- Improve the management performance of raw materials in the stock at Warehouse 4 of Avery Dennison RBIS Company Detail purpose:... Figure 1.2: Label and Packaging Materials products Sou
Background of the thesis
Production is always an important industry in our lives Manufacturing Companies always have a special mission for economic development and serve market requirements For good production management, it is necessary to have great warehouse management as a companion Effective inventory management, sources of raw materials are available and sufficient to meet, meaning that the production room will be assured of input to perform their duties
Warehouse management must not allow a lot of mistakes, which can affect the entire line behind and worse can affect the entire productivity of the company The warehouse is not only responsible for the storage function, but also is responsible for ensuring the input of raw materials for production as well as for semi-finished products There are always problems that affect that sustainability
Through more than 6 months of internship at Warehouse 4 at Avery Dennison, I have experienced many problems at this material warehouse Also participating in the project to improve the company's warehouse management I want to build an essay with the most objective and subjective views about the problem in reality and apply knowledge in practice With a strong motivation about the great value brought after improving the warehouse management system, I choose the topic "Analyzing warehouse management at Avery Dennison Company (Warehouse 4)" for my graduation thesis to bring those things convey to everyone.
Purpose of the thesis
- Analyze warehouse 4 management at Avery Dennison RBIS Company
- Improve the management performance of raw materials in the stock at Warehouse 4 of Avery Dennison RBIS Company
- Learning and grasping about the process, professional operations, and management of Warehouse 4 of Avery Dennison Company
- Evaluating warehouse performance and limitations
- Proposing solutions to improve Warehouse 4 management of the company
- Suggesting solutions to make employees work more efficiently and inventory management better.
Scope and Object of the thesis
Scope of the study: The warehouse management at Warehouse 4 of Avery Dennison RBIS Vietnam is located at No 4 Street, Long Hau Industrial Park, Long An Province Data collection time period: Data collected from July 1, 2021 to November 20, 2021
Research method
Information collection methods: collect information from profile, document and results through internal audits as well as feedback of involving people
- Data analysis methods: using the analyzed historical data
- Qualitative data analysis: implemented in the form of either interpretation explanation and understanding of the situations from investigating
- Delphi method: Useful information when exchanging with experts in the field.
Paragraphs
Chapter 1: Overview about Avery Dennison and Warehouse 4
Chapter 3: The reality of Warehouse 4’s working performance
Chapter 4: Solutions for a better Warehouse 4 management
Introduction to Avery Dennison
Avery Dennison (NYSE: AVY) is a global materials science company specializing in the design and manufacture of a wide variety of labeling and functional materials The company is a member of the Fortune 500 and is headquartered in Glendale, California
Avery Dennison RBIS, the $1.6 billion business of Avery Dennison Corporation, specializes in solutions for apparel and footwear brands Avery Dennison RBIS provides smart, innovative, and sustainable solutions to help brands optimize product value and enhance performance in global trade supply chains We elevate the brand through solutions for graphic paper labels, printed fabric labels, labels, decorative accessories, and packaging to attract consumers
Full name: Avery Dennison RBIS Vietnam Co., Ltd
Address: Lot E01 Center Street (Duong Trung Tam), Long Hau Industrial Park, Long Hau Ward, Can Giuoc District, Long An
Operation date: August 1, 2003 (Operating for 18 years)
Legal represent: Nguyễn Cửu Thanh Châu
Number of employees: Over 1,000 people
Corporation slogan: Inspired Brands, Intelligent World
In 1935, Avery Dennison Corporation was founded in Los Angeles, California as Kum Kleen The name was changed to Avery Adhesives in 1937 The company was originally founded by Ray Stanton (“Stan”) Avery, the first inventor of the first self- adhesive sticker
The first Avery labels were simple, round price stickers Stan Avery chose Kum Kleen Products as his original company name to advertise the ability of a self-adhesive label to be removed without leaving a mark In 5 years of operation, the number of employees is only 19
In 1946, the company was incorporated into Avery Adhesive Label Corp and the name was later changed to Avery Adhesive Products, Inc in 1958, and Avery Products Corporation in 1964 The name was again changed to Avery International Corporation in 1976, and it became Avery Dennison after the company strategic merged with Dennison Manufacturing Company in 1990 Today the corporation operating in more than 50 countries, with more than 32,000 employees and over $7 billion in revenue
In Vietnam, the factory was established on May 3/2003 first in VSIP, Thuan An town, Binh Duong Province and quickly get the trust of customers and occupy a strong market often
After more than 12 years of operation in the Vietnamese market, to serves the huge market demand, the corporation decided to build and inaugurate a new factory in Long Hau industrial park, Can Giuoc town, Long An province Total investment capital up to
30 million dollars Nowadays, the company operates with more than 3000 employees, dealing in many fields related to labels, packaging, decorative accessories and RFID labels (In 2020 Avery Dennison completes acquisition of Smartrac’s RFID transponder business)
Avery Dennison Corporation is a multinational manufacturer and distributor of pressure-sensitive adhesive materials (such as self-adhesive labels), apparel branding labels and tags, RFID inlays, and specialty medical products
The company’s products, which are used in nearly every major industry, include pressure-sensitive materials for labels and graphic applications; tapes and other bonding solutions for industrial, medical and retail applications; tags, labels and embellishments for apparel; and radio-frequency identification (RFID) solutions serving retail apparel and other markets
- Label and Graphic Materials (LGM)
Label and Packaging Materials: Design and produce packaging and label products to collect customer needs from many fields (Food and Drink, Pharmaceuticals,…)
Figure 1.2: Label and Packaging Materials products
Graphics Solutions: Design vinyl graphics and automotive wrap graphics worldwide
Reflective Solutions: Build reflective panels to illuminate construction areas, traffic signs, ambulances,
- Retail Branding and Information Solutions (RBIS)
Apparel Solutions: Delivery tickets, tags, and labels to external embellishments, and packaging for brands around the world
Figure 1.5: Retail Branding and Information products
RFID (Radio Frequency Identification): Provide RFID solutions for brands and system integrators
Printer Solutions: Providing customers with innovative and sustainable printer and labeler products and supplies that accelerate supply chain performance, increase productivity, and elevate the consumer experience
- Industrial and Healthcare Materials (IHM)
Performance Tapes: Providing high-performance bonding and functional materials for baby care, incontinence care, feminine hygiene and consumer packaging Our solutions include a wide range of adhesive closures, mechanical closures and closure components
Fastener Solutions: A global provider of fasteners for a wide range of industries and applications, along with the applicators and equipment needed to apply them
Medical: As a partner for medical device manufacturers, Avery Dennison Medical offers customized solutions, expertise, and the facilities to take your ideas from concept to completion
These are the 4 key strategies of AD RBIS Southeast Asian companies Avery Dennison RBIS Vietnam is an important link in the chain of companies in Southeast Asia
Deliver outsized growth in high-value categories: Continue to lead the smart label in apparel Accelerate vertical growth in key industries Focus on the growth of the external market in the customers in the sports and art market segment Those market segments are strategic customers
Unlock growth and value in the food industry and logistics segment: Address market needs for visibility display, efficiency and sustainability with integrated identity solutions and smart labels That vision for sustainability and long-term
Leverage business model transformation Continue to grow profitable shares at the base, develop flexibility, productivity, automation, and fixed-cost innovation to enhance profitability and competitiveness That makes the business will maintain its position in the world and have the trust of loyal customers
Strengthen your organization's digital capabilities and solutions: Boost up digital and data capabilities to lead solutions and raise the customer experience The digital transformation in the market is happening very quickly The acceleration to keep up with the times will support the future path ahead
Figure 1.11: Avery Dennison RBIS chart operation
Total Quality Manager EHS Manager Supply Chain
Figure 1.12: Avery Dennison Annual Financial Report 2016 – 2020
Inferred the company's financial statements for the past 5 years, shows that the company's business activities are on a continuous development track from 2016-2019 Though the impact of the COVID-19 pandemic caused the company's revenue to be significantly affected in 2019 and 2020, net profit still increased
Figure 1.13: Avery Dennison Year Stock Chart
Supply Chain department
1.2.1 Introduction to Supply Chain department
The Supply Chain department controls, manages and operates the entire Avery corporate supply chain Supply chain activities are closely related to and are the inflow and outflow of the enterprise's production processes
The entire Supply Chain department is under the management of MSEA Supply Chain Manager MSEA Supply Chain Manager will be directly responsible for the 4 departments below New decisions and information will flow from the top down
There are 4 job parts under MSEA Supply Chain Manager They will perform different functions
Purchasing: Researching potential vendors; Comparing and evaluating offers from suppliers; Negotiating contract terms of agreement and pricing…
Logistics: Monitor and track quality, quantity, inventory levels, delivery time, transportation costs and efficiency; Control and use the potential of the warehouse; Work in relation to the production department, quality assurance…
Materials Planning: Determining the required materials and generating purchase orders; Ensuring the consistent and adequate supply of materials necessary for production…
Supply Chain Analyst: Monitor and collect data on current operations, including scheduling, sourcing, warehousing, production, and delivery; Analyze data to determine areas for performance improvement…
These departments have separate functions and tasks that support each other in the supply chain The main task of warehouse 4 is to ensure that the goods in the warehouse are safe and to manage the correct inventory according to the quantity and quality All the small tasks in Warehouse 4 are managing huge numbers and materials
Improvements in warehouse 4 will apply within the framework of warehouse 4 and under the supervision of Supply Chain Manager, and do not directly affect the activities of related departments
The warehouse is an important part of logistics There are 2 main warehouses in Avery Dennison RBIS Long Hau: Warehouse 1 are finished good warehouses, Warehouse 4 is a material warehouse
Warehouse 4 has 3 departments including WH Clerk, WH TQ, WH Keeper/ Operator Each of them we can call a team Also for the warehouse 1
Figure 1.14: Supply Chain Department and Warehouse work chart
Warehouse 4
Warehouse 4 is the raw material warehouse of AD RBIS Viet Nam, under the Supply Chain department division Play an important role for the production of the entire RBIS Viet Nam
The main location in this study is Avery Dennison Warehouse 4, which is located on Road 4 Road, LHIP, Can Giuoc, Long An, Vietnam The Warehouse scale is 7000 square meters The number of employees is around 150 members with different roles
It has 2 main areas which are Zone A (paper, PFL…) is 2200 square meters and Zone
B (woven, thermal ) is 2200 square meters In addition, the staging area used to store goods temporarily is 1200 square meters (Zone C) and the WIP of Production Department The last area is private storage which has a special temperature to keep special goods such as (ink, chemical goods…) 400 square meters (Zone D)
In this warehouse, we have around 2630 pallets in total In 2 main areas Zone A and Zone B, they have 24 racks which are named from A-Z respectively Per rack has 5 floors and has 24 pallet racks named from 1 to 24 In the reserve area, it has 10 racks, which are named TAM1-TAM10, and per rack does the same as the main area
Warehouse 4 has 3 departments including WH Clerk, WH TQ, WH Keeper/ Operator Each of them we can call a team Also for the warehouse 1
Each group will take care of specific tasks in the import and export process and warehouse operations
In the operator group, there will be subgroups for each small warehouse, warehouse Team 4A, warehouse Team 4B and warehouse Team 4C
In the Clerk team will be responsible for receiving information, documents and exchanging for 1 or a few certain types of raw materials
Besides the main teams above, there is still one more team that is the supply chain analyst (Data Analyst)
The members of this team are quite small and the main duty is to control the supply chain operations of the warehouse and the flow of materials along the main supply chain
In addition, they control the data information and reports of the overall warehouse
LITERATURE REVIEW
Definition of supply chain
A supply chain may contain all activities that transform raw materials to final products and deliver them to the customers A number of stages are involved in a supply chain, typically including suppliers, manufacturers, warehouses, distribution centers, retailers, and customers
Figure 2.1: Structure of a supply chain
From Figure 2.1, the material flows go through the supply chain from suppliers to customers, while the information flows of orders and demands are in an opposite direction In today’s highly competitive and complex marketplace, a company with a more effective and efficient supply chain can have more advantage than its competitors The official definition given by the Council of Supply Chain Management Professionals (Vitasek, 2010) (1) is as follows:
“Supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and all logistics management activities Importantly, it also includes the coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers In essence, supply chain management integrates supply and demand management within and across companies Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model It includes all the logistics management noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance and information technology.”
Warehouse in Supply Chain
“A warehouse should be viewed as a temporary place to store inventory and as a buffer in supply chains It serves, as a static unit – in the main – matching product availability to consumer demand and as such has a primary aim which is to facilitate the movement of goods from suppliers to customers, meeting demand in a timely and cost- effective manner.” (Van Den Berg, 2013) (2)
Primarily a warehouse should be a trans-shipment point where all goods received are sent as quickly, effectively and efficiently as possible The basic processes of warehouse management remain the same over time We receive goods into the warehouse, we process orders, we replenish, we include some value-adding services and then we send the product
2.2.2 The role of the warehouse
Warehouse activities are directly linked to the organization and preservation of goods, so the role of the warehouse are:
- Ensure the continuity of the production and distribution of goods Helping businesses store all products and manage production quantities on the entire system
- Contributing to reducing production, transportation and distribution costs Thanks to that, the warehouse can actively create shipments with economic scale in the production and distribution process, thereby reducing the average cost per unit Warehouses contribute to saving circulation costs through good management of goods loss, economical and efficient use of warehouse facilities
Support the process of providing customer service of businesses by ensuring that goods are delivered in terms of quantity, quality, delivery status, contributing to delivery at the same time and place
2.2.3 The function of the warehouse
The function main of the warehouse are:
- Consolidation: When goods/materials are received from many different sources, the warehouse acting as a gathering point for such large shipments will have the advantage of scale when transported to the factory, market by means of transportation
- Coordination of goods: (Organization of business items) In order to well meet the order of many diverse items of the requester The warehouse is responsible for separating large shipments, coordinating and combining many types of goods into a complete order Make sure the goods are ready for the sale or production of the product
- Security and storage of goods: Ensure goods are intact in quantity and quality throughout the operation process, make the most of the warehouse area and capacity, take care of and preserve goods in the warehouse.
Warehouse management
Warehouse management generally means the control and optimization of complex warehouse and distribution systems In addition to the elementary functionality of an inventory management like the management of quantities and storage locations, the control and planning of transport means according to this principle warehouse management also comprises methods and means to control the system status and to choose an operating and optimization strategy For this reason the system preferably has to be called internal system for the control and optimization of material flows or system for the control and optimization of the (internal) material flow (Michael ten Hompel and Thorsten Schmidt, 2007) (3)
Warehouse management is the process of handling inventory and related tasks within a warehouse Inventory management deals with managing stock for the whole business and forecasting business trends Inventory management and warehouse management are two facets of managing stock Inventory management provides a high-level view, while warehouse management focuses on the details of the movement of stock (Abby Jenkins,
ABC Classify
An ABC analysis can assist in more effective inventory management of the different items (Luenendonk, 2016) (5) The whole aim is to enhance the ability to
Page 18 manage massive and complicated data sets with ABC analysis This is broken down into three simple categories
- The products in category A are the most common in the warehouse This are the products that provide a large part of the sales profits of a business This good does not take a lot of money and is the smallest part of your stock, but it brings the greatest income Usually, these products represent 10% of the inventory of the firm and represent about 80% of its income (Luenendonk,
- The center of your goods are category B objects These goods account for 20% of your inventory and 15% of your sales Management sometimes overlooks these goods, but there is plenty of promise in these category B pieces This B products can be turned into cash making A products with a little investment and care (Luenendonk, 2016) (5)
- Items in category C do not make a lot of money on their own The organization will comfortably make a little profit from these goods This amounts to about 70% of a company's inventory, despite the fact that revenues account for just about 10% of total revenue These activities require the least amount of oversight (Luenendonk, 2016) (5)
Once the first ABC Analysis has been done, it is beneficial to do another analysis to get a bigger picture of which goods are the most frequently picked Having already done an ABC analysis on Sales Revenue, the next step is to do another ABC analysis on picking frequency (Frandsen, 2014) (6) The picking frequency would be categorized in the ways in the list below
• A-products account for 80 % of the picking frequency
• B-products account for 15 % of the picking frequency
• C-products account for 5 % of the picking frequency
A Double ABC Analysis would then contain 9 different product classifications, 3 for the sales revenue criteria and 3 for the picking frequency which would give 9 different areas classification (Frandsen, 2014) (6):
Figure 2.2: Example of a Double ABC Analysis
Figure 2.3: ABC Analysis: product value and frequency of sales
Vendor Management Inventory (VMI)
VMI is a process which facilitates efficient inventory management The aim of VMI is to ensure availability and freshness at the point of sale with the lowest possible logistics costs and the lowest possible inventory level across the entire purchasing chain This is only possible if all parties speak the same language, share an understanding,
Page 20 apply the same standards and methods and work together on a constructive basis In any case, commercial pressure in the consumer goods industry will force companies to further streamline their purchasing processes, in order to achieve a sustained increase in efficiency and profits (Wassim Sasso, 2020) (8)
VMI is an alternative to the traditional order-based replenishment practice, being a more efficient supply chain integration strategy and collaboration concept In a VMI relationship, the vendor is empowered to manage a customer’s inventory and replenish the goods at the customer’s site automatically under agreed conditions and rules
VMI gives the vendor both responsibility and authority to manage the entire replenishment process The change is fundamental by making the availability and inventory turnover the new primary measures of the vendor’s performance instead of delivery time and preciseness
Collaboration is core to the success of VMI Buyers and vendors must enter VMI with the objective of multi-disciplinary teams working together to discover the “win- win” solution to VMI The individuals involved should be collaborators and understand the needs and requirements of their trading partners
Min stock/ max stock levels for VMI:
For products included in the VMI program, the next step is to determine Min/Max stock levels for products The Min/Max method was one of the earliest automated inventory replenishment methods used in enterprise planning The “Min” value
Page 21 represents a stock level that triggers a reorder The “Max” value represents a new targeted stock level following the reorder
There are no universal formulas for setting the Min/Max levels in VMI systems It depends on sales, production, planning,…
Thus, vendor and buyer first agree on delivery frequency and then on general days of supply (DOS) targets It is recommended to not set very low targets right away, instead, a 3-phase project with gradually lower stock levels is recommended in order to ensure product availability
Keep your Min/Max levels dynamic It is the responsibility of the VMI warehouse manager to perform ongoing reviews that would identify which products Min/Max levels need to be adjusted.
Bullwhip phenomenon
The “Bullwhip Effect” is a new term (but not a new phenomenon since it has been debated in the literature for over four decades) coined by Lee, Padmanabhan and Whang
(1997) (9) It refers to the scenario where the orders to the supplier tend to have larger fluctuations than sales to the buyer This distortion subsequently propagates upstream in an amplified form Generally speaking, the further upstream the echelon, the more distorted and amplified is the waveform
(Source: Lee, Padmanabhan and Whang) (9) (p.555)
THE REALITY OF WAREHOUSE 4’S WORKING
General link operation process
Figure 3.1: General link operation process
The process is a loop, starting with the production department when receiving the order, they will make their own production plan The order and planning information will then be forwarded to the planning and purchasing departments
Material Planner will enter the data of Warehouse 4 to control whether the amount of materials is enough to meet or not If the raw materials are enough, they will report to Warehouse 4 and export the materials to the production department
If it is not enough, the materials planning department will create an additional plan for the preparation of materials to match the plan of the production department They will then consult with the purchasing department and pass on the material plan to them The purchasing department will be responsible for contacting and creating a contract with the supplier Everything must go according to plan
The Supplier will deliver materials to Warehouse 4 as planned Raw materials will be stored at the warehouse and used for production The materials delivered to the warehouse must be compatible with the items listed in the Purchasing plan Errors in inventory and management of the warehouse will not be accepted by the production department and cause serious consequences
After the goods are finished, the production department will stock them in WH1 and WH2 We will take finished goods to our customers from those two warehouses
It is a general process but in reality, each department has to take on a lot of different specific jobs As for Warehouse 4, there will be 3 main processes that I will introduce right below.
Specific business process in Warehouse 4
In order to present more specific and vivid information, I will present on the table the process of importing materials at Warehouse 4
Due to weather reasons, the material delivery truck may arrive at the warehouse at irregular hours
Table 2.1: Input – Work instruction at Warehouse 4
Step Job Description Illustrating image
The related department (Im –Ex,
Purchasing,…) will inform details information such as intern code, quantity, quantity of packages, waybill, arrival time to Warehouse
Clerk who will inform to WH
Supplier or transporter contact with warehouse clerk when they come to company for delivering
Warehouse Clerk check the delivery documents and inform to
WH Operator who will check, count, receive raw materials and sign
WH Operator moves raw materials to temporary location where waiting to inspect quantity and hard – over delivery document to WH Clerk
Figure 3.4: Raw materials arrive at Warehouse 4
The TQ department relies on the mail of the Warehouse Clerk to take samples of raw materials and compare with approved sample by
- Qualified: TQ confirm to receipt raw materials to warehouse clerk by email
- Unqualified: TQ inform to hold, don’t receipt raw materials by email
TQ will control this raw materials; make the complaint documents to exchange or return with supplier
These unqualified materials will be taken to Zone C (Reserve area) and into temporary locations In order for the return and complaint procedures to take place, until the supplier comes and returns the perfect goods to us
Depending on the type of goods and the distance of the supplier, the items have different take-back times
On average, it takes about 1-2 weeks to complete The warehouse 4 has a reserve area to store for such cases
When the time is longer than expected, our side will send an email to urge the supplier
Figure 3.5: The TQ team are checking new RM
After receiving the information to receipt raw material, WH Operator check actual with packing list when they arrive to warehouse
Each team of Operator, will be responsible for each item of their own
Zone Zone B for example When the items of Zone B arrive, the Operator of Zone B will come and check the quantity against the Goods receipt note and packing list
Then there will be a month stamp on the boxes and a note of the item and the date of receipt
They will then deliver it to their respective Zone then place it in the vacant locators Then it is noted on the Goods receipt note then note it on the stock cards Finally give all the documents back to the Clerks
Warehouse Clerk receipt on system by PO, item and location follow actual
Document archives: goods received note with sign, delivery note, and packing list Figure 3.8: RM Tracking computer
Just like the import of the warehouse, the export process will also be presented in the table
For more information, the company has a professional transportation team between Warehouse 4 and the production department at the head office
Since it is a raw material warehouse, Warehouse 4 Avery Dennison uses the FIFO method (First In – First Out) in exporting raw materials Raw materials that have been in the warehouse for a long time must be removed from the warehouse first
Table 2.2: Output – Work instruction at Warehouse 4
Step Job Description Illustrating image
WH Clerks receive “Raw materials request” from Production
Based on Raw materials request,
WH Clerks check stock (item, quantity,…), if:
+ Enough: inform to WH Keeper to prepare (item, quantity, locator…)
Print the Raw Materials request note and give to WH Operation
+ Not enough: inform to production planning
Figure 3.11: Clerk team are checking on computer
Based on the Raw materials request note, WH Operator will prepare them (follow FIFO)
Update stock card follow actual quantity
Update PO number (input date if
VMI), remaining stock on Raw materials request note
Figure 3.12: The vacant location at Warehouse 4
WH Operator deliver RM with
RM request note to Production
Production department check quantity and sign in RM request note
Figure 3.13: The Operator takes the goods
WH Operator transfer RM request note to WH Clerk who will update system (item, locator ) follow actual
Document archives: output note from system with RM request note
After the raw material has entered the warehouse and has a specific location Then the next thing is to carefully preserve and control these raw materials Preservation is not exactly a process That string repetitive job with direct participation of the Keeper and indirect support of the Clerk
The only workaround to check and make sure everything is on track in the warehouse All activities will be done daily
The forklifts and the pallets must be ready for operation After finishing the workday to focus them on the right place specified
The pallets are classified according to regulations Pallets damaged during transportation must be brought to the damaged goods area behind the factory
The temperature of the warehouse must be suitable and always in a ready state Any interruption of the air conditioner must be reported and rectified as quickly as possible
Figure 3.15: Air conditioner at Warehouse 4
Raw materials at the locators are controlled for actual quantities by the stock cards next to them The number of stock cards must be fully replenished The stock cards that are no longer valid must be discarded immediately
Figure 3.16: Safe working loads instruction
The quantity and volume of materials must be neat and the load according to the standards The Operators have to bear the consequences if violated
Figure 3.17: The racks of Warehouse 4
The racks here have 5 floors and are marked with locations from A to Z The shelves are set up and solidly built Ensure a clean, dry and secure area to store our materials These types of items will usually be specified for certain locations in both areas A, B, C and D
Inventory must be checked at the beginning and end of the day on a regular basis It is important to double-check the accuracy of the stock cards As mentioned above, the types of items will be arranged for certain locations and areas Operators will be assigned to those items and managed in their own area
Due to the FIFO method, raw materials are quickly labeled with the month label when entering the warehouse
The month label must be properly affixed and filled with relevant information clearly This will facilitate the following operations
Figure 3.18: The month label at Warehouse 4
Reality of warehouse management
At present, the management of raw materials is relatively stable but still not completely perfect The raw material data recorded is not true to reality The consequences are a series of problems such as shortages, excesses, long inventories, etc The Operators do a great job but they are having a hard time finding materials and preparing them to bring them to the production department or other orders The errors in the numbers confused them and the Clerk team
Zone Category Item Clerk Data Stock cards
Sometimes there are not only errors in quantity but also errors in location Moreover, there are items with a lack of information that cause them to be in stock for a long time, taking up space in the warehouse The teams in this issue case have to discuss with each other again before exporting or importing goods, which takes a lot of effort and time
The cause of this chain of consequences stems from mistakes while using stock cards The recording of actual quantities by stock cards is not absolute and can cause serious confusion An additional cause is a lack of automatically in information management system of the warehouse Therefore, inventory reports and dashboards are approximate and lack absolute accuracy
Employee tools are gradually being digitized But the clerk's specific operations on the data are still manual and not entirely accurate
The clerks work on a variety of support tools such as Excel, Google Sheet,… According to them use those tools that are easy to use and control and are widely used They prepare inventory reports to their superiors on a regular basis The source of data that Data Analyst collects is mainly from the daily data of the Clerk team, so it is quite a large amount, it takes a lot of time to organize information effectively
TQ team is in that situation as the Clerk team They have to work on multiple tools
As well as exchanging information in many different ways
The overall area of warehouse 4 is very large Coordination of material in stock is relatively simple but takes effort This sometimes requires additional the Operator to avoid long delays The big difficulty was entering the data into the material requisition paper and its stock cards From the record of reports from the Operator, there are many times misunderstanding the numbers written by many different people
Recently, Warehouse Manager had a project to improve the layout of the warehouse Previous project implementers have successfully applied the project and have been in operation for more than 1 year And its effectiveness has been proven by recent results They analyzed the ABC method for the value of product categories Also implement double ABC method to calculate throughput as well as frequency of warehouse materials From there, rebuilding the layout arrangement for picking and receiving operations is maximally cost-effective and physically efficient
The proposed layout is robust, able to meet future needs Long-term goals are to reduce the amount of ingredients inventory in stock (back-up storage in peak season) and to reduce travel costs It was optimized the storage area (27% increase – Source: Data analyst)
The design improves the efficiency of the material moves and provides separate space for the specific storage of the warehouse The layout issue has been resolved and Warehouse 4 is moving on to further improvements
The Operators used 4 kinds of forklifts which are counterbalance forklift, pallet jack, walkie stacker, and reach fork truck Various means of transport for different cases Serving the needs of still moving materials inside the warehouse
Counterbalance forklift: The 3-wheel variant is ideal for situations requiring the operator to turn and maneuver in circles (Total length: 2.35m, total width: 1 meter and total height: 2 meter)
Pallet Jack: Pallet jacks feature a tiny footprint in exchange for power, allowing them to fit into the smallest places and raise small weights in tight quarters It has 1.6 meter length, 0.65 meter width, 1.2 meter height
Walkie Stackers: They have an unique shape and serve a certain purpose These material handling trucks, unlike other types of forklifts, do not have cabs Instead, the operator goes behind the stacker and guides it with the help of a handle attached to the stacker These machines, like pallet jacks, lack power, agility, and speed They are, nevertheless, excellent for instances when a higher pallet jack is required The walkie stacker has a considerably longer reach than its counterpart
The reach fork truck: The reach forklift is a warehouse truck used mainly for indoor work Its key ability is that it can extend its forks beyond the compartment and reach into warehouse racks in a way that standard forklifts cannot It also features an open compartment that allows the operator to have greater visibility While excellent for indoor use, reach trucks are not suitable for outdoor work due to their under-carriage clearance
Figure 3.22: The reach fork truck
Safety at work and human life is one of the most important factors in the workplace Around the working area are always arranged fire protection stations and instructions These fire protection sets are regularly maintained and checked, besides there are emergency fire alarm buttons Under the roof of the entire warehouse is equipped with a large-area fire protection system, when an incident occurs, smoke will rise and activate the system
There are special types of items that will be stored in area D and will be affixed with an additional label called "Chemical Identification Tag"
This label will classify the hazard and flammability of these chemical materials
Evaluation of the management of raw materials at Warehouse 4
When the required reports are made The main source of information is the secretariat The secretarial team will be directly responsible for data entry and maintenance of original documents There are errors they can correct from those documents
Then will be the information about the materials in the warehouse transferred to the Data Analyst From the data obtained from many secretaries, this department must organize and build real-time tracking and reporting
The reports will then be passed on to the Warehouse Supervisor, who will oversee and operate the warehouse After that, they will review and give feedback to the logistics department
3.4 Evaluation of the at Warehouse 4 management
Warehouse 4 has built an effective material storage system Specific and reasonable inventory preservation activities Site layout, layout arrangement, and regular inspection help prevent material damage and material loss That makes it easy to ensure that enough materials are delivered to the production department Output materials are always satisfactory materials
• Professional import and export process
The process created for the warehouse is lean and specific Import and export processes are smooth and convenient Each department works together effectively, maximizing the potential of the team Teams have a strong communication link and they have great control over incoming and outgoing materials
The process shows a logical operation sequence and avoids many mistakes Following the process also improves the cooperation of the teams in the warehouse These processes provide an overview of the overall operation of the plant and the alignment of different teams and tasks, of various natures
Each team in the warehouse contributes different functions and tasks but works together effectively and professionally These extraordinary abilities have been developed and trained for a long time The teams have specific tasks and responsibilities that do not infringe or influence each other
The Clerk team is the core of information and plays an important role in coordinating information and keeping information for the material warehouse
The TQ team is very thorough and strictly grasps the required quality to ensure that the products in and out of the warehouse are always up to standards They are constantly working to ensure the best quality raw materials
The Operator team is agile and flexible in coordinating materials and handling material-related issues They always make sure the materials in the warehouse are in place and not damaged
The technique for layout design, traveling, and the calculating method for layout and travel picking optimization were built fully and efficiently
The implementation of it aimed to enhance additional performance and make the staging more efficient by optimizing space to store a variety of items in a flexible and straightforward manner and optimizing the distance traveled for picking
Recently, material retrieving and moving has cut costs quite a bit
Warehouse 4 has clearly classified each type of product into each separate area Expensive and perishable materials will be transferred to Zone D (such as digital ink) and other zones will preserve different types of raw materials This reduces costs and increases the life of raw materials The zones also have different layouts to accommodate the materials in them
The facilities that Warehouse 4 equips employees are very rich The tasks are the means and tools to support all of its features
A full range of different forklifts and information tools such as computers and intranets are available It shows that the warehouse management department is very interested in the activities and difficulties of each individual employee
• Raw materials stock for a long time
These materials remain in the warehouse for a long time The main reason is due to lack of information about the product It is not possible to extract this product to which
PO or has been planned into the system data
Retracing the origin of the goods from the beginning takes a lot of time and effort Efforts to tackle the space to store those materials are also significant Because it has not been shipped for a long time, most of these materials are no longer enough to meet the quality standards and have already been out of date Expired raw materials must be destroyed
• Hard to find a direct and pick raw material correctly
Although there have been reasonable material layout arrangements, moving to the require area and picking the required materials is still difficult The difficulty here is that the material conforms to the requirements must be calibrated according to the FIFO method
SOLUTION FOR A BETTER WAREHOUSE
Urgency and purpose
Today, working activities and warehouse management 4 have proud advantages, but there are still weaknesses that prevent this material warehouse manager from moving forward Today's economy always requires businesses to improve their productivity and management efficiency, otherwise, they will be left behind
Raw materials are the assets of the enterprise, the input to the production process of that enterprise Good management will help businesses produce products smoothly Raw materials play a key role in the supply chain of a business itself, especially with a large enterprise like Avery Dennison RBIS
The improvement of Warehouse 4 management and the management of materials at the warehouse is an activity that comes from internal resources Changes must follow the standards of the market economy and avoid external factors In addition, the following requirements must still be followed: o Must be within the allowable financial framework o Must match the characteristics of Warehouse 4 and AD Company o The desired effect must be achieved.
Solution for warehouse 4 management
Warehouse 4 should periodically and unexpectedly check the amount of inventory
Periodic inspection of inventory of Warehouse 4 is obvious, mentioned earlier But more realistically we should check randomly to grasp the situation more accurately This random check will be useful when detecting random errors, frauds and management mistakes From there, correct and correct the information to be true to reality
Periodic reports and random reports will be the most objective metrics when combined From there, managers will make wiser decisions
It could be a surprise check on quality, or that the papers are kept, or the location of the materials that have been put in place Will give assessment results on each team's responsibility and level of work completed in Warehouse 4
Warehouse 4 needs to build a strategic plan for inventory – VMI
VMI helps reduce the sudden volatility of the bullwhip effect Instead of placing an order and costing it to order, we already have products in stock and ready for production
In addition, the supplier is not affected too much by being at the bottom of the bullwhip chain Another recent special case is the crises coming from the COVID-19 pandemic The difficulties it brings make it impossible for us to place orders for regular and accurate inventory and production At this time, VMI goods will be the solution to ease that tension on the warehouse side and the company
This solution cannot work alone It is necessary to have the contribution and support together of other departments in the Supply Chain department
The formulation of a strategic plan is a big one Contributions in it require investment and effort The joint efforts are for the stability of the division and the development of the company
Warehouse 4 needs to coordinate with the material planning and purchasing department To develop a specific inventory strategy plan Can resolve common problems such as overstocking or material shortages This is a series of linked activities
It is necessary to have the data of each other's research information to have small plans such as purchasing, storing, and producing Make an effort to have a joint investment in forecasting and planning ahead The proposed plans will create the premise for the work sequences of each department to take place in detail and with precise coherence
Currently, we can invest strategically to take advantage of VMI (Vendor Material Inventory) Previously, VMI was only considered as a supplementary measure for this material inventory But we should appreciate it more and see it as an upcoming strategic plan
VMI goods are about the extent and nature of each business, depending on the agreement of the two parties With Warehouse 4, VMI goods are also considered as goods that have been purchased and are available in the warehouse, can be used, but
Page 46 only paid when they have actually been released from the warehouse and used for purposes other than inventory.
Figure 4.1: VMI category using space inventory
According to the latest statistics in July, the number of pallets that VMI accounts for is only about 584 The capacity of the whole warehouse has a capacity of more than
5800 square meters (8584 pallet load) Its main materials are Paper Sheet, Tape, Paper Roll, other materials are not
Figure 4.2: VMI total inventory and max stock
From the statistics that I have, we can see that the VMI row has irregular ups and downs and is not really stable That said, there isn't really a specific plan for it yet To be able to use the company's financial capital and having relationships better These VMI rows need to be developed a smart use strategic plan We must contact the supplier about beneficial contracts for both parties, the reason why VMI is a symbiotic solution WIN – WIN
We should also add other VMI materials that are more diverse and more balanced But don't overdo it and build a balanced yardstick for them In other words, we need to be careful and smart when using VMI
In short, we need to build a plan to use VMI effectively and intelligently
Stage 1: Reusing previous ABC and double ABC analysis data that the layout project has completed Previous project information and data are carefully stored and managed by the warehouse manager
Stage 2: We will calculate the remaining and unused warehouse locations for newly arrived VMI items
Stage 3: Connect to RM and Planning Based on the available data of the warehouse and the data of the parts on the logistics To select which items should be provided with VMI
Stage 4: Contract to Vendor Promote strategies and ways to negotiate with suppliers on a decision common to both parties
Stage 5: Applying, Keep track and variable fix After completing the above stages
At this point, we need to monitor the production situation, supply ability, control ability Finally adjust the VMI row volume continuously and dynamically
Warehouse 4 needs to be installed with a modern management data information system (Oracle Cloud WMS)
The employees of the departments working together had certain errors and limitations And these things affect the results of their work To be able to achieve the purpose of work they have to simultaneously work on a lot of applications and various software
Managing information and data of this raw material warehouse needs an effective and professional management system Oracle Cloud WMS is an option worth considering
Oracle Warehouse Management delivers innovative capabilities, mobile solutions, reporting capabilities and an easy to use browser interface The solution is dynamic and easily configurable for rapid implementation that evolves with our business
With this advanced system we can achieve (General scale):
• Reduce manual processes: Reduce manual processes and excel spreadsheets by up to 70% By using a tool, single system
• Reduce costs: Maximizing enterprise resources brings high efficiency in resource use Leading to cost savings and boost revenue
• Real-time data is updated automatically: Improve the quality of accounting and secretarial information Accurate and timely data
• Industry 4.0 developments: As a foundation to guide businesses to the future industry 4.0 platform Improve competitiveness and stay ahead of the market About the warehouse in particular (Oracle Warehouse Management Cloud):
• Support warehouse management: the warehouse system in Oracle Cloud WMS is managed in a multi-level form The company level or Supply Chain department can access the data of each warehouse by accessing the system The management
Page 49 is optimally supported Manage materials and goods codes uniformly, avoid duplication, and flexibly
Shipping Mark Advanced Solution (QR Barcode)
In addition to the above solutions, the Supply Chain department has a project to improve the management of the raw materials warehouse It's the QR Barcode project
QR Barcode is a project for Warehouse 4 That is the big plan for many sides such as Warehouse, Production Department, Manager and Supervisor… Shipping Mark was built to deal with the general issue
The project goes for the goals:
● Unify the database throughout the products based on system and reality
● Close information and products linkage between warehouse and manufacture
● Visualize & standardize the physical information display
● Systematically tracking real-time transactions, reduce manual workload and human mistakes
● Pick goods purposefully following FIFO, decrease out-of-date material
● Minimize manual record and eliminate error typing (Stock cards)
● Close the gap between physical count and system count
4.3.2 Current and Early Project Step
Figure 4.6: QR Barcode current and early project step
Currently, the project is still being implemented and is in the “Applying & Testing Automation Barcode project” Step by step is a kind of many activities The whole
Page 52 process step is applied to Zone D And then will apply to other zones of the whole Warehouse 4
A simple way to explain this project is to replace inventory management with stock cards with a management approach with shipping marks Shipping mark label will be affixed to each box of materials upon arrival
Different materials will have different QR codes Retailed materials will be affixed with special labels, called core labels The outer label will be the parent label and the core label will be the child label Accompanying the QR codes are readers to identify the data for the Operator
▪ Help the Operators identify materials and item codes
▪ Import and export material data for the working process
▪ Responsible for the stock card and the monthly card (Turn 2 into 1)
▪ Declare the relevant information Explain the information outside and inside
In order for the shipping mark work to go as planned, Warehouse 4 must add another team That is the Shipping mark team, they will be the person to direct the current and future tasks of the team
The role of the Shipping mark team: The mission of the shipping mark team has not been clearly formed Currently, the team is created to create the labels They will then label the materials under control They are also pasting the labels of the locators Working tools: Computer and Printer
Figure 4.7: Working desk of Shipping mark team
The shipping mark shows the basic information of the material and its QR code The
QR code of the core inside the material bin will link to the QR code outside These QR codes are run by algorithmic software and no two codes are exactly alike
Adding a team to Warehouse 4 changes the workflow And the steps in that process will be summarized as follows:
Figure 4.10: Shipping mark workflow chart
The steps to build a shipping mark workflow are also a description of the future shipping mark's working steps Each step will be a stage in the working process
Inventory after entering the gate will be fully stamped by the shipping team and then the steps to enter the warehouse as usual Then if there is a move of the material, t must scan and move that material After that, the material is exported from the warehouse, then scanned out and presented to the gate and shipped
4.3.4 Evaluation and solutions for QR Barcode project
The QR Barcode project is a plan to improve the management efficiency of the warehouse The operation and implementation of the project will be the foundation for future work efficiency During the implementation of the project, we have discovered different strengths and limitations It is very important to overcome difficulties and shortcomings
● Pick goods purposefully following FIFO, decrease out-of-date material
● Minimize manual record and eliminate error typing (Stock cards removed)
● Close the gap between physical count and system count, the efficiency of cycle count
● The Operators work faster and improve the performance of other teams
Disadvantages/issues of the project:
● The old teams do not yet understand the new process that is about to change This major change will cause employees to re-learn from the beginning
● The locator labels are so vulnerable It was not a long lifespan
● The WIFI system does not meet The Reader's network access needs Sometimes, the information may be lost during connection failure
● There are still errors in information while scanning So the data on the system will also be wrong
4.3.5 The solution for the project
Change the overall process of both warehouse and employee training
Must build the integration of the new team into the general process of Warehouse 4 This combination will help the teams work together more smoothly and effectively It could be a training session and training on new ways of working at the warehouse Need to rebuild warehouse process and team tasks Teams will embrace change and new ways of working Especially, the Operator team needs to be thoroughly trained on the steps to coordinate with the shipping mark They need to be trained on how to use the reader and manipulate QR barcodes etc
It is necessary to build a professional leader to manage the work of this team The management of staff who manage KPIs and labels will be more effective if a good leader is selected The leader will provide more in-depth training for the shipping mark team to improve the group's activities
Make sure the team locator is solid and in place This makes searching and scanning the code unobstructed
We need to use the label holder for the labels at the locator It will be difficult when the labels at that location cannot be used It can slow down the workflow of many other activities In addition, data may also be lost Using a label holder would be a safety measure to avoid such things Our locator labels will be better preserved and avoid physical impact or loss
Set up a stable WIFI network
Add more WIFI hotspots at the warehouse Ensure that the reader will not lose network connection during work The WIFI waves must be stable and have a strong signal that can help to enter data into the system faster
We have to install more WIFI transmitters for the warehouses and it has a good signal These transmitters must have the same signal name So that the scanners do not lose connection while operating
The tally will be somewhat different when we apply the shipping mark to all items in stock We can use scanner phones to check the quantity at any rack But that information also comes from the Operators
We need to build a team whose main task is to count the actual number against the number on the system The information that this group brings will be extremely reliable when all they do is count manually and count with a scanner phone Their findings will reveal where errors come from and who is responsible The small risk classification can reduce the cost of warehouse risks a lot In addition, the raw materials in the warehouse are extremely valuable and highly secure, so theft management is also very important
4.3.6 The novelty of the solution