Warehouse Management: Storage, Placement, and Coding Systems

Posted on Apr 6, 2025 in Business Administration and Innovation Management

Storage Classes

We can distinguish several classes of storage based on their location in the production process:

  • Approval stores
  • Process distribution
  • Stock property:
    • Own facilities
    • Personal and public warehouses: The company pays rent and storage costs.
    • Hired warehouses: Payment is based on footprint, number of movements, volume, and distribution distance.

Installation Types:

  • Open storage: Goods are stored outdoors, at risk of deterioration.
  • Closed storage: Goods are stored in covered warehouses, which is more expensive but prevents deterioration.

Placement Methods

There are three basic placement methods:

  1. Fixed: Each article always has a designated place in the store, making it easy to locate. A common criterion is the size and movement of highly expensive merchandise. However, this method may not fully utilize space.
  2. Randomized: Each material is placed in any available warehouse location. This maximizes space and leaves no empty spots. However, it requires a very exhaustive and updated localization list to find items easily.
  3. Mixed: The store is divided into sections, and each item is stored within a specific section. This method seeks to exploit space while avoiding disorder.

You must seek the protection and preservation of stored items prone to damage during storage.

Dispatching Goods

Dispatching involves materials leaving the warehouse for the production process or final sale. There are two types:

  • Urgent: Items are needed suddenly and must be shipped immediately.
  • Scheduled: Items are specified in advance. The requesting staff presents a merchandise application with the due warehouse mind, drawn up and signed by the department responsible for the stock. The manager approves the request by checking the codes and signatures. If there is not enough stock, the request is passed to the inventory management department to investigate the shortage and to the purchasing department to contact the supplier.

It is recommended to update the inventory with each material output.

Release Process

  1. The responsible department develops the request for goods.
  2. The corresponding application is presented in the store.
  3. The warehouse worker reviews the application.
  4. The application is given to administrators to update the inventory, deducting the materials and their prices.
  5. Data is passed to accounting.

Coding Systems

Goods already stored in the right place need a predetermined coding system. In small stores, descriptions using common language are often used. However, as the amount and variety of items increase, it becomes difficult, and a more useful coding system is needed.

Advantages of Coding

  • Saves space
  • Saves time
  • Increases accuracy
  • Maintains order
  • Organizes information

Coding Methods

  1. Color Coding: Uses eight basic colors.
  2. Alphanumeric Coding: This is the most used method and uses letters, numbers, or a combination of both. Applications include:
  • Using letters related to the product name.
  • Using letters arbitrarily.
  • Using digits for classes.