Logistics- chapter 9

Warehouse designs:

-*Accident prevention* :Comprehensive safety programs and training, accident investigation and follow up -*Environmental protection*: Spill kits and spill plans -**Maintenance*: Scheduled maintenance of building, material handling equipment, and collision damage prevention

Public warehouse ownership

-A business that provides storage and related warehouse functions to companies on a short or long-term basis, generally from month-to-month. -Own their own equipment and hire their own staff to manage the facility. -Fees are typically a combination of a monthly storage fee plus a pallet-in fee and a pallet-out fee. -Fees will vary based on what is being stored and/or based on size and weight of pallets, value of goods, how fragile, etc.

Private warehouse ownership

-A storage facility that is owned by the company that owns the goods being stored in the facility. -Generally established by companies that have a large volume or highly valuable goods, or the need for some type of specialized storage or handling. -Can be operated as a separate division within a company -Can be co-located on-site with manufacturing, or off-site.

Contract warehouse ownership

-A variation of public warehousing that handles the shipping, receiving, and storage of goods on a contract basis -The contract can be for an entire building, or for a defined portion within a building. -Usually requires a client to commit to services for years rather than months -The fee structure may be fixed cost, cost-plus, or a combination of both. -The company providing the space handles the employees, equipment, and maintenance

Market positioned strategy

-Close to customers to maximize distribution services and improve delivery. -FEW SUPPLIERS; MANY CUSTOMERS

Product-positioned strategy

-Close to supply source to collect goods and consolidate before shipping products out to customers. -MANY SUPPLIERS; FEW CUSTOMERS

Economic benefits of warehousing (when overall logistics costs are reduced):

-Consolidation and break-bulk -Sorting -Seasonal storage -Reverse logistics

Warehousing types:

-Distribution centers -Consolidation terminals -Break-Bulk facilities -Cross-docks

Single warehouse positives:

-Less complicated -Operating costs and inventory will be lower -No duplication of equipment, warehouse staff, and managers -Network will be centralized and the company will have its best people, equipment and inventory systems concentrated in one place. -Warehouse can more actively focus on the needs of its customers

Intermediately positioned strategy

-Midway between supply source and customers, when distribution requirements are high and product comes from various locations -RELATIVELY EQUAL NUMBER OF SUPPLIERS AND CUSTOMERS

Multiple warehouse negatives:

-More complicated -Operating costs and inventory will be higher as each warehouse costs money to staff and operate. Duplication of equipment, warehouse staff, and managers -Network will be decentralized and the company will have to spread its best people, equipment and inventory systems across a larger network.

Advantages of public:

-No capital investment or property taxes -Flexibility -Lower costs and reduced risk Access to special features and services

Hybrid approach

-One hybrid network is a "hub-and-spoke" where there is a centralized warehouse (i.e., the "hub") which holds most of the inventory linked to a series of smaller geographically dispersed warehouses (i.e., the "spokes") which hold only a small amount of inventory to support their local area in the immediate time frame -The hub warehouse feeds the spoke warehouses with inventory as necessary on a regular basis.

Shipping(Primary function of warehouse #5)

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

Receiving (Primary function of warehouse #1)

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

Packing (Primary function of warehouse #4)

-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.

Disadvantages of public:

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

Multiple warehouse positive:

-Potentially faster delivery to customers from a decentralized network that is geographically dispersed throughout the market, assuming adequate inventory in each warehouse

Reverse Logistics includes activities supporting:

-Returns Management -Remanufacturing and Repair -Remarketing -Recycling -Disposal

Service benefits of warehousing (when sales improvements offset added cost):

-Spot-stocking -Full line stocking -Value-added services

Active storage

-Storage for basic inventory replenishment -Focuses on quick movement -Includes flow-through or cross-dock distribution

Extended storage

-Storage for inventory held in excess of period for normal replenishment -e.g., seasonal, speculative, or even commodities

Sorting: cross-docking

-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. -WHY IS IT IMPLEMENTED? -central site -consolidate shipments -break-bulk (break down large loads into smaller loads)

Storage (Primary function of warehouse #2)

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

Break-bulk

-Warehouse operation that divides full truckloads of items from a single source or manufacturer into smaller, more appropriate quantities for use or further distribution. -LOCATED CLOSER TO CUSTOMER BASE

Consolidation

-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 -LOCATED CLOSER TO SUPPLY BASE

Picking (Primary function of warehouse #3)

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

Traditional view of warehousing:

-a place to hold or store inventory

audits

-are common to maintain safety, assure compliance to regulations and help improve procedures

Sorting

-benefit is to reconfigure freight as it is being transported from origin to destination.

Sorting: mixing

-combines inventory from multiple origins (like cross-docking) but also adds items that are regularly stocked at the mixing warehouse

advantages of private

-control -visibility -cost

Slotting

-determines specific locations for the product based on: -velocity -weight -special storage requirements

Disadvantages of contract

-duration:The client company is expected to enter into a contract for a specific period of time; generally three years.

disadvantages of private

-high start up cost -fixed location -fixed size and costs

warehouse management systems

-integrate procedures and software support to standardize storage and handling work procedures -one main use is to coordinate order selection:

security issues

-involve protection from pilferage and damage

cycle counting

-is the audit of selected inventory on a cyclic schedule

Spot- stocking

-is the positioning of inventory for seasonal or promotional demand

Inventory accuracy

-is typically maintained by annual physical counts or counting portions of inventory on a planned basis

Discrete selection

-is when a specific customer's order is selected and prepared for shipment as a single work assignment

Wave or batch selection

-is when orders are processed through zones of the warehouse assigned to specific employees

Sorting: assembly

-occurs when products or components from 2nd Tier suppliers are assembled by a warehouse located near the manufacturing plant -Common processes are packaging and color customizing

strategic warehousing

-offers manufacturers a way to reduce dwell time of parts and materials

Advantages of hybrid:

-operating costs and inventory costs are lower -customer service is better

After world War II, the economy exploded and warehousing shifted from:

-passive storage to strategic assortment!!

Seasonal Storage:

-provides direct benefit by accommodating seasonal demand and/or production: -Accommodates seasonal demand such as lawn furniture and toys -Accommodates seasonal production such as agricultural products -Storage provides an inventory buffer, which allows production efficiencies within the constraints imposed by material sources and consumers.

Full line stocking

-provides one-stop shopping capability for goods from multiple suppliers

Advantages of contract

-services -cost -control

Single warehouse negative:

-the centralized network may take longer to deliver product to some customers who are remote from the central location.

Warehouse network

-the number of, and the relationship between, the warehouses that a company has in their organizational structure.

Contemporary view of warehousing

-the warehouse functions to mix inventory assortments to meet customer requirements -Storage of products is held to a minimum -Storage of inventory is waste in the LEAN warehouse

-MAXIMIZE FLEXIBILITY -which is basically to respond to ever-changing demand

An important goal in warehousing is to:

-economic and service benefits

Strategic warehousing can what kinds of benefits?!