The speed of order fulfillment is slow.
Contract Warehouse These are the product specific warehouse facilities acquired for the use for a specific period often in years rather than months against fixed charges. A contract warehouse can provide the benefit of both private & public warehouses. This facility provide the economies of scale, flexibility & customizes a facility. As the facilities are product specific product damages are less. The large volume will apportion the fixed costs with the co- users.
Warehouse Options – Owner operated or Private Factors Private Public Contract Investment High None Very little Cost per unit stored Inversely related to volumes Low Inversely related to volumes Flexibility in Material handling, storage & throughout planning Location Location Level of Control High Low Medium Adequacy of Goods Stored High Low High Risk Due to change in market demand or consumption center Minimal Minimal
2. Warehouse Site Selection (Location) The consideration of site selection revolve around two major factors - Service & The Cost The other factors influencing the site selections are : Infrastructure Market Access Primary Transportation Cost Availability Product Regulations Local Levies
3.Warehouse Options – Number and size warehouses The cost of warehousing is directly proportional to the number of warehouses. Factors affecting the number of warehouses : Inventory cost Warehousing cost Transportation costs Cost of lost sales Maintenance of customer service levels Service small quantity buyer
4. Warehouse Options – Warehouse Layout Design Location of the stock in warehouse directly affects the total material handling expenses of all goods moving through the warehouse. A balance has to be maintained between the material handling cost and utilization of cubic capacity.
4. Warehouse Options – Warehouse Layout Design The following steps need to be followed while designing the layout of a warehouse for a given space : Define a location for receiving & shipping function. Allocating separate area for slow, medium & fast moving items. Defining a location of fixed obstacle such as building columns, staircases, elevators shafts, toilets etc. Defining a minimum path for the movement of equipment and personnel for faster storage and retrieval. Locating stationary material handling equipment (crane, conveyor) at the assigned places. Locating storage equipment at the assigned places. Repeating the process for generating an alternative layout.
4. Warehouse Options – Warehouse Layout Design Evaluation of alternative layouts : Item Turnover Space utilization Product Configuration Good housekeeping Safety & Security :
Warehouse Costing Elements of warehouse cost – Transportation, Storage & administration. Warehouse Cost = Fixed Cost + Variable Cost • Fixed Cost : Rental, Capital Cost, Salary wages of the employees and utilities etc. • Variable Cost : Repair , Maintenance, Material Handling, transportation and packaging etc..
Warehouse Strategies Capacity Switching Hub Networking Cobbling Outsourcing
Performance Parameters The most common parameters that indicate the efficiency and effectiveness of warehouse operations are: • Stock Turn
You've reached the end of your free preview.
Want to read all 77 pages?
- Fall '19
- Supply Chain Management, warehouse operations, Private Warehouse