Unit 4: Warehouse management and emerging systems

• Stores responsibilities: safe custody, proper storage and location (bin locations), preservation, issue against authorised requisitions, record keeping, preventing pilferage and deterioration, housekeeping and safety.
• Stores layout: centralised vs decentralised stores; location systems — fixed and random (floating) locations.

• Bar codes (1D, 2D and QR) encode item identity for fast, accurate scanning at receiving, picking, issue and dispatch.
• Benefits: fewer errors, faster transactions, real-time updates; standards: GS1 (EAN-13 in retail).

Just-in-Time (JIT) produces and delivers exactly what is needed, when it is needed, in the quantity needed — eliminating waste. Developed at Toyota (Taiichi Ohno). Seven wastes (muda): overproduction, waiting, transport, over-processing, inventory, motion and defects. Kanban is a pull-based signalling system: a card (or bin) signals the previous stage to produce or supply more only when parts are used. Requirements for JIT: reliable suppliers, small lot sizes, quick set-ups, preventive maintenance, flexible workers and good quality.

• Annual physical stocktaking: counting all items at a point in time (often year-end) — operations may stop; teams, count tags, reconciliation.
• Purpose: verify records, detect losses, satisfy auditors and financial reporting.

• Perpetual inventory: records updated with every receipt and issue — bin cards and stores ledger, now ERP — giving balances at any time.
• Advantages: continuous control, no need to stop work, quick detection of discrepancies, supports reorder alerts.

• Cycle counting: counting a portion of items continuously throughout the year — A items more often (e.g., monthly), B quarterly, C annually.
• Benefits: higher accuracy, no shutdown, root causes of errors found and fixed quickly.

• Inventory variance: difference between book and physical stock.
• Causes: recording errors, theft, damage, evaporation and breakage (normal loss), wrong issues, unrecorded receipts.
• Treatment: normal losses absorbed in cost; abnormal losses written off; investigate and correct procedures.
• Material cost variances: price variance = (standard price − actual price) × actual quantity; usage variance = (standard quantity − actual quantity) × standard price.

• ERP inventory modules: materials management, warehouse management, automatic replenishment, real-time visibility across locations (SAP MM, Oracle, Tally Prime for small firms).
• RFID: tags read without line of sight, many at once — pallet tracking, apparel stores, FASTag; enables automated receiving and real-time stock.
• Automated tracking software: warehouse management systems, IoT sensors (temperature for cold chain), drones and robots for counting, AI demand sensing.