Download to read offline
157_50425_EA322_2013_1__2_1_Warehousing.ppt
- 1. Warehousing Copyright © 2010by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 2. 10-2 Warehousing overview • Strategicwarehousing • Warehouse operations • Warehouse ownership arrangements • Warehouse decisions
- 3. 10-3 Warehousing contributes valuein the logistics process • Traditionally viewed as a place to hold or store inventory • Contemporary view is the warehouse functions to mix inventory arrangements to meet customer requirements – Storage of products is held to a minimum
- 4. 10-4 Evolution of strategicwarehousing • Warehouses were once viewed as a necessary evil, used to coordinate product supply with customer demand • The explosion of the consumer economy after WWII saw the rise of distribution networks for consumer goods • Warehousing shifted from passive storage to strategic assortment
- 5. 10-5 Warehousing types evolvedto accommodate the dynamic aspects • Distribution centers • Consolidation terminals • Break-Bulk facilities • Cross-docks
- 6. 10-6 Strategic warehousing offersmanufacturers a way to reduce dwell time of parts and materials • Warehousing is integral to just- in-time (JIT) and stockless production strategies – Requires strategically located warehouses across the globe • An important goal in warehousing is to maximize flexibility – Respond to ever-changing customer demand
- 7. 10-7 Strategic warehousing canprovide both economic and service benefits • Economic benefits of warehousing occur when overall logistics costs are reduced – Consolidation and break-bulk – Sorting – Seasonal storage – Reverse logistics • Service benefits are justified by sales improvements that more than offset added cost – Spot-stocking – Full line stocking – Value-added services
- 8. 10-8 Consolidation and break-bulkreduce transportation cost • Consolidation occurs when a warehouse receives materials from a number of sources and combines them into exact quantities for a specific destination • Break-bulk occurs when a warehouse receives a single large shipment and arranges for delivery to multiple destinations
- 9. 10-9 Illustration of consolidationand break-bulk arrangements Figure 10.1 Consolidation and Break-Bulk Arrangements
- 10. 10-10 Sorting involves reconfiguringfreight as it flows from origin to destination
- 11. 10-11 Cross-docking is usedextensively by retailers to replenish store inventories • Cross-docking combines inventory from multiple origins into a prespecified assortment for a specific customer
- 12. 10-12 Successful cross-docking ishighly dependent on information technology WalMart Distribution Center • Products are received, selected, repackaged, and loaded for shipment w/o storage
- 13. 10-13 Mixing is usuallyperformed at an intermediate location between origin and destination • Mixing combines inventory from multiple origins (like cross-docking) but also adds items that are regularly stocked at the mixing warehouse Stock Inventory
- 14. 10-14 Assembly supports manufacturingoperations • Assembly occurs when products or components from second-tier suppliers are assembled by a warehouse located near manufacturing plant • Common assembly processes are packaging and color customizing
- 15. 10-15 Seasonal storage providesdirect benefit by accommodating production or demand • Seasonal production include agricultural products • Seasonal demand includes lawn furniture and toys • Seasonal storage allows production efficiencies within the constraints of seasonality
- 16. 10-16 Reverse logistics processing •Reverse logistics include activities supporting – Returns management • Recalls or product that did not sell – Remanufacturing and repair • Repairing/refurbishing equipment – Remarketing • Selling used equipment – Recycling – Disposal
- 17. 10-17 Service benefits ofwarehousing Full Line Stocking at United Electric’s Distribution Center • Spot-stocking is the positioning of inventory for seasonal or promotional demand • Full line stocking provides one-stop shopping capability for goods from multiple suppliers • Value-added services include any work that creates a greater value for customers – See Table 10.1 for examples
- 18. 10-18 Typical list ofvalue-added services Table 10.1 Value-Added Services
- 19. 10-19 Warehouse operations involvetwo major activities – handling and storage • Objective is to – Efficiently receive inventory – Store it as required – Assemble it into complete orders – Make a customer shipment • Operations will therefore emphasize product flow
- 20. 10-20 Handling • Handling mustoptimize movement continuity and efficiency – Receiving—Unloading the arriving vehicles – In-Storage—moving goods for storage (transfer) or order selection (picking) – Shipping—verifying the order and loading the departing vehicles
- 21. 10-21 Storage plans shouldmake product velocity a major factor • Slotting determines specific locations for the product based on – Velocity—how fast the goods move – Weight—how heavy is the product – Special Characteristics— how large or small, does it require rack or bin storage
- 22. 10-22 Warehouses must managetwo classes of storage • Active Storage—storage for basic inventory replenishment – Focuses on quick movement – Includes flow-through or cross- dock distribution • Extended Storage—storage for inventory held in excess of period for normal replenishment – E.g. seasonal, speculative, or even commodities
- 23. 10-23 Warehouse ownership arrangements •Private—warehouse operated by the firm owning the product – Building may be owned or leased • Public—service company owns warehouse and hires out space and services – Usually classed as • General merchandise • Refrigerated • Special commodity • Household goods and furniture
- 24. 10-24 Contract warehousing combineselements of private and public operations • Usually a long-term relationship or contract between a firm and the warehousing owner/operator – Long-term cost savings compared with public warehouse – Often a firm’s employees will work alongside the contract warehouse’s – Example is Kraft Foods who has contracted with AmeriCold Logistics since the late 1990’s
- 25. 10-25 Network deployment isthe combination of private, public and contract facilities used by a firm • Network deployment strategy requires answering two questions – How many warehouses should be established? – Which warehouse ownership types should be used in specific markets? • For example, when warehouse utilization is not full throughout the year – Use private or contract warehouse to cover 75 percent requirement – Public facilities used to accommodate peak demand
- 26. 10-26 Warehouse decisions thatdetermine handling and storage efficiency • Site Selection • Design • Product-Mix Analysis • Expansion • Materials Handling • Layout • Sizing • Warehouse management system • Accuracy and audit • Security • Safety and maintenance
- 27. 10-27 Site selection isdriven by service availability and cost factors • Identify broad geography where an active warehouse meets service, economic and strategic requirements • Selection and number of retail outlets drives location of support warehouses • Final selection should be preceded by extensive analysis
- 28. 10-28 Warehouse management systemsencourage best practices • Warehouse management systems (WMS) integrate procedures and software support to standardize storage and handling work procedures • One main use of WMS is to coordinate order selection – Discrete selection is when a specific customer’s order is selected and prepared for shipment as a single work assignment – Wave or batch selection is when orders are processed through zones of the warehouse assigned to specific employees
- 29. 10-29 Other warehouse planningissues • Inventory accuracy is typically maintained by annual physical counts or counting portions of inventory on a planned basis – Cycle counting is the audit of selected inventory on a cyclic schedule • Audits are common to maintain safety, assure compliance to regulations and help improve procedures • Security issues involve protection from pilferage and damage
- 30. 10-30 Safety and maintenanceissues must also be considered when planning warehouse designs • Accident prevention – Comprehensive safety programs and training, accident investigation and follow up • Environmental protection – Spill ( leak ) kits and spill plans • Maintenance – Scheduled maintenance of building, material handling equipment, and collision damage prevention