Question

1. Describe the importance of warehouse/ Distribution center operations management
2. Why it is crucial to solve problems that often face 3PL operations?

3. Departing from a relevant information within the article and possibly extending to other resources of your choice, discuss the value of considering warehouses as a strategic element within the overall supply chain management.

4. Departing from a relevant information within the article and possibly extending to other resources of your choice, discuss the critical success factors that improve warehouse reliability.

5. Describe the main processes of warehouse operations.

6. What are the risks/ issues and challenges often encountered in warehouse operations?

Answer 1

1.

The importance of a warehouse/distribution center operations management can be understood in the following points:

a. It helps the company to control and manage inventory effectively. It ensures that the inventory levels are maintained properly, reduces the order cycle time, and fulfills the requirements quickly.

b. It enhances the performance of the company. With effective management of the warehouse, the inventory can be obtained at the right time in the right quantity, this would smooth out the companies operations.

c. The goods would be available to the customers as and when they need it. It is so because warehouse management also studies the consumer buying behavior and replenished the inventory accordingly. Thus, customers would remain satisfied.

d. It would enhance the sales and increase the profits of the company because the customers would remain satisfied and loyal to the company as the goods would be available to them when they need it.

 

2.

It is important to solve the problems which arises in regard with the 3rd Party Logistics operation because:

a. A 3PL provider would allow your business firm to grow into various regions and even country without the barriers. If you couldn't solve the transportation problems arising with the 3PL, this would make your firm you to face problems to get in various regions to expand the business.

 

b. 3PL also allows for having distribution centers and warehouses that are strategically located to allow for quick shipping of the goods to anywhere in the world. Various problems regarding how and where the warehouses would be located would arise and have to solve in the best manner to make sure the firms are able to strategically use and optimise the 3rd party logistics and its functions for proper usage.

 

c. All the issues regarding lower costs and quicker delivery times are also to be ensured and solved when you are using the 3PL because if you didn't integrate all the functions and strategies together, you would incur more costs and more time. Thus, to ensure the delivery time activity and the cost are reduced, proper problem solving of the 3PL is to be ensured.

 

 

 

3.

Warehousing and warehouse management are part of the logistics management system, which in itself is part of the supply chain. Warehousing plays a vital role in the supply chain process. A warehouse is a large, spacious place that is used for the storage or accumulation of goods. Storing goods throughout the year and releasing when they are needed creates time utility. Although this is viewed simply to store goods, warehousing plays a fundamental role in the logistics system. Inbound functions assist to prepare for storage as well as outbound functions pack and ship orders, resulting in benefits for both the business and customers. Warehouse acts as a strategic element in the overall supply chain in numerous ways:-

 

Storage Facility: This brings higher returns for your business. Manufacturing or the purchasing of goods in bulk always makes sense in a business point of view.

 

Convenience: Distribution is an important part of any business, customers should never experience out of stock situations. Having one central warehouse that stores all your goods feeding your distribution process will have you constantly in control of the stock available as well as what is needed in the near future. This is called safety stocking, ensuring your business doesn’t run into unexpected problems such as faulty stock or shipment delays.

 

Additional Revenue: Owning your own storage facility could provide revenue by leasing out warehouse space. The ability to manufacture or buy goods in bulk also allows for greater revenue returns. These are both great ways to save money and expand your business.

 

Distribution: Warehousing and the placement of the warehouse can directly impact on your distribution. The further away your storage facility or warehousing is situated from your suppliers or manufacturers, the more your distribution costs will rise. Strategic placement of the facility can dramatically affect your transportation costs, in turn affecting your own product. Alternatively, some countries such as Germany use warehouses as their storage and retail facility.

 

Thus, warehouses sincerely qualify as strategic element in the overall supply chain process.

 

4.

Warehouse reliability means the implementation of appropriate guidelines and management policies to handle the warehouse tools, equipment, manage human resources, maintenance of goods and tools, and the use of technology. One of the important factors that improve warehouse reliability is the guideline and policy planning sufficiently in advance so that warehouse functions are effective. Warehouse reliability is measurable in terms of key performance indicators. These are the factors which help in improving the reliability of warehouses across different parameters. There are eleven main indicators, namely, safety, picking, order duration, order picking, warehouse statistics, slotting, replenishment, location, goods received, equipment and workforce (Ho, et al., 2018). Safety is a factor essential for every component of business and therefore essential for warehouse management as well. Unfortunately, this factor is often taken lightly as the statistics published by the US Bureau of Labor states that deaths due to poor warehouse management comes second in the fatality numbers. Warehouse and transport industry is a labor intensive industry which requires manual efforts for dealing with heavy machinery or vehicles and different kinds of materials are managed on a daily basis. There is continuous movement and the time limit has to be maintained for timely delivery which involves physical and mental stress and thus increases the vulnerability of the business sector. Therefore a warehouse where necessary measures have been taken to monitor the practices can be considered reliable from safety point of view. 

 

The next indicator is picking. It is the activity where most of the warehouse cost is involved because of the intensive manual efforts. The majority of the operating costs go into picking goods. This process requires efficient workers who can work effectively to manage both quality and time factors so that customers do not end up with faulty products and the overall system cost is reduced. This is a systematic process which when executed correctly can reduce operation costs but a minor mistake can lead to heavy increase in expenses. 

 

Order duration refers to the time gap between the receipt of order and dispatch of order. This factor is closely related to picking in terms of time and money. Picking and order duration together present a joint statistic of products, orders, quantity of orders and the number of cartons picked. This calculation depends on the warehouse management calendar which can include monthly, quarterly, daily or weekly. Generally annual evaluations are avoided as that would an extremely long time gap within which the issues can go out of hand. Slotting refers to the segregation of products according to the nature of the product or product category and the order in which they were picked. This means the products that are picked together are kept together in the stock keeping unit (Friesenbichler, 2016). The replenishment indicators indicates the speed at which the re-stocking happens. This does not hold much importance in the dry demand season but becomes a crucial indicator of reliability during peak demand. Faster replenishment means better reliability. Location refers to the use of the entire warehouse area, rather optimum usage of the warehouse space for storage, picking and packaging. Slotting is a component of location. It indicates the efficiency in warehouse design and organization that would segregate as well as unite each process for a complete holistic and efficient management. Goods received is an indicator refers to the volume of received goods and returned goods. Increased proportion of returned goods would mean low reliability of the warehouse and its other functions. Equipment management is a major indicator of reliability because it is the backbone of warehouse management. Properly functioning equipment and the use of right equipment in right places would improve reliability by adding value to the operations.  As mentioned earlier, warehouse management involved deep involvement of manual processes. The workforce is directly involved in manual processes and indirectly involved in equipment management. Therefore, improving workforce performance would improve warehouse reliability because the correct form of processing would lead to error minimization and more efficient packaging and picking functions would be done. Also, this would improve the dispatch time compliance. Additionally, technology does improve warehouse management. Automation of several warehouse processes indicates a developed and reliable warehouse. Technologies like the warehouse management system improves reliability (Stank & Maltz, 1996). However, this indication functions together with the workforce factor to improve reliability.   

 

5.

The six main warehouse operation processes comprise receiving, putaway, storage, picking, packing, and shipping. Optimizing these six processes will allow you to streamline your warehouse operation, reduce cost & errors, and achieve a higher perfect order rate.

 

a. Receiving

Receiving is the first warehouse process and one of the most crucial. To perform the receiving process properly, the warehouse should be able to verify that it has received the right product, in the right quantity, in the right condition, and at the right time. Failing to do so will have consequent impacts on all subsequent operations

 

Receiving also involves the transfer of responsibility for the goods to the warehouse. This places accountability on the warehouse for maintaining the condition of the goods until they are shipped. Properly receiving cargo will allow you to filter out damaged goods and avoid liability for them.

 

The aim of optimizing the warehouse receiving process is to receive cargo efficiently and correctly and to avoid accumulation at the receiving docks. Solutions such as power pallet trucks and conveyors will allow you to unload cargo and clear dock areas faster and more efficiently. In addition, dimensioners automate the capture of weight and dimensions of parcels and pallets to accelerate your receiving processing and obtain certified measurements. Finally, software such as labor management systems and dock schedulers allow you to properly allocate the right amount of personnel by accurately anticipating upcoming shipments.

 

b. Put-Away

Put-away is the second warehouse process and is the movement of goods from the receiving dock to the most optimal warehouse storage location. Failing to place goods in their most ideal location can impair the productivity of warehouse operation. When goods are put away properly, there are several benefits:

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• Cargo is stored faster and more efficiently

• Travel time is minimized

• Safety of goods and employees is ensured

• Warehouse space utilization is maximized

• Cargo is easier and faster to find, track, and retrieve

The aim of optimizing the putaway process is to move goods for storage to their most optimal location in a fast, efficient, and effective manner. Software such as slotting and space management systems automatically assign optimal spaces for each cargo to allow for a streamlined putaway process and maximized space utilization. In addition, putaway mobile applications and devices direct clerks to store cargo in the right location.

 

c. Storage

Storage is the warehouse process in which goods are placed into their most appropriate storage space. When done properly, the storage process fully maximizes the available space in your warehouse and increases labor efficiency.

Optimizing your storage process is only possible when the right KPIs are properly tracked. Having a software that automatically calculates your warehouse storage utilization and tracks the right storage KPIs will allow you to determine how efficient each aspect of your storage process is. Slotting optimization systems can also help you by assisting with the allocation of the best storage location for a given cargo. Lastly, utilizing the right warehouse storage system according to the size of your facility and product mix allows you to maximize your horizontal and vertical spaces while improving warehouse efficiency.

 

d. Picking

Picking is the warehouse process that collects products in a warehouse to fulfill customer orders. Since it is the costliest process in the warehouse, comprising as much as 55% of the total operating expense, optimizing this process will allow you to reduce costs significantly and increase your warehouse efficiency. Streamlining of this process should also focus on achieving higher accuracy, as errors can have a direct impact on your customer satisfaction.One of the ways to optimize the picking process is introducing the right technologies. Technologies such as mobile and wearables can streamline the picking process because they allow clerks to view picking lists wirelessly, access systems in real time, and scan anywhere in the warehouse. Other viable options include conducting an ABC analysis to improve your warehouse layout, selecting the right picking methodology, and utilizing software to guide clerks in properly executing the picking process.

 

e. Packing

Packing is the warehouse process that consolidates picked items in a sales order and prepares them for shipment to the customer. One of the primary tasks of packing is to ensure that damages are minimized from the time items leave the warehouse. Additionally, packaging must be light enough so as not to increase the weight of the goods and minimal enough to control packaging costs.

Optimizing the packing process can be done by utilizing software to guide people in executing the tasks. Provided that a packing system has all the necessary data, such as dimensions and weight, the system can automatically determine the type and amount of packaging material that will keep the item safe and packing costs low.

 

f. Shipping

Shipping is the final warehouse process and the start of the journey of goods from the warehouse to the customer. Shipping is considered successful only if the right order is sorted and loaded, is dispatched to the right customer, travels through the right transit mode, and is delivered safely and on time.

Previous processes, such as ordering, putaway, picking, and packing, are also vital to the success of shipping because they greatly affect whether the order is fulfilled accurately and safely.

To optimize the shipping process, having software systems to streamline many of the tasks is critical. Labor management systems let you allocate the right amount of resources to prevent over or under allocation. Having a shipping mobile application and device lets you have the right information on hand and in real time to verify shipments on the fly. And loading systems can let you have guides that clearly instruct how to load cargo safely and efficiently.

 

6.

The various risks/issues and challenges encountered in warehouse operations are:

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• Managing the area, space and layout and efficient utilization and organization of the same is a difficult task and requires careful planning and strategy.
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• Accurate tracking of the warehouse inventory requires equipments such as RFID tags, barcodes and other identification.
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• The inventory in a warehouse must be easily accesible and should be able to be taken out whenever required. Proper movement through the aisles and access must be provided for the same.
•  
• The warehouse must have proper storage conditions that must ensure the products remain safe and are not damaged. Warehouses must have protection from natural environment such as rains, climate, and rodents, insects etc.
•  
•  
• Proper produt handling must be ensured while loading and unloading the products from a warehouse in order to avoid product damage while handling.

1. The importance of a warehouse/distribution center operations management can be understood in the following points: