Warehouse Management. Global Business Productivity

A warehouse is the functional unit of a commercial or industrial company, which responds to particular objectives of support, control and supply of materials and products. When there is an optimal warehouse management, the cost and execution times are favored directly impacting the performance of the company.

Having a warehouse management system helps to organize and inspect all operations and the flow of goods in the warehouse under the current parameters and regulations to boost the efficiency and quality of the logistics network to improve the overall productivity of the company.

What is warehouse management?

Warehouse management is a broad logistic process that ranges from the admission of a material into the warehouse to its point of consumption. Therefore, it is a task to which all activities related to the stock of materials and finished products are designed.

It is a substantial part of lean manufacturing because it is a methodology that avoids excess stock to reduce waste and expenses. It has a relation of the location and he flow of the materials to maintain a control of them.

Warehouse management within the logistics process map: Limits and responsibilities

Warehouse management originates with the objective of optimizing each stage of the production process to sustain the supply and distribution of materials and products in a timely and continual manner. It is one of the most essential activities for the operation of a company.

It is possible to place this work within the map of logistics processes, since in this way it is possible to increase the responsibility of the area of warehouses that begins from the facilities and extends to maintaining them to improve production conditions.

The logistics process map includes:

• • Planning
  • Catering
  • Stock Management
  • Warehouse Management
  • Orders Management
  • Distribution
  • Customer service

Importance and objectives of warehouse management

Warehouse management provides superior value in the supervision of services and products. That is , it has a positive impact on the performance of the supply chain and therefore also on customer satisfaction.

Also, it guarantees the correct execution of the multiple logistic processes of the company, ranging from the supply to the distribution of the different goods and services, maintaining a balance at all levels of stock,which allows to deliver an immediate response without delays in the chain productive.

This process is closely related to the supply chain and its optimal operation depends on an appropriate strategy and the implementation of technologies to streamline and automate the activities of the different departments.

The objectives of warehouse management are:

• Streamline deliveries of goods in the warehouse
• Monitor each stage of the products
• Increase staff  productivity
• Guarantee deliveries in a timely manner
• Improve product quality
• Maintain inventory prices
• Reduce operating costs

Warehouse Functions

A warehouse is structured center that is responsible for regulating the flow of stock of products and to perform the following functions:

Merchandise reception

It allows to receive the goods that the suppliers send, verifying that each one coincides with the delivery documents, also checks the quantity and the quality of the order.

Storage

Determine the ideal location of the goods to favor their rapid location and handling. For this, it relies on fixed means such as warehouses, industrial supports, shelves,etc.

Conservation

The conservation of the goods in good condition implies keeping them under the rules of hygiene and safety in the warehouse and in turn, under the legislation that each product possesses.

Existence Control

This function is key to determine the quantity of products in stock and the frequency with which more will be requested in each order in order minimize storage costs.

Warehouse Values

The storage and control of materials and products raises the cost of the latter without additional value, but they are mandatory activities within production operations. Therefore, companies must be governed by the following fundamental principles of the warehouse:

• The entrance to the warehouse will be restricted to personnel outside it.
• Merchandise security must be the responsibility of only one person
• Entry and exit operations must have authorized documentation
• Warehouse personnel will be assigned according to their particular role to perform
• In the warehouse there should only be a maximum of two doors with the relevant security controls
• Inform the inventory control and accounting area about all the movements made in the warehouse.
• Products must have an identification form and an inventory control code
• Each material will be located in the warehouse according to its classification to facilitate its location.
• A flexible warehouse distribution that allows variations with a minimum investment must be guaranteed.

Warehouse management processes

Warehouse management has two transversal guidelines, which are its main processes. the planning and organization of information. Under these axes there are subaltern processes that complement the administration activity.

Planification and organization.

This stage of the process is a strategic point that provides balanced resource solutions under the policies and goals that the companies global strategy seeks to achieve with the objective of improving its competitiveness in the market. The activities that must be carried out in this process are:

Layout of the distribution network

The company must determine the distribution policies according to the sector to which it belongs,optimizing the response capacity to control the demand variations.

The design of the distribution network is the planning and tactical location of the warehouses and distribution centers that allow to manage the flow of products from their entry into the warehouse until delivery to the customer.

On the other hand, the particular requirements of distribution and storage are identified to determine the type of warehouse and distribution centers that best adapt to needs and increase efficiency. 

Warehouse Management Responsibilities

Here you define if the warehouse will be self-managed or if it will outsource.With self-management, greater control, long-term cost reduction, optimization of human resources are obtained, in general it provides intangible benefits.

On the other hand, outsourcing favors the preservation of capital and timely knowledge of storage and maintenance costs. In addition, it supports the expansion of warehouse spaces to meet market demands.

Warehouse Size

The dimensions of a warehouse must respond to the characteristics of the products and the demand. Other factors that are taken into account for the calculation of the size of the stores are:

• Customer Service Levels
• Storage Systems
• Production Times
• Stock Out
• Hall requirements

Warehouse Design

To achieve an optimal and efficient flow of materials, the warehouse and the distribution center must be located in the appropriate area under the conditions that allow carrying out all operations and at the same time must have the necessary equipment and technology.

The design of the warehouses facilitates the preparation and precision of the orders, as well as the placement of stocks to boost competitive advantages with diligent order cycles and better customer service.

Reception

This is a process of planning of entry, download and verification of goods which aims to automate each stage of reception to minimize human intervention that does not add value to the products.

Storage

This subprocess is conferred the preservation of the products to avoid the occurrence of risks in them, in human personnel and in the warehouse itself and for this, it must be divided into the following areas:

1. Reception
2. Reserve or stock
3. Order Preparation
4. Consolidation
5. Maneuver
6. Offices

Movement

Moving the goods is possible thanks to various means that allow at the same time the manipulation of several materials passing from the reception area to the storage location.

Information

Warehouse management focuses on improving the efficiency of the flow of goods and consequently the flow of information, which is an orientation axis. This thread is applied in each of the previous ones because in each one performance reports are required that help to record the daily activity and the evolution of the processes.

MRP software for warehouse management

Warehouse management involves multiple processes in which goods and products are handled and when they have a robust inventory, the administration of each one becomes complex, so it is necessary to resort to technology. That is, it is required to have a business software.

Thanks to MRP software it is possible to boost the profitability of companies, as it provides an advanced strategy for planning and control of materials and the production process to which they are subjected.

This system optimizes the production, programming and control of stocks used in warehouse management. Its activity within each company focuses on:

• Plan manufacturing activities and delivery orders.
• Automatically update stock reports of materials and products.
• Supply materials to the production area and maintain a constant availability of products for delivery to customers.

With Visual ERP you can manage and control your warehouse, thanks to the fact that it has an MRP that facilitates tasks not only at the operational level, but also at the administrative level allowing access to a broad knowledge of the performance of the activities, which favors the taking of decisions and internal communication.