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)