1. Supply Chain Logistics Management
Chapter 13: Warehouse Management

2. ECONOMIC BENEFITS OF WAREHOUSING
Consolidation
Break-bulk or cross dock
Processing/Postponement
Stockpiling
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3. WAREHOUSE BENEFITS CONSOLIDATION
Plant A
Consolidation Warehouses
Customers
A B C
Plant B
Plant C
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4. WAREHOUSE BENEFIT DISTRIBUTION ASSORTMENT
Plant A
Customer A
Customer B
Plant B
Distribution Center
Customer C
Plant C
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Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

5. WAREHOUSE BENEFIT BREAK BULK OPERATION
Customer A
Plant A
Break Bulk Warehouse
Customer B
Customer C
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6. SERVICE BENEFITS OF WAREHOUSING
Spot stock
Assortment
Mixing
Production support
Market presence
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7. WAREHOUSING BENEFITS IN-TRANSIT MIXING
Customer W
A-B-C-D
Plant A
Customer X
A-B-C-D
Warehouse Transit Mixing Point
Customer Y
A-B-C
Plant B
Product D
Customer Z
A-B
Plant C
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Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

8. WAREHOUSING BENEFITS MANUFACTURING SUPPORT
Vendor A
Vendor B
Assembly Plant
Manufacturing Warehouse
Vendor C
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9. WAREHOUSING ALTERNATIVES
Options
Private
Public
Contract
Other
Select warehousing option with best strategic fit
Logistics in Supply Chain Management, First Edition , Bowersox, Closs, and Cooper
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10. SHARE OF WAREHOUSE BUSINESS
Logistics in Supply Chain Management, First Edition , Bowersox, Closs, and Cooper
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11. DECISION FACTORS Strategy Type of need Information system Control
Product characteristics
Culture
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12. STRATEGY Full line Centralized postponement
Utilization of current capacity and resources
Market presence
Segment focused
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13. USE OF ALTERNATIVES (Percent of Facilities)
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14. WHO USES THE MOST FACILITIES?
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15. TYPE OF NEED Turn inventory Promotional inventory
Speculative inventory
Custom services and activities
Seasonal
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16. INFORMATION SYSTEM Communication capabilities System compatibility
Handling technologies
Activity based costing
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17. CONTROL Customs and bonding Temperature Secrecy Lot control and recall
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18. PRODUCT CHARACTERISTICS
Handling characteristics
Storage characteristics
Speed of movement
Flexibility
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19. NEW WAREHOUSES WILL BE:
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20. CULTURE Unionization Expertise Industry experience and economies
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21. VALUE-ADDED WAREHOUSING
Packaging
Refined unitization
Adjust pallets or shrink-wrap
Change containers
Production specialization
Product climatization
Recall capability
Market confidentiality
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22. TRADITIONAL HANDLING
Palletizing, put away, storage, replenishment, selection and loading for shipment
Food industry products handled up to 17 times in SC and in DC 4.3 times
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23. CROSS-DOCKING
Products received, selected, repackaged, loaded for shipment w/o storage
Enabled by conveyors & sortation equipment
Used with general merchandise & food
Fast moving products replenished using POS/planagram systems
Used in large (800K to 1,200K sq.ft..) DCs
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Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

24. FOOD INDUSTRY Less Impediments to C-D
Scanning data-<OC
Better category mgt. & tracking systems
Expansion forward w/mfg. pre-assembly multi-SKU pallets
Bar-code scanning at case & pallet levels
Advanced ship
EDI transactions
Automated replenishment programs
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25. CROSS-DOCKING RESULTS
MFG. added costs +$.10 /case
Average distributor cost savings $.35 /case
Break down store sorted cases saves $.50 to $.55/case
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26. ECR PILOT C-D TESTS RETAIL & WHOLESALE
<Inventory carrying costs
<Storage & processing space
<Product handling(damage, shrinkage, out of date products, returns, DC labor costs
Improved sales through displays
>Logistics savings to product sales support
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Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

27. STUDY OF C-D IN INDUSTRY
Only 76% space of traditional
Only 57% of direct labor
Case/hour increases Up to 75%
Excellent payback periods
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28. CONTRACT WAREHOUSING
Storage space, software systems, labor & management dedicated to a specific shipper’s logistics system
Resources customized to a specific client’s requirements
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29. DIFFERENTIATION CONTRACT VS. PUBLIC
Productivity sharing
Business relationships
Real estate arrangements
Pricing agreements
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30. INTEGRATED LOGISTICS SERVICES
Mission-Provide services to meet all or significant part of a shipper’s total logistical requirements
Titles-Third party logistics, contract logistics, logistics utilities, and integrated logistics service providers
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31. CONSIDERATION OF QUALITATIVE DECISION FACTORS
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32. TECHNOLOGY Remote Computing Automatic TrailerUL EDI Radio Frequency
Sortation Systems
HiDensity Unit Load Automatic Storage
Scanning
Pick-to-Light
M’tl Handling Auto.
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Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

33. WAREHOUSING IN FUTURE TOPIC OF WORKSHOP
Evolutionary cycles
Become paperless
Become shelfless
Become seamless
External factors
Global networks
People
Third party
Technology
Reverse logistics
Company examples
Logistics in Supply Chain Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

34. CONCLUSION Warehouse strategy is evolving to more focused and flexible
Technology and expertise are key warehouse alternative determinants
Operating and industry synergies are more important factors
Logistics in Supply Chain Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.