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IE6202: Warehousing Systems Instructor: Spyros Reveliotis Office: Room 316, ISyE Bldng tel #: (404) 894-6608 e-mail: spyros_at_isye.gatech.edu homepage: www.isye.gatech ... – PowerPoint PPT presentation

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Title: Instructor: Spyros Reveliotis


1
IE6202 Warehousing Systems
  • Instructor Spyros Reveliotis
  • Office Room 316, ISyE Bldng
  • tel (404) 894-6608
  • e-mail spyros_at_isye.gatech.edu
  • homepage www.isye.gatech.edu/spyros

2
Course Logistics
  • Office Hours 2-330pm MW (ow, an open-door
    policy will be generally adopted, but an
    appointment arranged by e-mail is preferred)
  • Grading policy
  • Homework Projects 25
  • Midterm I 20 (Tent. Date Thursday, Oct. 4)
  • Midterm II 20 (Tent. Date Thursday, Nov. 1)
  • Final 35
  • Exams closed-book, with 2 pages of notes per exam
  • Make-up exams and Incompletes Only for very
    serious reasons, which are officially documented.

3
Course Logistics (cont.)
  • Course Reading Materials
  • J. Bartholdi and S. Hackman, Warehouse and
    Distribution Science, Release 0.08, unpublished
    manuscript, 2000, URL http//www.isye.gatech.edu/
    jjb/wh/book/wh.pdf
  • An assembled package of various books excerpts
    and papers on warehousing topics, available by
    the Georgia Tech bookstore
  • Any other material distributed or cited in the
    lectures
  • Books on reserve
  • Tompkins et al., Facilities Planning, John
    Wiley Sons, 1996.
  • Heragu, S., Facilites Design PWS Publishing
    Co., 1997.

4
Course Objectives(What is this course all about?)
  • An introduction to the fundamental concepts and
    techniques involved in the design and operation
    of contemporary warehouses and distribution
    centers
  • In particular, a balanced development of the
    following issues
  • Familiarization with contemporary warehouses and
    their operation
  • A systematic exposition of the overall design,
    planning and control problem, as it arises in the
    context of contemporary warehouses
  • The decomposition of the problem to a series of
    sub-problems, and the development of
    analytical/quantitative methodologies for
    addressing these sub-problems
  • (Time permitting,) an introduction to the
    emerging issues and needs that arise from modern,
    globalized and internet-based economy.

5
Next...
  • Understanding the role of warehouses in
    contemporary distribution networks
  • A description of the warehouse operations and
    equipment
  • A (conceptual) description of the major design,
    planning and control problems arising in
    contemporary warehousing
  • Key References
  • J. Bartholdi and S. Hackman, Warehouse and
    Distribution Science, Release 0.08, unpublished
    manuscript, 2000, URL http//www.isye.gatech.edu/
    jjb/wh/book/wh.pdf Chpts 1-4
  • G. Sharp, Warehouse Management, Chpt 81 in
    Handbook of Industrial Engineering, by G.
    Salvendy (ed.), John Wiley Sons, NY, 2000.
  • B. Rouwenhorst et. al., Warehouse design and
    control Framework and literature review,
    European Journal of OR, Vol. 122, pgs 515-533,
    2000.
  • Tompkins et al., Facilities Planning, John
    Wiley Sons, 1996 Chpt. 9

6
The role of warehousing in contemporary
distribution networks
  • Buffer It holds inventory for downstream stages
    of the supply chain, in order to allow the entire
    production / distribution network to deal
    efficiently with the systematic and random
    variation in the network operations, or to
    exploit significant economies of scale.
  • Typical sources/examples of systematic variation
  • product seasonalities (e.g., Toys R Us, CVS
    merchandise)
  • cyclical / batched production due to large set-up
    costs
  • Typical sources of random variation
  • variations in transportation times due to
    weather, traffic congestion, bereaucracy, etc.
  • variations in production times due to unreliable
    operations, unreliable suppliers
  • Typical economies of scale involved
  • Price breaks in bulk purchasing

7
The role of warehousing in contemporary
distribution networks (cont.)
  • Consolidation center It accumulates and
    consolidates products from various points of
    manufacture within a single firm, or several
    firms, for combined shipment to common customers.
  • Consolidation allows to control the overheads of
    transportation operations by
  • allowing the operation of the carriers to their
    capacity, and therefore, the more effective
    amortizing of the fixed transportation costs
  • reducing the number of shipping and receiving
    operations
  • Cross-docking Consolidation without staging

8
The role of consolidation in contemporary
distribution networks
Retailers
Manufacturers
Manufacturers
Retailers
Consolidator
9
The role of warehousing in contemporary
distribution networks (cont.)
  • Value-Added-Processing (VAP) Increasingly,
    warehouses are required to undertake some
    value-added-processing tasks like
  • pricing and labeling
  • kitting (i.e., repackaging items to form a new
    item e.g., beauty products)
  • light final assembly (e.g., assembly of a
    computer unit from its constituent components,
    delivered by different suppliers)
  • invoicing
  • In general, this development is aligned to and
    suggested by the idea/policy of postponement of
    product differentiation, which allows for
    customized product configuration, while
    maintaining a small number of generic product
    components.

10
The major warehouse operations
  • Inbound processes
  • Receiving (10 of warehouse operating costs)
    the collection of activities involved in
  • the orderly receipt of all materials coming into
    the warehouse
  • providing the assurance that the quantity and
    quality of such materials are as ordered
  • disbursing materials to storage or to other
    organizational functions requiring them.
  • Put-away (15 of warehouse operating costs) the
    act of placing merchandise to storage it
    includes
  • determining and registering the actual storage
    location(s)
  • transportation
  • placement

11
The major warehouse operations (cont.)
  • Outbound processes
  • Processing customer orders (typically done by the
    computerized warehouse management system of the
    facility) This set of activities includes
  • checking that the requested material is available
    to ship
  • if necessary, coordinating order fulfillment with
    other facilities of the distribution network
  • producing the pick lists to guide the order
    picking and the necessary shipping documentation
  • scheduling the order picking and the shipping
    activity.
  • Order-picking (55 of warehouse operating
    costs) the set of physical activities involved
    in collecting from the storage area the materials
    necessary for the fulfillment of the various
    customer orders, typically identified as
  • traveling (55 of the order picking time)
  • searching (15 of the order picking time)
  • extracting (10 of the order picking time)
  • documentation and other activities (20 of the
    order picking time)

12
The major warehouse operations (cont.)
  • Outbound processes (cont.)
  • Checking Checking orders for completeness (and
    quality of product)
  • Packing Packaging the merchandise in appropriate
    shipping containers, and attaching the necessary
    documentation / labels.
  • Shipping The activities of
  • preparing the shipping documents (packing list,
    address label, bill of lading)
  • accumulating orders to outbound carrier
  • loading trucks (although, in many instances, this
    may be the carriers responsibility).
  • Others Handling returns, and performing the
    additional value-added-processing supported by
    contemporary warehouses, as discussed in a
    previous slide.

13
Product concepts related to the characterization
of material flow in a contemporary warehouse
  • Item (otherwise piece or each) The smallest unit
    of product sold by a distribution center, e.g.,
  • a 1-liter bottle of a soft drink
  • a box of 100 paper clips
  • Carton a paperboard container holding identical
    product, usually of a size and weight allowing
    manual handling example dimensions 14x10x20in
    or 30x20x40cm.
  • Tote a container usually made of plastic and
    often used for storing and handling different
    products usually similar in size to a carton,
    but re-usable.

14
Product concepts related to the characterization
of material flow in a contemporary warehouse
(cont.)
  • Inner pack several units of a product secured
    together and sold by the distribution center as a
    unit, if many items are contained in a carton,
    and purchase quantities per item are large a
    carton contains several inner packs.
  • Pallet a set of cartons or totes of identical
    product arranged in a cubical pattern and usually
    supported by a base that may be of wood or
    plastic example dimensions are 40x48x54in and
    80x120x100cm.
  • Mixed unit load a set of cartons or totes of
    different products arranged to a cubical pattern
    similar to a pallet, often wrapped or strapped
    for stability.
  • Overpack a large carton or tote containing
    different products smaller than a pallet but
    larger than a carton, so that manual handling may
    be difficult.

15
Product concepts related to the characterization
of material flow in a contemporary warehouse
(cont.)
  • Stock Keeping Unit (SKU) a set of product(s),
    packaged in a pre-specified manner, that it is
    identified as a distinct entity for distribution
    purposes e.g.,
  • a 2-liter bottle of Coca-Cola Classic
  • 6 2-liter bottles of Coca-Cola Classic packed in
    a carton
  • 12-ounce cans of Coca-Cola Classic, packed 24 in
    a carton.
  • Order a document from a customer, requesting
    specific SKUs in specific quantities.
  • Line item a line in an order document
    designating a specific SKU and quantity

16
A schematic representation of the warehouse
material flow
Replenishment
Replenishment
Reserve Storage and Pallet Picking
Case Picking
Broken Case Picking
Accumulation, Sortation Packing
Direct putaway to reserve
Direct putaway to primary
Receiving
Shipping
Cross-docking
17
Operational Cost Breakdown
10
20
15
55
18
The major concerns underlying the organization of
order-picking
  • Establish an efficient operation by controlling
    the order-picking labor costs, especially those
    due to traveling, and
  • maintain a high level of responsiveness to
    customer orders, while
  • preserving the order integrity.

Responsiveness
Costs
Quality
19
How?
  • By organizing the associated work-flow so that it
    presents
  • high pick density, i.e., average number of picks
    per foot of travel
  • short (order) flow time, i.e., the amount of time
    elapsed between the arrival of an order into the
    warehouse management system and the time it is
    loaded on the shipping carrier.
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