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Warehousing Functions

The document discusses different types of warehousing functions including material handling, customer service, information transfer, and storage. It describes the purposes of warehousing as providing desired customer service levels at lowest cost and storing products at origin and consumption points. Reasons for warehousing include both service-related factors like maintaining supply and cost-related reasons such as achieving economies of scale. The document also outlines different warehouse types like distribution centers and different positioning strategies for warehouses including market positioned, production positioned, and intermediate positioned.

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Yogesh Pandey
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82 views9 pages

Warehousing Functions

The document discusses different types of warehousing functions including material handling, customer service, information transfer, and storage. It describes the purposes of warehousing as providing desired customer service levels at lowest cost and storing products at origin and consumption points. Reasons for warehousing include both service-related factors like maintaining supply and cost-related reasons such as achieving economies of scale. The document also outlines different warehouse types like distribution centers and different positioning strategies for warehouses including market positioned, production positioned, and intermediate positioned.

Uploaded by

Yogesh Pandey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Warehousing Functions

Warehouses

Material Customer Information Storage


handling service transfer function

Receive goods
Identify goods Temporary Permanent
Sort goods
Despatch to storage
Hold inventory
Recall, select goods
Marshal the shipment
Despatch the shipment
Prepare records and
advices
Purpose of Warehousing
• To provide desired level of customer service at the
lowest possible total cost
• It is that part of the firm’s logistics system that stores
products (RM, Packing Materials, WIP, FG) at and
between point of origin and point of consumption
and provides info to management on the status,
condition and disposition of items being stored
• Distribution warehousing relates mainly to FG
Reasons for Warehousing
Service related Cost related
Maintain source of supply Achieve production economies
Support customer service Achieve transportation
policies economies
Meet changing market Take advantage of Quantity
conditions Purchase discounts and forward
Overcome time and space buys
differentials Least Logistics cost for a
Support JIT programs of desired level of customer
suppliers and customers service
Provide customers with the right
mix of products at all times
Temporary storage of materials
to be disposed or re-cycled
Warehouses
• Support manufacturing
• Mix products from multiple facilities for
shipment to a single customer
• Break-bulk
• Aggregate
• Used more as a ‘flow-thru’ point than as a
‘hoarding’ point
Distribution Warehousing
• The objective is to set up a network of warehouses
closest to the customer locations to service markets
better and minimise cost
• Could be C&FA s, depots or distribution centers
• Macro location strategies:
– Market positioned
– Production positioned
– Intermediately positioned
Distribution Center
• Warehouse designed to speed the flow of
goods and avoid unnecessary costs
• Speeds bulk-breaking to avoid inventory
carrying costs
• Helps to centralise control and co-ordination
of logistics activities
• Products can also be cross-docked (one
vehicle to another)

Market positioned..
Market Positioned
• Warehouses located nearest to the final
customer
• Factors influencing are:
– Order cycle time
– Transportation costs
– Sensitivity of the product
– Order size
– Levels of customer service offered
Production positioned….
In between…

Production Positioned
• Warehouses located close to the production facilities
or supply sources
• Not the same level of customer service as the earlier
one
• Serve as points of aggregation / collection for
products made in a number of plants
• Factors influencing are:
– Perishability of raw materials
– Number of products in the product mix
– Assortments ordered by customers
– Transport consolidation rates ex; FTL
Intermediate Positioned
• Mid point locations between the final customer and
the producer
• High customer service levels possible even if
products made in number of units

• Other macro approaches look at cost minimisation or


cost and demand elements to maximise profitability

Transportation management….

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