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Warehousing, Shipping


Need dedicated warehouse inventory employees extra load on management. ... Strongly backed by Wal-Mart, a large purchaser of PetPro goods, and other ... – PowerPoint PPT presentation

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Title: Warehousing, Shipping

Warehousing, Shipping Receiving
  • New Technology Evaluation

Problem Statement
  • What needs to be done
  • Research and implement new technologies to reduce
    costs and increase timeliness and accuracy of
    inventory reporting.
  • Why
  • To help PetPro become more competitive.
  • To help PetPro continue to be a highly
    contributing member of the Nestle group of

Technologies Under Consideration
  • Manual Inventory Method
  • (system currently in use)
  • Option 1 Barcode Scanners
  • Option 2 RFID Tags

Evaluation Template
  • System - how the system works
  • Disadvantages and Issues
  • Advantages and Benefits
  • Cost of Implementation
  • Physical Resource Requirements (including total
    cost of operating)

Manual Inventory Method
Manual Inventory Method
  • Taking Inventory
  • Computer prints list of items expected to be in
  • Employee compares actual stock with expected
    stock records discrepancies.
  • Employee manually enters discrepancies into
    computer to update inventory records.

Manual Inventory Method
  • Sending a Shipment
  • Computer prints list of items to be shipped.
  • Employee prepares shipment and records list of
    items actually shipped.
  • Employee manually enters list of items shipped
    into computer to update inventory records.

Manual Inventory Method
  • Receiving a Shipment
  • Employee makes a list of items in the received
  • Employee manually enters list into computer.
  • Computer reports discrepancies between actually
    received items, and items expected to be
  • Computer updates inventory records.

Manual Inventory Method
  • Disadvantages and Issues
  • Many points of manual data entry mean much
    potential for error entering data.
  • When taking inventory, items must be individually
    inspected time consuming and inaccurate and
    labour intensive.
  • Accounting department must make allowances for
    discrepancies between expected and actual

Manual Inventory Method
  • Advantages and Benefits
  • Few direct costs requires no special technology
    to operate beyond computer and printer and Excel
  • Little or no system downtime system can rely
    entirely on paper lists and no power for short
    time periods.

Manual Inventory Method
  • Projected Cost of Implementation
  • Not applicable because system is already in place
    and operating.

Manual Inventory Method
  • Physical Resource Requirements
  • Need dedicated warehouse inventory employees
    extra load on management.
  • Inventory can only be taken on a periodic basis
    due to the time required to take complete stock
    not good for JIT model.
  • Expenses incurred for large volume of paper used

Option 1 Barcode Scanners
Barcode Scanners
  • Different brands manufacturing various models and
    systems of barcode scanner were studied
  • Transformations, Inc
  • Price to implement 25000 to 100000 depending
    on options
  • Innovative Business Systems, Inc.
  • Price to implement 1 to Infinite

Barcode/UPC Scanners
  • Taking Inventory
  • Employee uses barcode scanner to scan every
    single item in stock.
  • List of scanned barcodes is electronically
    transferred into computer.
  • Computer calculates actual inventory on hand, and
    reports discrepancies between expected and actual.

Barcode/UPC Scanners
  • Sending Shipments
  • Employee receives list of items to be shipped,
    and scans barcode on each and prepares items to
    be shipped.
  • List of shipped items is loaded into computer, to
    update inventory on hand

Barcode/UPC Scanners
  • Receiving Shipments
  • Employee scans each item that was received.
  • List of items received is loaded into computer.
  • List of items expected is compared to list of
    items actually received, and any discrepancies
    are reported.

Barcode/UPC Scanners
  • Disadvantages and Issues
  • Person scanning items might miss a few.
  • Scanner may not pick up barcode properly (as
    happens in super market sometimes)
  • Inventory can only be taken on periodic basis
    (e.g. weekly) because of length of time required.

Barcode/UPC Scanners
  • Benefits and Advantages
  • Increased reliability, because inventory system
    is simplified.
  • Time savings in inventory checking. Complete
    warehouse inventory can be taken at shorter
    intervals, which yields more precise and timely
    information about warehouse assets.
  • Savings in paper costs.
  • Technology tested by other large companies (The
    Bay, Wal-Mart, Loblaws)

Barcode/UPC Scanners
  • Cost of Implementation
  • Barcode scanners, hardware to interface scanners
    with computers, new software all must be
  • Employees must be trained to use new technology.

Barcode/UPC Scanners
  • Physical Resources
  • A smaller group of employees required.
  • Repairs on scanning equipment.
  • Increased IT costs.
  • Storage space required for hardware.

Option 2 - RFID Tags
Radio Frequency Identification (RFID) Tags
  • System
  • Each item in the warehouse is fixed with a tiny
    electronic tag, which is encoded with a unique
    number. Sensors mounted at all warehouse entry
    points detect when a tag enters and leaves the
    warehouse. In this way, it is possible to keep
    track of items in the warehouse with extreme
    precision with little or no human intervention.

Radio Frequency Identification (RFID) Tags
  • Taking Inventory
  • No special process is required to take
    inventory. In special cases employees have the
    option of touring the warehouse with an RFID
    scanner to detect exactly what is inside the

Radio Frequency Identification (RFID) Tags
  • Sending a Shipment
  • Employee prepares shipment from a work order.
  • System detects items passing out of warehouse,
    and immediately updates database.

Radio Frequency Identification (RFID) Tags
  • Receiving a Shipment
  • System detects items entering the warehouse, and
    immediately updates database.
  • System compares the list of items received with
    the list of items that was expected, and reports
    any discrepancies.

Radio Frequency Identification (RFID) Tags
  • Disadvantages and Issues
  • All warehouse issues depend on the system, which
    means the system must be 100 dependable,
    otherwise the entire supply chain can be stopped.
  • Expensive hardware required to operate (high
    startup cost).
  • Radio frequency interference.

Radio Frequency Identification (RFID) Tags
  • Advantages and Benefits
  • Increased reliability, because nothing can enter
    or leave the warehouse without being noticed by
    the system.
  • Little or no direct human involvement in day to
    day warehouse operation. Significant reduction in
  • Strongly backed by Wal-Mart, a large purchaser of
    PetPro goods, and other companies with huge
    buying power.
  • .

Radio Frequency Identification (RFID) Tags
  • Projected Cost of Implementation
  • Tags, sensor equipment must be purchased.
    Purchasing new tags becomes another operating
  • Employee training in use of new system.
  • Significant changes in IT architecture.
  • Installation of equipment.
  • 10,000 to 500,000 to implement

Radio Frequency Identification (RFID) Tags
  • Physical Resource Requirements
  • Increased server space.
  • Increased IT spending.
  • Continuous purchase of new tags.
  • Repairs on equipment.
  • No employees dedicated to inventory tracking are

  • We recommend further researching RFID tags for
    possible implementation.
  • RFID has more upfront costs than barcode
    scanners, but the long-term benefits will be well
    worth it.
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