Warehousing. Part Three. Uses of Warehouses: Support manufacturing. Mix products from multiple production facilities to a single customer. Break bulk.

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Presentation transcript:

Warehousing. Part Three.

Uses of Warehouses: Support manufacturing. Mix products from multiple production facilities to a single customer. Break bulk. Consolidate small shipments into large shipments..

Logistics Concepts.. Inbound LogisticsOutbound Logistics SupplierSupplier CustomerCustomer..

Supplier A Supplier B Supplier C Supplier D Warehouse Carload or truckload shipments Manufacturing Support (inbound logistics)..

241 3 Mixing Warehouse (outbound logistics) Plant A, Product 1 Plant B, Product 2 Plant C, Product 3 Plant D, Product 4 Customer W 1234 Customer X 1234 Customer Y 1234.

2 4 Mixing Warehouse (outbound logistics) Plant A, Product 1 Plant B, Product 2 Plant C, Product 3 Plant D, Product 4 Customer W 234 Customer X 1234 Customer Y

2 4 1 Mixing Warehouse (outbound logistics) Plant A, Product 1 Plant B, Product 2 Plant C, Product 3 Plant D, Product 4 Customer W 1234 Customer X 1234 Customer Y Mixing Warehouse

ConsolidationWarehouse (outbound logistics) Plant A Plant B Plant C Consolidation Warehouse Customer Plant D

Breaking bulk..

BreakbulkWarehouse (outbound logistics) Plant Breakbulk Warehouse Customer 2 Customer 1 Customer 3

Types of Warehousing Direct store delivery. Private warehousing... Advantages: Control Flexibility in design and operation Long-term cost Better use of human resources. Tax benefits: depreciation. Intangibles: image of stability. XYZ Company Warehouse Disadvantages Fixed costs, especially if built for peak seasons. Investment. Return may be better if money is placed elsewhere

Types of Warehousing Direct store delivery. Private warehousing. Public warehousing... Advantages: Conservation of capital. Able to increase capacity when needed. Reduced risk of obsolesence. Economies of scale due to warehouse company’s investment Flexibility Tax advantages: some states have no inventory taxes for products in public warehouses. Specific knowledge of costs. Disadvantages Incompatible communications systems. Lack of specialized services.. May be unavailable when needed. XYZ Company Warehouse ABC Public Warehouse..

Types of Public Warehousing ABC Public Warehouse.. General merchandise Refrigerated or cold storage Bonded warehouses. Household goods, furniture.. Special commodity Bulk storage. Cross-docking facilities (3PL concept). Contract warehousing (can be used in 3PL).

Warehouse Characteristics Increase the number of warehouses and the average size of warehouses decreases. Factors influencing the number of warehouses: –Cost of lost sales. –Inventory costs. –Warehousing costs. –Transportation costs..

Warehouse Locations Market-based – nearest the final customer. Production positioned – collection points or mixing facilities. Intermediate positioning between producer and final customer. Customer Warehouse Factory Warehouse

Outbound Inbound Movement from an inbound dock directly to an outbound dock Cross-docking: Movement directly from an inbound dock to a sorting process to an outbound dock. Outbound Inbound Sorting area

Crossdock in at least two of these conditions: Product destination is known upon receipt. Destination is ready for immediate delivery. You daily ship to less than 200 locations. More than 70% of products fit conveyors. You receive large quantities of individual items. Products arrive pre-labeled. Some products are time-sensitive. Distribution center is near capacity. At least some inventory is pre-priced.

Crossdock in at least two of these conditions: Product destination is known upon receipt. Destination is ready for immediate delivery. You daily ship to less than 200 locations. More than 70% of products fit conveyors. You receive large quantities of individual items. Products arrive pre-labeled. Some products are time-sensitive. Distribution center is near capacity. At least some inventory is pre-priced.

Crossdock in at least two of these conditions: Product destination is known upon receipt. Destination is ready for immediate delivery. You daily ship to less than 200 locations. More than 70% of products fit conveyors. You receive large quantities of individual items. Products arrive pre-labeled. Some products are time-sensitive. Distribution center is near capacity. At least some inventory is pre-priced.

Crossdock in at least two of these conditions: Product destination is known upon receipt. Destination is ready for immediate delivery. You daily ship to less than 200 locations. More than 70% of products fit conveyors. You receive large quantities of individual items. Products arrive pre-labeled. Some products are time-sensitive. Distribution center is near capacity. At least some inventory is pre-priced.

End of Program.