Chapter 5 Warehousing and Storage.

C.5

Warehousing and Storage.

Warehousing- is the part of the firm of logistic system to storage the material and the goods.

Main activity relate to warehousing

Material handling

Transportation

Packaging production / manufacturing

Order process.

TYPE OF WAREHOUSES

Public warehouse

GENERAL MERCHANDISE

@Most common form of public warehouse

@Design to store almost any kind of product

@Does not required the specialized service

@Used by manufacturer, distributor and customers.

REFRIGERATED

@As known as cold storage warehouse

@provide temperature- control storage environment

@Used for preserving perishable items; eg fruit and vegetable

@Also store non-perishable item; eg film, pharmaceutical etc

@Divided into two; which is frozen and chilled

HOUSE GOOD

@Specialized in the storage and handling of household furnishing and furniture

@These warehouse are utilized by the household goods carrier industry for both temporary and long term storage

@Used for storage of personal of personal property rather than merchandise

@ Three main type include open storage, private room and container storage

BONDED WAREHOUSE

@Licensed by government to store good prior to payment taxes or duties.

@Any movement of goods in and out must be accompanied government form

@Type of goods store such as cigarettes, liquors, electrics, goods

@Allow delay of tax and import duties payment

BULK STORAGE

@ Provide tank storage of liquid and open or sheltered storage of dry products

@ Services are restricted to storing, handling, mixing, and breaking bulk product such as liquid chemicals, petroleum and syrup.

Advantage the petroleum warehouse.

Cheap

* No capital need

* Save cost on         -start up the operation

                   -hiring and training personal

                   -building, land, material handling equipment

Flexibility

          Short term comment

Easy to change field warehouse locations, because of change in market place

Reduce Risks

          In term of investment

          Easy to change field warehouse is normally 20 to 40 years

With public warehouse, the user firm can switch to another facility in a short period of time. (often within 30 days)

TAX ADVANTAGE

·         Save money on various kind of taxes related to property ownership

·         Enable to minimize total

KNOWLEDGE OF EXACT STORAGE AND COST

·         Firm can forecast their and cost

·         Enable to minimize total operation cost.

·         Available anywhere

·         Use of space

o   Allow user to rent as such storage space as need to meet peak requirement

DISADVANTAGE OF PUBLIC WAREHOUSE

COMMUNICATION PROBLEM

·         Lack of standardization

·         Effective communication cannot be fully achieved due to warehouse operator and clients.

·         Different client may use different system

LACK OF SPECIALIAND SERVICE

·         Most public warehouse facilities provide only service

·         Some range of service may not available at home place

SPACE MAY NOT AVAILABLE

·         Especially during seasonal time

·         May not available when and where a firm want it

PRIVATE WEREHOUSE

Operation by he firms owning the product

Facility may be owned or leased

Advantage of private warehouse

Control

·         The firm the own their good can practice a greater degree of control

·         Firm has direct control and responsibility for the product

·         Firm has right on operation of he warehouse

Flexibility

·         Freedom to design and operae the warehouse to fit customers need and characteristics of the product

·         Can be modified though expansion or renovation

Cost

·         No need o pay tax

·         Less costly over long term even though I needs high start up cost

Better customer service relationship

Tax benefits

*depreciation allowances on building and equipment reduce tax payable

Better use of human resource

* Greater care in handling and storage when firm’s  own workforce operates he warehouse

* Aware and know each of the product handling requirement

DISADVANTAGE OF PRIVATE OF WAREHOUSE  

Expensive

* Small companies could not afford

* High capital needed for land, equipment, building

* High start operation cost

*Hiring and training personnel

Fixed location

Fixed size

·         Cannot be expend in short term

·         Occurs problem when warehouse is too big or too small

Fixed cost

·         Overhead cost such electricity, maintenance, staff salaries and ets.

WAREHOUSES OPERATIONS

Material handling>>>>assembly of the inbound goods>>>>mixing of carload and truckload shipment.

WAREHOUSE DESIGN

Layout- How the inbound out bound cargo flow will interact with the internal facility processing points, workstations, and staging and storage areas.

Storage and aisle areas- Governed by and designed to accommodate pallet placement point and required aisle widths.

Stock location-must be compatible with the material picking and item retrieval schemes

Stock replenishment- relate to and influence stock location and facility layout.
BASIC SPACE REQUIREMENT IN A WAREHOUSE LAYOUT DESIGN

1        Receiving  and Shipping area

2        Storage area

3        Order picking, assembly and packing area

4        Recouping area

5        Office space

6        Miscellaneous

ECONOMIC OF WAREHOUSING

1              Production positioned

2              Market positioned

3              Intermediary positioned

THE ROLE OF DISTRIBUTION CENTRE AND WAREHOUSE

OPERATION CHARACTERISTIC	WAREHOUSE	DISTRIBUTION CENTRE
TYPE OF PRODUCT	EVERYTING LOW DEMAND HIGH DEMAND ITEM	MINIMUM NUMBER OF INVENTORY LIINE HIGH DEMANDS ITEM
OPERATION CYCLE	4  CYLE: RECEIVE,PICK,STORE,SHIP	2 CYCLE: RECEIVE AND SHIP
VALUE ACTIVITIES	MINIMUM VALUE ACTIVITIS	HIGH % OF VALUE ADDED ACTIVITIES
DATA COLLECTION	COLLECT DATA IN BACH(GROUP) EG: DAILY, WEEKLY,MONTLY	COLLECT DATA REAL TIMME BY/VIA SCANNING TECHNOLOGY
OPERATIONAL FOCUS	MINIMIZING THE OPERATIONAL COST TO MEET SHIPPING REQUIREMENT	MAXIMIZING THE PROFIT IMPACTT OF MEETING CUSTOMER DELIVERY REQUIREMENT