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Warehousing and material handling system

Warehousing and material handling system. Training Schedule. Type of warehouse Selection of warehouse Discussion Space and layout Discussion - warehouse constraints New concept – virtual warehouse Open discussion. Warehousing. an integral part of every logistics system

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Warehousing and material handling system

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  1. Warehousing and material handling system

  2. Training Schedule • Type of warehouse • Selection of warehouse • Discussion • Space and layout • Discussion - warehouse constraints • New concept – virtual warehouse • Open discussion

  3. Warehousing • an integral part of every logistics system • providing a desired level of customer service at the lowest possible total cost • a primary link between producers and consumers

  4. Is this what you are looking for ?

  5. In reality

  6. Lucky you have this one

  7. Cost Trade-offs Required in aLogistics System

  8. What is Warehousing? A part of a firm’s logistics system that stores products (raw materials, parts, goods-in-process and finished goods) at and between point-of-origin and point-of-consumption, and provides information to management on the status, condition, and disposition of items being stored.

  9. Warehouse vs DC

  10. Warehouse vs Distribution Centre

  11. Why Hold Inventories? - 1 1. To achieve transportation economies 2. To achieve production economies 3. To take advantage of quantity purchase discounts and forward buys 4. To maintain a source of supply 5. To support the firm’s customer service policies

  12. Why Hold Inventories? - 2 6. To meet changing market conditions (e.g. seasonality, demand fluctuations, competition) 7. To overcome the time and space differentials that exist between producers and consumers 8. To accomplish least total cost logistics commensurate with a desired level of customer services 9. To support the just-in-time programs of suppliers and customers

  13. The role of warehousing in logistics In the past, warehousing was necessary due to the traditional production-oriented ‘push’ system.

  14. The role of warehousing in logistics In recent times, however, a market-oriented practice or ‘pull’ system which requires constant monitoring of market needs. In a pull system, warehousing offers improved service to customers by positioning inventory to achieve strategic and operational objectives.

  15. Uses of Warehousing • Manufacturing support • Product - mixing • Consolidation • Break-bulk

  16. Manufacturing support • Warehouses function as inbound consolidation points for the receipt of materials shipments from suppliers

  17. Product - Mixing • Product mixing often involves multiple plant locations that ship products to a central warehouse

  18. Consolidation • Small orders from a number of suppliers may be shipped to a consolidation warehouse near the source of supply

  19. Breakbulk • Break bulk warehouses are facilities that receive large shipments of product from a manufacturing plant

  20. Factors Influencing Warehousingin the Future • Time • The best warehouse operations are those designed to reduce every aspect of order cycle time. • Quality • Users now expect performance that approaches perfection. • Asset productivity • Reduce total cost, reuse, and recycle. • New kind of workforce • Requirements for both management and labor will change significantly.

  21. Basic Warehousing Decisions 1. Which logistics system design should be adopted? 2. Should warehousing be owned, leased, rented, or some combination of these? 3. Should warehousing functions be subcontracted to a third party? 4. Should new materials handling equipment, or use labour intensive materials be installed? 5. How much capacity is required? 6. Where should warehouses be located? 7. What type of warehousing layout is appropriate?

  22. Materials to handle

  23. Poor design of the warehouse

  24. Poor design of the warehouse

  25. Types of Warehousing • Direct Store Delivery (market products directly to customers) • Public Warehousing (to rent space) • Private Warehousing (to own or lease space)

  26. Six types of Public Warehousing • General Merchandise Warehouses for manufactured goods • Refrigerated or Cold Storage Warehouses • Bonded Warehouses • Household Goods and Furniture Warehouses • Special Commodity Warehouses • Bulk Storage Warehouses Other options • Cross-docking • Contract Warehousing

  27. Warehouse vs Cross dock

  28. Cross dock

  29. Advantages of Public Warehousing 1. Conservation of capital 2. Use of space to meet peak requirements 3. Reduced risks 4. Economies of scale 5. Flexibility (size and location) 6. Tax advantages 7. Specific knowledge of storage and handling costs

  30. Disadvantages of PublicWarehousing • Effective communication may be difficult because of system incompatibility • Specialized services may not always be available. • Space may not be available on demand.

  31. Advantages of Private Warehousing 1. Control 2. Flexibility (design and operation) 3. Less costly 4. Better use of human resources 5. Tax benefits 6. Intangible benefits

  32. Disadvantages of PrivateWarehousing • Flexibility (fixed size and location) • Investment

  33. Size and Number of Warehouses • The size and number of warehouses facilities are interrelated decisions • They typically have inverse relationship • The general trend is to have fewer, but larger warehouses

  34. How Size is Measured? • Size is often defined in terms of square footage of floor space • Sometimes, in cubic space of the entire facility

  35. Factors Affecting the Size • Customer service levels • Higher the level, carry more stock 2. Size of market (served) • Wider the market, carry more stock 3. Number of products marketed • Full range of product need more space 4. Size of the products • Bulky one requires more space 5. Materials handling system used • Prepare turn round basin, aisle width

  36. Factors Affecting the Size 6. Throughput rate (i.e. inventory turnover) • dedicated location for package/dispatch 7. Production lead time 8. Economies of scale 9. Stock layout 10. Aisle requirement 11. Office area in warehouse 12. Type of racks and shelves used 13. Level of pattern of demand

  37. Warehouse Storage Area Sizing 1. Obtain monthly sales projection in the planning period 2. Convert sales revenue into volume by product group by months 3. Get the average inventory volume by considering turnover rate 4. Sum the total volume 5. Convert into area requirements by dividing the total volume by ceiling height 6. Discount by the utilization factor: aisle, gangway 7. Once a monthly figure on area requirement is obtained, a range of sizes is obtained 8. Match the range with the sales volume. Anything over a particular size is outsourced 9. Quantify the use of private and outsourced warehouse in dollars 10.The size that results in the least total warehouse operating expenses is the right size

  38. The Relationship of Demandto Warehouse Size

  39. Determinants of Storage SpaceRequirements

  40. Deciding Number of warehouses Four Factors: 1. Cost of lost sales 2. Inventory costs 3. Warehousing costs 4. Transportation costs

  41. Relationship Between Total LogisticsCost and the No. of Warehouses

  42. Break for 10 minutes andClassroom Discussion

  43. Selection of Warehouse Location

  44. Basic Warehousing Decisions • 1. Which logistics system design should be adopted? • 2. Should warehousing be owned, leased, rented, or some combination of these? 3. Should warehousing functions be subcontracted to a third party? 4. Should new materials handling equipment, or use labour intensive materials be installed? • 5. How much capacity is required? 6. Where should warehouses be located? 7. What type of warehousing layout is appropriate?

  45. Reasons for Site Seeking 1. It is necessary to relocate an existing warehouse operation (e.g. end of lease) 2. The business is expanding and must move inventory into a new market 3. More warehouse space is needed to accommodate a growing inventory 4. Contingency planning requires some decentralization of existing warehousing – in other words, there are too many eggs in one basket

  46. Location Selection Decision • The Macro perspective examines the issue of where to locate warehouses geographically to improve the source of materials and the firm’s market offering. • The Micro perspective examines factors that pinpoint specific locations within the larger geographic areas.

  47. Macro Approach 1 1. Market Positioned Warehouses 2. Production Positioned Warehouses 3. Intermediately Warehouses

  48. Macro Approach 2 1. Product Warehouse Strategy The firm places only one product or product grouping in a warehouse. 2. Market Area Warehouse Strategy Each facility stocks all the firm’s products so that customers can receive complete orders from a single warehouse. 3. General Purpose Warehouse Strategy Facilities carry a full line of products that each warehouse serves all markets within a geographical market.

  49. Macro Approach 3 • Approaches based on distance and cost minimization • The optimal site should minimize the total transportation costs including the costs of transferring raw materials to the plant and the costs of transferring finished goods to the market.

  50. Macro Approach 4 Infinite Set Approach: • Centre of Gravity Method Feasible Set Approach: • Load Distance Model • Scoring Model • Transportation Method Approaches are often used together

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