11 jan warehousing
TRANSCRIPT
!!BA#244:#Supply#Chain#Management#
Nike#
! Outsourcing!and!Supplier!Performance!
Reminders#
! CASE STUDY: Zara Fast Fashion
! LinkedIn Group: Presentation Grade for Nike and Zara
Internal#Supply#Chain#
Procurement! Produc5on! Storage! Distribu5on! Sales!and!Marke5ng!
Warehouse#
! A!misunderstood!func5on,!yet!a!vital!link!
Just@in@Time#(JIT)#
! developed!in!Japan!
! highlighted!the!drawbacks!of!having!a!fully!stocked!warehouse!
! goods!and!materials!arrive!only!when!needed,!in!the!exact!quan5ty,!and!there!are!no!unusable!surpluses!
! Experience!in!JIT?!
Warehouse#
! Purpose?!
Warehouse#
! Acts!as!a!Buffer!between!Supply!and!Demand!Imbalance!due!to!seasonality!or!lead!5mes!
Warehouse#
! Extends!Geographical!Reach,!increasing!market!share!
Warehouse#
! Supports!Reverse!Logis5cs!e.g.!product!recalls!
Warehouse#
! Enables!Transport!Economies!
Consolida5on!
Break!Bulk!
Distribution#Centers#
! If!the!organiza5on!has!a!number!of!sites!(factories,!branch!offices,!retail!outlets),!it!has!2!basic!op5ons!for!geSng!the!goods!! Mul5ple!direct!deliveries!to!each!site!! Single!bulk!delivery!to!a!central!warehouse!or!
distribu5on!center,!and!delivering!them!to!each!of!the!sites!
Distribution#Centers#
! Central!Distribu5on!Center!
! Network!of!Regional!Distribu5on!Centers!(RDCs)!/!Hubs!
! Both!
Distribution#Centers#Main#Purpose#
1.!Breaking!bulk!! AXracts!bulk!purchase!and!transport!discounts!! ‘Hub!and!spoke’!arrangement!
Break!Bulk!
Distribution#Centers#Main#Purpose#
2.!Consolida5ng!deliveries!! Cuts!down!on!number!of!transport!trips;!Saves!
transport!/!fuel!costs!and!reduces!environmental!impacts!
! Fills!up!transport!of!each!delivery!(not!was5ng!space!and!cost)!
! ‘merge!in!transit’!arrangement!
Consolida5on!
Processes#
Orders!Products!
Receives!Orders!
Receives!Products!
Delivers!Products!
Customer)
Company)
Order!Taking!/!Entry!
Credit!Status!Stock)Availability)
Stock!Replenishment!Pick)and)Pack)
Delivery!Schedule!
Carrier!Contrac5ng!
Elapsed!Time!
Cross@docking#! Goods!arriving!at!a!warehouse!from!a!
supplier!are!unloaded!from!a!supplier’s!truck!and!loaded!onto!outbound!trucks,!thereby!avoiding!warehouse!storage!
! Staging!area!where!inbound!deliveries!are!sorted,!consolidated,!and!onward!delivered!
! Reduces!inventory!holding!costs!and!lead!5mes!
! Reduces!shipping!cost!since!suppliers!can!use!full!truckloads!instead!of!par5al!loads!
Processes#
Orders!Products!
Receives!Orders!
Receives!Products!
Delivers!Products!
Customer)
Company)
Pick)and)Pack)
Elapsed!Time!
Cross@docking:#Successful#Application#
! reduces!the!number!of!warehouses!and!moves!towards!a!small!number!of!distribu5on!centers!
! Each!center!usually!serves!a!par5cular!geographical!area!!
! Can!reduce!cycle!5mes,!thus!improving!the!flexibility!and!responsiveness!of!the!distribu5on!network!
! Requires!exact!on^5me!delivery!from!each!manufacturer!which!is!hard!to!achieve!
Cross@docking:#Case#Studies#
! Goodyear!GB!Ltd!
! Switching!from!the!tradi5onal!stock^holding!supply!chain!opera5ons!to!cross^docking!techniques!in!the!1990s!! increases!of!service!levels!from!87%!to!96%!! inventory!reduc5on!of!16%!! cancella5on!of!more!than!135,000!square!g.!of!
warehousing!! cancella5on!of!all!hired!vehicles!! reduc5on!of!opera5ng!costs!in!real!terms!of!over!12%!
Where#to#Locate?#
?!
Where#to#Locate?#
! Proximity!to!Markets!
Where#to#Locate?#
! Proximity!to!Supply!Sources!
Where#to#Locate?#
! Availability!&!Cost!of!Transport,!Labor,!U5li5es!
Where#to#Locate?#
! Government!policies!
! Environmental!regula5ons!
! Quality!of!government!
Amazon#patents#flying#warehouse#
Amazon#patents#flying#warehouse#
! “Airborne!Fulfillment!Center”,!patented!in!the!US!would!consist!of!a!giant!airship!that!remains!at!high!al5tude!while!drones!collect!packages!from!it!to!deliver!to!loca5ons!on!the!ground!
! In!December!Amazon!was!reported!to!have!made!its!first!UK!delivery!by!drone!–!of!an!Amazon!Fire!TV!box!and!a!bag!of!popcorn!to!an!address!in!Cambridge!
! The!trial!is!limited!to!day5me!deliveries!during!suitable!weather,!promising!deliveries!within!30!minutes!
Warehouse#Objectives#
! Maximum!use!of!space!
! High!level!of!resource!produc5vity!(labor,!equipment)!
! Rapid!accessibility!of!materials!and!products!
! Protec5on!of!stored!materials!and!products!
! OTIF!delivery!
Layout#
! Objec5ve!is!to!maximize!the!u5liza5on!of!the!total!‘cube’!i.e.!its!full!volume,!while!maintaining!low!material!handling!
Layout#
! Frequency!of!order!! Near!the!entrance!vs.!toward!the!rear!of!the!facility!
! Correla5ons!between!items!! i.e.!item!A!is!usually!ordered!with!item!B!! Placing!them!close!together!reduces!cost!and!5me!
of!picking!(retrieving)!
! Need!to!periodically!make!a!physical!count!of!stored!items!
Layout#
! Height!of!storage!racks!
Layout#
! Number!and!width!of!aisles!
Goods#Inwards#Facility#
! Special!entry!and!access!points:!stopping,!loading,!and!unloading!space!for!vehicles,!where!they!don’t!interfere!with!general!road!traffic!
! Materials!handling!equipment:!forklig!trucks,!cranes,!conveyor!belts!and!other!mechanical!aids!to!loading,!unloading,!and!moving!goods!into!storage!
! Immediate!proximity!and!accessibility!to!storage!areas!and!facili5es!(to!minimize!the!movement!and!handling!of!goods!between!unloading!and!storage)!
Goods#Inwards#Facility#
Goods#Inwards#Facility#
Goods#Inwards#Facility#
! Space!for!the!inspec5on!of!deliveries!(to!establish!that!goods!have!been!delivered!as!ordered,!in!full!and!in!good!condi5on)!
! Space!(and/or!equipment)!for!sor5ng,!labeling,!and!other!required!handling!procedures!
! Security!(to!protect!vehicles!and!storage!areas!from!theg!or!vandalism)!
! A!defined!‘traffic!flow’!for!entry!and!exit!of!vehicles!
Warehouse Management Systems (WMS)#
! advanced!technology!and!opera5ng!processes!that!op5mize!all!warehousing!func5ons!
! offers!the!poten5al!to!manage!inventory!in!real!5me!and!provides!up^to^date!informa5on!regarding!orders,!shipments,!or!receipt!and!any!movement!in!between!
WMS: Successful Application#
! Common!mistake!made!by!organiza5ons!when!implemen5ng!WMS!is!relying!solely!on!the!sogware!vendor!to!develop!and!administer!the!project!
! Investments!in!WMS!can!be!returned!in!as!liXle!as!six!months;!Average!paybacks!usually!take!place!between!one!and!two!years!from!implementa5on!(Young,!2009)!
! Significantly!reduces!the!paper!component!of!warehouse!opera5ons!as!well!as!the!costs!associated!with!data!entry!by!clerical!personnel!(Hill,!2002)!
WMS:#Case#Studies#
! In!August!2011!SuperGroup,!owner!of!the!Superdry!brand,!implemented!an!upgrade!program!to!its!warehouse!management!systems!
! The!total!cost!of!stock!reduc5ons!(including!addi5onal!temporary!warehousing!capability)!was!es5mated!from!£6^9m!
WMS:#Case#Studies#
! Davant!Products!supplies!plumbing,!drainage!and!insula5on!products!
! Davant!managed!to!reduce!stock!costs!from!£1.75m!to!£1.25m!in!11!months!!
Warehousing and Third Party Logistics#
! Many!organiza5ons!regard!storage!and!distribu5on!as!support!func5ons,!rather!than!core!ac5vi5es!
! Provides!access!to!specialist!exper5se!and!resources!that!it!might!not!be!able!to!afford!in^house!
! Warehousing!facili5es,!distribu5on!centers,!and!transporta5on!fleets!with!no!need!to!commit!to!capital!expenditure!
Warehousing and Third Party Logistics#
! May!have!separate!contracts!for!warehousing!and!logis5cs!
! Contracts!are!usually!3^5!years,!with!1!year!no5ce!! Procurement!process!is!5me!consuming!and!
complex!! Difficult!to!switch!3PL!providers!
Regulations#
! Fire!&!Safety!
! Labor!codes!
! “Hazmat”!Standards!
! Sustainability!and!Environmental!requirements!
! Disaster!Recovery!Plans!
!!End#