CHAPTER 9: Warehousing.

Slides:



Advertisements
Similar presentations
Foundations of Chapter M A R K E T I N G Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Supply Chain and Logistics Management 17.
Advertisements

WAREHOUSING MANAGEMENT
WAREHOUSING MANAGEMENT
CHAPTER 9: Warehousing.
Logistics & Channel Management
Chapter 7 Logistics.
INTEGRATING SUPPLY CHAIN AND LOGISTICS MANAGEMENT
THE CONTEXT OF LOGISTICS. Cycle of Supply and Demand Customers Other Inputs Other Outputs Operations Demand for Products Supply of Products passed to.
Logistic Management Warehousing
Warehousing.
Transportation and Warehouse Planning Systems Byron Flores Bus M. 462 April 12, 2010.
Storage & Handling Systems. Reasons for Storage Reduce transportation – production costs Coordinate supply and demand Assist in the production process.
Supply Chain Management
Global Manufacturing and Materials Management
Warehousing Decisions
Supply Chain Logistics Management
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin INTEGRATING SUPPLY CHAIN AND LOGISTICS MANAGEMENT.
Network Design McGraw-Hill/Irwin
Cross-Docking Distribution Center (DC)
Supply Chain Logistics Management
Class 17: Chap 11: Logistics Mgt & Review Class 17 Agenda –Trimester 2 Exam covers: 6. 6s, 7.8, but not 17 –One page crib sheet is allowed – No.
WAREHOUSING.
Learning Objectives Determine the need for warehouses and inventory management Identify the various types of warehouses Identify and describe the different.
Warehousing McGraw-Hill/Irwin
WAREHOUSE MANAGEMENT Industrial Logistics (BPT 3123)
Managing Fulfillment Operations
Chapter 7 Logistics.
TRANSPORTATION MANAGEMENT
Overview of APL Logistics. Supply Chain Management Container Shipping Chartering & Enterprise Our Heritage Founded in 1968 Largest shipping company listed.
Chapter 3 Network and System Design. Objectives After reading the chapter and reviewing the materials presented the students will be able to: Understand.
SUPPLY CHAIN MANAGEMENT. PARTICIPANTS INTRODUCTION SUPPLY CHAIN MANAGEMENT.
Supply Chain and Logistics Management
Warehousing Storage (Location) Balancing act. Warehousing An act of storing and assorting the finished goods so as to create maximum time utility at minimum.
Cross-Docking
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
SUPPLY CHAIN MANAGEMENT. PARTICIPANTS INTRODUCTION SUPPLY CHAIN MANAGEMENT.
LOGISTICS MANAGEMENT 2. Definition Of LOGISTIS What is Logistics ?  “ Logistics means having the right thing at the right place, at the right time 
Distribution Customer Services and Logistics
Logistics McGraw-Hill/Irwin
Warehousing. Part Three. Sorry for the poor audio quality – technical problem. Also the first few slides you’ll have to advance manually.
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CHAPTER 9: Warehousing.
Logistics Management CHAPTER ELEVEN McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
Logistics Management CHAPTER ELEVEN McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
 Traditional concept of warehouse as store or go down  Development of modern concept of warehouse as facility Traditionally, consumer maintained his.
Chapter 8: Storage and Handling
Chapter 13 Logistics and Channel Management. Logistics13 Objective 1: L ogistics Planning, implementing, and controlling the physical flows of materials.
Strategic Logistics Management. Transportation Functionality & Role Functionality – Product Movement – Product Storage – Vein and Arteries of the Supply.
Warehousing. Part Three. Uses of Warehouses: Support manufacturing. Mix products from multiple production facilities to a single customer. Break bulk.
Department of Marketing & Decision Sciences Part 5 – Distribution Wholesaling and Physical Distribution.
Warehousing. Warehouse A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, Wholesalers, retailers, importers,
21 st -Century Supply Chains Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
L – 5 Distribution Channel - Warehousing and Inventory Management.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin INTEGRATING SUPPLY CHAIN AND LOGISTICS MANAGEMENT 16 C HAPTER.
Logistics Management CHAPTER ELEVEN McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
CHAPTER 10 Warehousing. Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin 10-2 Cost trade-offs in Marketing and.
DISTRIBUTION Distribution can be defined as an operation, or a series of operations, which physically bring goods manufactured or produced by any particular.
10-1 WAREHOUSING  A warehouse is typically viewed as a place to store inventory.  However, in many logistical system designs, the role of the.
Warehousing Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
INTRODUCTION TO SUPPLY CHAIN MANAGEMENT. What is a Supply Chain? A supply chain consists of the flow of products and services from: Raw materials manufacturers.
DISTRIBUTION: Managing Fulfillment Operations Chapter 11 MANAGING SUPPLY CHAINS A LOGISTICS APPROACH 9e COYLE | LANGLEY | NOVACK | GIBSON ©2013 Cengage.
Logistics Systems Prof. Costas Panou Lecture #3 in M.Sc New Technologies in Shipping and Transportation.
IIMM, Bangalore Branch1.  They are ;  1)PRODUCTION  a)Production of H.D.P.E Pipes  b)Production of Tanks  2)STORE  3)MAINTAINANCE  4)DAISPATCHING.
Warehousing.
Chapter 13 Logistics and Channel Management.
INTRO TO SAP EWM.
Common Learning Blocks
WAREHOUSING AND DISTRIBUTING CENTERS
5th Edition.
Chapter 13 Logistics and Channel Management.
Managing Fulfillment Operations
Presentation transcript:

CHAPTER 9: Warehousing

Warehousing overview Strategic warehousing Warehouse operations Warehouse ownership arrangements Warehouse decisions

Warehousing contributes value in the logistics process Traditionally viewed as a place to hold or store inventory Contemporary view is the warehouse functions to mix inventory assortments to meet customer requirements Storage of products is held to a minimum

Evolution of strategic warehousing 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

Warehousing types evolved to accommodate the dynamic aspects Distribution centers Consolidation terminals Break-Bulk facilities Cross-docks

Strategic warehousing offers manufacturers 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 Product assortments Value-added services Shipment sequencing

Strategic warehousing can provide 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

Consolidation and break-bulk reduce 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

Illustration of consolidation and break-bulk arrangements Figure 9.1 Consolidation and Break-Bulk Arrangements

Figure 9.2 - Sorting involves reconfiguring freight as it flows from origin to destination

Cross-docking is used extensively by retailers to replenish store inventories Cross-docking combines inventory from multiple origins into a prespecified assortment for a specific customer

Successful cross-docking is highly dependent on information technology Products are received, selected, repackaged, and loaded for shipment w/o storage Used with general merchandise & food Enabled by conveyors & sortation equipment Used in large distribution centers (800K to 1,200K sq.ft.) WalMart Distribution Center

Mixing is usually performed 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

Assembly supports manufacturing operations 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

Seasonal storage provides direct 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

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

Illustration of reverse logistics flow

Service benefits of warehousing 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 Full Line Stocking at United Electric’s Distribution Center

Typical list of value-added services Table 10.1 Value-Added Services

Warehouse operations involve two 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

Handling Handling must optimize 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

Storage plans should make 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

Illustration of storage plan based on product movement velocity Figure 9.3 Storage Plan Based on Product Movement Velocity

Warehouses must manage two 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

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 Bonded Special commodity Household goods and furniture

Contract warehousing combines elements 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

Network deployment is the 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

Warehouse decisions that determine 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

Site selection is driven 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

Illustration of straight-line product flow to facilitate velocity Figure 9.4 Basic Warehouse Design

Two examples illustrating the integration of handling equipment with final layout Figure 9.5 Layouts A and B

Warehouse management systems encourage 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

Illustration of the range of activities coordinated by an advanced WMS Figure 9.6 Warehouse Management System Functionality

A summary of WMS functionality and decision support benefits Table 9.2 WMS Functionality and Decision Support

Other warehouse planning issues 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

Safety and maintenance issues must also be considered when planning warehouse designs Accident prevention Comprehensive safety programs and training, accident investigation and follow up Environmental protection Spill kits and spill plans Maintenance Scheduled maintenance of building, material handling equipment, and collision damage prevention

What is the future of warehouse management? Will warehouses grow smaller in the future? Offer a wider range of services? Will final assembly of goods be increasingly done in warehouses? What is your solution to the “challenge of the last mile” posed by Dr. Patrick Dixon? Video link (7:45 min.) http://www.youtube.com/watch?v=ZbPMaxNl3J4