1. L – 5 Distribution Channel - Warehousing and Inventory Management.

2. The Link

3. WAREHOUSING / DC WAREHOUSING DISTRIBUTION CENTER
Receive – Store – Pick and ship
Receive - ship
Low value added
High value added
Collects data in batches
Collects data in real time
Focus on minimizing the operational cost
Focuses on maximizing the profit impact of meeting customer delivery requirement

4. Warehousing Decision
Strategic
Operational

5. Types of inventories Raw materials, components, and physical supplies
Finished goods
GIP / Materials to be disposed or Re-cycled

6. Why should firms hold inventories
Achieve Transportation economies
Achieve production economies
Take advantage of quality of quality purchase, discount and forward buyers
Maintain a source of supply
Support firms customer service policies.
Meet changing market conditions

7. Why should firms hold inventories…
Overcome the time and space differentials that exist between producers and consumers
Accomplish least total cost, commensurate with a desired level of CS.
Support JIT programs of supplies and customers
Offer product mix
Provide temporary storage support

8. Uses of Warehouse Support Physical supplies and distribution
Support manufacturing
To mix products from multiple production facility
To Break bulk or subdivide or other wise

9. Mechanism PUSH PULL WAREHOUSE FACTORY
( Serves to absorb excess production)
PULL
FACTORY
WAREHOUSE
DISTRIBUTION
( Flow thru center with positioning inventories closer to customers )

10. Functions of Warehouse
Manufacturing Support
Production Mix
Consolidation
Break bulk
Warehousing and Transportation synergy
Warehousing and production synergy

11. Factors influencing Warehouse Policies
The Industry
The firm philosophy
Capital availability
Product characteristics
Economic condition
Competition
Seasonality of demand
Use of JIT programs
Production process in use.

12. Types of warehouses General Merchandise warehouse
Refrigerated warehouse
Bonded warehouse
Household goods warehouse
Special commodity warehouse
Bulk storage warehouse

13. Functions of warehousing operation
Movement
Receiving
Transfer or put away
Order picking / selection
Cross docking
Shipping

14. Functions of warehousing operation
Storage
Temporary Storage
Semi Temporary storage

15. Information System Information system Inventory level Throughput level
Stock keeping locations
Inbound / outbound shipments
Customers data
Facility and space utilization
Personnel efficiency monitoring

16. Inefficiency in a warehouse
Information system
Redundant and excessive handling
Poor utilization and space and cube
Excessive maintenance cost and down time due to obsolete equipment
Dated receiving and shipping and dock condition
Obsolete computerized information handling of routine transactions

17. Public warehouse Advantages Disadvantages
Ability to increase w/h space to cover peak season
Lack of specialization
Reduced risk
Shortage of space – scalability limited
Economies of scale
communication
Flexibility
Tax advantage
Specific know how of cost
Minimal labor dispute
Conservation of capital

18. Private warehouse Advantages Disadvantages Control Lack of flexibility
Financial constrains
Less costly
Better use of human resources
Tax benefit
Intangible benefits

19. Factors affecting size of a warehouse
Customer size level
Size of market or market served
Number of products marketed
Size of products
Material handling equipments
Through put rate
Production lead time
Economies of scale
Stock lay out
Aisle requirement
Office area in the warehouse
Types of shelves / racks used
Level and pattern of demand
Processing / kit preparation area

20. Location analysis Market positioned Production positioned
Intermediately positioned
Models:
Von Thunen model
Weber's model
Hoovers model
Green Huts model
Center of Gravity approach

21. Factors from micro perspective
Quality and variety of transportation carrying the service site
Quality and quantity of labor availability
Labor rates
Cost and quality of industrial land
Potential for expansion
Tax structure
Building codes
Nature of commodity and environment

22. Factors from micro perspective….
Cost of construction
Cost of availability of utilities
Cost of money locally
Local government tax allowances and inducement to build.

23. Warehouse layout and design
Increased output
Improve product flow
Reduce cost
Improve service to customers
Provide better working condition
Safety
SHE