Chapter 9
Trade-offs that will determine how many warehouses the company needs and where they should be located are;
1) the level of customer service the company wants to provide 2) the amount of inventory the company is willing to invest in
Cross Docking (LEAN Warehousing)
A LEAN concept because it eliminates the need to store inventory, and reduces some transportation, which are both wastes.
Types of Ownership: Public Warehouse
A business that provides storage and related warehouse functions to companies on a short or long-term basis, generally from month-to-month. Slide 10/11
Warehouse
A facility used to store purchases, work-in-process (WIP), and finished goods inventory.
Types of Ownership: Private Warehouse
A storage facility that is owned by the company that owns the goods being stored in the facility. slide 14/15
Types of Ownership: Contract Warehouse
A variation of public warehousing that handles the shipping, receiving, and storage of goods on a contract basis slide 12/13
Load or Transportation Broker
Bring shippers and carriers together
Reduced Lot Sizes and Shipping Quantities (LEAN Warehousing)
By reducing lot sizes and shipping quantities, a company can increase velocity in the warehouse, and get shipments out faster. Faster throughput is a LEAN concept.
Green Reverse Logistics Programs
Can have a positive impact on the environment though activities such as recycling, reusing materials and products, or refurbishing unused products. slide 57
Modes of Transportation - Water
Carries heavy, bulky, low value materials like coal, grain, sand, and petroleum. However, because transport by water is so cheap almost any item may be shipped by water including: automobiles, produce, containerized cargo, etc. slide 39
Modes of Transportation - Air
Carries items with a high cost to weight ratio. Very light, high-value goods that need to travel long distances quickly including jewelry, fine wines, pharmaceuticals, racehorses, etc slide 37
Modes of Transportation - Pipeline
Carries materials in a liquid or gaseous state including: petroleum, natural gas, drinking water, gasoline slide 38
Modes of Transportation - Truck
Carries nearly anything from packaged household goods, to building materials, to liquid petroleum, etc. slide 35
Modes of Transportation - Rail
Carries very heavy shipments including heavy building materials, construction equipment, coal, etc. slide 36
Market Positioned Strategy:
Close to customers to maximize distribution services and improve delivery.
Product Positioned Strategy:
Close to supply source to collect goods and consolidate before shipping products out to customers.
Increased Automation (LEAN Warehousing)
Companies are using automated systems like pick to light, voice picking, conveyor systems, automatized guided vehicles (AGV's), and robotics to improve efficiencies and throughput times in the warehouse
Warehouse Network : Hybrid Approach
Companies may choose to do some type of a hybrid approach to balance costs and inventory against customer service. slide 24
Freight Forwarder
Consolidates LTL shipments into FTL shipments. They take small shipments from multiple companies and consolidate them into larger shipments.
Functional (Types of Warehouses)
Consolidation Break-Bulk Cross-Docking
Products have little value to the customer until they are moved to the customer's point of consumption
Delivered at the right time. Delivered to the desired location.
Net-Rate Pricing
Established discounts and accessorial charges are rolled into one all-inclusive price. Pricing is tailored to the individual customer's needs
Warehousing
Function that allows a company to receive, store, breakdown, repackage, and distribute items to a manufacturing location, or finished products to a customer
the fundamental questions to be answered in establishing a warehouse network are:
How many warehouses does the company need? Where should they be located?
Transportation Deregulation
ICC Termination Act of 1995 ICC was eliminated slide 46
Return of Unsold Goods
In some industries, goods are distributed to downstream members in the supply chain with the understanding that the goods may be returned for credit if they are not sold e.g., newspapers, magazines, even pharmaceuticals slide 56
Poor Reverse Logistics Can Hurt A Company
Inability of information systems to handle returns Lack of worker training in reverse logistics procedures Little or no identification on returned packages Need for adequate inspection and testing of returns Danger of placing returned products back into sales stocks slide 55
Intermediately Positioned Strategy:
Midway between supply source and customers, when distribution requirements are high and product comes from various locations
Logistics is necessary to:
Move goods and materials from suppliers to buyers Move goods and materials between sites (internal and external) Move finished goods to the customer
Green Warehousing (LEAN Warehousing)
One of the more sustainable goals for a green warehouse is to make it a net zero energy user.
Shipping (Primary Functions of a Warehouse)
Outgoing shipment of parts, components, and products. Includes packaging, marking, weighing, and loading for shipment.
Exempt Carriers
Person or company specializing in services or transporting commodities exempt from regulation by the Interstate Commerce Act.
Common Carriers
Person or company who transports freight for a fee that can be hired by anyone to transport goods.
Contract Carriers
Person or company who transports freight under contract to one or a limited number of shippers.
Receiving (Primary Functions of a Warehouse)
Physical receipt of material, identification, inspection for conformance with the purchase order (quantity and damage), put-away, and preparation of receiving reports
Packing (Primary Functions of a Warehouse)
Placing one or more items of an order into an appropriate container for safe shipping , and marking and labeling the container with customer shipping destination data, and other information that may be required.
Global Trade Management Systems (GTM) (Logistics Management Software Applications)
Provides global visibility, standardization, and documentation to comply with international trade regulations.
Ownership (Types of Warehouses)
Public Warehouses Contract Warehouses Private Warehouses
Intermodal Marketing Company
Purchase blocks of rail capacity and sell it to shippers
Trailer-on-Flatcar (TOFC)
Rail and Motor Carriers Offer point-to-point pickup and delivery service known
Container-on-Flatcar (COFC)
Rail and Water Carriers Offer point-to-point pickup and delivery service known
Five R's of Reverse Logistics
Returns Recalls Repairs Repackaging Recycling slide 53
Free on Board (F.O.B.) Destination
Seller arranges for transportation and adds charges to the sales invoice. Seller assumes the risk for in-transit loss or damage. Title does not pass to the buyer until delivery is completed
Free on Board (F.O.B.) Origin
Seller states price at point of origin and agrees to load a carrier Buyer selects the carrier and pays for the transportation Title passes to the buyer when the shipment originates. Buyer assumes the risk for in-transit loss or damage
Decisions driving warehouse management include
Site selection Number of warehouse facilities in the network Layout of the warehouse(s) Methods of receiving, storing, retrieving, and distributing products and materials
Transportation
The function of planning, scheduling, and controlling activities related to the mode, carrier, and movement of inventories into and out of an organization.
Types of Functions: Cross-Docking Warehouse
The logistics practice of unloading materials from an incoming truck or railcar and loading these materials directly onto outbound trucks or railcars, with little or no storage in between to reduce inventory investment and storage space requirements. slide 18/19/20
Storage (Primary Functions of a Warehouse)
The safe and secure retention of parts or products for future use or shipment.
Objectives of Transportation
To maximize the value to the company through price negotiations To make sure service is provided effectively To satisfy customers' needs
Warehouse Management Systems (WMS) (Logistics Management Software Applications)
Track and control the flow of goods from receiving dock to outbound shipment. New technologies, such as RFID tags, facilitate tracking.
Modes of Transportation
Truck Rail Air Pipeline Water
Transportation Management Systems (TMS) (Logistics Management Software Applications)
Used to select the best mix of transportation services and pricing.
Types of Functions: Break-Bulk Warehouse
Warehouse operation that divides full truckloads of items from a single source or manufacturer into smaller, more appropriate quantities for use or further distribution. slide 17
Assembly Operation (Secondary Functions of a Warehouse)
Warehouse operation that puts products together with other items/components before shipping them out to the final customer. Examples: Literature Spare Parts Advertising Materials
Types of Functions: Consolidation Warehouse
Warehouse operation that receives products from different plants or suppliers, sorts them, and then combines them with similar shipments from other plants or suppliers for further distribution. slide 16
Picking (Primary Functions of a Warehouse)
Withdrawing components from stock to make assemblies or finished goods, or to ship to a customer.
Fourth Party Logistics (4PL)
an interface between the client company and multiple logistics service providers. slide 30
A Third Party Logistics (3PL) company is
an outsourced provider that manages all, or a significant part, of an organization's logistics requirements for a fee. slide 27/28/29
U.S. transportation industry remains mostly
deregulated slide 47
Repackaging (Secondary Functions of a Warehouse)
for specific customer orders.
freight
goods transported by truck, train, ship, or aircraft.
Quality Inspections (Secondary Functions of a Warehouse)
incoming and outgoing.
Value of Service Pricing
is a pricing strategy which sets prices based on the value perceived by the customer, i.e., "priced at what the market will bear".
Cost of Service Pricing
is the setting of a price for a service based on the costs incurred in providing it.
Ranking of Transportation Modes
know chart slide 40 truck as a total is the best
Shippers' Association
nonprofit cooperatives which arrange for members' shipping
Warehouse Network
number of, and the relationship between, the warehouses that a company has in their organizational structure.
Private Carriers
person or company that transports its own cargo as a part of a business that produces, uses, sells or buys the cargo that is being hauled.
Combination Pricing
price is set at a value between cost-of-service minimum and value-of-service maximum. Most carriers use some form of combination pricing. Common in highly volatile markets and changing competitive situations
Reverse logistics
process of moving a product from the point of customer receipt back to the point of origin to recapture value or ensure proper disposal. slide 52/54
"Mode" "Carrier"
refers to the way in which goods are transported. refers to the company that transports the goods
Intermodal Transportation aka piggy back service
sixth mode of transportation, but it is really the use of multiple modes of transportation to execute a single transport shipment slide 41
Warehouse Network: Single Warehouse
slide 22
Warehouse Network : Multiple Warehouses
slide 23
Transportation Regulation
slide 45 Interstate Commerce Act of 1887 - created the Interstate Commerce Commission (ICC).
Technology and Trends in Transportation
slide 49 Platooning Driverless Trucks Drone Delivery
Roll-On/Roll-Off Ship
specifically designed to allow trucks to be driven directly on and off the ship without the use of cranes. Provides flexibility and speed
Logistics is
that part of supply chain management that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information, from point of origin to point of consumption, in order to meet customer requirements
Terms of Sale
the delivery and payment terms agreed between a buyer and a seller.
