Material Handling

Objectives Examine material handling and warehouse design Differentiate between types of warehouses Analyze distribution center operations Examine documentation needed for various modes of shipping

Inventory Storage Storage – holding of goods until they are sold – usually in warehouses

Types of Warehouses Private Public Distribution Centers Bonded Retail Distribution Center – goods to retail stores Fulfillment Center – goods directly to consumers Bonded

Private Warehouse Storage facility designed to meet specific needs of owner Advantage - valuable if move large volume of products – can specialize Disadvantage – costly to build and maintain

Public Warehouse Storage and handling facility offered to any individual or company that will pay for its use Advantage – businesses with low-to-medium volume storage needs or seasonal production Disadvantage – must pay rent and other costs

Types of Public Warehouses Bulk Storage – keep products only in bulk forms – such as chemicals/oil Cold Storage – handle perishables – fruits, vegetables, frozen products Commodity - store agricultural products – cotton, grain, tobacco General Merchandise – products that do not require special handling Household Goods – personal property, household articles, furniture

Distribution Center Warehouse designed to speed delivery of goods and to minimize storage costs Main focus is sorting/moving products – NOT storing them Planned around geographic markets Cut costs by reducing the number of warehouses and eliminating excessive inventory

Distribution Center Cycle

Distribution Center – System of Operations Unloader – unloads trucks and breaks down pallets Receiver - inventories and tags unloaded pallets Hauler – transports received pallets from receiving dock to storage racks Put-Away Driver – loads product into racks with a forklift Replenishment Driver – Pulls products from racks and prepares for order filler Order Filler – locates ordered products and moves it to designated location Loader – wraps pallets and loads the truck

Bonded Warehouse Public or private warehouses that store products that require payment of a federal tax Imports and exports

Skechers Distribution Center https://www.youtube.com/watch?v=FrsJqtsRTvs

Math Skills Calculate Savings. A large manufacturer can save 25% by using a distribution service instead of a private warehouse. The cost of the distribution service would total $55,450. How much money will the manufacturer save by using the distribution service? Cost Per Order. The cost per order is one measure of warehouse productivity. The cost per order is represented by the ratio Total Warehouse Cost:Total Orders Shipped. What is the CPO for a company that has a total warehouse cost of $850,000 and shipped a total of 95,000 orders in a one-year period? 1. X * .75 = $55450 = $73,933.33 2. $850,000/95,000 = $8.95

Material Handling Equipment – Storage Systems

TI-HI TI (Tier) – number of boxes/cartons stored on a layer HI (Pallet) – number of layers high to be stacked

Material Handling Equipment – Lift Equipment

Case Study: New Pallet Program Better by Half

Material Handling Equipment – Dock Equipment

Material Handling Equipment - Conveyors

Extreme Forklifting 2 Description: Always dreamed of becoming a forklift operator? Now you can! The forklifting adventure you’ve always been dreaming of! Features: Realistic, accurate and highly responsive controls. Support for most steering wheels. All the pallets you can wish for! Pick pallets up! Put pallets down! https://store.steampowered.com

Warehouse Functions Receiving Reserve Storage Forward Pick Sorting and/or Assembly Quality Control Shipping

CASE STUDY: Ryder Redefines the Smart Warehouse; Deploys Innovate Mix of Startup Technologies Partnerships with innovators in robotics, drones, sensors, and wearables make the smart warehouse customizable, flexible, and scalable.

Warehouse Layout and Material Flow Patterns U-Shaped I-Shaped L-Shaped https://www.youtube.com/watch?v=0OeStxbzKsM

U-Shaped Product comes in one side of the building, moves to the back (pallet storage), moves across the back (to forward pick), and back to the front for shipping

I-Shaped Items must move through the system in proper sequence

L-Shaped Items must flow through in proper sequence

Cross-Docking Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between.

Racking Each section of racking is called a “bay.” Each bay usually holds 2 or more pallets. Racking is usually 1 to 6 bays high (depending on how much space is available in the warehouse. Each bay usually has a label with an identification number.

Functional Layout A functional design must also take into consideration the isle space (area between the racks.) If the isle does not allow enough space for the material handling equipment (fork lifts and pallet jacks) to function properly, productivity goes down greatly.

Project: Warehouse Layout and Design SCENARIO: Kroger management has decided to open a new distribution center in Marshall County and requested that you design the warehouse for the new location. The goal for the warehouse layout is to optimize efficiency and minimize distribution time.

Documentation Documentation is needed to identify goods, enable tracking, indicate where the goods originated and where they are being shipped. Shipping goods globally is more complicated, because every country has its own set of regulations controlling which products can be imported or exported, how imports are taxed, which documents must be filed with the country’s customs officials, and which must accompany the shipment to its destination.

Customs Government authority designated to regulate the flow of goods to/from a country and to collect duties levied by a country on exports and imports Customs inspectors will review the documents to confirm the accuracy of the information that typically includes a brief description of each item, the number of items in the shipment, and the monetary value of the goods expressed in the importing nation’s currency. The United States, and most other nations, assess import duties, or taxes, on goods entering the country. Duty: the tax charged by customs for goods being shipped into the country; sometimes the tax is charged for goods leaving the country

Documentation – Domestic Shipping Address Label Packing List Purchase Order Invoice

Examples of Logistics Documentation

Documentation – International Shipping Commercial Invoice Insurance Certification Consular Invoice Dock Receipt Certificate Of Origin Warehouse Receipt NAFTA Certificate Export Declaration Bill Of Lading Export License Certificate Of Inspection Export Packing List

International Shipping Many companies have a small staff of employees who are familiar with the international shipping regulations and requirements and who have the experience necessary to complete forms accurately and file all required documentation. Other companies choose to contract with freight forwarders and 3PL firms to handle the logistics of international shipping. Many of these logistics firms handle thousands of international shipments each year, take note of any changes in a country’s import policies, and relieve much of the anxiety their clients may initially feel.

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Activity: Types of International Shipping Documentation Create and complete the following table in MS Word for all the documentation listed in Slide 39: Document Definition Example Commercial Invoice Created by the seller of the goods - represents the bill for the cost of goods