Without a warehouse management system, managing goods becomes difficult and error-prone. Warehouse staff have to work manually: writing down product information by hand, checking quantities by counting and keeping records in ledgers. This not only takes time but also easily leads to mistakes, such as recording wrong quantities, not updating product information fully or not classifying goods correctly.
As a result, warehouse management is ineffective, leading to losses of goods, time and money. That is why using a warehouse management system is so important: it saves businesses time and costs while improving the efficiency and accuracy of warehouse management. It lets businesses improve processes and optimize every warehouse-related activity, ensuring goods are fully prepared, inventory is managed effectively, excess stock is minimized and shortages are limited.
This is also why Hoa Phat Group, one of Vietnam's leading groups in producing and trading steel products and construction steel, has built a smart, modern warehouse management system.
So how does Hoa Phat Group's warehouse management system work? In this case study we share the best management practices from Hoa Phat's warehouse management, including:
1. A brief introduction to Hoa Phat Group
2. Hoa Phat's warehouse management methods
3. The goods warehouse management process
4. How to organize, lay out, arrange and store goods in the warehouse
5. How to assign product codes
6. How Hoa Phat manages its warehouses with barcodes and QR codes
7. How impressive is Hoa Phat's warehouse management system?
8. You may also be interested in
A brief introduction to Hoa Phat Group
Hoa Phat is Vietnam's leading industrial manufacturing group. Starting in August 1992 as a company trading construction machinery, Hoa Phat successively expanded into other sectors such as furniture, steel pipes, construction steel, refrigeration, real estate and agriculture. On 15 November 2007, Hoa Phat officially listed its shares on the Vietnamese stock market under the ticker HPG.
In terms of scale, Hoa Phat Group currently comprises 20 member companies and many affiliated units with more than 34,000 employees in total. The Group has many steel mills, copper and aluminium product plants, cement plants and steel pipe plants, as well as a large network of warehouses nationwide to store goods.
Hoa Phat Group organization chart (Photo: Hoa Phat)
Hoa Phat's warehouse management methods
Hoa Phat Group uses many different warehouse management methods to ensure efficiency and save costs. Some of Hoa Phat Group's warehouse management methods include:Software-based warehouse management: Hoa Phat Group uses warehouse management software to track inventory status, place orders and distribute goods. This software helps optimize the warehouse management process and minimize errors.
Barcode-based warehouse management: Hoa Phat Group uses barcodes to mark goods and manage the warehouse. Using barcodes simplifies checking and counting goods.
RFID-based warehouse management: Hoa Phat Group uses RFID technology to manage its warehouses. Products are fitted with RFID tags, making it possible to track the location of each product in the warehouse.
FIFO-based warehouse management: Hoa Phat Group uses the FIFO (First In First Out) system to manage goods in the warehouse. This ensures goods are used and issued in the order they were received.
ABC-based warehouse management: Hoa Phat Group uses the ABC system to classify goods and assess how important each type of goods in the warehouse is. This clarifies priorities in managing and issuing different types of goods.
Learn more: How to manage inventory with the 80/20 rule (the Pareto principle)
Hoa Phat in practice
Using a professional warehouse management system: Hoa Phat Group uses professional warehouse management systems, including a goods warehouse management system, a stock receipt/issue management system and a lot tracking system. These systems help the Group manage its warehouses effectively, increase accuracy and minimize errors in warehouse management.
Using advanced technology: using advanced technologies such as barcode reading systems and automation systems to make warehouse management more efficient.
Managing warehouses to international standards: Hoa Phat Group manages its warehouses to international standards such as ISO 9001:2015 for warehouse management and ISO 45001:2018 for warehouse safety management. This helps the Group ensure the safety and quality of goods in its warehouses.
Optimizing the warehouse management process: Hoa Phat Group regularly improves and optimizes its warehouse management process to minimize errors, increase efficiency and reduce costs.
Strengthening staff training: Hoa Phat Group invests in training staff in warehouse management skills and the use of warehouse management technology, so that staff have the skills needed to manage warehouses effectively.
The goods warehouse management process
For a large group like Hoa Phat Group, managing goods warehouses effectively is one of the most important factors in ensuring that production, business and supply run smoothly and efficiently.
Hoa Phat Group's goods warehouse management process includes the following steps:
Receiving goods: When goods arrive at the warehouse, staff receive and inspect them to ensure their quality and quantity.
Storing goods: After inspecting the goods, staff put them away in the various storage areas.
Managing receipts and issues: When there is a request to issue or receive goods, staff carry out the receipt/issue management procedures and processes to ensure goods move quickly and efficiently.
Lot tracking: Hoa Phat Group also applies a lot tracking system to ensure goods warehouse management follows the correct process and that product information is accurate and reliable.
Warehouse management software
Hoa Phat Group uses professional warehouse management software to ensure goods warehouse management is fast, accurate and efficient. The software lets warehouse staff carry out tasks such as receiving, issuing, stock counts, lot tracking and reporting on inventory status.
In addition, Hoa Phat Group also uses production and sales management software to ensure product information is accurate and reliable. This software is integrated with the warehouse management software to keep information linked and accurate between departments in the company.
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How to organize, lay out, arrange and store goods in the warehouse
Hoa Phat has set specific rules and processes for organizing, laying out, arranging and storing goods in the warehouse. Specifically, products entering the warehouse must be inspected and classified by type, size, weight and other characteristics. They are then arranged and stored in different areas of the warehouse according to the most scientific and convenient layout plan.
Products are coded and labeled for easy management, search and distribution. Product codes are created through a professional, consistent process, making goods management more accurate.
In addition, Hoa Phat's warehouse management system is integrated with modern technologies such as barcodes and QR codes to make goods management easier.
To ensure the safety and best preservation of goods, Hoa Phat also invests in modern technologies such as air conditioning, humidity control, security monitoring, etc. At the same time, it continually builds its staff's warehouse management capabilities, training them and keeping them up to date with the latest warehousing and logistics knowledge.
How Hoa Phat assigns product codes
Hoa Phat Group codes its goods to international standards to make goods management easier and more accurate. Specifically, Hoa Phat Group uses EAN codes (European Article Number) and UPC codes (Universal Product Code) to code its goods.
EAN is a versatile coding system used worldwide to code products. It uses barcodes to display product information, including product name, manufacturer, place of manufacture, production date, expiry date, quantity and price. An EAN code has 13 digits and is attached to the product.
UPC is a simpler coding system used mainly in the US and Canada. UPC also uses barcodes to display product information, including product name, manufacturer and price. A UPC code has 12 digits and is attached to the product.
Coding goods to international standards lets Hoa Phat Group manage goods accurately and quickly. By scanning the barcode on a product, Hoa Phat Group's warehouse management system can automatically update product information and check inventory quantities, making warehouse management easier and more accurate.
Here is an example of how Hoa Phat Group assigns product codes:
Suppose Hoa Phat Group produces a type of steel used in construction and codes it to the international EAN-13 standard; the code would be structured as follows:
Country code: The first digits of the EAN-13 code are the country code, assigned by the International Organization for Standardization (ISO). For example, 893 is Vietnam's country code.
Manufacturer code: The next digits (5 digits) are the manufacturer code, set by Hoa Phat Group itself. For example, Hoa Phat Group uses the manufacturer code 12345.
Product code: The next digits (5 digits) are the product code, set by Hoa Phat Group itself. For example, Hoa Phat Group gives this type of steel the product code 67890.
Check digit: The last digit (1 digit) is the check digit, calculated from the preceding digits to ensure the code is accurate.
So the EAN-13 code of Hoa Phat Group's steel product would look like this: 8931234567890X (where X is the check digit). When this barcode is scanned, Hoa Phat Group's warehouse management system automatically updates the product information in the system, making goods warehouse management easier and more accurate.
How Hoa Phat manages its warehouses with barcodes and QR codes
Hoa Phat Group uses a barcode system to manage its goods warehouses. The system lets staff use barcode scanners to scan and confirm product information, reducing errors and increasing accuracy in warehouse management.
Hoa Phat's steps for managing warehouses with barcodes and QR codes are as follows:
Defining product information: Each product's information is defined: product code, product name, manufacturer, expiry date, price, stock quantity and storage location.
Printing barcodes: Once the information is defined, warehouse staff print barcodes to stick on the products.
Scanning barcodes: Staff scan the barcode on the product and enter the information into the warehouse management software.
Checking goods: At checkpoints, staff scan product barcodes to confirm product information.
Tracking product history: The barcode system makes it possible to track a product's history from receipt to issue. Information on production date, expiry date, storage location, quantity and shipping history is stored in the system to make goods warehouse management easier.
Inventory management: Information on stock quantities and storage locations is regularly updated in the barcode system. This reduces waste and loss of goods in warehouse management.
How impressive is Hoa Phat's warehouse management system?
Hoa Phat Group uses many tools and software applications to manage its warehouses, including:
WMS warehouse management software (Warehouse Management System): a comprehensive warehouse management system that optimizes receiving, issuing and stock counting. The WMS is integrated with the ERP (Enterprise Resource Planning) system to provide accurate, complete information on inventory and warehouse operations
Barcode system: Hoa Phat Group uses barcode technology to manage products and materials in its warehouses. Products are labeled with barcodes to track and control the receipt, issue and storage of goods.
Production management software: Hoa Phat Group uses production management software to manage the production process and track the output of goods produced. This information is also integrated into the warehouse management system to ensure complete information on inventory and production.
GPS system: Hoa Phat Group uses a GPS system to track the transport of goods from the warehouse to the point of consumption. This information is updated in the warehouse management system, making warehouse management more effective and improving the delivery process.
Data analysis tools: Hoa Phat Group uses data analysis tools to evaluate warehouse performance and find ways to optimize the warehouse management process.
All this software is integrated together, creating a synchronized and accurate goods warehouse management system for Hoa Phat Group.
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