Fundamentals of Warehousing, Packaging, and Material Handling

WAREHOUSING, PACKAGING, AND HANDLING Strategic Warehousing 1. Consolidation and Break – Bulk   Consolidation occurs when a warehouse receives materials from a number of sources and combines them into exact quantities for a specific destination Break-bulk occurs when a warehouse receives a single large shipment and arranges for delivery to multiple destinations 2. Sorting - involves reconfiguring freight as it flows from origin to destination    Cross-docking combines inventory from multiple origins into a prespecified assortment for a specific customer. Mixing combines inventory from multiple origins (like cross-docking) but also adds items that are regularly stocked at the mixing warehouse. Mixing is usually performed at an intermediate location between origin and destination Assembly occurs when products or components from second-tier suppliers are assembled by a warehouse located near manufacturing plant. Common assembly processes are packaging and color customizing 3. Seasonal Storage - provides direct benefit by accommodating production or demand 4. Reverse Logistic- include activities supporting a. Returns management b. Remanufacturing and repair c. Remarketing d. Recycling e. Disposal Service benefits of warehousing   Spot-stocking is the positioning of inventory for seasonal or promotional demand. Full line stocking provides one-stop shopping capability for goods from multiple suppliers. Value-added services (VAS) – Any work that creates a greater value for customers. Warehouse Operations Warehouse operations involve two major activities – handling and storage a. Handling must optimize movement continuity and efficiency. 1. Receiving—Unloading the arriving vehicles 2. In-Storage—consists of inventory movements performed within the warehouse. 3. Shipping—verifying the order and loading the departing vehicles b. Storage plans should make product velocity a major factor. Slotting – the placement of specific products, determines specific locations for the product based on   Velocity—how fast the goods move Weight—how heavy is the product Warehouses must manage two classes of storage Active Storage—storage for basic inventory replenishment. Focuses on quick movement. This includes flow-through or cross-dock distribution, which uses warehouses for consolidation and assortment while maintaining minimal or no inventory in storage. Extended Storage—storage for inventory held in excess of period for normal replenishment. Warehouse ownership arrangements a. Private—warehouse operated by the enterprise that owns the merchandise handled and stored in the facility. b. Public—service company owns warehouse and hires out space and services. Public warehouses have traditionally been classified based on operational specialization such as:  General merchandise  Refrigerated  Special commodity  Bonded  Household goods and furniture Contract warehousing combines elements of private and public operations. Usually, a longterm relationship or contract between a firm and the warehousing owner/operator. Warehouse decisions that determine handling and storage efficiency       Site Selection Design Product-Mix Analysis Expansion Materials Handling Layout      Sizing Warehouse management system Accuracy and audit Security Safety and maintenance a. Site selection - identify broad geography where an active warehouse meets service, economic and strategic requirements. This is driven by service availability and cost factors. b. Design – warehouse design must consider product movement characteristics. Three factors to be determined during the design process are the: • • • Number of floors Cube utilization plan Product flow c. Product-Mix Analysis – the analysis of products that will be distributed through the warehouse. Each product should be analyzed in terms of annual demand, weight, cube, and packaging. It is also important to determine the total size, cube, and weight of the average order to be processed through the warehouse. d. Expansion – Potential expansion may justify purchase or option of site three to five times larger than required to support initial construction. Building design should also accommodate future expansion. e. Materials Handling – a handling system is the basic driver of warehouse design. Product movement and assortment are main functions of a warehouse. f. Layout – the layout or storage areas of a warehouse should be planned to facilitate product flow. Special attention must be given to location, number, and design of receiving and loading docks. g. Sizing – begins with a projection of the total volume expected to move through the warehouse. The projection is used to estimate base and safety stocks for each product to be stocked in the warehouse. A good rule of thumb is to allow for ten percent additional space to account for increased volume, new products, and new business opportunities. h. Warehouse management system (WMS) – most firms depend upon WMS to standardize work procedures and facilitate best practice. i. Accuracy and audit – inventory accuracy is typically maintained by annual physical inventory counts or by counting specific portions of the inventory as planned basis. Audits are also common to maintain safety, assure compliance to security regulations, drive procedural improvement, and facilitate work changes. j. Security – involves protection against merchandise pilferage, deterioration, and any form of operational disruption. k. Safety and maintenance – a comprehensive safety program requires constant examination of work procedures and equipment to locate and take corrective action to eliminate unsafe conditions before accidents result. Packaging Perspectives The primary concern for logistics operations is industrial package design. Individual products or parts are typically grouped into cartons, bags, bins, or barrels for damage protection and handling efficiency. Packaging for handling Efficiency All logistical operations are affected by packaging – from truck loading and warehouse picking productivity to transport vehicle and storage cube utilization. Handling efficiency in all of these situations is significantly influenced by package design, utilization, and communication characteristics. Package design – product package in standard configurations and order quantities facilities logistical efficiency. Master cartons – containers used to group individual products. Containerization / unitization – cartons grouped into larger units for handling Unit load – the process of grouping master cartons into one physical unit for materials handling or transport. Rigid Devices – provide an enclosure within which master cartons or loose products are unitized. The premise is that placing products inside a sealed container will both protects them and facilitate handling. Benefits of Rigid Devices       Improves overall material movement efficiency Reduces damage in handling and transit Reduces pilferage Reduces protective packaging requirements Provides greater protection from element environment Provides a shipment unit that can be reused a substantial number of times, thereby reducing waste and the need to dispose of the container. Flexible Devices = do not protect a product by complete enclosure. Most common type of nonrigid unitization is umtyaton stacked master cartons on either pallets or slipsheets. Pallets are most commonly constructed out of wood. Slipsheet is a flat stocking surface generally made of cardboard or plastic. Because slipsheets lie flat on the floor, special lift trucks are required to handle slipsheet unit loads. The primary advantage of slipsheets in comparison to pallets is cost and weight. Communication – the information transfer which is the final logistical packaging functionality. This function is becoming increasingly critical to provide content identification, tracking information, handling instructions, and information essential for security. Package tracking is critical for effective internal operations. Bus also for customers, who want to track their own package. HANDLING Basic handling considerations Logistical handling occurs throughout the supply chain. Bulk handling includes situations wherein the products is handled without first being placed in master cartons. Specialized equipment is required for handling bulk products such as solids and pellets (by using pipelines of conveyers). Non-bulk handling - products are shipped in master cartons. Four possible systems: 1. Mechanized Systems – employ a wide range of handling equipment. The types of equipment most commonly used are lift trucks, rider trucks, towlines, tractors-trailer devices, conveyors, and carousels. a. Lift trucks / forklifts – can move master cartons both horizontally and vertically but are limited to handling unit loads. b. Towlines – consist of either in-floor or overheadmounted cable or drag devices. Utilized to provide continuous power of four-wheel trailers. c. Tractor Trailers – consist of a driver-guided power unit towing one or more four-wheel trailers. d. Conveyers – used widely in shipping and receiving operations and serve as basic handling device for number of order selection systems e. Carousels – Moves inventory to the order selector. Consists of a series of bins mounted on an oval track or rack. 2. Semiautomated Systems - a combination of mechanical and automated systems is used to handle material. Typical equipment utilized: a. Automated Guided Vehicles (AGV) - Typically replaces mechanized tow tractors and trailers. They are automatically routed, positioned, and activated without a driver. b. Sortation - Typically used in combination with conveyers. Automated sortation provides two primary benefits: 1. reduction in labor 2. significant increase in speed and accuracy of order selection c. Robotics - A machine that can be programmed to perform one or more handling activities without intervention of an attendant or driver. d. Live Racks - A device commonly used to reduce manual labor in warehouses. Product automatically flows to selection position. Contains roller conveyers and is constructed for loading from the rear 3. Automated Systems - attempt to minimize labor as much a possible by substituting equipment capital investment. Focus on automated high-rise storage and retrieval systems. Automated storage/retrieval (AS/RS) - an automated unit-load handing system, using high-rise storage. Because humans are not an integral part of AS/RS, these facilities are often referred to as lights-out facilities. The four primary components: (1) Storage racks The initial function of the storage and retrieval equipment is to reach the desired storage location rapidly. A second function is to insert or remove merchandise from the rack. (2) Storage and retrieval equipment The storage and retrieval machine is essentially a combined lift truck an pallet holder built into a movable crane. It moves up and down the aisle to insert or remove a unit load from a storage bin. Numerous transfer arrangements and layouts have been developed. Transfer units may be dedicated or nondedicated. o Dedicated transfer car = is always stationed at the end of the aisle in which the storage and retrieval equipment is working . o Nondedicated transfer car = works a number of aisles and retrieval machines on a scheduled basis to achieve maximum equipment utilization. (3) input/output system is concerned with moving loads to and from the rack area. Two types of movement are involved: o Loads must be transported from receiving docks or production lines to the storage area. o Within the immediate peripheral area of the racks, loads must be positioned for entry or exit (4) Control system Similar to the automated order selection systems and in addition, it handles inventory control and stock rotation. Is also tracks product location within the AS/RS, storage bin utilization and crane operation. Information-Directed Systems - uses information technology to direct mechanized or automated handling equipment. Three common examples of information-directed materials handling systems: (1) RF Wireless (Wi-Fi) - Uses standardized materials handling equipment coordinated by information technology to provide operator directions and control in real time. The basic use of Wi-Fi to instruct movement of lift trucks is expanded in an information-directed application to become a highly integrated materials handling system. (2) Radio-Frequency Identification RFID - Creates the opportunity for two-way communication between specific products and lift truck operators. Can identify the exact location in the warehouse. Task interleaving – the process of assigning lift trucks to continuous assignment. Lift trucks are assigned independent of traditional work areas to specific jobs or work areas that need resources such as receiving or shipping. Chaotic design - build on the flexibility of using RFID technology to allow a warehouse to be stocked and operated to maximize inbound and outbound movement efficiency. (3) Light-directed operation (LDO) is pick-to-light. In pick-to-light, applications is a carrousel system variation that is becoming increasingly common. Order selectors pick designated items directly into cartons or onto conveyers from lighted carousel locations or storage bins. A series of lights or light tree in front of each pick location indicates the number of items to pick from each location. A variation of the pick-to-light system is put-to-light, where order selectors place product in lighted containers. Each container or tote is assigned to a specific order or customer, so the light is telling which customers are the receive a specific product.