Logistics and Supply Chain Management Part II: Warehouse Logistics 1 1

The Warehouse and the Logistics Chain Warehouse Types Raw material Warehouses hold raw materials near the point of induction into a manufacturing/assembly process.  Work in process Warehouses hold partially completed assemblies/products along assembly line.  Finished Goods Warehouses Hold inventory used to balance and buffer variation between demand and production schedule, usually near the point of manufacture.

Role of the Warehouse in the Logistics Chain Warehouse Types Distribution Centers accumulate and consolidate products from different points of manufacture to consolidate shipments to common customers. Product movement is a full pallets inbound and full/broken pallets or cases outbound. Fulfillment Centers receive, pick and ship small orders for individual customers. Local Warehouses are in the field to shorten transportation distances and permit rapid response to customer.

Role of the Warehouse in the Logistics Chain

Common Warehouse Activities

Storage Optimization in the Warehouse 1. Assign each item to least cost storage mode. Select storage mode that: minimizes cost of storage and handling for an item (depends on item demand and dimensional characteristics, and storage mode costs) Pallets - can choose to: - assign a position on floor storage - single deep rack, - double-deep rack - drive in / thru rack (*) - mobile rack

Storage Optimization in the Warehouse

Storage Optimization in the Warehouse Small Items - can choose: - bin shelving - storage drawers - flow rack (*) - horizontal carousels - vertical carousels - mini AS/RS (automated storage and retrieval system)

Storage for Large Items / Pallets Stacking Frames http://www.youtube.com/watch?v=JQnOkYn0sa8 Floor Storage (Stacking) Single Deep (Selective) Rack Double-Deep Rack

Storage for Large Items / Pallets Drive-In Rack Pallet Flow Rack http://www.youtube.com/watch?v=6rr6tYt2PXM http://www.youtube.com/watch?v=diO90lex6yA http://www.youtube.com/watch?v=VqUt7Iw3AKs&feature=related http://www.youtube.com/watch?v=Se0nCDiMcGw&NR=1 Pallet Flow Push Back Rack Mobile Pallet Rack http://www.youtube.com/watch?v=pNzSzO8tc24&feature=related http://www.youtube.com/watch?v=kjmIihLiyl4&feature=related http://www.youtube.com/watch?v=jV2zLKtoTfw

Storage for Small Items Storage Drawers Bin Shelving Mezzanine Carton Flow Rack http://www.youtube.com/watch?v=x_70BimxB9M&feature=related

Storage for Small Items Horizontal Carousels Vertical Carousels http://www.youtube.com/watch?v=jTo1oVEbVoY&feature=related http://www.youtube.com/watch?v=2_yXThsnSbM&feature=related http://video.google.com/videoplay?docid=7892540209753292755&ei=3XV1S--4OJqOqgLspenhBw&q=floor+storage+systems&hl=en# http://www.youtube.com/watch?v=SDqyk4hhb1s Automated Dispensing Systems http://www.youtube.com/watch?v=YHcu5bukV5U&feature=related Mini Load ASRS http://www.youtube.com/watch?v=kdVet_UOx30

Storage Optimization in the Warehouse 2.      Assign each item its optimal allocation of space. Decide to create a “forward area” separate from the reserve picking area for those items that generate a majority of pick requests.   Pros:   - short travel times to pick - greater picking productivity

Storage Optimization in the Warehouse 3. Assign the most popular items to the most easily accessed locations in the warehouse   A minority of the items (“A” Segment or fast movers) generate the majority of picking activity. Set them in picking areas that are easiest to pick from and yield highest picking productivity (the Golden Zone) and at hip level. The most popular items to the most easily accessed locations in the warehouse

Order Picking Human Work Elements include: Traveling to/from/between pick locations. Extracting times from storage locations. Reaching/bending to access pick points Document picking transactions Sorting items into orders Packing times Searching for pick locations

Picker working time distribution (typical) Order Picking Picker working time distribution (typical)

Order Picking Item-Order completion Distribution (A few items complete a large % of the order)

Improving Order Picking

Summary Logistics and Supply Chain Management Definitions Concept of Profiles and Data Mining Idea: get as much information of what goes on in the supply chain with respect to the the flow of material, information and money, by means of data “snapshots” to discover trends and therefore, opportunities for improvements. Each of the five logistics activities is quite complex. Requires much planning and analysis to achieve cost effectiveness. Focused on warehouse and picking activities and gave some principles

Typical Transportation Flow and Terminology SHIPPER pays CARRIER to transport CARGO from an ORIGIN to a DESTINATION. CONSIGNEE receives the cargo and the payment made to the carrier is called a FREIGHT PAYMENT. The document describing and contracting the movement of goods is called a BILL OF LADING.

Typical Transportation Flow and Terminology Carrier can be: EXPRESS/PARCEL CARRIER (FedEx, UPS) LESS-THAN-TRUCKLOAD TRUCKING COMPANY (Yellow Freight, Estes) FULL-TRUCKLOAD TRUCKING COMPANY (Schneider, JB Hunt) OCEAN LINER (Maersk, P & O Nedlloyd, Hanjin), RAILROAD (CSX, Florida East Coast, Union Pacific) AIR CARRIER (DHL, UPS, BAX Global or a PRIVATE FLEET)

Typical Transportation Flow and Terminology Cargo is housed in a CONTAINER (trailer, railcar, ocean container) for transportation.   Moved by a MOTOR VEHICLE (tractor, locomotive, airplane or ocean vessel). Cargo moves between various LOGISTICS FACILITIES (warehouses, terminals, distribution centers, ports). Arrangement and location of logistics facilities is called TRANSPORTATION NETWORK. A SHIPMENT is one or more orders traveling together.

Video Loading Docks

References Frazelle, Edward “Supply Chain Strategy” McGraw Hill 2002. Logistics Trends – Achieving Supply Chain Integration: Denali Consulting