Supply Chain Chapter 9: Logistics

Disadvantages of using a 3PL

-Control -Dependency -Pricing

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.

Main reasons cross docking is implemented:

1. A central site for products to be sorted and combined for delivery to multiple destinations in the most productive and fastest method possible 2. Consolidate: Combine smaller product loads into one method of transport to save on transportation costs 3. Break-Bulk: break down large product loads to smaller loads for transportation and easier delivery to customer

The fundamental questions to be answered in establishing a warehouse network are:

1. How many warehouses are needed? 2. Where should they be located?

Trade-offs that will determine how many warehouses the company needs and where they should be located are:

1. Level of customer service 2. Amount of inventory

Secondary Functions of a Warehouse

1. Quality Inspections 2. Repackaging 3. Assembly Operation

Primary Functions of a Warehouse

1. Receiving 2. Storage 3. Picking 4. Packing 5. Shipping

A _____ company is an outsourced provider that manages most of an organization's logistics requirements for a fee.

3PL

Advantages of Contract Warehouse

Client can obtain specialized services tailor-made. Can be negotiated at a lower cost. Offers a degree of control at a reasonable price

Types of Warehouses

Consolidation Break-Bulk Cross-Docking

A ___________ Warehouse handles the shipping, receiving, and storage of goods on a contract basis for a fee.

Contract

LEAN concepts

Cross docking Reducing lot sizes and shipping quantities Increased automation Green warehousing

Contract Warehousing How much space is it for? Fee structure? Who handles employees/equipment?

Entire building or defined portion May be fixed cost, cost-plus, or combination of both Company

_____________ is an interface between the client company and multiple logistics service providers.

Fourth-party logistics (4PL)

Disadvantages of Private Ownership

High Start-up cost Fixed Location Fixed size and costs

_________ Positioned Strategy: Relatively equal number of suppliers and customers

Immediately

Moving goods and materials from suppliers to buyers

Inbound Logistics

____________ is that part of supply chain management that plans, implements, and controls the flow of goods, services and information between the point of origin and the final customer.

Logistics

________ Positioned Strategy: Few suppliers; many customers

Market

Moving goods and materials between sites

Material Handling

Advantages of Public Warehouse Ownership

No capital investment or property taxes Flexibility Access to special features and services

Advantages of Private Ownership

Offers greater flexibility in designing the warehouse and gives users significant control over operations. Visibility of inventory, material flow, handling, supervision, and associated costs. Operating cost can be 15% - 25% lower if the company achieves at least 75% utilization.

Advantages of Cross-Docking Warehouse

Operational Efficiency Inventory Efficiency Transportation Cost Savings

Moving finished goods to the customer

Outbound Logistics

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.

Packing

Withdrawing components from stock to make assemblies or finished goods, or to ship to a customer.

Picking

Positives and negatives of Multiple Warehouse Network

Positives: Faster delivery Negatives: More complicated Higher costs Decentralizated network

Positives and negatives of Single Warehouse Network

Positives: Less complicated Lower costs Centralized network Negatives: May takes longer to deliver product to customers in remote location

Disadvantages of Public Warehouse Ownership

Potential for incompatible computer systems Specialized services may not be what is required/needed Space may not be available when/where needed

A _____________ is a storage facility that is owned by the company that owns the goods being stored in the facility.

Private Warehouse

________ Positioned Strategy: Many suppliers, few customers

Product

A business that provides storage and related warehouse functions to companies on a short or long-term basis, generally on a month-to-month basis for a fee.

Public Warehouse

Warehouse Ownership Types

Public Warehouses Contract Warehouses Private Warehouses

Physical receipt of material, identification, inspection for conformance with the purchase order (quantity and damage), put-away, and preparation of receiving reports

Receiving

Outgoing shipment of parts, components, and products. Includes packaging, marking, weighing, and loading for shipment.

Shipping

Public Warehouse Fees will vary based on what is being stored and/or based on:

Size and weight of the pallets If they can be stacked How fragile the product is Value of goods (risk of theft) Hazards associated with the goods

The safe and secure retention of parts or products for future use or shipment.

Storage

Customer service is generally better in a Hybrid Approach. T or F?

T

Customers can be internal or external. T or F?

T

Public warehouse owners own their own equipment and hire their own staff to manage the facility. T or F?

T

Disadvantages of Contract Warehouse

The client company is expected to enter into a contract for generally three years.

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.

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.

Assembly operation and examples

Warehouse operation that puts products together with other items/components before shipping them out to the final customer. (Literature, spare parts, advertising materials)

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.

Function that allows a company to receive, store, breakdown, repackage, and distribute items to a manufacturing location, or finished products to a customer.

Warehousing

Advantages of using a 3PL

cost, logistics expertise, efficiency

Products have little value to the customer until they are moved to the _______________.

customer's point of consumption

Private Warehouse generally established by companies that have large volume or ________________ goods.

highly valuable goods or specialized storage

One hybrid network is a "____________" where there is a centralized warehouse which holds most of the inventory linked to a series of smaller geographically dispersed warehouses.

hub-and-spoke

Contract warehousing could be thought of as renting an apartment for ___________.

inventory

A company will select a ______________ (referred to as a 4PL) that is then charged with managing the activities of all the other 3PL's being used by the company.

lead logistics partner

A warehouse network is simply the ________ of, and the ____________ between, the warehouses that a company has in their organizational structure.

number of, and the relationship

Warehousing provides time and place utility; the availability necessary to give materials _____________.

true value

The true value of ______________ lies in having the right product in the right place at the right time.

warehousing

A warehouse is a facility used to store purchases, ______________, and finished goods inventory.

work-in-process (WIP)