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location strategies Site selection Transport 3. Warehousing:³Storage or warehousing provides the place utility as part of logistics for any business and along with Transportation is a critical component of customer service standards´. 4. Customer Analysis Purchasing/Supplier Partnering Order Fulfillment Integrated Supply Chain Management Inventory Management & Control Warehouse & Transportation Manufacturing/ Re-manufacturing / Assembly Demand & Lead Time Management Materials Management 5. Reasons for warehousing:To support the company¶s customer policy. To maintain a source of supply without interruptions. To achieve transportation economies. To support changing market conditions and sudden changes in demand. To support any JIT programs. To provide customers with the right mix of products at all times and all locations. To ensure least logistics cost for a desir ed level of customer service. 6. Benefits of warehousing:Consolidation. 7. Consolidation Warehouses:Customers Plant A Consolidation Warehouses A C B Plant B Plant C 8. Benefits of warehousing:Consolidation. Break bulk warehouse. 9. Break bulk Warehouses:Customers A Break bulk Warehouses B Plant A C 10. Benefits of warehousing:Consolidation. Break bulk warehouse. Processing / Postponement. Stockpiling. Service benefits. 11. Warehouse Operating Principles:Three Principles are: Design criteria: a) Number of stories in the facility, b) Height utilization, c) Product flow 12. Warehouse Operating Principles:2) Handling technology Movement continuity,
13. 5) scale economies: Refer to the ability to reduce material -handling and storage through application of advanced technologies. 3) operating flexibility: Refers to the ability to adjust internal policies and procedures to meet product and customer needs . the space needed to meet peak requirements is not utilized. 14. 16. 3) Storage plan Types of warehouses:It includes: 1) Private warehouses. Warehousing Strategy« Other qualitative factors that should be considered include: 1) presence synergies: Inventory located nearby in a building that is clearly affiliated with the enterprise. while public facilities are used to handle peak seasons. public. 1) The 1st concerns how many warehouses should be employed. Qualitative Decision Factors:Private Contract Public Presence synergies Industry synergies Operating flexibility Location flexibility Scale economies The Warehouse location strategies: 1) Market positioned: a) Order Cycle time b) Transportation cost c) Sensitivity of the product d) Order sizes 2) Product positioned: a) Perishability of the raw materials b) Number of products in the product mix c) Assortments ordered by the customers from the product mix d) Transportation consolidation rates 3) Intermediately positioned: Site Selection:Location of the major markets. 20. 18. and contract facilities. 21. Local tax structures. 15. Warehousing Strategy« Full warehouse utilization throughout a year is a remote possibility. In other situations. Quality & Quantity of labour available. Any local govt. tax concessions or incentives. 2) Public warehouses. 17. 2) The 2nd question concerns which warehouse types should be used to meet market requirement s. stability of demand. . 2) industry synergies: Refer to the operating benefits of collocating with other fir ms serving the same industry. it may be more efficient to build private facilities to cover the 75% requirement and use public facilities to accommodate peak demand. 22. As a planning rule. 3) Contract warehouses Warehousing Strategy« An integrated warehouse strategy focuses on two questions. 24. Quality & Variety of carriers serving the proposed site. Nature of the products being distributed. and packaging. Contd« 4) location flexibility: Refers to the ability to quickly adjust warehouse location and nu mber in accordance with seasonal or permanent demand changes. central warehouses may be private. a warehouse designed for full-capacity utilization will in fact be fully utilized between 75 to 85 % of the time. weight. Movement scale economies. Thus from 15 to 25 % of the time. while market area or field warehouses are public facilities. Cost of construction. In such situations. Contd« Potential for expansion. Cost & availability of utilities . 23. 19. Warehousing Strategy« It may be more efficient to build private facilities to cover the 75 % requirement and use public facilities to accommodatepe ak demand. Warehousing Strategy:Many firms utilize a combination of private. Cost of industrial land. A private or contract facility may be used to cover basic year round requirements. Product-Mix Coiderations:Each product should be analyzed in terms of annual sales.
If pallets are to be utilized.25. small items Quick. Single-mode Service Choices and Issues:- o o o o o o Air Rapidly growing segment of transportation industry Lightweight. Product Deterioration:The most obvious form of product deterioration is damage from careless transfer or storage. 27. Such expansion considerations may require purchase or option of a site three to five times the size of the init ial structure. reliable. 28. Pilferage Protection:Protection against theft of merchandise has become a major factor in warehouse operation As standard procedure. 26. It is also desirable to determine the total size and weight o f the average order processed through the warehouse. Expansion:Well-managed organizations often establish five. TRANSPORT Transport Fundamentals:Transport involves Equipment People Decisions When deciding the transport mode for a given product there are several things to consider: Mode price Transit time and variability (reliability) Potential for loss or damage. Product deterioration from careless handling within the warehouse is a form of loss that cannot be insured against and constitutes a 100 percent cost with no compensating revenue. Warehouse Layout:Layout of a warehouse depends on the proposed material handling system and requires development of a floor plan to facilitate product flow. Another major form of deterioration is non-compatibility of products stored in the same facility. high-volume . only authorized personnel should be permitted into the facility and surrounding grounds. 29.to ten-year expansion plans. the first step is to determine the pallet size. expensive Rail Low cost.