w5 warehouse
TRANSCRIPT
3/10/2014
1
Warehouse management
(Manajemen Pergudangan)
Week 5
Storage Fundamentals in Inventory
Strategy4-37
PLA
NN
ING
OR
GA
NIZ
ING
CO
NTR
OLL
ING
Transport Strategy
• Transport fundamentals
• Transport decisionsCustomer
service goals
• The product
• Logistics service
• Ord . proc. & info. sys.
Inventory Strategy
• Forecasting
• Inventory decisions
• Purchasing and supply
scheduling decisions
• Storage fundamentals
• Storage decisions
Location Strategy
• Location decisions
• The network planning process
PLA
NN
ING
OR
GA
NIZ
ING
CO
NTR
OLL
ING
Transport Strategy
• Transport fundamentals
• Transport decisionsCustomer
service goals
• The product
• Logistics service
• Ord . proc. & info. sys.
Inventory Strategy
• Forecasting
• Inventory decisions
• Purchasing and supply
scheduling decisions
• Storage fundamentals
• Storage decisions
Location Strategy
• Location decisions
• The network planning process
3/10/2014
2
Why firm need storage and material
handling?11-38
Do firm really need storage and material handling as a part of the Logistics system?
Storage is an economic convenience not a necessity
Inventory to improve supply and demand coordinations warehouse and material handling are needed maintaining inventories
Reasons for storage11-39
To reduce transportation-production costs
To coordinate supply and demand
To assist in the production process
To assist in the marketing process
3/10/2014
3
Transportation-production costs
reductions11-40
Ship Direct
from Plant
Ship through 35
warehouses
Change in
costs
Production costs 500,000 425,000 -75,000
Transportation costs
- To warehouse 0 50,000 50,000
- To local area 250,000 100,000 -150,000
Warehouse costs 0 75,000 75,000
Total 750,000 650,000 -100,000
Coordination of supply and demand
Food, beverage and cigarette
Steel industry
11-41
3/10/2014
4
Production needs
Warehousing may be part of the production
process
Wine, cheeses
Cigarette
11-42
Marketing considerations
Warehousing is needed to deliver rapidly to the
customers and improve customer services (out of
stock)
11-43
3/10/2014
5
Storage functions
Holding
Consolidation
Break-bulk
Mixing (merge in translit)
11-44
Consolidation
warehouse
A
A B C D
B
C
D
Manufacturer A
Manufacturer B
Manufacturer C
Manufacturer D
10,000 lb.
8,000 lb.
15,000 lb.
7,000 lb.
40,000 lb.
Customer
Consolidation Warehouse
Similar to a merge-in-
transit facility
3/10/2014
6
Storage Cost SavingsDirect shipments to customers
MANUFACTURER
SHIPPING
WEIGHT
(lb.)
LTL RATE TO
CUSTOMER COST
A 10,000 $2.00/cwt. $200
B 8,000 1.80 133
C 15,000 3.40 510
D 7,000 1.60 112
Total $966
Storage Cost Savings (Cont’d)Shipments through a distribution center
MANUFACTURER
SHIPPING
WEIGHT (lb.)
LTL RATE TO
DISTRIBUTION
CENTERTOTAL LTL
A 10,000 $0.75 $75
B 8,000 0.60 48
C 15,000 1.20 180
D 7,000 0.50 35
Total 40,000
DISTRIBUTION
WAREHOUSE CHARGE
TL RATE FROM
DISTRIBUTION
WAREHOUSE TO
CUSTOMER TOTAL TL COST
$10 $1.00/cwt. $100 $185
8 1.00 80 136
15 1.00 150 345
7 1.00 70 112
$778 11-9
3/10/2014
7
Distribution
warehouse
Manufacturer Customer B
Customer C
Customer A
Low rate TL
shipment
LTL
Distribution, Break Bulk, or Pool Point
Warehouse
Warehouse may or
may not hold
inventories
Distribution
warehouse
Manufacturer B
Customer Y
Customer X
Product B
Product Mixing
Manufacturer A
Manufacturer C
3/10/2014
8
Warehouse functions
as buffer stock to anticipate fluctuations /uncertainties demands
to consolidate transportations for economic scale
to minimise response time for demand fulfillments
to keep quality and safety of raw material/parts/finished products that are stored
Storage functions are performed in an attempt to reduce transportation, production, and purchasing costs, which justify their added expense.
Storage alternatives
Ownership
Leasing
Rental
In-transit
11-51
3/10/2014
9
Types of Warehouse (types of products)
• raw materials
• finished goods
• supplies
• repair/spare parts
Arnold and Chapman 2008
Types of Warehouse (types of level)
• Main warehouse Consumable Item Storage
Critical item storage
Cool room
• Secondary warehouse Customs Process Storage
Empty basket storage
Chemical Storage
Temporary storage
Lube oil storage
Drilling and Completion Storage
Pipe yard
Case in oil company
3/10/2014
10
Types of Warehouse (flows)
Mixing or consolidation warehouse
Breakbulk warehouse
Drilling and Completion Storage
3/10/2014
11
Pipe Yard
Manufacturer A
Manufacturer A & B
Manufacturer A, B & C
Manufacturer A, B, C & D
Perc
enta
ge o
f usa
ble
wa
rehouse
ca
pa
city
Time, months
Balancing the Load on a Public
Warehouse
0
20
40
60
80
100
120
J F M A M J J A S O N D
Ballou (2004) Prentice Hall, Inc.
3/10/2014
12
Space Comparison
Ownership alternative
•Less expensive under high utilization
•High degree of control over operations
•Benefits of real estate ownership
•Space may be converted to uses other than storage
Rental alternative
•No fixed investment
•Lower cost under seasonal or low utilization of an owned facility
•Location flexibility
Ballou (2004) Prentice Hall, Inc.
Ballou (2004) Prentice Hall, Inc.
A Low Throughput, Holding Warehouse
Semipermanentstorage bay
Product
Inbound andoutbound
3/10/2014
13
Semi-permanent
storage bayProduct
Order picking and product mixing bays
Inb
ound
Outb
ound
A
B
C
D
C A
Replenishment
Order-picking
route
A High Throughput, Distribution
Warehouse
Ballou (2004) Prentice Hall, Inc.
END