King Mongkut's Institute of Technology North Bangkok
Basic Strategic Warehouse Management
1
Speaker’s Profile
Academic Backgrounds
•
Ph.D. in Urban and Transportation Planning, Department of Engineering
Systems and Technology, Graduate School of Science and Engineering,
Saga University, Saga, JAPAN.
•
M.Eng. in Transportation Engineering, Transportation and Infrastructure
Engineering Program, School of Civil Engineering, Asian Institute of
Technology, Pathumthani, THAILAND.
•
B.Eng. in Civil Engineering, Department of Civil Engineering, King
Mongkut’s University of Technology, Thonburi, Bangkok, THAILAND.
Working Experiences
•
Nihon University, Chiba, JAPAN: Senior Researcher and Project
Coordinator.
•
TEAM Consulting Engineering and Management Company, Bangkok,
THAILAND: Project Manager and Coordinator / Transportation –
Infrastructure – Logistics Engineer.
Basic Strategic Warehouse Management
2
Presentation Objectives
• Understand Warehousing in term of Definition,
Function, and Importance.
• Understand Considered Problems in
Warehousing.
• Know Possible Solutions or Improvement
Approaches for Warehousing.
• Realize Problems in Warehouse Management,
especially for Importance of IT in Warehouse
Management.
Basic Strategic Warehouse Management
3
Presentation Outline
•
•
•
•
Part 1: Introduction of Warehousing
Part 2: Management and Operation Principles
Part 3: Principles to Practices (Case Studies)
Conclusion
Basic Strategic Warehouse Management
4
Presentation Outline
• Part 1: Introduction of Warehousing
– What is Warehousing
– Importance of Warehousing
– Types of Warehouse
– Main Functions of Warehouse
– Activities and Operations in Warehouse
– Warehousing Costs
– Considered Issues in Warehousing
• Part 2: Management and Operation Principles
• Part 3: Principles to Practices (Case Studies)
Basic Strategic Warehouse Management
5
Presentation Outline
• Part 1: Introduction of Warehouse
• Part 2: Management and Operation Principles
– Approaches for Warehouse Management Improvements
• Better Plan and Design for Warehouse and Facility
• Improvement of Warehouse Management
• Advanced Technology Application in Warehousing
• Part 3: Principles to Practices
– Case Studies
•
•
•
•
Kmart and Wal-mart
Warehouse of a transformer factory
Tesco-Lotus Warehouse and Distribution Center
7-Eleven Retail Store
Basic Strategic Warehouse Management
6
King Mongkut's Institute of Technology North Bangkok
Basic Strategic Warehouse Management
7
What is Warehouse
•
•
•
Basic Strategic Warehouse Management
Most
people
just
imagine
warehouse as goods storage.
Not many really realize its
important role.
In particular, very few realize its
strategic roles in business
developments.
Source: http://www.jb-mhg.com/e_logistic 8
What is Warehouse
•
A part of logistics system storing products, such as raw materials, parts, goods-inprocess, finished goods) at and between point of origin and point of consumption,
and providing information to management on the status, condition and disposition
of item being stored.
Internal
Processing
Inbound
Outbound
Internal
Processing
•
•
•
•
Purchases
Customer return
Transfers
Outside Processing
•
•
•
•
Pick
Pack
Inspection
Count
•
•
•
•
Assembly
Storage
Move
Replenish
•
•
•
•
Customer Shipments
Vendor Returns
Transfers
Outside Processing
Source: Mark Mandeville, ORACLE
Basic Strategic Warehouse Management
9
Importance of Warehousing
•
•
•
•
Reduce “lead time” for purchasing
Encourage for Just-in-Time (JIT)
system.
Various products for transportation
Temporary storage for returned or
reproduced items
Basic Strategic Warehouse Management
•
•
•
•
•
•
Reduce no of times of purchasing
or for discounting
Stock of raw materials and parts
Support for customer service policy
Prepare for marketing changes
Decrease of transport cost
Decrease of production cost
10
Importance of Warehousing
•
Decrease of production cost
Factory
Supplier 1
Without
Warehouse
Supplier 2
Supplier 3
Factory
Supplier 1
With
Warehouse
Supplier 2
Warehouse
Supplier 3
Basic Strategic Warehouse Management
11
Importance of Warehousing
•
Decrease of transport cost
Factory A
Customer 1
Factory B
Without
Warehouse
Factory C
Customer 2
Factory A
Customer 1
Factory B
Warehouse 1
With
Warehouse
Factory C
Customer 2
Basic Strategic Warehouse Management
Warehouse 2
12
Types of Warehouse
• Three types (in term of business objectives)
– Public Warehouse
•
•
•
•
•
•
General Merchandise Warehouse
Refrigerated or Cold-Storage Warehouse
Bonded Warehouse
Household Goods and Furniture Warehouse
Special Commodity Warehouse
Bulk Storage Warehouse
– Private Warehouse
• Warehouse for Production
• Warehouse for Distribution (Economic Order Quantity:EOQ- Makro)
• Warehouse for Transportation
– Material Warehouse (Hotel, Hospital etc.,)
Basic Strategic Warehouse Management
13
Public Warehouse VS Private Warehouse
Advantage
Disadvantage
Public Warehouse
Private Warehouse
• Conservation of Capital
• Can increase space for peak demands
• Reduce risk
• Economy of scale
• Flexibility in resource adjustment
• Know specific activity costs
• Control
• Flexibility in service improvement
• Less cost over the long term
• Better use of human resource
• Tax benefits
• Intangible benefits
•Communication problem
•Lack of specialized services
•Shortage of spaces
•Lack of flexibility
•Financial constraints
Basic Strategic Warehouse Management
14
Main Functions of Warehouse
• Three main functions
– Move goods
– Store goods
– Transfer information
• New Warehouse Management Focuses:
– Smooth flow of goods or items rather than goods
storage.
– By fast and efficiently moving, storing, and
transferring in large amount.
• Cross-Docking System
Basic Strategic Warehouse Management
15
Cross-Docking System
•Low level of stocks, especially
for popular goods.
•Focus on receiving and shipping.
•Many value added activities.
•Real time data collection.
•Maximize profits through product
shipping based on customers’
requirements
Basic Strategic Warehouse Management
16
Activities and Operations in Warehouse
Receiving
-Schedule carrier
-Unload vehicle
-Inspect for damage
-Compare to P/O
Warehousing Process
Put away-Identify product
-Identify storage location
- Move product
-Update records
Storage
-Equipment
-Stock location
1. Popularity
2. Unit size
3. Cube
Shipping prep
-Packaging
-Labeling
-Staging
Order picking
-Information
- Walk & pick
- Batch picking
- AS/RS
Shipping
-Schedule carrier
-Load vehicle
-Delivery
-Update record
Basic Strategic Warehouse Management
17
Warehousing Costs
• Warehousing Activity Costs
Highest Part
Van Den Berg & Zijm (1999)
Basic Strategic Warehouse Management
• Warehouse affecting
the following costs;
– Warehousing Cost
– Cost of Lost Sales
– Inventory Cost
– Transport Cost
18
Considered Issues in Warehousing
• Three main issues
– Inefficient Warehouse Management System
– Unproductive Space Utilization in Warehousing
– Inappropriate Facility & Equipment Utilizations in
Warehousing
Basic Strategic Warehouse Management
19
Inefficient Warehouse Management System
• Consider warehouse activities
– Receiving
• incorrect products, uncompleted information etc.
– Put-away
• Unidentified products, unknown storage location etc.
– Storage
• Different size of items, appropriate location of storage etc.
– Shipping prep
• Unsuitable packaging, no labeling etc.
– Order picking
• Costly picking method, uncompleted picking etc.
– Shipping
• No scheduling, out of date records, inefficient loading.
Basic Strategic Warehouse Management
20
Inefficient Warehouse Management System
• Unknown storage location
Basic Strategic Warehouse Management
21
Inefficient Warehouse Management System
• Order picking
Basic Strategic Warehouse Management
22
Inefficient Warehouse Management System
• Different sizes of items, Difficult to carry and
store.
Basic Strategic Warehouse Management
23
Unproductive Space Utilization in Warehousing
• Inappropriate position of equipment or goods
in warehouse can directly or indirectly affect to
the efficiency of warehousing process.
– Item Characteristics (Size, Volume, Weight)
– Warehouse Characteristics (Height, Width, Length,
Structure)
Location and Layout of Warehouse is important
Need Good Plan and Design !!!
Basic Strategic Warehouse Management
24
Inappropriate Facility & Equipment Utilizations
• How to use appropriately and productive
equipments.
Basic Strategic Warehouse Management
25
King Mongkut's Institute of Technology North Bangkok
Basic Strategic Warehouse Management
26
Warehousing Costs
• Warehousing Cost (Source: Somphong, 2550)
Warehousing Cost is small portion, but significant impacts
It can affect to Inventory Cost and Transport Cost
Basic Strategic Warehouse Management
27
Approaches for Warehouse Management Improvements
• Three possible approaches
– Better Plan and Design for Warehouse and Facility
– Improvement of Warehouse Management
– Advanced Technology Application in Warehousing
Basic Strategic Warehouse Management
28
Better Plan and Design for Warehouse and Facility
• Factors of Warehouse Investment
– Market’s Demands
• Existing Warehouses
• Characteristics of Goods
• Economic Situation
– Resources
•
•
•
•
•
Area
Equipments
Staffs
Capital
Know-how or Specialists
– Regulations
– Others
Basic Strategic Warehouse Management
29
Better Plan and Design for Warehouse and Facility
Source: Kamnai, 2007
Basic Strategic Warehouse Management
30
Better Plan and Design for Warehouse and Facility
• Factors of Warehouse Location Selection
– Qualitative Factors
•
•
•
•
•
•
•
Source of raw material or items
Transportation Networks
Source of Labors
Community’s Attitudes
Public Facility
Environments
Future Opportunities
– Quantitative Factors
•
•
•
•
•
•
•
•
•
Land Costs
Construction Costs
Labor Costs
Raw Material and Finished Goods Shipment Modes
Distances between the Factory and Suppliers
Facilities around the Site
Proximity to Customers and Markets
Public Infrastructures
• Best Location Based
Tax and Insurance
on the Lowest
Unit Cost (Baht/m3 or Ton etc.)
Basic Strategic Warehouse Management
#$%& '
31
( ) $)* *+%
,./
012/
34564/
60"+7 8 987
! !
!
0
! "
!$
'
#
!
%&%3
!
&
.!
* "#
,-.
&
%
%
#!"#
1! /
&
!.
*
!
!
!
)
,
#$%&$ ' )( * ( + "
"!
,.-0/ 102
) !!
!
'
'(
*
1
!
%&
' *
,2
)
"#%
/
#$%3( + "
#$% 5 #$%$& &
78)/ 5 9:"8 ;=<>
#$%@A&
#$%&$ ' 8 D + 5 E + @A7 ( % ', / 402
60/ 402
?0/ -02
,'/ B02
C0/ -02
1'B0/ F02
%
%#
'%
+%
!
*
Basic Strategic Warehouse Management
32
:;
<=>
@ 8(=>
?
?
A
:;
<=>
@ 8(=>
?
?
:;
<=>
@ 8(=>
?
?
Basic Strategic Warehouse Management
33
Better Plan and Design for Warehouse and Facility
• Factors of Warehouse Design
–
–
–
–
Goods Similarity
Goods Popularity
Size, Weight, and Quantity
Characteristics of Material (Hazardous/Sensitive/Perishable Material,
Needed Storage Capacity)
– Space Requirements (To know Gross Space for Storage Operations
and Net Storage Space)
• Structural Loss
• Space for Storage Support Function
• Aisles
–
–
–
–
–
–
Main Aisles
Cross Aisles
Aisles in Retail Bin Area
Personal Aisles
Service Aisles
Fire Aisles
Basic Strategic Warehouse Management
34
Better Plan and Design for Warehouse and Facility
• Turn over rate of goods VS Warehouse Layout Design
BC
3DE3F60.
E6G2HE3F60.
IJ./E3F60.
Basic Strategic Warehouse Management
35
Better Plan and Design for Warehouse and Facility
• Design of Direction of Storage
• PART A: easy but not flexible
• PART B: the depth of row decreased
and no. of rows increased. Good for
forklift and pallet
• PART C: good for middle size and
easy for access
• PART D: Full Area Utilization and a
lot of items kept.
Source: Kamnai, 2007
Basic Strategic Warehouse Management
36
Better Plan and Design for Warehouse and Facility
• Warehouse Layout for General Goods
Basic Strategic Warehouse Management
37
Better Plan and Design for Warehouse and Facility
• Layout for Flammable Storage Warehouse
Basic Strategic Warehouse Management
38
Better Plan and Design for Warehouse and Facility
• Layout for Transit Shed
• KN P168 -2 Picts.
Basic Strategic Warehouse Management
39
Better Plan and Design for Warehouse and Facility
• Warehouse Floor Plan
– An efficient tool for managing spaces
– General Scale: 1:400
(Source: Kamnai, 2007)
Basic Strategic Warehouse Management
40
Better Plan and Design for Warehouse and Facility
• Layout Design for Cold Storage: Case 1
Poor Design
Basic Strategic Warehouse Management
41
Better Plan and Design for Warehouse and Facility
• Layout Design for Cold Storage: Case 2
Good Design
Basic Strategic Warehouse Management
42
Improvement of Warehouse Management
• Receiving Process
– Record Input Data from P/O
• Separate purchasing and warehouse systems
• Combine both
• Transfer P/O Data into Text File
– Process
• Carrier Scheduling
• Record Product Details:
– ID
– Unit
– Weight & volume for specific storage location
• Put-away Task Generation
– Storage Type
– Storage Location
– Code of Storage (Pallet)
• Report & Pallet Code
– Equipment
– Routing
Basic Strategic Warehouse Management
43
Improvement of Warehouse Management
• Put-away / Storage
– Separate types of goods and storages.
– Record Input Data (Ex. Locator Card)
•
•
•
•
•
Product Details
Product Conditions
Receiving Date
Quantity for in and out flows
No. of Stocks
– Physical Counting
– Location System
Basic Strategic Warehouse Management
44
Improvement of Warehouse Management
• Put-away / Storage
– Stock Keeping Unit (SKU)
– Collect number of unit load for benefits of storage,
movement.
– Generally, SKU can divided into 3 characteristics;
• Single Item (Ex. Clothes, Can)
– Carrier: Ex. Container, Box (Consider weight & storage space
mainly)
• Carton (Ex. Parcel Pack)
– Consider no. of item per SKU, storage space in term of WxLxH
• Pallet (Standard Size: 100 cm. x 120 cm.)
– Consider no. of item, weight, Allowable Height. (for moving)
Basic Strategic Warehouse Management
45
Improvement of Warehouse Management
• Put-away / Storage
– Seibu Reizo
– Yamamoto Foods
Basic Strategic Warehouse Management
46
Improvement of Warehouse Management
• Put-away / Storage
– Warehouse Layout of Location System
Basic Strategic Warehouse Management
47
Improvement of Warehouse Management
• Put-away / Storage
– Location System
• Bulk Storage Location
• Retail Storage Location
Basic Strategic Warehouse Management
48
Improvement of Warehouse Management
• Put-away / Storage
– EAN13 (European Artificial Numbering) or TAN:
Only Numeric, 13 Columns
885: Thailand
K( 7
L@9 7
GTIN
)7 *=#M=%
Basic Strategic Warehouse Management
49
Improvement of Warehouse Management
• Put-away / Storage
– GTIN
– GLN : Global Location
Number: 13 Digits
•
•
•
•
3 Digits: Country
6 Digits: Company or Org.
3 GLN Digits
1 Check Digit
– Ex. 885 123400 999 2
•
•
•
Basic Strategic Warehouse Management
50
Improvement of Warehouse Management
• Put-away / Storage
– Paul M. Swamidous, 1998
100
% of respondents
90
80
70
Benefits of Using Bar Code
Production Cost Decrease
81
68
83
Inventory Turnover Rate Increase
81
82
83
84
88
89
70
60
50
40
30
20
10
0
Never use
Beginner
Intermediate
User Type
Regular User
Experts
Basic Strategic Warehouse Management
51
Improvement of Warehouse Management
• Order Processing
– Consists of the following activities;
• Selection (Pick List)
• Withdrawal (Picking Orders)
– Customer Order Handling Methods
– Basic Order-Pick Methods
– Order-Picker Routing Patterns
• Marshalling
• Sorting (based on customer orders)
Basic Strategic Warehouse Management
52
Improvement of Warehouse Management
• Order Processing
– Customer Order Handling Methods
•
•
•
•
Discrete Picking
Batch Picking
Zone Picking
Wave Picking
– Basic Order-Pick Methods
• Picker walks to pick items.
• Picker uses the equipment or vehicle to pick items.
• Items are transported to pickers.
Basic Strategic Warehouse Management
53
Improvement of Warehouse Management
• Order Processing
– Order-Picker Routing Patterns: various methods
such as
•
•
•
•
•
S-shape Method
Return Method
Mid-point Method
Largest Gap Method
Etc.
B320N6O,6P3./
606/JCA
Basic Strategic Warehouse Management
54
Improvement of Warehouse Management
• Order Processing
– Order-Picker Routing Patterns:
Basic Strategic Warehouse Management
55
Improvement of Warehouse Management
• Dispatching
– Goods grouping
– Re-packaging
– Re-labeling
– Documentation
– Scheduling
– Vehicle Preparation
Basic Strategic Warehouse Management
56
Improvement of Warehouse Management
• Effectiveness Evaluation in Warehouse
Management
– Consider “Inventory Turnover Rate”
1
2
3
Sold Goods Quantity
Averaged Inventory
• Suitable when the same SKU
applied for all goods
Total Income from Sold Goods
Averaged Value of Inventory
• Suitable for retailed goods
(trading), because of easy
calculation
Total Cost from Sold Goods
Averaged Value of Inventory
• Need Cost Data, but evidently
show the flow of goods
Basic Strategic Warehouse Management
57
Advanced Technology Application in Warehousing
• Equipment Utilization
– Pallet Rack
– Push-Back Pallet Rack
– Forklift & Pick-to Vehicles
Basic Strategic Warehouse Management
58
Advanced Technology Application in Warehousing
• Equipment Utilization
– Barcode Printer & Scanner
– Automated Guided Vehicle
– Unit Load Automated Buffer
– Mini Load Automated Buffer
– Sorting Transfer Vehicle
Basic Strategic Warehouse Management
59
Advanced Technology Application in Warehousing
• Automated Warehouse
– Automated Storage and Retrieval System - AS/RS
– AS/RS Effectiveness
• Increase the efficiency of order process 3 times.
• Decrease the damage of goods for 50 %
• Increase the accuracy of inventory and services for 65 %
– Rack Support Building: RSB
• Drive-in rack or Selective rack (cheap structure and easy and fast for
construction)
– In Thailand, Sanyo: H 30 m. and construction cost reduced by 15 %
– Generally, 2 Systems: Unit and Mini Load Automated Buffer
Basic Strategic Warehouse Management
60
Advanced Technology Application in Warehousing
• Equipment Utilization
– Unit Load Automated Buffer
http://www.mhinfo.com
Basic Strategic Warehouse Management
61
Advanced Technology Application in Warehousing
• Equipment Utilization
– Mini Load Automated Buffer
http://www.mhinfo.com/
Basic Strategic Warehouse Management
62
Advanced Technology Application in Warehousing
• Equipment Utilization
– Sorting Transfer Vehicle
http://www.mhinfo.com
Basic Strategic Warehouse Management
63
Advanced Technology Application in Warehousing
• Information Technology Utilization
– Warehouse Management System (WMS)
• It is the system combining material handling and
information systems.
• It requires the study of goods or material flows for better
warehouse management
By David E. Mulcahy (1988)
Basic Strategic Warehouse Management
64
Advanced Technology Application in Warehousing
• Information Technology Utilization
– Should we use WMS for our warehouse?
• Needs of organization
• Available Budget
• Compatible with the existing warehouse structure (Ex.
Physical conditions)
• Directly Answer to Decision Maker’s Strategy or Policy.
(Source: Arun, 2004)
Basic Strategic Warehouse Management
65
Advanced Technology Application in Warehousing
• Information Technology Utilization
– Generally, WMS consists of the following
functions;
•
•
•
•
•
•
•
•
Real time labor management
Labor planning, tracking, and management
Integrated host system communication
Real time transaction-based operating systems
Modular software development
Material handling device control
Automated storage equipment control
In/Outbound traffic management
Source: Sirang, 1997
Basic Strategic Warehouse Management
66
Advanced Technology Application in Warehousing
• Information Technology Utilization
– Benefits of using WMS
• Reduce the losses of materials and goods
• Significantly Improve the accuracy of warehouse and
inventory system.
• Real time recognition of any change of material or
goods information.
• Increase the productivity of warehouse workers
• On time goods delivery
• Improve the customer services.
Source: Sirang, 1997
Basic Strategic Warehouse Management
67
Advanced Technology Application in Warehousing
• Information Technology Utilization
– Warehouse Management System
• Isolated software or module
– Power House
– IntelliTrack Warehouse Software
– Etc.
• Combined software or module (Concept of ERP)
– ORACLE
– SAP
– Etc.
“Senior level executives now realize that the
automated warehouse is as much a part of
e-commerce and e-fulfillment as the Internet.”
- Supply Chain Yearbook
Source: Mark Mandeville, ORACLE
Basic Strategic Warehouse Management
68
Advanced Technology Application in Warehousing
• Cost Saving of WMS
Source: Trunk, 1998
Basic Strategic Warehouse Management
69
Advanced Technology Application in Warehousing
• Cost Saving of WMS
Source: Trunk, 1998
Basic Strategic Warehouse Management
70
King Mongkut's Institute of Technology North Bangkok
Basic Strategic Warehouse Management
71
Case Study 1: Kmart VS Walmart
Inventory Turnover Rate
Cost of Goods Storage (Cent per 1 $)
3.6
5
7.3
2
Kmart loosed the profits about $ 1.9 Billion,
when compare with the inventory cost of Wal-Mart
Kmart bankrupted in 2002
Basic Strategic Warehouse Management
72
Case Study 2: Warehouse of a transformer factory
• Identify the problems and rood causes
– Problem Analysis Tools: (Panika, 2000)
• Tree Diagram
• Relations Diagram
Basic Strategic Warehouse Management
73
Basic Strategic Warehouse Management
74
Basic Strategic Warehouse Management
75
Improvement Warehouse Layout
Before
After
- Zoning
- Racking
Basic Strategic Warehouse Management
•Picking error 2.47 %
•Counting error 2.11 %
(485,309 B)
•Ave. moving time 3.95
min/box.
•Picking error 0.03 %
•Counting error 0.07 %
(1,623 B)
•Ave. moving time 1.71
min/box.
76
Case Study 3: TESCO-LOTUS Warehouse and Distribution Center
• TESCO-LOTUS Warehouse and Distribution
Center was established in 1994.
– In 2004, they occupied;
•
•
•
•
•
43 Hypermarkets (Planned to increase by 6)
1 Super Market
2 Lotus Value
9 Lotus Express (Planned to increase by 21)
About 2,500 Suppliers with trading 45,500 MB.
– Construction Cost of the center 2,000 MB.
– Distribute more than 800,000 units a day.
Basic Strategic Warehouse Management
77
Case Study 3: TESCO-LOTUS Warehouse and Distribution Center
• In the beginning; LOTUS had about 2,000
goods items per store.
• Big Problem:
– Each store has their own orders more than 2,000
items or about 22 million orders a year.
– In the principle of LOTUS, they have to order
365,000 times a year, generate 22 million bills a
year.
– Cost during the order processing 100 MB.
Basic Strategic Warehouse Management
78
Case Study 3: TESCO-LOTUS Warehouse and Distribution Center
• Lotus utilizes the computer network consisting of 3
systems;
– SCS (Stock Control System) for managing stores
– RAMS (Richter Automated Merchandising System) in Head
Office
• Control goods and information
• Contact to Vendor for replenishment (use EDI) and DC
– PCS (Product Controlling System) for managing
Warehouse and Distribution Center.
• Vendor Managed Inventory (VMI)
Basic Strategic Warehouse Management
79
Case Study 3: TESCO-LOTUS Warehouse and Distribution Center
• Vendor Managed Inventory (VMI)
Replenishment
Vendor
1
Inventory
Consumers
Sale & Forecast
Retailer
Consumers
Inventory
Vendor
2
Sale & Forecast
Consumers
Replenishment
Basic Strategic Warehouse Management
80
(Sourcing)
Basic Strategic Warehouse Management
(Stock Chamber)
(Cross Docking Chamber)
&
!"#$ %
Basic Strategic Warehouse Management
' !'(() !"#$ %
B320N6O
A Q
Case Study 3: TESCO-LOTUS Warehouse and Distribution Center
• Use “Visualize Scanner” (6,000 boxes per hour);
– Throughput Level: 1,000,000 cases a day.
• AUTO Shoe Sorter: 80 Outlets with 5,200 boxes/hr.
Basic Strategic Warehouse Management
83
Case Study 3: TESCO-LOTUS Warehouse and Distribution Center
• They separated suppliers into 2 groups;
– High performance suppliers: On time delivery and
stocks not required.
– Low performance suppliers: not on time delivery
and need to stock.
– 90% for cross docking
– 10% for warehouse
The modern and biggest warehouse / DC in
SEA.
Basic Strategic Warehouse Management
84
Case Study 4: 7-Eleven Retail Store
• 7-Eleven Convenience Stores
• Expect to expand for 3,000 shops over the
country.
• 4 DCs (Sukhumvit, Sukhumvit 101, Chokechairaummit, Bangbuathong)
• Combine Distribution Center (CDC) focuses on
fresh and daily Products (Small Size about 650
sq.m.)
• For the overall scale, about 1.4 million
customers a day.
• 2,000-3,000 goods types per shop
• 5600 shops and franchisees
Basic Strategic Warehouse Management
85
Problems in Retailing Store
* +((,"-./
-0-1
(.2(()
* 3(( 3()45
1) 6
7* 3(( ,"-"7 # -1"-)8
"1
6
(-
* 9:
".2(() 9 :
6
0.
* ;
/
-<
(#"1
6
(-+ 5
!-(:
(7.= :
6
5
"1
6
(-
* 3(( 41
(#
>:
"1
6
(-!6 ,"-"7 # -1 >,%
Basic Strategic Warehouse Management
B320N6O
A Q
Warehouse and DC in Sourcing
Warehouse
and
Distribution
Center can
influence with
CPFR
Basic Strategic Warehouse Management
Collaborative Planning, Forecasting & Replenishment
• The ability between trading partners to contribute their own
insights and competencies to develop and share demand plan
and forecast.
• CPFR Goal is to enhance the relationship and create
significantly more accurate information that can drive the
value chain to greater sales and profits.
Basic Strategic Warehouse Management
Customer Relationship Management
!" #$%
&
+,
-!
."%
)*
'(
* ? @ ABCD
? DEF
* F G
*
*
*
*
D
@L
FH
&@
FK
IJ
FH
&@
CM
CL
CM FN
OP
H
QFR?
:5
1(-6
53(6
-1(<S": T38S
": U :5
1(-6
53".
# -1
Basic Strategic Warehouse Management
B320N6O
A Q
King Mongkut's Institute of Technology North Bangkok
Basic Strategic Warehouse Management
90
Warehousing Functionality Spectrum
Product / Order Complexity
High
Low
ly
on
m
m to n
co due atio
s
ie RF egr
n
t
pa p at x in exity
m
pl
e
o
Co st pl Com
m
existing o
c
Highly Automated Facilities
Automate physical inventory handling
Warehouse Management
Implement true ““execution
execution system”
system” using
system directed tasks and task management
RF / Barcode Only
Improve accuracy and reduce latency
of existing transactions
Manual Inventory
Record transactions and
track balances
Small
Transaction Velocity / Volume
Large
Source: Mark Mandeville, ORACLE
Basic Strategic Warehouse Management
91
Business Pressures
Just-in-Time Delivery
Guaranteed Availability
• How do I integrate
operations to reduce order
processing time?
• How do I create a global
view of inventory?
• How can I improve the speed
of warehouse operations?
Inbound
One Size Fits One
• How can I manage
SKU proliferation?
• How do I ensure
labeling compliance?
• How can I improve order
promise accuracy?
Internal
Processing
Outbound
Lowest Total Cost
• Where can I reduce
inventory while maintaining
high fill rates?
• How do I improve labor
efficiency?
Source: Mark Mandeville, ORACLE
Basic Strategic Warehouse Management
Operational Challenges
Procurement
Manufacturing
Order Management
Warehouse
System 1
Warehouse
System 2
Warehouse
System N
RF Middleware
RF Middleware
RF Middleware
Integration and Operation Complexity, Localized Solutions
Source: Mark Mandeville, ORACLE
Basic Strategic Warehouse Management
A Need for Change
Leading Business Trends
• Fulfillment Processes Integrated with Partners
• Support All Company Processes (e.g. Service, Mfg)
• Automated Material Handling for Improved Productivity
• Mobile and Automatic Data Capture (e.g. RF, RFID)
• Streamlined Material Flow (e.g. Cross-Docking)
Telecommunication Technology (XML / EDI)
Modofied from : Mark Mandeville, ORACLE
Basic Strategic Warehouse Management
Import and Export in One Stop Service (OSS) Concept DC at Mukdahan
!"#
U,V
#$
%&
*+
%
TBB
8 #9
$
$
%
&
8 #9
M=%
% '(
$&
) <
RS
$
% '(
$&
$
%
&
8 #9
Basic Strategic Warehouse Management
95
Future Development in Warehouse and DC
• Virtual Warehousing (VW) (By Stuart et al., 1995)
– A worldwide system carrying out dynamic and
continuous material logistics functions
– By utilizing hybrid algorithm performing at the
efficiency and accuracy levels achieved only
world-class single-location distribution Centers.
Basic Strategic Warehouse Management
96
Improvement of Warehouse Management
• Information Flow.
Supply Chain Process
Management
Information
System
“Important”
Information Flows
During Production
Process
Raw material
- Purchasing
Moving Finished
Goods
Selling
Goods Flows
Logistics Process
Basic Strategic Warehouse Management
97
Information Technology for Supply Chain
Supply Chain
Deliver
Decision
Decision
Decision
Information
Information
Information
Data
Data
Data
Raw Material Stock Points Raw Material Stock Points
Basic Strategic Warehouse Management
Analytical IT
Ex. APS
Execution
Execution
Make
Execution
Source
Transactional IT
Ex. ERP
Raw Material Stock Points
Physical
Movement
Ex. Material
Handling
Storage
98
King Mongkut's Institute of Technology North Bangkok
Thank You Very Much
& Discussion
Basic Strategic Warehouse Management
99