decisions : (routing, timing, quantities, equipment size, transport mode).
Single-mode Service Choices and Issues Air Rapidly growing segment of transportation industry Lightweight, small items [Products: Perishable and time sensitive goods: Flowers, produce, electronics, mail, emergency shipments, documents, etc.] Quick, reliable, expensive Often combined with trucking operations
once the infrastructure is in place , it has very high capacity and low per unit cost. so it can be used to move large volumes of relatively low priced materials. Such as coal and minerals.
it discourages competition , as a track built by one organization between two points will have enough capacity to meet all demand.
Example: there is only one rail line under the English channel, but this has the enough capacity to ,meet the demand on this heavy used route for the foreseeable future.
Disadvantages of rail
The main disadvantage is its inflexibility.
All train service have to be timetabled in advance, so this leaves little flexibility for last minute or emergency deliveries.
Single-mode Service Choices and Issues Road: most widely used transport and is used at least somewhere in almost all supply chains.
Flexible, small loads [Products: Medium and light manufacturing, food, clothing, all retail goods
door-to-door service avoid transfers to another modes and can give a shorter overall journey time.
Advantages of road transport
Extensive road networks.
Vehicles do not have to keep to such rigid timetables. So they can go on journeys at short notice and with little planning.
Single-mode Service Choices and Issues Water One of oldest means of transport Low-cost, high-volume, slow Bulky, heavy and/or large items (Products: Nonperishable bulk cargo - Liquids, minerals, grain, petroleum, lumber, etc ) Standardized shipping containers improve service 90% of the world trade is moved by sea. World ‘s 20 biggest port handle over half of all world trade.
Single-mode Service Choices and Issues Pipeline The basic nature of a pipeline is unique in comparison of any other modes of transport. Pipeline operate 24-hours basis, 7 days per week and are limited only by commodity change over and maintenance. Primarily for oil & refined oil products Slurry lines carry coal or kaolin High capital investment Low operating costs Can cross difficult terrain Highly reliable; Low product losses
Disadvantages of pipeline Pipeline are not flexible and are limited with respect to commodities than can be transported s only products in the form of gas liquid ca be handle.
Determining the Scope of Physical Distribution Transportation—which mode to use?
Transportation intermediaries available for hire to the general public.
In-flow of Material Production Warehouse Production Unit Intermediate Warehouse Further Processing Finished Goods Warehouse Distribution Depot Distributor (Whole-seller) Distributor (Whole-seller) Retailer Consumer Retailer Consumer WAREHOUSE ? BUSINESS ACTIVITY
FUNCTIONS OF WAREHOUSE Material Handling Function Storage function Information Transfer function Customer Service function
1.Material Handling Function Receiving Storing Order picking Sorting
2. Storage Function Product Pilling. To avoid production stoppage. To avail discounts. Uncertainty
. Primary Functions of Warehouse Secondary Functions of Warehouse 3. INFORMATION TRANSFER FUNCTION
Primary Functions of Warehousing Process Secondary Functions of Warehousing Process
In-flow of Material Production Warehouse Production Unit Intermediate Warehouse Further Processing Finished Goods Warehouse Distribution Depot Distributor (Whole-seller) Distributor (Whole-seller) Retailer Consumer Retailer Consumer 4. CUSTOMER SERVICE FUNCTION
In-flow of Material In-flow of Material Production Warehouse Production Warehouse Production Unit Production Unit Intermediate Warehouse Intermediate Warehouse Further Processing Further Processing Finished Goods Warehouse Distribution Distribution Distributor (Whole-seller) Depot Distributor (Whole-seller) Retailer Distributor (Whole-seller) Retailer Consumer Consumer Retailer Retailer Consumer Consumer
WAREHOUSE LOCATION Market Orientated. Production Oriented. Intermediately Oriented.
Raw Material Packaging Material Ingredients Production Store/ Warehouse Production Unit Intermediately Oriented Intermediate Warehouse Further Processing Production Oriented Finished Goods Warehouse Distribution Market Oriented Distributor (Whole-seller) Depot Distributor (Whole-seller) Retailer Consumer Retailer Consumer
Production Store/ Warehouse Refinery Intermediately Oriented Intermediate Warehouse Margarine Department Production Oriented Cold Storage/ Finished Goods Warehouse Distribution Market Oriented Distributor (Whole-seller) Depot Distributor (Whole-seller) Retailer Consumer Retailer Consumer EXAMPLE BLUE BAND MARGARINE
Types of Warehouses i. Private Warehouses ii. Public Warehouses iii. Government Warehouses iv. Bonded Warehouses v. Co-operative Warehouses
Public warehousing Company’s supply chain will incorporate some warehousing function. This can be company-owned, owned by a third party logistics (3PL) company or could be a public warehouse. At certain times, extra warehouse space is required due to any number of factors including; seasonal inventory, warehouse re-organization or warehouse damage. Whatever the reason the use of public warehousing is a useful tool for the supply chain manager as they try to find the greatest efficiencies in the supply chain. The public warehouse is not only a facility where a company can store their products, but the public warehouse offers inventory management, physical inventory counts and shipping functionality. The public warehouse charges their clients for a certain rate for the goods stored, the volume of the warehouse used and the services the client wishes to use.
Public warehousing-Advantages Capability to expand market Zero capital investment Adjust for seasonality Reduced risk
Public warehousing-Advantages Public warehousing-Advantages Special features and services Tax advantage Greater flexibility Specific knowledge for storage
Public Warehousing-Disadvantages Communication problem Lack of personalized service Lack of space
Private Warehousing-Disadvantages Use of HR Tax Benefit Intangible Benefit
Private warehousing Dis-Advantages Lack of flexibility High Operation Cost Low Rate of Return High Start up Cost
Private Warehousing Storagefacility owned by the firm whose goods are stored in it.
Contract Warehouses The Contract ware house combines the best characteristics of both public and private warehousing. Contract Warehousing is similar to public warehousing other than the owner of the goods absorbs some of the cost risks by making a commitment to pay fees whether or not the space is utilized. The risks being shared by both the owner of the goods and the warehouse company means the costs will be less than public warehousing costs. In short, the contract warehouses can take total responsibility of logistics for a firm, leaving it to develop its expertise in manufacturer
On the basis of operation Plant or base warehouse (centralized warehouse) Plant or base warehouse are usually company owned warehouses. These are the integral part of the plant facilities. Their primary function is to receive products from the end of the assembly pipe line and store them tell they are shipped to the distribution center warehouse. Distribution center warehouse (decentralized warehouse) A distribution center warehouse is primarily established for movement of goods rather than for storage. It typically serves regional market, consolidates large shipments from different points of production, re-groups products into customer orders.
Industrial Packaging Individual products or parts are normally grouped into cartons, bags, bins, or barrels for handling efficiency. Bags of coal Carton Barrels Bin These containers are used to group individual products and are referred to as master cartons.
When master cartons are grouped into larger units for handling, the combination is referred to as containerization or unitization.
The master carton and the unitized load provide the basic handling unit in the logistics channel.
The weight, cube, and fragility of the master carton in an overall product line determine transportation and material-handling requirements.
If the package is not designed for efficient logistical processing, overall system performance suffers.
Naturally, few organizations can reduce their master carton requirements to a single size. When master cartons of more than one size are required, extreme care should be taken to arrive at an assortment of compatible units.
The sizes of the four master cartons result in modular compatibility
Of course, logistical considerations cannot fully dominate packaging design. The ideal package for material handling and transportation would be a perfect cube having equal length, depth, and width with maximum possible density. Seldom will such a package exist. The important point is that logistical requirements should be evaluated along with manufacturing, marketing, and product design considerations when standardizing master cartons.
Degree of Protection The package design and material must combine to achieve the desired level of protection without incurring the expense of overprotection. It is possible to design a package that has the correct material content but does not provide the necessary protection.
For package design, there are two key principles
The cost of absolute protection will, in most cases, be prohibitive.
Package construction is properly a blend of design and material.
Testing the package The determination of final package design requires considerable testing to assure that both marketing and logistics concerns are satisfied. Laboratory analysis offers a reliable way to evaluate package design as a result of advancements in testing equipment and measurement techniques.
Damage Protection Package damage results from the transportation, storage, and handling utilized. If privately owned and operated transportation is used, the product will move to its destination in a relatively controlled environment. On the other hand, if common carriers are utilized, the product enters a non-controlled environment. The less control a firm has over the physical environment, the greater the packaging precautions required to prevent damage.
Causes of Damage The four most common causes are vibration impact Puncture compression Within the logistical system, combinations of these forms of damage can be experienced whenever a package is in transit or being handled.
Packaging for Material Handling Efficiency Package utility concerns how packaging impacts logistical productivity and efficiency. All logistical operations are affected by packaging
Product Design Product packaging in standard configurations and other quantities facilitates logistical efficiency. For example, reducing package size can improve cube utilization. This can be accomplished by concentrating products (e.g. orange juice) or eliminating air inside packages by shipping items unassembled.
In most cases dunnage materials (like polystyrene foam peanuts) can be minimized simply by reducing box size. IKEA, the Swedish retailer of unassembled furniture, emphasizes cube minimization to the point that it ships pillows vacuum-packed.
Cube minimization is most important for lightweight products such as assembled lawn furniture that cubes out a transport vehicle before weight limits are reached. For example, substituting plastic bottles for glass significantly increases the number of bottles that can be transported in a trailer.
Unitization The process of grouping master cartons into one physical unit for material handling or transport. The concept of containerization includes all forms of unitization, from taping two master cartons together to the use of specialized transportation equipment. All types of containerization have the basic objective of increasing material-handling efficiency.
Unit loads provide many benefits over handling individual master cartons. First, unloading time and congestion at destination are minimized. Second, product shipped in unit load quantities facilitates materials handling. In bound shipment verification is also simplified as receipts can be bar coded. Inventory can be positioned rapidly for order selection.
Finally, in-transit damage is reduced by unit load shipping and specialized transportation equipment.
Benefits Reduces damage in handling Reduces pilferage Reduces protective packaging requirements Provides greater protection from environment Provides a shipment unit that can be used many times repeatedly.
Communication The third important logistical packaging function is communication, or information transfer. This function is becoming increasingly critical to provide content identification, tracking, and handling. The most obvious communications role is identifying package contents for all channel members.
Typical information includes manufacturer, product, type of container (can versus bottle), count, and Universal Product Code (UPC) number, Electronic Product Code (EPC) and may be communicated using a bar code or RFID technology. Visibility is the major content identification consideration as material handlers should be able to observe the label from reasonable distances in all directions.
Materials Handling Advancements in materials handling technology and equipment offer the potential to substantially improve logistics productivity. Materials handling process and technologies impact productivity by influencing personnel, space, and capital equipment requirements. Material handling is a key logistics activity that can’t be overlooked.
Principles of Material Handling Equipment for handling and storage should be as standardized as possible. When in motion, the system should be designed to provide maximum continuous product flow. Investment should be in handling rather than stationary equipment. Handling equipment should be utilized to the maximum extent possible. In handling equipment selection the ratio of dead weight to payload should be minimized. Whenever practical, gravity flow should be incorporated in system design
Types of Handling Systems Mechanized Systems Semiautomated Systems Automated Systems Information-Directed Systems
Mechanized Systems Mechanized Systems employ a wide range of handling equipment. The types of equipment most commonly used in mechanized systems are: Lift Trucks Rider Trucks Towlines Tractor Trailers Conveyors carousels
Lift Trucks Lift trucks also called forklifts. Lift trucks can move loads of master cartons both horizontally and vertically but are limited to handling unit loads. Types of lift trucks are: High-Stacking trucks. Pallet-less or Clamp trucks
Rider Trucks Rider trucks provide a low-cost, effective method of general materials handling utility. Rider trucks are widely used in consumer package goods warehouses. Rider truck is operating typical applications include loading and unloading of transportation equipment, order selection and accumulation, and shuttling loads.
Towlines Towlines are utilized to provide continuous power to four-wheel trailers. The main advantage of a towline is continuous movement. The most common application of towlines is for case goods order selection.
Tractor Trailers Tractor trailers consist of a driver-guided power unit towing a number of individual four-wheel trailers. The tractor in combination with trailer, like a towline, is used during order selection. The main advantage of a tow tractor with trailers is flexibility.
Conveyors Conveyors are used widely in shipping and receiving operations and serve as the basic handling device for a number of order systems. Conveyors are classified according to power, gravity and roller or belt movement. In power configuration, the conveyors is driven by a chain. In gravity and roller driven applications permit rearrangement with minimum difficulty.
Carousels Carousel operates on a different concept than most other mechanized handling equipment. The typical carousel application is for the selection of packages in such items as pack, repack and service parts. Carousel systems also utilized computer-generated pick lists and computer-directed carousal rotation to further increase order selector productivity.
Semiautomated Systems Mechanized handling is often supplemented by semiautomatic equipment. Typical equipment utilized in semiautomated handling includes: Automated Guided Vehicles [AGV]. Computerized Sortation. Robotics. Live Racks.
Automated Guided Vehicles [AGV] The AGVS is a mechanized material handling equipment without an operator. The system consists of four components. Vehicle for movement. Pickup and drop off locations. Guidance system. Computer control system.
Computerized Sortation The sorting device will sort the material based on the sorting code. The optical sensing reads the bar code on the items. The automatic sorting device increases system productivity through, Speed Accuracy Elimination of manual labor.
Robotics These are human like machines with microprocessor to perform the programmed activity or series of activities. Robotics can be used for break bulk or consolidation operations. Robotics can be used in extreme temperature environments like cold storage or deep freezers.
Live Racks Live racks are commonly used to reduce manual labor in warehouses is storage rack design in which product automatically flows to the desired selection position. The use of the live rack reduces the need to use lift trucks to transfer unit loads. The advantage of live rack storage is the potential for automatic rotation of product as a result of rear loading.
Automated Systems The concept of automated handling has offered great potential and limited accomplishment. Potential to automate Order selection Automated storage/retrieval
Potential to automate An Automated system has the potential to operate faster and more accurately than its mechanized counterpart. Automated system have been designed and constructed for specific applications. Information technology plays an important part in all handling systems. A major disadvantage of automation is its dependency on proprietary information technology networks.
Order selection The basic objective was to integrate mechanized, semiautomated, and automated handling into a system that offers the advantages of high productivity and accuracy while using minimal labor. The general process begins with an automated order selection device preloaded with product.
Automated storage/retrieval Automated storage system that use high-rise storage is a popular form of automation. The initial function of the storage equipment is to reach the desired storage location rapidly. The storage machine is positioned to service different aisles by transfer cars.
Information-Directed Systems The concept of information-directed handling is relatively new and the subject of a great deal of research and development. Information directed systems use mechanized handling controlled by information technology. There are two common examples of information-directed material handling systems. RF Wireless (Wi-Fi) Pick-to-Light
RF Wireless (Wi-Fi) The basic use of Wi-Fi to instruct movement of lift trucks is expanded in an information-directed application to become a highly integrated materials handling system. The main advantage of RF is to improve speed and flexibility of lift truck operations. RF technology provides real-time communication to central data processing systems.
Pick-to-Light Pick-to-light is a carousel system variation that is becoming increasingly common. In these systems order selectors pick designated items directly into cartons or onto conveyors from lighted carousel locations or storage bins.