Transcript Chapter 10: Warehousing - Northeastern State University

Warehousing.
Part Three.
Sorry for the poor audio quality – technical problem.
Also the first few slides you’ll have to advance manually.
Uses of Warehouses:
• Support manufacturing.
• Mix products from multiple production
facilities to a single customer.
• Break bulk.
• Consolidate small shipments into large
shipments.
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Logistics Concepts
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Inbound Logistics
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Outbound Logistics
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Manufacturing Support
(inbound logistics)
Carload or truckload shipments
Supplier A
Supplier B
Warehouse
Supplier C
Supplier D
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Mixing Warehouse
(outbound logistics)
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Plant A, Product 1
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Customer W
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Plant B, Product 2
Plant C, Product 3
Plant D, Product 4
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Customer X
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Customer Y
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Mixing Warehouse
(outbound logistics)
Plant A, Product 1
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Customer W
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Plant B, Product 2
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Plant C, Product 3
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Plant D, Product 4
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Customer X
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Customer Y
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Mixing Warehouse
(outbound logistics)
Plant A, Product 1
Customer W
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1
Plant B, Product 2
Plant C, Product 3
Plant D, Product 4
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Customer X
Mixing Warehouse
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Customer Y
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ConsolidationWarehouse
(outbound logistics)
Customer
Plant A
Plant B
Customer
Consolidation Warehouse
Plant C
Plant D
Customer
Breaking bulk
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BreakbulkWarehouse
(outbound logistics)
Customer 1
Customer 2
Plant
Breakbulk Warehouse
Customer 3
Types of Warehousing
• Direct store delivery.
• Private warehousing.
Advantages:
Control
Flexibility in design and operation
Long-term cost
Better use of human resources.
Tax benefits: depreciation.
Intangibles: image of stability.
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XYZ Company Warehouse
Disadvantages
Fixed costs, especially if built for peak seasons.
Investment. Return may be better if money is
placed elsewhere.
Types of Warehousing
• Direct store delivery.
• Private warehousing.
• Public warehousing.
Advantages:
XYZ
ABCCompany
Public Warehouse
Warehouse
Disadvantages
Conservation of capital.
Incompatible communications systems.
Able to increase capacity when needed.
Lack of specialized services..
Reduced risk of obsolesence.
May be unavailable when needed.
Economies of scale due to warehouse company’s investment
Flexibility
Tax advantages: some states have no inventory taxes for products in public warehouses.
Specific knowledge of costs.
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Types of Public Warehousing
General merchandise
ABC Public Warehouse
Refrigerated or cold storage
Bonded warehouses.
Household goods, furniture.
Special commodity
www.frigorifer.com/images/firma.jpg
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www.mwindy.com/images/frozen_pizza.jpg
www.burrowsmoving.com/.../buildingoutside.jpg
www.ewga.net/.../ewga/finewinestorage(1).jpg
Types of Public Warehousing
General merchandise
ABC Public Warehouse
Refrigerated or cold storage
Bonded warehouses.
Household goods, furniture.
Special commodity
Bulk storage.
Cross-docking facilities (3PL concept).
Contract warehousing (can be used in 3PL).
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Warehouse Characteristics
• Increase the number of warehouses and the
average size of warehouses decreases.
• Factors influencing the number of
warehouses:
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Cost of lost sales.
Inventory costs.
Warehousing costs.
Transportation costs.
Warehouse Locations
• Market-based – nearest the final customer.
• Production positioned – collection points or
mixing facilities.
• Intermediate positioning between producer
and final customer.
Factory
Warehouse
Warehouse
Customer
Cross-docking:
Movement from an inbound dock directly to an outbound dock
Movement directly from an inbound dock to a sorting process
to an outbound dock.
Outbound
Inbound
Outbound
Outbound
Inbound
Outbound
Inbound
Sorting area
Crossdock in at least two of these conditions:
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Product destination is known upon receipt.
Destination is ready for immediate delivery.
You daily ship to less than 200 locations.
More than 70% of products fit conveyors.
You receive large quantities of individual items.
Products arrive pre-labeled.
Some products are time-sensitive.
Distribution center is near capacity.
At least some inventory is pre-priced.
End of Program.