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to "that 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", and transportation are substitutes for each other, with warehousing having been referred to as "transportation at zero miles per hour."
Warehousing management has evolved to include value-adding services: (list 6)
- - Custom labeling
- - Promotional pack
- - Grouping and sorting of products
- - Kitting for production
- - Display building and packaging
- - Price marketing
What are the 5 major roles of distribution?
involves rearranging the quantities and assortment of products as they move through the supply chain and can take four forms:
- 1) Accumulating (bulk making)
- 2) Allocating (bulk breaking)
- 3) Assorting (building up a variety of products)
- 4) Sorting (separating products into grades and qualities)
WH v. DC, including "cross dock"
- - Warehouses (WH) emphasize the storage of products, and their primary purpose is to maximize the usage of available storage space.
- - Distribution centers (DC) emphasize the rapid movement of products through a facility, and thus they attempt to maximize throughput --> the amount of product entering and leaving a facility in a given time period.
Continued... Cross dock defined as:
"the process of receiving product and shipping it out the same day or overnight without putting it into storage"
- increased emphasis on time reductions in supply chains has led to the growth of cross-docking.
_______ WH (or renting)
- - 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:
- - high fixed costs
- - necessity of having high and steady demand volumes
- - may reduce an organization's flexibility
- - (is supposed to 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
- Potential drawbacks:
- - lack of control by the user
Warehousing labor safety practices monitored by Occupational Safety and Health Administration (OSHA)
- Less costly than private WH and more costly than public WH
- - AKA 3PL warehousing is a "long-term arrangement providing unique warehousing services to one client"
- - preferred alternative for many organizations b/c it simultaneously mitigates the negative aspects and accentuates the positive aspect of public and private WHing.
- - both vendor and client share the risks associated with the warehousing
- Mixes attributes of contract and public warehousing
- 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
WH design: General considerations
- - Quantity and Character of goods must be known -- product profiling
- - Know the purpose to be served:
- > Storage
- > Distribution
- > Cross-docking - process of receiving prod. and shipping it out the same day or overnight w/o putting in into storage.
WH Design: 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 (unused space is excess capacity = costs money)
- 1. Productivity
- 2. Safety
- 3. Hazardous materials
- 4. Security
WH Operations: Productivity (pg.158)
- is the measure of output divided by input, and although a number of different productivity metrics can be used to assess WHing productivity, not all are relevant to all kinds of facilities.
- Include: cases shipped per person, product lines shipped per person, pallets shipped per person, average warehouse capacity used, and forklift capacity used.
- *Important to recognize that increases in WHing productivity do not always require significant investment in technology or mechanized or automated equipment.
WH Operations: Safety (pg.159-160)
- Injuries on the job in warehouses.
- warehouse safety are common sense - and low cost - in nature.
- can be influenced by government regulations by (OSHA)
- Categories include:
- - Employee
- - Property
- - Motor vehicles
(It cost more to recruit, train, and replace a worker than to provide a safe environment)
WH Operations: Hazardous materials (hazmat)
- Receive special attention from logistics managers b/c of the injuries, death, and property damage they can cause.
- Hazardous Materials Management (HMM) - " Hazardous materials is any item or agent (biological, chemical, physical) which has the potential to cause harm to humans, animals, or the environment, either by itself or through interaction with other factors".
- Ex: explosives, flammable liquids, and flammable solids.
WH Operations: Security (pg.162-164)
- Focuses on two primary issues: 1. protecting products, 2. preventing their theft
- Key threats to WHing: theft, pilferage, heat and humidity, vandalism, fire, and loss of electricity.
- Threats result in --> 4-5 X's the products' value. Lost in sales opportunities (present and future), customer dissatisfaction, additional costs to enhance WHing security, and the administrative time and costs associated wit filing claims.