Warehousing, Materials Handling, and Packaging

Notes from the textbook

Define spot stocked

Select inventory is positioned in a local market warehouse in anticipation of responding to customer needs during the critical sales period

Value Added Service

any work that creates a greater value for customers

What are the economic benefits of warehousing?

1.) consolidation and break bulk

2.) sorting

3.) seasonal storage

4.) reverse logistics

Consolidation

The warehouse receives inventory from several sources that are combined into a large single shipment to a specific destination

What are the benefits of consolidation?

the realization of the lowest possible freight rate, timely, and controlled delivery, and reduced congestion at a customer’s receiving dock

Consolidation enables

both the inbound movement from origin and the outbound movement to destination to be consolidated into a larger shipment, which generally results in lower transportation charges per unit and most often quicker delivery

Both consolidation and break bulk arrangements use

warehouse capacity to improve transportation efficiency

What are the three types of assortment?

1.) Cross-docking

2.) Mixing

3.) Assembly

Cross Docking

objective is to combine inventory from multiple origins into a customized assortment to meet the needs of a specific customer

Mixing

usually performed at an intermediate location between shipment origin and destination

Assembly

used to support manufacturing operations, products, and components are assembled from a variety of second-tier suppliers at an assembly facility located in proximity to a manufacturing plant

Cross Docking requires

on-time delivery from each manufacturer

What is the economic benefit of seasonal storage?

accommodate either seasonal production or demand

Reverse logistics includes the following activities?

1.) returns management

2.) remanufacturing and repair

3.) remarketing

4.) recycling

5.) disposal

Define returns management

designed to facilitate the reverse flow of products that did not sell or to accommodate recalls

Recycling involves

returning the product following its useful life with the objective of decomposing it into its component materials so they can be effectively reused

Disposal

is if the materials still require reverse logistics

Warehouses can also be classified based on

ownership

Private Warehouse

operated by the enterprise that owns the merchandise handles and is stored in the facility

Public Warehouse

operated as an independent business offering a range of for-hire services, such as storage, handling, and transportation

Contract Warehousing

Combines all the benefits of private and public warehousing

• Unique or tailored logistics services for a limited number of customers

What are the major benefits of private warehousing?

• control

• flexibility

• cost

• a range of intangibles

Most firms depend upon a warehouse management system to

standardize work procedures and facilitate best practices

• Responsible for the tracking of all operational aspects of the facility

• Main use is to coordinate order selection