warehouse/ capacity decisions Flashcards
what is a warehouse
- facility where items are temporarily stored (SKUs)
- essential part of the SCM
- increasingly outsourced to logistics service providers
roles of warehouse
- consolidation
- —> product mixing and reduce transportation costs
- buffering (storage)
- —-> allows different areas of the suppy chain to operate independently, operational efficiency, reduce customer lead times
- value-added service
- —-> specific roles in the warehouse, packaging, pricing, labeling, kitting, customization
consolidation warehouse vs distribution
Consolidation - combines shipments from a numnber of sources in the same geographic area into larger, economical shipping loads
Distribution -> receives large incoming shipments and splits them to smaller outgoing shipments to demand points in a georgraphic area
why are warehouses beneficial to companies?
- transportation economies
- production economies
- quantity discounts/ forward buys
- protection against uncertainties/ demand fluctuations
- overcoming time and space differences between producers and customers
- reverse logistics (storing temporary items o be disposed or recycled)
Challenges of warehouse
- smaller order
- shorter response times
- larger product variety
difference between warehouse and cross-docking
- no storage/ order picking involved
- goods are sorted/consolidated/ transferred from inbound trailer to outbound trailers
- only receiving/ shipping function
- customer is known before goods arrive
main warehousing activities
- receiving (unloading, update inventory record, incpect quality/quantity)
- storage (repackage, transfer to storage location)
- order picking (retrieval) -> most labor-intensive activity,
- preparing for shipping -> value-added services (pricing, labeling) and packed and stacked in right load unit
Decisions that determine the efficiency of warehousing activities
- layout of the warehouse
- operations strategy (not changed frequently)
- —a. storage strategy -> where to store sku?
- —b. order picking strategy -> how to retrieve sku?
- —objective: maximize service level
forward reserve configuration
- large reserve area: bulk items
- small forward area: order picking items
advantage: picking efficiency, reduced distance
disadvantage: need to replenish forward area from reserve area
storage strategy location assignment policies
- dedicated
- full-turnover
- class-based
- family grouping
storage strategy rules
- dedicated: fixed location for SKUs
- > pro: order pickers will become very familiar with SKU locations, meaning efficient and less likely to make errors
- > con: importance for certain SKUs might change overtime - full turnover strategy: highest sale SKUs closest to the depot
- > optimize warehousing activities
- > con: confusing to order pickers if location changes too much, requires a lot of data and effort - Class-based strategy: a compromise between full turnover and dedicated
- > divide SKUs to 3: A (highest turnover), B(moderate turnover), C(low turnover) - Family grouping: related SKUs are stored together (salt shaker and pepper shaker)
order picking strategy
- order picking is very labor-intensive
- 50% of time spent on travel time
- searching and picking should be done more than traveling
- Either employ humans or employ machines
- Humans -> picker to parts (zoning, batching, routing) or parts to picker (tech: robots, AGV)
- Machines -> fully automated
Picker-to-parts strategy
- Zoning
- > each order picker assigned to single-zone
- > pros: familiar with locations
- > cons: different skus of the same order might be in different zones
- > consolidation strategies: progressive (order picked zone by zone) or synchronized (picked at the same time and merged at the end) - Batching
- > picking a set of orders in a single picking tour
- > pros: reduces travel distance
- > criteria: timing of orders, the proximity of orders, order due times are respected
- > sorting done during or after picking tour - Routing
- >list of skus and their quantities assigned to a single order picker and sequencing the items on the pick list to ensure short route through the warehouse
- > S-shape (works with within aisle storage), Return (across aisle & diagonal), Mid-point (permieter), Largest gap (perimeter)
warehouse management systems
used to run daily operations and track inventory levels in automated way
RFID
data chip that sends out information as microelectric waves that can then be scanned in the warehouses