Warehousing Slides Only 2007

8/14/2019 Warehousing Slides Only 2007

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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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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 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 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

.



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Movement

Warehouse

.


Picking, staging, loading


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Movement

Warehouse

.



Cross-docking


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Movement

Warehouse

.



Cross-docking

Packaging


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Movement

Warehouse

.



Cross-docking

Packaging

Light assembly, blending, kitting

Vendorseek.com

*


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Movement

Warehouse

.



Cross-docking

Packaging


*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

.



Cross-docking

Packaging


Labeling, shrink wrapping

LabelLabel

LabelLabel


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Movement

Warehouse

.



Cross-docking

Packaging




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Movement

Warehouse

.



Cross-docking

Packaging



Breakbulk, consolidation


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Movement

Warehouse

.



Cross-docking

Packaging




Transportation


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Movement

Warehouse

.



Cross-docking

Packaging




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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Centers:

Warehouse

--Receives.

--Stores.

--Picks

--Ships

Distribution Center

WarehouseDistribution Center



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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

.



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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


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


Plant A

Plant B

Plant C

Consolidation Warehouse

Customer

Customer

CustomerPlant D


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Breaking bulk

.

.


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BreakbulkWarehouse


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.

.

..

. .

.

.

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.

Warehousing Slides Only 2007

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