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222 CHAPTER 7 Inventory and Warehouse Management Processes

Business Processes in Practice 7.1: Inventory
and Warehouse Management at Steelcase, Inc.

Headquartered in Grand Rapids, Michigan, Steelcase versus fi nished goods. The warehouses at the manufac-
is the leading global workplace furniture manufac- turing plants store raw materials from the procurement
turer with approximately 11,000 employees and a total process until these goods are consumed in the produc-
revenue of approximately $2.3 billion in FY 2010. The tion process. They also store fi nished goods from the
company relies on a network of more than 650 indepen- production process until they are consumed by the ful-
dent and company-owned dealers to market, deliver, fi llment process. In the best case scenario, raw materi-
and install many types of offi ce furniture products (e.g., als are stored at the manufacturing plant only for a few
desks, chairs, and cabinets) for its customers. Steelcase hours before they are used in production, and fi nished
has manufacturing operations dispersed throughout goods are stored only for a few hours before they are
North America, Europe, and Asia. In North America, shipped to the RDCs. The RDCs receive materials from
Steelcase has ten manufacturing plants and six regional many manufacturing facilities and store those goods
distribution centers (RDCs). Each plant has a small until a customer order has been fi lled. They then pick,
warehouse to store raw materials and, temporarily, fi n- pack, and ship the fi nished goods to the customer.
ished goods. Steelcase orders raw materials through the Each Steelcase RDC receives daily shipment fore-
procurement process, which are delivered directly to cast reports from the manufacturing plants. The RDCs
the manufacturing plants. The production process con- use these reports to plan space for shipments and to
sumes the raw materials at the manufacturing plant, manage the logistics activities of the fulfi llment pro-
after which it ships the fi nished goods to the RDCs. The cess. Customer orders are typically fi lled from multiple
RDCs manage the logistics activities of the fulfi llment factories, a process that requires consolidating multiple
process, including planning shipments, allocating and inbound deliveries into a single outbound delivery. A
routing trucks, and consolidating, preparing, and loading large RDC can process more than 100 outbound cus-
shipments. The key goal of inventory and warehouse tomer shipments per day, with many more inbound
management at Steelcase is to optimize warehouse space deliveries from the manufacturing plants arriving
and effi ciently execute the fulfi llment process by balanc- simultaneously. This constant fl ow of inbound and out-
ing the inbound fl ow of goods to its manufacturing plants bound deliveries and material movements generates a
with the outbound delivery of customer shipments from very complex routing of trucks, pallet loaders, forklifts,
the RDCs. Steelcase uses the IWM capabilities of SAP and packing materials that are constantly moving in and
ERP extensively to monitor, assess, and manage the around the warehouse. Steelcase orchestrates this com-
effi cient fl ow of goods in and out of their warehouses. plex ballet with the IWM capabilities of SAP ERP.
The warehouses at the manufacturing plants and
Source: Steelcase, Inc. Materials Planning Group
at the RDCs utilize two different IWM processes to
address the distinctive storing needs of raw materials

In this chapter we will review and elaborate on the IM-related goods
movements introduced in previous chapters. We will then discuss the orga-
nizational data, master data, and processes associated with WM processes in
the context of the procurement, fulfi llment, and production processes. In these
discussions we will also highlight the linkages between IM and WM. We will
conclude with a discussion of reporting options. Immediately following the
end-of-chapter material is Appendix 7A, which discusses procedures for creat-
ing storage bins automatically.

INVENTORY MANAGEMENT
Figure 7-1 illustrates the four goods movements involved in inventory man-
agement. We have already discussed goods receipt (indicated with a “1” in the

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