warehouse management project 2

8/3/2019 Warehouse Management Project 2

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Team Members:

Goh Wee Ling LyndyTan Pei Keow JessSeah Bao Jie Dyon

Soo Tee Hong SteveWong Kang Fu Jasmond


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Introduction

Benefits of Warehousing

Types of Warehousing

Understanding Warehousing Stretagies Conclusion

Q & A


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Is it only a storage facility?

A warehouse is typically viewed as a place to store

inventory.

However, in many logistical system designs, the role ofthe warehouse is more properly viewed as a switching

facility as contrasted to a storage facility.


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Consolidation

Receives and consolidates materials from a number ofmanufacturing plants destined to a specific customer on asingle transportation shipment.

The benefits are the realization of the lowest possibletransportation rate and reduced congestion at a customer'sreceiving dock.


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Consolidation Warehousing

The primary benefit of consolidation is that it combinesthe logistical f low of several small shipments to a specificmarket area.

Consolidation warehousing may be used by a single firm,or a number of firms may join together and use a for-hireconsolidation service.

Each individual manufacturer or shipper can enjoy lowertotal distribution cost than could be realized on a directshipment basis individually.


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Alternative Warehouse Strategies (Contd)

Private warehouse facility is owned and managed bythe same enterprise

Public warehouse, in contrast, is operated as anindependent business offering a range of services -such as storage, handling and transportation.

Contract warehousing, which is evolving from thepublic warehouse segment, provides benefits of boththe private and public alternatives.

Types of Warehousing Strategy


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Private Warehouses

A private warehouse is operated by the firm owning theproduct.

The actual facility, however, may be owned or leased.

The decision as to which strategy best fits an individual

firm is essentially financial.



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Public Warehouses

General merchandise warehouses are designed to handIegeneral package commodities such as paper, smallappliances, and household supplies.

Refrigerated warehouses (either frozen or chilled)handle and maintain food, medical items, and chemicalproducts with special temperature requirements.

Commodity warehouses are designed to handle bulkmaterial or items with special handling considerations,such as tires or clothing.



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Public Warehouses

Bonded warehouses are licensed by the government tostore goods prior to payment of taxes or duties.

Household goods or furniture warehouse is designed tohandle and store large, bulky items such as appliances andfurniture.



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Contract Warehouses

Contract warehousing combines the best characteristics ofboth private and public operations.

The long-term relationship and shared risk result in lowercost than typical public warehouse arrangements.

Contract warehouse operations can provide benefits ofexpertise, flexibility, and economies of scale by sharingmanagement, labor, equipment, and information resourcesacross a number of clients.



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Material-Handling System

A material-handling system is one of the initialconsiderations of warehouse planning.

Movement is the main function within a warehouse.

Consequently, the warehouse is viewed as a structure

designed to facilitate maximum product flow.



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Many firms utilize a combination of private, public, andcontract facilities.

A private or contract facility may be used to cover basic yearround requirements, while public facilities are used tohandle peak seasons.

Full warehouse utilization throughout a year is a remotepossibility.


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The second form of combined public warehousing mayresult from market requirements.

A firm may find that private warehousing is justified at

specific locations on the basis of distribution volume.

In other markets, public facilities may be the least-costoption.

In logistical system design the objective is to determinewhatever combination of warehouse strategies mosteconomically meets customer service objectives.


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Other qualitative factors that should be considered include:

(1) presence synergies,

(2) industry synergies,

(3) operating f lexibility,

(4) location flexibility, and

(5) scale economies,

Each consideration and its rationale will be discussed.


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Presence synergies

Presence synergies refer to the marketing benefits ofhaving inventory located nearby in a building that is clearlyaffiliated with the enterprise (e.g., the building has thefirm's name on the door).

It is widely thought that customers are more comfortable

when suppliers maintain inventory in nearby locations.

Products and customers that benefit from local presenceshould be served from private or contract facilities.


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Industry synergies

Industry synergies refer to the operating benefits ofcollocating with other firms serving the same industry.

Reduced transportation cost is the major benefit since jointuse of the same public warehouse allows frequent deliveryof consolidated loads from multiple suppliers.

Public and contract warehousing increase the potential forindustry synergy.


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Operating f lexibility

Operating f lexibilityrefers to the ability to adjustinternal policies and procedures to meet product and

customer needs.

Since private warehouses operate under the completecontrol of the enterprise, they are usually perceived todemonstrate more operating flexibility.

There are many public and contract warehouse operationsthat have demonstrated substantial flexibility andresponsiveness.


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Location flexibility

Location flexibilityrefers to the ability to quickly adjust

warehouse location and number in accordance withseasonal or permanent demand changes.

Outside the growing season, however, these localwarehouses are unnecessary.

Public and contract warehouses offer the locationflexibility to accomplish such requirements.


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Scale of economies

Scale of economies refer to the ability to reduce

material-handling and storage through application ofadvanced technologies.

High-volume warehouses generally have greateropportunity to achieve these benefits because they canspread technology's fixed cost over larger volumes.

In addition, capital investment in automated equipmentcan reduce direct variable cost.


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In many logistical system designs, the role of thewarehouse is more properly viewed as a switching facility ascontrasted to a storage facility.

Understanding warehousing strategies enables moreeffective & efficiency in implementation of strategies &policies.

Warehousing strategies has a great impact on the type ofwarehouses to implement.

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Q & A


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warehouse management project 2

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