Supply Chain BA331

Basic concepts for dedicated storage

compatibility, complementarity, popularity, size

Fixed costs of a tractor trailor

cost of equipment, insurance premiums, license fees, permit costs, business overhead

Variable costs

costs that are incurred when transportation equipment is operated, including items such as fuel, highway taxes or port fees, and maintenance.

Incoming replenishment shipments are preassigned to actual demand orders, so that as soon as a product arrives in the facility it is already assigned to an order. -assortment -spot stocking -cross docking -break bulking -product life cycle mgmt.

cross docking

Which is part of a quick response system where inbound shipments of bulk items are not stored long term but instead broken into smaller quantities, mixed together, and quickly shipped to individual stores?

crossdock

Which of the following is NOT an area in which successful supply managers need expertise? technologies, customers, suppliers, processes, resources

customers

What type of storage technique assigns a specific location for each SKU every time it is stored? assortment random product profiling spot stocking dedicated

dedicated

Indirect materials

do not go directly into the final product but are necessary to maintain operations

Variable costs of a tractor trailor

driver wages and benefits fuel maintenance tires lodging/food tolls

Top causes of business interruption

fire and explosion, storm, machinery breakdown, faulty design, strike, riot, vandalism, flood, collapse, power interruption

Transportation costs are broken down into 2 categories

fixed costs and variable costs

Direct materials

go directly into the product sold to the downstream customer

Carousels

high assortment, low-volume SKU's to maximize space usage

Basic supplier selection process, 4 steps

identification evaluation approval monitoring

Fixed costs

include capital expenditures for transportation equipment, infrastructure such as ports and rail yards, trucking terminals, and airports.

Key to cross-decking

incoming replenishments are preassigned to actual demand orders, so that as soon as a product arrives in the facility, it is already assigned to an order. requires real time information both on the products arriving on incoming transportation assets as well as incoming customer orders.

Randomized storage

involves placing products in the first open bay available to minimize put-away and pick distances traveled and make best use of available warehouse space.

Intermodal

involves the use of more than one mode of transport for any particular freight movement. shipping containers

The Strengths and Weaknesses sections of a SWOT analysis focus primarily on:

issues that are internal to the company

Economics of scale

it is cheaper per unit to ship large volume than small volume. Transportation costs per unit of freight increase at a decreasing rate with increasing volume and/or weight density.

Automated storage/retrieval systems (AS/RS)

mechanized cranes that put away and pick pallet-sized loads based on WMS commands.

Conveyors

move items over long distances in the facility

information visibility is increasingly becoming a key role of warehousing, enabling managers to see not only what products are in the immediate warehouse but also in other warehouses and even retail stores that might be used to fulfill an order (this is becoming a key aspect of omni-channel retail operations)

multi-warehouse inventory visibility

An item with high market complexity and low importance to the organization should be classified as: non-critical leverage strategic bottleneck none of the above

none of the above

non-critical commodities

occupy the lower left quadrant of the supply portfolio matrix: most of the things that an organization buys are important for the business to run, but they do not materially impact the customer. -many alternative products and services -many sources of supply -low value, small individual transactions -anyone could buy it

Information walk & pick batch processing

order picking

What warehouse activity includes identifying the location of the product required to fill an order?

order picking

product sequencing

picking assets are sequenced through the pcik area so that they pick every product in the order in sequence as they move through the facility.

Strategic commodity

products are of high value to the internal buyer and to the end customer, and dealing with the supply market for these products is highly complex. Items an organization must have to keep its business running. -critical to profitability and operations -few qualified sources of supply -large expenditures -design and quality are critical -complex and/or rigid specifications

What is the best tactic purchasing can use in order to meet the material and support needs of its internal customers?

provide an uninterrupted flow of the appropriate quality materials and services.

What type of warehouse has the advantages of minimizing labor disputes, economies of scale, and letting experts run the warehouse? public private exempt bonded logistics park subcontracted

public

Identify product identify product location move products update records

put-away

Based on similar cost and service characteristics, which mode of transportation is the biggest competition for an inland water transport?

rail

5 main transportation modes

rail, motor, water (both ocean and inland), air, and pipeline transport

Warehouse Processes

receiving, put away and storage, order picking, shipment preparation, shipping.

Objectives of automation include:

reducing number of times goods are handled, minimizing movement to, within, and from the warehouse -ensuring rapid/efficient flow, -maximizing personnel safety -automating heavy labor and short-distance movements

Leverage commodity

refers to goods that are of high value to internal and external customers but are not in a complex purchasing environment. -high expenditures -large marketplace capacity with ample inventories -many alternate products and services -many qualified sources of supply -market/price sensitive

Bottleneck commodities

relatively complex due to the limited number of potential suppliers, yet the value to the internal user is relatively low in terms of cost and time commitment. they often have complex specifications or custom design and therefore a unique buying process that could be costly or difficult to manage because of regulation or specification-related processes. -complex specifications requiring complex manufacturing or service process -few alternative productions/sources of supply -big impact on operations/maintenance

Successful supply chain managers are experts in four areas:

resources, suppliers, processes, technologies

supply chain flows are increasingly moving not only to customers but also back from customers in the form of returns, recyclables, and repairs

reverse logistics and returns processing

What invention by Malcolm McLean revolutionized how products are shipped and reduced cost so that it is considered a key facilitator of global trade?

shipping containers

What invention by Malcolm McLean revolutionized how products are shipped at reduced cost, considered a key facilitator of global trade?

shipping containers

Packing Labeling Stacking

shipping preparation

What are the five key steps involved in driving an integrated procurement strategy and activities also known as The Strategic Sourcing Process?

step 1: market research step 2: spend analysis step 3: portfolio analysis step 4: contract negotiation step 5: supplier relationship management

Equipment stock location

storage

A commodity that is high in complexity or risk impact to a company and has high value potential or large spend is a __________.

strategic commodity

zone or order splitting

technique assigns different pick assets with responsibility for picking different zones of the warehouse.

Which of the following is the most important right of purchasing? delivery to the RIGHT place the RIGHT price the RIGHT supplier the RIGHT time the RIGHT material

the RIGHT supplier

Commodity

the inputs (or things we buy), including materials, sub-assembled components, equipment, and services, which are required to create value.

-schedule carrier -unload vehicle -inspect for damage

Warehouse processes; Inbound: Receiving

________+___________= Rate bargaining power when negotiating rates.

volume+ consistency

Role of Warehousing

-buffer differences between supply and demand-enables economy of scale in sourcing, manufacturing, and transportation. -provide time and place value through inventory storage -provides ability to consolidate multiple shipments -provides ability to consolidate multiple shopments -provides break bulk ability -customize products close to customer before final delivery.

Supplier relationship management (SRM)

-continuous monitoring of both the strategy and the supplier. -continuous monitoring of the supplier's performance on key goals and objectives. -supplier scorecard

Rail transport

-extremely high fixed costs for trackage rights for the land on which the roads run, tracks, rail yards, and the operating equipment itself. -variable costs are low -bulk food, heavy manufacturing, containerized goods

Product Placement

-fast moving SKU's nearest the outbound shipping docks to minimize distances traveled daily by pickers -slow-moving SKU"s at points furthest from outbound shipping dock doors to ensure that lengthy horizontal moves by pickers or handling equipment are minimized -reserve the middle area of the warehouse fro products received in periodic batches, those requiring rework before shipping, those that are compatible with fast-moving products, and/or back-up overflow from fast moving areas. -Design aisles to facilitate the most efficient flow of product to and from dock areas. -Configure storage areas to match the velocity and dimensions of each major product, rather than designing all storage bins, racks, and floor storage areas in the same dimensions. This facilitates the maximum use of available cubic space, because products are not only matched to the width of each slot, but also the depth and height of each storage slot.

Pipeline transport

-fixed costs are high -variable costs are low -traffic composition= petroleum, chemicals, mineral slurry

Water or maritime transport

-fixed costs for facilities and equipment are high -variable costs per unit are extremely low since massive volumes of product can be moved for long distances. -bulk food, mining, chemicals, containerized goods.

air transport

-low fixed costs -high variable costs -traffic composition- high-value goods, rush shipments

Motor transport

-low fixed costs because travel on roads and highways is largely subsidized by taxes, tariffs, and fees paid by the general public as well as by motor carriers. -variable costs are higher per unit of freight moved due to the costs of drivers, fuel, and highway use taxes. (weight stations) -consumer goods, medium/light manufacturing

Warehouse Management System (WMS)

-runs on a facility RF "backbone" and drives high levels of control and accuracy - basic logic contains item, location, quantity- so it knows X,Y,Z coordinates of every SKU -determines where to stock, where to pick, in what sequence, known as "directed movement" -improves labor management and productivity -can interweave unrelated tasks -integrates with ERP, cost and invoicing systems -can use visual display or voice -capable integrating with bar codes, RFID

Receiving and Put away process

-schedule deliveries and unload -inspect for damage during shipping -

Dedicated Storage

-usually the best choice for manual warehouse environments -allows pickers to become familiar with bin layout especially for high moving items -does not optimize space utilization

Randomized storage

-usually the best choice in highly automated facilities. -optimizes space utilization bin utilization and mixed product bins -reduces put-away time -becoming more popular as new technology eliminates the need for pickers to know where they are going

Which mode of transportation is best used to transport each of the products listed below? 1). heavy construction equipment 2). short distance consumer finished goods 3). long distance containerized goods 4). High value good 5). petroleum or mineral slurry

1). rail 2). motor 3). water 4). air 5). pipe

Service characteristics

1). speed- total time it takes for goods or services to be delivered where customers want them 2). availability,- the different places products or services can be made available for customers to access. 3). dependability,- the ability to deliver to the required tiem and place when and where products and services are expected and promised. 4). load capability- the variety of different types and categories of products that can be moved. 5). flexibility- the variety of origin and destination that the mode can service as well as the variety of pickup and delivery times that assets can be scheduled or redirected in the event of changing circumstances.

Standardized shipping container sizes

40' 20' 10'

Automation and Material Handling technology

Components: -automated storage/retrieval systems -carousels -case-picking and item picking equipment -pick and put to light systems -wearables, robots and drones

similar to merge-in-transit, an activity that includes receiving and sorting inbound goods into individual customer orders, potentially drawing additional items from storage, and preparing, packing, and shipping these orders to customers in a short time frame

Cross docking

A dollar saved in material costs goes directly to an increase in revenue for the organization. T/F

False

Sourcing is the inputs (or things we buy), including materials, sub-assembled components, equipment, and services, that are required to create value. T/F

False

Supplier portfolio analysis was introduce by Michael Porter. T/F

False, Lee Lacocca

Case-picking and item pciking equipment

Forklift, turret, and clamp trucks

another information service aimed at making products in-transit visible so that facilities that will receive products know they are coming in advance and when they will arrive, effectively expanding the warehouse to include those products that are moving.

Inbound and outbound advanced shipment notification

providing services such as item finishing or light assembly (e.g., inserting a power supply on electronic equipment), special packing or labeling (e.g., putting on a compliance label, inserting instructions in the proper language), and packaging.

Light assembly, kitting, and special packaging

multiple parts of an order coming from multiple locations are merged at one facility and then flowed out to customers without storage

Merge-in-transit operations

What warehouse activity includes identifying the location of the product required to fill an order? -shipping -order packing -put-away -shipment assembly -towline

Order Picking

-periodic internal review meetings to ensure that the strategy is still congruent with organizational objectives. - assess internal customer and supplier perceptions. -determine if key goals have been achieved -share results with top management -conduct periodic reviews of results with supplier to provide feedback.

Supplier scorecard

The purchasing function contributes to the type and bottom line of an organization.

TRUE

-schedule carrier -load vehicle -bill of loading -record update

Warehouse Processes; Outbound: shipping

Purchasing has become a strategic contributor to organizational value by contributing to both the top and bottom line of the business. T/F

True

The choice of suppliers is important to ensure an uninterrupted flow of supply and avoid some of the problems inherent in complex supply chains. T/F

True

When purchasing and supply management works well within an organization, the company acquires the best resources from around the world, which allows it to compete on cost, quality, and innovation. T/F

True

One of the most challenging aspects of purchasing is to ensure an uninterrupted flow of supply. Which of the following might "interrupt" that flow? natural disasters supplier quality issues logistics interruptions financial issues All of the above

all of the above

item batching

assigning a pick asset to pick the same or similar SKU's from multiple orders

Dedicated storage

assigns a specific location for each SKU every time is it stored. helps picker efficiency as pickers build up knowledge of where products are always stored. -but can underutilize space

Carriers will give you better rates if you give them revenue miles in ______________.

both directions

Carriers will offer better rates if clients give them revenue miles in

both directions

services

can be challenging to manage but offer a great opportunity for procurement in term of savings

What warehouse automation system is used for high-assortment, low-volume SKUs and maximizes space use? conveyors carousel item bins automated storage/retrieval system forklifts

carousel

Transportation cost theory

cheaper per unit to ship high volume or high density. "fill the ship", fill the plane", "fill the truck."

Economies of Distance

cheaper per unit to ship long distance vs. short distance. Goal is to fully utilize the assets that have been purchased by the business.

Sourcing

the processes involved in identifying the requirements, locations, and identity of specific companies and providers that may be used to acquire various inputs required to create value.

Purchasing

the processes used to actually make a buy from a source.

Procurement/Supply Management

the strategic approaches and processes used to secure needed inputs into the organization to create relevant value.

"Tapering Principle"

transportation costs per unit of freight or weight increase at a decreasing rate with increasing distance traveled. It is cheaper per unit to ship over a long-distance haul vs. a short haul as fixed costs can be spread over a longer operating distance.

Samsung wants to transport a load of 52-inch HDTVs from Carlsbad, California, to San Francisco. What method of transportation should Samsung use?

truck

Scanning systems

use bar codes or radio frequency identification data (RFID) tags to capture info that can tell the WMS and automated equipment where products are located or where to take them (handheld scanners or wearable glasses).

Pick or put to light systems

use light displays attached to storage locations to direct operators to specific stock locations.