Presentation on theme: "Learning Objectives Determine the need for warehouses and inventory management Identify the various types of warehouses Identify and describe the different."— Presentation transcript:
0 Unit 4: Warehouse Management Supply Chain ManagementUnit 4: Warehouse ManagementRead Lesson Link aloud to the students:In this module, you will begin to understand what warehouses are and why they are needed. We examine the activities that occur in warehouses and the practices successful warehouses implement. We will also discuss some of the resources available to those interested in learning more about supply chain management and warehousing.Module 1: Introduction to Warehouse Operations
1 Learning ObjectivesDetermine the need for warehouses and inventory managementIdentify the various types of warehousesIdentify and describe the different types of warehouse processesDescribe the Plight of the Warehouse ManagerIdentify World-Class warehousing principlesIntroduce industry specific professional organizations
2 Why are warehouses and inventory management needed? QUESTIONWhy are warehouses and inventory management needed?Storage of goodsReduce transportation costsImprove operational flexibilityShorten customer lead timesLower inventory costs
3 This is the most basic operation performed by warehouses Storage of GoodsThis is the most basic operation performed by warehousesEvens out the flow of goods in the supply chain by storing goods until they are neededIn it simplest form, warehouses store material until it is needed.
4 QUESTION What is inventory? Goods that support the production of raw materials and unfinished itemsItems used for maintenance, repair, and operating suppliesRaw goods, finished goods and spare partsPost-consumer items such as returns, scrap, and recyclable materials
5 Why is Inventory Management Needed? Inventory is a necessitySupports production and manufacturing activitiesCovers for exceptions in the supply chainSupports maintenance, repairs, and operationsSupports customer service activitiesSupports post-consumer activitiesOffers strategic opportunities to the supply chainThere are costs associated with having inventoryHolding costsSetup costsPurchasing costsBalance inventory levels with cost of holding inventoryMinimize costsNot too much excess inventoryEnough inventory to respond to demand when it is needed
6 Types of Warehouses Raw Material Warehouse Work in Process (WIP) WarehousesFinish Goods WarehousesDistribution Warehouses and Distribution CentersFulfillment CentersClimate-Controlled WarehousesSpecial Case (Foreign Trade Zone and Bonded Warehouses
7 Raw Material Warehouse These warehouses are generally large in scale and designed to hold large quantities of bulk materials. Two examples of raw materials warehouses might be petroleum warehouses that store raw crude oil and grain silos that house grains and corn.
8 Work In Process (WIP) Warehouse WIPs hold partially completed assemblies and products at various points along an assembly or production line. They can occupy a small footprint inside a factory or manufacturing center or can be located in a separate facility.
9 Warehouses - OtherFinished goods warehouses - Usually located near the manufacturing center, finished goods are stored here until there is a demand for them.Distribution warehouses and distribution centers - collect and consolidate goods from many sources and then provide consolidated delivery into a network of common customers.
10 Warehouses - OtherFulfillment warehouses and centers - receive goods from distribution centers and ship them to individual customers.Climate Controlled Warehouses:Frozen foods, chilled foods,and products that must bemaintained at a set temperatureare shipped throughclimate-controlled warehouses.
11 Warehouses - Other Special Case Warehouses Foreign Trade Zones (FTZs) - a designated area within the borders of the USA that is treated as being outside of U.S. Customs Territory for the purpose of customs duty payment.Bonded Warehouse - Similar to an FTZ, a Bonded Warehouse is a secured facility under the control of U.S. Customs where imported materials are stored with the purpose of delaying the payment of tariffs and duties. There are, however, several key differences between a Bonded Warehouse and an FTZ.
13 Private vs. Public Warehouses Private warehouses are warehouse facilities owned by a distributor or manufacturer and strictly used for their sole purposes. The inventory stored and the activities performed in these facilities support the goals of the organization.Public warehouses seek economies of scale by sharing resources. They generally store and manage multiple customers’ inventories and can leverage the space and warehouse resources across these multiple customers.
14 Typical Warehouse Layout BulkStorageCase PickValue-addProcessing AreaStaging Area for Receiving and ShippingTypical Warehouse LayoutReceiving areaStaging areaStorage areaValue-add area
15 Receiving AreaThe receiving area of a warehouse contains dock doors sufficient to accommodate the conveyance equipment that delivers material into the warehouse facility.
16 Staging AreaThe staging area is the temporary containment of material for inspection, unpacking or packing, and repackaging of material for subsequent storage or shipment.
17 Storage AreaStorage areas are where material is stored until needed. These areas are where warehouse material handling equipment such as racking, shelving and other storage media are set up.
18 Value-Add AreaFor warehouses that are performing value-added activities such as kitting, sequencing, repackaging, labeling, or minor sub-assembly, a designated area is set up to ensure that the appropriate amount of space necessary to perform the activities is available and to accommodate the equipment needed to perform these activities.
19 Warehouse FlowWarehouses typically use one of three layouts: U-shape, Straight-thru, or Modular.The U-shaped layout is the most popular layout.A typical “U” formation brings material in the front of the warehouse, stores and/or processes it in the middle and back of the warehouse, and then ships it out the front of the warehouse.The layout and thus the flow through the warehouse are dependent on the size of the facility; the number and placement of the dock doors; and the characteristics of the activity occurring in the warehouse.
21 Plight of Warehouse Management More / smaller transactionsManage more itemsMore product and service customizationMore value-added servicesMore returnsMore international ordersLess time for ORDER PROCESSING / MARGIN OF ERRORLess Skilled WMS Labor
22 World-class Warehousing Practices Take Warehouses from Stage 1 to Stage 5 Stage 1 = no-class … Stage 5 = world-class
24 Professional Organizations International Warehousing Logistics Association (IWLA).Warehousing and Education Research Council (WERC).Council of Supply Chain Management Professionals (CSCMP).National Association of Foreign Trade Zones (NAFTZ).American Society for Quality (ASQ).
25 Summary Warehouses are a critical part of the supply chain. Materials moving through the supply chain enter warehouses, where they are handled, stored, and ultimately shipped downstream to customers when needed.Understanding the types of warehouses and the roles they play in the supply chain is a prerequisite to knowing when and why to select a particular type of warehouse to satisfy customer needs.
26 Summary, cont.Most warehouses are configured to handle the same set of activities: receiving, prepackaging, put-away, storage, order picking, accumulation and sortation, packaging and/or pricing, and unitizing and shipping.The key to successful implementation of best-practice warehousing operations requires obtaining and understanding a comprehensive item level analysis of the material being handled, and then using that information to make warehousing decisions