Warehouse Toolkit.pdf

WAREHOUSE MANAGEMENT TOOLS
Why Have a Warehouse?
A warehouse requires labor, capital (land and equipment), and information systems, all
of which are expensive. Warehouses, or their various cousins, provide useful services
that are unlikely to vanish under the current economic scene. Here are some of their uses:
• Improve responsive to customer demand
• Reduce transportation costs and provide customer service
• Improve order processing
• Close to target market
• Ensure price stabilization
• Improve purchasing decisions
• Better Inventory Management:
• Improve risk management

Types of Warehouse
In today’s world of high-traffic eCommerce, globalization, and automated workers, the
ordinary picture of the warehouse is changing quickly.
Warehouses of the past fell into categories based on their size and production. Today
we need to take a fresh look at warehouse types. We can evaluate how they work and
what fills them. Defining their types will let us familiarize ourselves with the past,
present, and future of warehouses worldwide

Types of Warehouse
Bonded or Customs Warehouse
Bonded warehouses are structures built to store imported products and goods that
usually require duty payments. After a set period, the stored goods can leave the
warehouse without the obligation of paying duties. It’s not only duties that these goods
incur, but other charges and taxes involved in imports.
✓
Duty fees are exempt from any goods that
don’t sell, so demand isn’t crucial to target
POSITIVE POINTS
X
X
Passing Customs compliance can be complex
It can be challenging to arrange international
cargo
NEGATIVE POINTS
✓ Holds a variety of products
✓
Less financial strain for businesses storing
goods for more prolonged periods

Types of Warehouse
Public or On-Demand Warehouse
One of the best ways to reduce storage costs for small businesses is to own or lease
space in a public warehouse. Since public warehouses operate “on-demand” and
owners depend on filling available space, pricing can be competitive. In addition,
business owners often have options: some charge per pallet, others by square footage.
Each on-demand warehouse has its own system
✓
The owner, not the renter, has responsibility
for building maintenance, staffing, etc
POSITIVE POINTS
X
X
Less control over climate, square footage,
floor plan
Monthly costs can pile up quickly
NEGATIVE POINTS
✓
You don’t have to employ staff. It’s an all-in-
one contract
✓
Flexible contracts encourage small businesses
to use these spaces for their warehouse

Types of Warehouse
Smart or Automated Warehouse
Smart warehouses are growing in popularity and attracting funds from tech investors
day by day. They are primarily filled with low-emission automated tools, conveyor
belts, sorting tools, and unmanned equipment.
✓
Almost unlimited potential for business owners
looking to cut workforce costs
POSITIVE POINTS
X
X
High cost of entry
Vulnerable to large scale blackouts or
computer malfunctions
NEGATIVE POINTS
✓
Minimal inventory count issues or production
errors
✓
Cutting-edge sorting, retrieval, and material-
handling tools

Types of Warehouse
Distribution Centers
Distribution warehouses specialize in short-term goods storage. Owners prioritize short-
term storage because they can increase turnover with each cargo reception and
expedition. In many cases, goods stay in storage for less than a day. It is especially true
in the food industries, but any perishable item will do well in distribution centers
✓
Widely available with competing warehouses
in many areas
POSITIVE POINTS
X
X
Services and technology vary widely from
center to center
NEGATIVE POINTS
✓ Accommodates a range of product types
✓
Used explicitly for quick distribution, so
outsourcing is efficient

Types of Warehouse
Cross-Dock Warehouse
Cross-dock warehouse types specialize in transferring goods from inbound to outbound
trucks and other transport. The process of cross-docking is a complicated procedure.
Essentially, these warehouses are middlemen between cargo carriers and their
destinations.
✓ Reduces transportation costs
POSITIVE POINTS
X
X
Only financially viable with more extensive
inventories
NEGATIVE POINTS
✓
Consolidated shipping lowers prices,
eliminating the need for shipping partners
✓
Relatively low storage time keeps goods on
the move

Types of Warehouse
Private Warehouse
Private warehouses are owned by distributors, manufacturers, or wholesalers. Some of
the more established online and retail marketplaces will also oversee their own private
warehouses.
Compared to public warehouses, private warehouses are more costly. However, private
warehouses are an effective solution for small and medium-sized eCommerce businesses.
✓
Fewer errors because it is managed by a
small group of people
POSITIVE POINTS
X
X
Return rates are low
Less flexibility with operations
NEGATIVE POINTS
✓ Performance improvements
✓
Can be designed to fit the needs of a
specific company
X Expensive to build from the ground up

Dedicated Warehouse vs Shared Warehouse
There are many types of warehouse operations and we have stated a few of them, but
two are prominent. That is, shared and dedicated warehousing. How do you decide
which one is right for business? we will examine the definition of the two and help define
their difference and benefits and why one might fit better with the business.
What is a dedicated warehouse?
Dedicated warehousing is a totally managed third-party warehouse dedicated to a single
business. This includes outsourcing all labor, operations, equipment, services, and of course
warehouse space
What is a shared warehouse?
Shared warehousing is a totally managed third-party warehouse shared by multiple businesses.
The sharing of resources in this type of warehousing includes labor, operations, services,
equipment, and warehouse space. Another name for shared warehousing is multi-client
warehousing

Dedicated Warehouse vs Shared Warehouse
When deciding which type of warehousing operation is best for your business, treat it
like any other business decision you make. First look at the benefits of each and then
decide if that is worth doing in-house or outsourcing. Based on your priorities, you can
decide whether dedicated or shared warehousing is a fit for you.
Dedicated
Warehouse
Shared
Warehouse
Scale
Cost
Contract
Flexibility
Limited according to
deal
Fixed monthly cost
3 – 5 years
Custom services
Fit you needs
Grow with you
Shared monthly cost
1 – 3 years
Board services
Fit most of the needs

Warehouse Location
Several key factors should be considered when it comes to selecting the location of your
new warehouse. Do some research, take important notes, and compare them against all
the available options. The warehouse site selection process can be overwhelming but
compiling and analyzing all the data will help you make a more informed decision.
Cost Factors Infrastructure
Labor Environment Markets
• Land cost
• Labor cost
• Transportation
cost
• Tax incentive
• Tax structures
• Handling cost
• Government
policy
• Industry
regulations
• Enterprise plans
• Political stability
• Transportation
• Telecommunication
• Energy Utilities
• Water utilities
• Ports
• Airports
• Ports
• Availability
• Skilled labor
• Transportation
• Geographic
• Weather
• Neighbours
• Customers
locations
• Supplier
location
• Leadtime
• Traffic

Warehouse Operations
A warehouse reorganizes and repackages products. Product typically arrives packaged
on a larger scale and leaves packaged on a smaller scale. In other words, an important
function of this warehouse is to break down large chunks of product and redistribute
them in smaller quantities. In such an environment the downstream warehouse operations
are generally more labor-intensive.
Even though warehouses can serve quite different ends, most share the same general
pattern of material ﬂow. Essentially, they receive bulk shipments, and stage them for
quick retrieval; then, in response to customer requests, retrieve and sort SKUs, and ship
them out to customers. The reorganization of the product takes place through the
following physical processes
Inbound Processes → Receiving – Put-away
Outbound Processes → Order-picking – Checking, Packing, and Shipping

Selecting Warehouse Equipment
When it comes to storing and using equipment, there are several options. In order to
choose the most appropriate method of storing the product, you must consider the
product's size, the speed of throughput, the number of pallets per line item, the stock
rotation policy, and the type of material handling you will use in your warehouse.
Before buying new warehouse equipment, you should consider the following factors to
ensure you are investing in the right equipment for productivity, efficiency, and working
capital.
• Identify processes where there’s room for improvement
• Important cost and ROI considerations
• Getting to know the training requirements
• Assessing possible physical infrastructure and staffing changes
• Planning for shifts in productivity

Selecting Warehouse Storage Equipment
Warehouse storage Equipment is a major capital investment that, depending on the
design and the way they fit into your warehouse floor plan and processes, can either
help or hurt your throughput.
Warehousing Storage Systems
Storage
density
Throughput
Effectiveness
of space used
Load
accesibility
Rotation
of loads
No. Of
aisles
Equipment
Utilization
factor %
Probability
of damage
Sprinkler
requirement
Security
Type of
pallets
Block Storage High High Very good Poor LIFO Few W,N 60 High Ceiling Poor All
Tier Rack High Medium Very good Poor LIFO Few W,N 60 Low Ceiling Poor Captive
Standard Pallet (Selective) Low High Fair Excellent FIFO Many W,N, VNA 85 Low Ceiling in rack Good All
Double Deep Racking Medium Medium Good Fair LIFO Medium N 80 Low Ceiling in rack Good All
Bridge Cross varies Medium Good Excellent FIFO none W,N 85 Low Ceiling Good All
Drive-In High Medium Very Good Poor FIFO Few W,N 66 Medium Ceiling, in rack Good Varies
Drive-Through High Medium Very Good Poor ANY Few W,N 66 Medium Ceiling, in rack Good Varies
Movable High Low Excellent Good FIFO Few W,N 66 Low Ceiling, in rack Good Varies
Gravity Flow High High Excellent Fair FIFO Few W,N 90 Low Ceiling, in rack Good Captive
Push Back Medium Medium Good Fair LIFO Few W,N 66 Medium Ceiling, in rack Good Captive
Cantilever Low Medium Fair Excellent FIFO Many VNA 85 Low Ceiling, in rack Good None
W= Wide Aisle
N=Narrow Aisle
VNA = Very Narrow Aisle

Selecting Warehouse Material Handling Equipment
Storage systems play an important role in selecting MHE within a warehouse. Due to
this, it is essential that they are done simultaneously, considering the trade-off between
additional space capacity and throughput speed.
Category Type Name Comments Carriage
Electric Forklift Lift: up to 6 Meters up to 20 tons
IC Trucks Lift: up to 3,5 Meters 1,6 - 9,0 Tons
Stand-up counterbalanced lift trruck Lift: 7 Meters 1,8 Tons
walkie Walkie counterbalanced lift trruck
Driver seated reach truck Lift: up to 12 meter up to 1 ton
Driver seated four direction reach truck Lift: up to 12 meters up to 1 ton
Driver seated four direction reach truck Lift: up to 9,7 meters 2,5 Tons
Walkie reach truck
Stand on reach truck Lift: up to 3,75 meters 1,25 Tons
Narrow aisle reach truck Lift: up to 12,6 meters 2 Tons
Very Narrow Aisles (VNA) trucks Lift: up to 14,57 Meters 1-1,5 Tons
Electric front seat / tri-lateral VNA truck Lift: up to 7 Meters 1,25 Tons
Electric transverse seat / bi-lateral stacker with telescopic forks VNA truck Lift: up to 13 Meters 1,2 Tons
Electric transverse seat / tri-lateral stacker VNA truck Lift: up to 13 Meters 1,5 Tons
Clamp
Slip sheet
Curved clamp
Carpet boom
Accesories Truck Attachments
Counterbalanced Forklift truck
Sit-down
Electric Reach Forklift Truck
Reach forklift truck
Narrow Aisle / Very
Narrow Aisle trucks

Selecting Warehouse Material Handling Equipment
Category Type Name Comments Carriage
Hand Pallet Truck / Pallet Jack 2,2 Tons - 3 Tons
Hand pallet truck for display pallets 0,5 Tons
Hand pallet truck with weighting device 2,2 Tons
Electric walkie/pedestrian pallet truck / Tiller Truck Speed: up to 6 km/h 1,6-3 Tons
Electric pedestrian rider / stand-on pallet truck 1,6-2,5 Tons
Electric walkie /pedestrian pallet truck with extra mast lift or order picking lift Lift: 56 cm 2 Tons
Electric sideways seat pallet truck
Multi pallet transportation for
up to 3 pallets
3 Tons
Electric rider / stand-on / sideways powered pallet truck Speed: up to 10 km/h 2,4 Tons
Rider seated low lift pallet truck Speed: up to 14 km /h 3,6 Tons
Electric Hand Stacker Lift: 1,6-3 Meters 1 Ton
Pedestrian / Walkie high lift pallet truck Lift: up to 5,39 Meters 2 Tons
Pedestrian High Lift pallet truck with hinged platform up to 2 Tons
Pedestrian / walkie high lift pallet truck - double decker Lift: up to 1,54 Meters 2 Tons
Rider seated high lift pallet truck Lift: up to 3,75 Meters 2 Tons
Stand-on / rider high lift pallet truck Lift: up to 4,14 Meters 1,2 Tons
Order picker Horizontal order picker Lift: Up to 1 Meter 1 Ton
Horizontal Low lift order picker Lift: Up to 2 Meters 2 Tons
Ergonomic horizontal order picker with raising loader section Lift: Up to 1 Meter 1 Ton
Horizontal order picker with raising load section 1 Ton
Horizontal order picker with scissor lift load section Lift: Up to 2.3 Meters 1,6 Tons
Vertical order picker / combi trucks Lift: Up to 10,4 Meters 1,2 Tons
Order picker/tri-lateral stacker Lift: Up to 14,25 Meters 1,5 Ton
Order picker with raising platform
Tow Truck Driver Operated Tow truck 5 Tons
High Lift Pallet Trucks / Stackers
Walkie pallet stakers
Rider pallet stakers
Horizontal order picker
Vertikal order picker
Low lift Pallet Truck
Manual walkie pallet
truck
Electric walkie pallet
trucks
Rider pallet trucks

Warehouse Location Mapping
Once you’ve selected your warehouse storage
system, the key is to implement an effective
warehouse location mapping strategy.
Warehouse location mapping is defined as
identifying and naming all the shelving positions
for your products, work areas, and paths of
travel within your warehouse facility. An effective
analogy is to think that each product should have
its own place to “live,” and to think of a
warehouse as an item’s home address, with aisles
as the street, levels as floors within an apartment
building, bays units as the individual apartment
unit, and bins as rooms for each person.

The best way to begin your process of warehouse
location mapping is to walk through the
warehouse and conduct an assessment that
identifies the most ideal picking strategy. Take
note of streamlined routes, highly trafficked
areas, and other spots that may lead to trouble
or waste. It helps to speak with pickers and gain
first-hand knowledge about movements and
routes to prevent anyone from having to double
back to retrieve products. The most popular items
should be placed in the most accessible areas.

Warehouse location labeling is tricky. The
organization of location codes as well as what
locations are called can differ greatly between
warehouses. There are, however, a few industry
standards you should follow in order to prevent
needing to rename all your shelves later and
alleviate potential confusion for your pickers.
• Number shelves from the ground up
• setting up alphanumeric locations to use a zero
in all numbers less than ten
• Be consistent - Mapping workflow - Optimizing
picking processes - Improving accessibility
• Streamlining the shipping process

Cross-Docking
Cross-docking is a technique utilized in distribution centers and warehouses to speed up
the throughput of products. It eliminates the need to store products by consolidating
items during the inbound process and taking them directly to the shipping or dispatch
area. The name ‘cross docking’ explains the process of receiving products through an
inbound dock and then transferring them across the dock to the outbound transportation
dock. The process of cross-docking will not suit every warehouse’s need, it is, therefore,
important to make an informed decision as to whether cross-docking will increase the
productivity, costs, and customer satisfaction for your specific business.
But the pressure on companies to reduce order lead times requires products to move
through the supply chain much faster.

How to use
Operating an efficient cross-dock requires a good information technology system.
Advanced shipping notifications (ASNs) are essential, and goods need to be identified
easily at the inbound stage to enable staff to move them directly to the dispatch or
shipping area as opposed to the storage area. To enable this, barcodes or radio
frequency identification (RFID) tags must be aligned across suppliers and customers.
Suppliers can be requested to label the items with information that enables the goods-in
team to identify the items quickly. Alternatively, the inbound team is alerted to the fact
that a transfer of goods is required by an instruction on the paperwork, a voice
message, or a message on the barcode scanner. If the company is using scan
technology, a message appears on the screen as soon as the goods for cross-docking
have been identified. Instructions as to where to move the product should also be given
at this time

How Does Cross-Docking Work?
Here’s how it works:
• Truckloads arrive at the entrance docks to the warehouse
• The goods are unloaded and sorted and loaded into trucks waiting on-site
• The newly loaded trucks deliver the goods to the customers

Cross-Docking Pros and Cons
Cross docking requires efficient organization, streamlined transportation processes, up-to-date technology,
high turnover, and low lead time. If you can handle that, or find a 3PL that can provide it, then cross-
docking is right for you, if not you should stick with a more traditional warehouse approach.
POSITIVE POINTS NEGATIVE POINTS
✓ Increase Efficiency
✓ Reduced Warehouse Cost
✓ Decreased Lead Time
X High-Cost of Precise Organization
X Increased Cost of Trucks and Docks
X
Suppliers May Not Be Able to Do Cross
Docking
X Inefficient for Low-Turnover Businesses
X Requires system interface

Warehouse Space Calculations
In order to accurately assess your warehouse storage space requirements before you
invest (Own or Rent), you must first determine how much space you will need.
You should start by gathering the following information:
• What size are the pallets?
• How many pallets will be stored on a regular basis?
• How many pallets high can the product be stacked?
• Will SKUs be added with different dimensions?
• Will they require more space for operation or assembly or kitting?
• What are the future sales projections? The growth rate for each product?
• What is the inventory turnover ratio? Will have obsolete products?
• What warehouse space utilization model will work?

Calculation of Dock Space Requirements
To be able to determine your dock space requirements, you should start observing your
operation upon the truck’s arrival, and gathering some information that allows you to
evaluate your requirements:-
• Number of inbound trucks per day
• Size of the inventory per truck (in terms of pallets)
• Width and depth of the pallets
• Time to unload the pallets from the trucks
• Duration of pallets left at the staging area for inspection prior to put-away
• Work shift for the day (for the inbound team)
Then start your calculations as below
Docking Area required = Roundup[(Number of trucks received * Hours per load) /
length of work shift] * (size of inventory * space occupied per pallet)

Calculation of Dock Space Requirements
• Input factors
• 20 inbound trucks per day
• 26 pallets per truck unloaded
• Dimension of pallets to be 1m wide and 1.2m deep
• 45 minutes to unload a pallet from the truck
• 30 minutes to complete the inspection at the staging area
• 8 working hours for the inbound team
• Actual calculation
• Docking Area required = Roundup[(20 * (45+30)/60) /8] * (26 * 1 * 1.2) =
124.8 sqm
• Space for work and travel area = 124.8 * 2 = 249.6 sqm
• Total space required = 374.4 sqm

Calculation of Pallet Storage
There are many factors to consider when it comes to pallet storage, you need to have
some information about the products and their packaging, how they are arriving at the
warehouse house, and which type of vehicles and their capacity.
• Are the products stored as loose pieces or pallets in the vehicles? Assuming they are
stored in pallets, approximately how many pallets can be stored in a vehicle?
• We need to understand the storage method in the warehouse. Are you storing in
pallet racking, floor stacking, or another storage method? Assuming you are storing
the products in pallet racking, how high and wide is each bay of pallet rack?
• We need to understand the MHE for the moving of these products. Are we using a
forklift or a reach truck? These will impact the aisle width requirement.
There are also other factors to be considered such as the staging area size that
indirectly affect the calculation.

• Input factors
• The products are in pallet form (1.2m deep by 1m wide by 1m high). 8
pallets/vehicle.
• The products are stored in pallet racking in the warehouse. The racking bays are
2.3m wide and 6 levels high. Each bay can store 12 pallets.
• The number of pallet racking bays to be 50 bays, this translates to 50*12= 600
pallets/locations. (600/8= 75 vehicles)
This implies that the warehouse can store 75 vehicles, the assumption is that it begins as
an empty warehouse where all the 600 pallet locations can be used. A good warehouse
practice is to utilize approximately 80% of the total capacity, therefore 60 vehicles will
the best ideal number of vehicles can be stored in warehouse is 60 vehicles

Another method works based on calculating the width, length, and height of modules
within the warehouse.
Module width = Width of aisle + 2 Pallet lengths (short side) + 100 mm
• Input factors
• Aisle = 2,500 mm (variable with the type of MHE used) Pallet size = 1,200 mm
x 1,000 mm
• Two pallets short side = 2 x 1,000 mm = 2,000 mm Clearance = 100 mm
between back-to-back pallets
• Therefore:
• Width of module = 4,600 mm (the sequence is pallet—aisle—pallet—
clearance)

Module length = Width of upright + Clearance + 2 Pallets (long side)
• Input factors
• Rack upright plus clearance = 420 mm (120 mm + 3 x 100 mm)
• Two pallets (long side) = 2 x 1,200 mm = 2,400 mm
• Therefore:
• Length of module = 2,820 mm (the sequence is upright—clearance—pallet—
clearance—pallet—clearance)
Module Height = height of Pallet = 150 mm
• Input factors
• Pallet height = 1,350 mm
• Clearance above pallet = 150 mm / APR beam width of 140 mm
• Therefore:
• Height of module = 1,640 mm (the sequence is pallet and goods—clearance—
beam height)

Total pallets stored within the cubic capacity of a warehouse section, excluding
receiving and dispatch areas, gangways, and other areas:
(No of width modules x pallets in module width) x (No of length modules x pallets in
module length) x (No of height modules) = No of pallets into cube volume of the
warehouse)
A warehouse section with a width of 48 meters, a length of 120 meters, and a height of
10 meters:
Width calculation = 48 m + 4.6 m = 10 modules Length calculation = 120 m - 2.82 m
= 42 modules Height calculation = 10 m - 1.64 m = 6 pallets Therefore:
Total number of pallets = (10 x 2) x (42 x 2) x (6) = 10,080 pallet locations in this
warehouse storage area.

Resource Planning
Labor is a significant cost within a warehouse operation. Warehouse managers are
constantly required to optimize the number of staff employed and reduce overall
headcount by increasing productivity. Therefore, Planning work is crucial to running a
cost-effective warehouse.
Labor management enables warehouse managers to compare productivity between
staff and engineered standards, and as a result, identify opportunities for further
training or possible redeployment. The system can also be used to introduce incentive
schemes and be part of an appraisal system.
There are several labor management systems available, as well as, some WMSs also
have a labor-management module. However, it is possible to plan the resources
required within a warehouse manually using spreadsheets

Resource Planning
To be able to set up your labor system, you should follow below steps:-
• Identify your activities
• Decide on labor parameters [working hours – utilization rate]
• Perform a time and motion study
• Setting labor standards
• Compare standards vs actual
• Revise standards if required

Example for Identifying Resources – Inbound Activities
Distance Velocity Time per Time per Time per FTE Truck Equip. Peak No. of direct
[m] [m/sec] Unit [sec] [m] [h] Type Type Type Type FTE [gross] Trucks Equipment
5 Vehicle 25 M 0.90 S 27.78 s 2.31 m 0.05 h - - - Norm 0.01 FTE 0.00 EQP -
Vehicle 30.00 s 2.50 m 0.05 h - - - Norm 0.01 FTE 0.00 EQP -
Vehicle 25 M 0.90 S 27.78 s 2.31 m 0.05 h - - - Norm 0.01 FTE 0.00 EQP -
100 trans 20 M 0.90 S 22.22 s 37.04 m 0.74 h BCP PJ - Norm 0.01 FTE 0.00 EQP -
7 trans 10.80 s 1.26 m 0.03 h BCP PJ - Norm 0.01 FTE 0.00 EQP -
7 trans 20 M 0.72 S 27.78 s 3.24 m 0.06 h BCP PJ - Norm 0.01 FTE 0.00 EQP -
7 trans 10.80 s 1.26 m 0.03 h BCP PJ - Norm 0.01 FTE 0.00 EQP -
133 pal 16.20 s 35.91 m 0.72 h BCP PJ - Norm 0.15 FTE 0.05 EQP -
133 pal 3 M 0.72 S 4.17 s 9.24 m 0.18 h BCP PJ - Norm 0.04 FTE 0.01 EQP -
9000 cases 12.00 s 1800.00 m 36.00 h BCP PJ - Norm 7.68 FTE 2.38 EQP -
7 trans 25 M 0.90 S 27.78 s 3.24 m 0.06 h Chek - - Norm 0.00 FTE 0.00 EQP 0
133 pal 3.80 s 8.42 m 0.17 h Chek - - Norm 0.00 FTE 0.00 EQP 0
7 trans 25 M 0.90 S 27.78 s 3.24 m 0.06 h Chek - - Norm 0.00 FTE 0.00 EQP 0
7 trans 5.00 s 0.58 m 0.01 h Chek - - Norm 0.00 FTE 0.00 EQP 0
Required Resources 514.14 s 2282.39 m 45.65 h 9.12 h 2.81 h 0.00 h
16.62 Trucks/h
3.08 Pallet/h
61.24 Pallet/h
Check & Inspection
Scan Article EAN
Count cartons on pallet
Capture quantity in the terminal
Walk back to office
Take over labels
Go back to truck
Walk to inbound zone
Label pallet
Scan label
Walk into trailer
Repack cartons on pallet
Take pallet
Go to inbound zone
Drop pallet
Wrap pallet
Go from inbound to empty pallet storage
Take empty pallets (stake)
Go to truck
Put down pallets (stake)
Take pallet
Unloading truck
Check documents
Close gate (after unloading)
Walk back to office
Go to truck
Open gate
Take documents from driver
Take over documents
Activity (Warehouse / Administration) Volume UOM
Calculated No. of direct
Remarks
Inbound Activities

Example for Identifying Resources – Inbound Activities
Daily volume (average)
Inbound operation Type 1 Type 2 Type 3
Unloading
Unload palletized trailer 260 Pallets 52 5 Hand Pallet Scanner
Unload loose loaded containers & palletize 5000 Cases 200 25
Stretch-wrap pallets 100 Pallets 40 2.5
Put-away
Collect pallets, put away in wide aisle racking 210 Pallets 20 10.5 Forklift Scanner
Collect pallets, put away in drive-in racking 124 Pallets 16 7.75 Forklift Scanner
Collect pallets, put away in pick locations 26 Pallets 5 5.2 Hand Pallet Scanner
Sub-total 55.95
Over-Time (Estimated - 10%) 5.60
Total hours required 61.55 10 18
Available productive hours per person/truck per day 7 7 7
Approx number of staff required 8.79
Approx number of equipment required 1.43 2.57
Other
equipment
MHE
Hours
required
Productivity
standard
(units/hour)
UOM
Activity
(units)

Inventory Profiling
Inventory profiling “Slotting” is the process of identifying the most efficient placement
for each stock item in a warehouse or distribution center, considering item popularity,
characteristics, and safety aspects. Strategically placing the item in the optimum location
allows workers to pick items efficiently, quickly, and accurately, and reduces the risk of
injuries. Inventory profiling can be done manually using spreadsheets, database
programs, or specifically designed software. profiling is a recent addition to many
warehouse management systems (WMS)
There are several ways to increase picking productivity with slotting. Placing fast-
moving items close to the dispatch area, conveyors, and aisle ends minimize picker
travel time. Using easier-to-pick locations for high-activity items, such as the middle
levels of shelving and carton flow racks, also facilitates quicker and more ergonomic
picking

How to Start Inventory Profiling
The first step in any inventory slotting project is gathering the necessary information
about the items, locations in the warehouse, and product sales.
The following information is typically needed for each SKU:
The second step is getting picking location information, each pick location in the
warehouse needs to be defined. Information typically required for each slot is:
Item Dimension and Weight Case Quantity and Weight Pallet Quantity and Layer Qty
Vendor Information Item Group Family Information Storage Condition Requirements
Maximum Stacking Height Hazard Warring if Any Expiry Dates if Any
Location Number Usable Size Dimension Weight Capacity
Material Handling Equipment Position Within The Pick Path Types of items eligible to be stored

Inventory Profiling Rules
Once the necessary data have been collected, profiling rules must be established by
setting up constraints and objectives. Constraints include weight limits, hazardous
material areas, and vendor/family group areas. Objectives define factors such as the
desired stock level, where faster-moving items are placed, and how the activity will be
balanced. Examples of some typical rules include
• Put the fast-moving items close to the shipping dock and on the lower pallet rack levels.
Store slower-moving items on higher levels and further away from the dock.
• In the case pick area, locate taller cases and heavier cases at the beginning of the pick
path. Put faster-moving cases on floor/lower levels
• Place fast-moving items into carton flow racks, with the very fastest on the center levels.
Balance the workload among the flow rack units
• Put slower-moving items into shelving
• Put the faster-moving items closer to the take-away conveyor or end of the aisle
• Locate heavier items on the center levels of shelving

Task interleaving
Task interleaving describes functionality that
mixes dissimilar tasks such as picking and put-
away to obtain maximum productivity. Used
primarily in full-pallet-load operations, task
interleaving will direct a forklift operator to
put away a pallet on his way to the next pick.
In large warehouses, this can greatly reduce
travel time, not only increasing productivity but
also reducing wear on the forklift and saving
on energy costs by reducing forklift fuel
consumption. Task interleaving is also used with
cycle counting programs to coordinate a cycle
count with a picking or put-away task.

Task interleaving
Combining work for a forklift or powered pallet truck is good for tasks with the
following characteristics:
• The same materials handling equipment can be used to undertake both types of
moves.
• The end location for one type of move is relatively close to the collection point for
the other move. This means that the operator and truck have utilized both ways
rather than two separate single trips
• The moves are pretty much equal both ways. Ensuring that the tasks are well-
matched needs an accurate set-up in the WMS.
Task interleaving will not be successful if inbound activities are undertaken in the
morning, dispatch in the afternoon, and replenishment over-night
The key is to manage the task allocation and not disrupt urgent operations. The tasks
must be controlled sufficiently well and planned to coincide with other tasks

Pareto Analysis (80/20 Rule)
Nowadays, companies used to identify and separate best-selling products and
profitable customers from slow-moving products and less profitable customers.
The tool is used heavily within the warehouse environment. Examples are as
follows:
• 20% of the stock lines account for 80% of sales
• 20% of the stock lines produce 80% of the profit
• 20% of stock lines appear most frequently on orders
• 20% of the stock-keeping units (SKU) account for 80% of the stock value
These are some examples of common rules used in business today. They may not
be exact for every company, but most companies can relate to them or even
more.

ABC Analysis
ABC inventory analysis is a process of classifying products based on their value
of importance. This concept is derived from the Pareto principal of 80/20 rule
which focuses on vital few from the trivial many. Not all items in an inventory are
of the same value, therefore these items are broken down into three categories
A, B and C. Class A consists of the most valuable items, although these items
constitute only 10% of the quantity, they account for 70% – 80% of consumption
value. Class B consists of items with moderate importance accounting for 10% –
20% of revenue. And class C consists of the least valuable items that contribute
to only 10% of revenue. This classification helps managers in prioritizing and
monitoring items of high importance closely.

When to use
Both tools can be used in many areas of logistics in the warehouse. One of the
most time-consuming operations within a warehouse is the picking of orders. It
can take up to 60% of the overall labor activity within the warehouse and, of
that, half can be accounted for by travel to, between, and from the pick
locations. Thus, to reduce travel in the warehouse we need to place our most
popular items in terms of order frequency and sales volume as close to the
dispatch area as possible. To do this, we need to analyze the data

How to manage picking list frequency
• Download the sales data for the last 12 month
• List the sum of sold items in the last 12 month as highest to lowest by Value
• Define each Item Number as the total %ge of sales
• Tick the items which fall under 80% of total sales (Mark them with “1”)
• Repeat the above steps based on Volume and Frequency as well
• Consolidate the results in the above steps
• A – Items fall under the Top 80% of value, volume (qty), and frequency of sales, i.e., in all 3
dimensions. These are the most valuable items.
• B – Items fall under 2 of the 3, Top 80% value, volume, and/or frequency, i.e., in any 2 dimensions
• C – Items fall under 1 of the 3, Top 80% of value, volume, or frequency. i.e., in any 1 dimension.
• Q – Do not fall Top 80% of either value, volume, or frequency.

Item Number Quantity $ Value %ge Top 80%
XY-900-99-70 930 620 576,600 6% 1
XY-900-99-50 690 590 407,100 4% 1
XY-900-99-80 530 720 381,600 4% 1
XY-900-99-100 560 650 364,000 4% 1
XY-900-99-30 440 700 308,000 3% 1
C-100-1000-118 90 2900 261,000 3% 1
B-100-1000-07 990 260 257,400 3% 1
B-100-1000-09 830 300 249,000 3% 1
C-100-1000-113 90 2750 247,500 3% 1
C-100-1000-109 80 2910 232,800 2% 1
B-100-1000-03 920 250 230,000 2% 1
C-100-1000-101 90 2430 218,700 2% 1
C-100-1000-112 100 2140 214,000 2% 1
C-100-1000-119 80 2620 209,600 2% 1
B-100-1000-02 710 290 205,900 2% 1
C-100-1000-103 80 2550 204,000 2% 1
C-100-1000-114 90 2100 189,000 2% 1
A-100-1000-10 4150 45 186,750 2% 1
XY-900-99-40 230 770 177,100 2% 1
C-100-1000-117 70 2450 171,500 2% 1
C-100-1000-102 60 2810 168,600 2% 1
C-100-1000-115 70 2390 167,300 2% 1
A-100-1000-01 4550 35 159,250 2% 1
B-100-1000-01 960 160 153,600 2% 1
C-100-1000-105 70 2110 147,700 2% 1
B-100-1000-04 500 290 145,000 1% 1
A-100-1000-03 2880 50 144,000 1% 1
A-100-1000-04 3530 40 141,200 1% 1
XX-100-111-12 1170 120 140,400 1% 1
C-100-1000-100 60 2290 137,400 1% 1
A-100-1000-02 2680 50 134,000 1% 1
C-100-1000-111 50 2660 133,000 1% 1
B-100-1000-08 500 260 130,000 1% 1
XX-100-111-03 1180 110 129,800 1% 1
XX-100-111-05 1280 100 128,000 1% 1
XX-100-111-14 1250 100 125,000 1% 1
XX-100-111-02 1160 100 116,000 1% 1
XX-100-111-06 1410 80 112,800 1% 1
Item Number Quantity %ge Top 80%
A-100-1000-01 4550 8% 1
A-100-1000-10 4150 7% 1
A-100-1000-07 3600 6% 1
A-100-1000-04 3530 6% 1
A-100-1000-03 2880 5% 1
A-100-1000-02 2680 4% 1
A-100-1000-08 2680 4% 1
A-100-1000-09 2010 3% 1
A-100-1000-05 1930 3% 1
XX-100-111-07 1500 2% 1
XX-100-111-06 1410 2% 1
XX-100-111-10 1330 2% 1
XX-100-111-05 1280 2% 1
XX-100-111-01 1260 2% 1
XX-100-111-14 1250 2% 1
XX-100-111-04 1210 2% 1
A-100-1000-06 1190 2% 1
XX-100-111-03 1180 2% 1
XX-100-111-12 1170 2% 1
XX-100-111-02 1160 2% 1
XX-100-111-08 1090 2% 1
XX-100-111-09 1060 2% 1
XX-100-111-13 1050 2% 1
XX-100-111-11 1040 2% 1
B-100-1000-07 990 2% 1
B-100-1000-01 960 2% 1
Item Number Frequency %ge Top 80%
C-100-1000-116 500 3% 1
XY-900-99-30 497 3% 1
C-100-1000-115 495 3% 1
B-100-1000-01 488 3% 1
XX-100-111-06 485 3% 1
A-100-1000-01 482 3% 1
B-100-1000-02 481 3% 1
B-100-1000-10 471 3% 1
A-100-1000-06 463 3% 1
XX-100-111-11 457 3% 1
XY-900-99-50 456 3% 1
XY-900-99-40 422 2% 1
C-100-1000-112 417 2% 1
A-100-1000-05 408 2% 1
C-100-1000-110 407 2% 1
XX-100-111-05 406 2% 1
XX-100-111-02 400 2% 1
C-100-1000-114 394 2% 1
XX-100-111-14 389 2% 1
XY-900-99-10 389 2% 1
XX-100-111-09 373 2% 1
A-100-1000-08 356 2% 1
XY-900-99-100 353 2% 1
C-100-1000-101 347 2% 1
B-100-1000-09 346 2% 1
C-100-1000-111 320 2% 1
XX-100-111-10 313 2% 1
C-100-1000-109 309 2% 1
B-100-1000-04 292 2% 1
C-100-1000-118 282 2% 1
A-100-1000-03 276 2% 1
C-100-1000-104 274 2% 1
C-100-1000-108 274 2% 1
A-100-1000-09 273 2% 1
C-100-1000-105 260 2% 1
Based on value Based on volume Based on Frequency

Item Number Frequency Quantity Value Top 80% F Top 80% Q Top 80% V Score Cat
A-100-1000-01 482 4550 159250 1 1 1 3 A
A-100-1000-03 276 2880 144000 1 1 1 3 A
B-100-1000-01 488 960 153600 1 1 1 3 A
XX-100-111-02 400 1160 116000 1 1 1 3 A
XX-100-111-05 406 1280 128000 1 1 1 3 A
XX-100-111-14 389 1250 125000 1 1 1 3 A
XX-100-111-06 485 1410 112800 1 1 1 3 A
B-100-1000-02 481 710 205900 1 0 1 2 B
B-100-1000-04 292 500 145000 1 0 1 2 B
B-100-1000-09 346 830 249000 1 0 1 2 B
C-100-1000-101 347 90 218700 1 0 1 2 B
C-100-1000-112 417 100 214000 1 0 1 2 B
C-100-1000-114 394 90 189000 1 0 1 2 B
C-100-1000-118 282 90 261000 1 0 1 2 B
XY-900-99-100 353 560 364000 1 0 1 2 B
XY-900-99-30 497 440 308000 1 0 1 2 B
XY-900-99-40 422 230 177100 1 0 1 2 B
XY-900-99-50 456 690 407100 1 0 1 2 B
A-100-1000-02 31 2680 134000 0 1 1 2 B
A-100-1000-04 134 3530 141200 0 1 1 2 B
A-100-1000-09 273 2010 80400 1 1 0 2 B
A-100-1000-10 175 4150 186750 0 1 1 2 B
B-100-1000-07 100 990 257400 0 1 1 2 B
C-100-1000-105 260 70 147700 1 0 1 2 B
XX-100-111-03 34 1180 129800 0 1 1 2 B
XX-100-111-12 89 1170 140400 0 1 1 2 B
A-100-1000-05 408 1930 86850 1 1 0 2 B
A-100-1000-06 463 1190 53550 1 1 0 2 B
A-100-1000-08 356 2680 107200 1 1 0 2 B
C-100-1000-109 309 80 232800 1 0 1 2 B
C-100-1000-111 320 50 133000 1 0 1 2 B
C-100-1000-115 495 70 167300 1 0 1 2 B
XX-100-111-09 373 1060 31800 1 1 0 2 B
XX-100-111-10 313 1330 66500 1 1 0 2 B
XX-100-111-11 457 1040 62400 1 1 0 2 B
B-100-1000-03 223 920 230000 0 0 1 1 C
B-100-1000-08 183 500 130000 0 0 1 1 C
C-100-1000-113 23 90 247500 0 0 1 1 C

Choosing an order-picking strategy
Many warehouses continue to pick orders individually, however, in today's e-commerce
environment, there is a requirement to speed up the picking process.
There are different strategies in terms of picking descriptions and its Pros or Cons:
Picking Strategies:
• Single-Order Picking
• Batch Order Picking
• Cluster Order Picking
• Zone Order Picking
• Wave Order Picking

Single-Order Picking
Single-order picking is the most common fulfillment method, it is also the most time-
consuming. With single-order picking, the picker works on one order at a time. They’ll
search the warehouse for each item one by one to complete the order, once picked, the
pickers returns for the next order, which means pickers often travel the same route
repeatedly throughout their shift.
• Instructions can be via paper-based systems, scanners, voice or vision technology.
• It is normally a single-stage process unless every order is checked on dispatch.
• Handling equipment can range from a trolley to a forklift truck.
• Prone to error if using a paper-based system.
• Time-consuming.
• Training can be time-consuming for scanning and paper pick
Single-order picking is ideal for smaller warehouses that handle smaller order volumes.
If accuracy is an issue, this method works well since pickers work on just one order at a
time

Single-Order Picking
✓
✓
✓
✓
Single-stage operation
Flexible
Quick implementation
Ability to isolate urgent orders
Picker able to decide pick path if using paper
pick system
Utilize manual or technology systems
POSITIVE POINTS
X
X
X
X
Low pick rate
Increase labor manpower
Can result in bottlenecks at the pick face
Training can take some time depending on the
tools used
NEGATIVE POINTS
Typical applications: Most Operations

Batch Order Picking
Also known as multi-order picking, this method allows pickers to work on multiple orders
at the same time, one SKU at a time. Batch picking is best for companies that often have
multiple orders with the same SKUs or orders with only a few SKUs in each. It cuts down
on travel time since the picker usually only needs to travel to an item location one time
per picking cycle
• Typical use in e-commerce applications.
• One to five lines per order maximum.
• Can pick the exact amount from reserve storage and allocate to zero or pick full
cartons/pallets and return remaining to stock once allocation is completed.
• Handling equipment is mainly reach or forklift trucks for pallet quantities.
• Two-stage process - pick then sort and label. Possibly the return of the unused stock.
• Requires additional space to sort and label.
• Reliant on a system to consolidate orders.

Batch Order Picking
✓
✓
✓
✓
Multiple orders picked at the same time
Very effective for e-commerce orders where
100s of orders for single line items are
received
Reduced travel and increased accuracy
Can be used successfully in a cross-dock
operation
POSITIVE POINTS
X
X
X
X
Urgent orders cannot be separated easily
Requires system assistance to combine orders
Requires sortation area and additional staff
Repacking may be required
NEGATIVE POINTS
Typical applications: e-commerce Retail store orders

Cluster Order Picking
The cluster-picking method also allows pickers to work on multiple orders at the same
time. However, instead of concentrating on similar SKUs for multiple orders, pickers pick
a variety of items for multiple orders. Although there are a few different ways to
accomplish this (such as with vertical lift modules or carousels), the most common method
is for a picker to have a cart loaded with multiple containers.
• Operation is as per individual order pick otherwise.
• Order sizes are lower than for individual order picks.
• Orders are clustered in a particular area.
• Normally a single-stage process unless every order is packed and checked on dispatch.
• Handling equipment can range from a trolley to a forklift truck but requires segregated
sections in order to separate the orders.
• Reliant on the picker being accurate in sorting.
• System assistance is required to ensure orders are clustered efficiently.
• Training can be very time-consuming

Cluster Order Picking
✓
✓
✓
Multiple orders picked at the same time
Reduce travel in the warehouse if orders
clustered in a particular area
Reduce overall pick time
POSITIVE POINTS
X
X
X
X
Training can take some time
Accuracy can be an issue if no technology is
used
Requires equipment to hold multiple orders
Requires low cube items in the main
Requires system assistance to combine orders
Can result in bottlenecks
Needs sufficient orders to enable clustering
May require second stage to pack orders
NEGATIVE POINTS
Typical applications: Most operations with low cube items

Zone Order Picking
The warehouse is divided up into zones and each picker is assigned their own zone to
pull items from. For orders that require products from multiple zones, the order container
is passed on to the next zone, and that zone’s picker continues picking items for the
order. This process is continued until the order is fulfilled. This method is great for high-
volume warehouses that often suffer from picker congestion in multiple areas.
• Reduced walking distance as the picker looks after a small area.
• Picking can be simultaneous or sequential.
• Simultaneous orders require consolidation.
• Requires conveyors to transport orders around the warehouse.
• Essential to ensure each zone has near-equal activity.
• Used with pick and put-to-light systems.
• High accuracy if combined with scanning.
• Reliant on an accurate put-away operation.

Zone Order Picking
✓
✓
✓
Less travel for picker
Less training if pick to light and put to light
used
Orders can be picked simultaneously or
sequentially
Can accommodate different families of items
on orders such as hazardous, temperature
controlled, ambient etc.
POSITIVE POINTS
X
X
X
X
Normally requires conveyors
Cost of equipment
Normally combined with pick/put to light
systems, which can be expensive
Can lead to idle time if work is not balanced
between zones
NEGATIVE POINTS
Typical applications: Large numbers of SKUs and low number of items per order line

Wave Order Picking
With the wave picking method, pickers also work within their assigned zones except, to
cut down on time, all zones are picked from at the same time (instead of in one zone
and then passed on to the next). The items are then later sorted and consolidated into
their respective shipments.
✓
✓
Ability to schedule work efficiently
Orders are picked in time for a production
run or vehicle departure
POSITIVE POINTS
X
X
Requires a WMS to manage the allocation
NEGATIVE POINTS
Typical applications: orders are released on a timed basis or to departing trucks

Choosing pick technology
Of all warehouse processes, order picking tends to get the most attention. It’s just the
nature of distribution and fulfillment that you generally have more outbound
transactions than inbound transactions “The picking function in a warehouse can be up to
55% of the operating cost”, and the labor associated with the outbound transactions is
likely a big piece of the total warehouse labor budget “travel to, between, and from
locations being up to 60% of that labor involvement”
Another reason for the high level of importance placed on order-picking operations is its
direct connection to customer satisfaction. The ability to quickly and accurately process
customer orders has become essential to doing business.

When to use
Key objectives in designing an order-picking operation include increases in productivity,
reduction of cycle time, and increases in accuracy. These objectives may conflict with
one another in that a method that focuses on productivity may not provide a short
enough cycle time, or a method that focuses on accuracy may sacrifice productivity.
• Productivity: Productivity in order picking is measured by the pick rate.
• Cycle Time: Cycle time is the amount of time it takes to get an order from order
entry to the shipping dock
• Accuracy: Regardless of the type of operation you are running, accuracy will be a
key objective

Paper Picking
Order fulfillment using pick-by-paper is the most common picking method in warehouses
and retail environments because it can be done without the costly addition of
technology. Picklists are generated - either manually by a human or automatically by a
computer - and recorded onto a paper picklist that an associate will then use to fulfill
an order or series of orders.
✓
✓
Low cost – Flexible – Quick implementation
Single-stage picking operation
POSITIVE POINTS
X
X
Low pick rate - Low accuracy
Training can take some time
NEGATIVE POINTS
Typical applications: Most operations Pick rate: <100 lines/hours
✓ Ability to isolate urgent orders
X
Requires a manual update of the system from
written instructions
✓ Picker able to decide pick path
✓ Suitable as part of a contingency plan
X Requires return to desk for further instructions

Pick by Label
A picking technique in which workers are given a batch of shipping labels in a picking
location sequence with the location for each pick printed on the labels. The picker
applies the label as each carton is picked, for example to a pallet jack. Historically
pick-by-label was used for case picking, but it is now also seen for some e-fulfillment
applications.
✓ Low cost – Flexible – Quick implementation
✓ Single-stage picking operation
✓ Ability to label product with dispatch details
✓ Picker able to decide pick path
✓ Suitable as part of a contingency plan
✓ Reasonably accurate
X Low pick rate - Low accuracy
X Training can take some time
X Need to print labels
X Label information may be difficult to read
X Can damage the product if errors made
X Requires return to desk for further instructions

Pick by Barcode Scanning
Pick-by-Scan is a paperless picking process that is supported by a portable data
collection terminal “PDT”. The PDT replaces the classic picking list in paper form. Mobile
handheld computers with integrated 1D or 2D barcode scanners are used to guide the
employee step by step through the individual pick positions.
✓ Improved accuracy
✓ Paperless
✓ Ability to deal with multi-SKU locations
✓ Real-time stock update
✓ Flexible
X Low/medium pick rate
X
Can take longer than paper picking
operationally
X Cost of hardware
X Requires barcode on every product
X System requires wireless receivers

Pick by Wearable Scanners
Wearable technology is also known as "wearables," is a category of electronic devices
that can be worn as accessories, embedded in clothing, implanted in the user's body, or
even tattooed on the skin. The devices are hands-free gadgets with practical uses,
powered by microprocessors and enhanced with the ability to send and receive data to
other devices or the cloud.
✓ Improved accuracy – Improved productivity
✓ Paperless
✓ Ability to deal with multi-SKU locations
✓ Real-time stock update – Damage reduction
✓ Flexible – Less strain on operators
X Medium pick rate
X Cost of hardware
X Requires barcode on every product
X System requires wireless receivers

Pick by Voice
Pick-by-Voice is a paperless picking process in which communication between the picker
and the picking system takes place via voice. Instead of using the printed picklists, the
order picker works with a wireless or wired headset that is connected to a standard
pocket PC. Within the PC, the software is used to inform the pickers about the type,
number, and storage location of the items to be collected.
Typical applications: Most operations Pick rate: 150 to 200 lines/hours
✓ Paperless - Flexible
✓ Fewer processes Improved accuracy
✓ Real-time stock Update
✓ Improved safety - Damage reduction
✓ Improved productivity – Less training
X Cost of hardware
X Difficult in very noisy environments
X Problem with multi- SKU location
X Accuracy issue if product in incorrect location
X Unsure of long-term health issues

Pick to Light
Pick to light (or PTL) is an order-picking technology for warehouses and distribution
centers that utilizes lights and LEDs on racks or shelves to indicate pick locations and
guide order pickers through their work
Typical applications: E-Commerce / Retail Stores Pick rate: 250 to 450 lines/hours
✓ High accuracy - High productivity
✓ High pick rate – Easy to train staff
✓
Can be used with Pick to line/order & Zone
picking
✓ Simultaneous or sequential picking
✓ Improved safety - Damage reduction
X Cost of hardware - System failure
X Low Flexibility
X Long implementation time
X Limited in terms of product types
X Difficult with multi-SKU locations
X Difficulty with batched or clustered orders

Pick by RFID
RFID (Radio Frequency Identification) is a technology that can transmit the data stored in
a microchip through radio frequency signals. It includes a defined protocol that stores
and recovers information remotely, using tags, cards, etc.
These data are identified instantly and without any human intervention, providing major
time, efficiency, and safety savings.
Typical applications: High-Value Goods / Items Needs Traceability Pick rate: 200 to 300 lines/hours
✓ Very high accuracy
✓ High productivity
X Cost of hardware – Cost of tags
X Cost of hardware
X Requires international standards
X Issues with certain types of products
X Cost of maintenance

Warehouse Management System (WMS)
A WMS has become essential to the smooth and efficient operation of complex
warehousing and distribution environments around the world. Recognizing the
need for a WMS is a reasonably straightforward exercise for many warehouse
managers. Inaccurate inventories and pressure to continually reduce costs and
improve service levels make the investment decision almost intuitive. Investments,
however, are rarely made based on intuition. Fortunately, the benefits of a
WMS can be identified and, to a great extent, quantified, to provide an
accurate basis for justification.

A five-step plan to justify the introduction of a WMS
Step 1: Define the problem areas
Four principal benefits can be expected to arise from the implementation of a
WMS. These benefits lie in the four areas that cause the most efficiency
problems in warehouses: inventory accuracy, resource management, customer
service, and visibility. The first step is to identify the main problems currently
experienced. Begin by creating a matrix using these four benefits as the primary
categories. Next, list the facility's problems under each category

Step 2: Estimate the costs
This step is critical to understanding the severity of any problems. A variety of
equations and industry standards can be used to quickly estimate the costs
Error Occurrence (%) Cost/Occurrence Total cost
Ship
errors
1.5
4.0
(assume 50k orders pa)
$59
$59
$44,250
$118,000
Shrinkage 1.0 .01 x $1m in invoicing
.01 x $7m in invoicing
$10,000
$70,000
Data entry
errors
4.0
(assume 100k transactions pa)
$10 $40,000
Lost
product
5.0
7.0
(assume 50k orders x 5 lines per order)
$3.33
(10 minutes
searching x $20/hour)
$41,625
$58,275

Step 3: Identify the savings
The savings associated with the reduction of inventory levels may themselves
justify investment in a WMS. Many companies have reported reducing inventory
levels by as much as 30%. This level of reduction greatly affects carrying costs,
which typically equate to 25% to 35% of the cost of inventory
Potential cost savings (%)
Labor utilization 10% - 35%
Inventory reduction 5% - 30%
Floor space utilization 10% - 30%
Maintenance 0% - 10%
Shrinkage 50% - 75%
Rolling stock 10% - 20%
Increase shipping accuracy to 99%+
Increase data entry accuracy to 99%+

Step 4: Determine the cost of a WMS
At this point in the process, it will be reasonably clear how much money and time
a good WMS product will be able to save. The next step is to determine how
much will have to be spent to integrate the system. Although vendors use various
pricing models, the components of their pricing proposals usually fall into five
categories:
1. License fees 2. Custom development (if applicable);
3. Computer hardware 4. RF hardware
5. Services such as design, implementation, training, and testing

Step 5: Calculate the ROI
Once calculated and accepted by the board you can begin the process of
supplier selection

Selecting a Warehouse Management System (WMS)
A WMS can process data more quickly and can coordinate movements within the
warehouse. It can produce reports and handle large volumes of transactions, as
seen in e-commerce operations. The potential benefits of having a WMS in place
include the following:
• Efficient and effective labor management
• Improvements in productivity and accuracy
• Stock visibility and traceability
• Accurate stock-takes
• Reduction in picking errors
• Reduction in returns
• Accurate reporting
• Improved responsiveness
• Remote data visibility
• Automatic replenishments
• Improved customer service
• Minimized paperwork

Warehouse Risk Assessments
Warehouses, like any industrial facility, can be dangerous places to work in,
especially with the movement of forklift trucks, the risk of slips and trips, and
people working at height. So, to ensure a safe and secure environment,
companies need to undertake risk assessments regularly.
The following are potential risk areas:
• Falls from height;
• Slips, trips, and falls;
• Manual handling;
• Falling objects;
• Operation of MHE;
• Operation of other machinery
• Traffic movements
• Portable electrical equipment
• Lighting
• Hazardous substances, and fire.

Warehouse Risk Assessments
Principles that should be considered throughout the risk assessment process can
be broken down into a series of steps:
Step 1: Identifying hazards and those at risk
Step 2: Evaluating and prioritizing risks
Step 3: Deciding on preventive action
Step 4: Taking action
Step 5: Monitoring and reviewing

Warehouse Signs and Labels - Mandatory Signs

Warehouse Signs and Labels – Danger Signs

Warehouse Signs and Labels – Warehouse Signs

Warehouse Audit Checklist
This section provides an audit checklist for a warehouse and its operations. The
list of questions is not exhaustive and can be added to by users to mirror their
operations.
Audits should be undertaken by an independent person from within the company
or by an external consultant. The purpose of the audit should be explained to
the staff. Results must be shared with all the staff, and they need to take
ownership of any necessary improvements.
The audits are based on what we see as best practices in a warehouse

Audit By: Location: Date:
Warehouse
Daily
Inspection
–
Examples
Item Y N Marks
Block stacks are straight (no uneven or leaning stacks, no overhang)
Block stacks are built to the height specified for the product, or according to
DC requirements
Stock is in good condition (no damages or wet stock)
Racking is in good condition (no bent beams or other damages)
Ceiling lights working
Aisles and walkways free of obstacles
Minimum clearance around emergency exits, fire equipment, and sprinklers
Dock levelers and dock door area clean and free of hazards
Stretch wrapper areas clean and free of hazards
Where full pallets are wrapped, they are wrapped securely

Health
&
Safety
-
Examples
Item Y N Marks
Is a health & safety manual available?
Is the health & safety Policy clearly displayed?
Is a health and safety plan available at the branch site?
Have the previous year’s objectives been reviewed?
Is the hazard register available?
Is a training plan available to be implemented for health and safety training?
Are general health and safety instructions displayed?
Are health and safety committee meetings regularly scheduled and held?
Is the emergency plan current?
Does the emergency plan reflect actual practices?

Warehouse
Storage
-
Examples
Item Y N Marks
Is the warehouse using the right type of forklifts, designated for the business?
Have all employees responsible for handling materials been provided with
ergonomic training?
Are all pallet storage racks properly installed and braced as per guidelines
Are materials stacked on pallet racks at least several inches away from
overhead sprinklers?
Are forklift drivers trained to keep clear of dock edges?
Are forklift drivers trained to maintain safe clearances for aisles and at
loading docks?
Are forklift drivers instructed not to place or leave any materials in the travel
aisles?

Pest
Control
–
Examples
Item Y N Marks
Are all gaps, cracks and holes where pests could sneak in sealed effectively?
Are employees trained to keep track of any pest activity?
Are floor drains cleaned regularly?
Is the garbage cleared every day?
Are garbage bins cleaned regularly?
Are dumpsters covered when not in use?
Are dumpsters placed away from the entrances and exits?
Are dumpsters lined with bags and all trash bagged before being binned?
Is the warehouse including the roof, free of standing water?
Are all incoming packages inspected for evidence of any pest activity?

5S (5C)
5S, also known as 5C, has its origins in
Japan. 5S focuses on organizing the
workplace effectively and standardizing
work procedures (see. 5S simplifies
processes and reduces waste and non-
value-adding activities while improving
quality, efficiency and productivity. Safety
is sometimes included as a sixth S.
The tool is also effective in getting
employees involved in the improvement
process and ‘owning’ their area of work,
taking pride in how it looks and performs.
SAFETY

When to use
When a company is looking to improve efficiency within the warehouse and instill
a culture of continuous improvement.
How to use
5S needs to be carried out in the correct order. You need to give individuals
responsibility for each task and for their respective work areas within the
warehouse

There is a Japanese theory about waste that says, there are 7 types of waste
“now expanded to 8 wastes” to make it easy to remember “DOWNTIME” here it
is:
Defect
reject, repair, re-work causes a great waste of
resources: materials, manpower and machinery.
Over-Production
‘just in case’ mentality. ‘More than’, ‘faster than’
or ‘sooner than needed’ must stop
Waiting
Wasted time waiting for the next step in the
process.
Non-Utilized Talent
Underutilizing people's talents, skills, and
knowledge
Transportation
Unnecessary movements of products /
materials.
Inventory
wastes space, equipment, facilities, energy,
administration and IT resources. It needs to be
evaluated and adjusted as necessary.
Motion
any motion of a person or machine that does
not add value needs to be removed
Extra Process
Non-logical flow in the wrong sequence that
adds no value
5S is a philosophy, a way of thinking which focuses on organizing and managing the workspace by eliminating 7 Wastes while improving quality and safety

Sort or Seiri or Clear out
Set in Order or Seiton or
Configure
Standardize or Seiketsu
or Conform
Sustain or Shitsuke or
Continually improve
Shine or Seiso or Clean
1
2
3
4
5
Concentrates on removing any unnecessary items from the work area (damaged stock,
over-stocks, defective equipment, broken pallets). It can also refer to unnecessary
movement within the warehouse.
Focuses on efficient and effective placement of items, for example location labelling and
putting frequently used items in easy-to-access locations
Comes after you have cleared the area of any unnecessary items. Thoroughly clean the
area and produce a timetable for cleaning
Is all about creating standards for each work area. Walk through each process with the
relevant staff and then produce, document and display best practice procedures within
the warehouse
Ensures continuous improvement. Staff is encouraged not to return to previous work
practices but to accept change and take things to a new level. Regular checks and audits
need to be carried out, with the potential for bonus payments on achieving high-
performance scores.
More recently, companies have introduced a sixth S, which covers safety. It can be argued that safety is at the heart of the operation and therefore
is a valuable addition to the 5S mentality

5S Audit Checklist
Sort
–
Examples
Item Y N Marks
Materials, parts, or components • Are materials moved promptly?
Machines and other equipment • Are there any unused machines or other
equipment around?
Visual control • Are all waste materials in the correct skips?
Is unused equipment and machinery eliminated from the area?
Is the floor clear of all tools, spare parts, and materials?
Is the work in the process organized to reduce travel time and other forms of
waste?
Is the work-in-process inventory reduced to the least possible amount?
Are aisles, doorways, electrical panels, and fire extinguishers free from
material and blockages?

5S Audit Checklist
Set
in
Order
–
Examples
Item Y N Marks
Location indicators • Are Sub-Con locations marked?
Item Indicators • Are shelves marked with location?
Quantity Indicators • Are Finished Goods stacked to correct No. of boxes?
Parking/loading docks • Are all unused trucks and forklifts parked in the
designated area?
Material storage • Is stock rotation (FIFO) being adhered to?
Are storage places for tools and equipment designated and marked?
Are machinery, storage equipment, and columns identified and numbered?
Are all pipes, controls, and gauges identified and labeled to show function or
purpose?

5S Audit Checklist
Shine
–
Examples
Item Y N Marks
Floors & gangways • Are floors, exits & entrances kept clear, clean, and free of
waste?
Work Surfaces • Are work surfaces clean & tidy?
Cleaning Responsibilities • Is the person responsible for allocating cleaning duties?
(Stores Supervisor)
Are recycling bins located as necessary with trash and recycling being controlled in
the area?
5S holding and disposal areas are well maintained?
Are slot locations free of empty pallets and trash?
Are machines clean, well kept, and in good repair?
Are slot locations free of hanging shrink wrap or banding?

5S Audit Checklist
Standardized
-
Examples
Item Y N Marks
Are Operation Standards written, clear, and actively used?
Are shine maps available and employees aware of responsibilities
Is there a standard work in place including quality checks, and usage of workstations?
Are bins and parts properly identified and labeled?
Are supplies labeled and in their place?
Are footprinted and labeled areas adhered to?
Are visual safety signs and floor markings used to identify hazards in the area?
Are concerns regularly being generated?
Are concerns regularly being acted upon?

5S Audit Checklist
Sustain
-
Examples
Item Y N Marks
Training • Is everyone adequately trained in 5S procedures?
Timed Deliveries • Are times being adhered to?
Cleaning routine • Is the cleaning routine present & are all toots & materials
available?
Hourly monitor • Are supplier delivery times adhered to?
Is everyone within the area wearing proper personal protective equipment?
Are unused tools, equipment, raw materials, and work properly stored?
Are emergency plans, labels, and equipment visible and property stored in the area?
Are corrective actions from the 5S audit identified and adhered to?
Are employees receiving weekly feedback on their 5S efforts?

5S Audit Checklist
Safety
-
Examples
Item Y N Marks
Are emergency exits clear of obstructions?
Are fire exit doors easily opened from the inside
Are all light fittings in good working order with no sign of burns?
Are aisles clear of stock and empty pallets?
Are loading dock doors in good condition?
Are double-stacked pallets in good condition and stable?
Are stock items in pallet racking secured?
Are first aid cabinets and content clean and orderly?
Are walls and safety barriers in good condition?
Are changing room and locker areas clean and hygienic?

Warehouse Performance
A warehouse is a complicated and busy place, and it can be hard to get an accurate
sense of what is happening. Warehouse activity profiling is the careful measurement
and statistical analysis of warehouse activity. This is a necessary first step to almost any
significant warehouse project: Understand the customer orders, which drive the system.
The key facts to learn include the following.
What is the business? Who are the customers? What are the service requirements? What
special handling is required?
• Area of a warehouse (a larger warehouse will require either more labor or more
equipment to move product) and types of storage, material handling equipment
• The average number of SKUs in the warehouse (a rough indicator of the complexity
of work)
• The average number of pick-lines shipped per day

Warehouse Performance
• The average number of pick-lines shipped per day
• The average number of units (pieces, cases, pallets) per pick-line
• The average number of customer orders shipped in a day (more shipments mean a
larger shipping dock and/or more labor)
• Number of order-pickers and how many shifts devoted to pallet movement, case-
picking, and to broken-case picking (suggests where to look for opportunities to
reduce operating expenses, which are primarily due to order-picking)
• The average number of shipments received in a day (more shipments mean a larger
receiving dock and/or more labor)
• The average rate of introduction of new SKUs (it is difﬁcult to maintain a rational
storage policy when the population of SKUs changes quickly)
• Seasonality

Thanks!
Any questions?
You can find me at:
Egy-SupplyChain@altmails.com
I Like to share knowledge, and
information related to Supply Chain
Management
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Warehouse Toolkit.pdf

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