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RUNNING HEAD: RESTRUCTURING WAREHOUSING OF FALCON WORLD LINES

Restructuring the warehouse of Falcon World Lines Pvt Ltd

Farjad Khan

Mohammad Ahmed

M. Hammad Mehmoodi

Hasan Ali Khan

Mohammad Ali Jinnah University


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Acknowledgment

First of all, we would like to thank Almighty Allah, the most Beneficent and Merciful

for giving us the opportunity and strength to complete this project. Secondly, we would like to

thank our parents for providing us with necessary resources whenever needed. Thirdly, we

would like to thank Muhammad Ali Jinnah University and our respected supervisor Sir Humair

Ali for giving us a chance to work and present this project. Lastly we would like to thank the

management of Falcon World Lines, who despite their tough schedule gave us time to conduct

our visits and interview the employees. Special thanks to Ms Saima (HR Manager) and Mr

Omair (Warehouse Incharge) who gave us their precious time and provided us with necessary

information whenever required.

In the end, we hope that this project will carry out all the necessary requirements.

However, suggestions and feedback for improvements will be thankfully welcomed and

acknowledged.

Regards,

Farjad Khan

Mohammad Ahmed

M. Hammad Mehmoodi

Hasan Ali Khan


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Table of Contents

Introduction ................................................................................................................................ 6
Economic Outlook ................................................................................................................. 6
Industry Outlook .................................................................................................................... 7
History................................................................................................................................ 7
Economic Contribution. ..................................................................................................... 8
Trends. ............................................................................................................................... 8
Challenges .......................................................................................................................... 8
Competitors ............................................................................................................................ 9
DHL. .................................................................................................................................. 9
TCS. ................................................................................................................................... 9
Costa Logistics. ................................................................................................................ 10
The Firm, History & Background ........................................................................................ 10
Our Vision. ....................................................................................................................... 10
Our Mission. .................................................................................................................... 10
The Firm........................................................................................................................... 10
Definition & Related Theories ............................................................................................. 12
Warehouse........................................................................................................................ 12
Warehouse Management:................................................................................................. 13
Inventory control theory: ................................................................................................. 13
Picking process theory: .................................................................................................... 13
Order management theory: .............................................................................................. 13
Feasibility............................................................................................................................. 13
Detailed Organization Opportunity/Problem ........................................................................... 14
Lack of Technolgy ............................................................................................................... 14
Non-Compliance of International Standards ....................................................................... 15
Small Warehouse size .......................................................................................................... 16
Health and Safety ................................................................................................................. 17
No proper racking system .................................................................................................... 18
Less Space ............................................................................................................................ 19
Methodology & Procedure Adopted ........................................................................................ 19
Data Collection .................................................................................................................... 20
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Data Analysis ....................................................................................................................... 20


TCS .................................................................................................................................. 21
LEOPARD ....................................................................................................................... 21
FED-EX ........................................................................................................................... 22
DHL ................................................................................................................................. 22
M&P ................................................................................................................................. 23
COSTA ............................................................................................................................ 23
Warehousing Standards ....................................................................................................... 24
Floor Markings................................................................................................................. 24
Doors. ............................................................................................................................... 24
Fuel Storage. .................................................................................................................... 24
Heating. ............................................................................................................................ 24
Loading Area. .................................................................................................................. 24
Handling Equipment. ....................................................................................................... 25
Fire Protection. ................................................................................................................. 25
Stacking............................................................................................................................ 25
Need for Restructuring ......................................................................................................... 25
Results & Discussion ............................................................................................................... 26
Lack of Technology ............................................................................................................. 26
Non-compliance to standards ............................................................................................... 26
Health & Safety.................................................................................................................... 27
Lack of Space ....................................................................................................................... 28
Benefits of Restructuring ..................................................................................................... 28
Space Saving .................................................................................................................... 29
Increase in Customer Satisfaction & Services ................................................................. 29
Enhance the Productivity & Efficiency of Workers ........................................................ 29
Pallets ............................................................................................................................... 29
Managerial Implications .......................................................................................................... 30
Suggestions & Recommendations ....................................................................................... 30
Conclusion ........................................................................................................................... 32
Limitations ............................................................................................................................... 33
References ................................................................................................................................ 35
Appendix .................................................................................................................................. 37
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Executive Summary

Supply chain is now considered to play a vital role in the success of any organization.

It plays an important role in the strategic planning of the organization as it encompasses

activities including Procurement, Logistics, Warehousing, Quality. These activities, if done

efficiently and effectively will minimize cost and provide satisfactory service to the customers.

Warehouse Management is the key part of Logistics, which plays an important role in Supply

Chain. Warehouses are used to store raw materials and finished goods. If the goods aren’t

stored with efficient planning, it would be costlier for the organization.

This study is aimed at studying the performance of the warehouse of an organization.

The main aim for this project was to pick an organization that has a warehouse, investigate the

problems in the warehouse and propose solutions for the problems. For this purpose, we chose

Falcon World Lines Pvt Limited, which is a 3rd party logistics provider. We conducted our

visits to their warehouse. Mr Omair (Warehouse Incharge) guided and briefed us about the

warehouse. We interviewed him to find how they work, the process and practises they use. We

inspected the warehouse in detail to find out the problems. The problems that we found were

Lack of technology, not following international standards, no racks, health & safety, non-

expandable warehouse, lack of space. For these problems we proposed various solutions after

discussion within ourselves and with the management of Falcon World Lines. No software for

data analysis like SPSS is used. There isn’t any questionnaire filled as this is a business project.

Data collection, data analysis and solutions are all based on observations and group discussions

only.
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Introduction

Economic Outlook

An economy is an anatomy of activities established upon activities that are related to

distribution, trade, production, consumption of goods & services etc. According to World

Bank, Pakistan’s economy grew by 5.8% (2018) whereas in 2017, the economic growth of

Pakistan was 5.4%. IMF has predicted that due to CPEC, Pakistan’s economy is expected to

grow even further. Other factors that influence the increase in economy of Pakistan are

improvement in different sectors including manufacture, agriculture & service sector. On the

other hand, Pakistan is facing several problems including, terrorism, water shortage, energy

crisis, employment etc.

Agriculture sector of Pakistan is contributing 18.86% in the GDP of Pakistan. (Economic

Survey of Pakistan, 2017-2018). Agriculture sector’s contribution has been increasing over the

past few years due to using better seeds and efficient plantations. Manufacturing sector of

Pakistan in contributing 20.91% in the GDP of Pakistan, it had a growth of 6.24%. (Economic

Survey of Pakistan, 2017-2018). The service sector has the biggest contribution in the GDP of

Pakistan. It contributes 60.23% to the GDP which is more than the contribution of Agriculture

and Manufacturing sector combined.

Pakistan is a developing nation. It is also the country with 6th largest population. The Population

of Pakistan is 200.83 Million. It has a GDP of $ 304.952 Billion (2017), and a GDP per capita

of $ 1547.85 (World Bank, 2017). Pakistan had a 5.8% GDP growth rate which was the highest

in the last 13 years. This was because of tremendous work and investment done on CPEC.

According to World Bank, the GDP growth rate of Pakistan will decline in 2019. World Bank

Forecasts that in 2019, The GDP growth rate of Pakistan will be 5%.
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Industry Outlook

A warehouse can be interpreted operable as an edifice or a building where to store bulk or mass

productions and goods (wares) for commercial purposes. Throughout the all these times the

built up form or structure of a warehouse depends upon many different contexts; technologies,

materials cultures and sites. (7 benefits of warehousing, 2016)

History.

Warehousing actually has a long history it all started from prehistoric civilizations as

humans needed to survive and thrive in the nature they required raw materials, food and all

basic necessity to stock up or to store somewhere safe from the hardships of the atmosphere.

(tonder, 2018).Though times things changed and warehousing became an industry and from

just mass storage of goods and produce in a safe house or a "WAREHOUSE" what we say it

today became an enormous industry that not only store goods for domestic consumption but

has transformed into a supply giant throughout the globe so far and is now helpful in trading

across the globe new trends and features are introduced such as freight, cargo, pallets and

everything has a different and unique way for storing different and unique goods. In Pakistan

warehousing was not a new thing in the past when Britishers were ruling we had many

businessmen in subcontinent holding the goods for East India Tea Company and for their own

selves and concerns as well but it was never like the modern day warehousing. Due to lack of

modern warehousing facilitations results in huge post-harvest depletion ranging from 15% to

20% for food cereals and touch 40% for vegetables in fruits. Let’s just take example of one

crop that is wheat, wheat annual production is exceeding up to 25 million tons, it is valued

around 7.75 million ton rupees(PKR). Pakistan has approximately 5 millions of tons of wheat

storage capacities or facilities. The Remaining output due to lack of warehouses unfortunately

kept in open without any shelter which results in stale of up to total of 25% production before

reaching to the market (Review of wheat storage and grain issues).


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Economic Contribution.

The biggest and the largest contributor to Pakistan’s economy (GDP) is international

freight forwarding in service sector (Role of freight forwarding and logistics industry of

Pakistan, 2018). These are the services provided by the international freight forwarding

companies facilitate exports that mainly include textiles, cotton CP goods and its made-up stuff,

leather and leather goods. Sports goods, surgical, rice, fruits, vegetables and seafood

collectively these all generate over 80% of the country’s foreign exchanging.

Trends.

Warehouse now a days are now focusing on using Artificial Intelligence and Robotics

to increase the efficiency and effectiveness of the warehouse. Using Artificial Intelligence and

Robotics instead of Human resources decreases human error increasing the efficiency and

effectiveness of work done. Amazon Inc. is using Artificial Intelligence and Robots in their

warehouse which has increased the productivity and accuracy of their warehousing function.

(Granato, 2018)

Challenges

Policy recommendations

The policies that are made by the government does not favor the freight forwarding

industry at all. The government must know the loss the country has to bear every year annually

due to lack of facilities and land for storing the productions we are losing.

Transit and transshipment procedures.

The country’s geographical location gives it an advantage for transit and transport but

due un-manageable trafficking and not properly built route freight forwarding industry faces

delays for days even for weeks sometimes however CPEC seems to be guarantee of the proper

transit routes for logistics transportation.


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Competitors

A competitor is any person or organization that is contending with any other for something.

For organizations, a competitor is another organization that provide identical or comparable

products or services. The competing organizations compete with each other for the market

share. When there are more competitors in the market, the price of product or service is reduced

as organizations seek more market share.

The main competitors of Falcon World Lines are:

• DHL

• TCS

• Costa Logistics

DHL.

DHL was founded by Adrian Dalsey, Robert Lynn and Larry Hillblom in 1969. DHL

has an employment of 360,000 people in over 220 countries and territories worldwide. DHL

has achieved success due to their excellent customer service. They provide top quality service

satisfying their customers. DHL provides multiple services including; Parcel & document

shipping, Freight Shipping, Warehousing, Distribution, Logistics, Customs, Security and

Insurance. DHL is the Leader in Logistics worldwide. Other than the services mentioned, DHL

also offers Supply chain analysis.

TCS.

TCS was found in 1983 with its headquarters in Karachi. Since then it has been the

leader in courier and logistics industry of Pakistan. It has achieved and sustained its success

through, passion, commitment and innovation. TCS currently operates in Pakistan, UAE &

London with over 140 offices. It has 2 dedicated chartered planes, over 200 satellite tracked

ground vehicles and more than 3000 employees.


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Costa Logistics.

Costa Logistics was founded in 2010 by Muhammad Zeeshan. It is one of the leading

packaging and moving company in Karachi. It offers various services including; Courier,

packing and moving, Freight services, Logistics solution, Warehousing and distribution

services, Customs regulation, China to Pakistan and many more services. Their motto is to

provide their clients with uncomplicated services so that their client can freely focus on its core

business.

The Firm, History & Background

Our Vision.

We will be an industry leader that provides innovative and environmentally responsible

freight management solutions to a diversified customer base while being financially

responsible and recognized as one of the top transportation employers in Pakistan.

Our Mission.

Our mission is to be our customer’s preferred logistics partner by delivering innovative

freight management solutions through a high performance culture that emphasizes

collaboration, accountability, safety & exceptional service.

The Firm.

Falcon World line Pvt ltd is a third party logistics that launched its services in Pakistan

in 2016. They have International as well as local customers. They provide distribution services

to Samsung Pakistan, Changhong Ruba, Sharp Electronics, Ghani Glass and many others.

Falcon Worldlines currently have 32 Business Clients worldwide. They have 240 fleets

available and a workforce of 120 employees. The services they provide include;
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Land Cargo Services.

It is the process of transporting commodities by means of Land using trucks, containers,

any land moving vehicle. Falcon World Lines uses its fleet of 240 vehicles to deliver your

cargo safely to all places possible in Pakistan. It provides one of the most reliable land Cargo

services in Pakistan.

Global Logistics.

Global logistics is responsible for connecting the key components of the supply chain

from the origin of the product i.e raw material to its consumption point so that goods can be

distributed from the producer to consumer effectively and timely. Falcon Worldlines has a

global logistics division that ensures that your goods will be delivered on time no matter where

you are located.

Warehousing Solutions.

Falcon worldliness provides businesses with warehousing solutions. They have a

dedicated warehouse in Karachi for this purpose. They provide safe and secure warehousing

for goods. The stuff is expertly trained to keep the goods safe and have an effective material

handling process.

Freight Forwarding.

A Freight forwarder organizes shipments or containers to move goods from producer

to the market or the consumer. They don’t move the goods themselves but acts as an expert in

logistics and provide the business with shipment or container to move their goods. Falcon

Worldlines provides hassle-free, economic and efficient freight forwarding services.

Car-moving Service.

Falcon World lines provides sophisticated and stress free car-moving service to

transport your vehicle to any part of the world in a safe and secure method.
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Air Freight solutions.

Falcon World Lines has a separate Air Freight division that is dedicated in providing

you with efficient Air Freight. It provides economical, fast and secure Airplane for the delivery

of your goods.

Packaging & Moving Services.

Packaging & Moving service providers pack your goods and take them from one place

to another. Whether you want to relocate your home or want your office goods to be packed

and transported, trained professionals will come to your door step, pack your goods and safely

transport them to your desired destination.

Distribution Services.

Distribution is the process of delivering the product or service to areas that is easy

accessible by consumers. Business either distribute themselves or through distributors. Falcon

World Lines provides distribution services to business delivering their clients products to the

consumer markets.

Import & Export.

When importing and exporting goods, dealing with custom clearance and shipping is a

headache. Falcon World Lines provides an easy solution for this problem. They will deal with

all the problems and documentations and transport your good to and from your doorstep.

Definition & Related Theories

Warehouse.

A land or large part of area which is specified and utilized usually for storing of raw

materials or manufacturing goods before their distribution of sale. These warehouses are used

by importers, exporters, industrialists, transporters, manufacturers, custom etc. These are large

buildings built outside cities, towns and villages.


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Warehouse Management:

A warehouse management (WMS) is a process which allows organizations to control

warehouse operations from when goods are arrived to be stored until it gets dispatched to their

desired location. An operation in a warehouse mainly includes inventory management and

picking process.

Inventory control theory:

Inventory control management look after the flow of goods from manufacturer to

warehouses and after these facilities the point of sale. Inventory management does not only

deal with the operations but it also sees the tracking materials and automate a report how much

space is vacant for storing more goods.

Picking process theory:

Picking process is the process of pulling the products from warehouse to the desired

place i.e the customer to fulfill order. Picking process is mainly sorting the product range

according to the order received and picking through the shelves where they are kept.

Order management theory:

Order management involves the picking of order from various channels with inventory

databases, data collection. Order management includes management quotation info, checking

stocks, lot management, dealing with purchase orders, accepting orders, processing orders etc.

Order management can easily be defined as the process of taking, organizing, tracking and

fulfillment of orders.

Feasibility

For this project, we chose a 3rd party logistics provider and worked on it to for the betterment

of the company. For this purpose, we chose Falcon World Lines Pvt limited and inspected their

warehouse for problems and propose solutions for it. We will be focusing on analyzing the
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warehouse processes, how they store goods, how the records are kept, tracking and tracing of

goods stored, what technology is being used in the warehouse. After analyzing we will suggest

how to make their current practices better and propose solutions to the problems identified. We

will also be offering our services in implementing the solutions. In this project we put our

maximum efforts to make the company meet the service standards in the given and particular

time frame as it is the logistics company so it is the core business of the company to provide

services to its customers. We have initially suggested the design of the warehouse that how the

warehouse should be designed which help in reducing the time of picking parcels from the

shelf.

Detailed Organization Opportunity/Problem

Lack of Technolgy

The first and main problem that has been recognized after visiting Falcon World Line’s

Warehouse is that there is little use of technology. The world is moving forward at a high pace

with competition getting tougher. Competitors are always researching to find ways to gain

competitive edge over the other competitors. The best way to get a competitive advantage is

through using cutting edge technology. Using the same technology that’s being used in the

market doesn’t guarantee you success but using technology that’s not being used anymore will

guarantee failure. This is the case with Falcon World Lines. They are behind the competitors

in terms of technology. Falcon World Lines has to start using contemporary approach if they

wish to survive in this competition. 3PL industry in Pakistan is growing. It grew by 3.8% in

2017-2018. (Economic Survey of Pakistan, 2017-2018). With the industry growing there are

more and more companies entering the market. Falcon World Lines aim to become their

customer’s preferred logistics partner by providing services in innovative ways. Their aim

cannot be achieved with the current technology they use. Falcon World Lines don’t have a

proper software or portal for their working. All their work and data is done manually and
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maintained on Microsoft Excel. Falcon World Lines has to provide logistics solutions to its

customers, but using such technology will act as a barrier for customer growth. Customers

require efficient and effective management of their goods which cannot happen using the

current technology. By continuing to use old technology, Falcon World Lines might end up

losing customers. Lack of technology is the biggest threat for a company in any industry, but

in 3PL industry this threat is high as the customer require efficient management of their goods

which can be achieved only through the use of technology. Falcon World Lines lack the

technology to efficiently transfer their goods, track & trace the goods. This will prevent Falcon

World Lines from achieving economies of scale.

Non-Compliance of International Standards

The second problem that has been identified after visiting Falcon World Line’s warehouse is

that they are not working according to international standard. The procedures and processes

being used in Falcon World Lines doesn’t match the standards being followed worldwide and

among competitors. There is no quality standard in Falcon World Lines. Quality standard was

nowhere to be found upon our visit to Falcon World Line’s warehouse. The cartons were torn

apart and in poor condition. Working with such poor quality will be an obstacle for earning

bigger customers as for top companies, quality is the top priority and they don’t compromise

on it. The material handling is also not according to standard. There is only one forklift to carry

the materials. Most of the material picking is done manually through hands which is more time

consuming increasing costs. Warehouse design isn’t as per standard as well. According to

international standard, there should be different loading and unloading docks which should be

parallel to each other, but in Falcon World line’s warehouse, there is only one dock which is

used for both Loading and Unloading. This could result is wastage of time if multiple containers

have to load and unload at the same time. In such a condition, a container has to wait until the

other container is done loading goods and then the other container will unload its goods. This
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process is time consuming and would only result in increasing costs. Falcon World Lines can

have problems by not working according to the standard that is in the market. Not having the

technical advantage over competitors can create hurdles for Falcon World Lines in their

journey for success. Lack of standard creates weakness for Falcon World Line and their

Warehouse management in order to work efficiently and effectively. These international

standards are made so that companies can maximize their outputs using their resources

efficiently. This is what management of Falcon World Lines need to consider and start working

according to standards.

Small Warehouse size

The third problem that has been identified after visiting Falcon World Line’s warehouse is that

their warehouse is small with respect to horizontal size. This will ultimately result in lack of

space in the future. Lack of capacity will act as one the biggest hurdle in customer growth for

Falcon World Lines. To get new and bigger customers, Falcon World Lines would have to

increase their warehousing capacity. This can’t happen with the current warehouse they have.

Their current doesn’t have the capacity to expand horizontally. If Falcon World Lines wants to

enhance their warehouse capacity by enhancing their building size, they will have to reconstruct

the building from the start or they will either have to buy or rent a new warehouse. Falcon

World Lines has to start it from scratch by reconstructing it from initial level. Constructing a

new warehouse requires a lot of resources including time and capital. If Falcon World Lines

wants to construct a new warehouse, they will have to have all the resources required.

Constructing the new warehouse would require Falcon World Lines to invest their time in it.

They would also have to bear all the expenses in constructing the warehouse from scratch.

Constructing a new warehouse will be costly but will be highly beneficial. Lack of space around

their warehouse will cause higher cost when increasing space. If there were space around their

warehouse building, the cost for increasing the warehouse capacity would have decreased
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drastically. This is why choosing the ideal location and size for the warehouse to be situated is

considered an important step and requires a lot of strategic thinking. Choosing the correct

location and size for warehouse doesn’t guarantee success, but choosing the wrong location

and size guarantees failure as it’ll be costly. Working in the wrong condition can give poor

performance, but moving can be difficult enough. The only option to avoid the costs is to

choose the correct location facility in the first place. (Waters, 2003)

Health and Safety

The fourth problem that has been identified after visiting the warehouse of Falcon World Lines

is that they don’t have facilities to provide safety for the employees working in the warehouse.

In case of fire, there are no fire sprinkles installed for fire emergency in the warehouse. Fire

sprinkles are useful in controlling fire and reducing the level of fire. Being a 3PL organization,

the warehouse stores almost all types of goods including highly flammable goods as well. In

case of fire, the goods will be caught in fire increasing the level of fire and the fire can become

deadly and take lives. There is no fire exit in the warehouse. There is only 1 gate in the

warehouse that is used for loading, unloading, entering and exiting the warehouse. In case fire

blocks the gate, everyone in the warehouse will get trapped inside and can die. Upon our visit

we also saw that the employees were smoking cigarettes within the warehouse premise. This

is an extreme fire hazard as cigarette ash can cause fire. The cartons stored can catch fire easily.

There were oil barrels also stored in the warehouse that are highly inflammable. The employees

were smoking cigarettes care freely around the oil barrels without any thought. Such an attitude

is hazardous and can cause serious incidents in the warehouse. There is not any First aid in the

warehouse. In case of any accident with employee and the employee get injured, first aid can’t

be applied immediately. If the injury is serious, then it requires first aid treatment immediately.

If the person doesn’t get first aid immediately, the injury can turn deadly and life threatening.

Warehouse requires safety measures to be installed in the warehouse as the goods stored inside
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are the liability of the Warehouse. In case of pilferage or any harm to the products, Falcon

World Lines will be held responsible and have to pay for the goods to the customer. This is

costly in terms of monetary value and risk of losing the customer as it will dissatisfy the

customer. To avoid such costs, Falcon World Lines needs to upgrade the safety and security

standards in the warehouse.

No proper racking system

The fifth problem that has been identified after visiting the warehouse of Falcon World Lines

is that they don’t have racks to store the goods. There is only a small area in the warehouse that

has racks in it. The rest of the warehouse have no racks. Goods are stored on pallets in their

warehouse. Goods are even stored on the floor which is against the warehousing standard. The

cartons are stacked up upon one another up to the height that its touching the roof. The goods

are stored so close to each other that there is no passageway for the lifter to go through and

pick up the cartons. To pick up cartons, employees have to pick up each carton by hand and

put it on the lifter to move it. Working in this process is time consuming and requires more

man power. This increases the cost of working for Falcon World Lines. If they wish to transfer

the cartons in bulk quantity, it will be an issue as they don’t have the technology nor facility to

move the goods in bulk quantity from one place to another. Storing the goods on floor will

negatively impact Falcon World Lines. Customers who are quality cautious and work

according to standard wouldn’t hire Falcon World Lines for their logistics solutions as a

cautious customer wouldn’t want its products to be stored on floor like this. Without using

racks to store goods, Falcon World Lines will lose potential customers who want their goods

to be handled in proper way. The world is focused on satisfying customers. With competition

growing stronger day by day, the only way to retain and gain new customers is by satisfying

them. Falcon World Lines won’t be able to satisfy their customers with the current facilities

they have. Using racks to store goods in the warehouse will give the warehouse an organized
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look attracting more and better customers. Lack of facility to transfer goods from one place to

another in bulk quantity is a major weakness for Falcon world line’s warehouse.

Less Space

The sixth problem that has been identified after visiting the warehouse of Falcon World Lines

is that there isn’t enough storage capacity in the warehouse. Due to not having enough capacity,

Falcon World Lines doesn’t use racks to store goods. Instead they use pallets and even store

goods directly on floor. Falcon World Lines can’t install racks in the warehouse as they don’t

have enough space available in their warehouse. Not having enough space is a problem that’s

a cause for other problems in the warehouse of Falcon World Lines. Due to not having enough

space, Falcon World Lines store goods close to each other. This causes congestion in the

warehouse making it difficult to moves the goods. If cartons that are at that back has to be

moved out, then the workers have to take out each carton by hand. This is time consuming and

increases cost. Due to low space in the warehouse, the goods are racked up upon each other up

to the roof. Stacking good up to such height has a risk of damaging the goods. If the cartons

are stacked too high, removing a carton or even slightly bumping into the stack can cause the

whole stack to fall down resulting in damaging the goods inside and also cause injury to the

worker. Lack of space is the biggest hurdle for Falcon World Lines in achieving economies of

scale. Without having excessive space in the warehouse, Falcon World Lines won’t be able to

store more goods in their warehouse limiting Falcon World Lines to increase their customer

base. If Falcon World Lines wishes to increase their customers and store more goods, they will

have to increase their capacity by increasing the space of their warehouse.

Methodology & Procedure Adopted

In this chapter we have studied and compare the warehouses of different companies who are

dealing in the courier industry and their process of managing the flow of work done in

warehouse. As now a day world is moving towards the simplification of processes performed
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in warehouses. The courier industry is growing with high rate of growth just because of the

technological advancement in the industry which is the major helping hand in simplifying the

process, traceability, on time deliveries of parcels throughout the world. The culture of adopting

the technology is prevailing in the industrial society very rapidly and it is the main reason of

ease and efficiency in the process of Supply Chain of courier industry. Some of the companies

in Pakistan are also the beneficiary of these technological advancements.

Data Collection

The data for this research is primary data. For collection of data of Falcon Warehouse, we

visited the warehouse and interviewed the Warehouse Incharge Mr Omair. Most of our data

was collected through observation of the warehouse. We observed and inspected the warehouse

completely to find out the problems in the warehouse of Falcon World Lines.

Data Analysis

The data gathered for this project is verbal data instead of statistical data so statistical means

cannot be used to analyze the data. We analyzed the problems in the warehouse by comparing

it with international standards and how the competitors are working. For this purpose, we have

conducted interviews of several persons working in this industry and try to understand the

process of doing work in warehouse and try to find that how the warehouse system plays the

role in the productivity or performance of the company. The companies we have visited are

TCS, DHL, M&P, COSTA Warehousing, Leopard and Fed-Ex. The purpose to visit these

companies is that these are main companies of the courier industry in Pakistan and most of the

companies have the warehouses and the management system as per the standards of

warehousing.
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TCS

TCS has established its warehousing and distribution center in 2004. The purpose of

establishing this division is to provide the third party logistic service to the clients and it is for

the very first time any company is providing such services in Pakistan. The clients of TCS are

from different industries and TCS is managing the products and its warehousing on behalf of

these companies. The warehouses are set to provide the extra ordinary services to the

companies in their respective industry anywhere in the country. The warehouses of TCS are

spread over the area of approximate 650,000 square feet in different cities of the country

offering the services efficiently in the very reasonable rates. The material storage and the

equipment handling are performed on behalf of the clients of the company. The contemporary

techniques in warehousing and highly efficient (out of the box) distribution model is steadily

achieving the key performance indicator (KPI) put by the customers. The process of

warehousing is fully automated by the in house warehouse management system known as

WMS. It helps to provide the real time information about the process and increase the

percentage of transparency in the process. The specialized process in which TCS is involved

in is Warehousing, bar-coding, value addition and stock repacking, Reverse logistics. The

process of bar coding help to identify the product and its area of delivery and through bar

coding the special number is automatically generated which help in the tracing of the parcel.

TCS is using the highly updated system in their warehouse.

LEOPARD

It is another third party logistic service provider company working in Pakistan. The

company has divided the whole country into eight zones where they have established their

warehouses. Leopard has introduced the concept of mobile express in the country where they

had the products of their clients. The purpose of these mobile express is to minimize the lead

time of the deliveries of product. They have segmented the warehouse into several portions
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categorized as (gifts, lifesaving drugs and the heavy machineries). The traceability of the parcel

is done through a unique code generated by the system installed in the warehouse where they

assigned the code to each and every product at the time of booking.

FED-EX

FED-EX is operating in Pakistan and providing the third party logistics services in the

country. The company manages the warehouse and the re packaging of the material on behalf

of their clients. The warehouses are as per the international standards the parcels are assigned

a system generated codes used for tracking the parcels. FED-EX is managing the Omni-channel

supply chain on behalf of company in which they are involving their top tier warehouse officers

and warehouse management system through which they are getting the continuous excellence

or success.

DHL

DHL is one of the biggest companies operating in Pakistan. The warehousing system

of DHL is an example of an ideal warehousing in Pakistan. From the storage of the goods to

the consumable items, finished goods and etc everything is managed by the DHL as they are

one of the biggest solution and service providers. They share the warehouse or create dedicated

operations to improve the efficiency of the work. The services DHL is providing regarding

warehouse are WMS implementation to facilitate the visibility of the inventory and tracking of

order fulfillment, green warehousing, cross docking, raw material management, storing of

finished goods and raw material. DHL is also providing the temperature controlled

warehousing facilities to their clients as per the need of their product. DHL also provide the in-

transit freight storage to their clients.


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M&P

Muller & Phipps is another service provider company working in Pakistan. They are

managing the products of other companies on their behalf. The warehouses are categorized

according to zones and district and connected through a centralized system. The warehouse

management system is connected through an enterprise resource planning system in which the

supplier distributor and the warehouse staff are integrated. The labeling is done to categorize

the parcels according to their area of delivery.

COSTA

Costa warehousing provides the warehouses to their clients as per their demand, they

managed and customize the warehouse according to the nature of the product to be stored in

warehouse. When it comes to the customization of warehouses COSTA provides the multi-

principals warehousing and single principal warehousing. They managed warehouses with full

sprinkle system maintained annually. The stock record is fully computerized with batch and lot

number assigned to it. They allow their clients to visit their premises 24/7 a week. Through the

computerized system the process of immediate reporting of the parcels is done. The area of

warehouse is approx. 500000 sq. ft. the spacing between the pallets and the racks is as per the

international standards of warehousing.

The purpose of looking particularly in this sector of courier companies is to identify the gaps

that where the newly established companies are lacking which is causing harm to their business.

Falcon world-line is established about two years before and is still in the phase of development.

The purpose of these interviews with different companies is to fill the gaps and rectify the

problems facing by Falcon World-line. The purpose is to make the process of supply chain

smoothen as warehousing is the key element in the success of supply chain so the focus of this

project is to identify and rectify the gaps and flaws in the process and design a structure of
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warehouse as per the standards which will help to increase the efficiency in performance of the

organization.

Warehousing Standards

To know the level at which Falcon World Lines Pvt Ltd is working on and what standards they

follow and what standard they aren’t following we took a look at the international standards

being followed worldwide. For this we looked at standards made by United Kingdom

Warehouse Association and compared it with the standards and processes being followed in

the warehouse of Falcon World Lines. The standards are as under:

Floor Markings.

There should be proper markings on the floor to identify the area of storage and proper

boundaries. It helps to determine where to store goods and which areas to leave for passageway.

Doors.

There should be sufficient loading doors in the warehouse according to the traffic

involved. Ideally there should be a minimum of 2 doors, one for loading and the other for

unloading and they should be parallel to each other. There should also be separate door for

personnel use.

Fuel Storage.

Oil Barrels and Bottled gas should be stored separately in a locked cage/room.

Heating.

The warehouse should be adequately ventilated and there should be thermal insulation.

The pipes, tanks and heating units should be securely and safely located and protected.

Loading Area.

The loading area should be free from obstructions. There should be nothing else in that

area. There should be enough space available to allow the vehicles to turn a circle easily.
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Handling Equipment.

There should be sufficient equipment available for the tasks, and should be regularly

maintained and serviced. Small items like chain, ropes etc should be stored under a cover when

not in use.

Fire Protection.

There should be fire escape and fire hydrants/extinguishers/sprinklers in the warehouse.

They should be properly marked and escape route defined. Staff and employees should be

properly trained periodically to use fire equipments and fire drills. There should be a strict No

Smoking rule enforced in the warehouse.

Stacking.

Carton stacking should be done according to the bottom carton. Cartons should be

stacked up according to the how much weight the bottom carton can hold without getting

damaged.

Need for Restructuring

The processes and procedures currently being used in the warehouse are old and time

consuming. The world is moving at a fast pace with technology advancements being done.

Warehousing plays an important role in minimizing costs for a company. With the current

practices being performed in the warehouse, Falcon World Lines is having the issue of data

inaccuracy and problems in tracing data. It takes them hours or even a day to record data of

orders. This results in late order fulfillment and due to this they have lost some customers like

Shan Foods & Kemei. Companies like Samsung and ChanghongRuba have also limited their

business with Falcon World Lines. To tackle and solve these issues, there’s a need for

restructuring the warehouse of Falcon World Lines and for this purpose we have proposed

some solutions to make the warehouse better and attract more and better customers.
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Results & Discussion

Problems mentioned earlier were identified upon our inspection of the warehouse during our

visit to the warehouse of Falcon World Lines. Now we discuss the possible solutions to the

problems which can be implemented and make the warehouse more efficient.

Lack of Technology

Upon our visit to the warehouse office, the first thing that we noticed there was the lack of

technology. Warehouses should be having latest technology to ensure that the employees can

work efficiently and effectively. Microsoft Excel is still being used in the warehouse to manage

and track data which is time consuming and contain a risk of human error and data

manipulation. When we discussed this problem with the management of the Warehouse and

Falcon World Lines, they told us that they are a new organization and working on small scale

which doesn’t require high-end technology to work efficiently. On small scale using and

implementing it would be costlier. This is a reasonable argument but in our opinion they need

to implement a Warehouse Management System(WMS) so that when the organization grows

big, using Microsoft Excel would drag the organization down and make working slow. Using

WMS will make managing the warehouse efficient and effective. Implementing it now will

make it beneficial in the long run. If Falcon World Lines implement a WMS after the

organization grows big, then it will cost them more because the implementation cost, training

cost will increase.

Non-compliance to standards

Another big problem that we identified upon our visit to the warehouse was that Falcon’s

Warehouse isn’t working as per standards. There isn’t any proper palletization. Goods are also

being stored on floor which is strictly against the standards. According to standard, Goods

stored shouldn’t be place on floor, they should either be placed on pallets or in racks. (UKWA,

2008). Cartons are stacked up upon one other up to the roof. According to stacking standard,
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multiple cartons can be stacked upon each other but the weight should be bearable by the carton

that’s the base. When we inspected the carton, some cartons that were below were in a bad

condition as they couldn’t bear the weight (Safe Stacking and Storage, 1988). They don’t

maintain any quality standard as well. Cartons stored are in poor condition and torn apart. Upon

discussing these matters with the management, they told us that they don’t have enough pallets

to place them all over the warehouse, for stacking they told us that there isn’t enough space in

the warehouse so they have to use every space possible to store goods. Due to this they stack

up cartons to such height.

Health & Safety

The third main problem that we identified and proposed a solution for was the health and safety

issue in the warehouse. In case of fire there are no fire sprinkles or a fire exit. There’s only one

door in the warehouse which is the main door used for every purpose. There aren’t any first aid

boxes in the warehouse in case of any incident, the employee won’t be able to receive proper

first aid in time. The employees aren’t trained enough as well as they were smoking inside the

warehouse which is dangerous as due to the ash, the goods can catch fire. When we visited the

warehouse, there were oil barrels stored in the warehouse but the employees were smoking

carelessly which is highly dangerous as oil is a highly inflammable liquid. Upon discussing

this issue with the management of Falcon World Lines, they told us that to handle a fire

situation there are fire extinguishers installed in the warehouse that are enough to handle the

situation, it is a reasonable argument but in our opinion, fire sprinkles are needed as it sprinkles

water on fire as soon as the fire starts. Fire sprinkles wouldn’t let the fire intensity grow and

will minimize the damage further. Upon further discussion regarding the fire exit, they told us

that they don’t have space to make a fire exit in the warehouse. There are buildings on each

side of the warehouse except for the front which has the main gate. They informed us that there
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are first aid boxes in the warehouse, but they are in the desks inside the office. First aid boxed

should be in the warehouse and easily visible and accessible.

Lack of Space

Upon our inspection of the warehouse, we found out that they are having space issues in their

warehouse. Falcon World Lines lacks space to store the goods in their warehouse. Due to this

lacking the goods aren’t stored on pallets and stacked up upon each other. The warehouse

cannot expand neither vertically nor horizontally. Upon discussing this problem with the

management of Falcon World Lines, they told us that the management is well aware of this

problem which is why they allow the goods to be stored in such a way to maximize the use of

available space. We suggested them to buy or rent a bigger and better warehouse which can be

expanded in the future if needed. They replied back by saying that there isn’t enough finance

available to implement this suggestion but they will implement it in the future when the

organization will be operating on a larger scale.

Benefits of Restructuring

The major chunk of the business is disturbed due to the issue of space shortage and other

inefficiencies in the warehouse but after the implementation of this software in there warehouse

the company is successful to regain some of its clients that are Avior Pharma, Mehran Spices

& Pak Arab.

By the implementations of the proposed solutions we get several perks and benefits, just by

implementing the Warehouse Management System in the warehouse we have gained several

benefits i.e. (space saving, increase in customer satisfaction and Service, and enhance the

productivity and efficiency of workers).


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Space Saving

When the goods or inventory in the warehouse is managed properly it reduces the

chance of wrong pickings. We can say that it enables the accurate stocking, and stocking of

products can easily be forecasted on the basis of transactions of stocks. It helps to reduce the

over stock and save the space in warehouse. Now the excess space provides the opportunity to

Falcon Worldline Pvt Ltd to engage more clients with them like (Mehran Spices, Avior Pharma

and Pak Arab) which results in increase in business of Falcon Worldline Pvt Ltd.

Increase in Customer Satisfaction & Services

By the implementation of WMS the customer satisfaction of Falcon Worldline Pvt Ltd

is also increased because of the order fulfillment under the given time period. The clients like

(Samsung Pakistan, Sharp electronic, and etc.) also allow them to increase the order picking of

their companies. The service of the staff improves because of the reducing errors in the work

process.

Enhance the Productivity & Efficiency of Workers

WMS provided the significant benefits to the organization as the productivity of

workers increases because they know where the particular product is placed which saved the

extra time which was been wasted previously in the absence of WMS. Now workers can pick

more order in less time which results in the increase in profit of the company.

Pallets

The benefit of palletizing is that the space saving can easily be done and it helps to

expand the warehouse horizontally as well as vertically. By providing vertical space it is very

easy to pick the pallets by the help of forklift. Previously the movement of vehicles in the

warehouse was not possible due to the improper management of warehouse but after the
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arranging the warehouse in a proper way the movement of forklifts become easy and the good

can easily be picked up now.

Managerial Implications

Suggestions & Recommendations

We have visited the warehouse of Falcon World-line several times to rectify the basic problems

which are causing the disturbance in the operations of the organization. The suggestions we

have given to the company is to standardize the process according to the international standards

of warehousing.

• The use of modern techniques and we also suggested them to use the Warehouse

management system (WMS) to make the process smoother and efficient. We had

meetings with their head of the department in which we have discussed the

problems which they are currently facing and suggested them the possible

solutions for their problems.

• We have suggested them to standardized their warehouse like proper pelleting of

their products, proper space between the racks should be there, proper vehicles

should be used to avoid any damages or accident in warehouse which can hurt the

company financially and can also be the cause of health and safety issues in

warehouse so, to avoid these issues we suggested them to hire the trained,

certified and licensed drivers which can run their operations in efficient manners.

• Tracking of products in warehouse is key process because order picking can create

the difference so we have suggested them to integrate the process. As they also

provide distribution services for Samsung Pakistan, Changhong Ruba and other

different companies we suggested them the importance of keeping the stock on

top as in the season of summer the demand of air conditions usually gets high due
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to high heat wave so in order to cope up excess demand they must keep safety

stock for the fulfilment of immediate or urgent order at times.

• Success is not that much easy as it looks like, behind the success of any

organization there is firm dedication and hard work of their employees. So we

suggested them that they must train their staff and workers through training and

development sessions, seminars, workshops which can surely be helpful in

increasing the productivity of their labour which will be beneficial for the

company.

• Integrating their whole operations was a high end suggestion which was made.

We suggested them to improve their current picking methodology which must be

ease and suits their organization as making the right order picking will directly be

impactful to the supply chain productivity so this is the point which must not be

taken lightly. And as both inward and outward freight can result the high changes

for warehouse slotting system; all parties and systems must communicate

effectively among them.

• Communication should include more information without giving burden. In other

words, this means that the system and the team both must provide information

which is critical for each shipment, but this must be enough for successful

completion of an order. We suggested them to consider incentive workers as

warehouse fulfilment involves a team of skilled man power.

• Storing plus retrieving products are the large parts of the business so as a result

services can be improved by motivating and rewarding employees. Incentives and

rewarding system, especially in pick and pack areas can encourage being doing

work better and effectively.


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• We also suggested them to implement custom kitting strategies as it is the best

way to increase warehouse productivity. Grouping components are often use to

reduce inventory handling time and make the best use of warehouse storage. For

businesses like this same type of repair and procedures can help to cut down time

consuming errors and make easy the inventory management process.

• More likely it was also suggested that they must invest in quality equipment rather

than that low quality machinery which is of no use and waste our precious time by

which we would have produce best outcomes so cheap machinery should be

purchased in order to low down the cost. Minimizing errors could also lead to

make out best results so unlimited man hours and huge amount are lost every year

in this industry due to wrongly labelled items and incomplete or incorrect orders.

By choosing right technology it will allow them to trim all sources of waste, a

proper warehouse management system will define you the errors, identifying

accuracy issues and include maintenance plan to keep warehouse organized and

clean.

Conclusion

The conclusion of this project is that we have chosen the courier industry and have picked up

the company that is in its growing phase or period. We had a detailed conversation with the

officials and chosen the Warehouse department for our research purpose. We have visited their

warehouse several times to identify the problems the company is currently facing which are

causing harm to their business. The problems we have identified in their warehouse are that the

company is unable to follow the international standards of warehouse due to which the

company is facing difficulties in the expansion of their warehouse. The company is lacking in

the technological advancements due to which problems are occurring like wrong picking, stock

counting issues due to these problems the company is facing the issues of late deliveries. Health
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& safety issues, no proper fire exit plans. The solutions we have provided to the company are

that the use of WMS software instead of EXCEL, which will help to integrate all the functions

related to warehouse internally and externally as well. The proper check and balance can be

done through this software. We have offered the company to redesign the warehouse according

to the standards of warehouse followed internationally. The report concluded the problems and

their solutions as the world is moving towards the modernization adapting technologies to

simplify the work process so it is very important to be the beneficiary of the technological

advancements. It is the way to achieve the goals in more simple and efficient way just by

simplifying the process through the use of technology. We asked them to use the proper

firefighting plan to deals with any uncertain incident if occurred by the installation of fire

sprinklers in the warehouse. These are some of the highlighted points which we have discussed

in this report.

Limitations

The biggest limitation and challenge while working on this project was response issue of the

organization as this a competitive era full of competitors and extreme tough work schedule

which make it hard for employees to help and guide university them about the business. Due

to this we had to conduct many short visits to the warehouse to get more and more information

about the warehouse, its structure, the processes and practices they use.

Another limitation for us was that we had to get information through interviewing and

observation only. We couldn’t use any research papers for this project and couldn’t use any

software to analyze data as we don’t have any statistical data. We had to identify the problems

by our observations and propose solutions through standards and examples.

The time limit for this project was only 4 months and few days. Due to lack of time we focused

on Falcon World Lines only. The limit for this project is that it is only till Karachi. Due to time
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constraints we couldn’t visit their warehouse in Lahore which could have made this project

better.

Getting information from the employees and management was hard as they were afraid the

information will be leaked. They didn’t provide us with any confidential information which

might have had an effect on the outcome of this project.


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tonder, e. v. (2018, April 18). How did Ancient Human Presernve Food? Retrieved from

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UKWA. (2008). Standard of Warehouse.

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(2017). World Bank.


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Appendix

Pictures of our visit to Falcon World Line’s Warehouse


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