Chapter 04
Warehousing and inventory
45 terms
Practice by level
Terms
01Finished goodsThành phẩm
Definition
Product that has completed production and packing, has batch release, and is ready for sale.
Examples
- One shift puts out 143 thousand bottles, about 5,958 cases or 124 pallets.
- The plant carries 42 finished goods codes and 8 of them make up 70 percent of volume.
Easy to get wrong
Stock on a pallet is not automatically finished goods. A lot without batch release stays on hold and does not count as sellable inventory.
02Production handoverBàn giao thành phẩm
Definition
The step where quantity and custody of finished goods pass from production to the warehouse and are posted in the system.
Examples
- At the end of each shift production hands over 124 pallets with lot numbers and production times, and the warehouse signs within 30 minutes.
- The gap between the production count and the warehouse count is held under 1 pallet per shift.
Easy to get wrong
Handover is more than pushing pallets across a painted line. Until the quantity is posted the warehouse has nothing to sell, even with the pallets inside.
03Stock keeping unitMã hàng
Definition
A code identifying one specific product, separated by flavour, volume and pack format.
Examples
- Orange 500 ml in a 24 bottle case and orange 500 ml in a 12 bottle case are 2 different stock keeping units.
- The plant manages 42 finished goods codes across 6,000 pallet locations.
Easy to get wrong
The same drink in a different case format is still a separate code. Merging them in the stock figure sends pickers to the wrong pack.
04PalletPallet
Definition
A wooden or plastic base used to group many cases into one handling unit.
Examples
- One pallet holds 48 cases of 24 bottles, so 1,152 bottles.
- A standard wooden pallet is 1,200 by 1,000 millimetres, rated at 1,000 kg, and costs 180 thousand dong.
Easy to get wrong
Cases per pallet has to follow the agreed pattern. Adding one extra layer to save space breaks both the count and the stacking load.
05Pallet labelNhãn pallet
Definition
A label on the pallet showing product code, lot number, production date, quantity and a barcode.
Examples
- Each pallet carries 2 labels on two adjacent faces, each with 5 data fields and one barcode.
- Scanning a label takes 3 seconds against about 40 seconds to write the same data by hand.
Easy to get wrong
A pallet label does not replace the case marking. Once a pallet is broken down, the loose cases only carry what is printed on the case.
06Inbound staging areaKhu chờ nhập
Definition
Space next to the end of the line where pallets wait before being put away into storage locations.
Examples
- The staging area holds 60 pallets, close to half of one shift output.
- A pallet waits about 40 minutes in staging before it is put away.
Easy to get wrong
Staging is a waiting space, not a storage space. Once it holds more than 60 pallets forklifts start weaving and the line can stop for want of a place to set a pallet down.
07Put awayCất hàng vào vị trí
Definition
Moving a pallet from staging into its storage location and recording that location in the system.
Examples
- One put away takes 3 minutes, so 6 forklifts clear the 124 pallets of a shift in about 62 minutes.
- First time correct put away runs at 99 percent, which is about 1 wrong pallet per shift.
Easy to get wrong
Put away is not finished when the pallet is on the rack. Without the location posted in the system the pallet is lost, even while it sits in plain view.
08Warehouse layoutSơ đồ kho
Definition
How zones and aisles are arranged in the warehouse, which sets the travel distance of every pick.
Examples
- The warehouse covers 4,800 square metres with 6 racking rows and 5 aisles 3.2 metres wide.
- Moving the 8 fastest codes near the dispatch doors cut average pick travel from 85 metres to 52 metres.
Easy to get wrong
A layout that looks tidy on the drawing can still run badly. If 70 percent of volume sits at the far end, every trip adds 33 metres, and those metres become tens of hours a month.
09Storage locationVị trí lưu trữ
Definition
The address of one pallet space in the warehouse, written as row, bay and level.
Examples
- Location A12 level 3 means row A, bay 12, level 3, and holds exactly 1 pallet.
- The warehouse has 6,000 pallet locations, 4,800 in racking and 1,200 in floor block stacking.
Easy to get wrong
One location should hold one product code and one lot. Two lots in one location kills first expired first out at the moment of picking.
10Selective rackingKệ chọn lọc
Definition
Steel racking where any pallet can be taken directly without moving another pallet.
Examples
- The warehouse has 4,800 selective racking locations on 4 levels, each level rated at 1,200 kg.
- Racking costs about 1.2 million dong per location, so 5.8 billion dong for 4,800 locations.
Easy to get wrong
Selective racking gives access to the exact lot but spends floor area on aisles. Here aisles take about 35 percent of the floor, and that is the price of reaching any pallet.
11Block stackingXếp chồng trên sàn
Definition
Stacking pallets directly on the warehouse floor on top of each other, with no racking.
Examples
- The floor area holds 1,200 pallets, stacked 3 high and 8 deep from the aisle.
- A floor position costs close to nothing against 1.2 million dong for a racking location.
Easy to get wrong
Block stacking suits fast codes holding a single lot. A pallet at the back waits for the 7 pallets in front of it, so stock that came in first goes out last.
12Fast moving areaKhu hàng chạy nhanh
Definition
The zone for codes picked most often, placed near the dispatch doors to cut travel.
Examples
- The 8 class A codes carry 70 percent of volume but take only 22 percent of the storage space.
- After moving those 8 codes into 3 rows near the doors, forklift trips over 60 metres fell from 210 to 90 a day.
Easy to get wrong
Fast and slow have to be measured in pick trips, not in sales value. A high value code picked as full pallets twice a day does not need a spot near the doors.
13Storage capacitySức chứa kho
Definition
The maximum number of pallets the warehouse can hold properly, counted in locations rather than floor area.
Examples
- The finished goods warehouse has 6,000 pallet locations, 4,800 in racking and 1,200 on the floor.
- At 372 pallets dispatched a day, 6,000 locations cover about 16 days of production.
Easy to get wrong
Theoretical capacity is never fully usable. The warehouse needs empty locations to shuffle stock, so the workable ceiling sits near 85 percent, or 5,100 pallets.
14Storage utilisationTỷ lệ lấp đầy kho
Definition
The share of locations holding stock out of all locations in the warehouse.
Examples
- 4,800 pallets in 6,000 locations gives 80 percent utilisation.
- In the peak month stock rises to 5,400 pallets and utilisation touches 90 percent.
Easy to get wrong
High utilisation is not a sign of a healthy warehouse. Above 90 percent every put away turns into a search and the task grows from 3 minutes to 5.
15Storage conditionsĐiều kiện bảo quản
Definition
Requirements for temperature, humidity, light and stacking so product holds quality to the end of its life.
Examples
- Bottled soft drinks are kept between 15 and 30 degrees C, out of direct sun.
- The warehouse logs temperature 3 times a day, and in hot months the area under the roof reaches 36 degrees C.
Easy to get wrong
Storage conditions include how stock is stacked. Going from 3 tiers to 4 crushes the bottom cases and deforms bottles even when temperature stays in range.
16Remaining shelf lifeHạn sử dụng còn lại
Definition
The number of months left from today to the expiry date of a lot sitting in the warehouse.
Examples
- A lot made on 10 March with a 12 month life has 6 months left on 10 September.
- The warehouse tracks remaining life in 4 bands: over 9 months, 6 to 9, 3 to 6 and under 3.
Easy to get wrong
Remaining life is counted from today, not from the production date. Two pallets of one code made 2 months apart are very different to sell.
17Minimum life on dispatchHạn tối thiểu khi giao
Definition
The minimum shelf life stock must still carry at the moment it is handed to the customer.
Examples
- The distributor contract requires 9 of the 12 months to remain, or 75 percent of the life.
- One truck of 20 pallets was refused with 8 months left, and handling it back cost 6 million dong.
Easy to get wrong
In date is not the same as deliverable. A bottle with 8 months left is safe but breaks the 9 month clause, and the customer refuses it at the receiving door.
18First expired first outHạn sớm xuất trước
Definition
The rule of shipping the lot with the earliest expiry date first, whatever its receipt date.
Examples
- Of two lots of one code, lot A expiring in March and lot B in May, the warehouse ships A first even though B arrived 1 week earlier.
- Applying the rule properly cut expired pallets from 9 to 2 per quarter.
Easy to get wrong
The rule does not enforce itself once it is set up in the system. If two lots share one location the picker takes whichever pallet is easiest to reach.
19First in first outNhập trước xuất trước
Definition
The rule of shipping the lot that arrived first, based on receipt date rather than expiry date.
Examples
- For a code that runs 1 lot a week, first in first out and first expired first out give the same answer.
- After 3 pallets of rework, that stock has a new receipt date but the old expiry, so the two rules point at different pallets.
Easy to get wrong
First in first out only holds while receipt dates track expiry dates. For rework or returned stock, only first expired first out gives the right answer.
20Short dated stockHàng cận hạn
Definition
Stock still in date but with too little life left for normal delivery terms.
Examples
- The warehouse holds 46 pallets with under 6 months left, close to 1 percent of stock.
- The short dated list goes to sales every Monday and currently covers 7 codes.
Easy to get wrong
Short dated stock loses value week by week. Waiting another month for full price usually ends in writing off the lot and paying disposal on top.
21Warehouse damageHàng hỏng trong kho
Definition
Stock dented, broken or soiled by impact, falls or bad stacking while in storage.
Examples
- Last month the warehouse recorded 8 damaged pallets, 3 of them from forklifts hitting rack legs.
- Those 8 pallets are 46 million dong at cost, or 0.08 percent of monthly volume.
Easy to get wrong
Damage is often booked into one shrinkage line. Splitting it by cause shows 3 of the 8 pallets came from one tight corner, and that corner can be fixed.
22Full stock countKiểm kê toàn bộ
Definition
Counting all stock in the warehouse at one point in time, usually with receipts and dispatches stopped.
Examples
- The plant runs 2 full counts a year, with 24 people covering 6,000 locations in 8 hours.
- Each 8 hour stop delays about 124 pallets of dispatch, which has to be caught up on a weekend shift.
Easy to get wrong
Counting twice a year only reveals errors after they have built up for 6 months. By then most of the trail needed to find the cause is gone.
23Cycle countingĐếm luân phiên
Definition
Counting a small share of locations every day on a schedule, so the warehouse never stops.
Examples
- The team counts 60 locations every working day, or 1,560 locations a month.
- Class A codes are counted monthly, class B quarterly and class C every 6 months.
Easy to get wrong
Cycle counting does not replace the full count for the accounts. Its value is finding a gap within days, while logs and camera footage can still be traced.
24Stock discrepancyChênh lệch kiểm kê
Definition
The gap between the counted quantity and the system quantity at a location.
Examples
- Counting 1,560 locations in a month found 23 with gaps, totalling 14 pallets.
- Of those 23 locations, 15 were put away in the wrong place, so the stock was still inside the warehouse.
Easy to get wrong
Positive and negative gaps do not cancel out. A pallet extra in one location and a pallet short in another is two errors, not a balanced warehouse.
25Inventory accuracyĐộ chính xác tồn kho
Definition
The share of counted locations that match the system, out of all locations counted.
Examples
- 1,537 correct locations out of 1,560 counted gives 98.5 percent accuracy.
- The warehouse target is 99.5 percent, which allows no more than 8 wrong locations in 1,560.
Easy to get wrong
Accuracy is measured by location, not by total quantity. A total that matches while 23 locations are wrong still sends pickers to empty spaces.
26Stock shrinkageHao hụt kho
Definition
Stock lost inside the warehouse through damage, expiry, theft and recording errors.
Examples
- Last month shrinkage was 12 pallets against 9,670 dispatched, about 0.12 percent.
- Of those 12 pallets, 8 came from damage and 4 had no cause found.
Easy to get wrong
A small percentage can still be real money. The 0.12 percent here is 69 million dong a month, over 800 million dong a year.
27Stock adjustmentĐiều chỉnh tồn kho
Definition
A posting that changes the system quantity to match the physical count, with a reason code and an approver.
Examples
- The 14 pallet gap was cleared in 3 postings, each with a reason code and the warehouse manager signature.
- Any posting over 5 pallets needs plant manager approval, and there was 1 such case last month.
Easy to get wrong
An adjustment makes the numbers agree, it does not bring the stock back. A warehouse that adjusts freely erases the trail it needs to find causes.
28Finished goods inventoryTồn kho thành phẩm
Definition
All completed product waiting to be sold, counted in pallets and in money.
Examples
- Average stock is 4,800 pallets at 5.76 million dong per pallet, so 27.6 billion dong.
- Closing stock in May was 5,100 pallets, 300 above the average.
Easy to get wrong
Inventory is money standing still. Every 100 extra pallets ties up 576 million dong and takes 100 locations that faster codes need.
29Days of inventorySố ngày tồn kho
Definition
How many days of sales the current stock covers, found by dividing stock by average daily dispatch.
Examples
- 4,800 pallets divided by 372 pallets dispatched per working day is about 13 days.
- Against annual cost of goods sold of 660 billion dong, stock of 27.6 billion is about 15 calendar days.
Easy to get wrong
The average hides the spread between codes. An overall 13 days can be class A at 4 days while a class C code sits for 90.
30Inventory turnoverVòng quay tồn kho
Definition
How many times stock is sold and replaced within a year.
Examples
- Cost of goods sold of 660 billion dong divided by average stock of 27.6 billion gives 24 turns a year.
- Cutting stock from 4,800 to 4,000 pallets lifts turnover from 24 to 29.
Easy to get wrong
High turnover is not automatically good. Cutting too deep raises the ratio but creates stockouts, and one truck that cannot leave costs more than the capital saved.
31ABC classificationPhân loại ABC
Definition
Splitting product codes by share of volume so each group gets a different level of control.
Examples
- 8 class A codes carry 70 percent of volume, 12 class B codes 20 percent and 22 class C codes 10 percent.
- Class A is counted monthly and holds 3 days of safety stock, class C is counted every 6 months and holds none.
Easy to get wrong
Class C is small in volume but is 22 of the 42 codes. Most dead and expired stock sits there, so ignoring class C means ignoring the risk.
32Slow moving stockHàng chậm luân chuyển
Definition
Stock that still ships but moves far slower than the normal rate for the warehouse.
Examples
- Code C17 holds 40 pallets and ships 2 a month, which is 20 months of cover.
- The warehouse has 7 slow moving codes holding 180 pallets, 3.8 percent of stock.
Easy to get wrong
Shelf life is only 12 months, so 20 months of cover means most of that stock will expire. For dated product, slow moving is dead stock counting down.
33Dead stockHàng chết
Definition
Stock with no dispatch over a long period and no remaining plan to sell it.
Examples
- 6 pallets in old Tet packaging have not moved in 6 months and are worth 34.6 million dong at cost.
- Dead stock is only 6 pallets out of 4,800 but sits in 6 racking locations near the dispatch doors.
Easy to get wrong
Dead stock keeps costing money every day. Beyond the 34.6 million dong tied up, it holds 6 locations that fast codes need, and its value only falls further.
34Safety stockTồn kho an toàn
Definition
Extra stock held to absorb swings in demand and in production.
Examples
- Code A1 ships 60 pallets a day, so 3 days of safety stock is 180 pallets.
- Class A holds 3 days of safety stock, class B holds 2 and class C holds none.
Easy to get wrong
Safety stock is not a permanent number. When replenishment time drops from 3 days to 2, holding the same 180 pallets just parks capital.
35Reorder pointĐiểm đặt hàng lại
Definition
The stock level that triggers a replenishment order, equal to demand over the replenishment time plus safety stock.
Examples
- Code A1 ships 60 pallets a day with a 2 day replenishment time and 180 pallets of safety stock, so the reorder point is 300 pallets.
- A1 stock fell to 296 pallets on Tuesday morning and planning released a production order the same day.
Easy to get wrong
The reorder point is not the minimum level. It is where replenishment starts, and stock keeps falling another 120 pallets during the 2 day wait.
36Target stock levelMức tồn mục tiêu
Definition
The stock level the warehouse aims to hold for each code, set between the reorder point and the capacity ceiling.
Examples
- Code A1 has a target of 480 pallets, about 8 days of dispatch.
- The ceiling for A1 is 600 pallets, and above that planning has to push the production order back.
Easy to get wrong
Per code targets have to be added up and checked against capacity. All 42 codes at target come to 5,900 locations, leaving only 100 free to move stock around.
37Inventory holding costChi phí lưu kho
Definition
The cost of keeping stock, covering tied up capital, space, labour, power and losses.
Examples
- Holding cost runs about 18 percent of stock value a year, so 4.97 billion dong on 27.6 billion of stock.
- Spread over 4,800 pallets, that is about 86 thousand dong per pallet per month.
Easy to get wrong
Holding cost is not just the rent bill. Tied up capital and damage usually add up to more than rent, so cutting rent does not touch the root.
38Stock write offHủy hàng hết hạn
Definition
Removing expired or damaged stock from inventory, with a signed record and a disposal cost.
Examples
- Last quarter 9 pallets were written off at 52 million dong cost plus 3 million dong of disposal.
- The write off record carries 3 signatures from warehouse, quality and accounting, with photos of 4 lot codes.
Easy to get wrong
A write off closes the numbers, not the cause. If the next quarter brings another 9 expired pallets the problem sits in remaining life tracking.
39Goods issue notePhiếu xuất kho
Definition
The warehouse document raised when stock leaves, listing code, lot, quantity and destination.
Examples
- Issue note 2140 lists 20 pallets across 3 codes and 4 lot numbers for the eastern distributor.
- The warehouse raises about 42 issue notes a day covering 372 pallets, with several small notes sharing one truck.
Easy to get wrong
The note has to carry the lot actually picked. Printing the system lot while the picker took another one destroys traceability when a complaint arrives.
40Order pickingSoạn hàng
Definition
Taking the right code, lot and quantity from storage locations to fill an order.
Examples
- The warehouse picks about 1,200 order lines a day for 42 orders.
- Each shift has 6 pickers handling about 100 lines each.
Easy to get wrong
Picking workload is measured in lines, not in pallets. Those 1,200 lines may only add up to 372 pallets, but most of the time goes into the loose case lines.
41Case pickingSoạn lẻ thùng
Definition
Taking individual cases from an open pallet instead of moving a full pallet.
Examples
- An order for 18 cases is picked loose from an open pallet rather than dropping a full 48 case pallet.
- Case picking is only 72 of the 372 pallets dispatched daily but takes about 60 percent of picking time.
Easy to get wrong
One loose case costs many times more effort than one full pallet. Picking 18 cases takes about 9 minutes while moving a full 48 case pallet takes 2.
42Mixed palletPallet hỗn hợp
Definition
A pallet holding several codes or lots, built for one specific order.
Examples
- The mixed pallet for order 2140 holds 20 cases of A1, 16 of B3 and 12 of C7.
- The warehouse builds about 72 mixed pallets a day at 12 minutes each.
Easy to get wrong
A mixed pallet needs the heavy codes at the bottom and every lot written on the label. Without the lot detail a complaint cannot be traced to the right cases.
43Picking accuracyĐộ chính xác soạn hàng
Definition
The share of order lines picked with the right code, lot and quantity.
Examples
- 1,194 correct lines out of 1,200 is 99.5 percent accuracy, or 6 wrong lines a day.
- Scanning barcodes before loading the pallet cut wrong lines from 6 a day to 2.
Easy to get wrong
A wrong line does not stop at the warehouse. A customer short 6 cases files a report, waits for a top up and costs another trip, far more than those 6 cases are worth.
44Pallet wrappingQuấn màng pallet
Definition
Wrapping stretch film around a pallet so the cases stay in place while it moves.
Examples
- Each pallet takes 18 wraps using about 250 grams of film at 8 thousand dong.
- The wrapping machine handles 40 pallets an hour against 15 by hand.
Easy to get wrong
Cutting wraps saves very little. A pallet that collapses in transit ruins 48 cases worth 5.76 million dong, hundreds of times the film saved.
45Outbound staging areaKhu chờ xuất
Definition
The space in front of the dispatch doors where picked pallets wait and are checked before loading.
Examples
- The staging area holds 120 pallets, about 6 trucks of 20 pallets.
- Each load is checked on 4 points, pallet count, codes, lot numbers and wrap condition, in 8 minutes.
Easy to get wrong
Staging has to be marked out lane by lane. One shared heap lets two orders mix, and the error only shows when the customer counts at their door.