ch05 logistics

Work Systems and the Methods, Measurement, and Management of Workby Mikell P. Groover, ISBN 0-13-140650-7.

©2007 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

Logistics Operations

Sections:1. Introduction to Logistics2. Transportation Operations3. Material Handling4. Analysis of Material Handling Operations

Chapter 5



Four Categories of Workers

1. Logistics workers Move things Human components of logistics system Logistic system = work system

2. Production workers3. Service workers4. Knowledge workers



Introduction to Logistics

Origins in military science Procurement, transportation, and

maintenance of military supplies, equipment, and personnel

Business logistics Acquisition, movement, storage, and

distribution of materials and products, as well as the planning and control of these operations to satisfy customer demand

May also involve movement of people



Two Categories of Logistics

External logistics = transportation and related activities that occur outside of a facility Movement of materials between different

geographical locations Five traditional modes of transportation: rail

truck, air, ship, and pipeline Internal logistics = material handling and

storage within a facility



Logistics Workers – Job Titles

Transportation operations Air traffic controller, bus driver, parcel

service dispatcher, railroad train conductor, ship captain, teamster

Material transport in a facility Airport baggage handler, crane operator,

forklift truck operator, material handler Material storage

Crane operator in an AS/RS, inventory control manager, order picker, shipping clerk, tool crib stores clerk



Work Activities

Various combinations of physical labor and information processing

Physical labor Moving materials, work-in-process, and

finished products Information processing

Planning, coordinating, and controlling the physical movement



Importance of Logistics

Sometimes viewed as non-value-adding By comparison, manufacturing and

assembly activities add value by physically transforming materials

Logistics does not alter the product However, logistics operations create a time and

place value for customers Having the materials and products available

and getting them to customers when needed or wanted



Logistics Objectives - Metrics

Accuracy – deliver exactly what the customer orders

Availability – have items in inventory when the customer needs or wants them

Orders shipped complete - every item ordered included in shipment

Speed of delivery – time to delivery Returns and error recovery – how well are

these problems coped with



Business Logistics Objectives

Provide a specified level of customer service Deliver that level of service at the lowest

possible cost Increased customer service means higher cost

Guaranteed availability for every item means high inventory

Savings in inventory costs means higher stock-out frequency



The Logistics System

Consists of five components:1. Facilities – production plants and storage

centers2. Inventory – raw materials, work-in-process,

finished products3. Transportation and material handling – means

of moving inventory4. Information system – integration function5. Logistics workers - they make the system

work



Supply Chains

Defined as the set of activities that is concerned with the flow of materials and products from raw materials through production and distribution of finished goods to customers.

Supply chain management = the planning, coordination, and administration of the flow of materials and products in the supply chain



Supply Chain

Block diagram depicting participants and activity sequence in a supply chain



Basic Logistics Functions

1. Procurement Acquisition and movement of materials

from suppliers to manufacturing and/or assembly plants

2. Logistical support for manufacturing Making raw materials available for

processing and moving work-in-process 3. Distribution

Moving finished goods to customers



Functions in Logistics Operations

Model indicating three functional areas in logistics operations



Warehousing

A warehouse is a facility for storing three types of inventory:1. Raw materials in the procurement process2. Maintaining work-in-process for

manufacturing support3. Making finished goods available for

distribution



Warehousing Functions

1. Receive – unload incoming materials, inspect the materials, record receipt

2. Store – put the materials into storage and record the storage location

3. Pick (“order picking”) – retrieve materials from storage in response to customer orders

4. Ship – pack materials for shipment and load the carrier vehicle



Distribution Center Operations

Different combinations of products are shipped from suppliers to outlets through the DC



Improvements in Warehousing

Automated and mechanized storage systems – reduce labor costs, speed the storage and retrieval of materials

Cross-docking – incoming items are sorted and shipped without being placed in storage

Warehouse management systems – for maintaining inventory records, managing transportation operations, optimizing storage locations, and reporting labor performance



Transportation Operations

External logistics Transportation expenses consume between

one-third and two-thirds of the total costs of logistics

Freight transportation industry in the U.S. represents approximately 6% of gross domestic product Approximately $500 billion



Five Basic Modes of Transportation

1. Rail2. Truck3. Air4. Ship5. Pipeline



Transportation Infrastructure

Transport vehicles Planes, trains, and trucks

Rights-of-way Airways, RR tracks, roads and highways

Industrial organizations that provide transportation services

Government agencies that oversee the transportation industry



Transportation Terms

Carrier – company that provides the transportation service

Shipper – company that engages the services of a carrier

Consignee – company that receives the shipped materials



Rail Transport

Efficient movement of large tonnage over long mileage

Disadvantage – slow mover Applications:

Raw materials located away from waterways (coal, ore, lumber)

Low value manufactured goods (paper, wood products)

Intermodal freight



Improvements in Rail Transport

Elimination of work rules that resulted in high labor costs

Consolidation of companies Abandoning unprofitable railway lines Unit trains for mass transport of bulk

commodities (coal) Double-stack rail cars for intermodal containers Tri-level automobile cars



Trucking Operations

Deregulation of the trucking industry Motor-Carrier Act of 1980 - encouraged

competition, improved efficiencies Higher intercity tonnage movement than any

other transportation mode Suited to high-value finished products and

semi-finished items over short and medium distances Movement of merchandise Delivery of components/ subassemblies



Truck Transportation Advantages

Door-to-door delivery Service availability and frequency Speed of delivery



Trucking Operations

Truckload (TL) Loads greater than 15,000 lb Direct shipper to consignee Lower total cost to shipper

Less-than-truckload (LTL) Loads less than 15,000 lb Stops along the route result in longer

delivery times Higher per ton-mile rates Cheaper for small load sizes



Improvements in Truck Transport

More efficient scheduling Optimized routing for LTL operations Mechanized handling equipment Tandem trailers Intermodal operations – combination truck and

rail



Air Transport

Air passenger travel most visible Freight service also available

Major airlines provide freight service UPS and FedEx specialize in movement of

Packages Large containerized loads

Suited to delivery of high-value items over long distances and time is a factor



Air Transport

Advantage Speed of delivery over long distances

Disadvantages Airports not conveniently located Delivery times include local delivery times:

Shipper-to-airport Airport-to-consignee

High per ton-mile costs



Air Transport Operational Approaches

Strategic planning of routes and schedules Optimizing assignment of planes to routes Optimizing the number and locations of hubs Scheduling of crews

Adequate coverage Minimum labor costs

Optimizing aircraft maintenance schedules



Water Transport

Dominant mode of freight transportation in global trade

Ships Rivers and canals: flat barges Coastal waters and Great Lakes: deep-

water vessels Domestic transport: very large shipments

Time: slowest Cost: lowest Supplemental transport usually required



Improvements in Water Transport

Containerized cargo Mechanized material handling equipment to

speed loading and unloading Satellite navigation (primary importance for

oceangoing vessels Autopilot technology Sonar and radar Improvements in ice-breaking equipment



Pipelines

Disadvantages Limited in types of materials that can be

moved (e.g., gases, liquids, slurries) Slow (e.g., 4 mi/hr in Alaska pipeline)

Advantages Material moves 24 hours per day Not affected by weather conditions No empty containers or vessels



A portion of the Alaska pipeline near Fairbanks (photo by author)



Other Forms of Distribution

Intermodal operations - combinations of the five basic modes

Parcel delivery services Transportation agencies Internet and similar communication-based

distribution modes



Intermodal Operations

Rail and truck (piggyback) Containerships Truck and ship (fishyback) Train ship Truck and air



Giant cranes unload containers from a cargo ship in Vancouver, B.C., Canada (photo by author)



Parcel Delivery Services

Specialty services: Deliver small packages (<150 lb) Charge a premium price Provide fast transport

Demand for these special services has increased as commerce over the Internet has grown (e.g., companies like Dell Computer and Amazon.com)

Operations are basically intermodal Sortation hubs are required



Transportation Agencies

Provide specialized transportation services Intermediaries between shippers and

carriers Purchase high-volume, low-cost rates

from shippers and sell the transportation service to small-lot shippers at fees the shipper would not be able to obtain

Consolidate small lots into large shipments



Categories of Transportation Agencies

Freight forwarders – consolidate small shipments from multiple shippers into large shipments

Shippers’ associations – non-profit freight forwarders who serve member companies

Transport brokers – provide a coordinating and matching service between shippers and carriers



Internet and Similar Distribution Modes

Airplane tickets – electronic ticketing Digital distribution of music – Apple iTunes Satellite radio – subscribers avoid commercial

interruptions Video-on-demand High-speed Internet access



Material Handling

Defined as “the movement, storage, protection and control of materials throughout the manufacturing and distribution process including their consumption and disposal” (The Material Handling Industry of America)

Estimated to represent 20-25% of total manufacturing labor cost in US

Internal logistics



Material Handling Objectives

To move materials within a facility Safely Efficiently At low cost In a timely manner Accurately Without damage

Material handling is often an overlooked issue in industry



Material Handling Equipment

1. Material transport 2. Storage 3. Unitizing equipment4. Identification and tracking systems



Material Transport Equipment

Five categories:1. Industrial trucks2. Automated guided vehicles3. Monorails and other rail guided vehicles4. Conveyors5. Cranes and hoists



Industrial Trucks

Two basic categories:1. Non-powered

Human workers push or pull loads Low volume Short distances

2. Powered Self-propelled Larger loads Greater distances Common example: forklift truck



Forklift Truck

Forks are used to move pallet loads



Automated Guided Vehicle Systems

Material handling system that uses independently operated, self-propelled vehicles guided along defined pathways in the facility floor

Types of AGV: Driverless trains Pallet trucks Unit load AGVs



Automated Guided Vehicle

A unit-load automated guided vehicle



Rail-Guided Vehicles

Fixed rail system Overhead monorail - suspended overhead

from the ceiling On-floor - parallel fixed rails, tracks

generally protrude up from the floor Powered by electrified rail Routing variations: switches, turntables, and

other special track sections



Overhead Monorail



Conveyor Systems

1. Non‑powered Materials moved by human workers or

by gravity2. Powered

Power mechanism for transporting materials is contained in the fixed path, using chains, belts, rollers or other mechanical devices



Conveyor Types

Roller: can be powered or non‑powered Skate‑wheel Belt In‑floor towline Overhead trolley conveyor



Roller Conveyor

Common conveyor type

Can be powered or unpowered



In-floor Towline



Cranes and Hoists

Cranes Used for horizontal movement of materials

Hoists Used for vertical lifting of materials

Cranes usually include hoists so that the crane-and-hoist combination provides Horizontal transport Vertical lifting and lowering



Jib Crane with Hoist



Storage Systems

Function – to store materials (e.g., parts, work-in-process, finished goods) for a period of time and permit retrieval when required

Used in factories, warehouses, distribution centers, wholesale dealerships, and retail stores

Important supply chain component Automation available to improve efficiency



Conventional Storage Methods

Bulk storage Storage in an open floor area

Rack systems Permits vertical stacking of materials

Shelving Steel shelving comes in standard sizes

Drawer storage Modular storage units are available



Pallet Rack System



Automated Storage Systems

Mechanized and automated storage equipment to reduce the human resources required to operate a storage facility

Significant investment Level of automation varies

In mechanized systems, an operator participates in each storage/retrieval transaction

In highly automated systems, loads are entered or retrieved under computer control



Reasons to Use Automated Storage

Increase storage capacity Increase storage density Recover factory floor space Improve security and reduce pilferage Reduce labor cost & increase labor productivity Improve safety Improve control over inventories Improve stock rotation Improve customer service Increase throughput



Types of Automated Storage Systems

1. Automated storage/retrieval systems2. Carousel storage systems



Automated Storage/Retrieval System

Abbreviated AS/RS Consists of:

One or more storage aisles (S/R) machine for each aisle Storage racks – where loads are stored Input/output stations (P&D)

Manually operated Automated – interfaced to automated

material handling system (e.g., AGVS)



AS/RS



Carousel Storage System

Series of bins or baskets suspended from overhead chain conveyor in the form of an oval loop

Operation similar to systems used in dry-cleaning shops to bring clothes on hangars to front of store

Bins are positioned at pick & deposit station at one end of loop where human worker loads and unloads

Carousel systems can be horizontal or vertical



Carousel Storage System



Applications of AS/RS and Carousels

Unit load storage and handling (usually associated with AS/R systems)

Order picking Work‑in‑process storage Kitting – components to be used in assembly

are gathered from storage into a “kit” (usually associated with carousel systems)



Unitizing Equipment: Containers

Containers used to hold individual items during handling

Equipment used to load and package the containers



Unitizing Equipment for Packaging

Palletizers and Depalletizers Unit Load Principle

Simultaneous handling of multiple items Number of trips reduced Reduction in loading and unloading times Higher operating efficiency



Identification and Tracking Systems

Automatic Identification and Data Capture (AIDC) Bar codes Magnetic stripes Radio frequency tags (RFID)

The trouble with manual data collection & entry Error rate Time factor Labor cost

ch05 logistics

Engineering