Ch08 Warehousing
Transcript of Ch08 Warehousing
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Chapter 8
Warehousing Decisions
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Chapter 8 Management of Business Logistics, 7th
Ed. 2
The Nature and
mportance of Warehousing n !""", #7$ %i&&ion, or '.8 percent
of (D) *as spent on *arehousing.
The tota& supp&+ of .-. *arehousing space in!""" *as .! %i&&ion s/uare feet, an increasefrom !""' of 7'' mi&&ion s/uare feet of space.
Warehousing pro0ides time and p&ace uti&it+for ra* materia&s, industria& goods, and1nished products, a&&o*ing 1rms to usecustomer ser0ice as a d+namic 0a&ueaddingcompetiti0e too&.
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Chapter 8 Management of Business Logistics, 7th
Ed. 3
The 4o&e of the Warehouse in theLogistics -+stem5 A Basic
Conceptual Rationale The *arehouse is
*here the supp&+
chain ho&ds orstores goods.
6unctions of*arehousing inc&ude5 Transportation
conso&idation )roduct miing Crossdocing -er0ice )rotection against
contingencies -moothing
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Chapter 8 Management of Business Logistics, 7th
Ed. 9
Ta%&e 8!Warehouse Value-Adding
Roles
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Chapter 8 Management of Business Logistics, 7th
Ed. $
6igure 8!
Transportation Consolidation
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Chapter 8 Management of Business Logistics, 7th
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6igure 82
Supply and Product Mixing
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Chapter 8 Management of Business Logistics, 7th
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Basic Warehouse Decisions5
A Cost Trade-of Frae!or" :*nership
)u%&ic 0ersus contract 0ersus pri0ate
Centra&i;ed or Decentra&i;ed Warehousing <o* man+
Location
-i;e La+out What products *here
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Chapter 8 Management of Business Logistics, 7
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6igure 83
Basic Warehousing #ecisions
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Chapter 8 Management of Business Logistics, 7
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The :*nership Decision )u%&ic *arehousing
costs most&+ a&&0aria%&e.
)ri0ate *arehousingcosts ha0e a higher1ed cost component.
Thus pri0ate
*arehousing 0irtua&&+re/uires a high andconstant 0o&ume.
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Chapter 8 Management of Business Logistics, 7
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The :*nership Decision 6actors to consider
Throughput 0o&ume
-ta%i&it+ of demand
Densit+ of maret area to %e ser0ed
-ecurit+ and contro& needs
Customer ser0ice needs
Mu&tip&e use needs of the 1rm
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Chapter 8 Management of Business Logistics, 7
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Ta%&e 82 FirCharacteristics Afecting the
$!nership #ecision
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Chapter 8Management of Business Logistics, 7th
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)u%&ic Warehousing 4ationa&e for )u%&ic Warehousing
Limited capita& in0estment
6&ei%i&it+ )u%&ic Warehousing -er0ices
Bonded *arehousing
6ie&d *arehouses
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Chapter 8Management of Business Logistics, 7th
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)u%&ic Warehousing )u%&ic *arehousing
regu&ation5
Lia%i&it+ 4eceipts
)u%&ic *arehousingrates %ased upon5
=a&ue 6ragi&it+ )otentia& damage
to other goods
=o&ume andregu&arit+ Weight densit+ -er0ices re/uired
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Chapter 8Management of Business Logistics, 7th
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Contract Warehousing p 23> per +ear in 2''' to #2'.9 %i&&ion.
Compensation for seasona&it+ in products.
ncreased geographica& co0erage. ?%i&it+ to test ne* marets.
Manageria& epertise and dedicatedresources.
Less strain on the %a&ance sheet.
)ossi%&e reduction of transportation costs.
:ther issues discussed in Chapter !!.
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Chapter 8Management of Business Logistics, 7th
Ed. !$
The Num%er of Warehouses 6actors ?@ecting the
Num%er of Warehouses
n0entor+ costs
Warehousing costs Transportation costs
Cost of &ost sa&es
Maintenance of
customer ser0ice&e0e&s
-er0ice sma&& /uantit+%u+ers
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Chapter 8Management of Business Logistics, 7th
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Ta%&e 835 Factors Afecting
the %u&er o' WarehousesFactor Centralized Decentralized
-u%stituta%i&it+ Lo* <igh
)roduct =a&ue <igh Lo*
)urchase -i;e Large -ma&&
-pecia&
Warehousing Aes No
)roduct Line Di0erse Limited
Customer -er0ice Lo* <igh
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Chapter 8Management of Business Logistics, 7th
Ed. !7
Basic Warehouse :perations
Mo0ement 4ecei0ing
)uta*a+ :rder picing -hipping
-torage -toc &ocation Warehouse Management -+stem
WM-
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Chapter 8Management of Business Logistics, 7th
Ed. !8
6igure 8Basic Warehouse $perations
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Chapter 8Management of Business Logistics, 7th
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Warehouse La+out andDesign
De0e&op a demandforecast.
Determine each itemsorder /uantit+.
Con0ert units into cu%icfootage re/uirements.
?&&o* for gro*th. ?&&o* for ade/uate ais&e
space for materia&shand&ing e/uipment.
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Chapter 8Management of Business Logistics, 7th
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Warehouse La+out andDesign
)ro0ide for thetransportation
interface. )ro0ide for order
picing space.
)ro0ide storage space.
)ro0ide recouping,oce, andmisce&&aneous spaces.
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Chapter 8Management of Business Logistics, 7th
Ed. 2!
6igure 88Warehouse Space
Re(uireents
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Chapter 8Management of Business Logistics, 7th
Ed. 22
6igure 8" Principles o'Warehouse )ayout #esign
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Chapter 8Management of Business Logistics, 7th
Ed. 23
Warehouse La+out andDesign
Basic needs5
4ecei0ing
Basic storagearea
:rder se&ection
and preparation -hipping
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Chapter 8Management of Business Logistics, 7th
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Warehouse La+out andDesign
La+out and Design)rincip&es5 se one stor+ faci&ities
*here possi%&e. Mo0e goods in a straight
&ine. se the most ecient
materia&s hand&inge/uipment.
Minimi;e ais&e space. se fu&& %ui&ding height.
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Chapter 8Management of Business Logistics, 7th
Ed. 2$
Warehouse La+out andDesign5 )ayout and #esign
$&*ecti+es Cu%ic capacit+
uti&i;ation
)rotection
Ecienc+
Mechani;ation
)roducti0it+
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Chapter 8Management of Business Logistics, 7th
Ed. 2
Ta%&e 895 WarehouseProducti+ity Metrics
)ounds or units per da+ Emp&o+ees per unit mo0ed nits un&oaded per hour nits piced per hour nits &oaded per hour )ercentage of orders correct&+ 1&&ed
)roducti0it+ ratio F units hand&edGda+ di0ided%+ &a%or hoursGda+ Throughput F amt of materia& mo0ed through
the s+stem in a gi0en time period
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Chapter 8Management of Business Logistics, 7th
Ed. 27
Materia&s <and&ing
De1nition5 Ecient short distancemo0ement in or %et*een %ui&dings anda transportation agenc+.
6our dimensions
Mo0ement
Time
Huantit+ -pace
Coordination
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Chapter 8Management of Business Logistics, 7th
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:%Iecti0es of Materia&s<and&ing
ncrease e@ecti0e capacit+
Minimi;e ais&e space
4educe product hand&ing De0e&op e@ecti0e *oring
conditions
4educe hea0+ &a%or mpro0e &ogistics ser0ice
4educe cost
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Chapter 8Management of Business Logistics, 7th
Ed. 2"
6igure 8!2 ,tiliation o' a
Warehouse.s Cu&ic Capacity/
Principles o' Warehouse )ayout#esign
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Chapter 8Management of Business Logistics, 7th
Ed. 3'
)acaging
nterest in pacaging is *idespread Logistics
Warehousing Transportation -i;e
Mareting )roduction Lega&
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Chapter 8Management of Business Logistics, 7th
Ed. 3!
The 4o&e of )acaging
dentif+ product and pro0ideinformation
mpro0e ecienc+ in hand&ing anddistri%ution
Customer interface
)rotect product
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Chapter 8Management of Business Logistics, 7th
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What s )acagingJ
Consumer pacaging
Mareting managers primari&+
concerned *ith ho* the pacage 1tsinto the mareting mi.
ndustria& pacaging
Logistics managers primari&+ concerned
*ith ecient shipping characteristicsinc&uding protection, a%i&it+ to *ithstand
stacing *hen on a pa&&et, cu%e, *eight,
shape and other re&e0ant factors.
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Chapter 8Management of Business Logistics, 7th
Ed. 33
)acaging Materia&s
Ta%&e 8 presents a comparison of0arious pacing materia& characteristics.
Basic considerations inc&ude5 -oft materia&s
)&astic
En0ironmenta& issues 4ec+c&ing re0erse &ogistics
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Chapter 8
Management of Business Logistics, 7th
Ed. 39
Bar Coding
-tandard marings that can %e read %+automatic or handhe&d scanners that a&&o*for &a%or sa0ing &ogistica& acti0ities for a&&supp&+ chain mem%ers.
Bar Codes contain information regarding5
=endor
)roduct t+pe )&ace of manufacture
)roduct price