6. Warehousing and storage

Storage may be short-term for goods in transit or long-term to accumulate working stock that can be used for long-range planning and distribution, or used as a contingency.

The stock in the warehouse acts as a regulating buffer between supplies (stock entries) that are normally intermittent and needs (stock deliveries) that are normally regular or unexpected (emergency). Stock management involves managing an appropriate level of stock in the warehouse for regular needs as well as a certain level of supplies in case of emergencies. Stock has a cost-the price of items plus the warehousing charges (rent, human resources and materials). A good stock management system requires the right balance between costs and response to need.

The decision to create stock depends on several factors. First, you have to balance the benefit of holding stock against the cost of doing so. Second, you need to think about:

• protecting against uncertainty-if deliveries are late, sufficient inventory protects from stock-out
• bulk purchasing-prices are generally lower
• anticipating fluctuations or emergencies.

Warehouses contain different items identified as:

• (non-)consumable
• (non-)perishable
• fast/slow movers.

Items with a fast turnover, in terms of consumption, need good planning. Variations such as monthly consumption, delivery lead time (time period between accepting an order and the actual delivery of that order), expiry date (if applicable) and destination (what is going where) need to be monitored closely.

The quantity per item of stock required is based on two elements:

• Buffer stock-the buffer stock is the necessary quantity to supply the ongoing programmes without using the contingency stock.
• Contingency stock (or minimal stock)-the contingency stock is for unexpected events. Only vital articles form contingency stock. The contingency stock level is the result of coordination between the logistic department and the programme department. The contingency stock depends mainly on the humanitarian and security situation.

The following data are necessary to determine the buffer stock per article:

• estimated monthly consumption of the article
• frequency of orders to replenish the stock
• standard delivery time of the orders.

The amount of storage capacity required will depend on the type of storage required. The items and quantities needing to be stored are based on the:

• programme’s needs within a given period
• buffer stocks based on the time necessary to replenish
• contingency stock
• storage requirements and lifetime of products.

To determine the size of the warehouse required, use the volume and floor space needed, rather than the weight of the items to be stored. Extra space is needed to load, unload and repack damaged bags, and will also help with ventilation. A good ratio is 30% for access and 70% for storage.

Storage height depends on the type of items and packaging. A two-metre stacking height is appropriate for the majority of items. Piling over three metres is dangerous and may jeopardise stock at the bottom.

• Accessibility: Access to warehouse should be easy for cars and trucks in all weathers.
• Utilities: There should be office space for the storekeeper, preferably with toilet and wash-up facilities, and regular garbage disposal. Lighting in the warehouse and surrounding area. The warehouse should be fenced and facilities should be present for watchmen.
• Size: The warehouse should have sufficient capacity to meet forecast requirements for temporary or transit storage.
• Security: Area should not be likely to invite intrusion or vandalism.
• Proximity: There should be good access to transport infrastructure.
• Easy movement: The warehouse should have sufficient additional floor area to permit easy stock handling and access to all stocks for inspection, and insect and pest control.
• Ventilation: The construction should be dry and well ventilated. The roof should be leak-proof. There should be no broken windows. Doors should close securely with no gaps. To reduce temperature inside the warehouse, you should paint the roof and walls outside, in white.

Maintenance: The floor should be flat and solid, preferably smooth and crack-free concrete. The walls should be as clean and smooth as possible.

The storekeeper must be informed in advance by the logistician about deliveries, to be ready for storage (with sufficient clean space) and to recruit loaders if necessary. The storekeeper must know:

• the quantity of items (volume/weight/packaging)
• the delivery date
• the supplier/organisation name for external deliveries.

The storekeeper must inspect the delivery on arrival. If the inspection indicates poor quality, the storekeeper must refuse the delivery; it is easier to request the exchange of products at this stage. The delivery inspection involves the storekeeper:

• checking the quantity that is delivered matches the quantity mentioned on the delivery note; count and/or weigh the items when needed
• performing an administrative check-general documentation, consistency between the batch numbers, conformity certificates (or composition) and delivery notes
• refusing goods of an obviously poor quality-torn bundles, leaking drums, signs of insects, rusty tins, bad smells, wet goods
• repairing any weakened packages before storage
• writing the date of entry of stock on all the bags/final packaging if that perishable item has no date on the package.

Zones for activities and areas for storage must be defined inside the warehouse. These zones and areas can be identified by painting on the floor or, when feasible, by using metallic wire grids with secure locks. The space should be divided into four specific zones:

• arrival zone-during unloading, the storekeeper will inspect the delivery for quality and quantity. If this is correct, the storekeeper will accept and register the goods
• packing zone-for some deliveries, the storekeeper must prepare the order. The packing zone can also be used for repacking
• delivery zone-to save time during loading and to avoid disorder, items ready to be delivered are stored per destination
• storage zones-where stock is stored.

The organisation of storage zones will depend on the:

• volume and nature of products to store
• turnover of products-goods with the highest turnover must be more accessible
• compatibility of products.

An easy-reference guide should be developed for high-turnover stocks with numerous products. The guide will show:

• the precise division or building
• the shelf or rack, the column, and row or bin within the shelf.

This reference will be mentioned on the stock card to find the product’s physical location within the warehouse.

The storekeeper must follow these rules:

• Always store on pallets or shelves. (When there are not enough pallets, the goods that are less vulnerable to humidity will stay temporarily on the floor. If available, the storekeeper should layer the floor with plastic sheeting.)
• Ensure stacks are standardised to facilitate the physical inventory.
• Use one pile per product, per packaging, per expiry date and per donor.
• On each layer, alternate the direction of boxes to prevent a stack from tipping over.
• Leave 70 cm of empty space between stacks and walls.
• Do not exceed a height of three metres for stacks. Do not store above one metre per square metre.

When moving stock, the storekeeper should follow the following principles:

• First in, first out-goods that have been longest (subject to expiry date) in stock are delivered and/or consumed first, except for goods that expire.
• First expired, first out when dealing with products that can expire. Note that what comes in first, does not necessarily go out first (recently received drugs might have a more recent expiry date). Goods are stored according to expiry date-latest expiry at the back.

Storage requirements are much more stringent for food items than for non-food items.

Failure to meet these requirements will jeopardise the quality and safety of food items. Specific requirements are indicated on the packaging of food items. If there is no specification, good practices require:

• a shaded place (no direct sunlight on the goods)
• a dry environment (less than 70% humidity)
• a temperature between 0°C and 30°C.

The storekeeper is responsible for maintaining the quality of stored food items. Storekeepers must highlight on the stock report any quality problems and all goods close to the expiry date. The majority of non-food items can be stored in a non-optimal way for several days without major damage, whereas food items deteriorate very quickly or immediately.

In food aid programmes, the loss of food due to bad storage conditions has direct consequences for beneficiaries. Good storage techniques reduce the risks of food waste. In addition, specific food quality management is required to detect any possible damage and to take steps to halt any spoilage and consequent loss. For more information see Chapter 19 Distribution.

Containers

• For small volumes, containers 6 or 12 meters long can be used as alternative storage facilities.
• Containers offer a strong and waterproof structure. They are easy to secure and to transport. On the negative side, they can have poor ventilation, which leads to high temperatures and humidity. A weightless roof above the container reduces the temperature due to sunlight.

Rubb hall

• The Rubb hall is a large tent designed for storage.
• The weakness of the Rubb hall is security. Efficient drainage around the tent is needed for rainwater.
• To avoid mud, you must use gravel or light concrete on the access roads and surroundings. When possible, place the tent on a dry, flat surface on high ground to avoid flooding.

Emergency storage

• For a brief period, and if no better solution is found, emergency storage can be used. The minimum material required is plastic sheeting and wood.
• Prepare a flat surface with drainage for rainwater.
• If available, spread gravel on the surface. Lay the plastic sheeting on the flattened ground.
• Set the wooden pallets on the plastic sheeting and pile up items on the pallets.
• Cover with a top plastic sheet to protect items from sunlight and rain.
• Remove top plastic sheeting regularly for ventilation.

This solution is only acceptable for a short period, such as one-shot distribution.

A warehouse management system is a basic accountability requirement, and is essential for effective management of the warehouse and for tracking stock. Each warehouse must maintain the documentation in section 6.10.1.

To perform adequate storage and safe handling some equipment is needed. Requirements depend on the volume of movements, availability and practices in the country of operation, but may include:

• pallets or wooden platforms, shelves
• trailer or wheelbarrows, hydraulic loading and moving equipment (trans-pallet, forklift)
• manual and precision scale, measuring tape, empty bags and boxes, ladder (to access the top of piles).

For correct stock management, some simple equipment is necessary, such as:

• stock management procedures (stock cards, delivery notes and other forms as described in section 6.10.1)
• basic stationery, adhesive tape, calculators and office supplies (such as an archiving cupboard with a lock)
• conversion tables (weights, measures and volume)
• safety equipment including a first aid kit, sand, buckets, axes and appropriate fire extinguishers
• equipment to repair damaged packaging
• tools for opening and closing crates
• cleaning materials
• traps for rodents
• a computer for the central warehouse.

Rental and security costs could be significantly reduced by sharing a warehouse (with several divisions) or a compound (with several buildings) with another NGO. However, it should never involve sharing a single undivided space, as this could be a source of problems in terms of coordination, responsibility and procedure.

If an organization asks for temporary storage in CARE warehouses, the logistician has to clarify the:

• duration of storage and the cost in terms of pallets, cleaning and labor, if any
• person entitled by the other organization to release the goods and documentation used
• non-liability of CARE for the goods in case of damage, looting or theft.

• Make sure that mechanical equipment is maintained, and used only by authorized personnel.
• Make sure that safety instructions are strictly followed (tools, handling, lifting).
• Make sure that there are first aid kits, that they are maintained, and that someone knows how to use them.
• Keep an accident log together with the Safety and Security Officer.
• Check periodically that all openings (doors, windows, etc.) are working properly.
• Assign responsibilities and set out the steps that each staff member should take in case of fire.
• Make sure that fire-fighting equipment is immediately accessible inside and outside buildings.
• Prohibit smoking by anyone (including visitors and drivers).
• Never store, even temporarily, flammable materials in the main storage area.

The value of the products in the warehouse is significant and the insurance system is usually not functional in areas where CARE is operating. Below is some advice for the logistician to reduce the risk caused by five common threats:

• Internal pilfering-this threat can be limited by using clear procedures, documentation and undertaking responsibility for the warehouse.
• Robbery-a team of guards or a private company guard has a dissuasive effect; the number of people involved depends on the value of the stock. Reinforcing passive protection means strengthening the warehouse with high walls, barbed wire, metal gates and doors, efficient lighting, strong padlock, grids on the windows and ventilation openings.
• Looting by armed groups-prevention is possible by reducing the quantities in stock and by choosing a warehouse located in a non-exposed area. It may lead to a ‘zero stock’ policy in certain operating zones.
• Fire-prevention is essential. Smoking is forbidden inside a warehouse. Sensitive items (fuel, oils and chlorate) are kept in separate divisions. Fire extinguishers and sand must be available. Staff must be trained and tasks allocated in case of fire.
• Natural disaster-the choice of the location and the resistance of the building itself may protect the stock; this applies in particular to flooding or typhoons.

See also Safety and security.