3.3 Stock handling and storage

Typical warehousing operations are shown in Figure 3.2. Goods are received normally either from the manufacturing operation, or from an outside supplier from whence they normally are checked for identity, quantity and quality; in the case of internal receipts from manufacturing this is usually dispensed with. The items then have to be located in the warehouse and put away. Location may be fixed depending on their identity or variable depending on available warehouse space, in which case the stock records will also have to record the location in the warehouse where the goods have been stored. It may be necessary to locate individual consignments of goods separately so as to be able to physically identify them by date or batch number, either because they are date-sensitive for use, or, for costing purposes, if items in different batches can have different costs. Fixed item location systems lead to ease of operation; warehouse personnel soon become familiar with locations and know where to locate each item. Variable location systems offer better space utilization, particularly where the quantities held of each item vary over time to meet variation in supply or demand; however, it is vital to have a reliable location recording system and there is always a risk of incorrect locating leading to items getting lost.

Figure 3.2: Warehousing operations

Customer orders are normally passed to the warehouse from the order processing activity once stock allocation has taken place, often in the form of a picking list .