1

Warehouse Concepts

McHugh Software International

2

Warehouse Basics

3

What is a Warehouse?

• A facility that– Receives items from a source– Stores items until required– Picks items when required– Ships items to the appropriate user

4

Warehouse Objectives

• Improve customer service• Efficient use of space• Effective use of equipment• Efficient use of labor• Accessibility of all items• Protection of all items

5

Types of Warehouses

• Manufacturing Warehouse• Distribution Centers

– Parts/Catalog/Retail/Consumer products

• Cross-dock facilities– LTL Break Bulk Centers/Pool Distributors/Retail Flow-Thru

Centers

• Storage Warehouses (3rd Party/Contract)• Return Centers/Repair Centers

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Material Flow in Logistics Chain

• Raw material, parts and components• Initial processing/create subassemblies• Manufacturing process or assembly• Finished items inventory• Distribution to Warehouse and Wholesalers• Retailers• Customers

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Items

• Item Numbers– An unique product identified by a numbering system.– Referred to as SKU, UPC, part number, or material

number

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Locations

• Uniquely addressed position within the Warehouse used for the storage, staging or manipulation of product

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Storage Devices

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Pallet Storage

• Load characteristics play a big role in selection of the type of storage– Dimensions– Weight– Stackability– Storage limitations

• Flammable

• Refrigerator

• Frozen

• Warm

11

Pallet Storage

• Types of storage modules– Floor storage– Rack storage

• Selective rack (single deep)

• Double deep rack

• Drive-in or Drive-through rack

• Flow rack

– Choice based on nature of product and volume

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Bulk Storage

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Rack Storage

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Non-Pallet Storage

• Case flow rack• Shelves• Bins• Drawers• Automated picking systems

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Shelf

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Bins

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Drawers

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Slick Rail

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Vehicles

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Vehicles

• Many variations of fork trucks• Storage configuration and nature of picking

determines type of vehicles to use• Discuss:

– Vehicle variations– Configuration variations– Options

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Vehicle Variations

• Hand truck / hand jack– Manual or powered

• Walkie rider• Counterbalanced fork truck• Reach, double reach truck• Turret truck• Order picker

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Powered Hand Truck

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Counterbalance Fork Truck

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Reach Truck

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Turret Truck

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Stock Picker

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Warehouse Configurations

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Warehouse Physicals

• Storage systems– Pallet storage– Non-pallet storage

• Vehicles

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Configuration Variations

• Rack selection and layout may vary due to space limitations

• Three standard layout variants– Conventional - 12 foot aisle– Narrow aisle - 8 to 9 foot aisle– Very narrow aisle - 5 to 6 foot aisle

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Conventional Layout

• 12 foot aisles• Counter balance fork trucks• Least expensive equipment• Limited to four or five levels high

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Conventional Aisles

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Conventional Aisles

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Narrow Aisle Layout

• 8 foot aisles• Use reach truck• Tight turning radius• Also need fork trucks for work in other areas of the

facility• Limited to four or five levels high

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Narrow Aisles

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Very Narrow Aisle Layout

• 6 foot aisles• Use turret truck• Usually wire guided• Can get very expensive• Also need fork trucks for work in other areas of the

facility• Limit now up to nine levels high

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Very Narrow Aisles

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Layout Comparison

• Space to hold 1000 pallets– Conventional 10,000 SF– Narrow aisle 6,470 SF– NA with double deep rack 5,500 SF– Very narrow aisle 3,070 SF

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Options and Attachments

• Poles for carpet• Drum pickers• Slip sheet• Clamps• Double long forks• Double wide forks

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Automation

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Automation

• Five areas of automation use– External receiving– Production receiving– Transportation– Storage and picking– Outbound

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Production Receiving Automation

• Palletizers • Traditional (Alvey style) and robotic

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Automated Palletizer

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Manual Palletizer

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Pallet Conveyor

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Transportation Automation

• AGV’s (automated guided vehicles)• Tugs, mules, tow carts

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AGV

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AGV

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Tug

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Outbound Automation

• Conveyors– Belt conveyor for pick-to-belt– Extendable– Accumulation– Other

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Belt Conveyor

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Conveyors

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Accumulation Conveyor

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Extendable Boom Conveyor

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Extendable/Flexible Conveyor

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Scanners and Label Applicators

• Scanners– Fixed position– Omni-directional– Raster

• Label applicators

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Fixed Scanner

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Case Label Applicator

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Pallet Label Applicator

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Barcoding

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Barcode Basics

• Barcode - The optically machine readable bars and spaces of a symbol that contain encrypted data.

• Symbology - Code 39, UPC-A, UPC-E, Code 128, PDF 417, Interleaved 2 of 5

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Barcode Basics

• Orientation– Ladder - Horizontal Bars– Picket Fence - Vertical Bars

• Aspect ratio (height/width)• Bar width • Check digits• No-reads• Mis-reads

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Standards

• Application standards (procedures)• Product identification standards• Label standards• Symbology standards

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Label Compliance

• Label format• Specific data fields• Barcode symbologies• Print quality• Label placement• Environmental considerations

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Primary Standards Organizations

• ANSI - American National Standards Institute• UCC - Uniform Code Council• AIM - Automated Identification Manufacturers

Association

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Benefits of Label Compliance

• Improved customer relations• Reduced mis-ships• Improved public image• Improved information availability• Reduced cost of product handling

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Product Identification Standards

• Universal Product Code (UPC-A or UPC-E)– Individual consumer unit– Mfg Id, product number, check digit

• Shipping Container Code (SCC-14)– Case level – Pack size, mfg id, product number, check digit

• Serial Shipping Container Code (SSCC-18)– Shipping container level– Mfg id, serial number, check digit

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Bar Coded Pick Ticket

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Bar Coded Shipping Labels

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Radio Frequency Terminal (RFT)

• A computer terminal that is not physically connected to a computer, instead, it uses radio frequency transmissions to communicate with the computer.– Hand held – Vehicle mount

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Hand Held Terminals

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Vehicle Mount Terminals

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WMS Overview

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What is a WMS?

• System in a warehouse that manages:– Information– Inventory (Tracking, Accessibility, Protection)– Space– Labor– Equipment

• Must track and report activities

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Information Flow

EDI

Warehouse Manufacturing

Order Entry/Billing

TransportationPlanning

Purchasing

InventoryManagement

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Information sent to WMS

• Item, Customer and Vendor Information• Purchase Orders(PO’s)• Customer orders• Production orders or schedules• Transportation planning information• Inventory status information

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Information Received from WMS

• Receipt information• Shipment information• Inventory adjustments• Inventory status changes

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Why Implement WMS Systems?

• To improve – Improve customer service– Space utilization– Labor utilization– Equipment utilization– Inventory accuracy and control– Information availability– Shipment accuracy

• To minimize– Product handling– Cost– Errors

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Inter-Warehouse Material Flow

Warehouse Shipments Warehouse

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Inbound Shipments

• Purchase order receipts• Customer returns• Transfers

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Inbound Material FlowReceivingDock Door

Receiving PutawayStaging

QualityAssurance

Raw Material Warehouse

DamageFinished items

Warehouse

ManufacturingStaging

CustomerReturns

Area

Shipping Staging

PackageMaterials

Warehouse

Unload

Trailer,Container,Rail Car Damage

Sample

Damage

Damage

Damage

Damage

Scrap

Putaway

PutawayId Productand Stage

Crossdock

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Receiving from Internal Sources

• Production receiving• Work order output• Kitting output

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Receive from Manufacturing

ReworkManufacturing

ReceivingStaging

Shipping Staging

DamageFinished

itemsWarehouse

Manufacturing / Kitting

From CustomerReturns Staging

ID asDamaged

DamagedPutaway

Crossdock

Pick

ToManufacturing

ID Product

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Outbound Shipments

• Shipment Types– Customer shipments– Transfer shipments– Scrap, return to vendor, donations

• Carrier Vessels– Trailers, Vans, Pups– Rail Cars– Sea Containers

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Outbound Material FlowFinisheditemsReceiving

FinisheditemsWarehouse

ShippingStaging

ShippingDockDoor

Customer Returns

AreaDamage

Load Trailers

Pick

PutawayDamaged

Rework

Putaway

Crossdock

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Delivery to Internal Sources

• Production lines• Work order areas• Kitting areas• Rework• Repack• Damage

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Deliver to Manufacturing

Packaging Materials

Warehouse

ManufacturingStaging

ReturnsStaging

Raw Material

Warehouse

Manufacturing / Kitting

PutawayExcessProduct

Pick

ID Excess

Pick

ReturnExcess Deliver

Crossdock from Receiving

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Performance Measurement

• Things to Track– Inventory activity– Item activity– Location activity

• Reporting– Detailed transactions– Summarization over Time– Comparison over Time– Resource utilization

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Warehouse Events

• Types of events– Trailer arrivals– Trailer departures– Receipts– Shipments– Counts– Damage

• How many? How long? Resources?

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Item Activity

• Activities– Receipts, Putaway, Counts, Picks by UOM by type of order

• Information used for profiling– Determine cycle counting frequency– Determine storage profiles– Determine picking profiles– Determine resources needed

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Location Activity

• Track events performed at a location• Used to adjust warehouse layout• Adjust number of locations available for

– Storage by zone– Storage by item

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Resource Utilization

• Equipment– Hours of use– Percent utilization– Hours of downtime

• People– Hours per day on direct activities– Percent utilization– How much accomplished per hour– Number of units per hour

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Warehouse Performance

• Percent on-time shipments and turn-around• Percent of orders shipped complete• Shipping accuracy• Inventory accuracy, shrinkage, damage• Inventory turn-over• Operating cost per unit or order shipped• Operating cost per sales dollar

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WMS Functionality

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Scheduling Appointments

• Purpose– Control traffic to the facility

• Types of Appointments – Inbound (deliveries)– Outbound (pickups)

• Drop vs. Live considerations

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Inbound Appointments

• Based on requested delivery date• Shipper or carrier calls for an appointment• Drop or Live• Check authorization to deliver

– Reference purchase order number

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Inbound Appointments• Estimate time to unload

– Floor loaded vs. palletized– Mixed or full pallets– Number of pallets, cartons, total weight, etc.

• Assign date and time based on capacity– Dock calendar– People availability– Other arrivals already scheduled

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Outbound Appointments

• Pickup appointment based on delivery requirements

• Warehouse calls the carrier– EDI

• Customer pickups – Customer normally specifies the pickup time

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Outbound Appointments• Based On delivery appointments

– Traffic planner builds loads– Travel times are planned– Customers may impose limitations– Transportation restrictions may come into play

• Availability of trailers, etc.

– Appointment is to pick up the load based on delivery requirements

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Outbound Appointments

• Warehouse calls carrier– The preferred carrier is offered the load first– Load may be tendered to multiple carriers if the primary

carrier cannot handle the load

• No appointments from ‘drop’ trailers

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Yard Management

• Yard provides storage for inbound and outbound trailers and sea containers

• Functions required:– Log arrivals and departures

• SCAC, trailer id, trailer contents

– Log trailers current locations and movements

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Yard Management

• Trailer arrival (Check-in)– Verify authorization– Note trailer contents and seal (inbound)– Record arrival date/time– Record condition of the vessel– Direct driver to a dock door or yard location

• Trailer departure (Check-out)– Verify authorization to leave– Verify contents or seal (outbound)– Record departure date and time

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Receiving

• Open a receipt– One header record with vendor identified– One or more detail records with items to be received

• Unload the trailer• Identify the product• Stage product for putaway• Close the receipt

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Open a Receipt

• Get shipping paperwork from the driver• Determine purchase order from shipping

paperwork• Create a Receipt (paper or electronic)• Verify delivery on time• “Blind” receipts• Advanced Shipping Notice (ASN)

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Unload the Trailer

• Count the number of packages• Compare the number of packages to the

shipping paperwork• Check for damage• Record damage or count discrepancies

(paper or electronic)• Sign the shipping paperwork• Release the driver (live load)

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Identify Product

• Sort the product, if necessary• Build pallets• Count each item delivered• Record all product identified (paper or electronic)• Compare the count to the shipping paperwork and

purchase order• Perform any required inspection• Divert samples to the QA area

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Stage for Putaway

• After product has been identified and is ready to be putaway

• Organized for storage• Optional step

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Close the Receipt

• Record any discrepancies• Send the receipt to accounts payable• Manually or electronically • Freight claims for damage product

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Putaway

• Decide whether to use product immediately (cross-dock) or store for later use

• Select a storage location• Putaway execution

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Decide to Use or Store

• Cross-dock?– Need product for backorders?– Need product for manufacturing?– Use to fill a customer order (other than a backorder)?– Distributions to stores?

• Can product be used to top off a primary pick location (pickface)?

• Putaway to secondary storage

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Select Storage Location

• Location selection based on:– Size of product– Quantity to store– Annual product usage (velocity)– Storage requirements (flammable, refrig...)– Lot control, date control

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Putaway Execution

• Select product to be putaway– First received– Priority– Area serviced by a person

• Deliver to the selected storage location• Record product movement

– RF– Paper

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Order Management

• Order source– One header record with customer identified– One or more detail records with items to be

ordered

• Special issues• Shipment planning

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Order Source

• Source– Order entry department– Customer service or sales– Directly from customers

• Method– Phone– Fax– Electronic

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Order Specifics

• Sold-To, Ship-To, Ship-For• Ship Date or Delivery Date Requested• Carrier• Order Type and/or Priority• Under/Over Ship Allowed• Back Order Allowed

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Order Type / Priority

• Order type– Customer order or Store order– Transfer order– Return To vendor, Scrap, Kitting, etc.

• Priority– Rush– Regular– Will-call

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Special Issues

• Lot control– Chemical, Pharmaceutical, Food, Clothing

• Inventory reservation• Units of measure

– Standard– Converting

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Shipment Planning

• Determine the best way to deliver an order– When it has to be there – Carriers available– Size of order– Cost– Hazardous considerations

• Can put real pressure on the warehouse

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Best Way to Deliver

• Types of carriers– Common (TL, LTL)– Contract– Parcel or small package (UPS, FedEx)– Air

• Cost comparison example– LTL = $100 for first 500 pounds – UPS = $5.50 plus $.50/pound up to 150 pounds

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Picking

• Picking methods• Picking approaches• Wave vs. Order pick generation• Sortation, Automation• Other picking considerations

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Picking Methods

• Manual• Operator assisted (semi-automated)• Automated

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Manual Picking

• Pick lists• Pick tickets• RF• Combinations

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Pick List

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Pick Ticket

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Operated Assisted Picking

• Carousel• Pick-to-Light• AS/RS (Automated storage and retrieval system)• Slick rail

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Carousel

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Carousel

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Pick to Light

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Pick to Light

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AS/RS

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Slick Rail

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Automated Picking

• A-Frame• AS/RS

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A-Frame

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A-Frame

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A-Frame

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Picking Approaches

• Order picking• Independent picking• Cluster picking• Batch picking

– To pallet– To belt

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Order Picking Approach

• Part or all of one order• By area of the warehouse (type, size, ...)• Pick and pass• Location selection

– Order entry system– Fixed– Operator– WMS

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Order Picking Approach

• Process– RF– List– Labels w/ or w/o RF

• Pick sequence– Travel– Location number– Operator determined

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Independent Picking Approach

• Individual picks without regard to order• Multiple people may pick for one order• Take advantage of equipment• Limited to an area of the warehouse• Based on priority• Usually full pallets

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Pallet Picks

140

Pallet Picks

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Independent Picking Approach

• RF most common• Usually only used when a WMS in place• Order integrity established in shipping• Location selection by WMS

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Staging Area

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Cluster Picking Approach

• Pick multiple orders at once• Pick to tote or shipping carton• Use cart or automation• Part or all of each order• Maintain order integrity• Minimize travel

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Cluster Picking Approach

• Usually picking individual units • Usually from pickfaces• Process

– RF– List– Labels w/ or w/o RF

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Carousel

146

Batch Picking Approach

• With Waves• Pick inventory, not orders• Pick one or more items• Optimize picking• Usually from pickfaces• Requires WMS for planning and execution• Requires sortation (equipment or person)

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Batch Picking Approach

• Order integrity established in shipping process options:– To pallet

• RF

• List

• Labels w/ or w/o RF

– To belt• Almost always with labels

• Labels barcoded for sortation

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Pick to Belt

149

Pick to Light

150

Wave Generation

• A wave is a collection of picks organized to improve picking efficiency– Group picks by item, not order– Use batch picking– Requires sortation

151

Wave Generation

• Wave picking is likely to be used when:– Large number of orders

• Client 1– 17,000 items, 1300 case pickfaces– 1700+ orders, 70,000 -150,000 lines per day

• Client 2– 25,000 items, 5000 case pickfaces– 10,000 orders per day

– Case or unit picks dominate orders

152

Wave vs. Order Pick Generation

• Common wave generation rules– Single trailer– Same stop across all trailers– Carrier

• Wave generation limitations– Time– Sortation or palletizer capacity– Number of dock doors

153

Sortation

• Conveyors– Powered or not– Belts and rollers most common

• Scanners• Diverters• Chutes

154

Sortation

155

Sortation

156

Merge

157

Other Picking Considerations

• Lot control– Finding– Recording

• LIFO/FIFO• Serial numbers

158

Pickface vs. Secondary Storage

• Pickface– Primary picking location for an item, assigned– Rack, flow rack, shelf, bin– Usually for product picked in less than largest

UOM (less than pallet or less than case)– Replenished from secondary storage– Make picking for orders easier and quicker

159

Pickface vs. Secondary Storage

• Secondary Storage– Random storage, here today - there tomorrow– Rack, shelf or floor (bulk) storage– Primarily for product picked in largest UOM– Secondary source for picking less than largest UOM

160

Replenishment

• Refilling a primary storage location (pickface) with product from a secondary storage location

• Methods– Min/max– Top-off– Pro-active– Demand

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Packing Stations

• Repack (overpack) product for shipping• Some product can’t be shipped in its current

package– Too small– Fragile– Security

162

Packing Stations

• More economical to ship multiple products together in one carton– Savings in freight more than packing cost– Make sure it all arrives at once

• Kit or combo assembled for shipment (customer service)

163

Shipping Process

• Planning (discussed in last session)• Delivery to shipping, staging• Loading• Print paperwork• Check-out• Confirm shipment

164

Shipment Staging

• Designated area for each shipment, load or carrier• Pickers deliver• Final preparation for shipment

– Count verification using order or pick list– Stretch wrapping– Print and attach packing list or shipping label

165

Loading

• Reverse stop sequence• Balance trailer

– Front-back– Left-right

• Damage considerations• Hazard considerations• Security considerations• Shipper load and count• Carrier load and count• Close the trailer, seals

166

Print Paperwork

• Bills of lading• Packing list• Shipping labels• Manifest• Export

167

Bills of Lading

• Represents contract with common carrier to deliver items– Shipment (straight)– Memo/stop– Master

• Shipper assigns Bill of lading (BOL) number• Carrier assigns PRO number• Carrier signs BOL to accept load• Customer signs BOL to accept from carrier• Contents on next slide

168

Bills of Lading

Stop 1 Stop 2 Stop 3

BOL1 BOL5

BOL2

BOL3

BOL4

Stop BOL

Master BOL

Trailer

STRAIGHT BILL OF LADING ORIGINAL - NOT NEGOTIABLE Shipper’s No. __________________________

Carrier’s No. __________________________

CARRIER_____________________________________________________ SCAC_____________ Date________________

TO:Consignee

FROM:Shipper WH

Street Street

Destination Zip Origin Zip

Customer Order #: Vehicle Number U.S. DOT Hazmat Reg No.

No.Shipping

UnitsHM

Kinds of Packages, Description of Articles, and Exceptions (SeeNMFC Item (Rule) 360)

(IF HAZARDOUS -PROPER SHIPPING NAME)

PACKINGGROUP

WEIGHT(Subject to Corr.)

Class orRate

(Informational)

CHARGES(For Carrier Use)

Total Pallets: Loose Pcs: Total Weight: Pallet Weight:

Remit C.O.D. to:Address:City: State: Zip: COD Amt: $

C.O.D. FEE:Prepaid Collect $

NOTE: (1) Where the rate is dependent on value, shippers are required to state specifically in writing the agreed or declared valueof the property. The agreed or declared value of the property is hereby specifically stated by the shipper to be not exceeding

$____________________________ Per _______________________________________(2) Where the applicable tariff provisions specify a limitation of the carrier’s liability (NMFC Item 172) absent a release or avalue declaration by the shipper and the shipper does not release the carrier’s liability or declare a value, the carrier’sliability shall be limited to the extent provided by such provisions.

Subject to Section 7 of conditions, if the shipment is to be deliveredwithout recourse of the consignor, the consignor shall sign thefollowing statement:The carrier shall not make delivery of the shipment without

payment of the freight and all other lawful charges.

________________________________________(Signature of the consignor)

TOTAL CHARGES:

$FREIGHT CHARGESPREPAID COLLECT

RECEIVED, subject to the classifications and lawfully filed tariffs in effect on the date of the issue of this Bill of Lading, the property described above in apparent good order, except as noted (contents and condition of contents of packages unknown),marked, consigned and destined as indicated above which said carrier (the word carrier being understood throughout this contract as meaning any person or corporation in possession of the property under the contract) agrees to carry to its usualplace of delivery at said destination , if on its route otherwise to deliver to another carrier on the route to said destination. It is mutually agreed as to each carrier of all or any said property over all or any portion of said route to destination and as toeach party at any time interested in all or any of said property, that every service to be performed hereunder shall be subject to all of the bill of lading terms and conditions in the governing classification on the date of the shipment.Shipper hereby certifies that he is familiar with all the lading terms and conditions in the governing classification and the said terms and conditions are hereby agreed to by the shipper and accepted for himself and his assigns.

SPECIAL INSTRUCTIONS: EMERGENCY CONTACT:

SHIPPER: CARRIER:

PER: PER:

DATE: DATE:

e:\dmplus\forms\bol.doc

Straight Bill of Lading169

170

Packing List

• Identifies to customer detail of the shipment• Customer uses to receive• Multiple formats possible

– Customer specific content– Business related– Product line related

• May be for shipment, order, pallet or carton

171

Shipping Labels

• Uniquely identify shipment for customer• May contain bar codes

– Serialized shipping container code (SSCC)– Item number, PO, quantity, serial number, ...– ZIP code for carrier

• May be customer or industry specific format• UCC 128

172

Shipping Labels

173

Manifest

• For small package carriers• List of packages shipped• Strictly for shipment reconciliation• Paper or electronic• One per day or one per pickup

174

Manifest

175

Export Paperwork

• Usually a special group within the company• Unique requirements by country• Constantly changing• Warehouse often ship to freight forwarder and the

freight forwarder handles the paperwork• Canadian customs invoice

176

Canadian Customs Invoice

177

Check-Out

• Last chance to catch any problems• Guard verifies carrier as authorized to leave

– Checks BOLs against trailer– Checks trailer seals

• May be some time after the trailer was loaded

178

Confirm Shipment

• Send notification of shipment to billing dept• Maybe notify customer and/or carrier• Notification includes:

– Carrier, trailer, cost, weight and cube– Date and time shipped– Order, item, quantity, lot #’s, serial #’s– License plates (SSCC) and contents

179

Material Movements

• Staging and putaway for receipts• Picking, staging and loading for shipments• Movements not associated with an order

– Consolidate product– Relocate for seasonality– Take samples– Remove damaged product– For manufacturing (floor stock)

180

Physical Inventory

• Periodic count of all inventory in the warehouse to update inventory records

• Periodically– Once or twice a year– Shut down the warehouse for 1-3 days– Slow time of year– Minimize inventory on-hand

181

Physical Inventory

• Must clean up everything and put everything away– Ship or close all orders– Complete all receipts– Empty the docks– Usually reduce operations up to a week in

advance

182

Physical Inventory

• Count– Go to a location and count what is in the location by item– Compare the results to what the inventory records show– Adjust the inventory records as required– Blind count

183

Physical Inventory

• Count (cont.)– Recount vs. original count

• Quantity

• Dollar value

• Supervisor recount

– Summary vs. detail count• 187 pallets of the 9oz size 24/case

• 187 pallets * 60 cases/pallet * 24 units/case

184

Physical Inventory

• All inventory– Wall-to-wall– Top-to-bottom

• Update inventory records– Updated at a point in time– Recognize gain or loss– Variances grow until the next physical

185

Cycle Counting

• Regularly count a prescribed portion of the inventory based on a formula to insure inventory accuracy

• Philosophy radically different from physical inventory• Regularly = daily/by shift

186

Cycle Counting

• Count - same as for physical inventory• Prescribed portion of inventory

– Certain percent of inventory each day– Plan for coverage of the entire warehouse– Balance between cost and benefit– Don’t do shipping, receiving, staging, etc.– Do storage locations, pickfaces, etc.

187

Cycle Counting

• Formula– Simple as 1 aisle per day or x locations per day– ABC cycle counting

• Frequency by item based on value and volume

• 30/90/180 days

• Applies effort to products of higher value

– Always exceptions based on the business

188

Cycle Counting

• Key issues for cycle counting– Must be statistically significant sample– Saves money!

• Reduced labor

• Reduced shipping errors

• Improves customer service

• Reduced inventory levels

– Done while the warehouse is in operation - before, during or after regular hours

189

Kitting

• Combining two, or more, finished items together to create a new finished item– Examples: gift pack, sample pack, value pack, special

offer, display pack– Combining, not changing– Finished items items are salable separately– May be inventoried or special order– De-kitting

190

Value Add Operations

• Add highly variable customer specific “things” to a product before it is shipped without changing the basic nature of the product– Brand labeling– Ticketing and tagging– Personalizing

191

Value Add Operations

• Reduces inventory and waste• Increases flexibility• Brings in extra revenue• May save customer money

192

Inventory Adjustments

• Lost inventory• Found inventory• Scrap / damage / sample• Obsolete / aged / expired• Gifts for visitors• Employee benefit programs

193

Interfaces

194

Interfaces

• Interfaces to the rest of the organization and beyond• May be paper based (computer, fax, or hand

written), electronic or voice• Timing varies widely based on the sophistication of

the organization

195

Purchasing Interfaces

• Authorization to receive to the warehouse• Confirmation of receipt to purchasing• Confirmation of receipt to inventory management

196

Warehouse Transfer Interfaces

• Warehouse transfer group is part of the inventory management organization

• Transfer order to the shipping warehouse• Expected receipt to the receiving warehouse• Ship confirm from the shipping warehouse• Receipt confirm from the receiving warehouse

197

Customer Returns Interface

• Return authorization (RA, RMA or RGA) to the warehouse

• Confirmation of receipt to customer returns• Disposition of returned product to customer returns• Confirmation of receipt to inventory management• Product disposition to inventory management

198

Inventory Management Interfaces

• Corporate level inventory• Inventory adjustments to inventory management• Inventory reconciliation (WMS only)• Cycle counting adjustments to inventory

management• Physical inventory adjustments to inventory

management

199

Order Entry and Billing Interfaces

• Authorization to ship (orders) to the warehouse• Order status update to customer service• Confirmation of shipment to OE/Billing• Shipment confirmation to inventory management

200

Transportation Planning

• Orders for planning to transportation• Shipment plans to the warehouse• Actual shipment notification to transportation

201

Manufacturing Interfaces

• Request for material to the warehouse– Manufacturing order based– Replenishment of floor stock

• Notify manufacturing of material deliveries– Delivery to manufacturing– Material returned to stock– Historically a problem area

• Production plan to the warehouse• Notify manufacturing of finished items receipt• Notify inventory management of inventory

movements

202

Return to Vendor Interface

• Return authorization (RTV order) to the warehouse• Confirmation of shipment to the RTV group• Confirm shipment to inventory management

203

EDI Interfaces

• Receive ASNs from vendors• Notify customers of shipment• Notify carriers of shipment• Notify freight payment center of shipment• Receive appointment confirmations from carriers• Send appointment confirmations to carriers