Warehousing is a critical node in the network of logistics management. Warehousing primarily involves the activities centered on receiving and dispatching materials and supplies coming into and going out of the organization. Other materials such as work-in-progress, consumables and others are also held and managed by the warehouse. Current developments in lean manufacture, just-in-time and other similar inventory reduction approaches have continued to depress inventories and may in deed change the focal point of where the place in which the inventory is held, more likely pushing it back up the chain of supply.
In fact, the emphasis has now shifted for warehousing, and now it focuses on; facilitating smooth flow of goods to the clients, meeting the service standards requirement of clients, incorporation of activities such as postponement, which is a value adding activity as away of reducing stock keeping units (SKUs) and the number of product lines in a system as well as raising the dynamism in meeting customer needs (Rushton, Oxley and Phil, 2000).
Being a critical and busy part of an organization, there are some issues to do with warehousing that an organization needs to take care of lest the operations of the warehouse malfunction and consequently disrupting the entire supply chain, which normally has a ripple effect on the entire operation of the organization. These issues concern the actual design and management of the general day to day operations of a warehouse. The problem and challenges for the design a resource optimizing warehouse still is a complex task to logistics designers. The strategic issues concerning the design of warehouses are discussed in this paper.
Designing a warehouse; Warehouses, distribution centers and stores have to operate as integral component elements within the supply chain. Hence, when setting up these facilities, the key decisions must be determined by overall logistics strategies for cost and service. The following factors have to be considered in setting up the facilities; Product and Market base stability; Long-term projections of how the product range may develop together with long-term market expectations for growth will very much influence on the location and size of a warehouse facility, including the space that should be set aside for potential future expansion.
The considerations made in this stage will extend to impact on the organisations perceived needs for flexibility in future, which consequently can influence on the level of technology to be adopted and the type of warehouse to be built. Type of goods to be handled by the warehouse; The goods that an warehouse can handle include finished goods , raw materials spare parts, and work-in-progress in a span of material sizes, types, productive lives and other characteristics that may be set by an organization.
The range of units to be handled could be from individual small items to packages, sacks, palletized loads and on up to containers of ISO certification. Special requirement s for humidity and temperature mould most likely have to be met, and all these requirements will have absolute impact on the level of technology to be adopted. Location, type of facility and its size; the specific role of a warehouse in a supply chain together with capacity, the role and location of any other facilities in the in the chain will directly determine or at least influence the size and design capacity as well as the type of operation of a warehouse.
The need for inventory reduction, customer base, amount of inventory , overall service level and time compressions in the supply chain should be critically looked into in making decisions concerning location, type and size of a warehouse to be built. Whether the warehouse should be operated by the organization as an own-account or outsourced to a third party to run it is yet another consideration that should be made. Inventory and its location; there rises a question within the supply chain of not only in what locations to hold goods but also what goods and in what quantities to hold (Donald, & Waters, 2003).
The options that could be available could include distribution centers designed to cater for specific parts of the product range or specific markets, specific geographic areas, or regional centers for distribution of fast moving product lines, and a strategy of holding slower moving lines in the national distribution centers only. Customer base, service levels and product range are the factors that will influence the choice. Choice of unit load; the choice of loads-roll or cage pallets, tot bins, pallets-will have significant weight in determination of the characteristics as well as the nature of the goods passing along a supply chain.
This clearly encompasses a wide range of products, pack types and services, and unit quantities (Rushton, et al, 2000). ). This may look like as a routine factor that is less subject to strategic influences and more to operational influences. Within the warehouse however, it can influence the sizing and choice of storage systems as well as handling equipments. Further, in a wider context, it will affect vehicle loading and unloading as well as vehicle utilization and eventually the entire transport operations (Ross, 2004).
Warehouse Design Procedure; The basic principle of good warehouse design is to first of all define the overall requirements of the system and by carefully analyzing data, come up with a design that incorporates equipments and methods which most closely match those requirements. However, a n overriding prerequisite exists which is, for whatever level of technology or deign that is adopted for a particular project, a fast, accurate and effective information system to monitor and drive the operations is an end result.
The following steps make up the design process; i). Definition of system requirement and design constraints; the design requirements for distribution depot operation or a warehouse after taking into considerations such as likely business developments and potential forecasts for future growth, are likely to constitute; desired service level to be achieved, required throughput and storage capacities, specified facilities such as quality , packaging and others.
the constraints in this stage could include but not limited to; time, for instance the facility could be set a date by which it is to be running; financial limits such as limit on cost per unit throughput or capital expenditure, among others. ii).
Define, obtain, and analyze data; specifications for the most appropriate location and type of warehouse to be built can be obtained from various sources, for example through conducting a research based on the company’s size, structure and the nature of business it engages in, fairly reliable information can be adduced from the data collected and from this a n effective design of a warehouse developed.
A firm can also decide to outsource the warehouse designing professionals who are more likely to develop for it the most resources optimizing warehouse than any other person. Iii). Establish what unit loads that will be used; this will be a decision concerning the appropriate unit loads that are to be adopted, and include stillages, Skid sheets, pallets, tote boxes, roll cage pallets, and garment rails. The choice of unit loads to be handled directly influences the ability t utilizes space efficiently and the choice of equipment.
The customers may impose the dispatch unit loads with suppliers imposing the unit loads their material supplies arrive at client’s premises as well. The warehouse designer should therefore put these factors into consideration when designing the most appropriate for the processes to be carried out. Benefits of unit loads include movement minimization, standardization of equipments, material security, as well as minimizing the time it takes to load and unload vehicles.
Wooden pallet is the most common unit load (Ross, 2004). iv). Postulate primary methods and operations; the primary processes that will take place in a warehouse, must be established together with how they will be performed. The communication and information requirement should also be determined. Considerations of which systems, paper or paperless, will be used also need to be emphasized, with the kind of warehouse management system in mind. v).
Calculate staffing levels; this requirement for operating staff is closely related to the requirements for mobile equipment, and in majority of cases will fallout of the calculations. The staffing costs should enable full costing of the warehouse to be made. vi). Prepare possible sites and building layouts; this encompasses all the component of warehouse processes both inside and outside the building. After this stage comes the final stage whereby the design of the warehouse is turned into a physical facility. Management of Warehouse and information;
The broad responsibilities of managing distribution center or warehouse include good control, effective planning, as well as optimum resource use in the drive to achieve the objectives of the operation. The aims of an effective operation includes; meeting the service level requirements; operation that is cost effective; use of resources in an effective and efficient manner, safe operation, meeting the requirements for safety and in work environment; and maintaining the integrity of stock (Rushton, et al, 2000).
The operating cost for any individual component in a warehouse mainly depends on the nature of the industry and the nature of the particular warehouse’s operations among other factors. The dominant costs have though been found to be staff and building costs. Two key factors that managers and designers should put more emphasis on are the utilization for building space and proper design and management of systems for picking orders. Conclusion;
The adoption of computer based information systems in the management of material supplies, such as just-in-time approach, which have enabled up-to-the–minute information on stock location and availability to be accurately provided, have in a big way challenged the need to have warehouses and holding stock. Even with the deep integration of logistics and production planning, together with accurate techniques for forecasting demand, there will always be a level of mismatch between demand an d supply optimization in many if not all supply chains.
Hence warehouses cannot be eliminated from the supply chain. For this reason, the management of warehouses should be done using the highest level of management techniques in all areas of operations. The fist step is to design a warehouse that will effectively optimize the use of available space in the most economic manner possible. Such an initiative will keep the supply chain flowing and hence make an organization to avoid or reduce the operation losses that come with clogging or stalling of supply chains, whose consequences are usually severe.
References Donald, C. , Waters J. , & Waters, D. (2003). Global logistics and distribution planning: strategies for management (4th ed. ). London: Kogan Page Publishers Ross, D. (2004). Distribution: planning and control : managing in the era of supply chain management (2nd ed. ). MA: Kluwer Academic Publishers. Rushton, A. , Oxley, J. , & Phil, C. (2000). The handbook of logistics and distribution management. VA: Kogan Page Publishers.