Supply Chain Logistics Management
Chapter 14: Material Handling and
Packaging
Material Handling Systems
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Mechanized
Semi-automated
Automated
Information directed
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Mechanized Systems
• Moderate fixed cost, variable cost and flexibility
• Examples
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Forklift
Walkie-Rider pallet trucks
Towlines
Tow tractors
Conveyors
Carousels
Pick-to-light
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Semi-Automated Systems
• High fixed, low variable, low flexibility
• Examples
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AGVS
Sortation systems
Robotics
Live racks
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Automated Systems
• High fixed, lower variable, low flexibility
• Examples
– Order selection systems
– ASRS
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Information Directed Systems
• Moderate fixed and variable cost, high
flexibility and utilization
• Examples
– PC directed forklifts
– RF controls
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Packaging Factors Influencing Material
Handling
• Product characteristics
– Cube utilization
• Unitization
– Rigid containers (Containers)
– Non-rigid containers (Pallets, slipsheets,
shrinkwrap)
– Flexible containers (Knock down)
– Unit load building
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Role of Packaging
• Consumer packaging (Marketing emphasis)
• Industrial packaging (Supply chain emphasis)
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Unitization
Handling
Security
Stowability
Information
Protection
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
INTEGRATED LOGISTICS
SERVICES
• Mission-Provide services to meet all or
significant part of a shipper’s total logistical
requirements
• Titles-Third party logistics, contract
logistics, logistics utilities, and integrated
logistics service providers
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Defining Contract Logistics
Types and Categories of 3PL’s
• Asset-based
• Data-based
• Exclusive Service Provider
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
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Defining Contract Logistics
Drivers of Logistics Outsourcing
Debt reduction
Strategic focus of ...
Investment
Rationing
Financial resources
Human resources
Information technology
Competition
Faster (agility)
Better (quality)
Cheaper (low cost provider)
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Defining Contract Logistics
Advantages
Disadvantages
•Less asset investment
•Switching costs
•Lower operating costs
•Unseen “hidden” costs
•Focus on core competence
•Less customer contact
•Gain management skills
•Dependency
•Provide higher service level
•Loss of control
•Increased flexibility
•Entry mode to new markets
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Implementation
Steps to Outsourcing
• Strategic decision to outsource
• Determine the first impact area clearly
• Define the objectives of outsourcing activity
• Supplier selection process
• Contractual issues
• Work the project
• Review the operating plan and budget
• Implementation plan
• Frequent feedback - CIP
• Partnering
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
CONCLUSION
• Warehouse strategy is evolving to more
focused and flexible
• Technology and expertise are key
warehouse alternative determinants
• Operating and industry synergies are more
important factors
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.