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Storage and Warehousing Techniques

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Presentation on theme: "Storage and Warehousing Techniques"— Presentation transcript:

1 Storage and Warehousing Techniques
Warehouse Management, 3rd edition by Gwynne Richards Published November 2017 (Kogan Page) Copyright D.G. Richards 2015

2 Introduction and Background
Section 1 Copyright D.G. Richards 2015

3 What are the roles of a warehouse in your view?
Copyright D.G. Richards 2015

4 Warehouse definition “Warehouses are typically viewed as a temporary place to store inventory and as a buffer in supply chains. They serve as static units matching product availability to consumer demand and as such have a primary aim which is to facilitate the movement of goods from suppliers to customers, meeting demand in a timely and cost effective manner”. Primarily a warehouse should be a trans-shipment area where all goods received are despatched as quickly, effectively and efficiently as possible. Van den Berg (2012) Copyright D.G. Richards 2015

5 Whether they’re old…. Copyright D.G. Richards 2015

6 they have the majority of processes in common
Or ultra-modern they have the majority of processes in common Copyright D.G. Richards 2015

7 Terminology ABC Activity based costing
ABC Method of prioritising items AIDC Automatic Identification and Data Collection AS/RS Automated storage and retrieval system CMI Co-managed inventory CPFR Collaborative Planning, Forecasting and Replenishment EDI Electronic Data Interchange EPOS Electronic Point of Sale ERP Enterprise Resource Planning e.g. SAP, Oracle FLT Fork lift truck JIT Just in Time OTIF On time in Full PPT Powered pallet truck RFID Radio Frequency Identification SAP A well-known ERP system SKU Stock keeping unit VMI Vendor Managed Inventory WMS Warehouse Management System Collaborative Planning, Forecasting and Replenishment (CPFR) is a concept that aims to enhance supply chain integration by supporting and assisting joint practices. CPFR seeks cooperative management of inventory through joint visibility and replenishment of products throughout the supply chain. Information shared between suppliers and retailers aids in planning and satisfying customer demands through a supportive system of shared information. This allows for continuous updating of inventory and upcoming requirements, making the end-to-end supply chain process more efficient. Efficiency is created through the decrease expenditures for merchandising, inventory, logistics, and transportation across all trading partners. Copyright D.G. Richards 2015

8 The Objectives of Warehousing
The primary objective of warehousing is to maximize the effective use of the operational resources while satisfying customer requirements. Match product availability to customer demand Maximum customer satisfaction at Minimum cost Ensure visibility and accuracy of stock SIX BASIC PRINCIPLES Accuracy, Cost Control, Cleanliness, Efficiency, Safety & Security Warehouse manager ensures Minimum cost – maximum customer satisfaction – match product availability to consumer demand Copyright D.G. Richards 2015

9 V Warehouse trade-offs Accuracy Speed Space Time Service Cost
Responsiveness Storage costs Speed Time Cost Efficiency Volume purchases V Copyright D.G. Richards 2015

10 Key Warehouse Challenges (Adapted from Dematic)
Operational Requirements Cost reduction Increase productivity, improve utilisation of space, staff and equipment Achieve the Perfect Order Improve productivity, increase accuracy, improve handling and invest in systems Shorter order lead times Improve processes and increase productivity Sales via multiple channels and increase in smaller orders Improved picking strategies such as bulk picking and greater use of technology Fluctuations in demand Flexible working hours and improved forecasting Proliferation of SKU Improved use of equipment such as carousels, A Frames and flow racks Labour cost and availability Staff retention through excellent working conditions, flexible hours, training and improved productivity Increasing cost of energy and environmental challenges Manage energy more efficiently, better use of waste Data accuracy and speed of transfer Introduce Warehouse management system and real time data transfer Copyright D.G. Richards 2015

11 Warehouses in the supply chain
Raw materials Component manufacture Product assembly /manufacture Wholesalers/Dealerships Consumers Direct sales Retailers Returns centres Disposal Re-process - Warehouse requirement Copyright D.G. Richards 2015

12 Role of the warehouse To facilitate getting the product to the customer: On time (OT) In Full (IF) To the right place In the right condition With the right paperwork At the right cost As environmentally friendly as possible Warehouse manager has influence on some but not all these factors Copyright D.G. Richards 2015

13 The need for retailer warehouses?
To better match supply with customer demand To consolidate deliveries and reduce shipping costs To reduce store deliveries Warehouse Vendors Retail stores Vendors Retail stores Copyright © John J. BARTHOLDI III. Georgia Tech University All Rights Reserved. Copyright D.G. Richards 2015

14 Why do we need to hold stock?
Plant breakdown, toys at Christmas, sun tan lotion in the summer Copyright D.G. Richards 2015

15 Why do we need to hold stock?
Buffer in the supply chain or manufacturing process Satisfy demand – can be erratic Buy low sell high – precious metals, oil, coffee etc. Shortage or unreliability in supply Cope with peak demand - seasonality Maintenance parts Quality control cover Customer and supplier lead times Sub assembly Holding stock in numerous locations Ability to increase production runs Humanitarian storage Archive storage Smooth the flow of goods Packaging material Store returns Promotions and Product launch Cover for production shutdowns Lower unit cost if bought in large quantities and if transported in large quantities Production breakdown Ripening products, cheese, meats, whiskies Delay taxation payments Plant breakdown, toys at Christmas, sun tan lotion in the summer Copyright D.G. Richards 2015

16 Seasonality/demand uncertainty
Finished Goods storage 2000 4000 6000 8000 10000 12000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Week number No. of pallets C1 C2 C3 C4 Total FG Chocolate mftr run up to Easter February 2010 July 2009 Copyright D.G. Richards 2015

17 Seasonality/demand uncertainty
Copyright D.G. Richards 2015

18 Construction company Sales and stock
Copyright D.G. Richards 2015

19 Bathroom Manufacturer Seasonality
Pieces in Thousands Month Copyright D.G. Richards 2015


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