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Learnings from Warehouse visit

Individual Assignment

Manoj Kumar Megotia

On 12
June 2014, a group of about 30 Logistics & Supply Chain Management students made a visit
to the Danzas warehouse facility in Jebel Ali.
The warehouse area was impressive, spread over an area of 54000 sq feet in the Jebel Ali free zone
and housed consumer durables, surgical equipment and medicines among other things.
This was an opportunity for the students to see a real logistics operation in practice. During the
visit we were shown how the organisation works, and how the goods are received, stored and
despatched. The structure of the organization and services rendered by it such as freight forwarding,
Customs clearance & brokerage, Warehousing & distribution, Supply chain solutions and Contract
logistics were explained in detail.
The warehouse manager answered the queries of the students pertaining to the Warehouse
Management System (WMS), the allotment of storage area to clients and the billing procedure to
After brief instructions on safety procedures, the HSSE manager led the students into the warehouse
and explained different aspects and practices followed.
Broadly, the visit yielded rich dividends in terms of following learning outcomes:
Charging procedure to Clients: Warehousing services were typically charged on a direct usage/
contract basis. Charges were generally categorized as per space occupied, warehouse labour hours
and other clerical services.

Storage charges were quoted basis:
Flat rates for monthly storage
Flat rates per square foot

Handling charges were invoked upon receipt of inbound product. The rate quoted covered both
inbound & outbound activities and is charged once at the time of product receipt.

Clerical charges are identified as order processing. These charges covered the costs of order
processing, but the receipt of inventory, customer communications and reporting as well.

Value-added services were charged as per the service provided.
Warehouse Activities: The main warehouse activities included: receiving, transfer and put away,
order picking/selection, accumulation, sorting, cross docking and shipping.
The warehouse used fixed location fixed quantity process of storage. The device used was single-
deep pallet rack. As the name implies there is only one pallet stacked at each level and the pallets
were retrieved with forklifts. For higher levels, reach truck or a high-level order picker was used. The

pallets on the bottom level were easily accessible with for instance a pallet jack. As a rule, the
allocation was made by the Warehouse Management System. Fast moving goods were generally
allocated lower racks while slow moving goods were put on higher levels.
Items were given a dedicated slot. With dedicated slots all items had a specific location. Allocation
and storage devices are an important strategic decision and rethinking the allocation strategy can
save both time and reduce costs. In dedication of slots to items, factors such as frequency of use,
volume and destination were taken into consideration.
Picking Procedure
The warehouse followed Man-to-goods picking procedure and the items were picked manually by
the use of forklifts from dedicated storage locations by an operator. This procedure reduces cost
because items were usually in pallets or boxes and seldom in units.
The location of the item to be picked was given by the Warehouse Management System.
The Warehouse operations can be further divided into Inbound and outbound operations:
Inbound operations:
The inbound process includes all the activities required to receive incoming goods and make these
available in stock for picking. This involved unloading the goods from the vehicle to a dedicated area
where sorting, verification and controls could be performed. Goods loaded on pallets were rolled on
roller bed and thereafter unloaded by forklifts and taken to the allocated location as shown by the
WMS or taken to the cross docking deck.
Each SKU was given a specific storage location, which was created by entering information on the
Warehouse management System. Labels were then printed and pasted on the items and then put
away in stock. The items were transported to their designated storage location by different means
and the put away was confirmed either by hand scanners or lists.

Flow Chart: Inbound operations

Outbound Operations:
The outbound process involved activities required to collect and ship away orders to end customers.
It starts when the orders are released and available for being processed by the operator. Orders
were displayed either on lists or in scanners. The picking route was performed by forklifts or trolleys.
The items were placed at different levels for picking in shelves or racks in wide aisles, very narrow
aisles, on open floor area or in low shelves.
First, the operator gets instructions of where to find the required items. He then transport the
vehicle to the location, gets ready for picking, picks the required items and confirms the pick. After
all orders or order lines were processed, the operator returns to the outbound area where the goods
are ready for packing, if required. The process involves confirming the order in the WMS and printing
delivery labels and notes.
When the finished packages reach the outbound area, where they await pick up, they are sorted
according to their destinations on pallets.

Flow Chart: Outbound operations

The visit was very informative and the students could relate to the topics taught in lectures. It was
observed that how competitive advantage can be gained by improving on technology and using
modern concepts of warehousing.