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Question 1

1. Normally warehouses will be equipped with Materials handling equipment (MHE) to suit its
processes and activities.

(a) Examine the factors influencing MHE at FedEx Penang Airport operations.
[15 marks]
- Load Capacity
The warehouse, measuring 4,830 square meters (52,000 square feet), is also the first
facility of its kind in Malaysia to feature x-ray scanning for 100% of all outbound
packages.  This is made possible with the use of advanced conveyor belts and sorting
systems as well as outbound x-ray scanning equipment capable of handling more than
2,700 packages per hour.
- Flexibility
The FedEx enhanced facility will play an essential role in turning Penang into a logistics
hub for Malaysia's northern region, as well as a gateway enabling cross-border trade and
attracting foreign investments," said Yang Amat Berhormat Chief Minister of Penang,
Tuan Chow Kon Yeow.
- Adaptability
The facility will have two dedicated Boeing 767 freighters capable of next-business-day
delivery flights to major cities in the U.S. and Asia Pacific, as well as 71 ground
operations vehicles covering more than 60 local routes in Penang and neighboring
mainland states, such as Kedah and Perak.  This facility also supports the FedEx Asia
Road Network, a unique and extensive road system that spans more than 7,000 km and
connects all key markets in South East Asia and China, from Singapore to Guangzhou. 
The facility will be operated by approximately 350 team members.

(b) Explain the way(s) MHE contribute to DHL warehouse operations.

[15 marks]
Dedicated and shared operations - The scale, location or complexity of the business
requires a dedicated solution, DHL has the people and expertise. The flexibility and cost
 advantages of sharing space, labor, equipment and transportation, and consistently
excellent operations, DHL's shared warehousing and distribution solutions.

Ambient and temperature-controlled facilities - All of the processes are set up to meet
the standards of the new EU GDP guidelines change control, risk management, exception
management and CAPA handling to safeguard the integrity of the goods during the entire
transport chain. DHL Freight has established a dedicated Life Science Competence
Center in Belgium. Throughout Europe, a fleet of refrigerated trucks is at your disposal at
any time. These ensure that sensitive goods are treated in compliance with the new EU
GDP guidelines. During the journey, the temperature is measured continuously,
transmitted via GPS and made available online. The state-of-the-art IT tools allow to
track the status and temperature of all shipments at every stage of the journey. All
warehouses and cross docking stations are GDP compliant, specifically equipped to
guarantee continuous temperature control.

Storage, pick, pack and dispatch - From storage of raw materials to consumables, spare
parts and finished goods, DHL provides solutions that ensure that can deliver on
customer promise. And whether efficiency is best served by sharing warehouse
operations or creating a dedicated operation, they provide the solution that drives the best
value for your business.

Delivery and returns management - They offer service Parcel Connect Return. With
the original shipment, they can attach a return label. In this way, the customer has
everything needed to handle a return. 

(c) With an aid of an example, illustrate MHE fundamental issues.

[10 marks]
 Lack of diversity in storage
For businesses in warehousing or supply chain, you can't afford to have a "one-trick
pony" racking system. A lack of diversity in your storage media can result in running out
of storage space extremely quickly if and when your product mix changes. If you can
 anticipate any changes or additions to your product, think about diversifying your storage
with some of the following racking types:

 Pallet flow racks

 Case-flow racks
 Push-back racks
 Single or Double deep racks

 Being blind-sided by fuel costs

When deciding to purchase material handling equipment such as forklifts, the fuel source
is one of the most important aspects of the machinery to consider. Fuel will be a constant
expense, no matter if you choose an electric forklift or an IC forklift. It is important to not
only take into account the prices of fuel now, but also where they might trend in the
future. 
For larger fleets with lots of work hours being put into your fleet, you may also want to
take into consideration the tax incentives for investing in clean burning fuel.
 
 "Honeycombing"
Another problem that occurs with racking is honeycombing, where inefficient or poorly
planned pallet racking results in clusters of empty spots that are unable to hold any
product. Honeycombing reduces your overall storage space and increases the time it can
take for employees to pick orders or navigate storage.
   
 Not staying up to date on safety training
OSHA always seems like a monkey on the back of business owners; but, when all is said
and done, promoting the safety and well-being of everyone in and around the workplace
is in everyone's best interest. When companies lapse on safety training, such as with
forklift operator training, disaster can strike. Not only will accidents be more likely to
occur without properly timed training and safety recertification, but in the event of an
accident onsite, an insurance policy may not cover damage or medical expenses if proper
OSHA regulations aren't followed to a "T".
 
  Not planning for changes in your business
Similar to the first problem we mentioned, not planning for changes in your business can
easily chew up your profit margins. Being able to chart out how far into the future you're
going to lease a new forklift fleet, reconfigure all of your racking into narrow-aisle
shelving, expand into a secondary warehouse space, or any other big move can help you
save time, money, and a lot of headache in the planning and execution of any of those
changes.

Question 2

(a) Evaluate the impacts to the warehouses in NBCT following this announcement.
[30 marks]
This announcement in the region, will call for high increase in the demand of
warehousing system. The new foreign investments in the given target industrial area will
create high demand for warehouses because warehouses will be requiring for storing the
finish products and raw material needed for these new industries. We can anticipate that
increase in companies in these areas will boost the demand for warehousing for
supporting the material storage and operations.
· Govt. Incentives for warehouse Development: Government will be promoting to
increase warehouses in the target region to facilitate the proper storage of materials. For
this Government will be coming out with attracting incentive schemes so that they can
motivate larger businesses player to invest in warehousing development and management
to support the increasing demand of warehouses.
· Better opportunity for warehousing business: This announcement will increase the
demand for utilization of existing warehouses and excising warehouses will be utilized at
peak level. Thus this will result in better profitability for the warehousing businesses.
Warehouses will explore better opportunities during this time.
· Effectiveness and efficiency in warehousing segment: This announcement will drive
effusiveness and efficiency in warehousing operations and existing warehousing players
will prefer to make best use of their resources during this potential upcoming peak
demand time in their area.
· Boost in Supply Chain Business: This announcement will boost the demand in the
supply chain operations. This will increase the demand in logistics and transportation
area also along with the warehousing area.

(b) Examine the current and new activities that can now be carried on in NBCT.
Support your answer with examples.
[30
marks]
Building a focal point for shipping and transshipment activities as one of its main
terminals, the North Butterworth Container Terminal (NBCT), The North Butterworth
Container Terminal (NBCT), was recently gazette as a free commercial zone (FCZ). Free
commercial zone refers as a special economic zone, which is a geographic area, and
having some specific custom regulations which becomes advantageous for to store goods,
export import, handling the product, re- exporting, and many other activities, which is not
subject to custom duty or other. Example- Hong Kong, Los Angeles, and Singapore.

The gazettement of NBCT involves 10 lots of land covering the total area of 83.57
hectares. Which is a huge area to perform all the activities performed in free trade area, it
increases the job opportunities, economic growth and advancement of the port, the port
could leverage on the FCZ status to entice investors around the world to conduct value-
added activities such as break-bulking, grading, repackaging, relabeling, transit and re-
export. Which leads to Competitive advantage for the port and increase the economic
value and strong financial backups.

Once the facilities are upgraded, cutting-edge technologies are implemented and
introduced to cater to the foreign investors, the local workforce and port operations will
become much more efficient and effective. NBCT will be able to cater the activities such
as high-tech warehousing and logistics facilities, thus spearheading the positive economic
growth in the Northern region of Malaysia. 
 Transshipment. One of the most impactful activity after the gazettement of NBCT as
FCZ.  Transshipment is the process in which containers exchange or uploaded from one
vessel to another before being shipped off to their intended location or loading into
another vessel to reach their intended location.  Due to this development foreign
companies will be able to use the facilities before exporting their products overseas. And
investors around the world to conduct value-added activities such as break-bulking of
product, grading, repackaging if required, relabeling, transit and re-exporting the
product. This will also benefit Penang Port in the long run through the exempt of customs
duty, and other various taxes applied on goods by government except for certain goods.

References
Port, P. (2021, February). PENANG PORT’ NBCT GAZETTED AS A FREE COMMERCIAL
ZONE. Retrieved from Penang Port: https://www.penangport.com.my/media-
center/announcements/february-2021/penang-port%E2%80%99-nbct-gazetted-as-a-free-
commercial-zo

University, W. O. (2021). Question. Retrieved from Course Hero:

https://www.coursehero.com/tutors-problems/Business-Other/34364004-Penang-Port-
Sdn-Bhd-is-set-to-be-a-focal-point-for-shipping-and/?justUnlocked=1