LSC801 - Warehouse Storage Techniques Assignment

Assignment Task

Current situation ‘Jim Olsen Storage’ (JOS)

Jim Olsen’s dream of creating a collaborative warehouse is now a reality (refer to Assessment 1 Warehouse Scenario A for background) and the warehouse has been operating reasonably successfully for several months. The collaborating businesses are in close proximity to each other and so stock is available to the retail operations without undue delay.

The collaborating businesses are in close proximity to each other and so stock is available to the retail operations without undue delay. Overall space utilisation is approximately 20% paint shop goods, 40% groceries, and 40% for Jim’s Tiles. Ownership of the stock remains with each business, but shared data allows Jim to manage the warehouse and all stock in it while the other two businesses lease floor space and pay ‘handling fees’ for warehouse services provided by Jim, which include unloading and storage, picking and loading, and associated administration.

Because of the nature of the three businesses there is a wide variety of goods in the warehouse as follows:

• Automotive paint shop. Enamel paints and thinners, sand paper, masking tape, paint proof coverings, spray guns, hoses, overalls, gloves, masks, safety shoes, etc.;
• Grocery store. Bulk food products (bagged rice, flour, sugar), dry goods, canned goods, drinks, and non-perishable goods typically found in a grocery store (cleaning products, personal hygiene, etc.); and
• Jim’s Tiles. Ceramic tiles, grout, tiling equipment and accessories

Jim has started to collect data about the warehouse handling as presented in Table 1 (MHE stands for ‘material handling equipment’)

Table 1. Warehouse handling data

Jim has used his orders received data to identify high turnover stock items, efficiently store them on the bottom shelves, and locate them close to the warehouse entrance, but he wonders if his decision to create zones based on ownership is the right one

You are familiar with this warehouse operation and you make the following observations:

• This is a standard warehouse operation (also known as ‘low cube’);
• Many items are stored for greater than one month;
• There is very limited truck parking space;
• There is one loading dock;
• The ceiling height is typical; and
• A simple warehouse management system is used.

Assignment

Having made a significant investment, Jim now wants to know how the new warehouse operation is performing: “What is satisfactory and what needs to improve? How can costs be reduced? Is the labour and equipment resource satisfactory or are adjustments necessary?” He knows that ‘what is measured can be managed’ and so he has also asked you to identify what you consider to be the highest priority key performance indicators (KPIs) that are appropriate for his warehouse operation.

You are to write a word report (not incl. appendices, citations and references) that: critically evaluates Jim Olsen Storage’s performance in terms of the following aspects:

1. location of the warehouse;

2. layout and location of the stock in the warehouse;

3. location numbering system;

4. space utilisation;

5. storage equipment;

6. material handling equipment;

7. order picking strategy;

8. resource planning (labour)

9. IT systems; and

10. general tidiness.

For the purposes of this evaluation, you need to: 

• Explain which of these 10 aspects of Jim’s operation appears to be performing satisfactorily and which ones he needs to improve;
• Analyse sources of costs in relation to the foregoing performance aspects; and
• Identify and justify at least six KPIs that you consider to be the highest priority and most appropriate for measurement, given the fact that Jim’s warehouse operation is small and relatively low tech. What data typically needs to be captured for each KPI?

On the basis of these points you will be recommending realistic improvements to aspects of warehouse performance and next steps in order to measure performance. The aim is to apply the theory to the given situation (demonstrate knowledge) and identify improvements (evaluation and critical thinking).

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