CONTROL PROJECT

OF INVENTORIES
GROUP WORK

This work aims to introduce the tools

what a company, ALQUERIA S.A uses to carry out a
control your inventories and propose a project that
benefit the company

Lucia Soler, Rodrigo Rubiano, Cristian

Sánchez, Julio Cesar Rodríguez, Milton Bolaños
Diego Granados, Félix Santana, Fabio Quimbay and
Wilson Triviño.
February 28, 2013
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INTRODUCTION.

The company ALQUERIA S.A manages various types of tools to perform control.
of inventories today, which is why a proposal for identifying the use is wanted.
appropriate inventory policy with the subject of study, through the information
collected through a survey.

The main objective is to contribute to the maximum of the acquired knowledge and generate value in
the supply chain through the contributions we can generate over time
learning process.

For which it must be taken into account that each organization must seek the
tools to face that external world called competition and maintain well
strong infrastructure, good financial control, its solidity in the marketing field and
The good management of your inventory will allow you to achieve success.
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INVENTORY CONTROL OF THE COMPANY ALQUERIA S.A.

1. DEFINITION OF THE PROBLEM.

The company ALQUERIA S.A has implemented countless modifications in its
work procedures in each of their departments, areas and each of their
processes, always trying to improve them in order to be competitive in the market
dairy, but we see that situations constantly arise where we can see the
large amount of goods that are destroyed due to expiration, due to poor turnover
of the products, although there are policies and procedures for controlling their shelf life,
We see that its execution is not enough to prevent these situations.

Although the percentage of returns has decreased, today there are still high numbers.
amounts of merchandise destruction or delivered as donations to the bank of
food, due to short deadlines, we must also take into account the mismatches
in inventories those that are causing losses to the company. For this reason, if there were
an additional tool to the returns procedure would be good for the
company in managing its inventories and in financial execution.

For the inventory control of ALQUERIA S.A, certain processes are required that
they allow for the fulfillment of activities, each process requires meticulous
implementation but often they are not carried out efficiently, the method
rudimentary or traditional for inventory taking; which are bringing as
resulted in major difficulties in losses and discrepancies in inventory management.
in the inventory of the company ALQUERIA S.A we can find many issues that
they delay the normal activities of the offices and generate an increase in costs
of storage.

As long as the problem is viewed and no measures are taken, the company will continue its
normal sales course, but with the difficulty of continuing with a problem that will persist
decreasing its profits, the company may be solid and the percentage against the
sales may be minimal, but looking at it in pesos it is a high level, and it will continue to exist.
bad product rotation and the increase in expired goods will continue.

For this reason, a study is intended to be carried out that will allow for the improvement of a process that has
existed, for this purpose we addressed the topic of merchandise returns, the turnover
of dates and minimize inventory discrepancies, since the traditional way how
they are being managed, it is evident that it is not the most efficient.
Thus we asked ourselves the following question:
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What actions should be taken to reduce breakdowns, the bad

rotation of products and discrepancies in inventories, and thus make more
Is inventory management efficient at ALQUERIA S.A.?

2. JUSTIFICATION OF THE PROJECT.

At this important point, it will address the research topic as the study
methodological for the proper management in inventory control of the products of the
plant in Cajicá, in addition to covering all the logistics in the implementation of
systematic procedures and infrastructure at ALQUERIA S.A. which is the key
so that the ongoing research project is aimed at improving the good
management of returns avoiding a high percentage of destruction of
merchandise and that this information is channeled through some systematic means.

The research will be carried out at the CARLOS ENRIQUE CAVELIER (PEC) plant.
specifically in Cajicá (Cundinamarca). For the realization of this research
he took as a reference the average returns of the PEC and difficulties in the last
year, a period that is considered prudent for a detailed analysis of the variables and
indicators used in this research, such as the PPE (weighted age of
product).

The subject of study will be of an industrial nature, as the situation to be investigated is

Present in a recognized organization at the level of the dairy industry in Colombia.

3. OBJECTIVES.
GENERAL OBJECTIVE.

Establish through a methodological study an improvement in management

inventories at ALQUERIA S.A., emphasizing the return process and
destruction of the products. We must also take into account the study of
Develop software that facilitates the control of products and the management of
inventories of the company ALQUERIA S.A, through the implementation of a
database.

b) SPECIFIC OBJECTIVES.

1. Diagnose the current situation in the inventory process in the warehouse of

storage of the logistics area at ALQUERÍA S.A
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2. verify the procedure for the entry, exit of material and inventory control of
warehouse.

3. Verify the classification of products in stock in the warehouse according to the theory
ABC.

4. Determine if the organizational model is being applied in the inventory (layout)

5. Identify the resources that are needed for the system installation
automated.

6. propose an inventory control automation system for the warehouse of

storage of the logistics area in ALQUERÍA S.A

7. Foster efforts in the 5S methodology.

4. GLOSSARY
FIFO: First in, first out method. This method basically consists of
in giving inventory out to those products that were purchased first, so
The inventories will contain those products purchased most recently.

PEC: plant ENRIQUE CAVELIER

weighted age of the product

BREAKDOWNS: breakdown is a word that comes from the Arabic language al-awarriy as it means
damage suffered by the goods. Where the word damage is considered as a
word that means to cause detriment or to ruin something.

INVENTORY: is that set of goods, both movable and immovable, with which
Create a company for trading.

SUPPLY CHAIN: logistical and management process that takes place

between suppliers and retailers in order to have the products at the point of sale
and thus satisfy the demand of the end consumer.
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BARCODE: Unique, standard, and international identification of products

through a combination of dark bars and light spaces. There are two systems in
the international sphere: the EAN and the UCC.

CROSS DOCKING: It is a process of conditioning goods in a warehouse.

central to then be distributed to different points of sale, customers, or other warehouses.

SUPPLY CHAIN: It is the process that involves everything from purchasing

raw material until the delivery of the finished product to the end consumer.

VALUE CHAIN: It is each of the processes that participate within an objective.

general printing added value that benefits the customer and the organization. One
voluntary alliance of companies to create an economic benefit for customers and
share the profits.

EPC: Electronic Product Code (similar to a barcode but contains)

various information about a certain item.

FREIGHT: The amount paid for the transportation of goods or objects from one place to
origin to a destination site.

BENCHMARKING: The process of comparing performance against the practices of others

companies, with the purpose of improving performance. Companies can also
make an internal reference. Tracking and comparing current performance with
actions of the past.

SUPPLY CHAIN: Movement of materials, funds, and related information

through the logistics process, from the acquisition of raw materials to delivery
from finished products to the end user. The supply chain includes all the
sellers, service providers, customers, and intermediaries.

DISTRIBUTION CHANNELS: The channels of sales supported by a company.

These can include retail sales, sales from distribution associates (by
example, wholesale sales), Sales of the original equipment manufacturer (the OEM <Original
Equipment Manufacturer>), internet exchange or market sales, and auctions of
Internet.

LOGISTIC CHANNELS: The network of participating supply chains committed

in storage, handling, transfer, transportation, and communication functions that
they contribute to the effective flow of goods.

DISTRIBUTION CENTER (DC): A post-production warehouse for finished goods.

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ISO 9001 Certification: The internationally recognized standard that establishes the
requirements for a Quality Management System for a service company. ISO
9001 is an approach to managing a business with respect to quality. Achieving the
certification is a rigorous process, with more than 130 requirements that operations
must comply.

ORDER CYCLE: The time and process involved from the placement of an order
upon receipt of the shipment

TIME CYCLE: The time it takes for a business to receive, stock, and deliver
an order to a customer. Once only measured in days, many industries now measure the
time cycle in hours.

COUNCIL OF LOGISTICS MANAGEMENT [CLM]: It is a non-profit organization of

businessperson who is interested in improving their skills in logistics and in the
supply chain address. The Council works in cooperation with the industry
private and various organizations with the purpose of understanding and developing the concept
of logistics. This is achieved through a continuous program of formal activities
and informal research and discussions designed to develop theory and understand the
logistical process.

HARMONIZED TARIFF CODE: A code to describe all items

numerically in the management of international trade by the World Customs
Organization. This code is used by countries to determine obligations and taxes.
for shipments across international borders.

TIME-BASED COMPETITION: A competitive marketing strategy based on time

in a company's ability to deliver its products to its customers faster than
its competition.

OUTBOUND CONSOLIDATION (BREAK-BULK): Consolidation of multiple shipments

small ones for various clients in a larger load. Sent to a nearby location
to the customers; to be later distributed in small shipments to the customers
(also known as Pool Distribution).

CONSOLIDATION: Combination of two or more shipments with the purpose of reducing the
transport proportions.

WAREHOUSING COSTS OF INVENTORY: A financial measure that calculates all

the costs associated with holding a unit in storage, usually
expressed as a percentage of the inventory value. Includes inventory-in-
almacenamiento
depreciation and handling cost.
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CPFR (COLLABORATIVE PLANNING FORECASTING AND REPLENISHMENT): Data

and process standards models developed for collaboration between suppliers and
a company with prohibited methods for planning (agreement among colleagues
commercials to lead the business in a certain way); forecasting (agreed-upon)
methods, technology, and timing for sales, promotions, and orders of
provisioning); and replenishment (generation of the order and fulfillment of the
order

CROSS-DOCKING: The direct flow of goods through a facility, from the

reception function to the sending function, eliminating the need for storage.

BREAK-BULK: The separation of a single bulk cargo

consolidated into smaller individual shipments for delivery to the end recipients
consignees.

INVENTORY DEPLOYMENT: A technique to position inventory strategically

to meet customer service levels while minimizing inventory and
storage levels. Excess inventory is replaced with information
derived through the supervision of supply, demand, and inventory in stock thus
like in motion.

SUPPLY CHAIN MANAGEMENT (SCM)

The direction and command of all materials, funds, and information
related in the logistics process from the acquisition of raw materials to the
delivery of finished products to the end user.

MANAGEMENT OF RESOURCES: a competence that encompasses specification,

purchase, address, maintenance and disposal of vehicles at the time
appropriate, in order to increase the return on investment.

E-BUSINESS: The term derived from terms such as

email and e-commerce. It's doing business on the Internet, not just buying and selling,
but also providing services to customers and collaborating with business partners.

E-FULFILLMENT: Fulfillment is the stage of the relationship between a customer and a supplier.
what happens when the latter must fulfill everything it promised in a timely and proper manner:
delivery of products or services, associated quality level, established deadlines,
contractual guarantees, among other alternatives. By extension, e-fulfillment is a set
of technological tools aimed at addressing this situation when it comes to
operations carried out through electronic commerce.

EDI - ELECTRONIC DATA INTERCHANGE

INTERCHANGE) A standardized format for exchanging business data. The standard
it is ANSI X12 and was developed by the Data Interchange Standards Association, ANSI X12
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is closely coordinated with an international standard, EDIFACT. A message of

EDI contains a string of data elements, each of which represents a
singular common fact such as price, product model number, etc.…, separated by a
delimiter character. The entire string is called a data segment. One or more
segments of the data identified by a header and a drag-and-drop form for
a set of transactions, which is the unit of transmission of EDI (equivalent to a
message).

ENTERPRISE RESOURCE PLANNING (ERP): An industry term for the

a wide range of activities supported by multi-module application software that
helps a manufacturer or another partner manage the important parts of their business,
including product planning, purchasing of parts, maintenance of
inventory, interaction with suppliers, providing customer service, and tracking of
orders.

LIKERT SCALE: (Method of summative evaluations) is a type of additive scale,

which was developed by Rensis Likert in the early 1930s, however it is still
current and widely used. It consists of a series of sentences or judgments before which one
request the reaction of the person to whom it is administered. That is, each is presented
sentence or statement (stimulus) that expresses a favorable or unfavorable statement about
an attitude object, and the respondent is asked to answer by choosing one of the points
from the scale. Each point is assigned a numerical value. Thus, the person obtains a
scoring with respect to each statement that contains the scale, and in the end, its is obtained
total score, summing the scores obtained in relation to all the sentences.

FLOW THROUGH DISTRIBUTION: A process in which products are brought from the
multiple locations to a central facility (sometimes called Cross-Dock), re-stocking
for delivery to your destination and same-day shipping. This eliminates storage, reduces
inventory levels and streamlines the order cycle time.

CONTINUOUS FLOWS The process of keeping loaded trucks in motion with

different loads and drivers.

GEO-CODE: Identifies locations by using three, four, or five digits as

postal codes or other identifiers (depending on the country) to enable mapping,
planning and execution of deliveries.

VENDOR-MANAGED INVENTORY - (VMI < VENDOR-MANAGED)

In the VMI process, the vendor takes responsibility for managing the
restocking of stock. Instead of a customer who places orders, the seller
replenish as needed. This process is sometimes called inventory
managed by supplier (SMI <Supplier Managed Inventory>) or co-managed of the inventory.
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FINISHED GOODS INVENTORY (FGI): They are

Completely manufactured, packaged, stored, and prepared products for
its distribution.

JUST IN TIME (JIT) An industrial strategy that smooths the flow

material within industrial plants. JIT minimizes investment in inventory
providing timely, sequential product deliveries exactly where and
when needed, from a multitude of suppliers. Traditionally a strategy of
automotive is being introduced into many other industries.

LAY OUT: Refers to the proper physical distribution within a plant or warehouse.

THE BEST PRACTICE The performance of the best operation or its application in a
given industry.

It is the waiting time established for the fulfillment of a

process: Example. The delivery of an order in 24 hours.

LOGISTICS: According to the Council of Logistics Management (CLM), logistics is the process of
plan, implement, and control effectively and efficiently the flow and storage of
goods, services, and information related from the point of origin to the point of consumption with
the purpose of meeting customer requirements.

INTEGRATED LOGISTICS: A comprehensive and extensive supply chain system

complete supply, as a single process, from the procurement of the materials
cousins until the distribution of the final product. All the functions that make up the
supply chain is managed as a single entity, rather than functions
individuals that are handled separately.

LTL CARRIERS (LESS THAN TRUCKLOAD CARRIERS): Companies that consolidate and
small cargo shipments are transported by truck using a network of terms and
stop points.

INVENTORY MANAGEMENT: The process of ensuring the availability of products

through inventory management activities such as planning, positioning
of stock, and monitoring of the product's age.

OUTSOURCING: Subcontracting of commercial functions or processes such as

logistics or transportation services to an external company, instead of doing them
internally.

PICK/PACK (PICKING): The process of selecting the inventory product and packing it
shipping containers.
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CAPACITY PLANNING: specific planning of the level of resources (for

example factories, fleets, equipment, system hardware, and size of the workforce
labor). what supports the company for better production.

MANUFACTURING PLANNING: Definition of daily or weekly production and

schedules of the machine for multiple plants or production lines in order to comply
orders and demand forecasting. Some manufacturing planning modules
It also includes the planning of raw materials.

CONTINUOUS REPLENISHMENT PLANNING (CRP)

PLANNING): A program that activates the manufacturing and movement of product through
the supply chain when an identical product is purchased by an end user.

SUPPLY CHAIN PLANNING: Typically involves activities

how to create a set of suppliers, responding to the buyer's forecasts, or
generating internal usage forecasts.

DEMAND PLANNING: The process of forecasting and managing demand

for products and services aimed at end users, as well as for intermediate members
in the supply chain.

MANUFACTURING PLANNING: The generation of execution programs to

plant level by product and resource (e.g., production line and machine) in order to
solve the daily capacity bottlenecks. The planning modules
they usually include a more granular level of resource information, and provide
as much functionality as a set of dependent sequences, and points of use and
arrangement of materials.

A commercial strategy to reduce inventory in the chain and

shorten the time cycle of manufacturing, distribution, and sale of a product. The information
from the point of sale is transmitted electronically back to the store supplier
who is responsible for the adequate supply of the store.

RATIONALIZATION OF THE RESOURCE: A process that audits the transport of a

company and the distribution resources and compares them against a supply chain plan
optimal supply.

REPLENISHMENT: The process of moving or restocking

inventories from a reserve storage location to a primary location
Picking.

EFFICIENT CONSUMER RESPONSE (ECR< EFFICIENT CONSUMER RESPONSE>)

An initiative of the supermarket and grocery industry designed to
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restock the store shelves based on actual consumer demand in

place of demand forecasts.

INVENTORY TURNOVER: The cost of goods sold divided by the level

average available inventory. This indicator measures how many times the inventory of a
the company has been sold over a period of time. Operationally, the turnovers
the inventory includes measures such as the total value of goods passing through the chain divided by
average inventory level for a given period.

OPTIMIZATION ROUTINES: Routines used to determine the optimal solution to a

specific problem. Included in the execution and planning of the supply chain
to reduce costs or times in the chain. Usually tactically focused to
use in ongoing operations.

SIMULATION ROUTINES: Various routines that use historical information to simulate

future alternatives for designed supply chain operations.
Normally strategically focused for future functions, these can
then perfecting oneself and/or prioritizing oneself.

INTERNATIONAL TRADE SYSTEMS

Execution systems designed to automate business processes
import/export. The basic functional components are the generation of
commercial documentation and its transmission, and the approval of regulatory compliance.

STOCK KEEPING UNIT (SKU); Numbering system that makes a product or

discernible article from all the others.

WORK-IN-PROGRESS: Parts and sub-assemblies in the process of becoming finished goods.

TRACEABILITY: Process of identifying or searching for information about the origin of a

determined product, service, or person.

INTERMODAL TRANSPORT: which transports goods using two or more modes of transportation
transport. An example would be loading into containers that could first be taken to a
port by truck, transport it by ship and train, and finally transfer it to a truck
to deliver to its final destination.

ADDED VALUE: increased or improved value, based on its functionality or

utility.

INVENTORY TURNOVER: The speed at which inventory moves through

from a defined cycle (for example, from reception to sending).
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VISIBILITY: The ability to access or view relevant data or information that is

related to logistics and the supply chain.

WMS - WAREHOUSE MANAGEMENT SYSTEM

A software application that manages the functions of a warehouse or center
distribution. The functionality of the application includes reception, storage, handling
inventory, cycle counting, task permissions, order planning, assignment
of order, restocking, packaging, shipping, worker address and equipment interface
material handling, equipment interfaces. The use of radio frequency technology along with
barcode systems provide the foundations of a WMS, for on-time delivery and
real-time accurate information.

5. THEORETICAL FRAMEWORK.

To support this research, the following background information was taken into account.
various previous studies, theses, and opinions on some related theories
with automated systems.

For the problem we pose in this work, it must be taken into account that for
designing the automated system must coordinate with data from other entities with the
organization interested in implementing such an automated system in general.

Quintero, A. (2001) Implementation of a New Inventory Control System and

Research About the Results of its Application. Aiming to establish an objective
general, study and implement the research control system of a company and
apply adjustments, corrections, and adaptations that are necessary to ensure the
supply agreement.

An inventory control system designed specifically for the needs

the company is an essential factor in production and sales policies thus
as in functional projections, since it allows to ensure the adequate,
sufficient and timely supply of raw materials for production with the minimum
possible static investment in inventories that implies and means saving money
and rationality of production.

The following presents the theoretical perspective that is used for development
the proposed research, which aims to provide a coordinated system
and coherent concepts and propositions that allow addressing the problem, in a way
to establish a reference framework for the interpretation of the study results
proposed.
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5.1 Inventory

The inventory is the set of goods or items that the company has to
trade with those, allowing the purchase andsaleor the manufacturing first before
sell them, in a specific economic period. They must appear in thegroupofassets
circulating.

It is one of the largest existing assets ina company. The inventory appears
so much in thebalance sheetlike in theincome statement. In the balance sheet, the
inventory is often the largest current asset. Inthe stateas a result, the
final inventory is subtracted from thecostof available goods for thesaleand sopower
determine the cost of goods sold during a specific period.

Inventories are tangible goods held for sale in the ordinary course.
for business or to be consumed in the production of goods orservicesfor your
posteriormarketing. The inventories include, in addition to raw materials,
productsinprocessyproductsfinished goods or merchandise for sale, the materials,
spare parts and accessories to be consumed in the production of manufactured goods for
the sale or provision of services; packaging and containers and inventories in transit.

5.2 Inventory Control

The various aspects of theresponsibilityabout inventories affect many

departments and each of them exerts a certain degree of control over the products, to
as they move through the various inventory processes.
All these controls that cover, from theprocedureto developbudgetsy
forecastsfrom sales and production to the operation of a cost system pro the
accounting department for the determination of inventory costs,
constitutes the system ofinternal controlof the inventories, thefunctionsgeneral are:
Planning, purchase or acquisition, reception, storage, production, shipments and
accounting.

5.3 Types of inventories.

5.3.1 Physical Inventory: It is the actual inventory. It is to count, think, or measure to

then note and record each and every one of the different classes of assets
(items) that are in stock on the inventory date.

5.3.2 Perpetual Inventory: It is the one that is kept continuously in accordance with the
requirements in the warehouse, through a detailed record, where they are kept
I finish the amounts in the monetary units and in physical quantities.

5.3.3 Initial Inventory: this is the inventory that is carried out at the start of operations.
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5.3.4 Final inventory: it is the one carried out by the person responsible at the end of the fiscal year.
economic, generally at the end of a period or accounting, or serves to
determine a new asset situation in that sense, after
carried out, after all commercial operations of the period have been completed.

5.3.5 Maximum inventory: Due to the crowd control approach employed,

there is a risk that the inventory level may become too high for
articles. Therefore, a maximum inventory is established.

5.3.6 Minimum inventory: it is the minimum amount of inventory to be maintained in

the warehouse.

5.3.6 Safety inventory: they are those that exist in a given place of the
company as a result of uncertainty in the demand or supply of units in
that place. These inventories related to raw materials protect against
inherent risks of suppliers, due to factors such as waiting time,
strikes, holidays, or units that are of poor quality will not be able to be
accepted. They are used to prevent shortages due to uncertain fluctuations of
demand.

5.3.7 Prevention Inventory: it is held in order to meet a future need

permanent defined. It differs from security ones because of the light
the need that is known with reasonable certainty and therefore, involves a
lower risk.

5.4 Function of Inventories

Help with the independence of operations.

It allows for the continuity of demand variations.
Determine the optimal sequence of operations.
It allows for the optimal use of productive capacities.
Determine economic conditions for exploitation.

5.5 Importance of inventory

Allows you to verify the differences between the records of existence in the
files of physical existence and excellence (real quantity in existence).
It allows verifying the differences and the physical accounting excellences, in values.
monetary.
Provide the estimated total value of the inventory (accounting), for
balance effects, when the inventory is done close to the closing of the
fiscal year
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5.6 The needs of physical inventory are based on two reasons:

The physical inventory meets the tax requirements, as they must be

recorded in the inventory book, according to the legislation.
The physical inventory meets accounting needs, to verify in
reality, the existence of material the approximation of real consumption.

5.7 In inventory management, the following activities must be handled:

Organization of the locations.

Document closure
Establishment of Inventory Levels.
Establishment of Inventory States.
Establishment of Forms for Inventory Control and Verification.
Development of Inventory Policies
Planning of the schedule and necessary resources
Counting
Verification
Adjustments if necessary

6. DIAGNOSIS.
CURRENT SITUATION

The current storage situation in the logistics area is presented below.

from the company ALQUERIA S.A and the process used for the entry and exit of its
inventory products.

Through the tour to evaluate the current situation of the area of

company storage in study, positive aspects could be determined and
negatives that shape the current state of the storage warehouse.
During the direct observation of the processes, the following was identified:

1. DEMAND PLANNING PROCESS.

Daily, a primary group composed of logistics personnel meets.

production to execute national planning based on demand. they are supplied
the CEDIS according to their inventory capacity. With this information, they anticipate
creating orders that must arrive at these points with a supply day
anticipated, taking into account the sales forecast and the production stock.
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Production commits to supply logistics within the next 24 hours.

dividing the commitment into 8-hour shifts. Specifying the product and the quantity
required by shift; this facilitates logistics in assigning orders according to stock
of physical inventory and thus meet the needs of the customers.

Scheduling of steps according to demand, distributed in shifts for supply

the logistics
It was observed in this process the following:
The product steps do not always align with the schedule.
In programming, there are products that production does not have.
causing delays in shipments and in the loading of vehicles.
The planning is being carried out without taking into account real and suitable stock.
for the office.
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d. The orders that the area

of planning the
demand mounting no go
according to the
programming y
neither with the
existence of products
in production, since
There are retained products
or exhausted
Quarantine product transfer unit to logistics

2. RECEIPT AND STORAGE OF PRODUCT.

The reception of products by the logistics area for their respective storage in
the warehouse PT (finished product) is carried out through verification and control in the
crossing box between production and logistics, which must be fulfilled according to the
meeting held between the production area and demand planning; where it is concluded
a series of agreements between the two parties, whether short-term dates or
estimated quantities for storage in warehouse PT for their respective dispatch.
These agreements are captured in a step programming format, which must be
to be verified and fulfilled through the course of steps between production and storage PT.

a) The activities carried out in this procedure include:

Identification and Labeling of supplies.
Load the inventory into the information system.
Location of the goods in the warehouse.
Inventory control.

b) There are two general types of storage:

Assigned storage.
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It is the assignment of specific locations for a certain supply,

respecting this assignment even when there is no stock in inventory.

Rack area, with assigned locations

Currently, the sites or locations are not being respected.

assigned for each of the products.

Chaotic or Random Storage.

A supply can be assigned to any location within the warehouse, but
a program is required that allows knowing in what location it is located
determined reference.

Where due to the

lack of space
they are stored
products in
some part of the
storeroom. Tales
such as the
zone of
enrollment of
platform
supermarkets and
traditional.
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Flowchart for the reception of products from CT to PT or logistics warehouse

3. ORACLE.
Oracle is onesystem of
database management
object-relational (o
ORDBMSby the acronym
in English of Object
Relational Data Base
Management System)
developed byOracle
Corporation.

Currently, Oracle
(Nasdaq: ORCL) still
heads the list. The
technology Oracle himself
find practically in
all industries
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around the world and in the offices of 98 of the 100 Fortune 100 companies. Oracle is
the first software company that develops and implements software for businesses
100 percent activated by Internet across its entire product line: database,
commercial applications and application development tools and support
decisions. Oracle is the world's leading provider of management software.
information, and the second software company.

Oracle from version 10g Release 2 has 6 editions:

Oracle Database Enterprise Edition(EE).
Oracle Database Standard Edition(SE).
Oracle Database Standard Edition One(SE1).
Oracle Database Express Edition(XE).
Oracle Database Personal Edition(PE).
Oracle Database Lite Edition(LE).

EnALQUERIA S.A, the Oracle system used is Oracle v3.0.0, where it is a

declarative languageof access to relational databases that allows specifying
various types of operations in them. One of their characteristics is therelational calculus
that allow for inquiries to be made in order to easily retrieveinformationof
interest in databases, as well as making changes to it. Oracle allows you to perform
queries, generate reports, view movements, movements and through an SQL you
You can see all movements at any time.
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4. OPTIMAL LAYOUT.
In the warehouse of the logistics area, there is a layout format with specific zones and
with the exact storage capacity of the warehouse, which is assigned by
quantities and references of the products. The layout is designed to make it
the product is more affordable, each code has its defined position and the quantity to
to store.
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Nowadays, due to poor planning in production, there is overstock of

some products, which causes the layout not to be fulfilled, resulting in poor rotation
of dates and the poor organization of the warehouse; due to the planning of the
demand and programming is carried out systematically or virtually and not physically
systematic, does not have 100% efficiency since at the time of dispatches
many missing items are reflected, due to the fact that it is systematically not differentiated
product suitable for dispatch to the retained, but it looks like a global inventory.
Many times it can be observed that the racks are not fulfilling their purpose but instead
that are being allocated for the storage of raw materials or others
products that are not necessary for the execution of shipments and this affects management
correct of inventories y the use appropriate layout.

Warehouse layout distribution according to inventory days or demand planning

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Storage product distribution scheme in warehouse (layout PT)

5. DISPATCH PROCESS.
In the storage and dispatch process, we must take into account the Policies of
Inventory Flow:

• LIFO (Last in, First Out): The goods that arrive last are the first to leave.
It is known as LIFO (Last In, First Out)

FIFO (First In First Out): The merchandise that arrives first to the warehouse is the first to be
dispatched. It is also known as FIFO (First In First Out)

• FEFO: (First Expire First Out): Merchandise that expires first is the first to be
shipped.

In the logistics area and the quarantine warehouse, there is no effective rotation of the
products what affects the E.P.P (weighted age of the product) and this causes that
several products expire or have short dates, it is also observed that due to
the poor planning of product step scheduling in the production area
Logistics is affected by FIFO, which is more evident when planned.
offers, since they do not have a defined place in the layout or excessive stock of
product. This causes many products to be scattered or hidden.
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6. INVENTORY PROCESS.
Within the storage stage, two basic activities are carried out: management and
inventory control. Basically, an inventory is a usable resource, which is
find stored for later use at a certain moment. Although in
ALQUERIA S.A has an inventory procedure, but it is not followed; as it is carried out
manually and if there is no specific instruction for its completion,
this is due to being done in a disorganized manner and the group that carries out the
The inventory has not had the proper training for each of the responsible personnel.

To carry out proper inventory control, the following points should be considered:
which are not taken into account currently to carry out efficiently a
inventory in logistics that certifies its total reliability.

6.1. Methods for Inventory Control and Verification:

Total Inventory: In this inventory control, the idea is to take the inventory of
total inventory of the warehouse. In this procedure, a count is made of all the
stocks within a specified timeframe, to subsequently carry out a
verification and cross-checking against the information system. This type of inventory taking
physical can be by supply or by locations according to the policies defined by the
entity.

•Cycle Inventory: The cycle count can be defined as a physical count of the
inventory that is carried out at a certain frequency in supplies that are part of the
inventory, at predefined intervals in a random and/or predetermined manner that can
is for supply or by locations. One advantage of managing cycle counting is that it
It can handle in batches, which prevents the total movement operation from stopping.
of supplies.

6.2. States of the Inventory Elements:

Available: is that state in which the supplies are ready.

for your use.

Assigned: It is the state in which supplies are intended for some operation.
or activity.

Quarantine or Temporary: it is that state in which a period must be fulfilled.

of storage before making it available due to paperwork legalization, adjustments
previous, etc.
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Not available: it is that state of the inventory that refers to supplies that are not
they are unfit for use due to damage, maintenance, or expiration of use period.
Includes low elements

It is noteworthy that these states mainly change in the procedures of

Storage and Preparation

7. VERIFICATION OF INVENTORY DATA vs SYSTEM

Upon completion of the physical inventory count of products in the logistics area, we proceed to
make a comparison of physical inventory vs system; based on their difference, proceed to
carry out a recount for subsequent verification.
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8. ADJUSTMENTS.

ADJUSTMENT: corresponds to the positive or negative movement (surplus or shortage) that

register in the information system to leave the virtual warehouse with the stock
real physical counts according to the physical inventory counts that are carried out. These adjustments are
they are made using the exchanged or leftover products.

9. REPORTS.
The report on the Inventory at ALQUERIA S.A aims to provide a view
global of the current situation of each of the areas of the organization. Likewise
way, intends to serve as a reference and analysis document in this field.
In the logistics area, the reports on the current status of the inventory show us
too many variables, which show us that the inventory process is not
controlled since assertiveness and the current state are observed in these inventories
pesos and quantities.
Despite the fact that a physical inventory is conducted cyclically in the logistics area and
periodic we realize that it is not 100% effective due to the lack of control in the
product and the inadequate use of the layout.

A report must be prepared that shows the historical valuation of the state of the
inventory and its behavior in pesos.
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A report must be prepared that shows the historical physical inventory versus the system.
where you can observe their behavior day by day.

10. E.P.P
The EPP (WEIGHTED AVERAGE AGE) this is another report that must be completed after
carry out inventory control and verification.

It consists of taking inventory of the product dates that are in the warehouse.
finished product, taking a goal set to 7 days of storage,
representing their rotation behavior that this weekly schedule.
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There is a database in Excel, EPP VERSION 3 that consists of:

WINERY PT audit date formula % warehouse
DATE 6 October 11, 2012

CODE DESCRIPTION Expiration LOCATION Date Current Days AGE

0004 ENTERA 1100 2012-12-02 00:00:00 C1 2012-10-06 00:00:00 60 57 938 1031.8 3
0004 ENTERA 1100 2012-12-03 00:00:00 C3 October 6, 2012 60 58 33600 36960 2
0004 ENTERA 1100 2012-12-03 00:00:00 C4 2012-10-06 00:00:00 60 58 6720 7392 2
0004 ENTERA 1100 2012-12-04 00:00:00 C4 2012-10-06 00:00:00 60 59 5040 5544 1
0006 CINNAMON OATS 200 2012-11-12 00:00:00 A1B0006 2012-10-06 00:00:00 60 37 260 52 23
0025 ENTERA X1100 INSTITUTIONAL 2012-12-02 00:00:00 C1 2012-10-06 00:00:00 60 57 2870 3157 3
0026 ENTERA 900 SIXPACK 2012-11-30 00:00:00 2012-10-06 00:00:00 60 55 455 2457 5
0027 SKIMMED 900 SIXPACK 2012-11-16 00:00:00 2012-10-06 00:00:00 60 41 180 972 19
0027 SKIMMED 900 SIXPACK 2012-11-16 00:00:00 2012-10-06 00:00:00 60 41 180 972 19
0027 SKIMMED 900 SIXPACK 2012-11-17 00:00:00 K1C1311 2012-10-06 00:00:00 60 42 180 972 18
0027 SKIMMED 900 SIXPACK 2012-11-17 00:00:00 2012-10-06 00:00:00 60 42 180 972 18
0027 SKIMMED 900 SIXPACK 2012-11-29 00:00:00 J4D1189 2012-10-06 00:00:00 60 54 180 972 6
0027 SKIMMED 900 SIXPACK 2012-11-29 00:00:00 K1D1316 2012-10-06 00:00:00 60 54 228 1231.2 6
0027 SKIMMED 900 SIXPACK 2012-11-29 00:00:00 K4D1319 2012-10-06 00:00:00 60 54 180 972 6
0027 SKIMMED 900 SIXPACK 2012-11-29 00:00:00 K5D1320 2012-10-06 00:00:00 60 54 180 972 6
0027 Skimmed 900 Sixpack 2012-11-30 00:00:00 2012-10-06 00:00:00 60 55 180 972 5
0027 SKIMMED 900 SIXPACK 2012-11-30 00:00:00 K3D1318 2012-10-06 00:00:00 60 55 180 972 5

Verification of product shelf life in the system using Excel format.

It is done by scanning the barcode

of the product

Expiration: it is entered in the handheld after reading the code of

bars.

Expiration date: it is entered directly with the hand held

Product location: taken with the reading of the rack code where it is located.
the reported product.

Date: indicates the day on which the audit was conducted.

Business days and current day: in the

the database is already available
the days that it must be a
product in store of
storage this
corresponds to the lifespan table
what Alquería handles for the
dispatch of each of the
distribution channels.
Short date authorizer
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The E.P.P reports must be carried out as follows:

WEEKLY EPP.

Weighted Average Age PPE

MENU MONTHLY EPP

Year (Various elements)

My (All)
WeeklyBehavior
Values 900000 9.0
Week Date Meta Epp per Liters 8.0 8.0
800000 7.2 8.0
29 July 16, 2012 7.0 5.5 520.241 6.8
32 06/08/2012 7.0 7.2 818.366 700000 6.2 7.0

37 10/09/2012 7.0 6.8 505.179 600000 5.5 6.0

38 17/09/2012 7.0 6.2 649.375 500000 5.0
39 29/09/2012 7.0 8.0 505.697 400000 4.0
40 06/10/2012 7.0 8.0 515.716
300000 3.0
200000 2.0
100000 1.0
0 0,0
16/07/2012 06/08/2012 10/09/2012 September 17, 201229/09/2012 06/10/2012
29 32 37 38 39 40
Epp prom liters Meta

Historical EPP
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7. CONCLUSION.
Currently in our warehouse we are facing a series of inconveniences for the
development of the operation due to this we conclude that the current inventory system
It is deficient since despite having changed the layout several times, it continues to be so.
presenting problems of poor rotation, and one of the factors that influence this is
the misuse of the racks since almost always the spaces designated for
storing the finished product is used to store empty baskets, materials
raw materials and supplies.
Reason why it is necessary to systematize the entire process in order to guarantee the
adequate product rotation and improve inventory management.

8. POSSIBLE SOLUTIONS.
Since the logistics area does not yet have sufficient technology to carry out a management
Optimal inventory management took into account a series of research on possible
solutions to improve the current situation, among the possible solutions we find the
following:

a) Electronic invoice.
The electronic invoice is a type of invoice that differs from the paper invoice because of the
IT management method and sending via a communication system that
together they ensure the authenticity and integrity of the document
electronic.
An electronic invoice is constructed in 2 phases:

1. The invoice is created as it has always been done and is stored in a file.
data.
2. Subsequently, it is signed with a digital or electronic certificate.
property of the sender that encrypts the content of the invoice and adds the digital seal to the
same

b) Voice picking.
Tool that enables the 'Dialogue' between the WMS and the work teams of
a distribution center, avoiding paper lists, screens, and portable devices
to obtain the instructions.
The staff uses the most natural way of communication, 'speech', while taking
he/she finishes his/her daily tasks.

c) Rfid.
Acronym for Radio Frequency Identification, in Spanish identification by radio frequency) is
a remote data storage and retrieval system that uses devices
known as labels, cards, transponders or RFID tags. The fundamental purpose
The purpose of RFID technology is to transmit the identity of an object (similar to a serial number.
unique) through radio waves.
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d) Pick to light.
What defines a pick-to-light system is that the system visually guides the operator towards
the exact locations of the warehouse where to pick up the items from the order. In each case
and depending on the operation devised as a solution, a certain one is used
combination of DPDs (Digital Picking Display).
Each location that contains a type of item or SKU (Stock Keeping Unit) carries
associated with a DPD. The most common DPD model includes a luminous push button
that visually guides the operator towards each location

e) Warehouse management system wms.

A WMS (Warehouse Management System) is a key system in the chain of

supply of an organization or community. Its objective is to organize, control
and direct the execution of the movements of materials and products within a warehouse.

9. PROPOSAL.
Based on previous research and the current situation of the winery regarding
the inventory management, it was determined to propose the
implementation of the WMS system.

The objectives to be achieved with the implementation and establishment of this system are:

Reduce times in processes and increase efficiency between input and

product output.
Validate and control the returns process.
Carry out the Picking process in an orderly and guided manner through
RF terminals for online inventory updates and restocking
opportunely the supply locations.
Keep the inventory updated in real time for proper planning
sales.
Control the shipping process through 'blind' validation processes VS the
invoice corresponding to it.
Sending information via 'ASCII' text files to Administrative System
from Client for process validation.

The information provided allows you to know the operating costs of the warehouse,
productivity of people and resources, the erroneous behaviors of the
operators, the degree of resource utilization, the efficient handling of returns, the
efficient receiving and shipping of products etc.
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Functionality Description

Advanced Localizer System Most solutions have the

Locations logic to determine which is the best
location to store the product
Evaluate rules, parameters, and configuration. recently received.
how to be the product data, batch, dates,
dimensions, the location, the area, the zone, and
inventory data.

2. Allocation Optimization Some WMS solutions have

Locations (Slotting) added a re- module
optimization that is incorporated into the
Distribution center managers WMS is available as a
they frequently restock their separate module.
inventory to minimize time of
search and journey as well as optimize the
utilization of space.

3. Dynamic Task Queue RF WMS solutions are

designed to use equipment
A task within a distribution center Radio Frequency (RF) laptops
it is a collection, packaging, dispatch, what receives the instructions from the queue
reception, storage, etc. A queue of of tasks. This queue directs to the
tasks is a list of active tasks that are workers in an intelligent way and
assignable to the workers of the center of optimized.
distribution. The software automatically
assign the task to the worker using rules and
parameters.

4. Work Flow of a configurable deposit Most WMS solutions

they provide workflow that
A workflow enables a allows configuration to indicate the
configuration to indicate the tasks that a tasks that a product needs.
specific product is needed at the moment of
to be dispatched (sale) and at the reception
The software allows for configuration of
the workflow task at the product level,
so that tasks can be performed
adequate and can guarantee the
customer satisfaction.
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5. Certification Configuration of Most WMS solutions

Employee They require a list of tasks
valid that employees can
Employees receive training and are to be carried out in the deposit. Most of
take a test to obtain your certification. WMS solutions require a list
The certification is for working with equipment and of the teams for which the
specialized tasks in the warehouse. For example, employee has certification of
forklift, cyclical counts. utilization.

6. Work Performance & Standards Some WMS solutions have

Structured structured labor regulations and
measurement tools of
Work Management Systems (LMS) work performance. Many of the
consist of structured norms based on WMS solutions have tools
studies of distribution centers conducted for generating work reports.
by Industrial Engineers. Based on these
standards, the actual time used versus the
standard can be compared to
report generation, queries, graphs.

7. Accountability of deposit and Completely supported

Transaction History
Each task performed by the worker of
distribution center is registered in the database
of data. Errors and exceptions are
they identify and automatically alert
they are passed to the corresponding supervisors.
The supervisors and the defined workers
you can consult and review each movement
from an inventory article through the
transaction history log of the center
of distribution.

8. Withdrawal / Recall and Traceability Completely supported. Very accurate.

in the inventory, where was it
The ability to perform a recovery of shipped and how it was shipped.
product based on the lot number or code You can search by lot number,
from production. Extreme traceability through production code and even by
lot number or production code. serial number.
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9. Definition of Deposit Equipment Lead the right team through

the correct hallways to the levels
The software has defined the center's equipment. correct. For example, the elevator only
distribution (e.g. Forklift) with It is directed to work through the halls
concepts of limitation and authorization of wide enough but not towards
user to use this equipment. a mezzanine, nor through very narrow corridors
narrow.

10. Handling of Manipulation Equipment The WMS facilities

Material through Interfaces they often act as an interface
for Carousels, Classifiers,
The material handling equipment (MHE) Diverters and other MHE equipment.
it is a specialized team managing Who provides WMS solution
products that are moving or they have experience in these interfaces.
storing. The MHE is operated by
commands for external software. The WMS is
the "brain" and the MHE is the slave. The MHE
includes Classifiers.

WMSpuede can quickly provide tangible benefits to an organization, generating

efficiency in operations and saving space in the warehouse. Implementing a WMS in
execution, a company achieves a great number of advantages, including:

a) Capacity management of the

deposit (definition of areas and
rules of location
replenishments of
positions).
b) Space saving by eliminating
excess or obsolete stock and
selecting the location
suitable for the measurements of
the pallets and the stacking height
supported, using the philosophy
of semi-chaotic warehouse for
maximize the utilization of the
spaces.
c) Agile and precise visibility of
amount and conditions of the
merchandise in their locations.
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d) Assortment planning with optimized routes

e) Assortment and dispatch by order or by zone
f) Truck capacity analysis
g) Arrival and departure schedule of transport at the platforms
Cross-docking
i)Task assignment by warehouse sectors
The correct selection of the portable handheld terminals that the staff will use
to be used in daily operations and Radio Frequency Equipment, is a
key aspect for the success of the implementation of a WMS

Example case of WMS system implementation:

The implementation process in the case of Vázquez took 7 months and covered from the
warehouse processes, up to changes in receiving, then the model was scaled up
national, a process that lasted 3 years. The consensus among those who have implemented these
systems say that its implementation fluctuates between 6 to 8 months "once it is in place
all the "annex" background well designed and prepared for parameterization,
for example: the design of future operations, the lifting and design of the
masters (products, customers, suppliers, teams, operators, among others), the definition
of operational alternatives and the 'hardware store' (servers, racks, NAS, UPS, etc.), among
others," notes Luis Alberto Álvarez, Lead Consultant - Advisory at PwC Chile and with more than
12 years of experience in consulting and redesigning logistics operations in Chile, Peru
and Argentina

According to Waldo Vásquez, regarding the initial budget, 'these changes can signify
between 20% to 30% more. However, those differences are negotiated, as it occurs
a feedback between the client and the implementer, where both parties learn from one another
another one and that allows for a better negotiation.

For a WMS system, it is necessary to consider. *** That before implementing it, the
the company should gather information about similar experiences
regardless of the sector in which they have participated in the implementation.
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10. BIBLIOGRAPHY.

The provided text is a URL and cannot be translated.

inventory/[Link]

[Link]
[Link]

Unable to access the provided link.

The provided text is a URL and does not contain translatable content.

The provided text is a URL and does not contain translatable content.
inventories&user_login=jcfdezmx2

[Link]

The provided text is a URL, and there's no translatable content.

[Link]/[Link]

URL provided does not contain translatable text.

administration-inventory/548-what-should-I-consider-to-implement-a-wms

The provided text is a URL and does not contain translatable content.
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11. ANNEXES.

This study includes a series of documents that indicate the functions and
the description of each of the manuals that must be taken into account in the management
of the company's inventories ALQUERIA S.A.

A. Frequency radio manual: which would be used in the handling of handhelds, since
It is an electronic means that facilitates the implementation of the WMS system.

[Link] for the physical inventory taking: which is implemented in the

Alqueria S.A. company, but its application and management are not the most efficient or
productive due to the lack of training and the awareness of each of the
people responsible for carrying out this process.