FINAL PROJECT

NAME
SHOAIB SAJID (2222151)
ASIF UR REHMAN (2212068)
MUHAMMAD ABDULLAH (2212089)
SUBJECT:
LOGISTICS MANAGEMENT
INSTRUCTOR
MAM WARDA GAFOOR

SITUATION
Amazon is planning to setup an E-commerce warehouse in Pakistan. This warehouse is
going to be serving not only in Pakistan but all regional countries. You are the main
consultant in this project. Answer the following questions and give a plan that addresses all
the issues along with any that you think needs to be addressed.
1. In order to do this assignment, you must understand how an e-commerce warehouse
operates?
2. What are the possible layouts?
3. What machinery do you recommend, cost and Return on Investment (ROI).
4. What is the IT requirement?
5. What kind of human resource and in what quantity do you need?
6. Also suggest what size of facilities needed keeping in mind the potential business
growth up till 2030.
7. What city/region/location is most suitable?
8. What is your learning from this entire exercise?

ANSWER NO. 1
To understand how an e-commerce warehouse operates, we need to focus on key processes such
as inventory management, order fulfillment, and shipping.

Warehouse Process Flow

The warehouse process typically follows these steps:

1. Inventory Management: Goods are received from suppliers, stored, and organized in
specific zones based on type and demand. Technology like Warehouse Management
Systems (WMS) is used for tracking stock.
2. Order Fulfillment: When an order is placed, items are picked from storage. The picking
process can be manual or automated using robots or conveyors. Once picked, items are
packed based on order specifications.
3. Shipping: After packing, orders are labeled with customer details and dispatched to
delivery services for final shipment.
4. Returns Management: Returns are handled by inspecting the goods, restocking or
refurbishing them, and processing refunds.
 1. Inventory Management: Goods are organized and stored.
2. Picking: Orders are processed and items are picked.
3. Packing: Items are packed according to order specifications.
4. Shipping: Orders are shipped out to customers.

This flow shows the essential processes in an e-commerce warehouse.

ANSWER NO. 2
When designing an e-commerce warehouse, the layout is critical for optimizing space, improving
efficiency, and ensuring fast order fulfillment. Here are the most common warehouse layout
types used in e-commerce operations:
1. U-Shaped Layout
In this layout, the warehouse is designed so that goods flow in a "U" shape. Products are received
at one end, processed and picked in the middle, and then packed and shipped at the other end.
Best for: Small to medium-sized warehouses with limited space.
2. Straight Line Layout
Products flow in a straight line from receiving to storage, picking, packing, and shipping.
Best for: Large warehouses with a high volume of similar orders.
3. Grid Layout
The warehouse is divided into a grid-like structure with aisles running both horizontally and
vertically, creating a series of blocks. This layout allows for efficient storage and easy access to
items.
Best for: Warehouses with a diverse range of products
4. Free Flow Layout
There are no predefined aisles or fixed pathways. Products are placed based on picking
frequency, and workers navigate freely to pick items.
Best for: Smaller, high-variety warehouses.
5. Zone-Based Layout
The warehouse is divided into zones, each designated for different types of products. Workers
are assigned specific zones for picking, and products are stored in each zone according to their
category.
Best for: Medium to large warehouses with diverse inventory.
6. Random Storage Layout
Items are stored in any available space within the warehouse. The location of each item is
tracked by a warehouse management system (WMS), allowing for flexibility in storage.
Best for: High-density warehouses with a constantly changing product mix.
7. Cellular Layout
The warehouse is divided into cells, each dedicated to specific tasks such as receiving, sorting,
or packaging. Workers move products from one cell to the next.
Best for: High-volume warehouses with well-defined processes.

ANSWER NO. 3

For an e-commerce warehouse, the right machinery can enhance productivity, streamline
processes, and reduce operational costs. Below are key types of machinery, their approximate
costs, and expected Return on Investment (ROI):

1. Automated Guided Vehicles (AGVs)

 Description: AGVs move products throughout the warehouse without human

intervention, automating tasks such as picking, storing, and transporting.
 Cost: $50,000 - $100,000 per unit.
 ROI:
 Payback Period: 2-3 years.
 Benefits: Reduces labor costs, increases efficiency, and enhances order accuracy.
  ROI Example: After automating transport, a warehouse can increase throughput
by 20-30% while reducing labor costs by 10-20%.

2. Automated Storage and Retrieval Systems (ASRS)

 Description: These systems automate storage and retrieval, optimizing space utilization
and minimizing human involvement in material handling.
 Cost: $500,000 - $2,000,000 (for large systems).
 ROI:
 Payback Period: 3-5 years.
 Benefits: Maximizes storage density, reduces labor costs, and speeds up picking
times.
 ROI Example: By improving storage capacity and reducing time spent on
manual retrieval, ASRS can increase efficiency by 40-50%.

3. Conveyor Systems

 Description: Automated conveyors transport goods throughout the warehouse,

improving flow between stations (picking, packing, and shipping).
 Cost: $100,000 - $500,000 depending on warehouse size.
 ROI:
 Payback Period: 1-3 years.
 Benefits: Speeds up order fulfillment and minimizes manual handling errors.
 ROI Example: A conveyor system can reduce worker travel time by 30-40%,
improving productivity.

4. Sortation Systems

 Description: Sortation systems automatically categorize products based on shipping or

destination, improving the packing process.
 Cost: $200,000 - $1,000,000.
 ROI:
 Payback Period: 2-4 years.
 Benefits: Increases sorting speed and reduces errors.
 ROI Example: A sortation system can cut labor costs by 15-20% by automating
the sorting process.

5. Robotic Pickers

 Description: Robotic arms or systems that can pick items from shelves and place them in
bins for packing or shipping.
 Cost: $30,000 - $150,000 per robot.
 ROI:
 Payback Period: 1.5-2 years.
 Benefits: Increases picking speed and accuracy, reduces labor dependency.
  ROI Example: Robotic pickers can increase picking accuracy by up to 99% and
reduce labor costs by 10-15%.

6. Warehouse Management System (WMS)

 Description: A software system that helps manage and track inventory, order fulfillment,
and warehouse operations.
 Cost: $100,000 - $500,000 for implementation.
 ROI:
 Payback Period: 1-2 years.
 Benefits: Improves inventory accuracy, optimizes storage, and streamlines
workflows.
 ROI Example: WMS can reduce stock outs, improve inventory management, and
increase order accuracy, leading to a 10-20% increase in operational efficiency.

ANSWER NO. 4

The IT requirements for an e-commerce warehouse include both hardware and software solutions
to ensure smooth operations, data management, and integration across systems

1. Warehouse Management System (WMS)

 Purpose: Manages inventory, order fulfillment, and warehouse processes.

 Features: Inventory tracking, order management, real-time data updates, reporting.
 Requirements: Cloud-based or on-premise server, data backup system, integration with
other systems (ERP, CRM).

2. Enterprise Resource Planning (ERP) System

 Purpose: Integrates all business processes (finance, HR, procurement, sales).

 Features: Real-time data sharing, financial tracking, order management.
  Requirements: High-performance servers, database management systems, network
infrastructure.

3. Automated Material Handling Systems (AMHS) Integration

 Purpose: Links robots, conveyors, and AGVs with WMS for seamless material
movement.
 Features: Communication with WMS, real-time updates, system diagnostics.
 Requirements: Robust network infrastructure, IoT sensors, real-time data processing.

4. Internet of Things (IoT) Devices

 Purpose: For real-time tracking of products, environmental conditions, and equipment

health.
 Features: RFID tags, temperature sensors, motion detectors.
 Requirements: IoT platform, sensors, data storage, wireless network.

5. Cloud Infrastructure

 Purpose: Ensures scalable, secure, and accessible storage of large volumes of data.
 Features: Data storage, processing power, disaster recovery.
 Requirements: Cloud service provider (AWS, Microsoft Azure, etc.), data encryption.

6. Data Security and Backup Systems

 Purpose: Protects sensitive data and ensures continuity in case of system failures.
 Features: Encryption, access control, data redundancy, disaster recovery plans.
 Requirements: Firewalls, VPNs, secure servers, regular backup protocols.

7. Networking and Communication Systems

 Purpose: Ensures seamless communication between systems, employees, and equipment.

 Features: Wireless networks, secure intranet, mobile devices, communication software.
 Requirements: High-speed internet, secure Wi-Fi, dedicated servers, mobile devices for
staff.

8. Hardware

 Purpose: Supports the IT infrastructure and operations of the warehouse.

 Requirements: Barcode scanners, RFID readers, mobile devices, servers, workstations,
network routers.

9. Reporting and Analytics Tools

 Purpose: Provides insights into warehouse performance, inventory, and KPIs.

  Requirements: Business intelligence software (Tableau, Power BI), data visualization
tools, dashboards.

ANSWER NO. 5

For an e-commerce warehouse in Pakistan serving regional countries, the following human
resources are essential for smooth operations. The quantity of staff will depend on the
warehouse's size, technology, and operations scale. Below is an overview of the roles and their
estimated numbers.

1. Warehouse Manager

 Role: Oversees all warehouse operations, ensuring efficiency and managing the team.
 Quantity: 1 (for overall management).

2. Operations Supervisors

 Role: Supervises warehouse teams in specific areas (receiving, picking, packing, and
shipping).
 Quantity: 4-6 (depending on the warehouse size).

3. Inventory Managers

 Role: Manages inventory levels, stock rotation, and order processing.

 Quantity: 2-4.

4. Forklift Operators/AGV Operators

 Role: Operates forklifts or Automated Guided Vehicles (AGVs) for material handling.
 Quantity: 10-20 (depending on warehouse automation level).

5. Pickers and Packers

 Role: Picks items from shelves, packages them for shipment, and ensures order accuracy.
 Quantity: 30-50 (depending on order volume).

6. Quality Control Inspectors

 Role: Inspects products for damage, accuracy, and quality before shipment.
 Quantity: 5-10.

7. IT Support Staff

 Role: Supports the IT infrastructure, including WMS, network, and automation systems.
 Quantity: 3-5 (including system administrators, technicians).
8. HR and Admin Staff

 Role: Handles staffing, payroll, and general administrative tasks.

 Quantity: 3-5.

9. Safety and Security Personnel

 Role: Ensures the safety of the workers and the security of the warehouse.
 Quantity: 5-8.

10. Customer Service Representatives

 Role: Handles customer inquiries, issues, and returns.

 Quantity: 5-10 (scalable based on the order volume).

11. Maintenance Staff

 Role: Maintains the machinery, equipment, and overall infrastructure.

 Quantity: 3-5.

12. Drivers (for delivery)

 Role: Delivers goods to customers.

 Quantity: 10-15 (depending on delivery radius and fleet).

Summary of Human Resources Needs:

 Total Estimated Staff: 90-160 employees, depending on warehouse scale and

automation.
 Key Roles: Warehouse Manager, Operations Supervisors, Pickers, Packers, IT Support,
Quality Control, HR/Admin, Safety & Security, Customer Service, Maintenance, and
Drivers.

ANSWER NO. 6
To accommodate Amazon’s potential business growth in Pakistan and the region by 2030, the
warehouse facility should be designed with scalability, efficiency, and future demand in mind.

1. Warehouse Space Requirements:

 Initial Size (2024-2026): Approximately 100,000 to 150,000 square feet for medium-
sized operations with room for receiving, storage, picking, packing, and shipping.
  Growth Size (2027-2030): 200,000 to 300,000 square feet to accommodate increased
order volume, additional product categories, and advanced automation systems.

2. Storage Capacity:

 Initial Storage: Design for 20,000-30,000 pallet locations.

 Growth Storage: As order volume grows, expand to 50,000-70,000 pallet locations by
2030.

3. Picking and Packing Areas:

 Initial Setup: 5,000 to 10,000 square feet for picking and packing areas.
 Growth Expansion: Allocate 10,000 to 20,000 square feet for optimized packing
stations and advanced sorting systems.

4. Technology Integration:

 Automation Space: Plan for 2,000 to 5,000 square feet for automated systems (AGVs,
robots, conveyors).
 IT Infrastructure: Space for server rooms and network operations within 1,000-2,000
square feet.

5. Employee Facilities:

 Initial Facility: 3,000 to 5,000 square feet for office space, break rooms, and staff
amenities.
 Expansion: 5,000-7,000 square feet to support a growing workforce by 2030.

6. Shipping and Delivery Areas:

 Initial Setup: 10,000 to 20,000 square feet for loading docks, delivery staging, and
outbound transportation.
 Growth: Increase space to 20,000 to 30,000 square feet for expanded logistics.

7. Future-Proofing:

 Flexibility: Design the layout to allow easy expansion in stages, especially in storage,
picking, and packing areas.
 Height: Utilize high ceilings (minimum 30 feet) to optimize vertical storage and allow
for automated storage systems.
 ANSWER NO. 7
Karachi, located on the southern coast of Pakistan, is the most suitable city for setting up an e-
commerce warehouse due to its strategic advantages in terms of logistics, infrastructure, and
connectivity. As Pakistan’s largest port city, Karachi is home to the Karachi Port and the Port
Qasim, which are critical for international trade and supply chain operations. The proximity to
the sea allows for efficient import/export activities, reducing shipping costs and transit times for
products coming from or going to international markets. Additionally, Karachi is a major
commercial hub with well-developed road, rail, and air transport networks, ensuring easy access
to key regional markets across South Asia, the Middle East, and Central Asia.

The city’s extensive infrastructure, including warehousing spaces, skilled labor, and proximity to
major trade routes, makes it an ideal location. Furthermore, the nearby Gwadar Port, which is
positioned for expansion under the China-Pakistan Economic Corridor (CPEC), could provide
even more logistical advantages in the long term. This port, once fully operational, will enhance
regional connectivity and offer additional capacity for handling increased trade volumes in the
future, further boosting Karachi’s appeal as a central logistics hub. Therefore, Karachi’s
combination of port access, road connectivity, and economic significance makes it the optimal
choice for Amazon’s e-commerce warehouse.
ANSWER NO. 8
Here are the precise points from this exercise:

1. Location Importance: Karachi's proximity to major ports (Karachi Port, Port Qasim)
and future Gwadar Port ensures efficient logistics and reduced shipping costs.
2. Warehouse Layout: Choosing the right layout (U-shaped, zone-based) optimizes space
and workflow efficiency.
3. Technology Adoption: Automation (AGVs, ASRS, and WMS) improves efficiency,
reduces labor costs, and enhances accuracy.
4. Human Resource Planning: Align staffing with operational needs, focusing on
specialized roles like IT support and system maintenance.
5. Scalability: Plan warehouse size and capacity for future growth, considering increased
storage, automation, and demand by 2030.
6. IT Infrastructure: Strong IT systems (WMS, ERP, and IoT) are essential for real-time
tracking and efficient warehouse management.
7. Cost-Benefit of Machinery: Investing in automated machinery (AGVs, robotic pickers)
improves throughput and ROI.
8. Sustainability: Incorporate energy-efficient systems and waste reduction practices for
long-term cost control.
9. Regional Ports' Role: Karachi’s strategic port access, combined with Gwadar’s future
growth, enhances regional trade connectivity.
 10. Long-Term Planning: Thorough planning for future scalability, technology, and market
trends is critical for success through 2030.

SUMMARIZED PLAN

E-Commerce Warehouse Plan for Amazon in Pakistan (Serving Regional

Countries)

1. Warehouse Location

 Location: Karachi is the ideal location due to its proximity to major ports (Karachi Port,
Port Qasim), strong logistics infrastructure, and access to Gwadar Port for future
expansion.

2. Warehouse Size and Layout

 Initial Size (2024-2026): 100,000 to 150,000 square feet, expandable as demand

increases.
 Growth Size (2027-2030): Expand to 200,000 to 300,000 square feet.
 Layout:
 Use U-shaped or zone-based layouts to optimize storage and workflow.
 Plan for scalable areas, especially for storage and packing.

3. Machinery and Technology Integration

 Automated Guided Vehicles (AGVs): $50,000-$100,000 each, ROI in 2-3 years.

 Automated Storage and Retrieval Systems (ASRS): $500,000-$2,000,000, ROI in 3-5
years.
 Conveyor Systems: $100,000-$500,000, ROI in 1-3 years.
 Robotic Pickers: $30,000-$150,000 each, ROI in 1.5-2 years.
 Warehouse Management System (WMS): $100,000-$500,000, ROI in 1-2 years.
 Focus on automation to reduce labor costs and increase operational efficiency.

4. IT Infrastructure

 WMS & ERP Systems: To manage inventory, order fulfillment, and integrate with other
systems.
 IoT Devices: For real-time tracking of goods and equipment.
 Cloud Infrastructure: For scalable data storage and processing.
 Networking: High-speed internet, secure Wi-Fi, and mobile devices for staff.
5. Human Resource Requirements

 Key Roles: Warehouse Manager, Operations Supervisors, Inventory Managers, Pickers,

Packers, IT Support, HR/Admin, Safety & Security, and Customer Service.
 Estimated Staff: 90-160 employees, scalable with automation.

6. Facility and Space Planning

 Initial Setup: 100,000-150,000 sq. ft. with space for storage, picking, packing, and
shipping.
 Growth: 200,000-300,000 sq. ft. by 2030, with expandable storage and automation
space.
 Employee Facilities: Offices, break rooms, and staff amenities will require 3,000-5,000
sq. ft.

7. Cost and ROI Considerations

 Machinery Investments: Focus on AGVs, ASRS, robotic pickers, and conveyors for
better ROI (2-5 years).
 IT Systems: WMS and ERP software to optimize warehouse operations and inventory
management.
 Scalability: Design facility with room for future expansion in storage, packing, and
automation.

8. Regional and Global Connectivity

 Logistics Hub: Utilize Karachi’s port access and future Gwadar Port to streamline
import/export processes and regional connectivity.

9. Sustainability

 Incorporate energy-efficient systems and waste-reduction practices to optimize long-

term costs.

10. Long-Term Planning

 Design for future scalability through 2030, integrating emerging technologies and
adapting to market demands.