By Omar YoussefWarehouse Manager E-mail: Omarof5@hotmail.comE-mail: Omar@Americana-lb.com

Warehouse Operations

Training Session

Mission Statement

“The warehouse is our strongest asset.

Dedication, accountability and reliability are at the heart of our business philosophy. Focussed on our restaurants needs, we provide integrated logistics of outstanding product quality, Product quantity, and delivered on time. we are the extension of your business.”

Warehouse Objectives

1. Maximize effective use of space. 2. Maximize effective use of equipment.3. Maximize effective use of labor.4. Maximize accessibility of all items.5. Maximize protection of all items. 6. Maximize effective use of information.7. Maximize the protection of company’s assets.8. Minimize goods Handling.9. Minimize the company operating Cost.

Warehouse Functions

1. Unloading2. Receiving & Checking inbound goods3. Internal product movement4. Storing5. Order-picking 6. Stock Sortation7. Stock Rotation8. Packing 9. Loading & Shipping10. Cycle Counting11. Replenishement12. Handling Returns13. Maintenance & Loss Prevention

Operational Process

Picking

Inbound Activities

Outbound Activities

ProcessActivities

Put-away PackingStorageReceiving Shipping

1 - Unloading2 - Counting3 - Identifying4 - Marking5 - Quality Control6 - Registering goods

7 – Put away11 – Product

Category12 – Palletize

13 – Stocking 14 – Cycle Counting15 – Replenishment16 – Stock Rotation17 – Space Planning

18 – Routing19 – Directing20 – Zoning21 – Dunnaging

22 – Confirmation23 – Invoicing24 – Sealing25 – Staging26 – Loading

Receiving

• Receiving Objectives

• Right Product • Right Quality• Right Quantities• Right Weight• Right PPB.• Right Condition• Right Standards• Right Time

Receiving

• Prepare to receive goods and materials• Check Temperature • Unload the product (manual or

automated)• Count the product• Check the product (quality, quantity &

expiry)• Check Methods(100 % accept,100

%check, 10% sample check)• Identify the product• Mark the product• Enter the product on the receipt

register• Transfer the product to stage area• Enter the product in stock• Re-Stack the product

• Receiving Procedures

Put away & Stacking

• Stack according to First in First out

• Stack according to standards

• Method of stacking

- Manual Stacking

- Automated Stacking

• Keep stacked goods neat

• Boxes to be stacked evenly

• Keep Identity sticker visible

• Keep expiry date visible

• Stack goods in a safe way

Picking Time Consumption

Source: John J. Bartholdi, III, Steven T. Hackman, 1998

Pickers Time Breakdown

Traveling55%

Paperwork and other activities

20%

Extracting

10%

Searching

15%

Traveling

SearchingExtracting

Paperwork

Picking

• 50-60% of time spent traveling

• - Optimize picking workload• - Optimize work force assignment• - Optimize picking route • - Use of labor standards

• Apply First in First out• Use the right picking equip• Pick the right item (accuracy)• Picking the right qty (accuracy)

• Keep the Picking area neat• Picking Method

• - Manual Picking• - Automated picking

This is wrong

This is Right

Shipping

• Invoicing

• Staging

• Categorizing

• Checking

• - the right product

• - in the correct quantity

• - in good condition

• - and on scheduled time

• Confirming

• Loading

Cold Storage Standards

• Proper Storage Temperature

• - Dry Storage from 55 to 70 F(13-21 C).• - Refrigerator from 34 to 38 F(1-4 C).• - Freezers from 0 to -22 F(-18 - -30 C).

• A relative humidity of

• - 50-60 % in the storeroom• - 75-85 % in the refrigerators for meats, fish,

chicken, dairy products• - 85-95 % for fruits and vegetables

• Good ventilation provides clean air at the required temperatures and humidity.

Unit Load Racking

44

-48

”

40” 40” 40”

132”

40”40”40”

3-6

”

• 3-6” between unit loads• 3-6” between unit load and bay member• 4-6” between unit load and wall• 18” between unit load and first ceiling obstacle• 6” off the floor

001

002

003

004

005

006 008 010

009 011

012 014

013

016

015

018

017007

002

001003005007009011013015017

004006008010012014016018

Aisle 12

Aisle 1111-A-L1-002

11-A-L1-001

11-A-L1-004

11-A-L1-003

11-A-L1-006

11-A-L1-005

Location & Aisle Numbering for Ground Storage

A B C

Location and Aisle Numbering for Rack Storage

AIS

LE

- 0

2

Aisle Entry

Left Right

02-L-01A

02-L-01B

02-L-01C

02-L-01D

02-L-03A

02-L-03B

02-L-03C

02-L-03D

02-L-05A

02-L-05B

02-L-05C

02-L-05D

02-L-07A

02-L-07B

02-L-07C

02-L-07D

02-R-08A

02-R-08B

02-R-08C

02-R-08D

02-R-06A

02-R-06B

02-R-06C

02-R-06D

02-R-04A

02-R-04B

02-R-04C

02-R-04D

02-R-02A

02-R-02B

02-R-02C

05-R-02D

Drivers Duties

• Loyalty to company is very important • To implement all job description• Cars, daily check up for maintenance• Cars, Cleaning on weekly basis• Cars, Damage resulting of omission • No eating or drinking while driving • Complying w/warehouse rules & regulations• To execute information delivered to you• Smoking is not allowed in warehouse• Cooperation w/colleagues and direct managers• Deal w/rests. representative Like the only customer• Handling returns as per policy

Key Inventory Terms

• Lead time. Time interval between ordering and receiving the order

• Holding (carrying) costs. Cost to carry an item in inventory for a length of time, usually a year

• Ordering costs. Costs of ordering and receiving inventory

• Shortage costs. Costs when demand exceeds supply

Inventory Costs

• Ordering costs.

• Includes monitoring costs, order preparation. order transmittal, order receipt (unpacking, shelving, loss and damage).

• Holding (Carrying) costs.• Includes interest, insurance, depreciation,

obsolescence, deterioration, spoilage, pilferage, breakage and warehousing costs.

• Warehousing costs.• Energy, Space, Labor, Equipment security

• Stock out costs. • Includes opportunity cost of not making a

sale (lost profit), lost customer goodwill, backorder costs, lateness charges.

COMPONENTS OF CARRYING COSTS

• Capital Costs. Cost of Money.

• Storage Costs. Is the cost of space, personnel, and equipment.

• Risk Costs. It is the costs of obsolescence, Damage, pilferage, insurance, etc.

• Records & Handling costs.

Total Cost

AnnualHoldingcost

PurchasingcostTC = +

Q

2H

D

QSTC = +

+Annualorderingcost

DC+

TC Total annual cost D Annual DemandC Cost per unit Q Order quantityS Cost of placing an orderH Annual holding and storage cost per unit of inventory

The Total-Cost Curve is U-Shaped

Ordering Costs

An

nu

al

Cost

Holding Costs

Total Costs

Cost Minimization Goal

Optimal Order Quantity

Re-ordering Point

L L

Q

S

TimeR = Reorder point = L*D + S Q = Economic order quantityL = Lead time D = Demand per Unit of TimeS = Safety Stock

L

Qu

anti

ty

Reorder point Reorder point Reorder point Reorder point

L

Safety Stock (SS)

WD Cost Breakdown

Figures based on October 31, 2005

Average Company

% of SalesTransportation & Maintenance ………………………… 0.19%Warehousing ………………………………………………………0.61%Salaries & Wages………………………………………………. 1.07%Total WD Cost ……………………………... 2.72%

WD Opportunity

• To be Improved• Inventory Accuracy

• Picking Accuracy

• Picking & Replenishment Efficiency

• Control of Products

• Space Utilization

• Stock Rotation

• Backorder Handling

• Resource Planning & Scheduling

• Labor & Equipment Productivity

• Performance Management

• Reduced• Inventory• Workforce• Damage / Shrinkage Product• Lost Stock & Safety Stock• Search Times• Paperwork / Human Error• Physical Inventory Taking• Labor, Equipment & Utility Costs• Driver / Delivery Costs• Worker Accidents• Warehousing Costs• Outside Warehousing

WD Opportunity

Warehouse Controls

•Personnel Safety and Health• Reduce all risks • Follow procedure for security risk• Report all accidents• Handle any accident• Report any security risk• Promote good housekeeping• Maintain a clean, neat personnel hygiene • Maintain a clean workplace• work according to standards• Dispose of waste in timely way• Effectively mark aisles & maintain their• integrity• Have adequate lighting• Apply all rules adopted in your organization

Fire Prevention and Protection

Warehouse Controls

Is smoking permitted in the warehouse?

Warehouse Controls

•Theft and Pilferage

•Product Damage & Contamination

•Storing Hazardous Materials

Equipment & Tools

Any Questions?