warehousing slides only 2007
TRANSCRIPT
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Warehousing, Part One.
Marketing Logistics
Advance manually to begin.
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Warehousing
The storing of products, including rawmaterials, parts, goods-in-process,finished goods at and between point-of-
origin and point-of-consumption. Provides information on status of goods.
.
.
Distribution centers are a type of warehouse which
hold minimum inventory of high-demand goods.
.
.
.
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.
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Warehousing: Storage of
inventories all through logistics
process. Raw materials, components, parts. Finished goods.
Physical supply Distribution
Warehouse Warehouse
The storing of products, including rawmaterials, parts, goods-in-process, finishedgoods at and between point-of-origin andpoint-of-consumption.
Provides information on status of goods.
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Achieves transportation economies.
Inventory in a Warehousing Context
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Transportation Economies
WarehouseSupplier
Economies of scale
.
Transportation
carriers usually
give discountsfor bigger loads.
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Transportation Economies
WarehouseSupplier
Economies of scale
.
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Inventory in a Warehousing
Context
Achieves transportation economies.
Achieves production economies.
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Achieves Production Economies
Economies of scale
Warehouse
Assembly line
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Inventory in a Warehousing
Context
Achieves transportation economies.
Achieves production economies.
Quantity purchased discounts, forwardbuy discounts.
Maintain source of supply.
Support customer service policies.
.
.
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Inventory in a Warehousing Context
To meet changing market conditions. Seasonality.
Demand fluctuations.
Competition. To overcome time and space differentials
between producers and consumers.
To minimize logistics costs while meeting
customer service goals. To support just-in-time inventory programs.
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End of Part One.
Scroll Down to Part Two.
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Warehousing Part Two
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Three Basic Warehouse
Functions Movement.
Storage.
Information.
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Movement
Warehouse
.
Receiving, putting away
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Movement
Warehouse
.
Receiving, putting away
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
Packaging
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
Packaging
Light assembly, blending, kitting
Vendorseek.com
*
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
Packaging
Light assembly, blending, kitting
*Kits are how some manufacturers sell parts. By selling the
parts in a kit, the manufacturer gains economies of scale in
things like transportation costs. It also saves administrative
costs because rather than billing for and keeping track ofeach part, the manufacturer only has to keep track of the kit.
Kitting is also a light manufacturing technique in which
assembly workers, sometimes in a warehouse, get all the
component parts of what they are assembling in a single
kit so that time is not lost looking for parts.Vendorseek.com
*
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
Packaging
Light assembly, blending, kitting
Labeling, shrink wrapping
LabelLabel
LabelLabel
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
Packaging
Light assembly, blending, kitting
Labeling, shrink wrapping
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
Packaging
Light assembly, blending, kitting
Labeling, shrink wrapping
Breakbulk, consolidation
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
Packaging
Light assembly, blending, kitting
Labeling, shrink wrapping
Breakbulk, consolidation
Transportation
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Movement
Warehouse
.
Receiving, putting away
Picking, staging, loading
Cross-docking
Packaging
Light assembly, blending, kitting
Labeling, shrink wrapping
Breakbulk, consolidation
Transportation
Import, export services
(also an information function)
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Storage
Warehouse
.
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Information
Warehouse
.
Inventory tracking
Order entry
Display building/promotions
Proof of delivery
Tracing/customer service billing.
Service reporting/carrier monitoring
Site location
Real estate management
Network analysis
Systems analysis
W h Di t ib ti
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Warehouses versus Distribution
Centers:
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Warehousing
The storing of products, including rawmaterials, parts, goods-in-process,finished goods at and between point-of-
origin and point-of-consumption. Provides information on status of goods.
.
.
Distribution centers are a type of warehouse which
hold minimum inventory of high-demand goods.
.
.
.
.
.
.
W h Di t ib ti
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Warehouses versus Distribution
Centers:
Warehouse
--Receives.
--Stores.
--Picks
--Ships
Distribution Center
WarehouseDistribution Center
Warehouses versus Distribution
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Warehouses versus Distribution
Centers:
Distribution Center
Receives
Ships
Distribution Center
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www.perotdevelopment.com
.
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www.arvinmeritor.com
.
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www.arvinmeritor.com
.
Warehouses versus Distribution
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Warehouses versus Distribution
Centers:
Other Differences Warehouses
--Minimal adding ofvalue.
--Data collection in
batches.
--Aim at minimizingshipping costs.
DistributionCenters
--Maximum adding of
value (includingfinal assembly).
--Real-time datacollection.
--Aim at maximizingprofit of demand
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End of Part Two.
Scroll Down for Part Three.
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Warehousing.
Part Three.
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Uses of Warehouses:
Support manufacturing.
Mix products from multiple production
facilities to a single customer.
Break bulk.
Consolidate small shipments into large
shipments.
.
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Logistics Concepts
. .
Inbound Logistics Outbound Logistics
Su
p
p
l
i
e
r
Cu
s
t
o
m
e
r
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Supplier A
Supplier B
Supplier C
Supplier D
Warehouse
Carload or truckload shipments
Manufacturing Support
(inbound logistics)
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2 41 3
Mixing Warehouse
(outbound logistics)
Plant A, Product 1
Plant B, Product 2
Plant C, Product 3
Plant D, Product 4
Customer W
1 2 3 4
Customer X
1 2 3 4
Customer Y
1 2 3 4
.
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2
4
1
Mixing Warehouse
(outbound logistics)
Plant A, Product 1
Plant B, Product 2
Plant C, Product 3
Plant D, Product 4
Customer W
1 2 3 4
Customer X
1 2 3 4
Customer Y
1 2 3 4
3Mixing Warehouse
1
1
1
2
2
2
3
3
3
4
4
4
1
2
3
4
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ConsolidationWarehouse
(outbound logistics)
Plant A
Plant B
Plant C
Consolidation Warehouse
Customer
Customer
CustomerPlant D
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Breaking bulk
.
.
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BreakbulkWarehouse
(outbound logistics)
Plant Breakbulk Warehouse
Customer 2
Customer 1
Customer 3
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Types of Warehousing
Direct store delivery.
Private warehousing.
..
Advantages:
Control
Flexibility in design and operation
Long-term cost
Better use of human resources.
Tax benefits: depreciation.
Intangibles: image of stability.
XYZ Company Warehouse
Disadvantages
Investment. Return may be better if money is
placed elsewhere.
.
..
. .
.
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Fixed costs, especially if built for peak seasons.
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Types of Warehousing
Direct store delivery.
Private warehousing.
Public warehousing.
. .
Advantages:
Conservation of capital.
Able to increase capacity when needed.
Reduced risk of obsolesence.
Economies of scale due to warehouse companys investment
Flexibility
Tax advantages: some states have no inventory taxes for products in public warehouses.
Specific knowledge of costs.
Disadvantages
Incompatible communications systems.
Lack of specialized services..
May be unavailable when needed.
XYZ Company WarehouseABC Public Warehouse
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Types of Public Warehousing
ABC Public Warehouse
. .
General merchandise
Refrigerated or cold storage
.
Bonded warehouses.
.
Household goods, furniture.
.
Special commodity
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Types of Public Warehousing
ABC Public Warehouse
. .
General merchandise
Refrigerated or cold storage
.
Bonded warehouses.
.
Household goods, furniture.
.
Special commodity
Bulk storage.
Cross-docking facilities (3PL concept).
Contract warehousing (can be used in 3PL).
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Warehouse Characteristics
Increase the number of warehouses andthe average size of warehousesdecreases.
Factors influencing the number ofwarehouses: Cost of lost sales.
Inventory costs.
Warehousing costs.
Transportation costs.
.
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Warehouse Locations
Market-based nearest the final
customer.
Production positioned collection points
or mixing facilities.
Intermediate positioning between producer
and final customer.
CustomerWarehouseFactory
C d ki
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Outbound
Outbound
Outbound
Inbound
Inbound
Movement from an inbound dock directly to an outbound dock
Cross-docking:
Movement directly from an inbound dock to a sorting processto an outbound dock.
Outbound
Inbound
Sorting area
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Crossdock in at least two of these
conditions:
Product destination is known upon receipt.
Destination is ready for immediate delivery.
You daily ship to less than 200 locations.
More than 70% of products fit conveyors. You receive large quantities of individual items.
Products arrive pre-labeled.
Some products are time-sensitive.
Distribution center is near capacity.
At least some inventory is pre-priced.
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End of Program.