THE CONTEMPORARY ISSUES OF WAREHOUSING AND DISTRIBUTION IN SUPPLY CHAIN MANAGEMENT

THE CONTEMPORARY ISSUES OF WAREHOUSING AND DISTRIBUTION IN SUPPLY CHAIN MANAGEMENT. (A CASE STUDY OF UNILEVER PLC, NIGERIA)

 

Abstract

This paper “The contemporary issues of warehousing and distribution in supply chain management” tries to identify the current challenges facing warehousing and distribution in supply chain management using Unilever mega distribution centre (Unilever MDC agbara) in Nigerian as a case study, Through personal experience as a reach truck operator in Unilever, research, and interview of professionals in the field of supply chain management i am able to identified the following common contemporary issues of warehouse and distribution:

  • Impediments of material flow
  • The multiple handling of stocks during operation
  • Inefficient use of storage and handling equipment
  • Lack of warehouse strategic planning
  • Lack of maintenance culture &cost control

The aim of this project is also to analyze in detail all the challenges mentioned above and the activities of warehouse operation that lead to these contemporary issues in warehousing and distribution and provide a profound solution to each in order to achieve warehouse optimization, space utilization and overall cost control.

Keywords: warehouse management system (wms)

Enterprise resource planning(ERP)

 

 

TABLE OF CONTENT

Title Page                                                                                               i

Certification                                                                                            ii

Dedication                                                                                              iii

Acknowledgement                                                                                  iv

Abstract                                                                                        v

Table of Content                                                                                    vi-vii

Chapter One

1.0         Introduction                                                                                       1-4

1.1         Unilever Plc as a company                                                       4-6

1.2         Research Method                                                                     6

Chapter Two

2.0         Material Flow                                                                           7

2.1         The fluid model of product flow                                              8

2.2         Units of handling                                                                     8-10

2.3         logistics goals                                                                           10-12

2.4         Supply chain                                                                            13-14

2.5         Lean                                                                                         14-15

2.6         Lean warehousing                                                                    15

2.7         Approach in terms of lean strategy                                            15-16

Chapter Three

3.0         Warehouse operation                                                                17-18

3.1         Warehouses as part the logistics system in the supply chain       18-19

3.2         Why focus on warehousing                                                      19-22

3.3         Receiving                                                                                 22

3.4         Put-away                                                                                  23

3.5         Order-picking                                                                           23-31

3.6         Shipping                                                                                  31-33

3.7         Warehousing cost                                                                     33-34

Chapter Four

4.0         Storage and handling equipment                                              35

4.1         Storage equipment                                                                   35-36

4.2         Pallet storage                                                                            36-38

4.3         Storage equipment                                                                   38-40

4.4         Bin-shelving or static rack                                                        41-44

4.5         Summary                                                                                 45

4.6         Conclusion                                                                              45

References                                                                                    46-48

 

 

 

 

Chapter One

Introduction

Warehousing and distribution has been inn existence since the beginning of human history, it all started from less form to a complicated and advanced form of 21et century logistic revolution that we all enjoy today, let us imagine what will be the challenges of logistic in West African State between Oyo Empire and Benin republic in 12th and 15th century, a time when warehousing and distribution in West Africa still remain in its pure crude form or let us quickly go back to the word Logistic called “Logistika”, this is a Greek word used for military officers responsible for ensuring the supply and allocation of resources so that the soldiers could move forward efficiently during ancient Roman and Greek war, it means warehousing and distribution of foods, water, ammunitions, drugs and other necessary gadgets of war are very important for the survival of the soldiers I war front.

From this little historical fact, it is very clear that winning a war is not only by best practice of strategies but also with best practice of warehouse and distribution of war materials, yet there are logistical challenges of warehousing and distribution during this era, a time where there are no sophisticated logistic technology we experience today.

Through ages of logistics humans have always seeking to device new ways of solving the challenges of warehousing and distribution, as time progress, logistic advanced greatly with the addition of railways, ships and industrial revolution of 18th and 19th centuries. After World War II, logistic move tremendously from war fare to business, warehousing and distribution focus on inbound and outbound process and it has been a continuous improvement till the present time.

The Theme of the project is the investigation of possibility for optimizing warehousing operations through the change of material flow and space utilization. Influence on the change on financial results of the Company is also considered, and also looking into the Company providing all the data for the research is “Unilever” plc, located in Agbara Ogun State, Nigeria. I have been working for the Company for more than a decade now and this has given me in-depth knowledge of supply chain management to a certain degree, so it very clear to me that Warehousing plays an important role in the supply chain, and here’s why:

Continuous production – Factories need to have their raw materials stored so they can make a continuous supply of goods. The storage allows the factories to have enough raw materials put by so production is production.

Large scale production – Production needs to take current demand and future demand into consideration. Manufacturers are able to create their products in huge quantities, saving money. The products are then stored until sold.

Price stabilization – Sufficient stock in warehouses is required to keep a sensible level of the price of the goods. If the goods are in scarce supply the price could be increased. If there are too many goods the prices may need to fall to move the goods. Warehousing allows the price to be stabilized.

Quick supply – Industrial and agricultural goods are often produced in specific areas and then sent throughout the country. These goods need to be stored near where they’re consumed so there isn’t a delay getting them to the consumers.

Seasonal demand – Goods are only demanded seasonally such as arm clothing during the winter. Storage allows these goods to be produced during the year so they’re ready when they’re needed.

Seasonal production – his is when the seasonal commodities are harvested at set times of the year but are purchased and consumed throughout the year. Storage allows the commodities to be supplied when needed.

A warehouse requires labor, capital (land and storage-and-handling equipment) and information systems, all of which are expensive. Is there some way to avoid the expense? For most operations the answer is no. Warehouses, or their various cousins, provide useful services that are unlikely to vanish under the current economic scene, but yet there are contemporary issues that need to be check mate in order to perform effectively and efficiently.

It was known in advance, that warehousing is troublesome and changes are desirable. My task was to find what operations are all right and what are the obstacles preventing good performance. Coming up with ideas for the improvement of the situation was part of my work as well.

“Unilever” plc as a Company

Unilever come into limelight of modern warehouse in 2013 and kick-off  full operation with  double-deep rack warehouse that has 25 pallet capacity, 7double-deep Raymond reach truck,10 electric forklift and  3 electric power pallet truck, this is a huge amount invested on equipment that need a serious focus of maintenance culture, they also spend a lot on warehouse management system (WMS) with the use of  RADIO FREQUENCY SCANNER to drive a real time operational activities and inventory control, at the middle of 2014 additional 5reach truck was added making it 12 reach truck into the operation in order to increase productivity, but due to lack of lack of maintenance culture at the middle of 2016 almost all the reach trucks  turn to scrap while the 10 forklift become scraps, this is  a huge loss on asset  that suppose to be in operation for at least 10 year  but never last for 5 years, the generation of revenue for future purpose on the equipment eventually put to halt,  and also lead to down side of employees the organization cannot longer keep.

The invest in warehouse management system (wms)  cannot be over emphasis in 21century logistic revolution, this make Unilever to also implement R/3 SAP (system application product), an Enterprise  resource planning (ERP)  to achieve the following:

  • Inventory control and management
  • Customer service and tracking
  • Company productivity
  • Return investment
  • ERP integration

But the reverse was the case due to bad warehouse practices, pick face that was design for picking of fractions were rendered useless and this lead to breaking of bulk stock and multiple handling of stock and also increase travelling time during order-picking within the rack, at the end of it all the company is losing more through operational expenses, since the last two years UNILEVER has been in serious chaos of bad warehouse practice which is really affecting the employees at the lower level of the pyramid and yet the management at the top level of the pyramid had done nothing about it and this is one of the reasons why I embark on this project.

Research Methods

I have spent many months working for the Company while writing this thesis work. The company has provided me with some basic data, financial accounting tables, and some reports. I took part in everyday work of the organization and it caused my observations, which are included in the thesis. This work also contains information taken from the knowledge and work experience over a decade.

The theory is taken from books, articles, and Internet publications. The thesis also includes my own knowledge, experience, and ideas. The work is based on available information, which I have worked on and got assumptions, tables, and analyses as a result. Research methods in this thesis work are qualitative; data was collected, analyzed and preceded with new ideas as a result.

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