|Table of Contents|
Common Terms in Warehousing
Stock Keeping Unit (SKU)
A unique code or nomenclature that designates a single line item of a larger consignment. SKUs may be tied to a specific production run or expiration date, and may denote only a product of specific characteristics. A single storage facility with multiple SKUs will require very different handling procedures than a storage facility with few SKUs.
The lowest unit at which stored cargo items may be counted at. An inventory unit may be an individual item (example: blanket), storage container (example: bottle of pills) or kit.
The lowest unit at which a stored cargo item is handled. In the context of a warehouse, the handling unit may be a carton that contains many inventory units. A handling unit may be a single unit, or an entire pallet.
Material Handling Equipment (MHE)
MHE is any form of mechanical equipment used to facilitate the loading and offloading of cargo, or the movement of cargo around an open space such as a port or a warehouse. MHE includes forklifts, cranes, pallet jacks, and more.
The order generated by a requestor and communicated to a warehouse indicating the quantity and type of SKUs to be pulled from inventory and shipped.
First In / First Out (FIFO)
An inventory and asset management system in which the oldest received inventory items on hand are the first removed from inventory.
Non-Food Item (NFI)
Any stored item that is not food in nature. In the humanitarian context, NFI items usually refer to durable, non-perishable items such as household and shelter materials. NFI management in humanitarian settings usually does not require advanced storage solutions, unlike storage of medicines or medical consumables which may require temperature controls.
‘A warehouse is a planned space for the storage and handling of goods and material.’ (Fritz Institute)
In general, humanitarian aid agencies agency's follow a model for delivering goods to affected beneficiary populations similar to commercial distribution networks, comprised of international and local warehouse facilities that serve as consolidation points, feeder facilities and last mile distribution points.
Example: Overview of a general humanitarian supply chain and warehousing needs.
Many international humanitarian response organizations have adopted a strategy of pre-positioning relief supplies in large warehouses not located in the countries of response operation, usually located in one or more strategic regional locations. The development of regional warehouses as lead to a general reduction in time required to respond to rapid-onset emergencies, as well as promotes a more reliable and consistent supply of physical relief items for countries of operation located around the region served by the warehouse.
- Readily available access to a high volume of intermodal international transport – Is the warehouse near sea ports seaports and airports of sufficient size and throughput capacity?
- Relative location to the area of response – Does the region have sufficient response activities and does the location match the overall area of planned intervention?
- The nature of planned interventions – Will the warehouse serve rapid response activities? Or will the warehouse only feed into longer ongoing activities?
- Political climate of the country – Is the government of the country in which the regional warehouse located stable and not prone to conflict, ouster or drastically changing policies?
- Economic feasibility – Is operating in the country cost effective? Are there incentives such as free trade zones or humanitarian exemptions that reduce costs of international operations?
- Access the correct amenities – Does the location have facilities of the right size and quality required? Is there need for climate controlled or bonded storage?
- Access to sufficient technical support – Are there skilled labourers/companies readily available on the market who can manage and conduct specialty tasks like repairs?
Regional/international warehouses can be purpose built or purpose designed facilities operated by permanent staff that has been trained in all the areas necessary to run an efficient facility, or stock can be held utilising some version of a third-party logistics provider (3PL) staff and facilities. Ideally, any regional or international warehouse would use computer-based inventory management tools, with software to help in the planning and management of the warehouse. The operating environment of a primary regional or international warehouse used for pre-positioning should typically be relatively stable, and overall attention focused on the efficient and cost-effective warehouse operation. Numerous organizations have centralized pre-positioning facilities strategically located globally. Some of these offer extended services to other humanitarian organizations on a cost-plus operating charges basis, such as the United Nations Humanitarian Response Depot (UNHRD) Network.
Central Warehouse – Area of Response
The need and number of warehouses required in an area of response depends on volume and type of activities undertaken and locations of operation. Many response organizations prefer to keep at least one central warehouse in a country or area of response.
The central warehouse serves as the primary reception point for goods flowing into a country, as well as a consolidation point for goods purchased locally. The size of a central warehouse depends on the anticipated volumes of goods themselves, the expected throughput of cargo, and the ancillary activities such as kitting that may occur on site. The overall purpose of a centralized warehouse strategy would be to provide sufficient and controlled flow of relief items to more remote or harder to access locations, keeping enough on hand to meet demand at all times. Some organizations may wish to forego a central warehouse strategy all together in lieu of arranging direct deliveries from vendors or international ports of entry to field warehouses or beneficiary distribution sites.
Field level warehouses are another strategy many response organizations have adopted. A field level warehouse is usually towards the end of the supply chain, near the last point of distribution to the beneficiary. Field warehouses can come in a variety of formats, ranging from tents and mobile soft sided structures to small hard sided structures. Some field warehouses might be just as large as a central facility depending on need; what defines a field facility is its proximity to programmatic activities and its role as the last stop en route to beneficiaries.
The warehouse work force may be casual labour that has never worked in a warehouse before, while and the inventory system is more likely to be paper based. Often, the situation while setting up a field level warehouse initially chaotic, sometimes dangerous and coupled with a humanitarian need which may be very urgent. The management style must therefore be practical and action oriented with a focus on making the humanitarian goods available as quickly and efficiently as possible, while remaining accountable at the same time.
When approaching warehousing, either at an international or response level, there are a variety of options available. Some options – such as government partnerships or temporary structures – make sense for short term or emergency contexts, while larger more sophisticated warehouse solutions might require long term investment and substantial resources over time. Below some of the solutions available to humanitarian agencies.
- Needing to identify and manage physical space.
- Identifying, training and managing personnel.
- Assuming most or all cost and risk associated with running the facility.
- Establishing and adhering to warehousing and stock management policies.
Due to the nature of most humanitarian contexts, agencies tend to own or operate their own facilities in the affected countries. As such, humanitarian agencies focus on and develop strategies largely for country and field level warehouses, sometimes with an emphasis on the lowest operating parameters. Agencies may choose to self-own or self-manage larger regional or international warehouses too, however this comes with increased complexity and operational knowledge.
- Permanent storage structures already built.
- MHE and racking/storage equipment already installed.
- Advanced warehouse management software may already be in place.
- Warehouse workers already trained and readily available.
- Security precautions already taken.
Storage with a commercial third-party provider can vary based on contract type; humanitarian agencies may wish to rent an entire warehouse facility for themselves, or they may wish to only pay for the physical space inside a warehouse that they use. The nature of billing for commercial warehouses varies between contracts as well, but the following rates are common:
- In and out charges per pallet or cubic meter.
- Storage rate per day/week/month, charged per pallet position occupied or cubic meter.
- Packaging and labeling fees.
- Offloading/Loading charges per vehicle.
- Monthly/annual security and insurance charges.
Buying into a warehouse arrangement – especially one managed by a large international company is a good way of increasing covered storage space quickly, and is useful for storage sites in regional or international settings where permanent employees of the respective aid agencies are not based. Commercial warehouse solutions tend to only be useful in more developed contexts, or areas not prone to civil unrest. Commercial warehouse providers are also not humanitarians by nature, and may engage in activities that humanitarian organizations disagree with, such as support to military activities. Each of these factors will need to be considered by agencies entering a commercial option.
- Transit - for temporary storage of goods destined for different locations and need storage for a very short time.
- Pre-positioning – stock meant for unknown emergencies, usually sitting for long periods of times before being called forward. Stock in these facilities is usually designed with long term storage in mind.
- Bonded Storage – for storage of goods whose duty is unpaid and especially where the goods are destined to another country. Pre-positioned stock is often held in bonded storage to facilitate export. Customs holding facilities are usually bonded, but private companies can be certified bonded as well.
- Open Storage – storage contained in the open air, usually in a secure area. Not ideal for perishable products. In emergencies, sometimes open storage is the only alternative.
- Temporary Structures – usually capable of being established quickly in areas where regular permanent storage solutions aren’t available. Temporary structures might include tents or Mobile Storage Unites (MSUs).
Site Selection Planning
There are many things to consider while selecting a location and/or a structure in which to establish a warehouse/storage facility.
Anticipated Cargo Needs
When planning a new warehouse space, organizations should consider what the anticipated cargo needs will be. Cargo needs will at least include the maximum anticipated volume at any given time, however they should also factor for special handling requirements or special activities, such as kitting. Understanding the full scope of the warehouse may require consultations between program and logistics personnel, and a mapping of programmatic activities over the coming period of time. Even a relatively small volume of cargo may require a large area in which to operate.
- Total anticipated volume of cargo for the specific storage location.
- Numbers and types of independent types of goods (SKUs) needing to be accounted for.
- Interior space adequate for the anticipated flow of work.
- Need for handling equipment (MHE) for cargo items – MHE parking spaces, recharging, etc.
- Duration stored goods will stay for / the duration the storage site may be required for.
- Need for ancillary activities – repacking, labelling, kitting, break bulk, etc.
- Speed at which throughput/ancillary activities may be required – multiple loading bays, large dispatch area, etc.
- Need for special storage - cold chain, dangerous goods, etc.
- Additional planned buffer stock required.
The individual volume needs of different organizations can vary. A generic list of volumes per common relief item can be found in the below table:
Irregular Shapes - Some irregular items, such as mechanical or farm equipment may have complex physical attributes that make space planning hard. When looking at highly irregular shapes, planners should consider the outside measurement of only the longest, widest and tallest parts of the item, as those are the parts that will come in contact with other stored items in a warehouse. To do this, planers should imagine an invisible box that is barely large enough to fit the irregular item, and use the “edges” of the “box” to calculate the total required space. In this way, the overall space requirement may actually be larger than they first appear.
Nested Cargo – Some cargo items can be neatly “nested,” meaning that they can rest inside of or occupy space inside of each other. Buckets – a common humanitarian item – can fit inside one another, taking up considerably less space when stored appropriately. When planning space, organizations should account for nested storage by measuring the outer dimensions of the items while stacked/nested, and not the outer dimensions of the individual unit. In this way, overall space requirement may actually be less than they first appear.
Physical Storage Space Aspects
Once the anticipated project and volume needs are established, organizations planning storage should review and assess the physical aspects and amenities associated with a potential storage space. Though there may be enough interior space to accommodate purely volumetric calculation, warehouses and storage sites may be lacking key infrastructure, or require substantial improvement to meet operational needs. A non-comprehensive list of physical space needs might include:
- Ample space for trucks to enter, park, load/offload and turn around.
- Warehouse/storage site is not prone to flooding or other extreme weather events.
- Impact on the soil/sand/ground in the truck parking/offloading areas and kitting areas during routine activities – will the ground remain unaffected, or will improvement and maintenance be required.
- Location/Building has access to basic unities - electricity, water, communications.
- Location has bathroom facilities on site.
- If required, the storage space has separated compartments for different storage areas/different storage needs – climate controlled, secured areas, etc.
- A usable office space of appropriate size.
- The capacity to refuel trucks – does the site have existing refueling tanks, or do tanks need to be installed.
- Proposed warehouse site has an existing physical structure.
- Existing structure and surrounding grounds are in good condition – if not, consider required upgrades.
- If required, location has drive-up loading bays for vehicles.
- Location has adequate walls, doors, and ceilings – if not consider cost and complexity of required repairs.
- If required, location has existing racking/shelving.
- Storage space floors smooth and free from cracks, and capable of supporting required activities.
- Walls are flat and free from pipes, exposed electrical wiring, support beams or other protrusions that might impact storage.
- Structure is free from any perforations that may lead to water or pests coming into the facility.
- There is proper drainage around structure – if not, consider cost and complexity of making drainage.
General Storage Location
The geographic location of the proposed site is also important – a poorly situated site may impact costs and time to adequately delivery humanitarian aid, and generally reduce opportunity to access markets and services. General things to consider when selecting a storage site are its proximity to key things, such as:
- Proposed site location is near the primary areas of intended use.
- If in a capital city, consider the need for the warehouse to be near the airport/sea portseaport.
- If in a field setting, consider the need for the warehouse to near the intended distribution sites.
- Proposed storage site is near major arterial roads used for transport.
- Proposed location as easy access to transporters and casual labor.
- Storage facility will be easily accessed by organization personnel.
Safety and Security
Overall safety concerns should be included in planned warehouse and storage space. Safety measures might include the physical components of a warehouse, but also the prevailing security surrounding the proposed location. When considering safety needs of a proposed site, organizations should also include security personnel in the planning process.
- Physical structure has a fire suppression system, and emergency exits – if not consider costs of installing fire suppression equipment.
- Storage location has built up walls/fences and access gates.
- Storage location has guard post and guard quarters, and possibly available guard service – many storage sites will require agencies to contract their own guards.
- Warehouse is not near any known or anticipated major targets - military bases, police stations, government offices, etc.
- Warehouse is not near potential hazards – chemical processing depots, fuel stations, landing strips, etc.
- Area is not known for security incidents in the past.
- Proposed location is not exposed and relatively inconspicuous, if possible.
Once a warehouse or storage location has been selected meeting the needs of the humanitarian organization, and the overall response plan, and the facility has been fully restored or renovated to match the storage requirements, agencies will have the opportunity to design the physical layout of the warehouse space and any associated MHE or storage aids. It is important to understand the basics of a warehouse layout upfront to avoid problems later.
Physical Warehouse Layout
A proper warehouse layout should not impede the physical flow of work, increase the risk of damage to items, or impact physical safety of any persons in or around the warehouse.
Larger Built-up Warehouses – Larger, more built up warehouses and storage facilities have a variety of layout and space management options. The overall need for the various components of a warehouse are dependent on the needs of the agency and the physical features of the available space. Some of the things to aid agencies may wish to consider when looking at larger warehouses might include:
Example warehouse floor plan of a larger warehouse operation:
The ways in which cargo is physically stored in a warehouse can dramatically increase usable storage space, increase efficiency, and impact safety. Generally, there a few main categories through which cargo is physically stored and handled.
- Stacking irregularly shaped cargoscargo.
- Warehouse space with constantly changing racking needs.
- Quickly moving entire racks from one place to another.
If loose cargo is stored in the racks, it should be properly braced, secured, or wrapped. The entire frame can be moved by a forklift, and frames can be easily stacked as high as safely possible to take advantage of vertical space. Unfortunately, stacking frames can only be used in warehouses with smooth and stable floors, and where forklifts can safely operate. Many larger facilities use stacking frames to augment racking and shelving, especially for irregular shaped items that cannot be easily stacked otherwise.
- Small, low quantity, loose items – example: vehicle replacement parts.
- Items that are dispensed at small quantities – example: medications.
- High value items – example: computer equipment.
Shelving an can easily be constructed in remote field warehouses from local materials, insofar as the local materials can physically support the required stored items. Shelving can also be installed anywhere inside a larger warehouse, however the location should make contextual sense. As an example, shelving may be used as an intermediary stage of order fulfillment; a warehouse may have pallets/large cartons of items small items, but only receive pick orders for low quantities. A reasonable quantity of stock may be moved to pre-defined shelf space to facilitate ease of fulfilling low or item level pick orders. Shelving may require a separated space physically separated from the main warehouse floor; high value items or controlled goods might be better suited stored on shelving in a separate lockable space.
Ground storage of loose items is quite common in humanitarian settings. Most remote field warehouses are usually too small to accommodate specialty equipment installation, lack the sufficient infrastructure to properly support MHE, or are temporary structures in nature. A substantial portion of humanitarian relief supplies don’t necessarily require advanced handling either. There are several tricks to properly managing stacks of cargo, which are covered in the stock management section of this guide. Humanitarian agencies should resist the urge to use ground handling in all contexts despite its prevalent nature; commodities such as medication may benefit from not being stacked in a pile. Space planers should also resist the urge to fill up all available space when utilizing ground storage; warehouses and storage facilities using ground storage and stacking should still observe the 70/30 rule, keeping lanes and aisles open for safety while making room for loading and offloading.
Pallets – Pallets have become ubiquitous across transport and warehousing operations globally, however there is a wide variety of sizes, dimensions and physical construction of pallets. Though local warehouse managers may have very little control over the types of pallets that might arrive, an understanding of pallet differences can assist with both space planning, and safe utilization of racking and MHE.
Both the square meters and side dimensions of pallets have implications for how pallets consume floor space in warehouse and trucks, how pallets may fight fit through doors, and how a pallet might be stored in elevated pallet racking. In addition to differing dimensions, there are different body constructions and different materials used in building pallets. Common pallet constructions:
Two-way entry pallet - close boarded, no base board
Four-way entry pallet - perimeter base
Four-way entry pallet - close boarded, 3 base
Two-way entry pallet - reversible
Four-way entry pallet - close boarded, perimeter base
Four-way entry pallet - open boarded, 3 base
Four-way entry pallet - wing type
Two-way entry pallet - wing type
- Pallets come in either two-way entry or four-way entry, meaning forks can lift from only two side or all four sides.
- Pallets can be reversable or nonreversible. Non reversable pallets mean only one side has a stable surface upon which cargo can be stored. Non reversable pallets are sometimes called “skids.”
There may also be requirements for pallets to be fumigated, heat treated, or made of plastic. Pallets are predominantly made of wood, and different wood sources are more prone to infestations that can impact stored goods. Some countries even have regulations prohibiting the use and transportation of untreated wood pallets.
Material-Handling Equipment (MHE)
Material-Handling Equipment (MHE) is defined as any mechanized or manual machinery to assist with the movement of cargo, either around a warehouse or during the transport process.
MHE typically involved in warehousing operations might include:
Forklifts – A mechanized power loader capable of lifting full pallets and heavy equipment. Forklifts come in a variety of sizes to meet a variety of load needs, but generally come with an enclosed cab and a four wheel base. All forklifts will have a hydraulic or chain powered “mast” capable of extending and lifting cargo vertically. The height and lift capacity of the mast depends on the rating of the forklift, and more information can be found from the manual or manufacture website.
Depending on the make, forklifts can be powered by either battery, compressed gas, or diesel/gasoline. Forklifts are generally designed for either use inside a warehouse with even surfaces, or for all terrain outdoor use.
Before obtaining a forklift, humanitarian agencies should consider:
Pallet Jacks – Sturdy, low centre push cart with forks capable of lifting a pallet a few centimetres off the ground. Pallet jacks are typically only powered by hand, using a hydraulic piston to gently lift and lower pallets. Pallet jacks generally require flat surfaces and only work indoors, but can assist with moving large loads quickly and with minimal effort.
Dollies – Occasionally referred to as hand trucks, dollies allow for moving of stacked cargo without the aid of a pallet. Dollies can be useful for moving relatively small loads, such as a stack of cartons, or a single large item, such as a large roll. Many dollies are designed with heavy duty inflatable ties to assist with operating outdoors.
Push Carts and Others – There are a variety of other simple tools to facilitate the movement of cargo around a warehouse or between mode of transits. A very common tool is a standard push cart, however there are many variations on sizes and components, and users should select the support tools most useful to them.
A warehouse working with large MHE and palletized cargo will have some different needs than a small field level warehouse. Additionally, larger facilities may have contracts with professional cleaning or repair companies, while smaller facilities will be purely self-managed. The basic tools and equipment of a warehouse should reflect the daily needs of the operation, and the prevailing environmental conditions. Planners should think through their basic supply needs when establishing a warehouse; an overabundance of basic tools may cost more, but a lack of tools can stop an operation entirely.
Safety and Security
When establishing any warehouse or storage facility, adequate physical security measures must be enacted. In humanitarian contexts, relief supplies are incredibly attractive to thieves – often humanitarian supplies are in short supply and the chaotic environments and limited infrastructure make theft frequent and hard to trace. Additionally, the overall operating environment may make responding to injuries caused in the workplace difficult. Aid agencies should have solid measures in place ensure a safe and secure workplace for stored items and workers.
- High visibility vests worn by warehouse workers and visitors as needed.
- Warehouse workers have sufficient and adequate breaks.
- MHE is properly maintained, and support equipment such as ladders is not compromised or damaged.
- Staff who operate MHE are trained and/or certified for that equipment where required.
- Stocked first aid kits available on site.
- Warehouse workers wear proper protective equipment, including gloves, hard hats, ear and eye protection as required.
- Fire exits are clearly marked.
- Lanes for movement of MHE are clearly marked on the floor.
Situational Safety – As the storage site is established, agency security personnel conduct periodic reviews and follow incidents accordingly. Safety and security assessments of the warehouse and the surrounding areas should be conducted at least once a year, and security incidents occurring on site or in the immediate area should be properly reported in a timely manner.
Once a facility has been fully selected and is operations begin, agencies will need to continue to maintain, or ensure that the third-party associated with running the facility maintains the physical structure, supporting equipment, and immediate grounds around the facility.
- Be built with either the front and or back facing prevailing winds to minimize wind pressure.
- Should not be constructed in a low point, or in a location prone to flooding.
- (Ideally) MSUs Should be built on free standing slabs to elevate the MSU above waters caused by rains or flooding.
- MSUs must be properly secured, lockable from the outside and difficult for anyone to climb under the outer apron.
Damage to physical MSUs such as warping of beams or tearing of vinyl siding must be assessed, and repairs conducted by a knowledgeable person. Cracks or damage to MSU foundations must be repaired quickly to prevent further compromising the structure.
- Fumigation – external companies may be able to be contracted to provide fumigation services.
- Rat traps/glue – placing pre-made traps around the warehouse to capture rodents.
- Keeping warehouse floor clean at all times.
- Removing spoiled/rotten items from the general stock and disposing as soon as possible.
In the event an infestation is identified, records should be taken of the date and type of treatment used. Records can help schedule routine fumigation or product inspection, but also may indicate seasonal problems as well.
The documentation requirements for warehousing can be vast, depending on the type of warehouse, regulatory controls over the stock or the facility, the types of commodities stored, or the specific activities of the agency running the facility. Documentation might include inspection reports, fumigation schedules, repairs, import/export documents related to bonded storage and more.
As an overview, most humanitarian agencies will use at least several standard documents across all of their storage operations, including large professional facilities all the way down to field level storage. These documents are essential for the proper audit and tracing of cargo as it flows in and out of agency managed facilities. It is important that this standard document be accurate, and that copies are properly kept – both at the site of operation, and eventually scanned/backed up in another location for wider historical record keeping.
- The vehicle is managed/owned by the agency.
- The destination of the vehicle is a facility or distribution site managed by the agency.
- The contract with the third-party trucking company stipulates that they must use agency specific waybills.
- A GRN may capture information on multiple consignments arriving at once.
- GRNs may take the place of waybills, which may show up with incomplete or incorrect information, or may not come at all.
- GRNs are a form of standardizing incoming information in the format most useful to the organization.
- With proper planning, a GRN can be generated prior to a shipment arrival so warehouse crews know what to expect at the point of offloading.
GRNs should capture dates, locations, persons involved in the transaction and the contents of the cargos cargo entering the warehouse. The exact structure, contents and sequence of a GRN vary depending on needs – as an example, an organization focused on medical interventions may need to track batch and lot numbers, while an organization focused on food may choose to track items by the kilogram. Organizations should consider their own internal requirements when drafting a GRN.
Example Stock Card:
A stock card should at the bare minimum include:
- The item description
- The SKU code (if available)
- Any consignment or procurement relevant information.
- Dates and quantities of cargo items received.
- Dates and quantities of cargo items released.
- Running total balance.
Certain types of goods requiring more meticulous control and analysis, may and need to be tracked using stock cards with specific information, including but not limited to:
- Project or donor earmarks.
- The SKU code (if available).
- Relevant product info - Expiration dates, batch numbers, lot numbers, date of manufacture
- Project or donor earmarks
- Reorder threshold
- Manufacturer references
- Temperature control requirements
The stock card has inventory control purposes and is normally managed by the store keeper and updated immediately with each stock movement, including losses. The use of stock cards is imperative in all warehouses, even if the number of articles is short or there is limited rotation. In an ideal context, any warehouse worker on the floor should be able to quickly reference a stock card for the most up to date information on the status and flow that specific good in a warehouse. Quantities and dates on stock card should also match the quantities and dates on a warehouse ledgerinventory Ledger, GRNs and waybills.
Warehouse Ledger – A warehouse ledger For some items, bin cards can be introduced. These may have a similar format as the stock card but are fixed to the bins or shelves where the items are kept. Bin cards track movements of an item stored in a particular bin, shelf or stack. Bin cards are used when big quantities of the same item are stored, requiring some kind of grouping, easing handling, picking and counting processes.
There is no one standard for a warehouse ledger inventory Ledger system. Historically, running warehouse ledgers inventory Ledgers were recorded by hand in a book, but modern systems may use computer-based spreadsheets, specially designed software, web-based tracking, and more. The important part is that a warehouse manager can quickly and on-demand find relevant information for any stock item contained in the warehouse through a single centralized system.
In an ideal cargo reception process, incoming shipments should be arranged prior to the delivery vehicle arriving and information on incoming shipments should be communicated to the warehouse team in advance. Ideally, the consignment contents and volume, and possibly even a scanned copy of a packing list and/or waybill will be communicated in advance as well.
- If a single organization is moving cargo between two warehouses/storage locations it directly manages, it should be relatively easy to provide advanced delivery information to the receiving location.
- If the warehouse in question is receiving cargo from outside sources such as a vendor, agencies should endeavor to obtain as much information as possible up front.
- In any situation, vehicles approaching the warehouse or storage facility should be instructed to call at least one hour in advance to ensure the warehouse can adequately receive and offload the vehicle. In storage facilities with busy operations, the vehicle will need to be scheduled for a specific time for offloading.
At Cargo Reception
Steps to take at the point of receiving cargo into a warehouse facility include:
- The weights and volumes for each line item are recorded.
- Full count is conducted against the waybill. Discrepancies between the piece count and the waybill or damages should be noted on the waybill.
- A goods received note (GRN) for the received items is generated.
- Items are placed in appropriate, corresponding place in warehouse/stock room.
- Physical copies of the GRN and Waybill are backed up in a secure location in the office warehouse.
- As item are placed in the warehouse, stock cards should be updated. If no stock card yet exists, a new stock card should be generated.
- Shipments arriving without prior notification may be rejected, depending on security, warehouse capacity and policy of the organization.
- If damaged items are received, they should be separated from the main consignment and placed in a well-marked location, to be repaired or disposed of later.
Much like planning cargo reception, there are steps that warehouses and organizations can take to plan for cargo dispatch as well.
- Cargo dispatch should be planned in advance and communicated to the warehouse; pick orders should be clear, and warehouses given time to pull down cargo, compile shipments, and stage for pick up.
- Vehicles arriving for pick up should be known and scheduled in advance. Vehicles arriving for unplanned cargo pick-ups, or arriving announced for planned cargo pick-ups may be delayed or rejected based on the policy of the managing organization.
At Cargo Dispatch
Steps to take at the point of releasing cargo from a warehouse facility:
- A physical piece count on the consolidated cargo is conducted to confirm correct number.
- A waybill or a goods released note is generated (if required by the terms of the movement), containing information on the released cargo, dates, and names of person releasing and driver picking cargo up.
- Stock cards and warehouse ledger inventory Ledger updated with the new piece counts.
Physical Storage Guidelines
Irrespective of the size of the warehouse/storage facility or nature of the storage arrangements, there are basic rules humanitarian organizations can use to enhance their physical stock management processes.
In any situation where cargo is stored for any period of time, it is strongly advised that humanitarian warehouse managers utilize both some form of warehouse ledger inventory Ledger and a paper stock/stack/bin card system.
An ideal warehouse ledger inventory Ledger will be electronically maintained, utilizing some form of spreadsheet or special use software. The ledger should be constantly kept up to date, and should be easy to access and understand by any team member responsible for accounting for cargo on site.
Stock/stack/bin cards should be clearly visible from the floor of the warehouse, legible, easy to read, and utilize the local language of operation. Stock/stack/bin cards should match the warehouse ledgerinventory Ledger.
Stock managers must by default practice FIFO – First In / First Out – unless otherwise required to. Some storage facilities may have large volumes entering and leaving the physical facility, and managers must take care to ensure that old stock is not forgotten or ignored.
Stored cargo must always be separated from the ground, using pallets, tarpaulin, shelving, or racking. Warehouse managers should be constantly motoring the status and condition of stock on hand. All handling units should appear in good condition, and be free from avoidable damage of any kind, including water damage, punctures or rusting. If cartons or items appear to be crushed, punctured or experiencing damage from regular wear and tear, they must be separated, repaired (if possible), and returned to inventory in a manner that prevents future damage.
It is strongly advised that a full stock count should be conducted at least every six months, if not more frequently depending on the size of the facility and the overall volume of throughput. Stock counts should be conducted “double-blind” – a method to reduce human error or tampering of individual counting. How a double-blind stock count works:
- Two teams of two persons each (four persons total) are identified in advance. These two teams will conduct the count sequentially. All four persons should ideally come from different parts of the organization, and not have direct control over the stock or direct financial incentive to tamper with stock counts.
- Warehouse activities are completely halted during the time of the stock count. This means that no cargo goes in or out, and stored items are not moved around the facility. Ideally, only counters should be let inside the facility during counting.
- The two team should meet in advance to ensure all parties understand the process.
- The first two-person team starts at one far end of the warehouse/storage facility and begins counting, using a pre-defined common understanding (example: Piece count per shelf, piece count per line item, etc). The first team member counts, while the second team member records on a pre-defined recording system.
- The second two-person team begins after the first two-person team. The second count can begin after the first count has ended, or even by waiting for only a few minutes.
- The second team will count using the same agreed upon common understanding. The second two-person team can start from the same location as the first team, or start from the opposite side of the warehouse.
- Once the full warehouse/stockroom has been counted fully by both parties, both parties sit down and compare counts. Any place where there are discrepancies between the two counts, both parties must go to that stock location and reconcile the differing counts.
- Only after both teams have come to a mutual agreement on the stock numbers can the count be considered closed.
Some agencies prefer to have an appointed person to oversee or manage the counting teams. Agencies may also choose to employ the “stock tag” system to facilitate counting. The overall size of the warehouse and quantity of items stored within it will determine the length of time required to complete a full double-blind count. A small facility could be completed in a just a few hours, while a large facility might take several days. Humanitarian agencies should consider their storage setups when designing a stock count system.
DisposalThere are a variety of methods for conducting physical inventories. Agencies should review different inventory methods, and set up guidelines and time intervals for conducting inventories, including ad hoc and regularly scheduled annual inventories.
Throughout the course of managing physical stock, damaged items will be discovered, either as a result of age, expiration, mishandling, or even from items that were defective in the first place. As damage items are discovered, they must be clearly marked and addressed. Some damaged items can be repaired, especially if damage is only to outer packing. An item that is ultimately still usable, but has damaged outer packing can be repacked into new cartons/bags where available, the packaging itself can be taped or sealed. Even if there are no replacement cartons/bags available, the usable items can be stored loose on the racks/shelf/stack and be marked for usage first during the next pick order.
If the core item is ultimately not usable due to extensive damage, spoilage or expiration, the item will need to be separated from the rest stored goods. Damaged goods should be clearly marked, and stored in a separated area. Depending on the severity of the damage, a loss report may need to be generated, including the number of units damaged and the associated values. As damaged items are removed from the general inventory, inventory Ledgers should be fully updated, with damaged items clearly indicated as being deducted from the full inventory count.
Damaged items may need to be returned to a vendor, handed over to third party authorities, or be disposed of.
As warehouses continue throughout their operations, they will inevitably need to dispose of damaged, expired, or no longer required goods. Disposition of any item must be done in an ethical, environmentally friendly and legal manner, all in compliance with the internal policies of the organization managing the facility. Options for disposition:
- Donation/Resale – items still in usable condition can be sold or donated to other agencies or local populations in accordance with donor regulations and internal financial policies.
- Dispose – some items can be thrown directly into the trash without concern, such as small quantities of expired food stuffs or cardboard.
- Destroy – some items, such as expired medication, harmful chemicals, bulk foodstuffs, and specialty “dual use” or military grade hardware, may need to be actively destroyed. Many local authorities have regulations on the destruction of these items, and there may even be authorized companies certified in destroying key materials. Agencies should investigate local laws and seek out disposal companies whenever required.
- Re-export – some items, such as heavy machinery, may need to be re-exported from the country of operation. Re-exporting of key items may be required by donors and national authorities, or may be just more cost effective than local disposition.
Ground Storage / Stacking
Ground storage and stacking is extremely common in humanitarian warehousing operations, especially in field settings near the final distribution points. Storing cargo on the ground and/or in stacks has become a default, largely because the necessary infrastructure to manage special warehouse equipment of storage solutions isn’t always available, there are limited skill sets available in the local market, and many of the smaller field warehouses are by nature transitional.
Cargo stored on the ground or in stacks should always be clearly demarcated. A stock card should physically accompany every stored SKU item, and warehouse mangers managers should be able to quickly identify and pick orders without having to sort through piles of non-related items.
- A safe height may be context specific; for NFI cartons/bales/sacks of any size that are heavy enough injure workers, stacks should never exceed 2.5 meters, while light voluminous items such as empty plastic jerry cans might be stored higher if required.
- No matter the height, warehouse workers should be able to safely withdraw cargo from the top layer without risk of falling or causing the stack to collapse.
- A stack should not surpass a ratio of 3:1 - the height cannot be 3 times the vertical length than the horizontal width of the base.
- Stacks should never be so high that they come into contact with the ceiling, and at least half a meter space should be left between the top of the stack and the ceiling for accessing items as needed.
- Spoiled or damaged items in the middle are difficult to spot or deal with
- Practicing FIFO may be difficult of cargo in the middle of a large stack is inaccessible
- Visual counting may be difficult or impossible
- In some circumstances, that much Excessive weight in a single area of the warehouse may lead to structural risks
Ground storage of cylindrical items must usually be done in way to prevent items from rolling or falling. Ideally, items like tires and metal drums should be stored with their flat surfaces facing downward on a pallet or tarp. In some cases, cylindrical items may not be able to be safely stacked on their flat surfaces due to height restrictions, weight concerns, or the overall dimensions of the item – in which case guard barriers can be built outside the pallet or floor storage to keep the items in one place. Any guard barrier should be strong enough to contain the weight of the combined items.
Loose timber and lumber is are commonly stored throughout the humanitarian sector. Timber should:
- Ideally be stored outside in a covered space.
- Separated by type/length/requirement.
- Be easy to count.
Thought it may be tempting to stack timber in a pile, dense piles of wood can lead to infestation or rot, and make proper accounting very difficult. To facilitate timber management, solutions might include:
Double stacked pallets are defined by one or more pallets placed on top of each other without the additional layer of a pallet rack or support structure. Double stacking is fairly common in transport, but should be avoided for any form of medium to long term storage in warehouses. A double stacked pallet can easily fall over and injure warehouse workers if any part of the bottom pallet is compromised, often without warning. A collapsed double stacked pallet can also easily destroy the contents of one or both of the individual pallets. With the inconsistent flows and constant changes of a humanitarian supply model, a double stacked pallet may end up being stored for much longer than originally planned, and managers may forget or simply not realize the dangers of double stacking.
|Double Stacked Pallet|
Cargo stored on pallet racking has advantages and disadvantages. Though use of pallet racking affords the efficient use of vertical space and rapid movement of large volumes of cargo, users of pallet racking sacrifice the ability to manage cargo at the unit level, instead having to work mostly with palletized cargo.
Pallet Rack Safely in Use
Warehoused items stored on shelving offers the quickest and most organized access to the lowest inventory unit. Where as ground stacking or pallet racking are meant for large scale storage of high volumes of items, shelving should be treated as a sorting point for individual items, much like items stored on the shelf a local store.
- Shelved items should have stock cards clearly visible and accessible. If shelved items are taken from a larger consignment in the warehouse, both the warehouse stock and the stock on shelving should probably be tracked on separate stock cards.
- Shelves should not be overloaded, and all items should be clearly identifiable and separated.
- Shelves should be clearly numbered for ease of reference.
As shelving tends to contain loose items or items at the unit level, there are a few tricks warehouse and stock managers can use.
- Fragile items such as glass vials can be stored on the bottom shelf to reduce the risk of accidental breakage if handling units are dropped or fall over.
- Liquids, powders and solids should be clearly separated. Liquids should be stored on bottom shelves, both because of their weight and because a ruptured package might leak on all items below it.
- Some like-items may still need to be separated. As an example - the same quantities and dosage of a single pharmaceutical may have different expiration and/or batch/lot numbers, or different items belong to different donor grants. Each item will need its own stock card and clearly defined space.
Temperature Controlled Items
The need for temperature-controlled storage has been increasing in the humanitarian operations over the past few decades, and agencies are becoming more aware of the challenges surrounding temperature sensitive cargo. Temperature control ranges are generally defined in the following ranges:
Cold-Chain - Cold-chain storage includes anything in the “frozen,” “refrigerated,” or “cool” categories. Cold-chain management requires equipment specifically planned and used for the required temperature ranges. This might include keep cool boxes, specially calibrated refrigerators, and refrigerated trucks/containers. Cold-chain also requires special monitoring and training. For more information on cold chain management, please refer to the cold-chain section of the LOG.
Warehouses are frequently a holding and consolidation point for extremely dangerous items, and humanitarian storage facilities are no exception. Humanitarian agencies may be handling and storing highly volatile or reactive compounds without understanding them. Field level warehouses may not have the proper storage set up for dangerous items, and workers may not be fully educated on the proper handling of dangerous items.
Fuel – Storage and management of fuel is sometimes referred to as “Hot Work,” and can be extremely hazardous. Liquid or compressed gas fuels by their nature are highly combustible and should be treated separately than other storage items.
Fuel should be stored in a separate storage area outside the main facility, and at least 10 5 meters (preferably more) away from the main structure. Any fuel storage area should be well ventilated, and be accessible only by designated persons. Fuel storage areas should have the appropriate fire suppression equipment nearby, and staff should be instructed not to smoke or perform external work in the immediate vicinity of the storage area. Never store fuel in a completely enclosed storage facility such as a shipping container, or a facility that can reach excessive heats.
Other dangerous goods common to humanitarian operations might include compressed gas cylinders. Even if a compressed gas cylinder is storing non-flammable compounds, contents under pressure can cause violent eruptions that can harm or kill handlers. Compressed gas cylinders should never be stored in excessive heat, and should be laid on the ground or securely fastened to a wall. If possible, avoid storing compressed gas altogether, or for as short as possible.
Some items may not be dangerous to handle, but are considered “regulated,” either due to their value or for legal reasons. Some governments may deem some medications, communications equipment, or other specialty items as regulated items, resulting in a requirement for special handing. Controlled storage spaces might also be used for bonded or pre-cleared cargo.
Regulated items should be safely separated from the rest of the storage facility. Regulated storage space should be access controlled, with only appropriate personnel having keys or authority to enter. Depending on the specific regulation, regulated items may require special labelling, and more frequent inspection, and may even require inspection from outside companies or government offices.
The proper storage of mechanical equipment can be frequently overlooked in storage settings. Mechanical equipment, including generators, vehicles and pumping equipment, will still require routine inspection and maintenance. Equipment with engines will still have plastic and rubber components - including sealants, filters, valves and tubing – which will degrade over time and render the equipment useless. Equipment with liquids - such as motor oils, gear lubricants, or fuel – can evaporate, harden or even slowly corrode machine parts. Large external rubber surfaces – such as tires, water bladders or inflatable boats – are especially prone to damage in long term storage or excessive heat.
The longer equipment is stored for, the more likely it is to not be usable when the time comes. This is especially problematic in pre-positioning facilities, but should be observed in field warehouses as well. Where required, storage of specialty mechanical equipment should be kept for as short a time as possible.