Supply chain management/logistics management is an important part of business. The flow of goods from the point of origin to the hands of consumers is required to move along smoothly so that both the consumers and supply chain partners experience satisfaction, efficiency and profitability respectively. Warehouse management is a part of supply chain management and retailers and wholesalers are usually faced with a lot of questions as to how to operate efficiently in order to realize high degrees of optimization within the warehouse.
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Warehouse management is not often only concerned with management of stock and inventory but also handling employees by organizing and managing them in a way that results to the highest levels of satisfaction and productivity (Bardi & Langley 125). The main purpose of a warehouse management system is to handle inventory with the help of manual or computerized procedures to manage the reception of stock/inventory together with returns into the warehouse or store.
Footzone is a contracted warehouse that has been in the shoe business for the last five years and is located in the Central business district of Hong Kong next to the port. The warehouse only handles three Nike’s athletic shoe brands and several Nike’s fashion shoe brands. The private warehouse serves as a centralized warehouse that receives orders on behalf of other importers. The warehouse uses the latest supply chain management systems and warehouse management systems warehouse to store and dispatch shoes when they are ordered.
Some of the issues that the owner of the warehouse has been forced to put into consideration in order to operate with the highest degree of efficiency and please his clientele include, coming up with an appropriate layout for the warehouse to optimize space and to ensure that the client’s goods fit well into the warehouse.
Other concerns include coming up with a good storage system that preserves the quality of merchandise, proper operations management which concerns processing orders, receiving money and dispatching orders, material handling, and physical location of stock, auditing inventory records, automation, warehouse safety concerns and management of warehouse management information systems (Wheelen & Hunger 287).
Footzone warehouse management has given a lot of thought and come up with appropriate strategies that assist the company to solve various issues within their warehouses for more efficient and optimal workplace.
Layout of warehouses usually depends on compatibility, the complimentary nature of goods or popularity of items in the warehouse.
Footzone’s layout is not any different Nike is the most popular shoe brand in the region accounting for almost 50% of total sales within the region, thus Nike is a favorite among other shoe brand such as Adidas and Reebok the layout of the warehouse has also 100% of the total space belonging to Nike products since the warehouse doesn’t hold rival brands.
The warehouse layout uses pallet racks and a narrow isle so the amount of storage within the warehouse can be easily maximized to store more shoes.
The current layout is specifically suitable for the warehouse because it allows easy access of material within the warehouse, when it comes to order picking and receiving inventory it is much easer for employees to locate and dispatch orders to the appropriate layout. If the layout if a warehouse is properly designed then likelihood of activities flowing efficiently within is much likely to occur.
The use of very narrow and narrow isles is becoming more famous and, this is now one of the most the most widespread warehouse racking systems currently in use around the world that is gaining popularity especially because it makes it able to use a very small space to store very many items of inventory.
When a very narrow isle layout with double deep and push pack capabilities with dimensions of (2700mm width and 5300mm height) is used in warehouses this allows for a high-rise system to be put in place so that the pallets can raise high into the ceiling additionally pallets need to be very stable and in most cases permanently attached to the ground for safety reasons.
Since Nike products are highly popular and in high demand, this layout of pallets has made it possible for Footzone to receive large inventory of Nike shoes running to the hundred of thousands at a go and store them at their facilities to be picked up later by their various clientele.
The advantage of this layout where narrow skids/pallets are used is that one the entire warehouse is divided into sections where one type of brand is kept and this even makes it easier for the workforce to trace the products in during dispatch when clientele come to collect their merchandise using automated techniques.
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The various store keeping units that have been developed as a result of the narrow pallets has made it even easy to access various Nike products because the pallets assign the inventory numbers such as 123N1, 123N2, these numbers serve as a glossary or a reference by which employees can be able to trace specific inventory when need arises.
The movement of materials during picking from the isles and SKU’s is designed in such a way that both employees and forklifts can move directly fro inside the warehouse isles while carrying pallets and place then in trucks so that they can be delivered to their clientele.
Storage and picking of materials
Storage and order picking are important aspects of warehouse operations because good storage techniques ensure that the qualities of items are preserved and that no physical or chemical changes actually take place. Warehouse designing programs especially in Footzone are designed is such a way to ensure that the entire order picking operations aim to increase productivity and efficiency within the warehouse, lessening of cycle time and lead times and increases in accuracy of placed orders.
That is why the corridors leading from the shelving rack is wide and spacious to facilitate ease of movement of forklifts and manpower, the corridors lead directly into a loading bay which is strategically placed at the end of the corridor.
This way Nike merchandise belonging to a particular clientele can be easily loaded to trucks for transportation. Storage of inventory and stock belonging to clients within Footzone is taken very seriously and the warehouse is installed with the latest air conditioning systems that allow the temperature of the rooms and the spaces between the isle to be regulated according to the Nike manufacturers specific guidelines.
The air conditioning systems are specifically made to regulate temperatures and moisture content of the room and ensure that they are maintained at a certain level. The isles storage of the various batches of Nike shoes are arranged is such a way that the most frequently ordered shoe types are more easily accessible. This reduces the amount of traffic and disturbance that those shoes which are stored for longer periods face making it quite hard for obsolescence and redundancy of stock within the facilities to take place.
The management of Footzone warehouses is aware of certain dangers that living micro organisms such as vermin and insects may induce on stock and inventory and thus the warehouse has hired a anti-Vermin infestation company to assist the firm in ensuring that their facilities remain pest free for very long periods of time and this way Nike products are able to last longer while in storage.
Footzone warehouses are also fitted with the latest security systems to help keep out intruders who may break into the facilities and steal from the company.
Being a contracted warehouse, the company needs to be dependable and ensure that the products especially the thousands of shoes belonging to Nike are able too is stored safely and that the customers to be confident that their goods are safe and cannot be stolen while under its protection. The storage techniques that have been put in place by the management of Footzone has enabled the company maintain very low percentages of damaged goods making their clientele happy and satisfied due to their high levels of dependency.
Order picking is a crucial part of warehousing operations, contracted warehouses usually hold goods on behalf of their clientele and store them safely for a given amount of time but when the right time comes it becomes the duty of the owners of the goods, in this case Nike shoes, to pick them up unless they request otherwise to have alternative means of transport to be organized by the warehouse.
One main explanation for the high level of significance placed upon order picking operations is the fact that this phase of warehousing operations allows the business to interact directly with its customers and thus if the warehouse has the ability speedily, efficiently and accurately process customer orders then it will certainly keep its clients satisfied. A lot of relevant information is gathered by customer care officials of the company during this stage and used by the company to improve various processes within the warehouse.
Footzone warehouse usually receives Nike shoes on behalf of its clients who do not have the warehousing capacity to handle their own goods upon arrival, with each individual pair packed in boxes in patches of 50 pieces. The biggest dealers in town usually place their orders in multiple of 50’s and when the company receives them, they are loaded on wooden pallets and placed on shelving racks.
Shelving racks enables products with similar features to be placed on stock keeping units (SKU’s) for easier tracing when time for dispatch comes. Since narrow isles are used, it becomes easier for forklifts to access both sides of the isle and withdraw the batch of Nike shoes especially when the time for picking the items comes. The use of SKU’s and bar codes has made it quite easy for the warehouse personnel to trace particular Nike shoes when a customer comes calling.
The Footzone’s staff scan and process orders without physically verifying what is inside the boxes and this enables the warehouse operate with high efficiency and speed allowing for easy flow of inventory. In Footzone warehouse, products are stored in various fixed locations on pallet Shelving rack. During order picking, employees assigned with the task usually pick upon order at a time using forklifts.
Fast moving products are usually placed in the beginning of the pick flow due to the frequent nature of picking while bulkier inventory is stored towards the end of the pick flow due to their infrequent nature of picking. This type of arrangement enables forklifts and order pickers prioritize and save on time through the ease of movement. Once the orders are picked they are then placed into delivery trucks and taken to where the clients need them.
Good material handling practices make it quite easy for the warehouse staff to take care of inventory and stock once they arrive more appropriately in order to prevent issues such as misplacement, redundancy and obsolescence of stock.
Footzone warehouse has put in place manual material handling system that work together with computerized and barcode systems to ensure high efficiency in handling of inventory. Most of the Nike’s inventory held within the premises of the warehouse is quite expensive and is usually purchased in high volumes thus requiring more strict measures of recordkeeping to ensure that there are high levels of accountability.
Although the current system of moving inventory is manual, the warehouse has put in place an automated identification system that makes it quite easy for staff and order pickers to identify the exact location of inventory within the shortest time possible. Nike shoes are usually received in batches of 50 shoes and are placed together in industrial packaging which protects consumer type packages from any harsh environmental conditions.
While handling this materials Footzone ensures that the quality of these packages is preserved and that incase the industrial packages which are made of thick nylon are compromised in the process of handling within the warehouse emergency measures are taken and resealing is done immediately.
Automation within the warehouse has been made possible by the use of SKU’s and barcode and this has made it easier to identify a specific design of shoes belonging to Nike. Many of Footzone clients usually place varying orders of designs and by using barcoding systems it becomes more easy and possible for the order pickers and employees to locate and pick out their merchandise from the warehouse.
Additionally, the warehouse has introduced an EDI (Electronic data Interchange) system that allows the whole company to interact on real-time basis and this improves the process of interaction with customers by making it possible to enhance their relationship with the customers.
Electronic data interchanges have made it possible for clients to place their orders and specify the timeframe under which they expect to pick their orders. Previously, the amount of paperwork that the staff of the warehouse use to do was so much and this consumed a lot of time, however the introduction of a database and EDI technology has improved the materials handling process.
The barcodes which are crucial to the EDI technology have made it quite easy to identify locations, identify the client and also the specific Nike designs. The warehouse currently is in the process of introducing conveyer belt systems that will reduce the heavy work load handled by Forklifts, the installation of this conveyer belts will make the process of loading inventory into client’s trucks easier and even more efficient and assist in increasing efficiency and save time.
Footzone is a very large warehouse that interacts with hundreds of clients who purchase millions of pairs of Nike shoes annually and it is hence necessary that the appropriate information systems are put in place to ensure that accurate records of each and every client and every transaction.
Accountability is a very important part of business and this is why Footzone warehouse has decided to shift its information system from a paper system and to a computerized system that allows all necessary information to be obtained from a single click of a button (Stadtler & Kilger 64). The current warehouse management system technology uses bar-coding technology together with SKU’s as the basis of recording transactions unlike previously where the staff of the warehouse was forced to manually record transaction events.
The existence point-of-sale scanners, computer software that are customized for warehouse operations, and local area networks (LAN) that has made it possible for EDI technology to be adopted have made the process of collecting and managing the flow of crucial information within Footzone Warehouse possible. Electronically collected information is also used by the I.T experts who handle the information system to analyze the information and store it in the centralized data base (Stadtler & Kilger 65-71).
The Information that is collected is customized in such a way that allows the warehouse staff using specific code consisting of numbers and letters assigned to every different design and shoe size number of Nike product and matches them to their client database (Tompkins & Smith 114). Thus, when need arises or even upon demand Footzone officials can be able to obtain statements of account belonging to a specific customer and make a print out.
The information management system has been very helpful in ensuring that when clientele place orders, or pick orders when they make payments or demand refunds every transaction is recorded down to every last detail. Additionally, the staff of Footzone is able to trace specific goods and mark them to ascertain their authenticity in preparation for dispatch. This has made it even easier for information to be shared between various departments and also between the clients and the organization.
Footzone warehouse clients get a chance to make opinions and suggestions and this has made it possible for our customer care department to develop applications that are able to collect, analyzed and store their opinions so that they can be used in the future to improve their services.
Every client has his/her own demands and its up to the warehouse to cater to their needs and this is why Footzone’s information management system is quite specific ensuring that the need of every client is directly catered to and that their orders reach them in good condition as specified by the customer and on due time.
Monitoring and Auditing of stock levels
The information and management system also acts as a means by which the level of inventory can be controlled and regularly inspected. Once data is collected over a certain period a continuous method of evaluation stock as opposed to periodic methods of auditing stocks is used (Stadtler & Kilger 113).
Continuous method of monitoring stock levels allows the warehouse staff to do stock taking without necessarily paralyzing normal business operations, in this case inventory belonging to every client is matched against the orders which have been dispatched and those that are still physically present in the warehouse.
This technique of auditing or monitoring stock levels ensures that accounts are reconciled and that clients are notified through EDI’s about the where bout of their merchandise. Incase huge discrepancy which cannot be accounted for are found then the officials who are responsible for ensuring that the inventory levels are secure are held responsible.
Safety and health
Due to the nature of activities that take place in a warehouse, the warehouse environment is susceptible to safety issues and health issues. Every year very many injuries take place in warehouses and it is thus the duty of warehouse managers to set the appropriate mechanisms that will ensure that the safety of their staff is guaranteed.
Accidents usually occur especially when dealing when handling industrial machinery trucks such as (forklifts) and conveyer belts, inappropriate handling of warehouse materials by warehouse staff resulting to accidents, Slips and falls by employees and even clients at some cases.
Despite warehouse premises being prone to accidents sometimes some materials which are held within the warehouse may turn hazardous when exposed too unfavorable conditions. Footzone has also experienced some of these problems in the past and has over time tried introducing measures that will continuously improve the safety conditions in its warehouses.
When handling forklifts and placing wooden racks onto rack shelves, manual laborers and forklift operators are required to be very careful and the warehouse has continuously ensured that the entire workforce gets adequate industrial safety training and each one of them has been handed a safety operation manual that they are required to have at heart.
The warehouse is particularly careful when dealing with chemical materials that could be toxic. The warehouse ensures that the shoes and other merchandise are free from any chemical substances that could be harmful to humans. The surrounding environment is kept at the right temperatures to avoid dampening that can give growth to harmful moulds that are known to attack shoes and materials thus reducing the likelihood of health hazards.
The forklift policy within the company prohibits unauthorized forklift usage because in some instances it puts other personnel who are not aware of forklift usage under danger. Secondly, the use of damaged forklifts is also prohibited within the premises because faulty machinery is more likely to breakdown and damage wooden racks or their shelves and could lead to damaging of the products or injury of the handlers (Bowersox, Closs & Cooper 63).
Thirdly, due to the sensitive nature of operations it is prohibited for forklifts to over speed or be driven at high speeds (forklifts are required to move at most at the speed of 5Km/Hr).
Additionally, the interaction of forklifts and pedestrians is prohibited especially in between isles unless under instructions of the supervisors and floor managers this rule makes it possible to reduce forklift pedestrian commotion/accidents (Bowersox, Closs & Cooper 154-166). Additionally, the warehouse also either repairs or disposes off damaged racks so that when forklifts carry these skids/pallets onto racks/shelves it becomes unlikely for them to slip from the grasp of forklifts and injure individuals or also clientele merchandise.
Regular site inspection and safety audits are also carried out by internal employees and council officials to ensure that the grounds of Footzone warehouse, is declared health hazard free (Bowersox, Closs & Cooper 83-85). Regular inspections also assist the company to identify any loopholes that may compromise safety and health of those individuals who interact with them by initiation corrective action at the soonest time possible.
The introduction of pallet racking protection systems, safety barriers, gates, adequate lighting and good ventilation systems are some of the safety and health systems that have been put into place by the management of the warehouse to ensure that every employee and client is safe when interacting with Footzone.
Fire breakouts is one such threat and risk that faces all warehouses. Consequently, Footzone has installed over 45 fire extinguishers and a sprinkler system to ensure that incase of fire breakouts the fire will be put under control. Additionally, there is a no smoking policy within the premises to reduce the chances of fire breakouts.
The warehouse management also ensures that regular checks of electrical wiring are conducted by certified electricians to prevent electricity related fires (Bowersox, Closs & Cooper 184). Footzone’s warehouse management is highly convinced that the level of safety in their warehouses matches up to international standards.
Contracted warehouses are a very important part of the supply chain as they enable businesses which do not have the space and capacity to get a third party to handle bulk volumes of their merchandise to do so under contractual terms. Business cycles are very specific and thus when time comes for members of the integrated supply chain want to collect their merchandise it is important for the warehouses to release their goods in a good condition.
Moreover, it is important that the time scheduled of dispatch and picking materials are met with accuracy and efficiency. Warehouses are required to match up to international standards by ensuring that they provide a good and safe environment that is accident-free because accidents can hinder the level of output and even interfere with the intended business cycles inconveniencing end consumers and the entire business partners by distorting the smooth flow of goods hence distracting the demand and supply patterns of the market.
Moreover, for efficiency to be achieved it is necessary for warehouses to use up to date operation strategies that offer the best material handling practices, best layout for space optimization, automation and appropriate information management systems that will allow the warehouses to monitor stock levels and enhance relationships with their clients because this will ensure high levels of output efficiency.
Bardi, Edward & Langley Coyle. The Management of Business Logistics. 7th Edition. Mason: South-Western College Publications, 2002. Print.
Bowersox, Donald, Closs, David & Cooper, Bixby. Supply Chain Logistical Management. McGraw-Hill, New York, 2002. Print.
Stadtler, Hartmut & Kilger, Christoph. Supply Chain Management and Advanced Planning: Concepts, Models, Software and Case Studies. 3rd Edition. Berlin: Springer-Verlag, 2004. Print.
Tompkins, James, & Smith, Jerry. Warehouse management handbook. 2nd edition. Raleigh: Tompkins Publishers.1998. Print.
Wheelen, Thomas & Hunger, David. Strategic Management & Business Policy: Achieving Sustainability.12th International Edn. New York: Pearson Prentice Hall, 2010. Print.
A diagrammatic expression showing the movement of Nike merchandise, forklifts and human traffic in Footzone warehouse
(Into the warehouse). Where goods are received before being lifted by warehouse personnel and forklift into the narrow isles.
( outside the warehouse).Where goods are dispatched/Picked by clientele
Wide corridors on either side to allow ease of movement during receipt and picking of Nike merchandise into and outside the warehouse.
Illustration of narrow high rising isles that serve as the shelving racks that hold pallets containing 50 pairs of Nike shoes.
Arrow indicating movement of forklifts, personnel and merchandise within the warehouse
Movement of forklifts and personnel along the Isles while placing goods is specific locations (SKU’s)