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1^st stage. To determine: the warehouse is necessary or not

or it is better to use direct deliveries.

2^nd stage. To choose type of warehouse.

3^rd stage. The optimum quantity of necessary warehouses is calculated.

4^th stage. Warehouse locations and the sizes are determined.

5^th stage. The logistic system of a warehouse is designed.

The first four stages belong to macrologistics of warehouse economy, which studies logistic system of movement of a flow of goods between warehouses of producers and consumers.

The fifth stage belongs to micrologistics of warehouse, which as logistic system considers the operating or projectable warehouse. The purpose of the project is optimization of internal streams, which exist within a concrete warehouse.

1^st stage.

It is possible to avoid creation of a warehouse only in that case, when characteristics of all streams are optimum combined, it doesn't demand creation of stocks.

Main options:

1. Work on the «Just in time» technology (doesn’t require content of inventories);

2. Transfer of function of the organization of work with inventories to service firm;

3. Creation of warehouse economy.

Optimization of warehouse economy is the big problem of the largest enterprises (for example, by withdrawal of warehouses from unadapted rooms which besides can be used for expansion of trade floors).

2^nd stage.

There are several types of warehouses: own, collective use, contractual.

Own is a warehouse which is owned or managed by the same firm which possesses the goods which are stored in it. The main benefits of own warehouse are connected with high extent of control of its activities, complete control facilitates integration of warehouse operations with other operations of logistic process of the entity.

Warehouse of collective use is independent firm which renders warehousing services for a certain reward (the fixed payment or percent of the cost of the stored items). Use of collective warehouses gives the chance to easy changing a location of a warehouse association, the sizes and quantity of the elements constituting it, flexibly to react to the fluctuations in demand, requirements of suppliers, etc.

Contractual warehouses were allocated from group of collective warehouses. They differ in wider list of services, long term of the relations with users, accounting of their individual requirements.

The choice of warehouse’s type is made on the basis of economic calculations.

3^rd stage.

The quantity of warehouses and their geographical placement are determined by location of consumers and producers, and also by features of goods. The quantity of warehouses in logistic system has significant effect on logistic expenses and level of service.

4^th stage.

Territorial placement of warehouses and their sizes are determined by capacity of material flows, demand in the market, the sizes of the region of servicing, accommodation in it of consumers and producers, development of transport infrastructure, requirements of clients to quality of service (speeds, uninterrupted operation, and reliability of implementation of orders) and set of other factors.

The basic rules of logistics for designing warehouse system are:

• the warehouse logistic network shall be as close as possible to points of final sale;

• ways of merchandising have to be used as often as possible;

• in all stages of merchandising it is necessary to provide movement of most integrated logistic units to the greatest possible distance. In reality, existence of thoroughfares, suitable rooms influences a warehouse arrangement.

Following to these rules gives essential economy of logistic costs in distribution system.

There are three options of placement of warehouses: near recipients, near producers, intermediate placement. Usually warehouses place is near receivers, for to resupply clients more quickly. The main criterion in case of job evaluation of these warehouses is ensuring necessary service quality to receivers (for example, to retail dealers). Quick response to change of their requirements allows cutting down expenses from the missed sales, to lower inventories of goods at receivers. The range of goods of such warehouse is very wide; many producers located in different places deliver products. In case of the choice of the place for a warehouse it is reasonable to have it closer to consumers, which occupy a considerable share in deliveries, or in places of concentration of many consumers. It will provide minimization of transportation costs.

The warehouse system can be two types:

• consisting of several same warehouses having the regions of activities;

• consisting of one (or several) large central storage (which is brought closer to producers) and group of less powerful, which receive items from this warehouse and serving the regions.

This stage demands the accounting of a large number of various factors. During design, a large number of possible options has to be analyzed and estimated. It demands application of modern economic-mathematical methods, computer programs.

5^th stage.

For effective functioning of a warehouse it is necessary to organize functioning of all elements constituting in a single logistic complex.

Each of warehouse processes three types of material flows: entrance, internal, output.

Material resources get on a warehouse as an entrance flow and take place in a zone of reception of goods. Then it goes to a zone of storage of items by internal stream, item complete set zone, and zone of packaging and consolidation of item, shipment zone. After passing of all stages of warehousing, the item goes to the customer.

Entrance flows are processed by means of logistic transactions of unloading of vehicles and acceptance, internal – by means of operations of placement on storage, selection, completing and packaging of sending, output flows assume loading on vehicles.

According to this, from this sequence of transactions on movement of a material flow we can allocate three groups of logistic transactions of management:

1. management of goods receipt (supply with inventories, control of deliveries, the organization of the vehicles performing delivery to a warehouse, quality control);

2. management of intrawarehouse operations;

3. management of sale of goods (registration and forwarding, the organization of the vehicles performing delivery to receivers, control of accomplishment of orders, information and other servicing of receivers).

The warehouse shall work in close interrelation with services of purchases and sales (production). Coordination of activities with service of purchases provides systematic delivery of products to a warehouse (optimality of entrance streams). The warehouse builds the work according to information, which is received from service of purchases; therefore, the organization of internal warehouse flows depends on timeliness and accuracy.

Interaction with sales department is very important (or production divisions, if the warehouse provides with raw materials production process) because efficiency of accomplishment of orders, an opportunity to provide rational routes and amounts of batches of the goods delivery depends on effective information communication with sales office.

Designing of a logistic warehousing system is performed in the following order:
1) the purposes of activities of a warehouse and the carried-out functions are formulated taking into account the place of a warehouse in a logistic chain;

2) required level of technical equipment of warehouse system is established (mechanized, automated, and automatic);

3) elements of warehouse system are determined: a stock article (the pallet, a pack, etc.), a warehousing method (in racks, on pallets, etc.), storage equipment, a method of completing and sending batches, a method of intra warehouse movement of goods, information system, etc.;

4) from these elements separate subsystems of a warehouse are designed;

5) options of logistic warehouse system are created by the created subsystems;

6) the assessment and the choice of achievement of the activities purpose by warehouse logistic system, rational from the point of view of efficiency, is made.

Important element of warehouse system is the stock article.

The stock article is quantity of freights over which logistic transactions are made (loading, unloading, storage, transportation, etc.) without his crushing, as with a united weight. For example, pack of books, standard boxes or pallets, containers, etc.

The choice of a stock article - is very important because its sizes influence to characteristics of storage equipment and storage locations. Usage of a single stock article allows bringing the various equipment, a container, means of transportation, and a zone of acceptance and storage of participants of material flows into accord; it considerably reduces costs.

Designing, assessment and choice of elements, subsystems and logistic system of a warehouse are conducted by means of special computer programs.

Logistic processes aa such exist in three options: industrial, trade and construction.

The supply flow includes raw materials, materials, accessories, assembly nodes, auxiliary materials, etc. bought in the market of means of production on industrial enterprise.

Logistic process is a consecutive change of conditions, development stages, set of consecutive actions for achievement of any result (for example, production process — consecutive change of transactions, etc.).

Logistic process in a warehouse requires complete coordination of functions of supply with inventories, cargo handling of physical distribution of orders.

Logistic process in a warehouse includes:

• supply with inventories;

• supply with stocks;

• unloading and acceptance of freights;

• intrawarehouse transportation of freights;

• warehousing and storage of freights;

• complete set of orders for clients and shipment;

• transportation and expedition of orders;

• collecting and delivery of empty carriers of goods;

• control over the implementation of orders;

• information servicing of a warehouse;

• ensuring customer service (rendering services).

Functioning of all components of logistic process shall be considered in interrelation and interdependence. Such approach allows not only coordinating accurately activities of services of a warehouse; it is a basis of planning and control of promotion of freight in a warehouse with the minimum costs.

Conditionally all process can be divided into the 3 components:

1. transactions which are directed to coordination of service of purchase;

2. transactions which are directly connected with cargo handling and its documentation;

3. operations which are directed to coordination of service of sales.

Supply with stocks. Coordination of service of purchase is performed during transactions on supply with inventories and by means of control of conducting deliveries. The main objective of supply with inventories consists in providing a warehouse with goods (or materials) according to opportunities of its conversion in case of complete satisfaction of orders of consumers for this period. Therefore, determination of requirement to purchase of inventories must be approved with service of sales and the available capacity of a warehouse.

Control of deliveries. Accounting and control of a stock receipt and sending orders allows to provide rhythm of conversion of cargo flows, the maximum use of the available amount of a warehouse and necessary conditions for storage to reduce stock lives and to increase warehouse turnover by that.

Unloading and acceptance of freights. In case of implementation of these transactions it is necessary to be guided to delivery conditions of the signed agreement. According these spaces of unloading for the specified vehicle are prepared (a trailer, the truck, the container) and necessary materials handling equipment are prepared. Unloading in modern warehouses is performed on unloading automobile or railway stages and container areas. Special equipment of places of unloading and right choice of materials handling equipment allow to carry out unloading effectively (in the shortest possible time and with the minimum losses of freight), in this connection idle time of vehicles and consequently, and distribution costs decrease is reduced.

The operations performed at this stage include:

• unloading of vehicles;

• control of documentary and physical compliance of orders of delivery;

• documentary registration of the arrived freight through information system;

• formation of warehouse cargo unit.

Intrawarehouse transportation. It assumes movement of freight between various zones of a warehouse: from an unloading stage in an acceptance zone, then in a zone of storage, picking and on a loading stage. This operation is carried out by means of hoisting-and-transport cars and mechanisms. Cargo transportation in a warehouse shall be performed at the minimum extent in time and space.

Warehousing and storage. Process of warehousing consists in placement and stacking of freight on storage. Basic principle of rational warehousing is effective use of volume of a zone of storage (optimum choice of a warehousing system and first of all storage equipment). The equipment under storage shall answer specific features of freight and provide the maximum use of height and the warehouse space. At the same time the space under working passes has to be minimum, but taking into account normal operating conditions of hoisting-and-transport cars and mechanisms. System of address storage use for the ordered storage of freight and economic permission by the principle firm (fixed) or free (freight will be stirred on any empty seat) the choice of the place of warehousing. Process of warehousing and storage includes:

• laying of freight on storage;

• storage of freight and providing the conditions corresponding for this purpose;

• control of a stock availability in a warehouse which is performed through information system.

Complete set of orders and shipment. Process of a complete set is reduced to preparation of item according to orders of consumers. The complete set and shipment of orders include:

• receiving order of the client (selection leaf);

• selection of item according to each name by request of the client;

• complete set of the selected item for the specific client according to his order;

• preparation of item for sending (laying in a container, on a goods carrier);

• documentary registration of the prepared order and control of preparation of the order;

• combination of customer orders to a shipping lot and registration of way bills;

• shipment of freights to the vehicle.

Picking of customer orders is carried out in a picking zone. Preparation and registration of documentation are carried out through information system. The address system of storage allows specifying the place of the selected item in a selection leaf, it considerably reduces time of a sampling and helps to monitor holiday of item from a warehouse. Thanks to information system, accomplishment of function of consolidation of freights is facilitated in an economic batch of shipment, which allows using the vehicle as much as possible. At the same time the optimum delivery route of orders is chosen.

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