Title: Storage
1Storage Handling Systems
2Reasons for Storage
- Reduce transportation production costs
- Coordinate supply and demand
- Assist in the production process
- Assist in the marketing process
3Storage System Functions
- Holding
- Consolidation
- Break-bulk
- Mixing
4Consolidation 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
5Break-bulk Warehouse
LTL
Low rate TL shipment
Customer A
LTL
Distribution Warehouse
Manufacturer
Customer B
LTL
Customer C
6Distribution 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
7Materials-Handling Functions
- Loading Unloading
- Movement to and from storage
- Order filling
8Storage Alternatives
- Space Ownership
- Rented Space
- Leased Space
- Storage in Transit
9Advantages 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
10Renting 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.
11Renting 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.
12Advantages of Public Warehouses
- No fixed investment
- Lower cost if utilization of private space would
be low - Location flexibility
13Leased 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
14Storage 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
15Materials-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