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FIU EIN 5346 - Chapter 10 Warehousing Management

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Chapter 10 Warehousing ManagementLearning ObjectivesWarehousing ManagementSlide 4Slide 5Slide 6Adding a Warehousing Facility: Shorter-Haul Transportation (Fig. 10-1)Slide 8Slide 9Slide 10PowerPoint PresentationPublic WarehousingPrivate WarehousingContract WarehousingMulticlient WarehousingDesign Considerations in WarehousingWarehousing Trade-offsWarehousing OperationsWorkplace Safety IssuesSlide 20Slide 21Slide 22Slide 23Slide 24Chapter 10Warehousing ManagementLearning Objectives•To understand the role of warehousing in a logistics system•To learn about public, private, contract, and multiclient warehousing•To expose you to select considerations when designing warehousing facilities•To examine some prominent operational issues in warehousing© 2008 Prentice Hall 10-2Warehousing Management•Key Terms–Accumulating (bulk-making)–Allocating (bulk-breaking)–Assorting–Contract (3rd party) warehousing–Cross-docking•Key Terms–Distribution centers–Dunnage–Fixed slot location–Hazardous materials–Multi-client warehousing–Occupational Safety & Health Administration (OSHA)© 2008 Prentice Hall 10-3Warehousing Management•Key Terms–Paperless warehousing–Private warehousing–Public warehousing–Regrouping function–Sorting out–Throughput–Variable slot location–Warehouse•Key Terms–Warehousing© 2008 Prentice Hall 10-4Warehousing Management•Warehousing refers to “that part of the firm’s logistics system that stores products (raw materials, part, good-in-process, finished goods) at an between points of origin and point of consumption.”Source: Douglas M. Lambert, James R. Stock, and Lisa M. Ellram, Fundamentals of Logistics Management (New York: Irwin McGraw-Hill, 1998), Chapter 8.•Warehousing management has evolved to include value-adding services–Custom labeling–Promotional pack–Grouping and sorting of products–Kitting for production–Display building and packaging–Price marking© Pearson Education, Inc. publishing as Prentice Hall10-5Warehousing Management•Warehousing and transportation are substitutes for each other, with warehousing having been referred to as “transportation at zero miles per hour.”© Pearson Education, Inc. publishing as Prentice Hall10-6Adding a Warehousing Facility: Shorter-Haul Transportation (Fig. 10-1) © 2008 Prentice Hall 10-7ProducerRetailer ARetailer BRetailer CProducerRetailer ARetailer BRetailer CWarehouseVolumeShipmentWarehousing Management•Warehousing serves to match different rates or volumes of flow when patterns of production and consumption do not coincide•Regrouping function–Accumulating (increasing quantity)–Allocating (reducing quantity)–Assorting (building up a variety of products)–Sorting (separating products into grades and qualities)© 2008 Prentice Hall 10-8Warehousing Management•Warehouses–Emphasize the storage of products–Primary purpose is to maximize the usage of available storage space•Distribution centers emphasize rapid movement of products through the facility•Throughput is the amount of product entering and leaving a facility in a given time period© Pearson Education, Inc. publishing as Prentice Hall10-9Warehousing Management•Cross-docking can be defined as “the process of receiving product and shipping it out the same day or overnight without putting it into storage.”Source: No author, “2008 Cross-Docking Trends Report,” Saddle Creek Corporation, 2008.•Increased emphasis on time reductions in supply chains has led to the growth of cross-docking.© Pearson Education, Inc. publishing as Prentice Hall10-10© 2008 Prentice Hall 10-11Ideal Facility for Pure Supplier Consolidation (Figure 10-2)Public Warehousing•Public warehouses –Serve all legitimate users–Require no capital investment on the user’s part–Allows users to rent space as needed–Can be rented on a month-to-month basis–Offers more locational flexibility–May provide specialized services•Potential drawback of public warehouses–Lack of control by the user•Warehousing labor safety practices monitored by Occupational Safety and Health Administration (OSHA)© 2008 Prentice Hall 10-12Private Warehousing•Private warehousing –is owned or occupied on a long-term lease–Offers control to owner–Assumes both sufficient demand volume and stability so that warehouse remains full•Potential drawbacks of private warehouses:–High fixed cost–Necessity of having high and steady demand volumes–May reduce an organization’s flexibility© 2008 Prentice Hall 10-13Contract Warehousing•Contract warehousing (3PL warehousing) is a long-term arrangement providing unique warehousing services to one client •Both vendor and client share the risks associated with the warehousing•Less costly than private warehousing and more costly than public warehousing© 2008 Prentice Hall 10-14Multiclient Warehousing•Multiclient warehousing–Mixes attributes of contract and public warehouses–Services are more differentiated than those in a public facility–Services are less customized than those in a private facility–Services are purchased through minimum 1 year contracts –Are attractive to smaller organizations © Pearson Education, Inc. publishing as Prentice Hall10-15Design Considerations in Warehousing•General considerations–Quantity and character of goods must be known—product profiling–Know the purpose to be served•Storage•Distribution•Cross-docking© 2008 Prentice Hall 10-16Warehousing Trade-offs•Fixed versus variable slot locations for merchandise•Build out (horizontal) versus build up (vertical)•Order-picking versus stock-replenishing functions•Two-dock versus single-dock layout•Conventional, narrow, or very narrow aisles•Paperless warehousing vs. traditional paper-oriented warehousing operations•Other space needs© 2008 Prentice Hall 10-17Warehousing Operations•Warehousing productivity analysis•Safety considerations–Regulated by OSHA–Warehouse safety categories include:•Employee•Property•Motor vehicles•Hazardous materials•Warehousing security•Cleanliness and sanitation issues© 2008 Prentice Hall 10-18Workplace Safety Issues•Located in Minnetonka, Minnesota1-20Company Facts:Company Information:•Single unloading dock•Warehouse workers: $14/hr, must be paid for an entire shift, cannot be assigned other tasks•Trucks arrive randomly at 4/hr•Penalty for idle truck: $60/hr•Team of 2, 3, 4, or 5


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FIU EIN 5346 - Chapter 10 Warehousing Management

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