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INTEGRATED WAREHOUSE MANAGEMENT
System Preview
The concept of being able to monitor the exact quantity per item and per lot of existing
inventory is essential to inventory control. Combined with the results of M.R.P. this may
prove to be the appropriate way to handle a Supplier Schedules System in a meaningful
way.
A location-controlled warehouse is an area divided into specific locations with
determined capacity. This enables ease of management especially if the stocked items
are used on an everyday basis e.g. fast moving stock. In this case the correct selection
of the storage location minimises forklift movements towards the final destination that
might be the despatching ramp or the floor shop.

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Like any open operational system, a warehouse needs a precise registration of
incoming entities and an exact recording system of outflow. An information system to
monitor quantitative and qualitative factors associated with the entities is also
necessary. To satisfy the above functions of warehouse, apparently control should be
imposed on every procedural step.
• The arrival of goods should be identified and labeled in sequence of receipt.
Relevant information to each pallet received should incorporate item, lot, quantity and
receipt status. A label with bar-code insignia and descriptive characteristics identifies
each incoming pallet designated for receipt at a specific receive-location.
• Once stored, the pallet is part of the stock and depending on its inventory status may
be nettable, available or both. The exact position of the pallet is recorded and may
be there onwards traced by location. The pattern of recording is simple. The forklift
operator is compelled to record the pallet being moved and location from which it is
being picked. This relation is kept in the system during the pallet’s movement. A
single forklift operator may pick as many pallets as his equipment allows him. The
subsequent action is to travel to the required destination (despatching area or
production floor) or any intermediate location. The unloading of the pallet, again,
requires the operator to scan the pallet’s bar-code and successively the destination
location.
• The outflow is monitored indirectly by identifying the destination locations in a specific
manner. For example, the despatching location(s) may have a discrete descriptive
code (D107 i.e. D for Despatch) and so may the production floor buffers (B050 i.e. B
for Buffer).
Functionality Prerequisites
There is a set of initial conditions and parameters that have to be set to specific values
to describe the operational environment. The specifications are direct and indirect. The
direct ones are related to the actual description of the warehouse and its locations as
well as the various peripheral entities associated. The indirect ones are parameters that
affect the overall functionality of the warehouse and are usually set to value once.

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The locations may be warehouse storage locations or production buffers. When
outlining the warehouse, the storage locations have to be declared and fully described
with respect to capacity. It is very helpful to use coding schemes that are meaningful.
A location can be declared as a buffer and coded as such. This immediately divides the
locations into storage ones and buffers.
Each location has a certain quantity of stock of a specific item(s) related to it or none at
all. In every case a cycle count is in order. Once the count has been completed, stock
is recorded per item and per lot. By updating the inventory file, physical stock is now
identical to the logical one.
The various warehouses that belong to a company should be designated and their
attributes set. In detail, each warehouse should be declared as a lot controlled
environment or not, as a warehouse that operates with the use of remote data terminals
(RDTs) or not, etc. It is important, at this point, to declare the coding chosen to
designate the receipt location as well as the despatch location, that have already been
fully described in location maintenance.
The parameters that have to be set refer to the entity with respect to which the picking
logic is activated as well as the declaration of the inspection location used at the receipt
area. When implementing a F.I.F.O. system for processing lot controlled stock it is
appropriate to choose the item’s lot/serial number, to proceed with picking from the
storage locations.
In some cases, it is necessary to know the exact quantity of an item per box or pallet.
These items should be designated and the respective quantities recorded. There are
items that may be splitted and subsequently merged again, so they should be flagged
as such. Finally, it is important to declare the inventory status codes used in the
warehouse being described.
System Mechanics
The primal objective of the system is to be able to provide an exact picture of quantity
on hand on a real time basis. This satisfies the needs of the Warehouse, the statistics

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of the Logistics Dept. and the requirements of Production Scheduling that are relative to
the Purchasing Dept.
This is a real time open system and therefore dependent on changes of the
environment. Its operational integrity heavily relies upon the correct functioning of the
associated procedures. More importantly it relies upon precise execution on the human
element’s behalf.
It addresses three major areas of functionality:
• Receipts
The receiving procedures facilitate shipments by suppliers as well as shipments of stock
from warehouse to warehouse within the company. Each warehouse has a unique code
associated to it and is identified as such throughout the system.
Each receiving procedure identifies the composition of the received material according
to the despatch note and/or packing list. To do this the warehouse supervisor is
responsible for associating the Purchase Order number, as registered in the system, to
the stock items being delivered. This ensures contingency.
The stock items being received are selected per Purchase Order line number and the
insertion of the respective quantities received reduces the outstanding quantity to be
received accordingly.
Once the quantity of units per pallet for each item is known to the system it converts the
quantity received to pallets received. At the same time the lot is also specified (usually
it is the date received or the expiration date). Hence the system generates a Goods
Received Note as well as the corresponding labels per pallet. Each label contains a
serial number generated by the system that appears in bar-code form (electronically
identifiable) and in human legible form as well as the item’s code, description and
quantity held.
These labels are attached to the bottom right of each pallet. It is important to point out
that unequal delivery is also handled. In many cases the shipment delivered may not be
equally divided on the pallets. This results to a number of pallets with an equal quantity

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of units held and the pallet with a residue quantity. In these cases extra care should be
taken so that the respective labels identify the right pallet.
At this point each pallet is uniquely identified by a label and exists in that sense for the
system. The remaining issue in a location controlled warehouse is to relate each pallet
to a location. This is done by the forklift operators.
For each movement, the forklift operator has to record the pallet and the location. If the
movement is a «pick» then the pallet and the source location (location of origin) are
recorded, whereas if the movement is a «put» then the pallet and the destination
location are recorded.
Referring to receipts the forklift operator picks the pallet to be stored, scans the pallet’s
bar-code label or keys-in the pallet’s serial number as well as the bar-code designating
the receipt area (ramp). Subsequently the system proposes the destination location in
the warehouse. The operator may go to that or any other location, to place the pallet.
The placement consists of scanning the pallet to be placed (or again by keying-in the
pallet’s serial number) and the corresponding destination location. If the destination
location is the one being proposed by the system then the movement is directly
accepted. If the destination location is arbitrarily chosen by the operator, the system
prompts for verification and logs the alternative placement registering the user’s
identification.
• House-keeping
The storage locations are used to stock items of any status. It is not necessary to have
fixed inspection locations if the warehouse’s capacity is limited. The only necessary
thing is to designate stock that is under inspection. Therefore it is important to be able
to change the inventory status of stock to identify its ability to be used either in
production or to be shipped-out.
To satisfy a requirement for a specific amount of stock, a procedure enables the picking
of pallets, abiding F.I.F.O. constraints. A pallet is completely traceable in a location
controlled warehouse. Given the pallet’s serial number, the system traces the pallet to
its location permanent or not.

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Depending on the nature of inventory in many cases it is necessary to split a pallet or
merge smaller quantities of inventory onto a pallet. Splitting a pallet means that two
pallets result, each of which contains a specific quantity. Both pallets have the same
attributes and naturally reside at the same location. On the other hand merging is
allowed by the system provided that the two pallets being merged have the same
attributes e.g. same item, lot and status.
Pallets may be moved from one location to another regardless of status. There is a
constraint however that restricts a pallet from being moved from a storage location to a
buffer when its inventory status is labeled as under inspection or in quarantine.
The handling of the pallets is done by the forklift operators with the use of the remote
data terminals. The functions available are adequate to cater for the everyday
operations. An outline is presented in the following:
Receipt. Allows for receipt of multiple pallets and subsequent placements at planned or
variable locations.
Movement. Allows planned placements of pallets in locations chosen by the
warehouse manager. The selection is done via the respective menu.
Production. Allows for selective feeding of machine buffers with predesignated pallets
or their equivalents. The constraints are limited to supplying the daily production plan
needs per shift. This obviously restricts picking to materials used for specific final
products. The work order for which the movement is done must be released.
Returns from Production. Allows for picking pallets from the machine buffers. When
this is attempted the respective work order must be closed. A procedure caters for
selecting which pallets should be sent back for storage and which should remain for
satisfying packaging needs of the successive work order if any.
Despatch. Allows for moving pallets from arbitrary source locations to the predefined
despatch location. This move is necessary for the despatch procedure that produces
the despatch note.
Independent. Allows for independent moves. This means that no constraints are
imposed to restrict a movement. An operator may pick a pallet and move it to any

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destination. There is an exception though. Return from production is restricted to
independent moving. Once a pallet is allocated to a specific work order it should be
deallocated and then allowed to move.
Status. Allows for characterising a pallet with a specific inventory status.
Check. Displays the immediate data relevant to a pallet. In other words when
prompted with the pallets serial number, the item number, lot, location, inventory status
and quantity display.
Split. Allows for splitting a pallet into two discrete pallets with identical characteristic
apart from the quantities.
Merge. Allows for merging two pallets into one provided that the quantities of the two
pallets share the same characteristics.
Cycle Count. Allows for recording the stock found during a cycle count. Entering the
pallet’s serial number or by scanning the bar-code insignia, all associated details appear
on screen. These data may be accepted as such or may be modified accordingly.
Consume. Allows for declaring the consumption of the contents of a pallet. This is
done by stating the date, the machine and the final product code to pin-point the
consumption point and finally by stating the pallet’s serial number as well as the quantity
consumed.
Cancel. Allows for cancellation of a consumption. Again the date, the machine and the
final product code must be stated as well as the pallet’s serial number. If there is a
multiple successive consumption of partial quantities then it is possible to browse and
select the one that must be canceled.
Request. Allows for an extra request of stock quantity that might arise as a need. This
is done by stating the date, the machine, the final product’s code and the item’s code as
well as the quantity requested.
A variety of printed lists support the functionality of the system. A brief outline of the
possibilities is listed in the following.
* Movements of a pallet since its entrance in the warehouse.

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* Pallets allocated per work order.
* Consumption per work order.
* Movements per work order.
* Empty storage locations.
* Storage locations with remaining space.
* Quantity on hand per item, per lot and per status in all locations.
* Pallets per location.
* Outstanding movements e.g. receipts not registered at storage locations.
* Re-print Goods Received Note.
* Re-print receipt labels.
* Expired pallets.
* Pallet’s period of residence in warehouse.
* Changes in pallet’s inventory status.
* Shipment variances.
* Pallets outstanding for production.
* Log file content of alternative placements.
* Splitted pallets.
∗ Pallet label re-print.
∗ Location label re-print.
• Issues
The issuing procedures facilitate issuing to production, despatching to another
warehouse or returns to suppliers. In every case a list or note with the corresponding
details is being printed.
Issuing to production is a rather complex procedure as a whole but easily implemented
as far as the warehousing part is considered. The daily requirements, shift by shift,
generate a succession of pallets to be brought to production at discrete time intervals.
The forklift operators are responsible for completing the list’s requirements. This means
that they will supply the production buffers with the pallets listed or their equivalents. A
pallet is equivalent with another then and only then when it holds the same item of the
same lot, of the same quantity and of the same status.

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Despatching to another warehouse consists of the selection of pallets to despatch and
the issuance of the respective despatch note. Prior to despatch and before issuing the
note the pallets have to move from their storage locations to the warehouse’s despatch
location. The same steps are followed when pallets are returned to a supplier.