WAREHOUSING

Firman Ramdhana
Dimas Tedjo Prabu
M Febreyhan
Inton Simarmata

1102110007
1102110035
1102100169
1102110001

STRATEGIC
WAREHOUSING
Storage

has
always
been
important aspect of economic
development.

Warehousing

provides time and

place utility for raw materials,
industrial goods, and finished
products, allowing firms to use
customer service as a dynamic
value-adding competitive tool.

 The

warehouse is
where
the
supply chain
holds or stores
goods.

Functions

of
warehousing
include:

Transportation
consolidation

Product

mixing

Cross-docking
Service
Protection

against
contingencies

Smoothing

ECONOMIC BENEFITS
Economic

benefits of warehousing
occur when overall logistics costs
are reduced.

Four

basic economic benefits:

1.

Consolidation and break bulk

2.

Sorting

3.

Seasonal storage

4.

Reverse logistics

1. CONSOLIDATION &
BREAK BULK

In consolidation, the warehouse receives

materials, from a number of sources, that are
combined in exact quantities into a large single
shipment to a specific destination.

A break-bulk operation receives a single large

shipment and arranges for delivery to multiple
destinations.

CONSOLIDATION

BREAK-BULK
CUSTOMER A

PLANT A

BREAK-BULK
WAREHOUSE

CUSTOMER B

CUSTOMER C

2. SORTING

The basic benefit sorting is to reconfigure

freight as it flows from origin to destination.

Three types of assortment:

Cross-docking

Mixing

Assembly

 The

objective of cross docking: to

combine inventory from multiple origins
into a prespecified assortment for a
specific customer.

Warehouse

that perform in-transit

mixing have the net effect of reducing
overall product storage and minimizing
transportation cost.

 The

objective of assembly is to support

manufacturing operations.

Products

and
components
are
assembled from a variety of second-tier
suppliers by a warehouse, often referred
to as lead supplier, located in close to
manufacturing plant.

CROSS-DOCKING
Company A
Or
Plant A

Company B
Or
Plant B

Company C
Or
Plant C

Customer A

Distribution
center

Customer B

Customer C

MIXING
Customer W
Plant A

Customer X
Transit mixing
point
Plant B
Product D

Customer Y
A

Customer Z
Plant C

ORDER ASSEMBLY
Vendor A
Vendor B
Vendor C

Lead
supplier
distribution
center

Assembly
plant

Retail
distribution
center

Retail store

Vendor A
Vendor B
Vendor C

3. SEASONAL STORAGE

The direct economic benefit of storage

is to accommodate seasonal production
or demand.

4. REVERSE LOGISTICS
PROCESSING
Reverse

logistics includes the

activities to support:
Returns

management

Remanufacturing
Remarketing
Recycling
Disposal

and repair

Returns management is designed to facilitate

the reverse flow of product that did not sell.
Remanufacturing and repair facilitate the
reverse flow of product following its useful
life.
Remarketers use coordination and reverse
flow to resell product.
Recycling returns product following its useful
life so that they can be effectively reused.
When material cannot be effectively reused, it
still may require reverse logistics to dispose
of it in the appropriate landfill.

SERVICE BENEFITS
1.

Spot-stocking

2.

Full line stocking

3.

Value added services

1. SPOT STOCKING

Spot stocking is typically used to support

customer accommodation.

Manufacturers of highly seasonal products often

spot-stock.

Under this concept, select inventory is spotstocked in a local market warehouse in

anticipation of responding to customer need
during the critical sales period.

2. FULL LINE STOCKING

The difference between spot-stocking and full

line stocking is the degree and duration of
warehouse utilization.

A spot stocking strategy would temporarily

warehouse a narrow product assortment in a
large number of warehouse for a limited time
period.

The full line stocking warehouse improve

service by reducing the number of suppliers.

3. VALUE ADDED
SERVICES (VAS)

Cross dock
Customer returns
Home delivery
In transit merge
Kan Ban
Kitting
Labeling
Lot control
Mass
customization/postpon
ement

Order fulfillment
Pick
Pool distribution
Repair
Returnable container
Reverse logistics
Specialty packaging
Store support

WAREHOUSE OPERATIONS
Handling

Handling equipment

Handling activities:

Receiving

In-Storage handling: Transfer and selection

Shipping

Storage

Stock location

Warehouse management system (WMS)

Type:

Active storage: quick movement & flexibility

(maintain minimal inventory in storage)

Extended storage (maximum space utilization)

Storage Plan Based on Product

Movement
Receiving docks

Storage space for lowvolume product

Storage space for highvolume product

Staging
and cross
dock area

Shipping docks

Storage space for lowvolume product

WAREHOUSE
OWNERSHIP
ARRANGEMENTS
Factors
to consider

Throughput volume

Stability of demand

Density of market area to be served

Security and control needs

Customer service needs

Multiple use needs of the firm

1. PRIVATE WAREHOUSE

Typically operated by the firm owning the

product.

More flexibility since operating policies, hours,

and procedures.

Less costly

The use of private warehousing is decline.

2. PUBLIC WAREHOUSE

Rationale for Public Warehousing

Limited capital investment

Flexibility

Economic of scale

Public warehousing:

General merchandise (electronics, paper, food)

Refrigerated (chemical product, medical)

Special commodity (bulk material)

Bonded (licensed by government)

Household goods and furniture

3. CONTRACT

Combine characteristics of private and

public.
Compensation for seasonality in
products.
Increased geographical coverage.
Ability to test new markets.
Managerial expertise and dedicated
resources.
Less strain on the balance sheet.
Possible reduction of transportation costs

WAREHOUSE DECISIONS

Site selection (warehouse location):

Service availability

Cost (land cost)

Expansion

Utilities

Design:

The number of floors

Cubic capacity

utilization

Protection

Efficiency

Basic warehouse design

Receiving area
Bulk
storage
area

Rack
storage
area
Receiving area
Receiving area
Receiving area

Product flow

WAREHOUSE DECISIONS

Product-mix analysis

Expansion

Material handling

Layout:

Sizing

Warehouse management systems (WMS):

Discrete selection: a specific customer

order (critical content order)

Wave selection/ batch selection: all

customer order.

Layouts
Truck Receiving

Selection area

Storage area

Truck Receiving

Remote
storage

Selection from storage

along line

Truck Shipping

Truck Shipping

WMS

Core functionality:
Receiving
Put-away
Cycle-count
Pick
Task management
Quality analysis
Replenishment
Pack
Opportunistic cross-dock
Inventory control
Work order management
ship

Advanced functionality:
Yard management
Labor management
Warehouse optimization
Value-added service
Planned cross-dock
Returns management

Interface systems (middleware)

ERPTMSMaterial handlingSupply chain planning
systems

WAREHOUSE DECISIONS

Accuracy and audits: cycle counting

Security

Pilferage

Damage

Safety and maintenance