Introduction to Facility Logistics

IE 504
Facilities Design

Mohamed A. Awwad, Ph.D.

1
 Today
• Welcome – Introductions
• Course Information
– Syllabus, Assignments, etc.
• Warehouse Rationale (Chapter 1)

2
 Education
• B.S. & M.S. in Mechanical (Design &
Production) Engineering,
Cairo University

• M.S. & Ph.D. in Industrial

Engineering, University of Central
Florida
– Dissertation: “Modeling Design
Storage Systems With Location
Uncertainty”

3
Work Experience

4
 Teaching and Research
Teaching Research Interests
• Probability, Statistics & DOE • Applied OR
• Production Systems
• Military OR
• Operations Management
• SC & Logistics
• SC & Logistics
• Project & Engineering • Healthcare
Management

5
 Introduce Yourself
• Name

• ??

• Why are you taking this course?

 Textbooks
• Required
– Warehouse & Distribution Science, Bartholdi &
Hackman, Release 0.98
– Available for free at: www.warehouse-science.com

• Reference
– Tompkins, White, Bozer and Tanchoco, Facilities
Planning, 4th ed., John Wiley & Sons, Inc., New
York, 2010. This textbook is on reserve in Mullins
Library. 7
 Acknowledgement
• Many of the course materials are adapted
from material provided by
– Dr. Letitia M. Pohl (U of Arkansas)
– Dr. Jen Pazour (Rensselaer Polytechnic Institute, RPI)
– Dr. Jim Noble (Mizzou)
– Dr. Russell Meller (Fortna)
– Dr. Kevin Gue (U of Louisville)
– Dr. John White (U of Arkansas)

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 Course Topics
• WH'ing 101 • Non-Traditional Aisle
• Warehouse Rationale Designs
• Material Flow & Storage Strategy • Manual and Automated
Piece-Picking
• Warehouse Operations • End-of-Aisle Unit Load AS/RS
• Material Handling Equipment • Basic Introduction to
• Unit-Load Storage System Conveyors
Design • AGVs
• Carton Storage System Design • Order Profiling
• Piece-Picking Systems • Conveyors
• Split-Case Sorting Systems
• Warehouse Sizing Models • Warehousing Around the
• Crossdock Design World
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 Logistics System Design

Logistics is concerned
with the efficient flow
and storage of goods
from point of origin to
point of consumption

That’s Logistics
UPS commercial
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 Facility Logistics
“Logistics inside the facility”
• Efficient flow and storage of goods within the building, from receiving to
shipping

Facility Logistics involves facility design and material handling for manufacturing,
distribution, and service facilities. Research topics include both design and
operational aspects of material and information flows within facilities to improve
productivity and performance. Specific topics include facility layout, material
handing, storage/retrieval systems, order fulfillment, sensor deployment, and
inventory tracking and control, among others.

Material Handling and Logistics (5:40)

– https://www.youtube.com/watch?v=dEtn3P2kFFI
Produced by Material Handling Industry of America (MHI)
MHI’s Tagline: “The industry that makes the supply chain work”

FedEx and UPS Documentary

- https://www.youtube.com/watch?v=JZu_gxi3sbs&nohtml5=False

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Why Focus on Material Handling
and Logistics?
• Material Handling and Logistics
are the backbone of the US
Economy.
• Makes Up 8.5% of Gross Domestic
Product ($1.33 Trillion) [Material
Handling & Logistics US RoadMap, 2014]

• Transportation and Logistics is the

2nd Largest Employment Sector in
the US (6 million people
employed) [The Bureau of Labor Statistics]

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 10 Major Trends
• growth of e-commerce
• relentless competition
• mass personalization
• urbanization
• mobile and wearable computing
• robotics and automation
• sensors and the Internet of Things
• Big Data and predictive analytics
• the changing workforce
• sustainability
Source: Material Handling & Logistics US RoadMap, 2014
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 Focus:
Distribution Centers/Warehouses

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15
Distribution Center 101

Pazour, EIN 5346 Engineering Logistics 16

The Average Warehouse

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 Warehouse Rationale
• Chapter 1 of the Text: Warehouse Science

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 Why have a warehouse?
• To better match supply with customer
demand
– Allow us to respond quickly when demand
changes
– Buffer against sudden changes in supply
• To consolidate product
– Reduce transportation costs
– Provide customer service
• To provide value-added processing
• To realize economies of scale
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 Warehouse Location Metrics:
Cost and Speed to Delivery

“We want fast delivery,”

Amazon CEO Jeff Bezos

Amazon is taking on a big expansion of its distribution

warehouses, in an effort to make one-day shipping the
norm, with same-day delivery not so far out of reach.
http://www.nytimes.com/2012/09/12/technology/amazon-forced-to-collect-sales-
tax-aims-to-keep-its-competitive-edge.html?_r=0

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Response Time 1 week-> 1 Distribution Center

Clientes
Centro
distribución

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Response Time 5 days-> 2 Distribution Center

Clientes
Centro
distribución

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Response Time 3 days-> 5 Distribution Center

Clientes
Centro
distribución

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Response Time 1 day-> 13 Distribution Center

Clientes
Centro
distribución

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Same Day Response --> 26 Distribution Centers

Customer
DC

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 Why have a warehouse?
Consolidate Products

Warehouse

Vendors Retail stores Vendors Retail stores

𝒎𝒎 vendors and 𝒏𝒏 retail stores 𝒎𝒎 vendors and 𝒏𝒏 retail stores

𝒎𝒎 × 𝒏𝒏 shipments 𝒎𝒎 + 𝒏𝒏 shipments

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 Response time vs Number of Facilities
The trade-off between cost of building and
operating facilities versus cost of
transportation and impact on response time.
Response Time

Number of Facilities

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 Names/Types of Warehouse
• Cross Dock
Simplest
– Pallet In –> Pallet Out (No Storage)
• [Unit-load] Warehouse
– Pallet In –> Storage –> Pallet Out
• Breakbulk Facility
– Pallet in –> Storage –> Cases Out
– Storage area is same as the picking area
• Distribution Center or Order-Fulfillment
Most
Complex
Center
– Pallet in –> Storage In Pallets –> Breakbulk
at Fast Pick area –> Send out individual
cases /items
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 Types of Warehouses
• Retail Distribution Center (DC)
– Examples: Wal-Mart, Target, Dillards, Academy Sports
• Service Parts Distribution Center
– Examples: Thermo King, Parts Distributing Co, Ford, GM
• Catalog Fulfillment or e-commerce DCs
– Examples: LL Bean, Amazon, Wal-Mart
• 3PL Warehouse
– Examples: Ozburn-Hessey Logistics
• Perishables Warehouse
– Examples: Grocery DCs, Flowers, Pharmaceutical DCs

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