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iii
second edition
Warehouse
Management
A complete guide
to improving
efficiency and
minimizing costs
in the modern
warehouse
Gwynne Richards
iv
Publisher’s note
Every possible effort has been made to ensure that the information contained in this book is
accurate at the time of going to press, and the publishers and author cannot accept responsibility
for any errors or omissions, however caused. No responsibility for loss or damage occasioned
to any person acting, or refraining from action, as a result of the mat erial in this publication can
be accepted by the editor, the publisher or the author.
First published in Great Britain and the United States in 2011 by Kogan Page Limited
Second edition 2014
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as
permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced,
stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers,
or in the case of reprographic reproduction in accordance with the terms and licences issued by the
CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the
undermentioned addresses:
2nd Floor, 45 Gee Street 1518 Walnut Street, Suite 1100 4737/23 Ansari Road
London EC1V 3RS Philadelphia PA 19102 Daryaganj
United Kingdom USA New Delhi 110002
www.koganpage.com India
© Gwynne Richards, 2011, 2014
The right of Gwynne Richards to be identified as the author of this work has been asserted by him in
accordance with the Copyright, Designs and Patents Act 1988.
ISBN 978 0 7494 6934 4
E-ISBN 978 0 7494 6935 1
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Richards, Gwynne.
Warehouse management : a complete guide to improving efficiency and minimizing costs in the
modern warehouse / Gwynne Richards. – Second edition.
pages cm
Includes bibliographical references and index.
ISBN 978-0-7494-6934-4 – ISBN 978-0-7494-6935-1 (ebk) 1. Warehouses–Management. 2. Business
logistics. 3. Materials management. I. Title.
HF5485.R53 2014
658.7’85–dc23
2013050663
Typeset by Graphicraft Limited, Hong Kong
Printed and bound in India by Replika Press Pvt Ltd
v
Contents
List of figures xi
List of tables xv
Acknowledgements xvii
Introduction 1
01 the role of the warehouse 5
Introduction 5
Types of warehouse operation 7
Why do we hold stock? 12
Warehouse location 16
Number of warehouses 20
Supply chain trends affecting warehouses 21
The growth of e-fulfilment and its effect on the warehouse 22
Specialized warehousing 24
Summary and conclusion 34
02 Role of the warehouse manager 36
Introduction 36
Warehouse trade-offs 38
The warehouse manager’s challenges 39
Lean warehousing 43
People management 47
People challenges 47
Attracting and retaining warehouse employees 51
An ageing and constantly changing workforce 52
Operating hours 53
Training 55
Warehouse audit 56
Quality systems 56
Summary and conclusion 57
vi Contents
03 Warehouse processes: receiving and put-away 58
Introduction 58
Receiving 60
Pre-receipt 60
In-handling 66
Preparation 66
Offloading 67
Checking 70
Cross docking 73
Recording 74
Quality control 74
Put-away 74
Summary and conclusion 76
04 Warehouse processes: pick preparation 77
Introduction 77
Preparation 79
Warehouse pick area layout 90
Summary and conclusion 93
05 Picking strategies and equipment 95
Introduction 95
Picker to goods 98
Goods to picker 103
Types of automated picking 105
Examples of automated picking systems 106
Handling equipment 119
Storage equipment 124
Summary and conclusion 132
06 order-picking methods 138
Introduction 138
Paper pick lists 138
Pick by label 139
Pick by voice 139
Barcode scanning 146
Radio frequency identification 151
Pick by light/pick to light 152
Put to light 156
Contents vii
Comparisons 157
Cost of errors 160
Deciding on type of picking system and equipment 165
Summary and conclusion 167
07 Warehouse processes from replenishment to
despatch and beyond 168
Introduction 168
Replenishment 168
Value-adding services 169
Indirect activities 170
Stock management 171
Stock or inventory counting 173
Cycle counting or perpetual inventory counts 174
The count itself 175
Security 176
Returns processing 177
Despatch 181
Role of the driver 186
Summary and conclusion 187
08 Warehouse management systems 188
Introduction 188
Why does a company need a WMS? 189
Choosing a WMS 191
The process 191
Selecting the right WMS 192
What to look for in a system 195
Selecting a partner 197
Before the final decision 198
Implementation 198
Software as a service 199
Cloud computing 200
Summary and conclusion 201
09 Warehouse layout 203
Introduction 203
Data collection and analysis 205
Space calculations 207
viii Contents
Aisle width 213
Other space 214
Warehouse layout examples 215
Finding additional space 217
Summary and conclusion 219
10 storage and handling equipment 220
Introduction 220
Storage equipment 220
Storage options 221
Shuttle technology with a difference 231
Very high bay warehouses 232
Other storage media 236
Warehouse handling equipment 239
Vertical and horizontal movement 242
Automated storage and retrieval systems (AS/RS) 250
Specialized equipment 252
Recent technical advances 253
Summary and conclusion 254
11 Resourcing a warehouse 255
Introduction 255
Processing activities 256
Other factors 274
Summary and conclusion 275
12 Warehouse costs 276
Introduction 276
Types of costs 277
Return on investment (ROI) 280
Traditional versus activity-based costing systems 280
Charging for shared-user warehouse services 285
Logistics charging methods 290
Hybrid 292
Summary and conclusion 292
Contents ix
13 Performance management 293
Introduction 293
Why do we need to measure? 294
What should we be measuring? 294
How to choose the right performance measures 299
Traditional productivity measures 301
New performance metrics 304
Hard and soft measures 306
Integrated performance models 307
Benchmarking 309
Balanced scorecard 312
Summary and conclusion 315
14 outsourcing 316
Introduction 316
The outsourcing decision 317
Core activity/core competence 320
Improvement in customer service 321
Cost reduction 321
Labour relations 321
Financial strategy 322
Flexibility 322
Role of third-party contractors 323
Preparing to outsource 323
Choosing the right partner 325
The transition 328
Managing a third-party relationship 328
Why contracts fail 328
The future of outsourcing 331
Summary and conclusion 337
15 Health and safety 338
Introduction 338
Risk assessments 341
Layout and design 345
Fire safety 349
Slips and trips 351
Manual handling 352
Working at height 352
