Chapter 3 Warehousing

Question 1

Types of warehouses.

Answer 1

1. Production warehouse - a warehouse with raw materials, semi-finished and finished goods which are received and delivered to nearby plants. Finished goods are delivered to customers or other warehouses.
2. Distribution center - a center that holds finished goods received from the production plant or other distribution centers and ships them to clients.
   2.1 Centralized warehouse - a center that services a big, centralized area while keeping inventory low.
   2.2 Local warehouse - a center that serves smaller geographical areas or countries. Customers can be served quickly due to close proximity.
3. Private warehouse - operated by the owner of the goods.
4. Third party warehouse - operated by a third-party logistics provider on behalf of one or more clients.
   4.1 Dedicated warehouse - holds goods for one client.
   4.2 Public warehouse - holds goods for multiple clients.

Question 2

Warehouse functions.

Answer 2

1. Break-bulk
2. Storage
3. Consolidation
4. Customization

Question 3

Questions relating to a proper supply chain structure.

Answer 3

1. Should inventories be held centralized or decentralized?
2. Should we operate the warehouse or outsource to a third party?
3. Which goods are held in stock, and which sourced from suppliers or other DCs (buy-hold-sell vs sell-source-ship).
4. Are goods delivered through storage or driven through the supply chain by sing cross-docking, direct-shipments and merge-in-transit techniques.
5. Are inventories dedicated to a certain customer group or are they generally available?

Question 4

Putaway rules

Answer 4

1. Product group
2. Velocity
3. Separation
4. Weight
5. Volume
6. Balancing
7. Lot number
8. Close to pick location

Question 5

What is disposition?

Answer 5

The operator has to decide which destination is most appropriate for customer returned goods: Regular storage, repair shop, junk dealer, waste disposal, or refurbishing. This is called disposition. Based on the decision the goods follow a specific path

Question 6

Name the warehouse processes/activities.

Answer 6

1. Receiving
2. Putaway
3. Storage
4. Replenish
5. Pick and pack
6. Ship
7. VAL
8. Cross-docking

Question 7

Define inventory allocation and explain inventory allocation rules.

Answer 7

Inventory allocation - the WMS decides from which storage location goods are picked and replenished.
1. Packing unit
2. Product quantity
3. Variants
4. Substitution and cannibalism
5. Age
6. Age vs efficiency
7. Distance

Question 8

Reasons for storage

Answer 8

1. Instant availability
2. Lot sizes
3. Seasonal supply
4. Demand anticipation
5. Speculation
6. Strategic product

Question 9

Measures of quality of services

Answer 9

1. Responsiveness - how soon an order should be completed.
2. Accuracy - the margin of error allowable in services.

Question 10

Describe a possible order management routine

Answer 10

1. Order release
2. Inventory allocation
3. Task generation
4. Task release

Question 11

What are the outbound processes?

Answer 11

1. Order-picking
2. Packing
3. Consolidation
4. Shipping

Question 12

What is cross-docking and distinguish between the two control rules.

Answer 12

Cross-docking - transfers received goods directly or via an intermediate buffer, to the shipping dock. It saves handling steps since goods do not need to be putaway and picked. Goods are available for shipping more quickly.
Two control rules for cross docking:
1. Opportunistic cross-docking
2. Planned cross-docking

Question 13

Warehouse services

Answer 13

1. Inbound handling
2. Storage
3. Outbound handling
4. Value added logistics