Storage

1
Storage Handling Systems
2
Reasons for Storage

• Reduce transportation production costs
• Coordinate supply and demand
• Assist in the production process
• Assist in the marketing process

3
Storage System Functions

• Holding
• Consolidation
• Break-bulk
• Mixing

4
Consolidation Warehouse
10,000 lbs.
Manufacturer A
10,000 lbs.
Manufacturer B
40,000 lbs.
10,000 lbs.
Consolidation Warehouse
Retailer
Manufacturer C
10,000 lbs.
Manufacturer D
5
Break-bulk Warehouse
LTL
Low rate TL shipment
Customer A
LTL
Distribution Warehouse
Manufacturer
Customer B
LTL
Customer C
6
Distribution Warehouse used for Product Mixing
Product A
Manufacturer A
Products A, B, C
Customer X
Product B
Manufacturer B
Distribution Warehouse
Product C
Products A, B, C
Customer Y
Manufacturer C
7
Materials-Handling Functions

• Loading Unloading
• Movement to and from storage
• Order filling

8
Storage Alternatives

• Space Ownership
• Rented Space
• Leased Space
• Storage in Transit

9
Advantages of Space Ownership

• Less expensive warehousing than renting or
  leasing (especially if have high utilization of
  the space)
• Higher degree of control over warehousing
  operations
• May be only practical alternative if products
  require specialized personnel or equipment (i.e.,
  pharmaceuticals)
• Benefits from real estate ownership
• May use space for other purposes in the future
• Space may serve as base for sales office, private
  fleet, or purchasing department

10
Renting Space in Public Warehouses

• 6 most common types of Public Warehouses
• Commodity warehouses
• Limit services to storage handling of
  commodities that spoil easily (lumber, cotton,
  tobacco, grain, etc.)
• Bulk storage warehouses
• Store handle bulk products (i.e., liquid
  chemicals, oil, syrups, etc.). Also mix products
  break-bulk as part of their service)
• Temperature-controlled warehouses
• Regulate temperature humidity in the storage
  space.

11
Renting Space in Public Warehouses

• 6 most common types of Public Warehouses
• Household goods warehouses
• Specialize in storage handling of household
  items and furniture.
• General merchandise warehouses
• Most common type. Store merchandise that does
  not require special facilities or special
  handling
• Miniwarehouses
• Small warehouses having unit space from 20 to 200
  square feet. Often grouped in clusters.
  Intended as extra space hence, few services
  provided.

12
Advantages of Public Warehouses

• No fixed investment
• Lower cost if utilization of private space would
  be low
• Location flexibility

13
Leased Space

• Intermediate choice between short-term space
  rental in public warehouse and long-term
  commitment of private warehousing.
• Typically can achieve lower rate in leasing than
  in renting the space
• Lose some location flexibility since lease
  contract will be for specified period of time
• Leasing might offer the opportunity to have
  control over the storage space

14
Storage in Transit

• Refers to the time that the goods remain in the
  transportation equipment during delivery
• Requires coordination between owner of the goods
  and provider of the transportation service
• May reduce or even eliminate the need for
  conventional warehousing
• Attractive to firms dealing in seasonal
  merchandise or shipments over long distances

15
Materials-Handling Considerations

• Load Unitization
• Palletization
• Containerization
• Space Layout
• Storage
• Order picking
• Storage Equipment Choice
• Racks, shelf boxes, bins, U-frames
• Movement Equipment Choice
• Manual equipment
• Power-assisted equipment
• Fully-mechanized equipment