Chapter 6- Warehouse Management & Materials Handling Flashcards
Why is Warehousing needed?
- To receive,store &and ship to and from production or distribution locations
- To hold Inventory while avoiding losses through waste, obsolescence and deterioration.
Value added services at Warehouses?
Labeling
Product mixing
Consolidation
Assembly into shipments
Primary focus of Warehouses?
- Balancing the trade off between higher customer service with low inventory levels & operating costs
- Optimizing the number and location of Warehouses in distribution network
Types of Warehouses - CBTHGM
- Commodity- Lumber, Cotton, Tobacco, Grain (spoil easily)
- Bulk Storage- Liquid chemicals, Oil, Highway Salts & Syrups (mixed or broken down from bulk)
- Temperature Controlled- Perishable and Chemicals
- Household Goods- Household items and furniture
- General Merchandise- Broad range, no special handling or facilities
- Miniwarehouses- Grouped in clusters, extra space & few services, convenient location, security concern
Distribution Center
- A warehouse for storing & shipping usually finished goods at a distance from a manufacturing site
- Provides a quick throughput of goods within a region
- Supports many locations
- Great benefit to retailers to have stocked large no of products
- More labour is required in distribution center than in bulk warehouses as associates are responsible for handling smaller yet complex shipments.
Cross Docking
- A system in which Freight moves in and out of a distribution center without being stored there
- Used to minimize or eliminate warehousing by unloading and loading materials into outbound trailers without storing
- Change the type of conveyance
- To sort & combine material from different regions intended for different locations
Short Haul Trucking
Is used for long distance or international shipments ( Trucking is the most common mode to move goods around distribution centers)
Hub & Spoke
- Refers to centralizing and integrating logistics activities from several Warehouses - the Spokes
- into one strategic location- the Hub
- Combines benefits of cross-docking and consolidation
- Hub Warehouses do not hold any form of inventory but is simply a conduit for sorting, repackaging and shipping freight to its final destination
- May also repair the broken items, dispose of outdated products or act as factory outlet
- Typically located at airports, harbors and highway intersections
Factors to determine optimal number of Warehouses
- Company’s strategic plan
- Customer needs
- Costs
- No of customers and location
5 Buying habits
6 Service level
Factors to weigh while determining requirements for new warehouse
Financial considerations
Environmental considerations
Governmental considerations
Political considerations
Buy or Lease
Lease - Immediate storage capability
- No capital investment
Buy- Offsetting benefits of cost and tax depreciation
- More control and flexibility
- Low costs over long run
Financial considerations
- Energy costs and utilization
- Labor costs and availability
- Work productivity
- Quality
- Work ethics
- Location
- Unemployed
- Regional wages
- Level of staffing requirements
- Type, size and complexity of operations - Transportation Costs and Requirements
- Modes of transportation
- Based on location- In the city or outskirts
Environmental considerations
- Green purchasing ( Environmental friendly products and services)
- Green logistics ( Measure and minimize the environmental impact of logistics activities)
- Proactive in environmental area of logistics, packaging, remanufacturing, disposal and reuse
- Local recycling programs
- Cleanup and disposal requirements for hazardous materials, obsolete and outdated inventory
Governmental Considerations
- Local state, federal and individual country laws & regulations in locating a warehouse
- Ties to environmental safety
- Zoning ordinances
Political Considerations
Tax breaks Financial incentives Ad valoram tax abatement Sales or Use tax exemption Financial help with land acquisition or site improvement Assistance with relocation and hiring
Ad Valoram Tax
Tax based on the transaction value of the property
Warehouse Specialized equipments
Dock levelers Pallet dollies Stretch wrapping machines Lift trucks Palletizers Dock equipment
Inventory classification based on the cost handling
Fast, medium, slow moving
Safety stock policy
Warehouse Key activities
Receiving Put away Storage Pick n Pack Shipping
Industry standards for Safety
Warehouse Permitting process
Warehouse assessment & certification program
Fire departments
Environmental Concerns
Carbon footprint reduction
- low voltage lighting
- solar panels
- seasonal energy efficiency rating (SEER)
Inverted T Warehouse Flow
- Goods going in and going out located on same side
- Designed areas for bulk storage
- Low use items are placed farthest away from exit
- High use items are placed nearest
- Saves time & minimizes the distance traveled for fast moving stocks
Cross flow Warehouse
- One way system
- Incoming goods passage on the left
- Outgoing passage on the right
- Retains the main advantage of the T system
- Removes central aisle congestion
Corner Warehouse flow
- Incoming and outgoing passage at the adjacent sides of the same corner of the Warehouse
- Reduces congestion during times of high throughput activities
Through flow Warehouse
- Advantage of being flow system
- Entry and exit points on the opposite sides
- Wide aisle space
- Material has to travel full length of the building between receipt and issuance
- Increased security risks and surveillance
- limited expansion options
Build up capacity
- Vertical expansion of the Warehouse
- Height of the building will dictate how high shelving can be assembled
- Higher the shelf racking, better the space utilization
- Consideration of cubic footage/cubic metres alongwith square footage/square metres
- Relates directly to the type of equipment needed
Build out capacity
-Horizontal expansion of Warehouse building
Objective of Space Requirements
- To efficiency use the space with Building’s cubic footage and achieve balanced traffic flows
- To minimize stock movement, both in number and distance to avoid double handling
Reasons for Less Space Requirements
1 Decreased Production 2 Decrease in the number of SKUs 3 Less volatile demand 4 Longer Product Life cycle 5 Customer takes control of deliveries 6 Smaller Manufacturing quantities 7 Higher Inventory turns 8 Smaller Purchase quantities 9 Quick response suppliers 10 Cross docking 11 Carriers perform consolidation
Reasons for more space requirements
1 Growth of market or market share 2 Shorter product life cycle 3 Increase in number of SKUs 4 Direct store delivery to customer 5 Elimination of distributors 6 Expansion into specialized markets 7 Imported and exported items 8 Longer production increases 9 Increase in manufacturing quantities 10 Customer wants faster response time 11 Forward buying
Storage system
Fixed location system - stores the Inventory item in a set physical location Random - lower space utilization - higher accuracy
Random location system
- stores inventory in any available space
- higher utilization of space
- lower accuracy
In either system, Warehouse location should be identified in the inventory records
Manual equipments
- Flexible
- multiple materials movement for variety of goods
- fairly modest Investment
- limited capabilities of the operator with regard to load size and speed
Examples-
-Two wheeled and four wheeled hand trucks
- Pallet Jacks, Scissor Lift, Rolling Ladders
-
Power assisted equipment
- Increases lifting capacity for an operator
- allows loads to be stacked
- costly yet quite reasonable investments
- multi tiering racking systems
Example
- Forklifts, High lifts, Pneumatic lifts
Fully automated Mechanized systems & Robots
- automate the picking and packing process
- move large pallets of inventory
- Ongoing maintenance is important
Automated storage & retrieval process
- computer controlled equipment
- utilizes bar coding & scanning technology
- minimal staffing
- justified if substantial and continuous flow in and out of the Warehouse
- low operating cost with high initial investment
- Product orders can be filled by using automated picking system that retrieves products off the Warehouse shelf and place them on a conveyor system to transport them to a loading truck and then on to customers
