Page 223 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes moved, such as near primary aisles and in low storage racks. Such a location minimizes travel
distance and the need for extended lifting. Conversely, low-volume product can be assigned
locations that are distant from primary aisles or higher up in storage racks.
Similarly, the plan should include a specific strategy for products dependent on weight and
storage characteristics. Relatively heavy items should be assigned to locations low to the ground
to minimize the effort and risk of heavy lifting. Bulky or low-density products require extensive
storage volume, so open floor space or high-level racks can be used for them. On the other hand,
smaller items may require storage shelves or drawers. The integrated storage plan must consider
and address these.

9.4.4 Warehouse Management Systems

The development of work procedures goes hard in hand with training warehouse personnel.
Most firms implement a WMS to standardize work procedure and encourage best practice. It is
management’s responsibility to see that all personnel understand and use these procedures.

In a mechanized warehouse, approximately 65 percent of personnel are employed in some facet
of order selection. The two basic methods of order picking are individual and area selection,
also known as batch selection. Using individual selection, one employee completes a customer’s
total order. This system is not widely used. Its primary application occurs when a large number
of small orders are selected for repack or consolidated shipment, such as e-commerce fulfilment.
Under the more commonly used area selection system each employee is assigned responsibility
for a specific portion of the warehouse. To complete a customer’s order, several different selectors
are required. Because each employee has a thorough knowledge of a specific selection area, less
time is required to locate items.
Work procedures are also important for receiving and shipping. Established procedures for
receiving and ensuring product entry into inventory records are critical. If pallets are used, the
merchandise must be stacked in appropriate patterns to ensure maximum load stability and
consistent case counts. Personnel working in shipping must have knowledge of trailer loading
practices. In specific types of operations, particularly when merchandise changes ownership,
items must be checked during loading.
Work procedures are not restricted to floor personnel. Procedures must be established for
administration and maintenance. Replenishment of warehouse inventory can cause operational
problems if proper ordering procedures are lacking. Normally, there is limited interaction
between buyers and warehouse personnel although such communication is improving with
integrated supply chain management organizations. Buyers tend to purchase in quantities that
afford the best price, and little attention is given to pallet compatible quantities or available
warehouse space.
Ideally buyers should coordinate with warehouse personnel before commissioning large orders
or introducing new products. The experience of some companies has forced management to
require buyers to predetermine warehouse space assignment prior to ordering. Another potential
problem is the quantity of cases ordered. The goal is to purchase in pallet-multiple quantities.
For example, if a product is ideally stacked on pallets in a 50-case pattern, the buyer should order
in multiples of 50. If an order is placed for 120 cases, upon arrival the cases will fill two pallets
plus 20 on a third pallet. The extra 20 cases will require the warehouse cubic space typically used
for a pallet of 50 and will require the same amount of materials handling capacity to move.
9.4.5 Material Handling

Material handling is an important part of managing materials. How will the material be moved?
Physically moving material requires equipment of various kinds, depending on the type and

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