A warehouse reorganizes and repackages product. Product typically arrives packaged on a larger
scale and leaves packaged on a smaller scale. In other words, an important function of this
warehouse is to break down large chunks of product and redistribute it in smaller quantities. For
example, some skus may arrive from the vendor or manufac- turer in pallet quantities but be shipped out to customers in case quantities; other skus may arrive as cases but be shipped out as eaches; and some very fast-moving skus may arrive as pallets and be shipped out as eaches.
    In such an environment the downstream warehouse operations are generally more labor-intensive.
    This is still more true when product is handled as eaches. In general, the smaller the handling unit, the greater the handling cost. It can require much labor to move 10,000 boxes of paper clips if each box must be handled separately, as they may when, for example, stocking retail stores. Much less labor is required to handle those 10,000 boxes if they are packaged into cases of 48 boxes; and still less labor if those cases are stacked 24 to a pallet.
    Even though warehouses can serve quite different ends, most share the same gen- eral pattern of material flow. Essentially, they receive bulk shipments, stage them for quick retrieval; then, in response to customer requests, retrieve and sort skus, and ship them out to customers.
    The reorganization of product takes place through the following physical processes (Figure 3.1).
• Inbound processes
– Receiving
– Put-away
• Outbound processes
– Order-picking
– Checking, packing, shipping

Figure 3.1: Order-picking is the most labor-intensive activity in most warehouses. Travel can be reduced by careful putaway.

    A general rule is that product should, as much as possible, flow continuously through this sequence of processes. Each time it is put down means that it must be picked up again sometime later, which is double-handling. When such double-handling is summed over all the tens-of-thousands of skus and hundreds-of-thousands of pieces and/or cases in a warehouse, the cost can be considerable.
    Another rule is that product should be scanned at all key decision points to give “total visibility of assets”, which enables quick and accurate response to customer demand.