SLDS - LM Obt 1.1 (WH-1)

For VIDEO LECTURE Slides for LM OBT 1.
1
(Parts 1 and 2) Click: An Introduction to
https://drive.google.com/file/d/1QrdPGOReuya
Up-F02o3dPF0vAU3KcBzx/view?usp=sharing
https://drive.google.com/file/d/1oRgaydgtWNu
Logistics
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Management
& Warehousing
What is Supply Chain Management?
 Supply chain management is
the design, planning, execution, and
monitoring of supply chain activities
with the objective of:
 creating net value,
 building a competitive infrastructure,
 leveraging world-wide logistics,
 synchronizing supply with demand, and
 measuring performance globally.
—APICS Dictionary
Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.2 of 64

 SCM coordinates
the material, information,
and financial flows
between and among
all the participating enterprises.
 SCM also includes
optimization tools and also
functions for aggregation
and monitoring.
 It can flexibly deal with the changes
in the logistics chain.

The term Supply Chain Management
was coined by two consultants:
1. R K Oliver, and
2. M D Webber
 In their article in Outlook (1982):

“Supply Chain Management:
Logistics Catches up with Strategy.”

According to Oliver and Webber:
 SCM/Logistics Should be a concern
of the top management of the firm.
 Top management should
reconcile and balance
conflicting functional objectives
along the supply chain

Dictionary Definition of Logistics
 The branch of military science
having to do with procuring,
maintaining, and transporting
material, personnel, and facilities.
- Oxford English Dictionary
 The logistics function is concerned with

the time- and space-related placement
of goods to serve customers better.

Three Different Perspectives on
The Relationship between Logistics and SCM
Logistics and SCM

are separate and
Logistics SCM distinct functions
that have parts
that overlap.
Intersectionist

Logistics has
evolved
Logistics SCM Logistics SCM to become
SCM. /
Logistics has
been
Intersectionist Evolutionist
relabeled by
(Relabeling)
more recent
term SCM.

Logistics is
part of SCM. SCM
Logistics SCM SCM is SCM
Logistics
a much wider, Logistics
intercompany,
Intersectionist boundary-spanning
Evolutionist Inclusionist/
concept.
(Relabeling) Unionist

SCM
Logistics SCM Logistics SCM
Logistics
Intersectionist Evolutionist Inclusionist/

(Relabeling) Unionist

Evolution: From NCPDM to CSCMP
Jan-1963 1985 1-Jan-2005
Renamed:
National Council of Renamed:
Council of
Physical Distribution Council of
Supply Chain
Management Logistics
Management
(NCPDM) was Management
Professionals
founded (CLM)
(www.cscmp.org)

CSCMP Definition of Logistics Management:
 Logistics management is
that part of supply chain management
that plans, implements, and controls
the efficient, effective
forward and reverse flow, and storage
of goods, services, and related information
between the point of origin
and the point of consumption
in order to meet customers’ requirements.
- Council of Supply Chain Management Professionals (CSCMP)

 The logistics costs are significant for the firm
as well as the economy.
 For the firm,
from 4% to over 30%
of the sales revenues.
 According to the IMF,
logistics costs average about
12 percent of the world’s GDP.

Logistics can and
does play an important role
in a nation’s economic growth
and development.
 The importance of
reverse logistics and information
has now been recognized.
 Information can be substituted
for inventory is the new axiom
in the discipline of SCM!

 Companies should base their logistics strategies
on customer needs and wants; and
Tailored Logistics approaches should be considered
over Mass Logistics approaches.
 Mass Logistics involves serving every customer

with the same type and level of logistical service;
this invariably results in some customer being
overserved while others are being underserved.
 Tailored Logistics involves serving

groups of customers with similar logistical
needs and wants in a way appropriate to
and matching with their needs and wants.

 Humanitarian Logistics is emerging
as the application of logistics
to help people who have been affected
by natural and/or man-made disasters.
 Humanitarian logistics mostly involves
locating, collecting, transporting, and
distributing food and medical supplies
to the affected people
as soon as possible.

 Logistics is important to the corporate strategy
as it adds significant value and provides
competitive advantage in terms of
cost and customer service.
 Logistics activities provide the bridge between:

 Manufacturing (concentrated at
relatively few locations to make it
efficient and cost effective) and
 the geographically dispersed
target market locations
that are separated
by time and distance.

Economic Utilities (Values)
Created by Business
 Form Utility/Value refers to a product’s being in a form
that is useful and of value to the customer.
 Manufacturing/assembly creates the form utility
by changing the form of inputs materials
 Certain logistics activities, such as breaking bulk
and mixing products, can also provide form utility
 by changing the shipment size
or packaging of the products
to match customer requirements.

 Time Utility/Value refers to products’
being available when they are needed
by the customer.
 Inventory management (a logistics activity)
creates the time value in the products.
 Space or Place Utility/Value refers to

products’ being available where
they are needed by the customer.
 Transportation (a logistics activity) creates
the place value by moving products
from points of lesser value
to points of greater value.

 Possession Utility/Value refers to value or
usefulness that comes from a customer being
able to own/take possession of a product.
 Sales & Marketing, Engineering, and Finance
create the possession value by helping
customers acquire the product through
advertising, technical support, and
terms of sale (pricing and credit availability)
 Payment terms can also facilitate creation
of possession utility, e.g., by facilitating
payment through credit and debit cards, or
by providing automobiles on lease, etc.

Logistics/SCM, being
responsible for creating
the form, time, and place utilities
in the product,
add the maximum value,
and, thus, plays a major role
in the success of the business.

Evolution of Supply Chain Management
INTEGRATED BUSINESS LOGISTICS MANAGEMENT

MATERIALS MANAGEMENT PHYSICAL DISTRIBUTION
▪ Demand Forecasting ▪ Finished Goods
Inventory
▪ Requirements Planning
▪ Distribution Planning
▪ Production Planning & Control
▪ Order Processing
▪ Purchasing & Incoming QC
▪ Customer Service
▪ Manufacturing Inventory
LOGISTICS: Transportation + Warehousing & Store Keeping

+ Material Handling + Industrial Packaging + Reverse logistics

SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN SUPPLY NETWORK DESIGN SUPPLY NETWORK
STRATEGY & CONFIGURATION PLANNING
INTEGRATED BUSINESS LOGISTICS MANAGEMENT

MATERIALS MANAGEMENT PHYSICAL DISTRIBUTION
▪ Demand Forecasting ▪ Finished Goods
Inventory
▪ Requirements Planning
▪ Production Planning & Control
▪ Purchasing & Incoming QC
▪ Manufacturing Inventory
LOGISTICS: Transportation + Warehousing & Store Keeping

+ Material Handling + Industrial Packaging + Reverse logistics

SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN SUPPLY NETWORK DESIGN SUPPLY NETWORK
STRATEGY & CONFIGURATION PLANNING
STRATEGIC
INTEGRATED BUSINESS LOGISTICS MANAGEMENT PLANNING
MATERIALS MANAGEMENT PHYSICAL DISTRIBUTION MARKETING

▪ Demand Forecasting ▪ Finished Goods (PRICING/CRM)
Inventory
▪ Requirements Planning PRODUCT
▪ Production Planning & Control DESIGN
▪ Purchasing & Incoming QC QUALITY
▪ Manufacturing Inventory MANAGEMENT
LOGISTICS: Transportation + Warehousing & Store Keeping INFORMATION

+ Material Handling + Industrial Packaging + Reverse logistics TECHNOLOGY
SALES

SCM Software Packages Are
Back-end applications designed to link
 Suppliers,
 Manufacturers,
 Distributors, and
 Retailers
 in a cohesive production
and distribution network.

Warehousing:
A Role Beyond Storage

Learning Objectives
 Role of Warehousing in Logistics
 Warehouse Functions and Options
 Strategic Decisions in Warehousing:
Site, Layout, Type, Storage
 Warehousing Strategies
 Warehousing Performance Measures

A Warehouse Is
 A logistical facility that is used
to store materials, such as raw materials,
input parts, goods-in-process, MRO
(maintenance, repairs, and operating)
supplies and finished goods, at and between
the points of origin and consumption.
 Referred to by some as
“Transportation at
Zero Miles per Hour!”

Costly, Long-Lead Time,
Long-Haul Transportation Retailer A
Supplier Retailer B
Retailer C
A Warehouse Can Divide a Slow-Response,

Costly, Long-Haul Distribution Route into:
 A Cost-Effective, Long-Haul
Transportation Root Employing
Large Vehicles Carrying
Full-Truck Loads (FTLs), and…

Transportation
at Zero Miles
Costlier, But Responsive, Fast,
Cost-Effective per Hour;
Short-Haul Transportation
Long-Haul Transportation Lower Safety
(Marginal Cost Increase)
(Significant Stock because of
Cost Reduction) Risk Pooling Retailer A
Supplier Warehouse Retailer B
Retailer C
 A Quick-Response, Short-Haul Transportation

Root Located Close to a Group of Destination
Locations Employing Smaller Vehicles
Carrying Less-than-Truck Loads (LTLs)

A Warehouse Can Be…
 A Raw Material and Component Warehouse.
A place where raw materials and
other input components are
stored at or close to the point of induction
into a manufacturing or assembly process
 A Work-in-Process Warehouse.
A facility to store product
in some intermediate state
at various points along
a production or assembly line

 A Value-Added Service Warehouse.
A facility to customize products
through postponement of final assembly, or
mixing, finishing, labeling, and/or packaging
operations at a location
closer to the final customer
to reduce lead time

 A Finished Goods Warehouse, where finished goods
(FG) are stored till they are further distributed.
 The FG inventory is held to buffer the variation
between production output and market demand.
 A Local Warehouse, which is located

close to a large number of customers (retail outlets)
or a large customer (e.g., an OEM) to make small,
just-in-time deliveries at a very short notice
to permit rapid response.

 A Distribution Centre that plays
a key role in an organization’s logistics strategy.
 Products from various points of supply
are accumulated, consolidated, and sorted in it
for combined shipments to common
customers (e.g., retail stores)
 A DC might be located central to either
the production locations or the customer base
 The product movement may be typified by:
Full Pallets/Cases DC Full Cases, Broken-Case Quantities
 It is a point where organization fails or succeeds

in fulfilling the sales and marketing promises.
 A Sortation Centre/Cross-Dock
where products collected from different regions are
sorted by zip or post code for (overnight) deliveries
 A Fulfilment Centre
(e.g., for e-retailing) designed and equipped
to manage large volumes of small/single-item orders
➢ It may also double up as
a Returns Processing Centre.

A Warehouse Can Also Be…
 A Reverse Logistics Centre,
where returns are checked and either
repackaged, repaired, remanufactured,
recycled, or disposed of safely
 A Warehouse-Style Retail Store,
where the upper portions of tall, heavy-duty,
mechanized industrial racks are used
as warehouse storage areas, while
the bottom parts of the racks are used
for displaying ready-for-sale merchandise

Today, a Warehouse Is Used More as:
 A Switching Facility
rather than
a long-term storage house
 A variable in make-and-sale equation

of the organization that affects
availability, lead times,
transportation costs,
customization, etc.

Today, Warehousing Is Viewed as
 A Strategic Consideration:
A Source of
Competitive Advantage
 A means to enhance
customer satisfaction
rather than
to reduce costs.

Warehousing Is Important in SCM Because It:
 Facilitates holding of goods
within a reasonable delivery range
of customers locations
to enhance customer service
 Has significant impact on the overall costs
 It is closely associated with

the inventory management function
(What, How Much, Where,
and How Long to Store)

Warehouse Managers
Are Expected to Achieve:
 Maximum utilization of storage space
in terms of floor/shelf area and cubic space
 Higher labor productivity
 Maximum assets utilization
 Reduced material handling
 Lower operating costs
 Higher inventory turnover
 Shorter order-filling/cycle times

Basic Tenets of Warehouse Management
 Accuracy (in Recording Receipts,
Issues, and Stock Levels)
 Efficiency and Cost Control
 Orderliness and Cleanliness
 Safety (of Employees and Users)
 Security (of Stored Goods)

Lean Warehousing
 Involves elimination of all unnecessary costs
from warehousing operations by:
 Eliminating all unnecessary activities:

Only those activities that add value
to the overall process are allowed
 Performing tasks in
the most efficient manner
at the most appropriate time
and location

Centralized versus Decentralized Warehouses
 A centralized  A decentralized
warehouse ensures warehousing system
tight control on operates with
inventories, multiple warehouses
provides located close to the
economies of scale point of use or
and risk pooling consumption
resulting in enabling rapid fulfilment,
higher availability fast response, and higher
and lower costs levels of customer
service albeit at a
relatively higher cost.

Warehouse Functions
 Stock Holding
(Raw Materials, WIP, and Finished Goods)
 Match different rates of production and consumption
 Consolidation/Transit Warehousing
(of a number of small shipments
into large shipments)
 Break Bulk/Transhipment (dividing the material
received in bulk—e. g. oil, fertilizer, chemicals, etc.
into smaller consignments for individual customers;
changing to different vehicles/modes)

Warehouse Functions (continued)
 Cross Docking
(Receiving, breaking bulk, sorting, & unitization
of shipments without storing in less than 24 hours)
 Mixing/Assembling (of several incoming
ingredients/components into final products)
 Postponement/Value-Added Services
(mixing/assembling or finishing of
customizable products at the warehouse
as per the configurations
specified by the customer)

 Packing and Labelling
(packaging/repackaging/labelling of materials in
customer-specified quantities and packaging options)
 Regrouping or Assortment Building and
Consolidation (e.g., at a distribution centre
for different retail outlets)

 Sorting
(Used by letter, parcel, and pallet
distribution companies)
 Fulfillment
(To receive, pick, and ship
large volume of small orders
to individual customers)
 Reverse Logistics
(for returns management)

Material Handling Functions
 Unloading goods from and Loading on
Transportation Vehicles
 Material Movement to and from the Storage Area
manually; or using material handling equipment
(such as trolleys, cranes, conveyors, or forklifts), or
by Automated Storage and Retrieval Systems (AS/RS)
 Order Filling
(Picking up of the required items
from different locations in the warehouse,
staging for inspection, and finally
packaging and dispatching)

Information Handling Functions
 Goods Inwards
 Inspection and Auditing
 Goods Outwards
 Stock-outs
 Excess Stock
 Invoicing
 Warehousing Expenses
 Transit Damages and Breakages
 Consignment Tracking

Warehouse Processes
Pre-advice
 The purchasing process should

ensure that the suppliers present
the product to the warehouse
in the most appropriate way.
 The warehouse manager
should be involved in specifying
the packaging, transportation,
and delivery aspects of the deal.

Warehouse Processes
Following Aspects Should Be Discussed
Pre-advice Internally and Externally Prior
to the Order Being Placed:
 Size, type, and quantity of cartons
 Type of Transit Packaging: Cardboard,
plastic, totes, metal stillage, roll cages, or
pallets
 Palletized or non-palletized delivery
 Size and type of pallets
 Required labels and their
position on cartons/pallets
 Mode of transport, delivery,
quantity and frequency of delivery
 A Lot of Time Can Be Saved in Receiving
Warehouse Processes
if information related to shipped
Pre-advice products is communicated electronically
in advance by the supplier through an
Advanced Shipping Notice (ASN);
it also helps in scheduling receiving
activities and resources.
 Advanced Shipping Notice (ASN)
indicates the time the load is
leaving the supplier location,
the exact position of each pallet on the
truck, and the scheduled arrival time.
 Some Warehouse Management Systems
(WMSs) can use this information to pre-
allocate pallet locations for the product.
Warehouse Processes (continued)
Pre-advice  Following Checks Are Made on Arrival
 Vehicle details against
the booking reference
Receiving  Vehicle seals against
the delivery paperwork
 Temperature history and
the current temperature
of the goods (if applicable)
 Unloading from Vehicle Could Be
 By Pallets
 From Stacks on to the Pallets
Pre-advice
 Unloading Methods/Equipment
 By Pallets
Receiving  From Stacks on
to the Pallets Using
• A Palletizer
• A Boom Conveyor
• A Robot and
a Palletizer, or
a Boom Conveyor

Click to Watch Videos of Unloading Methods
(OBTs would include questions on the Videos; however,
there won’t be any questions on Videos in CBTs)
 UnloadingByPallets:(https://drive.google.com/file/d/1oM6ZCwzUF7YR4w
mMgToFZhAoRwPjgFkj/view?usp=sharing )
 From Stacks on
to the Pallets Using
• Palletizer:(https://drive.google.com/file/d/1dJPOmgZpvsMhyKu4r0vby8
L1AAuuiQKG/view?usp=sharing )
• RoboticUnloadingWithBoomConveyor:(https://drive.goog
le.com/file/d/1ed5Sn6T_zLRNuYtBcL7S5SlM5n4clClu/view?usp=sharing )
• TelescopicBoomConveyor:(https://drive.google.com/file/d/1AYl
4TJ01lDUXjmqFTNTUdjxAjQ_1btd9/view?usp=sharing )

Warehouse Processes Checking Goods before Put-away
 Compare actual quantities
Pre-advice to those in the documents
Checking through 100% checks
(Prepackaging or random checks
/Labeling)  Some retailers use GFR
Receiving
(Good Faith Receiving) to
accept products directly into
Stores or Distribution Centers
(DCs)
 Random checks are,
however, made and any
discrepancies found are
charged to the supplier
on a pro rata basis.

Warehouse Processes
Blind Counts
Pre-advice
 Delivery notes can be used
Checking to check off the deliveries;
(Prepackaging
or
/Labeling)
Receiving  To assure greater accuracy,
operators may be required
to first make “blind” counts
(without knowing the
expected quantities) which
are then cross-checked
against the paperwork
only after the whole load
has been received.
Warehouse Processes
Prepackaging/Labeling: Following
Pre-advice activities, if done at the time of
Checking receiving, can save a lot of time
(Prepackaging during shipping; and, thus, reduce
/Labeling) Warehouse Order Cycle Time
Receiving
(WOCT):
 Prepackaging in Issue/Outgoing
Lot Sizes
 Applying Necessary Labels and
Tags (Disadvantage: Inventory
might get committed earlier than
necessary, thus, losing flexibility)
 Cubing and Weighing for Storage
and Transportation Planning
Product Cube and Weight Information
 Can be provided by the supplier
 If not provided by the suppler,
should be captured
at the receiving dock
 A device, e.g., a Cubiscan
is often used at receiving
to capture and automatically
communicate inbound
carton dimensions and weight
to the WMS

Click to Watch Videos of Cubiscan Devices
(OBTs would include questions on the Videos; however,
there won’t be any questions on Videos in CBTs)
 ManualCubiscan:(https://drive.google.com/file/d/1qIMjTjWVIIy4r47d_ydcq
bM00YxoH0O9/view?usp=sharing )
 In-MotionCubiscan:(https://drive.google.com/file/d/1AhqM7Hv4kn-
aXfPw8QDKHyRn7JhdS-ld/view?usp=sharing )
 CeilingMountedCubiscan:(https://drive.google.com/file/d/1RItPLbW_e
kuXCKDCP_r42fVKG1XO2rx3/view?usp=sharing )

Warehouse Processes
Pre-advice Recording
Checking  Standard data such as
(Prepackaging Product Code, Description,
/Labeling) and Quantities are recorded
Receiving
after checking
 If applicable, Batch/Lot
Numbers and Serial Numbers
are also recorded.
 Barcode scanning makes
the data capture more
accurate and much faster.

Pre-advice
Checking
(Prepackaging
/Pricing)
Receiving Put-away
Put away:
 Assign storage locations
on STORAGE EQUIPMENT
 Move products to assigned locations
using MTERIAL HANDLING EQUIPMENT
Introduction
Updatetorecords
Logistics & Warehousing by khalid_sheikh / LM 1.1.63 of 64
To Be Continued…

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For VIDEO LECTURE Slides for LM OBT 1.

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.2 of 64

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.3 of 64

 In their article in Outlook (1982):

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.5 of 64

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.6 of 64

 The logistics function is concerned with

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.7 of 64

Logistics and SCM

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.8 of 64

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.9 of 64

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.10 of 64

Intersectionist Evolutionist Inclusionist/

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.11 of 64

Jan-1963 1985 1-Jan-2005

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.12 of 64

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.13 of 64

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.14 of 64

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 Mass Logistics involves serving every customer

 Tailored Logistics involves serving

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.16 of 64

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.17 of 64

 Logistics activities provide the bridge between:

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 Space or Place Utility/Value refers to

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INTEGRATED BUSINESS LOGISTICS MANAGEMENT

LOGISTICS: Transportation + Warehousing & Store Keeping

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.23 of 64

INTEGRATED BUSINESS LOGISTICS MANAGEMENT

LOGISTICS: Transportation + Warehousing & Store Keeping

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.24 of 64

MATERIALS MANAGEMENT PHYSICAL DISTRIBUTION MARKETING

LOGISTICS: Transportation + Warehousing & Store Keeping INFORMATION

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A Warehouse Can Divide a Slow-Response,

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Supplier Warehouse Retailer B

 A Quick-Response, Short-Haul Transportation

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 A Local Warehouse, which is located

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Full Pallets/Cases DC Full Cases, Broken-Case Quantities

 It is a point where organization fails or succeeds

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 A variable in make-and-sale equation

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.38 of 64

Introduction to Logistics & Warehousing by khalid_sheikh / LM 1.1.39 of 64

 Has significant impact on the overall costs

 It is closely associated with

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