logistics ch 10: warehouse management

the process of receiving product and shipping it out the same day or overnight without putting it into storage

cross-docking is defined as:

rapid movement of products through the facility (maximize throughput)

distribution centers emphasize...

-improved service (product reach destination more quickly) -lower cost (less holding and carrying costs)

2 benefits of cross-docking

-Owned by the firm storing goods in the facility -Offers control to owner

2 benefits to private warehousing

-length of time a product is in a facility (24 hours or less for cross-docking facility) -design of the facility (should be designed with a minimal amount of storage space and truck doors on two or more sides)

2 differentiators of cross docks from other forms of warehousing

-Less costly than private warehousing (not public) -Allows a company to focus on its core competencies -Can offer the same degree of control as private warehousing due to contract specifications

3 benefits of contract warehousing

-Services are more differentiated than those in a public facility -Services are less customized than those in contract warehousing -Services are purchased through minimum one-year contracts

3 factors of multi-client warehousing

-Repetitive in nature -Strenuous and physically demanding -Occasionally dangerous

3 reasons why workforce motivation is difficult in warehouse management

-High fixed cost of private storage -Necessity of having high and steady demand volumes -Less attractive when interest rates are high -May reduce an organization's flexibility

4 drawbacks of private warehousing

-Warehousing productivity analysis -Safety considerations -Hazardous materials -Warehousing security -Cleanliness and sanitation

5 operational issues in warehousing:

-Serve all legitimate users -Require no capital investment on the user's part -users can rent space as needed (month-to-month) -No responsibility for personnel decisions and regulatory issues -Offer more locational flexibility -May provide specialized services

6 benefits of public warehousing

-Theft -Pilferage -Heat and humidity -Vandalism -Fire -Loss of electricity

6 security threats to warehouses

allocating (bulk breaking)

Involves breaking larger quantities into smaller quantities

accumulating (bulk matching)

Involves bringing together similar stocks from different sources

regrouping function

Involves rearranging the quantities and assortment of products as they move through the supply chain -4 forms: accumulating, allocating, assorting, & sorting out

multi-client warehousing

Mixes attributes of contract and public warehouses

warehousing

Refers to "that part of the firm's logistics system that stores products (raw materials, parts, goods-in-process, finished goods) at and between points of origin and point of consumption" -___________ and transportation are substitutes for each other, with _____________ having been referred to as "transportation at zero miles per hour"

assorting

Refers to building up a variety of different products for resale to particular customers

sorting out

Separating products into grades and qualities desired by different target markets

-quantity and character of goods to be handled -the purpose to be served by a particular facility (ex: Facilities with low rates of product turnover should maximize utilization of the cubic capacity, while facilities that emphasizes rapid product movement should facilitate the flow of product into and out of it)

WAREHOUSE DESIGN CONSIDERATIONS 2 general factors to know before designing a warehouse facility

-As aisle space increases, storage capacity decreases -Easier to operate mechanical equipment in wider aisles -Reduce the chances of accidents and product damage with wider aisles -Narrower aisles require specialized storage and handling equipment (more expensive)

WAREHOUSE DESIGN CONSIDERATIONS Aisle size

-cheaper to build up than build out (warehousing equipment costs tend to increase)

WAREHOUSE DESIGN CONSIDERATIONS Build out (horizontal) versus build up (vertical)

-fixed slot locations: each SKU has one or more permanent slots assigned to it -variable slot location: empty storage slots being assigned to incoming products based on space availability

WAREHOUSE DESIGN CONSIDERATIONS Fixed versus variable slot locations for merchandise

whether workers who pick outgoing orders and those who are restocking storage facilities should work at the same time or in the same area

WAREHOUSE DESIGN CONSIDERATIONS Order-picking versus stock-replenishing functions

-two-dock: has receiving docks on one side of a facility and shipping docks on the other side -one-dock: each dock can be used for shipping and receiving

WAREHOUSE DESIGN CONSIDERATIONS Two-dock versus single-dock layout

balance among space, labor, and mechanization with respect to warehouse design

WAREHOUSE DESIGN CONSIDERATIONS trade-offs

warehouse automation

WAREHOUSE DESIGN CONSIDERATIONS utilizing mechanical or electronic devices to substitute for human labor -ex: narrow aisle forklifts, automated guided vehicles, automated storage and retrieval systems, radio frequency identification, and others -Offers the potential to reduce labor costs and improve warehouse productivity -must ensure that automation results in noticeable improvement in warehousing effectiveness and efficiency

contract warehousing

a long term, mutually beneficial arrangement which provides unique and specially tailored warehousing and logistics services exclusively to one client, where the vendor and client share the risks associated with the operation -aka third-party (3PL) warehousing or dedicated warehousing

fulfillment center

a third-party logics (3PL) warehouse where incoming orders are received, processed and filled

e-commerce orders

fulfillment centers are focused on...

lack of control

main drawback of public warehousing

-don't have sufficient volumes to build their own storage facilities -don't have sufficient volume to justify using contract warehousing -Have regular, but not continuous, need for specialized equipment or services -Can benefit from working with other companies that have similar needs or requirements

organizations that are attracted to multi-client warehousing:

dealing with large volumes of inventory

private warehousing should only be used by firms... -retail chain stores match this description and often use this type of warehousing

throughput

the amount of product entering and leaving a facility in a given time period

-to match different rates of flow when patterns of production and consumption do not coincide -Facilitate the regrouping function in a supply chain

two roles of warehousing in the supply chain

-Warehouses -Distribution centers -Fulfillment centers -Cross-docking facilities

warehouses can be provided by:

the storage of products (maximize the usage of available storage space)

warehouses emphasize...