Key warehouse process must be known to anybody who is interested in warehouse design or warehouse operations. Broadly, warehouse processes can be classified as inbound, storage & outbound. Inbound is receiving goods in to warehouse and outbound is dispatching goods as per customer requirement. Whereas, storage is ensuring goods are stored safely in the warehouse. Following diagram explains simple concept of goods coming in to the warehouse and goods going out of the warehouse.
Warehouse processes can be further sub categorized as below. The graphical representation of inbound flow and outbound flow can be explained as below.
Warehouse process – Inbound
The inbound flow in a warehouse begins when goods arrive at the warehouse gate. The stock can be received as stock transfer, supplier inventory or seller inventory. The stock transfer is company owned stock received from another warehouse or manufacturing plant. Supplier inventory is the inventory delivered by supplier to the warehouse. Post inventory receipt in the warehouse, supplier is paid for the stock. Seller inventory is owned by seller and warehouse provides only logistics support to the seller. In this case, seller is charged for warehouse services.
It is important to turnaround following inbound flows quickly to ensure stock availability to end customer. Availability of stock is an important factor to improve company’s top line. This is even more applicable in E-commerce industry.
Following are the sub process of inbound flows.
Yard is the space required for vehicles to wait till their inbound or outbound processing turn comes up. The objective of yard management is to oversee movement of vehicles in yard of warehouse.
The objective of dock management is to reduce wait time for trucks in the yard. In order to efficiently schedule operations at loading or unloading docks it is important to have visibility on the following.
- Availability of loading and unloading docks at any given time
- Docks currently in use and their planned schedule of availability
Unloading is process of removing goods from docked vehicle and staging in temporary storage area called inbound staging. Material handling equipment like Hand pallet truck, Battery operated pallet truck or counter balance truck are used depending upon size of product.
- Pallet loaded vehicle – In palliated vehicles, goods are already loaded on pallets by supplier into vehicle. Unloading pallets requires lesser effort, thus provide faster dock turnaround time.
- Loose loaded vehicle – in loosed loaded vehicle, cartons are loosely loaded into vehicle. For unloading, first cartons are palliated, then pallets are transported to inbound staging area.
Receiving activity checks that right product, in the right quantity, in the right condition, and at the right time is received at the warehouse. Companies normally receive goods against ‘Advance Shipment Note’ or ASN which contains information like name of item, UOM (Unit of Measurement) Serial no, Lot no, manufacturing and expiration dates.
Basis handling units, either pallet receiving, carton receiving or each receiving is performed. Receiving also involves the transfer of responsibility for the goods to the warehouse. This places accountability on the warehouse for maintaining the condition of the goods until they are shipped.
Put-away is the movement of goods from the inbound stage to the most optimal warehouse storage location. Following is the put away process
- Operators accept the put-away task from Warehouse Management System (WMS). For different types of WMS visit this page.
- Operator scans the relevant bar code of goods to be put away.
- System directs operator to deliver goods to the optimal storage location.
- Once at the location, operator scans the relevant stock location bar code
- Operator places goods into the location Then confirms task is complete.
Depending upon storage type like rack, ground or shelving effort required also varies. Put away in rack and ground is faster whereas put away in shelving requires more effort.
Warehouse process – Outbound
The objective of warehouse is to dispatch orders, basis customer requirement. Therefore, it is important to understand different types of customers and orders.
- Stock transfer orders
- Inter warehouse transfer
- Company owned retail outlets
- Sells orders
- Modern trade
- Retail outlets
- Institutional customers
All above orders types are raised in customer ERP. These orders are released into WMS through wave. Following are major types of warehouse outbound flow.
Picking is the warehouse process that picks products from storage in a warehouse to fulfill customer orders. It is the costliest process in the warehouse, comprising as much as 55% of the total work force.
Following are three types of picking process
- Discrete picking – one order at a time
- Clustered picking – multiple orders at a time
- Batch picking – picking all the goods at once to sort to specific customer orders.
Picking process is when operator accepts pick task from system. Picker travels to system suggested location. At location, picker scans location bar code. Then picker picks product and scans product bar code. Then picker moves to next system suggested location and repeats the activity until picking task is completed.
Packing is the process that consolidates picked items in a order and prepares for shipment to the customer. The primary tasks of packing is to ensure that damages are minimized from the time goods are dispatched from warehouse.
Basis the handling unit, following are different types of packing
Packing of unit picked items – unit picked items are either picked in cartons or totes. Unit picked items are packed basis order size. If order size is small as in case of e commerce, then individual units are packed. If order size is equal to carton size, then all unit picked items are put in carton and carton is packed.
Packing of carton picks – packing for carton picks is printing and pasting packing slip on cartons. If order size is more than one carton, then all cartons from same order are consolidated on pallet, before moving to outbound staging.
Loading & Dispatch
Shipping is the final warehouse process and the start of the journey of goods from the warehouse to the customer.
Loading can be of two types
- Pallet loading – faster loading process, as pallets are already staged in outbound staging area. Using pallet trucks, these pallets are loaded into vehicle.
- Loose loading – some trucks are loaded loosely with cartons. Takes longer time, as pallets are taken inside vehicle, then cartons are stacked one by one.
Once loading is completed, invoice and other shipping documents are handed over to vehicle carrier.
Stocktaking or cycle count is when you manually check and record all the inventory at given locations that your business currently has on hand. Importance of stock take is to avoid stock out, overstocking or dead stock. Stock take also helps in tracking damaged, misplaced or stolen products.
Two types of stock take
Perpetual stock take (PST) or cycle counting is a stocktaking method which involves checking a section of your inventory regularly on set days. It means, instead of conducting a single annual stock take of the entire warehouse, it is broken down into several smaller mini stock takes.
Annual Stock take or Annual cycle count is Stocktaking when you manually check and record all the inventory at given locations that your business currently has on hand, once in a year. Annual stock take requires warehouse operations to be stopped during stock take process.
Returns are the most complicate and intricate part of businesses the volume of returns is growing for many organisations – mainly due to the e-commerce revolution. Alarmingly, much of returns for many firms is for just one item at a time, which makes return process more complex and costlier than other process.
Following are major reasons of returns
- Damaged products delivered – products will be damaged either due to poor packaging or due to improper handling in transport
- Wrong products delivered – wrong products might be delivered due to inaccurate picking and shipping by warehouse or mismanagement in transport
- Customer did not like product – this type of return is more prevalent in eCommerce industry, as orders are placed online, without looking at product.
Warehousing service provider can provide numerous VAS to its customers. These VAS requirements are often specific to industry sectors. Following are most common types of VAS services provided in warehouses. Some of the major VAS services are kitting, labeling, tagging, sequencing, line feeding etc.