Chapter 7: Warehouse Management

Overview

Warehouse management involves the physical storage and movement of products in the supply chain. This includes inventory management within a location, the handling of outbound and inbound shipments, quality management considerations such as incoming inspection, issuing components to production orders and handling output in a manufacturing environment, and handling transfer orders between locations in a multisite environment.

Various terms (such as inventory management or distribution management) are used to refer to these activities, and responsibility for these activities may be assigned to one or several functional areas. For simplicity s sake, further explanations use the terms warehouse management function and warehouse personnel, and several synonyms for a location ”such as warehouse, plant, and site ”will be used interchangeably.

The requirements for coordinating and reporting warehouse management activities vary from company to company, and between sites within a company. For example, a smaller firm often has simpler requirements and warehouse personnel can handle put-away requirements in their head. Other firms have larger warehouse facilities with more complex requirements for putting away and picking material, and warehouse personnel need explicit instructions on what to do. This argues for a contingency approach for modeling and managing warehouse management activities. This chapter explains three levels of functionality for managing warehouse activities: basic, intermediate, and advanced.

The starting point for explaining the basic level of warehouse management functionality involves the definition of inventory locations and the approach to inventory transactions. Explanations for each additional level of functionality involve revisiting the warehouse management policies for a location and the impact on inventory transactions.