L1 Introduction to physical distribution and warehousing environment Flashcards
Distribution
Steps taken to move and store products from supplier site to customer site
3 Decisions of Distribution
- How much inventory to hold
- How to plan transport configuration
- Where to locate facilities
Tradeoff of Customer service
Cost of Distribution
Measures of customer service
- Product availability
- Product variety
- Response time
- Returnability
5, Order visibility
Some trends in Distribution
- E-commerce
2. Crowd-sourcing
Logistics drivers
- Inventory
- Trasnport
- Facility
Facility
Physical sites for storage or production
Inventory
Storage of goods
Transport
Freight transport = movement of cargoes from one location to another
Why do we need warehousing
- Seasonality storage
- Commodity storage
- Cycle stock (EOS)
- Matching of supply and demand
- Production needs
- Value-added services
- Distribution (save $ by consolidation, break-bulk and mixing) = known as Distribution Centers
Consolidation
Economical to consolidate smaller shipments into larger ones (LTL becomes FTL)
Break-bulk
TL shipments with low transport rates are moved to warehouse and reshipped in small quantities.
Common when customers order LTL quantities and distance between customers are long.
Mixing
Firm establishes a product mixing point for products from different manufacturers
Types of warehouses
Raw materials warehouse
Work in process warehouse
Finshed goods warehouse
Difference between a holding warehouse and DC
Holding warehouse : emphasis on holding activities and goods are stored for longer time. Much of the warehouse space is dedicated for storage
DC : More attention given to speed and ease of product flow.
Most warehouse do both, just a difference in matter of degree
