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‘A warehouse is a planned space for the storage and handling of goods and material.’ (Fritz Institute)

In general, warehouses are focal points for product and information flow between sources of supply and beneficiaries. However, in humanitarian supply chains, warehouses vary greatly in terms of their role and their characteristics.

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The global warehousing concept has gained popularity over the last decade as stock pre-positioning becomes one of the strategies for ensuring a timely response to emergencies. They are usually purpose built or purpose designed facilities operated by permanent staff that has been trained in all the skills necessary to run an efficient facility or utilising third party logistics (3PL) staff and facilities. For such operations, organisations use, information systems that are computer based, with sophisticated software to help in the planning and management of the warehouse. The operating situation is relatively stable and management attention is focused on the efficient and cost effective running of the warehouse operation. Numerous organizations have centralized pre-positioning units strategically located globally. Some of these offer extended services to other humanitarian organizations on a cost plus operating charges basis. The United Nations Humanitarian Response Depot (UNHRD) Network.

Field Warehouses

They are Field Warehouses are usually temporary in nature. They may be housed in a building buildings which was not designed to be used as a warehouse or , in a temporary building/structurestructures, in and are often in mobile units such as (rub halls, Wiikhalls and sometimes ) that are little more than a tent in a field. The initial staff may be a casual workforce that has never worked in a warehouse before and the inventory system is more likely to be paper based. Often the situation is initially chaotic, sometimes dangerous coupled and coupled with a humanitarian need which may be very urgent. The management style must therefore be practical and action oriented with a focus on making the humanitarian goods available as quickly and efficiently as possible, but yet while being accountable at the same time accountable.

Policies and Procedures

Policies

The policies contain hard and fast rules and regulations that define the general conduct of the warehouse operation. Examples of the types of policies that organisations will define are as follows:

  • organisational specific warehouse management policy and procedures guideline outline
  • health and safety
  • human resources management
  • security
  • pest control
  • warehouse maintenance and cleaning
  • quality control
  • record keeping and reporting
  • reverse logistics – Return of goods and exit strategy in the event of downscaling or shutting down operations
  • disposal of obsolete and damaged goods.

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However, in creating such procedures, care must be taken to avoid constraining the use of local initiative which might be required to deal with local conditions. Procedures should be considered as streamlining the business processes and providing checks and balances. They provide guidance to warehouse managers and must have some level of flexibility to cater for cater to unique situations, than to be rigidly adhered to. This can be achieved by limiting the level of detail that the procedures document defines, allowing more flexibility and/or by arranging ‘dispensations’ to allow departure from the procedures in order to optimise local performance, especially in emergencies.

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  • receiving and issuing of supplies;
  • quality control or verification;
  • storage of goods;
  • how to control stock movement (stock control);
  • documentation flow;
  • how to detect and deal with stock losses;
  • how rejected material will be managed; and
  • how to deal with unwanted material, obsolete and scrap, disposal.

See also a Warehouse Rental Contract sample.

Types of Warehouse Space

  • Commercial: in rented building used for business.
  • Government or state: such as at the ports or harbours. This is common in emergency situations.
  • Transit: for temporary storage of goods destined for different locations and need storage for a very short time.
  • Bonded warehouses: for storage of goods whose duty is unpaid and especially where the goods are destined to another country. Pre-positioned stock is often held in bonded warehouses so that export is quick and can be sometimes be stored for long periods sometime.
  • Open storage: not ideal for perishable products but in emergencies, sometimes the only alternative.
  • Space that is owned and managed by the organisation.
  • Pre-fabricated warehouses where there are no permanent structures available. This is common practice in emergencies.

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  • Planning inbound receipt procedures.
  • Storage formalities e.g:
    • location management
    • inventory control
    • occupational health and safety
  • Outbound delivery procedures.

See Inventory Management Guidelines and refer to the Annexes for different samples: Perpetual Inventory form, Stock Count Report form, In/Out Stock Report form.

How to Select and Set-Up a Warehouse

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  • allocate space for each type of product and locating number;
  • allow sufficient space for easy access to the stacks for inspecting, loading and unloading. Stacks should be one meter from the walls and another meter between stacks;
  • sizing the goods receipt and despatch area;
  • allow space for storage of cleaning materials and supplies;
  • allocate areas for damaged items by consignment number;
  • allow sufficient space to repackage damaged items and place it in separate stacks;
  • sufficient free space is needed to operate a warehouse effectively. When planning the size of a warehouse consider:
    • planning on having about 70-80% utilisation of available space, whilst considering:
    • throughput rate
    • number of sku’sstock keeping units (SKU)
    • handling characteristics of items, etc.
  • See Stacking guide in the Annexes.

How to calculate warehouse storage space.

Special storage needs

Some relief items require special attention in terms of the type and security of the storage area. For example:

  • Medical supplies and drug shipments can contain a large number of small, highly-valued and, often, restricted items, many with a limited shelf-life. Thus, a secure area is required, as well as judicious attention to expiry dates.
  • Hazardous products such as fuels, compressed gases, insecticides, alcohol, ether and other flammable, toxic or corrosive substances must be stored separately, preferably in a cool, secure shed in the compound but outside the main warehouse.
  • Antibiotics and vaccines may require temperature-controlled cold storage arrangements, with sufficient capacity and a reliable, as well as a back-up, power source.
  • With combustible items, such as alcohol and ether, specific attention is required when storing and handling. Inventory management techniques need to be implemented to prevent wasteful surpluses and to ensure proper stock rotation to avoid costly losses due to expired goods. Procedures for controlling, preserving and releasing medical supplies and drugs should be established in consultation with the medical experts.

Space utilisation and handling

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Diagram 1: Space utilisation

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  • planning the workload
  • allocating resources
  • space utilization & handling, (see the diagram above):
    • receiving goods;
    • storing goods.
  • assembling consignments
  • despatching consignments
  • disposal of goods
  • pest control
  • security
  • inventory management
  • handling and stacking techniques
  • occupational health and safety

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Both are applicable to humanitarian situations and have associated pros and cons. Note that economic order quantity (EOQ) in practice only works in a fairly stable environment where demand variability and replenishment lead-time are reasonably stable and predictable. This is not the case in an emergency. Economic order quantity is applicable in more stable environments such as refugee camps and perhaps later in a relief/recovery phase.

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Optimisation comes from having logistics systems that can configure, procure and consolidate these packages quickly and at least cost and a distribution chain that is flexible and can adapt to changing requirements quickly and at least cost.

Information systems that facilitate transparency of the supply chains chain inventory levels and location + peg supply to , location, and demand provide the visibility necessary to visibility to facilitate good planning and effective decisions that maximise service services and reduce costcosts.

Stock control and movements

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  • establish levels of operating stocks based on consumption/rate of usage. The stock levels shall be reviewed from time to time depending on current needs. (See “Inventory control above);
  • ensure that weekly and monthly stock balances reports of each stock item and the total value are prepared;
  • maintain monthly stock usage report of each item kept in the store and the overall in the usage trend in last six months;
  • review and report on six monthly basis slow moving items indicating the last movement date the unit value and total value and liaise with user department;
  • establish quantity, lead -time and availability of each item supplied on the market;
  • keep a record of all non- stock items received from suppliers, returned to suppliers and issued out to users.

See monthly inventory report and stock report.

Monitoring Goods in Transit

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To facilitate and account for movement of stocks the following documents could be used:

See in the Annexes the warehouse flow chart.

Stock Records - Documentation

  • stock identification
  • stack cards, see samples 1 and 2
  • bin cards
  • stock Checks: see inventory section for different samples or in the Annexes
  • stock loss reporting
  • reporting of stock levels.

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The warehouse is a key component of the supply chain in emergencies. It buffers uncertainties and breakdowns that may occur in the supply chain. When properly managed and appropriately stocked a warehouse provides a consistent supply of material when it is needed.

References

Additional Information

  • Fritz Institute Certificate in Humanitarian Logistics Warehousing and Inventory ModuleICRC Logistics Field Manual – Chapter 6 Warehouse Management pp 285-362- Link
  • UNICEF Emergency Field Handbook p 380
  • CILT (UK) Certificate – Distance Learning Materials – Warehousing- Link
  • Olsen, D.R.(2003), Gower Handbook of Supply Chain Management, 5th Edition, edited by John Gattorna, Gower- Link
  • Rushton, A., Oxley, J., and Croucher, P., (1989,2000), The Handbook of Logistics and Distribution Management (Second Edition), Kogan Page, London- Link
  • Robeson, J.F. and Copacino, W.C. (1994), The Logistics Handbook, The Free Press- Link
  • Mangan, J., Lalwani, C., and Butcher, T. (2008). Global Logistics and Supply Chain Management, John Wiley & Sons, Hoboken, New Jersey.
  • WFP Emergency Field Logistics Manual
  • - Link

 

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