Learnings from Warehouse visitIndividual Assignment

6/14/2014Manoj Kumar MegotiaGSEP13GLSCM047

On 12th June 2014, a group of about 30 Logistics & Supply Chain Management students made a visit to the Danzas warehouse facility in Jebel Ali.

The warehouse area was impressive, spread over an area of 54000 sq feet in the Jebel Ali free zone and housed consumer durables, surgical equipment and medicines among other things.

This was an opportunity for the students to see a real “logistics operation” in practice. During the visit we were shown how the organisation works, and how the goods are received, stored and despatched. The structure of the organization and services rendered by it such as freight forwarding, Customs clearance & brokerage, Warehousing & distribution, Supply chain solutions and Contract logistics were explained in detail.

The warehouse manager answered the queries of the students pertaining to the Warehouse Management System (WMS), the allotment of storage area to clients and the billing procedure to clients.

After brief instructions on safety procedures, the HSSE manager led the students into the warehouse and explained different aspects and practices followed.

Broadly, the visit yielded rich dividends in terms of following learning outcomes:

Charging procedure to Clients: Warehousing services were typically charged on a direct usage/ contract basis. Charges were generally categorized as per space occupied, warehouse labour hours and other clerical services.

Storage charges were quoted basis: • Flat rates for monthly storage • Flat rates per square foot

Handling charges were invoked upon receipt of inbound product. The rate quoted covered both inbound & outbound activities and is charged once at the time of product receipt.

Clerical charges are identified as ‘order processing’. These charges covered the costs of order processing, but the receipt of inventory, customer communications and reporting as well.

Value-added services were charged as per the service provided.

Warehouse Activities: The main warehouse activities included: receiving, transfer and put away, order picking/selection, accumulation, sorting, cross docking and shipping.

Storage:

The warehouse used fixed location fixed quantity process of storage. The device used was single-deep pallet rack. As the name implies there is only one pallet stacked at each level and the pallets were retrieved with forklifts. For higher levels, reach truck or a high-level order picker was used. The

pallets on the bottom level were easily accessible with for instance a pallet jack. As a rule, the allocation was made by the Warehouse Management System. Fast moving goods were generally allocated lower racks while slow moving goods were put on higher levels.

Allocation

Items were given a dedicated slot. With dedicated slots all items had a specific location. Allocation and storage devices are an important strategic decision and rethinking the allocation strategy can save both time and reduce costs. In dedication of slots to items, factors such as frequency of use, volume and destination were taken into consideration.

Picking Procedure

Man-to-goods

The warehouse followed Man-to-goods picking procedure and the items were picked manually by the use of forklifts from dedicated storage locations by an operator. This procedure reduces cost because items were usually in pallets or boxes and seldom in units.

The location of the item to be picked was given by the Warehouse Management System.

The Warehouse operations can be further divided into Inbound and outbound operations:

Inbound operations:

The inbound process includes all the activities required to receive incoming goods and make these available in stock for picking. This involved unloading the goods from the vehicle to a dedicated area where sorting, verification and controls could be performed. Goods loaded on pallets were rolled on roller bed and thereafter unloaded by forklifts and taken to the allocated location as shown by the WMS or taken to the cross docking deck.

Each SKU was given a specific storage location, which was created by entering information on the Warehouse management System. Labels were then printed and pasted on the items and then put away in stock. The items were transported to their designated storage location by different means and the put away was confirmed either by hand scanners or lists.

Flow Chart: Inbound operations

Outbound Operations:

The outbound process involved activities required to collect and ship away orders to end customers. It starts when the orders are released and available for being processed by the operator. Orders were displayed either on lists or in scanners. The picking route was performed by forklifts or trolleys. The items were placed at different levels for picking in shelves or racks in wide aisles, very narrow aisles, on open floor area or in low shelves.

First, the operator gets instructions of where to find the required items. He then transport the vehicle to the location, gets ready for picking, picks the required items and confirms the pick. After all orders or order lines were processed, the operator returns to the outbound area where the goods are ready for packing, if required. The process involves confirming the order in the WMS and printing delivery labels and notes.

When the finished packages reach the outbound area, where they await pick up, they are sorted according to their destinations on pallets.

Flow Chart: Outbound operations

Conclusions:

The visit was very informative and the students could relate to the topics taught in lectures. It was observed that how competitive advantage can be gained by improving on technology and using modern concepts of warehousing.