Achieving excellence in distribution: storage,

h OBS £ handling, transportation and reverse logistics

Student: Juan Manuel González G.
DNI: 50211995-M

s
Reaching the excellence in the
country
di ibution:
%
sale
Cont./year (Country)
o
Pallets (year) P a íst ) n . /M
(
it's
C
j

Portugal: a 20%
are
handling, transportation and nv
Spain:
35%
-
33600
RIC DO D ER At
600 50
58800 1050
logistics Italy:
Greece:
36%
9%
60480
15120
1080
270
90
23
TOTAL 100% 168000 3000 250
Case of

CD LISBON CD MADRID CD MILAN CD ATHENS

A maker when I was little appliance, distributes their products from

overseas in he South of
Europe following the following geographic scheme (sales x country):
Each country, ha been using a warehouse solution particular, (LISBON, MADRID, MILAN and
ATHENS)
however new sales volumes and pressure in costs, They force him to rethink the model
and
carry out a deep logistics reengineering.

Various options are modeled and the conclusion is reached to end this historical model and implement a single
WAREHOUSE or distribution center for the region (Southern Europe). The estimated savings are modeled as up to 40%
over historical Distribution costs.

Imported goods will be received in a single CD (single stock) and delivered by full truck or container to the rest of the
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 Achieving excellence in distribution: storage,

h OBS £ handling, transportation and reverse logistics

Student: Juan Manuel González G.
DNI: 50211995-M

s
countries (each will use a small crossdocking warehouse without stock to deconsolidate grouped orders and deliver them
to customers).

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 Achieving excellence in distribution: storage,

h OBS £ handling, transportation and reverse logistics

Student: Juan Manuel González G.
DNI: 50211995-M

s
The data and work volumes of this operation (import and distribution) are:

Distances (Kms): The distribution of the product is carried out annually in 3000 trucks or containers (same number
as incoming containers) and
follows the same % as the supply map on the previous page.
Athens-Mil: 1450K
Athens-Mad: 3600K Portugal: 20% Spain:
Athens-Lisb: 4200K 35% Italy: 36%
Milan-Mad: 15OOK Greece: 9%
Milan-Lisb: 21OOK
Mad-Lisb: 600K Data: 3000 Cont. Year;
168,000 pallets/year;
NOTE: Cost 1 Euro/K Without Seasonality; Continuous supply for 12 months; 168000/12=14000
[Pallets/month];
Product rotation in warehouses is 30 days.
10% increase in sales in each of the next ones. 5 years.
After carrying out a detailed analysis of the available data on this operation, it is requested:

1) Reason the optimal location of the new CD (warehouse) for southern Europe.
Most suitable country? We have the % of sales and we must calculate the total number of pallets per country (volume of
merchandise on pallets). Relative importance of each of them.
Below is the table of distances, number of trucks or trips and costs per km/ calculated the distribution cost that we will have if
we choose any of the 4 options. The
the cheaper the one chosen will be.

With the sales percentages that the problem gives us, we build the following distance and cost matrices that help us identify the
best location to distribute the appliance manufacturer's merchandise,

Cont./Month Portugal:
(Country) $/km Spain: Italy: Greece:
Portugal:
50
- 600 2100 4200
87,5 Spain: 600 - 1500 3600
90 Italy: 2100 1500 - 1450
22,5 Greece: 4200 3600 1450 -

Then with the costs they give us we obtain the costs per trip and for the load that must be transported, as shown below:

3
 Achieving excellence in distribution: storage,
handling, transportation and reverse logistics
Student: Juan Manuel González G.
DNI: 50211995-M
Origin Cost Thus, adding the costs from each origin to each different destination we obtain the
Madrid € 268.500,00 following, where we see that the destination that has the highest profitability in Southern
Lisbon € 336.000,00 Europe, from where it communicates with all commercial destinations at the lowest cost
profitable, is by having all the appliance merchandise arrive in Madrid and be sent from
Milan € 352.875,00
there to the rest of Europe.
Athens € 655.500,00 Therefore, the intermediate city where the containers that travel in
Overseas mode, they would be received in Valencia and from there they would be transported directly to the outskirts of Madrid
where the largest distribution centers are located, to take them from there to other destinations in Europe.

Cost € Portugal:
Monthly Spain: Italy: Greece: Cont./year Cont./Month
Portugal: - 52500 189000 94500 Country % of sale Pallets (year) (Country) (Country)
Portugal: 20% 33600 600 50
Spain: 52500 - 135000 81000 Spain: 35% 58800 1050 88
Italy: 189000 131250 - 32625 Italy: 36% 60480 1080 90
Greece: 9% 15120 270 23
Greece: 210000 315000 130500 - TOTAL 100% 168000 3000 250

Possible location or locations within the country? Remember that the product comes from overseas (sea import). The options
with the triangles on the map of southern Europe with sales by country on the previous page.

- A possible location, as I said before, is the city of Valencia, since it is the port that has a direct connection with the
'Overseas' mode of transport, so in this way I also think it would be strategic to have 2 additional Madrid locations in
Europe
to configure an efficient logistics network.
This would be having a CD in Zaragoza, that works like C. Storage for products that leave from Madrid or that arrive
there. From a central part of Europe.
while I also believe that having a Distribution Center located in the Port of Bilbao can connect with companies that have
greater connectivity with Northern and Eastern Europe, with the aim of expanding the market towards these areas.

2) Calculate the optimal size of the CD (necessary capacity in pallets), rotation 30 days.
a) Forhefirst year
b) Forhethird year
c) Forhefifth year NOTE: Ability inpalletsnecessary Not in m2….
Cont./year Cont./Month From the data given in the problem we obtain that
Country % of sale Pallets (year) (Country) (Country)
Portugal: 20% 33600 600 50
in the first minimum year we must have a capacity
Spain: 35% 58800 1050 88 of 168,000 Pallets, if this value increases
Italy: 36% 60480 1080 90 conservatively by 10% annually then for the 1st, 3rd
Greece: 9% 15120 270 23 and 5th year we will have the following forecasts.
TOTAL 100% 168000 3000 250

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 Achieving excellence in distribution: storage,

h OBS £ #
handling, transportation and reverse logistics
Student: Juan Manuel González G.
DNI: 50211995-M

s
Year
Ability
Pallets
1st 14000
2nd 15400
3rd 16940
4th 18634
5th 20497,4

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 Achieving excellence in distribution: storage,

h OBS £ handling, transportation and reverse logistics

Student: Juan Manuel González G.
DNI: 50211995-M
3) If, to optimize spaces, you installed 10,000 spaces for euro pallets in 4-height racking. What space would you need to
s
install the racks? Calculate.

The Euro Pallet is of the following dimensions, EUR-pallet Dimensions (W × L)

EUR, EUR 1 800 mm × 1,200 mm 31.50 in × 47.24 in
Taking the information from the following website:
https://www.logisticaproductiva.com/uploads/1/5/2/2/15229884/selectivo.pdf where the dimensions of a pallet, the optimal
aisle size and height of the shelves, then, each Rack should have a depth of 85cm, as follows:

In this case I would use 6 rows of Racks to locate the 1000 spaces, so that each row
of shelves has 250 pallets. This would imply placing 63 towers of 4 floors high in the
warehouse, thus the pallet warehouse should have a length of per at least 1900 m2
and a width of about 1200 m2

4) If the input productivity is 16 pallets per hour (unloading + product placement), and we work a single shift of 8 hours per
day and 22 working days per month. Calculate the machinery necessary to make the entries. (a alone
machine download and locate). If the calculation gives decimals, the rounding upward is what
usual.

If we calculate the number of pallets that enter daily is 128 (pallets) according to that data, then yes have8 hours of
work during 22 business daysthey need to be placed
11 pallets every hour, so since a single machine can place 11 pallets per hour, you should have a productivity of68.7% with
a single forkliftwhat is recommended
have a productivity greater than the income of merchandise, then with 2 forklifts, productivity would increase 90% having
so oneproductivity of 20 movements per
hour. With this would reduce to a productivity total of 6.12am; leaving afree time for
set up of the machines, set up of the warehouse staff, thus in this way we would prepare the daily planning of movements in the
warehouse using 2 forklifts in the warehouse of the dimensions calculated previously.

moved
Pallets available pallets/ Available
enter / h work hours month working hours Productivity
16 176 2816 176 11

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 Achieving excellence in distribution: storage,

h OBS £ handling, transportation and reverse logistics

Student: Juan Manuel González G.
DNI: 50211995-M

s
5) If we made Picking preparations by boxes and each pallet had 40 boxes. We will consider that 100% of a month's
pallets are prepared in picking and that the picking productivity is 140 boxes/hour, with 8 hours worked per day and 22
working days per month. (Note: if the calculation gives decimals, round up.)
Calculate:
a) Number of boxes out per month;

pallets
Pallets available
moved/mo machine Productivity
enter / h work hours
nth movements (hours)
16 176 2816 176 11
With the calculations in the previous table we obtain the following data:

boxes/pallet
40
140boxes /h
24640 boxes/
month
So the productivity data at 100% box movements, 24,640 boxes must be moved per month.

b) Number of picking hours per month/staff needed for picking.

Using the same calculation logic we would then need the following personnel each month to carry out the piking.

Each person must move 616 pallets/month

Likewise, 14,000 pallets/month must be moved, so 22.72 hours/month are needed, so since this must be an integer, at
least 23 hours/picking are required, this can be divided into a team of 3 people to carry out the picking, which They
would work 6 effective hours each.