Supply Chain Management

1. Supply Chain Management Warehousing

2. Supply Chain Management Warehouse A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, Wholesalers, retailers, importers, exporters, customs etc. They are usually large plain buildings in industrial areas of cities and towns. Today warehouses are not used to store things but rather to receive, breakdown, repackage and distribute components to a manufacturing location or finished products to customers

3. Supply Chain Management Warehouses • Some warehouses are completely automated, with very few workers working inside. • The pallets and product are moved with a system of automated conveyors and automated storage and retrieval machines coordinated by programmable logic controllers • The direction and tracking of materials in the warehouse is coordinated by the WMS, or Warehouse Management System, a database driven computer program. • The WMS is used by logistics personnel to improve the efficiency of the warehouse by directing putaways and to maintain accurate inventory by recording warehouse transactions.

4. Supply Chain Management FUNCTIONS OF A WAREHOUSE • Receiving, Storing, switching, change SKU size, • Allows stock rotation (FIFO, LIFO), • Buffer stock for customers – retail or commercial, • Command and control centre – inventory control, • Enables off-the-shelf (JIT) for customers, • Provides a more-local 'Market Presence'.

5. Supply Chain Management FUNCTIONS OF A WAREHOUSE • Consolidation and Break-Bulk • Assortment (Cross Docking, Mixing) • Postponement (Packaging, Labelling) • Stockpiling (Seasonal, Bulk-Buy) • Reverse Logistics

6. Supply Chain Management

7. Supply Chain Management Consolidation: Groupage (Consolidation) • Goods from a number of suppliers are grouped together for single delivery points, • A range of goods from single suppliers are grouped together for each customer.

8. Supply Chain Management Plant 1 Store A Consolidation Warehouse Plant 2 Store B Store C Plant 3

9. Supply Chain Management Break Bulk: • Receives customer orders from manufacturer and delivers to different customers. • A break bulk operation receives combined customer orders from manufacturers and ships them to individual customers. • The break bulk warehouse sorts or splits individual orders and arranges for local delivery.

10. Supply Chain Management Store A Break-Bulk Warehouse Plant Store B Store C

11. Supply Chain Management CROSS-DOCK = No storage(?) Cross-dock (from multiple suppliers): • goods sorted as they arrive, • goods moved across dock and loaded onto trailers, • benefits - optimal vehicle use and low handling costs, • requires sophisticated planning techniques.

12. In-coming Outgoing Supply Chain Management • Cross Docking • Transferring goods • from incoming trucks at receiving docks • to outgoing trucks at shipping docks • Avoids placing goods into storage • Requires suppliers provide effective addressing (bar codes) and packaging that provides for rapid transshipment

13. Supply Chain Management Sainsbury's distribution timetable • Early evening - Goods arrive at warehouse from supplier. • Overnight - Sorted and packed. • Early morning - Despatched. • 7.30am - On store floor.

14. Supply Chain Management Warehouse Ownership Classification: • Private (Ownership or Lease) • Public (Standardized service, relationship is less important) • Contract (Customized, mutual benefits, long term commitment, Good relationship)

15. Supply Chain Management Warehouse Planning: • Location Analysis • Site selection • Design • Product mix • Future expansion

16. Supply Chain Management Location Analysis Before selecting site, there is some location analysis techniques that could assist company in selecting a general area for warehouse location. • Location Factor RatingThe location factor rating technique may be used when many sites are available, and each site has some appealing characteristics. The purpose of the technique is to "score" each site to be somewhat objective about the location decision. The steps in using the technique are: 

17. Supply Chain Management Center-of-Gravity Technique  • The center-of-gravity technique can be used when multiple suppliers or customer bases exist at different geographic locations, and it is economically sensible to locate centrally to service all of them. In general, transportation costs are a function of distance, weight, and time.

18. Supply Chain Management Site Selection Once location analysis is completed, a specific building site must be selected. • The primary factors in site selection are the availability of services and cost. • The cost of procurement is the most important factor governing site selection. • Beyond procurement cost, setup and operating expenses such as rail sidings, utility expenses, taxes, insurance rates, and highway access require evaluation.

19. Supply Chain Management Site Selection Several other requirements must be satisfied before a site is purchased • Necessary utilities must be available. • The soil must be capable of supporting the structure, and the site must be sufficiently high to afford proper drainage

20. Supply Chain Management Design Criteria: • Warehouse design criteria address physical facility characteristics and product movement. • Three factors to be considered in the design process are: • the number of stories in the facility, • height utilization, and • product flow.

21. Supply Chain Management Number of stories in the facility • The ideal warehouse design is limited to a single story so that product does not have to be moved up and down. • The use of elevators to move product from one floor to the next requires time and energy.

22. Supply Chain Management Height Utilization: • Regardless of facility size, the design should maximize the usage of the available cubic space by allowing for the greatest use of height on each floor. • Most warehouses have 20- to 30-foot ceilings, although modern automated facilities can effectively use ceiling heights up to 100 feet. • Maximum effective warehouse height is limited by the safe lifting capabilities of material-handling equipment, such as forklifts.

23. Supply Chain Management Product-Mix Considerations • The design and operation of a warehouse are related directly to the character of the product mix. • Each product should be analyzed in terms of annual sales, stability of demand, weight, and packaging. • It is also desirable to determine the total size and weight of the average order processed through the warehouse.

24. Supply Chain Management Future Expansion • Future expansion is often neglected when an enterprise consider initial establishment of its warehouse facilities. • Well-managed organizations often establish 5 to 10 year expansion plans. • Such expansion considerations may require purchase or option of a site 3 to 5 timesthe size of the initial structure.

25. Supply Chain Management Warehouse Security • Pilferage protection (Theft,) • Product deterioration (Damages)

26. Supply Chain Management Safety and Maintenance • Health and safety • Incidents • Environment

27. Supply Chain Management Warehouse management System (WMS) • Computer software designed to manage the storage and movement of items throughout the warehouse.

28. Supply Chain Management Home Assignment: Role of Barcodes, RFID’s and Voice picking technology in Warehouse & Role of MRP, MRPII and ERP systems in SCM

29. Supply Chain Management End of Topic