Lec 3 Warehousing

8/3/2019 Lec 3 Warehousing

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Warehousing


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WarehouseA warehouse is a commercial building for storage of goods.

Warehouses are used by manufacturers,Wholesalers, retailers, importers,exporters, customs etc.

They are usually large plain buildingsin industrial areas of cities and towns.

Today warehouses are not used to store things but rather toreceive, breakdown, repackage and distribute components toa manufacturing location or finished products to customers
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Warehouses

Some warehouses are completely automated, with very fewworkers working inside.

The pallets and product are moved with a system ofautomated conveyors and automated storage and retrieval

machines coordinated by programmable logic controllers

The direction and tracking of materials in the warehouse iscoordinated by the WMS, or Warehouse ManagementSystem, a database driven computer program.

The WMS is used by logistics personnel to improve theefficiency of the warehouse by directing putaways and tomaintain accurate inventory by recording warehousetransactions.


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FUNCTIONS OF A WAREHOUSE Receiving, Storing, switching, change SKU size, Allows stock rotation (FIFO, LIFO), Buffer stock for customers retail or commercial, Command and control centre inventory control, Enables off-the-shelf (JIT) for customers, Provides a more-local 'Market Presence'.


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FUNCTIONS OF A WAREHOUSE Consolidation and Break-Bulk

Assortment (Cross Docking, Mixing)

Postponement (Packaging, Labelling) Stockpiling (Seasonal, Bulk-Buy)

Reverse Logistics


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Consolidation:Groupage (Consolidation)

Goods from a number of suppliers are

grouped together for single deliverypoints,

A range of goods from single suppliers are

grouped together for each customer.


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Plant 1

Plant 2

Plant 3

Consolidation

WarehouseStore B

Store C

Store A

Supply Chain Management


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Break Bulk: Receives customer orders from manufacturer and

delivers to different customers.

A break bulk operation receives combinedcustomer orders from manufacturers and shipsthem to individual customers.

The break bulk warehouse sorts or splits individualorders and arranges for local delivery.


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PlantBreak-Bulk

WarehouseStore B

Store C

Store A

Supply Chain Management


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CROSS-DOCK=No storage(?)Cross-dock (from multiple suppliers): goods sorted as they arrive,

goods moved across dock and loaded onto trailers,

benefits - optimal vehicle use and low handling

costs,

requires sophisticated planning techniques.


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Cross Docking Transferring goods

from incoming trucksat receiving docks

to outgoing trucks atshipping docks

Avoids placing goodsinto storage

Requires suppliersprovide effective

addressing (bar codes)and packaging thatprovides for rapidtransshipment

In-coming Outgoing


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Sainsbury's distribution timetable Early evening -

Goods arrive at warehouse from supplier. Overnight -Sorted and packed. Early morning -

Despatched. 7.30am -On store floor.


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Warehouse Ownership Classification: Private (Ownership or Lease)

Public (Standardized service, relationship is less

important) Contract (Customized, mutual benefits, long term

commitment, Good relationship)


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Automated Warehouse of IKEA


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Warehouse Planning: Location Analysis

Site selection

Design

Product mix

Future expansion


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Location AnalysisBefore selecting site, there is some location analysistechniques that could assist company in selecting a

general area for warehouse location.

o Location Factor RatingThe location factor rating technique may be used when many

sites are available, and each site has some appealing

characteristics. The purpose of the technique is to "score"

each site to be somewhat objective about the location

decision. The steps in using the technique are:


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Center-of-Gravity Technique The center-of-gravity technique can be used when

multiple suppliers or customer bases exist atdifferent geographic locations, and it iseconomically sensible to locate centrally to serviceall of them. In general, transportation costs are afunction of distance, weight, and time.


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Site SelectionOnce location analysis is completed, a specific

building site must be selected.

The primary factors in site selection are theavailability of services and cost.

The cost of procurement is the most importantfactor governing site selection.

Beyond procurement cost, setup and operatingexpenses such as rail sidings, utility expenses,taxes, insurance rates, and highway access requireevaluation.


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Site SelectionSeveral other requirements must be satisfied before

a site is purchased

Necessary utilities must be available.

The soil must be capable of supporting thestructure, and the site must be sufficiently high toafford proper drainage


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Design Criteria: Warehouse design criteria address physical facility

characteristics and product movement.

Three factors to be considered in the designprocess are: the number of stories in the facility,

height utilization, and

product flow.


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Number of stories in the facility The ideal warehouse design is limited to a single

story so that product does not have to be movedup and down.

The use of elevators to move product from onefloor to the next requires time and energy.


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Height Utilization: Regardless of facility size, the design should maximize the

usage of the available cubic space by allowing for the greatestuse of height on each floor.

Most warehouses have 20- to 30-foot ceilings, althoughmodern automated facilities can effectively use ceiling heightsup to 100 feet.

Maximum effective warehouse height is limited by the safelifting capabilities of material-handling equipment, such as

forklifts.


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Product-Mix Considerations The design and operation of a warehouse are

related directly to the character of the product mix.

Each product should be analyzed in terms ofannual sales, stability of demand, weight, andpackaging.

It is also desirable to determine the total size andweight of the average order processed through the

warehouse.


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Future Expansion Future expansion is often neglected when an

enterprise consider initial establishment of itswarehouse facilities.

Well-managed organizations often establish 5 to10 year expansion plans.

Such expansion considerations may requirepurchase or option of a site 3 to 5 times the size ofthe initial structure.


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Warehouse Security Pilferage protection (Theft,)

Product deterioration (Damages)


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Safety and Maintenance Health and safety

Incidents

Environment


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Warehouse management System (WMS) Computer software designed to manage the

storage and movement of items throughout the

warehouse.


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Home Assignment:Role ofBarcodes, RFIDs and Voicepicking technology in Warehouse

&

Role of MRP, MRPII and ERP systems in

SCM


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End of Topic

Lec 3 Warehousing

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