage costs You might run out of stock if there's
a hitch in the system
You can keep up to date and develop You are dependent on the efficiency
new products without wasting stock of your suppliers
Advantages Disadvantages
Easy to manage Higher storage and insurance costs
This might suit your business if sales are difficult to predict (and it is hard to
pin down how much stock you need and when), you can store plenty of
stock cheaply, the components or materials you buy are unlikely to go
through rapid developments or they take a long time to re-order.
Inventory Management:
Stock control methods
There are several methods for controlling stock, all designed to provide an
efficient system for deciding what, when and how much to order.
You may go for one method or a mixture of two or more if you have various
types of stock.
Stock review
You have regular reviews of stock. At every review you place an order to return
stocks to a predetermined level.
Inventory Management:
Stock control methods
Just In Time (JIT)
This aims to reduce costs by cutting stock to a minimum.
Items are delivered when they are needed and used immediately.
There is a risk of running out of stock, so you need to be confident that your
suppliers can deliver on demand.
These methods can be used alongside other processes to refine the stock
control system.
For example:
Re-order lead time
Allows for the time between placing an order and receiving it.
Batch control
Managing the production of goods in batches.
You need to make sure that you have the right number of components to
cover your needs until the next batch.
If your needs are predictable, you may order a fixed quantity of stock
every time you place an order, or order at a fixed interval - say every
week or month.
In effect, you're placing a standing order, so you need to keep the
quantities and prices under review.
Cycle Count:
Count some items each day
Count all items a set number of times annually
Count A items more often than B or C items
Timely correction of errors, no store shutdown
Periodic Count:
Traditional method, requires store shutdown
Annual count of all items
Often done by temps
Disruptive, expensive, error-prone
Necessary for some activities e.g., retail
Warehouse Contribution in Logistics Goals
1. Number of warehouses
2. Specific warehouse location
3. Whether or not to own the warehouse
The effect of adding warehouses
Pro:
Customer service improves
Total Total cost
Transportation costs decline with Cost
shorter distances to travel Inventory cost
Rapid delivery may improve
competitive position Warehousing cost
Decentralized system allows better Transportation cost
service to small customers
Cost of lost sales
Con:
Inventory costs rise with redundant Number of Warehouses
functions, safety stock
Setup and overhead costs go up
Where should warehouse be located?
Element Description
Neighborhood Consider available space, soil support,
nearness to market; not districted to
warehouse district
Services Available of services is most important factor
Costs Services, location (urban cost more), taxes,
insurance, transportation
Community Tax incentives, infrastructure support, trained
inducements and available workforce
Regulations Environmental impact statements can slow
constructions, inflate costs
Who should own the warehouses?
59
Warehouse Layout
60
Warehouse Layout
61
Warehouse Layout
Safety: Potential hazards for workers in warehousing
1.Forklifts
2.Hazard communication
3.Electrical, wiring methods
4.Electrical, system design
5.Guarding floor & wall openings and holes
6.Exits
7.Mechanical power transmission
8.Respiratory protection
9.Lockout/tag out
10.Portable fire extinguishers
Safety: Hazards & Solutions (Docks)
Hazard:
Injuries happen here when forklifts run off the dock, products fall on
employees or equipment strikes a person.
Solutions:
Drive forklifts slowly on docks and dock plates;
Secure dock plates and checks to see if the plate can safely support the
load;
Keep clear of dock edges and never back up forklifts to the docks edge;
Provide visual warnings near dock edges;
Prohibit dock jumping by employees;
Make sure that dock ladders and stairs meet OSHA specifications.
Safety: Hazards & Solutions (Forklifts)
Hazard:
About 100 employees are killed and 95,000 injured every year while
operating forklifts in all industries. Forklift turnovers account for a
significant percentage of these fatalities.
Solutions:
Train, evaluate and certify all operators to ensure that they can operate
forklifts safely;
Do not allow anyone under 18 years old to operate a forklift;
Properly maintain haulage equipment, including tires;
Before using a forklift, examine it for hazardous conditions which would
make it unsafe to operate;
Follow safe procedures for picking up, putting down and stacking loads;
Drive safely, never exceeding 5 mph and slow down in congested areas
or those with slippery surfaces;
Safety: Hazards & Solutions (Forklifts)
Hazard:
Workers can be injured when they are caught in pinch points or in the in-
going nip points, are hit by falling products or develop musculoskeletal
disorders associated with awkward postures or repetitive motions.
Solutions:
Inspect conveyors regularly;
Ensure that pinch points are adequately guarded;
Develop ways of locking out conveyors and train employees in these
procedures;
Provide proper lighting and working surfaces in the area surrounding the
conveyor.
Safety: Hazards & Solutions (Materials Storage)
Hazard:
Improperly stored materials may fall and injure workers.
Solutions:
Stack loads evenly and straight;
Place heavier loads on lower or middle shelves;
Remove one object at a time from shelves;
Keep aisles and passageways clear and in good repair.
Safety: Hazards & Solutions (Manual Lifting/Handling)
Hazard:
Back injuries may occur from improper lifting or overexertion.
Solutions:
Provide general ergonomics training and task-specific training;
Minimize the need for lifting by using good design and
engineering techniques;
Lift properly and get a coworker to help if a product is too
heavy.
Safety: Hazards & Solutions (Hazard Communication)
Hazard:
Chemical burns are possible if spills of hazardous materials occur.
Solutions:
Maintain a Material Safety Data Sheet (MSDS) for each chemical to which
workers are exposed in the facility;
Follow instructions on the MSDS for handling chemical products;
Train employees on the risks of each chemical being stored;
Provide spill cleanup kits in any area where chemicals are stored;
Have a written spill control plan;
Train employees to clean up spills, protect themselves and properly
dispose of used materials;
Provide proper personal protective equipment and enforce its use;
Store all chemicals safely and securely;
Store chemicals away from forklift traffic areas.
Safety: Hazards & Solutions (Charging Stations)
Hazard:
Fires and explosion risks are possible unless proper guidelines are
followed.
Solutions:
Prohibit smoking and open flames in and around charging stations;
Provide adequate ventilation to disperse fumes from gassing batteries;
Ensure that fire extinguishers are available and fully charged;
Provide proper personal protective equipment such as rubber gloves and
eye and face protection;
Properly position forklifts and applies brakes before attempting to change
or charge batteries; follow required procedures when refueling gas or
propane fueled forklifts;
Provide conveyors, overhead hoists or equivalent materials handling
equipment for servicing batteries;
Provide an eye washing and safety shower facility for employees exposed
to battery acids.
Safety: Hazards & Solutions (Poor Ergonomics)
Hazard:
Improper lifting, repetitive motion or poor design of operations can lead to
musculoskeletal disorders in workers.
Solutions:
If possible, use powered equipment instead of requiring a manual lift for heavy
materials;
Reduce lifts from shoulder height and from floor height by repositioning the shelf or
bin;
Ensure overhead lighting is adequate for the task at hand;
Provide employees with task-oriented ergonomic training;
Use your legs and keep your back in a natural position while lifting;
Test the load to be lifted to estimate its weight, size and bulk, and to determine the
proper lifting method;
Get help if the load exceeds the maximum weight a person can lift safely without
assistance;
Dont twist while carrying a load, but shift your feet and take small steps in the
direction you want to turn;
Keep floors clean and free of slip and trip hazards.
Safety: Hazards & Solutions (Other Hazards)
Inadequate fire safety provisions, improper use of lockout procedures and failure to
wear personal protective equipment also create hazards in the warehouse workplace.
Employers should have an emergency plan that describes what is expected of
employees in the event of an emergency, including:
1. Provisions for emergency exit locations and evacuation procedures;
2. Procedures for accounting for all employees and visitors;
3. Location and use of fire extinguishers and other emergency equipment.
Warehouse operations need a lockout/tag out program to prevent equipment from
being accidentally energized and injuring employees.
Employees required to perform these operations should be trained and all employees
should have a working knowledge of the program.
Finally, management at warehouse operations needs to conduct a site hazard
assessment to determine what personal protective equipment (PPE) must be worn
based on the hazards present and train warehouse employees on proper PPE
selection, use and maintenance.
Warehouse Safety: Vedio
Warehouse Safety:
http://www.youtube.com/watch?v=KTnGZ37sZqM
http://www.youtube.com/watch?v=HSZEQdQKOp8
http://www.youtube.com/watch?v=yj537e91r3U
http://www.youtube.com/watch?v=2tma-zFkDEY
Forklift Safety:
Carhttp://www.youtube.com/watch?v=zIbttYevARE
Forkliftshttp://www.youtube.com/watch?v=0iTtIk9jioY
3D http://www.youtube.com/watch?v=IJvHzFnSBDw
Warehouse Metrics:
Is the Measure Relevant?
The measures we use must have the following attributes:
Validity
If the measure does not fit the particular warehousing environment, it lacks
credibility and is quickly discarded.
For example, a distribution center storing tires should not be measuring
warehouse temperature.
Coverage
The measure must be broad enough to have meaning, but specific enough to
identify specific areas of improvement.
For example, in a bulk warehousing environment, a tons per work-hour
measurement provides good coverage.
Comparability
Can the measure be used across multiple warehouse locations and have the
same applicability?
Warehouse Metrics:
Is the Measure Relevant?
Completeness
Does the measure cover the task or function adequately enough to have
meaning?
For example, in a bulk warehousing environment, tons per work-hour is a
complete measure for a operation.
Cost-Effectiveness
Is the measure worth calculating? Is the money spent to calculate it less
than the possible savings from improving the performance?
For example, it might not be worthwhile to calculate cost per unit in a bulk
warehouse because cost per ton is adequate and much less costly to
measure.
Based on this assessment, not all types of measures are worth doing for
all functions within a warehouse.
Warehouse Metrics:
Measures of the Overall Facility
The following chart illustrates some common warehouse measures for the
overall facility:
Warehouse Metrics: Receiving
Process Oriented
Top-down
Direction
Never
Ending
Total Quality
Bottom-up
Management
Implementation
Small
Steps
Root
Causes
Continous Improvement methods
Questions???
Abbreviation Description
FCL Full container load
LCL Less container load
ASN Advanced shipping notice is a notification of pending deliveries, similar to
a packing list. It is usually sent in an electronic format and is a common
EDI document.
SC Supply Chain
3PL Third party logistics ex. Agility
SRM Supplier Relationship Management
CRM Customer Relationship Management
SOP Standard Operating Procedures
KPI Key performance indicator
VMI Vendor managed inventory
SSDR Supplier service defect rate
SDR Service defect rate
Abbreviation Description
JIT Just in time
Pull System A pull system is where processes are based on customer demand.
Push System A push system is where processes are based on projected production plan