6177233.ppt

Work Systems and the Methods, Measurement, and Management of Work
by Mikell P. Groover, ISBN 0-13-140650-7.
©2007 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.
Logistics Operations
Sections:
1. Introduction to Logistics
2. Transportation Operations
3. Material Handling
4. Analysis of Material Handling Operations
Chapter 5

Four Categories of Workers
1. Logistics workers
 Move things
 Human components of logistics system
 Logistic system = work system
2. Production workers
3. Service workers
4. Knowledge workers

Introduction to Logistics
 Origins in military science
 Procurement, transportation, and
maintenance of military supplies,
equipment, and personnel
 Business logistics
 Acquisition, movement, storage, and
distribution of materials and products, as
well as the planning and control of these
operations to satisfy customer demand
 May also involve movement of people

Two Categories of Logistics
 External logistics = transportation and related
activities that occur outside of a facility
 Movement of materials between different
geographical locations
 Five traditional modes of transportation: rail
truck, air, ship, and pipeline
 Internal logistics = material handling and
storage within a facility

Logistics Workers – Job Titles
 Transportation operations
 Air traffic controller, bus driver, parcel
service dispatcher, railroad train conductor,
ship captain, teamster
 Material transport in a facility
 Airport baggage handler, crane operator,
forklift truck operator, material handler
 Material storage
 Crane operator in an AS/RS, inventory
control manager, order picker, shipping
clerk, tool crib stores clerk

Work Activities
 Various combinations of physical labor and
information processing
 Physical labor
 Moving materials, work-in-process, and
finished products
 Information processing
 Planning, coordinating, and controlling the
physical movement

Importance of Logistics
 Sometimes viewed as non-value-adding
 By comparison, manufacturing and
assembly activities add value by physically
transforming materials
 Logistics does not alter the product
 However, logistics operations create a time and
place value for customers
 Having the materials and products available
and getting them to customers when
needed or wanted

Logistics Objectives - Metrics
 Accuracy – deliver exactly what the customer
orders
 Availability – have items in inventory when the
customer needs or wants them
 Orders shipped complete - every item ordered
included in shipment
 Speed of delivery – time to delivery
 Returns and error recovery – how well are
these problems coped with

Business Logistics Objectives
 Provide a specified level of customer service
 Deliver that level of service at the lowest
possible cost
 Increased customer service means higher cost
 Guaranteed availability for every item
means high inventory
 Savings in inventory costs means higher
stock-out frequency

The Logistics System
Consists of five components:
1. Facilities – production plants and storage
centers
2. Inventory – raw materials, work-in-process,
finished products
3. Transportation and material handling – means
of moving inventory
4. Information system – integration function
5. Logistics workers - they make the system
work

Supply Chains
Defined as the set of activities that is concerned
with the flow of materials and products from
raw materials through production and
distribution of finished goods to customers.
 Supply chain management = the planning,
coordination, and administration of the flow of
materials and products in the supply chain

Supply Chain
Block diagram depicting participants and activity
sequence in a supply chain

Basic Logistics Functions
1. Procurement
 Acquisition and movement of materials
from suppliers to manufacturing and/or
assembly plants
2. Logistical support for manufacturing
 Making raw materials available for
processing and moving work-in-process
3. Distribution
 Moving finished goods to customers

Functions in Logistics Operations
Model indicating three functional areas in
logistics operations

Warehousing
A warehouse is a facility for storing three types of
inventory:
1. Raw materials in the procurement process
2. Maintaining work-in-process for
manufacturing support
3. Making finished goods available for
distribution

Warehousing Functions
1. Receive – unload incoming materials, inspect
the materials, record receipt
2. Store – put the materials into storage and
record the storage location
3. Pick (“order picking”) – retrieve materials from
storage in response to customer orders
4. Ship – pack materials for shipment and load
the carrier vehicle

Distribution Center Operations
Different
combinations of
products are
shipped from
suppliers to
outlets through
the DC

Improvements in Warehousing
 Automated and mechanized storage systems –
reduce labor costs, speed the storage and
retrieval of materials
 Cross-docking – incoming items are sorted and
shipped without being placed in storage
 Warehouse management systems – for
maintaining inventory records, managing
transportation operations, optimizing storage
locations, and reporting labor performance

Transportation Operations
 External logistics
 Transportation expenses consume between
one-third and two-thirds of the total costs of
logistics
 Freight transportation industry in the U.S.
represents approximately 6% of gross
domestic product
 Approximately $500 billion

Five Basic Modes of Transportation
1. Rail
2. Truck
3. Air
4. Ship
5. Pipeline

Transportation Infrastructure
 Transport vehicles
 Planes, trains, and trucks
 Rights-of-way
 Airways, RR tracks, roads and highways
 Industrial organizations that provide
transportation services
 Government agencies that oversee the
transportation industry

Transportation Terms
 Carrier – company that provides the
transportation service
 Shipper – company that engages the services
of a carrier
 Consignee – company that receives the
shipped materials

Rail Transport
 Efficient movement of large tonnage over long
mileage
 Disadvantage – slow mover
 Applications:
 Raw materials located away from
waterways (coal, ore, lumber)
 Low value manufactured goods (paper,
wood products)
 Intermodal freight

Improvements in Rail Transport
 Elimination of work rules that resulted in high
labor costs
 Consolidation of companies
 Abandoning unprofitable railway lines
 Unit trains for mass transport of bulk
commodities (coal)
 Double-stack rail cars for intermodal containers
 Tri-level automobile cars

Trucking Operations
 Deregulation of the trucking industry
 Motor-Carrier Act of 1980 - encouraged
competition, improved efficiencies
 Higher intercity tonnage movement than any
other transportation mode
 Suited to high-value finished products and
semi-finished items over short and medium
distances
 Movement of merchandise
 Delivery of components/ subassemblies

Truck Transportation Advantages
 Door-to-door delivery
 Service availability and frequency
 Speed of delivery

Trucking Operations
 Truckload (TL)
 Loads greater than 15,000 lb
 Direct shipper to consignee
 Lower total cost to shipper
 Less-than-truckload (LTL)
 Loads less than 15,000 lb
 Stops along the route result in longer
delivery times
 Higher per ton-mile rates
 Cheaper for small load sizes

Improvements in Truck Transport
 More efficient scheduling
 Optimized routing for LTL operations
 Mechanized handling equipment
 Tandem trailers
 Intermodal operations – combination truck and
rail

Air Transport
 Air passenger travel most visible
 Freight service also available
 Major airlines provide freight service
 UPS and FedEx specialize in movement of
 Packages
 Large containerized loads
 Suited to delivery of high-value items over long
distances and time is a factor

Air Transport
 Advantage
 Speed of delivery over long distances
 Disadvantages
 Airports not conveniently located
 Delivery times include local delivery times:
 Shipper-to-airport
 Airport-to-consignee
 High per ton-mile costs

Air Transport Operational Approaches
 Strategic planning of routes and schedules
 Optimizing assignment of planes to routes
 Optimizing the number and locations of hubs
 Scheduling of crews
 Adequate coverage
 Minimum labor costs
 Optimizing aircraft maintenance schedules

Water Transport
 Dominant mode of freight transportation in
global trade
 Ships
 Rivers and canals: flat barges
 Coastal waters and Great Lakes: deep-
water vessels
 Domestic transport: very large shipments
 Time: slowest
 Cost: lowest
 Supplemental transport usually required

Improvements in Water Transport
 Containerized cargo
 Mechanized material handling equipment to
speed loading and unloading
 Satellite navigation (primary importance for
oceangoing vessels
 Autopilot technology
 Sonar and radar
 Improvements in ice-breaking equipment

Pipelines
 Disadvantages
 Limited in types of materials that can be
moved (e.g., gases, liquids, slurries)
 Slow (e.g., 4 mi/hr in Alaska pipeline)
 Advantages
 Material moves 24 hours per day
 Not affected by weather conditions
 No empty containers or vessels

A portion of the Alaska pipeline near Fairbanks
(photo by author)

Other Forms of Distribution
 Intermodal operations - combinations of the
five basic modes
 Parcel delivery services
 Transportation agencies
 Internet and similar communication-based
distribution modes

Intermodal Operations
 Rail and truck (piggyback)
 Containerships
 Truck and ship (fishyback)
 Train ship
 Truck and air

Giant cranes unload containers from a cargo ship
in Vancouver, B.C., Canada (photo by author)

Parcel Delivery Services
 Specialty services:
 Deliver small packages (<150 lb)
 Charge a premium price
 Provide fast transport
 Demand for these special services has
increased as commerce over the Internet has
grown (e.g., companies like Dell Computer and
Amazon.com)
 Operations are basically intermodal
 Sortation hubs are required

Transportation Agencies
 Provide specialized transportation services
 Intermediaries between shippers and
carriers
 Purchase high-volume, low-cost rates
from shippers and sell the transportation
service to small-lot shippers at fees the
shipper would not be able to obtain
 Consolidate small lots into large
shipments

Categories of Transportation Agencies
 Freight forwarders – consolidate small
shipments from multiple shippers into large
shipments
 Shippers’ associations – non-profit freight
forwarders who serve member companies
 Transport brokers – provide a coordinating
and matching service between shippers and
carriers

Internet and Similar Distribution Modes
 Airplane tickets – electronic ticketing
 Digital distribution of music – Apple iTunes
 Satellite radio – subscribers avoid commercial
interruptions
 Video-on-demand
 High-speed Internet access

Material Handling
Defined as “the movement, storage, protection
and control of materials throughout the
manufacturing and distribution process
including their consumption and disposal” (The
Material Handling Industry of America)
 Estimated to represent 20-25% of total
manufacturing labor cost in US
 Internal logistics

Material Handling Objectives
 To move materials within a facility
 Safely
 Efficiently
 At low cost
 In a timely manner
 Accurately
 Without damage
 Material handling is often an overlooked issue
in industry

Material Handling Equipment
1. Material transport
2. Storage
3. Unitizing equipment
4. Identification and tracking systems

Material Transport Equipment
 Five categories:
1. Industrial trucks
2. Automated guided vehicles
3. Monorails and other rail guided vehicles
4. Conveyors
5. Cranes and hoists

Industrial Trucks
Two basic categories:
1. Non-powered
 Human workers push or pull loads
 Low volume
 Short distances
2. Powered
 Self-propelled
 Larger loads
 Greater distances
 Common example: forklift truck

Forklift Truck
Forks are used
to move pallet
loads

Automated Guided Vehicle Systems
Material handling system that uses independently
operated, self-propelled vehicles guided along
defined pathways in the facility floor
 Types of AGV:
 Driverless trains
 Pallet trucks
 Unit load AGVs

Automated Guided Vehicle
A unit-load
automated guided
vehicle

Rail-Guided Vehicles
 Fixed rail system
 Overhead monorail - suspended overhead
from the ceiling
 On-floor - parallel fixed rails, tracks
generally protrude up from the floor
 Powered by electrified rail
 Routing variations: switches, turntables, and
other special track sections

Overhead Monorail

Conveyor Systems
1. Non-powered
 Materials moved by human workers or
by gravity
2. Powered
 Power mechanism for transporting
materials is contained in the fixed path,
using chains, belts, rollers or other
mechanical devices

Conveyor Types
 Roller: can be powered or non-powered
 Skate-wheel
 Belt
 In-floor towline
 Overhead trolley conveyor

Roller Conveyor
Common conveyor
type
Can be powered or
unpowered

In-floor Towline

Cranes and Hoists
 Cranes
 Used for horizontal movement of materials
 Hoists
 Used for vertical lifting of materials
 Cranes usually include hoists so that the
crane-and-hoist combination provides
 Horizontal transport
 Vertical lifting and lowering

Jib Crane with Hoist

Storage Systems
 Function – to store materials (e.g., parts, work-
in-process, finished goods) for a period of time
and permit retrieval when required
 Used in factories, warehouses, distribution
centers, wholesale dealerships, and retail
stores
 Important supply chain component
 Automation available to improve efficiency

Conventional Storage Methods
 Bulk storage
 Storage in an open floor area
 Rack systems
 Permits vertical stacking of materials
 Shelving
 Steel shelving comes in standard sizes
 Drawer storage
 Modular storage units are available

Pallet Rack System

Automated Storage Systems
Mechanized and automated storage equipment to
reduce the human resources required to
operate a storage facility
 Significant investment
 Level of automation varies
 In mechanized systems, an operator
participates in each storage/retrieval
transaction
 In highly automated systems, loads are
entered or retrieved under computer control

Reasons to Use Automated Storage
 Increase storage capacity
 Increase storage density
 Recover factory floor space
 Improve security and reduce pilferage
 Reduce labor cost & increase labor productivity
 Improve safety
 Improve control over inventories
 Improve stock rotation
 Improve customer service
 Increase throughput

Types of Automated Storage Systems
1. Automated storage/retrieval systems
2. Carousel storage systems

Automated Storage/Retrieval System
 Abbreviated AS/RS
 Consists of:
 One or more storage aisles
 (S/R) machine for each aisle
 Storage racks – where loads are stored
 Input/output stations (P&D)
 Manually operated
 Automated – interfaced to automated
material handling system (e.g., AGVS)

AS/RS

Carousel Storage System
Series of bins or baskets suspended from
overhead chain conveyor in the form of an oval
loop
 Operation similar to systems used in dry-
cleaning shops to bring clothes on hangars to
front of store
 Bins are positioned at pick & deposit station at
one end of loop where human worker loads
and unloads
 Carousel systems can be horizontal or vertical

Carousel Storage System

Applications of AS/RS and Carousels
 Unit load storage and handling (usually
associated with AS/R systems)
 Order picking
 Work-in-process storage
 Kitting – components to be used in assembly
are gathered from storage into a “kit” (usually
associated with carousel systems)

Unitizing Equipment: Containers
 Containers used to hold individual items
during handling
 Equipment used to load and package the
containers

Unitizing Equipment for Packaging
 Palletizers and Depalletizers
 Unit Load Principle
 Simultaneous handling of multiple items
 Number of trips reduced
 Reduction in loading and unloading times
 Higher operating efficiency

Identification and Tracking Systems
 Automatic Identification and Data Capture
(AIDC)
 Bar codes
 Magnetic stripes
 Radio frequency tags (RFID)
 The trouble with manual data collection & entry
 Error rate
 Time factor
 Labor cost

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