Warehousing management.Definition: part of a firm's logistics system that storesproducts (raw materials, parts, goods-in-process,finished goods) at and between points of origin andpoint of consumption..Warehousing and transportation are substitutes foreach other..Tradeoff of warehousing: a new layer of costs &shorter-haul transportation versus quicker response &greaterconvenience
Warehousing management •Definition: part of a firm’s logistics system that stores products (raw materials, parts, goods-in-process, finished goods) at and between points of origin and point of consumption. •Warehousing and transportation are substitutes for each other. •Tradeoff of warehousing: a new layer of costs & shorter-haul transportation versus quicker response & greater convenience
Why is warehousing desirable?1. Regrouping function in quantities and assortments:Accumulating (bulk-making): bring togethersimilar stocks from different sourcesAllocating (bulk-breaking): break largequantities into smaller onesAssorting: build up a variety of differentproducts fro resaleto particular customersSorting: separate products into grades andqualities desired by different target markets
Why is warehousing desirable? 1. Regrouping function in quantities and assortments: • Accumulating (bulk-making): bring together similar stocks from different sources • Allocating (bulk-breaking): break large quantities into smaller ones • Assorting: build up a variety of different products fro resale to particular customers • Sorting: separate products into grades and qualities desired by different target markets
Why is warehousing desirable?2. Patterns of production and consumption do notcoincide and warehousing serves to match differentrates of flow. eg: canned fruit3.Storage for surplus purchase4. Value-added services: assembly, light-manufacturing.product testing, affixing state tax stamps,repackaging and labeling
Why is warehousing desirable? 2. Patterns of production and consumption do not coincide and warehousing serves to match different rates of flow. eg: canned fruit 3. Storage for surplus purchase 4. Value-added services: assembly, light-manufacturing, product testing, affixing state tax stamps, repackaging and labeling
Design considerations inwarehousing·P304 top and side views of distribution centerGeneral considerations:.To use common sense.eg.Prior to designing the quantity and character ofgoods must be known. eg·Different purposes of storage or distribution affectsthe space layout. eg
Design considerations in warehousing •P304 top and side views of distribution center •General considerations: •To use common sense. eg •Prior to designing the quantity and character of goods must be known. eg •Different purposes of storage or distribution affects the space layout. eg
A trend of cross-docking·Definition:aprocess whereaproduct isreceived in a facility, occasionally with otherproducts going to the same destination, thenshipped at the earliest opportunity, without goinginto long-term storage·It emphasizes pallet loads of products·P307
A trend of cross-docking •Definition: a process where a product is received in a facility, occasionally with other products going to the same destination, then shipped at the earliest opportunity, without going into long-term storage. •It emphasizes pallet loads of products. •P307
Tradeoffs in warehousingdesign.Tradeoffs must be made among space, labor, andmechanization·Productprofilingproducts’physical handling properties?the volume and regularity of movement?the frequency of picking?fast or slow movingAcaseofapharmaceutical distributor
Tradeoffs in warehousing design •Tradeoffs must be made among space, labor, and mechanization. •Product profiling: •products’ physical handling properties •the volume and regularity of movement •the frequency of picking •fast or slow moving •A case of a pharmaceutical distributor
Tradeoffs in warehousingdesignFixed versus variable slot locations formerchandise·Build out (horizontal) versus build up (vertical)·Two-dock versus single-dock layout·Labor-intensive versus mechanization versus automation·Space devoted to aisles versus space devoted to storage·Picker-to-part versus part-to-picker systems·Paperless versus paper-oriented operations.Virtual warehouseversusrealwarehouses
Tradeoffs in warehousing design •Fixed versus variable slot locations for merchandise •Build out (horizontal) versus build up (vertical) •Two-dock versus single-dock layout •Labor-intensive versus mechanization versus automation •Space devoted to aisles versus space devoted to storage •Picker-to-part versus part-to-picker systems •Paperless versus paper-oriented operations •Virtual warehouse versus real warehouses
Warehouse management system(WMS).Functions: inventory management, product receiving,determination of storage locations, order selection, andorder shipping.The least expensive one may be $30,000, while paybackperiods generally run between 1-2 years, because of:·Higher worker productivity·Lowerlaborcostsand fewerpick errors·Better utilization of capacityImproved pickingprocedures and better services
Warehouse management system (WMS) •Functions: inventory management, product receiving, determination of storage locations, order selection, and order shipping. •The least expensive one may be $30,000, while payback periods generally run between 1-2 years, because of: •Higher worker productivity •Lower labor costs and fewer pick errors •Better utilization of capacity •Improved picking procedures and better services
Otherissues·Employee safety problems due to bad operation, largevolumes ofwastegenerated,fire,and etcHazardousmaterials.Warehousing security: theft and pilferage.Stockcontrol
Other issues •Employee safety problems due to bad operation, large volumes of waste generated, fire, and etc. •Hazardous materials •Warehousing security: theft and pilferage •Stock control
Questions for the case study1. List the factors which add difficulties to assignprecise costs of the delivery systems.2. Do you think Mannix Model Market should get itsSchoenecker candy through the buying cooperativeor continue to rely on direct deliveries bySchoenecker'sdrivers/salespeople?Giveyourreasons with data support.3. If you were Sandy, what additional informationwould you like to have before being asked to makesucharecommendation?
Questions for the case study 1. List the factors which add difficulties to assign precise costs of the delivery systems. 2. Do you think Mannix Model Market should get its Schoenecker candy through the buying cooperative or continue to rely on direct deliveries by Schoenecker’s drivers/salespeople? Give your reasons with data support. 3. If you were Sandy, what additional information would you like to have before being asked to make such a recommendation?