Chapter 4: Warehouseing

Annotations:

• Warehouses and distribution centers fulfil a critical role in the SC

1. Link between Production, Transportation, Final end customer
2. Raw materials stored in warehouses before processing and finished goods
   1. General needed for raw materials & finished goods

1. Provide a level of customer service at the total lowest cost
2. Link the producer and the supplier as the intermediary
3. Major function
   1. Movement fuction
      1. Receiving
      2. Transfer
      3. Order selection
      4. Shipping
   2. Storage function
      1. Semi-permanent
      2. Temporary
   3. Information transfer
      1. Occurs simultaneously with movement and storage function

1. Any system of storing products at any point in the logistics system from the point of origin of goods, through production to the point of consumption.
2. Warehouse and distibution center (DC) are used interchangeably although a DC holds inventory at the downstream end of the supply chain.
3. Warehouses refer to places where raw materials, work-in-process goods and finished goods are stored.

1. To achieve production economies of scale
2. To obtain purchasing discounts for large scales
3. To maintain the supply source
4. To support firms' customer service policies
5. To meet changing market conditions
6. To overcome time and space differentials
7. To accomplish least total cost logistics
8. To serve customer needs more effectively
9. To support just-in-time (JIT) programs

Annotations:

• Deciding how many warehouses to build and where to locate them, depends on the following main factors:

1. The firm policy and thinking

   Annotations:

   • Do they prefer centralized distribution or many decentralized distribution
2. The cost-time calculation and the trade-offs

   Annotations:

   • increase in price of petrol and diesel has become a major factor
3. The actual customer base
4. The geographic nature of the area

1. The physical layout of a warehouse impacts productivity of staff members who pick, pack and move goods and has cost implications when not managed effectively
2. Natural lighting, controlled access points, ergonomic and user-friendly picking design, all contribute to cost effectiveness
3. Seven essential steps and 10 general guidelines should be taken into account when warehouse layout and design are undertaken
4. Critical and non critical items

   Annotations:

   • Table 4.1 Page 63

1. makes careful use of rows, levels and stacks
2. Goods that have been stored, must be found easily if they are picked for outbound distribution to the customer or during stock-taking activity

1. Compatibility

   Annotations:

   • In terms of similarity
2. Complemetary

   Annotations:

   • How often products are ordered together
3. Popularity

   Annotations:

   • Dependent on turnover rates or demand rates

1. According to demand frequency
2. According to pick destination
3. According to special storage requirements
   1. Hazardous
   2. Perishable

1. 1. The inbound logistics function
2. 2. Inventory management and storage
   1. Putting the right stock in the right place
   2. Giving the right code to the right product
   3. Developing a coding system
3. 3. The outbound logistics function

1. Logistics process that minimises the need for storage

1. 1. Receiving
2. 2. Put-away
3. 3. Storage
4. 4. Packaging
5. 5. Ship-prep
6. 6. Shipping (transport)

1. Storage space utilisation
2. Product handling problems
3. Equipment problems
4. Labour intensity
5. Information gaps between warehousing, manufacturing or retailing
6. Costing and budgeting

1. Category 1: Forklifts and pallet handling equipment
2. Category 2: Turret trucks and reach trucks
3. Category 3: Scanning equipment and new technologies
4. Category 4: Portable storage racks and other devices