Warehouse and Inventory Management - Report Example

Warehouse and inventory management Introduction: Inventory management is the direction and control of activities with the purpose of getting the right inventory in the right place at the right time in the right quantity in the right form at the right cost. Warehouses are the links between the producers and the customer. It has movement management which helps provide better customer services in at low costs. Or in simple words we can ay warehouses are storages for raw material and finished goods. However with time the warehouse demands have increased which in turn has demanded a progress for inventory mixing and movement taking into consideration time and space. Details of Inventory and warehouse management for the firm: The detailed explanation of Inventory accurateness starts with a consideration of the circumstances where faults occur. In between lays the work or conditions used to which leads to an error resistant process. The process is composed of clever technology, a trained staff and continues improvement which has to be constant. In this task various jobs like cycle counting, process evaluation, audits, user interface design, procedures, employee training, accountability, control methods, root cause analysis, process checks, exception reporting, transaction techniques, measurement, counting methods, bar codes, RF systems, speech-based technology, light systems, and software are taken into consideration. Before anything there are some basic points to be taken in to account. Considering the Basic Inventory: The process, technology and staff are the main hands of the Basic Inventory. They are the main responsibilities in the standard cycle count program. They also initiate unconventional method that proves to be more effective. Root cause analysis: Here the basic cause concerning the reasons that contribute to make error is analyzed. This will help in locating the firm’s negatives or limitations. This analysis is very important as it is the base of Inventory management. Process evaluation; Taking into account the overall objective of the company is the main task of Process Evaluation. Procedures: The procedures or process changes in a company makes it important for the workers to concentrate on it which in turn has a major on process changes makes it easier for workers to be precise and have a major positive impact on inventory accuracy. Employee training: A company with a good technological background always has a good staff and employee training always helps in Inventory accuracy. It is in all a inexpensive procedure but gives more results than any other investment the company executes. The result is an overall improvement in all the operations of the company. Data Analysis. Data analysis takes huge quantity of raw facts and converts it into meaningful studies that is used in making well equipped decisions or solve problems proactively. Data analysis mainly includes study of bills of materials; routings; item set-up; forecasts; demand; order quantities; safety stocks; order profiles; item profiles; work-in-process; inventory transactions; inbound, outbound, on hand, in-transit inventories, allocated quantities; and multi-plant relationships. Data analysis is usually accomplished with a combination of downloaded files that can be examined offsite, whatever database ids ready, reporting tools already available and the query. The mostly used tools are Microsoft Access, Query 400, and Crystal reports. Financial analysis. The precise cost/benefit examination of tools or technology investments is significant in making sure that you are creating the best equipment and technology decisions. Allocations/Availability—It is the demand produced by sales or production orders against a specific item. The terms and the actual processing that controls allocations differ from one software system to another. Basically a standard allocation is an aggregate quantity of demand against a specific item in a specific facility. Usually there are two types of allocation which are discussed below: Standard allocations are usually related as normal allocations, soft allocations, soft commitments or regular allocations. In standard allocations there is no measurement that exact units will go to specific orders. Firm allocation is against specific units in a facility such as an allocation against an exact location, lot, order or serial number. Firm allocations are generally referred as specific allocations, hard commitments, holds, reserved inventory, frozen allocations and hard allocations. The main difference between the two is that Standard allocations just show that there is actual demand while firm allocations precisely set aside the inventory for a specified order. Audits: Also known as Accuracy audit—here verification is done periodically taking into consideration the Inventory accuracy. The main tasks involved sampling of inventory facts and physical counts to conclude correctness. Accuracy audits are important and can be used as a substitute for the annual physical inventory for financial accounting purposes. Question 1: Critically evaluate all aspects you think are relevant in relation to warehouse space and layout planning. You must provide various practical examples from the academic literature to underpin your arguments. Answer 1. Material handling system and Space requirement planning: When very narrow aisle and high bay storage systems are needed, AS/RS is majorly used. It helps in storing inventory, buffering processes, and sequencing products as needed. AS/RS systems can handle a wide variety of product units such as cartons, totes, and pallets. AS/RS systems also provide very precise inventory management information systems and can hold a wide variety of product types including raw materials, work-in-process, and finished goods. The main functions of using AR/RS are that it reduces labor and provides consistent sequenced material flow. In this we can also use the NAVI SORTING method. It is a slide shoe type sorter that approves the shoe horizontal feed function with less failures to work, and pushes it to the destination smoothly. Because a non contact drive method by a linear motor is used, the outcome becomes superior due to its high speed, quietness, and maintenance, which is suitable for the sort of heavy transportation things such as cardboards and plastic containers. Material flow design: For material flow design we will apply a branch and bound procedure. This will help us in designing flow paths of fixed path material handling systems. It can be related with automated monorail systems (AMS), automated guided vehicle systems (AGVS), flexible conveyor systems and other fixed-path material handling systems. Here we will create an economic model which takes into mind the construction cost of each path segment as well as the travel cost of the same. Here a procedure will be developed to determine the configuration of flow path and the direction of each flow path segment. A tight lower bound for the optimal idea function and an efficient search strategy are suggested. Racking configuration: For Racking configuration we may use the Detailed Selling Lead Description system. Features of the system: 1) This system offers very high concentration storage 2) Ideal for warehouses storing large quantity but limited variety of products 3) The warehouse utilization rate increases by about 80% as compared to other systems. 4) Each passageway is dedicated to a single type of product 5) It follows last-in-first-out (LIFO) sequence Random Storage method: A random storage method refers to a study where products are stored in a proper manner keeping in mind space utility and effortlessness in locating a product. If we take Storage method into consideration for our firm it will increase the performance of our production Unit. The automated storage retrieval systems performance will also improve. Let’s take in consideration of how the method can help our firm: Usually the needs of manufacturing operations are rooted in material features. The Bill of Material (BOM) is the best source to link material characteristics. We can then make BOM as a main attribute of a production system by which we can incorporate a CIM system. The projected method is not only a better storage method but can also incorporate an AS/RS into CIM system which will make the work and outcome of the production unit better in many ways. Cycle Counting: Cycle counting is the process to often schedule the inventory count which keep on rotating the inventory or in simple words we can say that it cycles through your inventory. This is one of the most important tools to achieve the inventory accuracy. In this the user specifies as per how often the items or locations are counted. For a better strategy that will help in inventory accuracy, a understanding of the characteristics of the operation as well as a detailed study of the various cycle counting tactics and its inner working are very crucial. The main topics covered under Cycle Counting are Objective of the program Deciding a cycle count strategy The Advantaged and disadvantages of using the specified stratification for determining The frequency of the cycle count. The alternative methods of cycle counting Combining methods to give a better outcome Understanding the quantity handling procedure in the program. The Significance of transaction control Explaining the reason for counting a control group. The advantages and disadvantages to carryout the Blind counts. Process for reconciliation of variances. Considering the effects of adjustments. How to control situation where things like lost inventories come forth. Defining a simpler way to cycle count without using a program How to succeed in a 24/7 operation for cycle counting. Why other verification methods are needed to be supplementary with the program How to include tasks adding the cycle count strategy Measuring accuracy by various means is important. Question 2: Discuss ALL aspects you think are relevant in relation to warehouse operations management. Consider the appropriateness of mechanization and full automation. You must provide various practical examples from the academic literature to underpin your arguments. Warehouse management system— for the management of the material which includes its movement and storage, computer software is developed which easies the Warehouse management. Putaway, replishment and picking are the three functions of WMS. The key to these systems is the logic to direct these operations to the precise locations based on user defined principle. Warehouse management will help the firm in Reducing inventory. Reducing labor costs. Increasing storage capacity. Increasing customer service. Increasing inventory accuracy. Intended for pick and put away Picking items can be carried out in different ways: per order, to stage Placing goods or items away either into the warehouse or cross-dock to shipping Replacement of items based on predefined maximum or minimum bin numbers Warehouse workforce: The warehouse workforce is the staff or employees of a warehouse. Software’s are being developed to ease the work of the Workforce. Detailed study of hoe software will help the warehouse workforce. In this the put away and pick up procedures are guided by the software. Example: if you want to pick a product the software guides you for the location and when you receive items to be put away the software guides you for an empty bin. This saves time of the workforce and the outcome of their work is accurate and consistent. The new employees or momentary staff can start their work from the first day itself. Warehouse productivity is yet another point. In this the productivity of the workforce is enhanced by some systems. For example there is Simplified Gainsharing program which propose considerable benefits for companies and workers. In this three points are taken into consideration Getting Started: In this section the main work is to explain the principles of simple Gainsharing. The main sections include how to overcome objections and get  employee buy-in, improve productivity and quality, set performance expectations,  and more. Day-to-Day Management In this we study how Simplified Gainsharing influences both hourly workers and their superiors. This segment centers on the changing role of the superior or manager and shows how to keep these key players aggravated and alert so that they can continue to get greater output gains throughout the warehouse. Continuous Improvement Once the Gainsharing program is recognized you’ll find that productivity is up, turnover is down, and quality and self-esteem are both high. But t productivity gains are still to be made. In this section we study how to put into practice and run a mentoring program that will make sure that each warehouse worker is working at max out productivity. Material handling equipment: Here attention is paid more on movement and less on long-term storage. Material handling is a process result that considers the functionality and costs of material handling equipment and manual handling methods. This concept relates to conveyors, sorters, spirals, carousels, and a wide assortment of electrical and mechanical devices. All these equipments are mechanics and can breakdown or malfunction if not properly used or maintained. Here we have to see a systematic way to handling and maintaining the material. The first and foremost point of maintenance is to make a list off all the equipments. By this the company can develop ways to improve its material possessions. The list should include physical assets, production equipment, processes, and all major areas: mobile equipment, conveyor systems, sorter systems and facility-related assets, as well as bar code scanners, printers and other devices that keep a DC functioning. Companies should consider other factors that have an effect on how the equipment runs while an equipment list is being compiled. Example, equipment operating in the desert with blowing sand requires more maintenance than in a mild climate on the East Coast. The basic things to consider are for how much time are the equipments running are they indoor or outdoor and the climatic condition whether suitable or not.  After the list is made and conditions are looked into the firm has to estimate the current state of maintenance. Then one has to develop and put into practice a calculated maintenance plan. This plan must comprise a modified preventive maintenance (PM) program to make sure that the equipment runs with high consistency. The final steps are categorizing priority areas for improvement based upon a total benchmark evaluation of the maintenance operation. Note of common mistakes occurring should be taken so that the repeated occurrence of the mistakes do not take place. Warehouse Security-It is a collective attempt to keep out interruption into a warehouse by unauthorized persons, destructive pests, and other events beyond man's control (i.e. windstorm, lightning, and flood), thefts or fire. It consists of record keeping, access control, building design, and maintenance and housekeeping function. The securities to be considered are; Security alarms, cameras or CCTV, Wire Mesh Partitions & Security Cages for inventory, Automation and Carousels, Security gates, Access controls, Fire detection alarms, emergency lightings, etc. Product deterioration: In any firm product deterioration is a common problem. Programs are designed to provide a method to prevent damage or deterioration (i.e., preserving and segregating product). It comprises of suitable storage to secure product or parts with receipt and dispatch methods. In his a good control over packaging, packing and labeling processes is required. Safety and maintenance: Safety and maintenance is the main point in warehouse industry. Some basic problems faced are fall from heights, manual handling, slips trips and fall, falling of objects, operating lift trucks, traffic movement, machinery, electrical equipment, hazardous substances, poor lighting, poor hygiene and comfort. For this the warehouse has to be built and maintained keeping into account the safety measures. Here training the staff using the right equipments, regular servicing and maintenance of equipments trucks or anything mechanical, floor conditions to be kept maintained, warning signs have to be located everywhere, vehicle routes kept free from obstructions, machineries should be maintained and have a emergency stop button, building should be built to appropriate standards, good quality light provided for workers, first aid facility available all the time and the area kept clean and hygienic. Bar codes: They are sequence of bars and spaces that are programmed to represent characters. They are designed to be machine-readable. EXAMPLE: a programmable bar code scanner which is using a keyboard-wedge interface provides a low-cost means of including automated data capture (ADC) into your operation. Example: In the RFID military compliance solution they propose a quick and cost proficient way to meet Department of Defense authorizations by using a supplemental RFID label that is encoded with a unique identification code. The code is printed as a bar code and in human readable characters. Throughout g the shipping course, the supplemental RFID label is attached to cartons or pallets in propinquity to the MSL label. At the time of shipment preparation the suppliers scan or key MSL data and the unique number from the supplemental RFID label into the DoD DD250 Web-based purchase order management system. The RFID labels measure 4 x 2 inches and use Avery Dennison Class 1 inlays. Question 3: Provide a detailed case study of the use of information technology (IT) in the warehouse. Use this as a basis for a review of how technology can help the warehouse manager achieve his objectives Automatic data collection: Correct and efficient data collection influences the performance of inventory management, warehouse management, customer service, and ultimately, the total business act.  There are systems made in which data is captured with online wireless devices. An ADC helps in Collecting and using the accurate inventory data in very less time. It increases the efficiency and productivity of the warehouse and gives access to accurate inventory data throughout the business. Example of such a system is the RS232 Data Acquisition Software by WinWedge Electronic data interchange: (EDI) It exchange of structured data by agreed message standards from computer-to-computer .Or we can say that transformation of data from one computer application to another by electronic means and with a minimum of human interference. It can be useful in Warehouse Shipping Order, Warehouse Stock Transfer Shipment Advice, Warehouse Stock Transfer Receipt Advice, Warehouse Shipping Advice and Warehouse Inventory Adjustment Advice RF systems or RF computer Here radio frequency is used by a portable device to transmit data to the host system. RFID: Radio Frequency Identification: In this a technology is used where by the help of the devices attached to the objects data is transmitted to an RFID receiver. The size of the devices vary anywhere from large pieces of hardware that are of the size of small books or small devices that can be inserted to a label of a package. RFID are more beneficial that bar codes as they have the ability to hold more data and change the stored data as per processing. It does not need line-of-sight to move data and is very effectual in harsh environments where bar code labels don’t work. The Real time locator system. In this system RFID technology is used to transmit the physical location of RFID tagged items. System need some type of RFID tag to be attached to each object that is to be tracked and RF transmitters/receivers located throughout the facility help decide the location and send information to computerized tracking system. Speech-based technology: Speech-based technology is also known as voice technology. It is mainly composed of two technologies — Voice directed: In this the computer data is converted into audible Speech recognition: This technology allows the user’s voice input to be transformed into data. The portable voice systems consist of a wearable computer and headset with a microphone. This technology helps in Order picking. It is a way to automate the process of taking orders which otherwise needs half the staff. It increases effectiveness and improves services to meet the rising expectations of the customers. Example: Maines Paper & Food Services, the fifth largest food service distributor uses this to supply the restaurants, health care facilities, and educational institutions that are its customers, Maines has built an extensive supply system that includes six facilities. The flagship of the system is a 300,000-square-foot distribution center near Binghamton, N.Y., where 60 to 70 order selectors work each shift. In an average week, they log 400,000 picks in this facility alone. Maines came to a decision to upgrade the warehouse management system it merged Manhattan Associate's PkMS supply chain execution system with the Vocollect Talkman voice-recognition system, and then it tied it all together with an 802.11b (Wi-Fi) wireless LAN. Light systems: In this system activities are directed by the help of lights. Pick to light System: In this each pink location is displayed by lights or LED displays Software is used to light the next pick and only the specific amount that has to be picked is lighted. Warehouse Design: Here one develops conceptual designs for storage, production, and material handling. A conceptual design is a scale drawing that despots flow, types of storage equipment, aisle widths, work stations, etc. A well-designed warehouse ensures you the purpose of accomplishing the best balance of cost, productivity, and space utilization while taking into consideration the accurateness and safety. The distinctive operational needs of each facility will be the utmost important point. A custom solution is a sole mixture of standard storage and material handling equipment alongside with procedure that is considered to meet the specific requirements of the facility. The main aspect of the custom solution is not only saving money but also be less expensive initially by making certain that the most cost-effective equipment is designed into the plan. User interface design: An interface design is Human-machine interface designed to be user-friendly. This helps in quality and quantity work. In this our goal will be simple and intuitive interaction by making the computers user friendly. Usernomics can help our company in making our products easy to learn, easy to use, aesthetically pleasant, and profitable. There will be 10 main points that we will consider while making our interface design Clear view of system status Interaction between system and the users should be known to both. In short the computer (system) should appear in a logical and natural manner that is understandable by the user (mainly Staff) User organization and freedom There should be consistency and standards throughout the system as this make it easier for the user. Error preventions. Recognition rather than recall will not strain the user in using his own memory. The system should be flexible and efficient to use Information which is irrelevant or rarely needed should be excluded. Help users recognize, diagnose, and recover from errors Provide help and documentation that is easy to search and implement. Question 4: What do you understand by modern methods of inventory management? Compare these with more traditional models such as re-order point and EOQ. Answer 4 Modern methods of inventory management: The traditional models such as re-order point and EOQ are good enough for small scale industries where inventory management is limited but for large projects they don’t prove that useful. Many systems in the market today are naïve. Large sizes, lead-time, demand patterns, production quantity, order distributions are not considered. As a result of which MRPII/ERP systems do not optimize inventory procedures. The MRPII and ERP types do not give better customer services and inventory situations. Common Problems with MRPII/ERP Systems As mentioned earlier, all MRPII/ERP systems currently on the market are very simple and can’t reach to standards for large scale industries. For years these systems have provided base for many companies but still they have some inbuilt weaknesses. The plans and stocking parameters are randomly fixed. Infinite capacity: Usually the MRPII/ERP systems create an impractical production situation that leads in unnecessary inventories, sub-optimal utilization of resources which results in poor customer service. Just In time program: is an inventory strategy put into practice to improve the return on investment of a business by reducing in-process inventory and its related costs. The process is driven by a series of signals, or Kanban that tell manufacture processes to make the next part. Kanban are usually simple visual signals, such as the presence or absence of a part on a shelf. If executed correctly, JIT can lead to remarkable improvements in a manufacturing organization's return on investment, quality, and efficiency. New stock is ordered when stock reaches the re-order level. This saves warehouse space and costs. However, there is one drawback of the JIT system is that the re-order level is decided by past demand. If demand increases above the average demand, the firm could lessen inventory and cause customer service issues. The Just In Time Inventory System has many benefits. Some are listed below 1) Set up times are reduced which in turn helps the company to improve their bottom line, to be more proficient and utilize the saved time on other areas. 2) The flow in the warehouse is improved which reduces employee fatigue and lads to more prominent work. 3) Employees with multi skills can be used in more than one area as they are trained for the same. 4) There is a better consistency of scheduling and employee work hours. 5) Increases emphasis on supplier relationship which will keep the company in good books of Public. 6) Supplies round the clock keeping the workers engaged and productive. Distribution Requirement Planning: This Process is used for important inventory requirements in a warehouse. DRP may be used for both distribution and manufacturing. In manufacturing, DRP will work directly with MRP. DRP may also be defined as Distribution Resource Planning which also includes formative labor, equipment, and warehouse space requirements. Spreadsheet Simulation Program: In order to enhance the large scale inventory replacements operations using Economic Order Quantity (EOQ) types of models or some more probabilistic models is a good decision. . For example, in a typical EOQ model, it is understood that there is a regular known demand rate. Many companies are yet to see any real situations that satisfy this condition. In addition, the model takes for granted that there is a constant, known lead-time for delivery. This theory is impractical. Product items are contending for the same resources while production is going on. So the Lead-time differs greatly. Probabilistic models (e.g., the newsvendor model) have severe assumptions that make the model inappropriate to realistic situations. As an alternative obtaining to planning and stocking constraint values from reproduction is a better way. Using specific planning and stocking constraint values, reproduction allows to easily inspect inventory operation functioning, e.g. stock-outs and frequencies, inventory amounts and carryovers, etc. The results from reproduction provide a clear picture as to a best choice of preparation and stocking restriction. The new simulation program, have the following inputs for each product. 1. Product demand pattern. 2. Production/order lead-time.. 3. Safety stock/reorder point. 4. Reorder/production quantity. To run this program, the first need is to count all the four items above for each situation. After running a few situations, the best replacement strategy will speedily appear. The program is very flexible, because demand patterns and planning and stocking parameters can easily be changed in reproduction. Given the capability of the work center, the best replacement policy for each product/product group can thus be gain. As a matter the guesswork is taken out which results in a best inventory policy. It examines impartially the various replacement scenarios and provides the user the best choice for use. After that a production sequence is mapped and TOC (Theory of Constraint) is applied to the method of manufacture scheduling operation. To add in the practice also goes hand-in-hand with the replacement operation discussed above. References: Ten Usability Heuristics – Paper by Jacob Nielsen International journal advanced manufacturing technology (Int. j. adv. manuf. technol.)  ISSN 0268-3768  Simplified Gainsharing Training Handouts by Pat Kelley, and Ron Hounsell. A Systematic Approach to Material Handling Maintenance (article MHM) July 2002 Written by: Roland Newhouse http://www.usernomics.com/user-interface-design.html http://www.accuracybook.com/ http://www.accuracybook.com/CycleCounting.htm http://www.inventoryops.com/dictionary.htm http://www.inventoryops.com/services_detail.htm#Software%20Optimization http://www.lionhrtpub.com/orms/orms-2-01/hsiang.html Read More