Warehousing provides storage and consolidation of raw materials, work-in-progress, and finished goods to facilitate supply chain flow. Key functions include transportation consolidation, product mixing, cross-docking, and protecting against contingencies. The economic benefits are reducing overall logistics costs through consolidation and break bulk operations, sorting goods for distribution, seasonal storage, and reverse logistics. Warehouses must consider throughput needs, demand stability, service requirements, and multiple business unit needs in their operations and design.

1. WAREHOUSING
By. Akhmad Suryana

2.  Storage has always been important aspect of
economic development.
 Warehousing provides time and place utility
for raw materials, industrial goods, and
finished products, allowing firms to use
customer service as a dynamic value-adding
competitive tool.

3.  The warehouse is  Functions of
where the supply chain warehousing include:
holds or stores goods.  Transportation
consolidation
 Product mixing
 Cross-docking
 Service
 Protection against
contingencies
 Smoothing

4.  Economic benefits of warehousing occur
when overall logistics costs are reduced.
 Four basic economic benefits:
1. Consolidation and break bulk
2. Sorting
3. Seasonal storage
4. Reverse logistics

5.  In consolidation, the warehouse receives
materials, from a number of sources, that are
combined in exact quantities into a large
single shipment to a specific destination.
 A break-bulk operation receives a single large
shipment and arranges for delivery to
multiple destinations.

7. CUSTOMER A
BREAK-BULK
PLANT A CUSTOMER B
WAREHOUSE
CUSTOMER C

8.  The basic benefit sorting is to reconfigure
freight as it flows from origin to destination.
 Three types of assortment:
 Cross-docking
 Mixing
 Assembly

9.  The objective of cross docking: to combine
inventory from multiple origins into a
prespecified assortment for a specific
customer.
 Warehouse that perform in-transit mixing
have the net effect of reducing overall
product storage and minimizing
transportation cost.

10.  The objective of assembly is to support
manufacturing operations.
 Products and components are assembled
from a variety of second-tier suppliers by a
warehouse, often referred to as lead
supplier, located in close to manufacturing
plant.

11. Company A
Customer A
Or
Plant A
Company B
Or Distribution center Customer B
Plant B
Company C Customer C
Or
Plant C

12. Customer W
Plant A A B C D
Customer X
A B C D
Transit mixing
point
Customer Y
Plant B
Product D A B C
Customer Z
A B
Plant C

13. Vendor A
Lead supplier
Vendor B Assembly plant
distribution
center
Vendor C
Vendor A
Retail
Vendor B Retail store
distribution
center
Vendor C

14.  Thedirect economic benefit of storage is to
accommodate seasonal production or
demand.

15.  Reverse logistics includes the activities to
support:
 Returns management
 Remanufacturing and repair
 Remarketing
 Recycling
 Disposal

16.  Returns management is designed to facilitate the
reverse flow of product that did not sell.
 Remanufacturing and repair facilitate the reverse
flow of product following its useful life.
 Remarketers use coordination and reverse flow to
resell product.
 Recycling returns product following its useful life so
that they can be effectively reused.
 When material cannot be effectively reused, it still
may require reverse logistics to dispose of it in the
appropriate landfill.

17. 1. Spot-stocking
2. Full line stocking
3. Value added services

18.  Spot stocking is typically used to support
customer accommodation.
 Manufacturers of highly seasonal products
often spot-stock.
 Under this concept, select inventory is spot-
stocked in a local market warehouse in
anticipation of responding to customer need
during the critical sales period.

19.  The difference between spot-stocking and
full line stocking is the degree and duration of
warehouse utilization.
 A spot stocking strategy would temporarily
warehouse a narrow product assortment in a
large number of warehouse for a limited time
period.
 The full line stocking warehouse improve
service by reducing the number of suppliers.

20.  Cross dock  Order fulfillment
 Customer returns  Pick
 Home delivery  Pool distribution
 In transit merge  Repair
 Kan Ban  Returnable container
 Kitting  Reverse logistics
 Labeling  Specialty packaging
 Lot control  Store support
 Mass
customization/postpon
ement

21.  Handling
 Handling equipment
 Handling activities:
▪ Receiving
▪ In-Storage handling: Transfer and selection
▪ Shipping

22.  Storage
 Stock location
 Warehouse management system (WMS)
 Type:
▪ Active storage: quick movement & flexibility (maintain
minimal inventory in storage)
▪ Extended storage (maximum space utilization)

23. Receiving docks
Storage space for high-
Storage space for low- Storage space for low-
volume product
volume product volume product
Staging
and cross
dock area
Shipping docks

24.  Factors to consider
 Throughput volume
 Stability of demand
 Density of market area to be served
 Security and control needs
 Customer service needs
 Multiple use needs of the firm

25.  Typically operated by the firm owning the
product.
 More flexibility since operating policies,
hours, and procedures.
 Less costly
 The use of private warehousing is decline.

26.  Rationale for Public Warehousing
 Limited capital investment
 Flexibility
 Economic of scale
 Public warehousing:
 General merchandise (electronics, paper, food)
 Refrigerated (chemical product, medical)
 Special commodity (bulk material)
 Bonded (licensed by government)
 Household goods and furniture

27.  Combine characteristics of private and public.
 Compensation for seasonality in products.
 Increased geographical coverage.
 Ability to test new markets.
 Managerial expertise and dedicated resources.
 Less strain on the balance sheet.
 Possible reduction of transportation costs

28.  Site selection (warehouse location):
 Service availability
 Cost (land cost)
 Expansion
 Utilities
 Design:
 The number of floors
 Cubic capacity
 utilization
 Protection
 Efficiency

29. Receiving area
Bulk storage Rack storage
area area
Receiving area
Receiving area
Receiving area
Product flow

30.  Product-mix analysis
 Expansion
 Material handling
 Layout:
 Sizing
 Warehouse management systems (WMS):
 Discrete selection: a specific customer order (critical
content order)
 Wave selection/ batch selection: all customer order.

31. Truck Receiving Truck Receiving
Selection area Storage area Remote
storage
Selection from storage
along line
Truck Shipping Truck Shipping

32. WMS Core functionality: Advanced functionality:
Receiving Yard management
Put-away Labor management
Cycle-count Warehouse optimization
Pick Value-added service
Task management Planned cross-dock
Quality analysis Returns management
Replenishment
Pack
Opportunistic cross-dock
Inventory control
Work order management
ship
Interface systems (middleware)
ERP—TMS—Material handling—Supply chain planning systems

33.  Accuracy and audits: cycle counting
 Security
 Pilferage
 Damage
 Safety and maintenance