Warehousing.

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Warehousing.

• Part Three.

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Uses of Warehouses

• Support manufacturing.
• Mix products from multiple production facilities
  to a single customer.
• Break bulk.
• Consolidate small shipments into large shipments.

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Logistics Concepts
S u p p l i e r
C u s t o m e r
Inbound Logistics
Outbound Logistics
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Manufacturing Support (inbound logistics)
Carload or truckload shipments
Supplier A
Supplier B
Warehouse
Supplier C
Supplier D
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Mixing Warehouse (outbound logistics)
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4
1
3
Customer W
Plant A, Product 1
1
2
3
4
Plant B, Product 2
Customer X
1
2
3
4
Plant C, Product 3
Customer Y
Plant D, Product 4
1
2
3
4
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Mixing Warehouse (outbound logistics)
Customer W
Plant A, Product 1
1
1
1
1
1
1
2
3
4
1
2
Plant B, Product 2
2
2
2
2
2
2
Customer X
1
2
3
4
Plant C, Product 3
3
3
3
3
3
3
3
Customer Y
Plant D, Product 4
4
4
4
1
2
3
4
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Mixing Warehouse (outbound logistics)
Customer W
1
Plant A, Product 1
1
1
2
3
4
1
2
3
4
2
Plant B, Product 2
2
Customer X
Mixing Warehouse
1
2
3
4
1
2
3
4
Plant C, Product 3
3
3
Customer Y
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Plant D, Product 4
4
1
2
3
4
1
2
3
4
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ConsolidationWarehouse (outbound logistics)
Customer
Plant A
Plant B
Customer
Consolidation Warehouse
Plant C
Customer
Plant D
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Breaking bulk
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BreakbulkWarehouse (outbound logistics)
Customer 1
Customer 2
Breakbulk Warehouse
Plant
Customer 3
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Types of Warehousing

• Direct store delivery.
• Private warehousing.

XYZ Company Warehouse
Advantages
Disadvantages
Control
Fixed costs, especially if built for peak seasons.
Flexibility in design and operation
Long-term cost
Investment. Return may be better if money is
placed elsewhere.
Better use of human resources.
Tax benefits depreciation.
Intangibles image of stability.
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Types of Warehousing

• Direct store delivery.
• Private warehousing.
• Public warehousing.

XYZ Company Warehouse
ABC Public Warehouse
Advantages
Disadvantages
Conservation of capital.
Incompatible communications systems.
Able to increase capacity when needed.
Lack of specialized services..
Reduced risk of obsolesence.
May be unavailable when needed.
Economies of scale due to warehouse companys
investment
Flexibility
Tax advantages some states have no inventory
taxes for products in public warehouses.
Specific knowledge of costs.
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Types of Public Warehousing

ABC Public Warehouse
General merchandise
Refrigerated or cold storage
Bonded warehouses.
Household goods, furniture.
Special commodity
Bulk storage.
Cross-docking facilities (3PL concept).
www.frigorifer.com/images/firma.jpg
Contract warehousing (can be used in 3PL).
www.mwindy.com/images/frozen_pizza.jpg
www.burrowsmoving.com/.../buildingoutside.jpg
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www.ewga.net/.../ewga/finewinestorage(1).jpg
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Warehouse Characteristics

• Increase the number of warehouses and the average
  size of warehouses decreases.
• Factors influencing the number of warehouses
• Cost of lost sales.
• Inventory costs.
• Warehousing costs.
• Transportation costs.

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Warehouse Locations

• Market-based nearest the final customer.
• Production positioned collection points or
  mixing facilities.
• Intermediate positioning between producer and
  final customer.

Warehouse
Warehouse
Factory
Customer
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Cross-docking
Movement from an inbound dock directly to an
outbound dock
Movement directly from an inbound dock to a
sorting process to an outbound dock.
Outbound
Inbound
Outbound
Outbound
Inbound
Outbound
Inbound
Sorting area
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Crossdock in at least two of these conditions

• Product destination is known upon receipt.
• Destination is ready for immediate delivery.
• You daily ship to less than 200 locations.
• More than 70 of products fit conveyors.
• You receive large quantities of individual items.
• Products arrive pre-labeled.
• Some products are time-sensitive.
• Distribution center is near capacity.
• At least some inventory is pre-priced.

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Crossdock in at least two of these conditions

• Product destination is known upon receipt.
• Destination is ready for immediate delivery.
• You daily ship to less than 200 locations.
• More than 70 of products fit conveyors.
• You receive large quantities of individual items.
• Products arrive pre-labeled.
• Some products are time-sensitive.
• Distribution center is near capacity.
• At least some inventory is pre-priced.

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Crossdock in at least two of these conditions

• Product destination is known upon receipt.
• Destination is ready for immediate delivery.
• You daily ship to less than 200 locations.
• More than 70 of products fit conveyors.
• You receive large quantities of individual items.
• Products arrive pre-labeled.
• Some products are time-sensitive.
• Distribution center is near capacity.
• At least some inventory is pre-priced.

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Crossdock in at least two of these conditions

• Product destination is known upon receipt.
• Destination is ready for immediate delivery.
• You daily ship to less than 200 locations.
• More than 70 of products fit conveyors.
• You receive large quantities of individual items.
• Products arrive pre-labeled.
• Some products are time-sensitive.
• Distribution center is near capacity.
• At least some inventory is pre-priced.

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End of Program.