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BM_M0110/GSLM52700Warehouse Planning and

Operations Systems

Yat-wah Wan Room: C317; Email: ywan; Ext: 3166

Office Hour: Wed 3 5 pm, or by appointment

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Outline

importance of warehouses housekeeping issues functions and types of warehouses operations in warehouses

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The Importance of Warehouses

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A Supply Network

Raw Material

WH

FactoryWIP WH

Finished Goods WH

Distribution

Center

Retailer … Retailer

… Factory

Raw Material

WH

WIP WH

Finished Goods WH

Local WH Fulfillmen

t Center

Home Home…

…

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A Supply Network

Raw Material

WH

FactoryWIP WH

Finished Goods WH

Distribution

Center

Retailer … Retailer

… Factory

Raw Material

WH

WIP WH

Finished Goods WH

Local WH Fulfillmen

t Center

Home Home…

…

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Warehousing & Storage Industryin Taiwan#1

#1 http://win.dgbas.gov.tw/dgbas04/bc5/earning/ht4561e.asp

# of Employees Earning (NT$/M)

male female male female

Industry 1,976,818 1,136,561 49,245 34,729

Services 1,713,415 1,979,479 51,569 43,546

Year 2011

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Warehousing & Storage Industryin Taiwan#1

#1 http://win.dgbas.gov.tw/dgbas04/bc5/earning/ht4561e.asp

# of Employees Earning (NT$/Mon)

male female male female

Manufacturing 1,562,495 1,055,992 49,459 34,763

Wholesale & retail trade 714,473 761,036 46,272 39,633

Transportation & storage 184,046 78,362 52,574 45,432

Year 2011

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Warehousing & Storage Industryin Taiwan#1

#1 http://win.dgbas.gov.tw/dgbas04/bc5/earning/ht4561e.asp

Warehousing & storage

Truck freight transportation

Retail sale of general merchdise

Retail trade

Wholesale trade

Computer, electronic & optical products manufact

Electronic parts & components manufacturing

Earnings (NT$/Mon)# of Employ.

40,0558,374

34,94267,285

37,513137,543

34,401381,036

46,977956,930

50,423208,208

50,967561,485

Year 2011

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The Unimportance of Warehouses?

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Competition of Two Companies

1979 Kmart

best national discount retailer 1,891 stores, ave. annual revenue $7.25 mill/store

Wal-Mart a small local discount retailer 228 stores, each being about half as profitable as

Kmart’s

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Competition of Two Companies

Wal-Mart in 2011 number of stores (worldwide): number of employees: sales:

January 22, 2002, Chapter 11 (of the US Bankruptcy Code) for Kmart Corporation merged with Sears in 2005

Reasons? (Stalk et al. (1992) Competing on Capabilities: the New Rules of Corporate Strategy, Harvard Business Review, March-April, 57-69)

8979

2.1 millions

US$421.849 billions

GDP of Taiwan:

$423.0 billion

(2010, Wiki)

$504.6 billion

(2011, CIA Factbook)

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Strategy of Amazon

fulfillment centers /warehouses/distribution centers

1 3 5 7 9 11 13 15 170

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20

30

40

50

60

Num.

Total Num.

Area

Total Area

Num. Total Num. Area (m ft2) Total Area

1997 1 1 0.2 0.21998 0 1 0 0.21999 3 4 2.31 2.512000 1 5 0.6 3.112001 0 5 0 3.11

2002 0 5 0 3.11

2003 0 5 0 3.112004 0 5 0 3.112005 3 8 1.08 4.192006 2 10 1.78 5.972007 3 13 2.02 7.992008 4 17 2.85 10.842009 0 17 0 10.842010 5 22 4.22 15.062011 10 32 8.68 23.742012 9 41 8.45 32.192013 6 47 6.3 38.492014 1 48 1 39.49

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Course Objectives

to enable students to have the basic knowledge to manage and to improve modern warehousees

to understand roles of warehouses in a supply chain more from the business and management perspective

issues to learn operations and processes in different types of warehouses equipment for warehouses

material handling, communication, information processing and system control

design, status assessment, benchmarking, and improvement of warehouses

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Words of Caution

learning is … (teaching is also …)

learning is … The real battlefield is out there …

Be prepared

Always try your best, and your best only

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House-Keeping Issues

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Structure of the Course

introduction (1 lecture) examples of warehouses (3 lectures) functions of warehouses (0.5 lectures) material handling equipment in warehouses (2.5 lectures) special functions & equipment of warehouses (2 lectures) benefit analysis & benchmarking of warehouses (2

lectures) papers and cases (3 lectures)

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Structure of the Course

introduction (1 lecture) examples of warehouses (3 lectures)

warehouses for standardized goods completely automated warehouses distribution centers cargo freight stations

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Structure of the Course

functions of warehouses (0.5 lectures) material handling equipment in warehouses

(2.5 lectures) storage and retrieval of

pallets cases small pieces

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Structure of the Course

special functions and equipment of warehouses (2 lectures) identification and communication equipment layout of warehouses

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Structure of the Course

benefit analysis and benchmarking of warehouses (2 lectures) benefit analysis and justification profiling and benchmarking

papers and cases (3 lectures) papers and cases also in other lectures

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Assessments

assignment 50% various forms: literature search, literature

review, essay, problems, presentation, etc.

project 50% proposal presentation report

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References

Books Abernathy, Frederick H., et al. [1999] A Stitch in Time: Lean Retailing

and the Transformation of Manufacturing -- Lessons from the Apparel and Textile Industries, New York: Oxford University Press.

Adams, Nicholas D., et al. [1996] Warehouse and Distribution Automation Handbook, New York: McGraw-Hill.

Bartholdi, John J. and Steven T. Hackman [2011] Warehouse and Distribution Science, http://www.warehouse-science.com.

Frazelle, H. Edward [2001] World-Class Warehousing and Material Handling, McGraw Hill: New York.

Heragu, Sunderesh [1997] Facilities Design, PWS Publishing Company, Boston, MA.

webpages: many

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Functions and Types

of Warehouses

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Types and Functions of Warehouses

Value-added service

ConsolidationStorage Distribution Increase Service Level

Inter-modal Interface

distribution centers

e-fulfillment

centers

3PL warehouses

private warehouses

warehouse operators

cargo terminals

courier services

…

…

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Operations in Warehouses

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Operations in Warehouses

receiving prepackaging (optional) putaway storage order picking packaging and/or pricing (optional) sorting and/or accumulation unitizing and shipping

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An Example

http://www2.isye.gatech.edu/~jjb/wh/sites/sites.html

a telecommunications DC in Denmark

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Examples

Eslite (誠品開發物流)

Shiseido (台灣資生堂:資生堂物流中心)

Anway (台灣安麗 : 安麗體驗廣場)

Yes Logistics (好好國際物流)

Cold Chain (嘉豐冷凍冷藏股份有限公司)

Taoyuan Free Trade Zone (遠雄自由貿易港區)

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Preparation for Next Week

container terminals: warehouses with standardized goods

Hongkong International Terminal Limited (HIT) & MPA (The Maritime Port Authority of Singapore)

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A Supply Network

Raw Material

WH

FactoryWIP WH

Finished Goods WH

Distribution

Center

Retailer … Retailer

… Factory

Raw Material

WH

WIP WH

Finished Goods WH

Local WH Fulfillmen

t Center

Home Home…

…

stores or (private)

warehouses in manufacturers and retailers

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A 3PL Warehouse

3 PL: e.g., members of HAFFA travel agents of cargoes consolidation of cargoes value-added services …

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Warehouse Operators

operators providing warehousing services storage, distribution, consolidation, value-added

services … for example, Kerry Logistics

offices: 600+, in six continents area of logistics facility: 3 mill m2 (3 km2; 300 h; 300

Jia) employees: 19,000 2011 revenue: US$2 bill

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Cargo Terminals

inter-modal interface, e.g., between air and land, or between sea and land temporary storage, information processing,

value-added service, … examples for air and sea

Learning is Far More Important than …

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