Tuesday, 30 June 2015

Warehouse Material Flow

Warehouses perform many different tasks that take place from the moment goods are received up until the goods are delivered to the customers. The material flow tasks include the following:
  • The goods are received at the warehouse where they are unloaded from the vehicles.
  • The goods are then inspected and go through quality control.
  • Goods are prepared to be transported to the area used for storage and labelling also take place at this point.
  • Goods are moved to the storage area and put away until they are needed.
  • When orders come in, the goods are then picked from the storage area.
  • Multiple SKU goods can be combined for shipment.
  • Goods are prepared for transportation to the shipping area.
  • The goods are transported to the shipping area ready to be shipped to the customer.
There are other tasks that can also take place in the warehouse:
  • Breakbulk and consolidation
  • Carrier monitoring
  • Cross docking
  • Import and export services
  • Light assembly, filling, outfitting and blending
  • Network analysis
  • Packaging
  • Postponement
  • Real estate management
  • Site location
  • Systems development
  • Tracking inventory
  • Transportation



Monday, 29 June 2015

About Packaging Model


Packing is rarely seen as a value added component in manufacturing and distribution. It is more of a cost driven centre and when designing the packaging in manufacturing it is often possible to come up with more cost effective methods that will also support handling, protect the product distribution and support.

A systematic approach to packaging logistics is to ensure that logistics considerations do not fully dominate the packaging design. The design should also be worked around marketing and the product design so that all factors are fully considered. The packaging needs to consider both the cost driven centre along with the value adding processes within logistics. 

There are six steps that help to explain this approach:
  1. Work out the flow route of the package and the level of the packaging
  2. Work in the packaging logistics into the product type stage
  3. Create the package design
  4. Create the information flow throughout all of the parties
  5. Redesign the packaging system
  6. Use the value chain model and fully evaluate the final package design



Saturday, 27 June 2015

Chit Chat: Automotive Industry Outlook Part Two

One of the trends affecting the automotive industry in 2015 and beyond is found within the supply chain. The industry is focusing on collaborating with all the links on a closer level than ever before. The industry will be adopting a two pronged approach to innovation – working to reduce the costs due to innovations used in the supply chain and to enhance the product lines produced.

One of the areas that is proving to cause some concerns is within the importance of intellectual property ownership and the exploitation of intellectual property as the differences emerge on the regional levels. However, this is just a block that needs to be worked around as great collaboration with external partners, which includes the customers and suppliers alike, is significant and will play an important role in increasing profits over the next two years.

The supply chain will need to be reorganised and to incorporate value added services.  Business models will be altered and the manufacturers are finding ways to grow while reducing costs. An example of this is how the manufacturers have reduced costs by moving their facilities so they are closer to end customers. This not only allows them to save money but also localise the products and act quicker and increase accuracy when orders are placed.

The value added services can be found in different areas including maintenance, optimising the performance and managing the life cycle of the product.  This is one of the ways that the manufacturers are able to meet with customer demand and provide an excellent service. The use of value added services present a low cost and low risk way of expanding on the product offerings and to boost profits.

Friday, 26 June 2015

About Distribution and Packaging Efficiency

Packaging plays an important role in logistics. The packaging effects on material handling are significant. Good packaging will have a positive effect and poorly designed packaging will have a negative effect.  Packaging is designed to display information and is advantageous as the information is useful throughout the supply chain. It specifically helps the warehouse staff to locate and quantify products.

The size of the packaging has an effect on how the warehouse is used and how products are being protected. It also affects material handling. It has to be able to protect the goods inside the packaging as well as the weight of other products that are stacked on top of it. The packaging also allows for different modes of transport to be used.

With good packaging an efficient material handling system can be used and this in turn ensures the warehouse can provide a good level of customer service by being quick and accurate. This also helps to reduce the costs as fewer resources are required.

Packaging also has direct effects on transportation as it determines the volume of a product. It has a direct effect on time utility and place utility as the product moves from its origin to the final customer. Volume, storability and handling are all factors that are determined by the physical characteristics of products – so packaging has an important role in this part of the logistics process.

Thursday, 25 June 2015

What are the Ten Functions that Protective Packaging Should Perform?

Protective packaging needs to perform ten separate functions, which are as follows:

  1. Packaging needs to fully enclose the materials inside to keep them protected and to protect other items from the materials.
  2. Keep the materials restrained so they cannot move in an undesirable fashion within the container during transportation.
  3. To prevent contact and keep them separated by using corrugated fibreboard when shipping glasses.
  4. The packaging must also work to help protect the content from external shocks or vibrations.
  5. Identical containers need support when they stack. Packaging plays a role by providing this support in the building block concept.
  6. The contents are positioned due to the packaging in order to get as much protection as possible.
  7. Packaging helps to evenly distribute the weight of the contents as many of the automated handling machines are designed to work with evenly distributed weighted packages.
  8. In order to provide an exterior surface area suitable for the application of shipping labels and identification along with any other instructions that are required.
  9. To prevent the items being tampered with while being transported as any tampering will be noticed through the damaged packaging.
  10. To ensure that the package will not cause any hazards to anyone who may come into contact with it.




Wednesday, 24 June 2015

What are the Methods Used for Various Label Backing?

There are four methods that are used for label backing:
  1. Plain back label is the most economic option used with the high speed labelling machines which uses the minimum amount of glue necessary for the lap or spot gluing. They often contain shipping documents that can come unstuck and can be used as shipping labels when they are run through the electronic data processing equipment.
  2. Gummed label is applied with simple moisturising but it is a more expensive alternative to the plain back labels. The labels are normally manually applied but they can also be applied with semi or full automatic equipment.
  3. Pressure sensitive labels stick to any smooth service, so there is no need to glue or apply moisture in order for them to be applied to the packaging.  These labels are ready adhered to low release backing paper and they can be removed from the backing paper manually and also by machine.
  4. Heat seal coated labels need to be applied by using a heating element to make the thermoplastic adhesive. The labels can be applied to the service with pressure given by machinery or manually.




Tuesday, 23 June 2015

What are the Labelling Regulations for Food Production Part Two

Today we’re continuing our look at the labelling regulations for food production.

Date Tagging: Tag tagging has two parts. The first is the use-by-date consists of the day or the month and in some cases, both, that the product needs to be consumed by. The second is the best before date, which informs the consumer when the product will begin to degrade and no longer be at the optimum quality.

Business Name and Address: The business name and address needs to be included on the label as well as the packager or manufacture if it is located in the European Union and is independent of the main business.

Place of Origin: Labels need to show the place of origin, which is especially important if the product name could be seen as misleading.

Instructions for Use: If the usage or preparation of the product isn’t obvious to consumers, the instructions need to be added to the label.

Presentation: The label must be readable and written in English, or in other languages for special countries.

Lot or Batch Code: Individual batches have to be easily identifiable, which is why a lot mark or batch code is required. It is worth manufacturers knowing that the smaller the batch will result in reduced financial losses and costs if the products need to be recalled.

Monday, 22 June 2015

What are the Labelling Regulations for Food Production Part One

There are lots of regulations that determine the labels on products for distributing to the public.  Some of the information is also placed on the larger packages for retailers and also on carton lots as some retailers pass these lots on to their consumers, meaning they wouldn’t see the information on the individual sized goods. This is a complicated subject as the laws do vary from country to country, but the following labelling regulations generally remain the same:

Name: The name of the brand also informs the customers of the nature of the product – so often a description will be added to the name of the product. Generic names for products are also used, such as coffee, prawns etc.

Nutrition Information: The nutritional information isn’t exactly a legal requirement but when a product makes a claim (e.g. if a product claims to be low in sugar or salt) it has to be supported with the nutritional information.

Ingredients: A list of ingredients has to be shown in descended weight order. Additionally, preservatives must be clearly labelled as a preservative along with a European registration number.

Medical or Nutritional Claims: Tighter regulations are applied in the medical or nutritional information of food to make sure the false claims cannot be made with the exception to certain conditions. The conditions state that the food with claims of reduced the fat or rich in vitamins need to meet the compulsory claims or standards before it can be made. Meanwhile, “adverse conditions” such as treating or curing disease are prohibited to present on the food products.

Storage Conditions: This information share with consumers to show how food is stored for the optimum shelf life.

Return tomorrow for part two of the labelling regulations for food production.



Saturday, 20 June 2015

Chit Chat: Automotive Trends in 2015 – Part 5

There are several factors that will be essential for manufacturers to achieve success during 2015 and beyond:
  • Speedy adaptions that will mean innovations are quickly put into action. Companies need to be agile by transforming their supply chains.
  • Companies looking to gain success in Brazil must acknowledge that low cost manufacturing is no longer found in Brazil. Investment is needed to be made in Brazil.
  • Manufacturers cannot sit on their profits. They need to invest in product development and innovation and take risks to avoid being left behind.
  • Incorporate tax measures into the KPIs of their supply chains.
  • Investments need to be made in rising economies and innovations made that are targeted specifically at these markets to meet the needs and the price points expected by the customers.
Global innovation is required by manufacturers, increasing the sophistication of their product. They need to work closely with their customers and suppliers in order to meet expectation and come up with solutions that satisfy.  Introducing value added services is also a way of meeting the needs of the customers.


Friday, 19 June 2015

Packaging Equipment and the Major Functions Items Performed

Packaging equipment is needed so the packaging is able to work and the costs can be kept to a minimum. Equipment is used to make the packaging and also required so the packaging can be used. 

The equipment that is used by the user will mostly be designed for a specific type of packaging. The equipment is classified by the function and these are the main functions that can be carried out by the packaging equipment:
  • Forming and assembly
  • Filling, overwrapping and loading
  • Weighing and counting
  • Closing and sealing
  • Bundling and reinforcing
  • Identification

Thursday, 18 June 2015

What are the 10 Functions of Packaging?

Packaging works in two ways. It helps to protect the product while it is stored and moved and it also works to improve the efficiency of distribution. That’s not all it does, below are the ten functions of packaging:

1.     Containment. Products have to be contained before they can be moved so that they are fully protected.

2.     Apportionment. Manufacturers create large outputs and packaging is used to turn that output into smaller quantities so it is more useful to customers and the products will be managed and consumer sized.

3.     Convenience. Some packaging has useful features that aid distribution and handling, as well as opening, display, sale, reclosing, use and reuse.

4.     Information Transmission. Packaging is used to share information, including how to use the products, recycle them, reuse them, how to dispose of them and more. The information can be printed directly on the packaging or on labels.

5.     Portion Control. Packages are more useful for households and can also be used to improve inventory control.

6.     Unitisation. The amount of times a product is handled can be reduced using unitisation. The packaging are unitised and placed onto pallets.

7.     Physical Protection.  The objects are protected by the packaging helping to reduce damage and accidents. The packaging can protect against vibration, compression, temperature and more.

8.     Barrier Protection.  The contents within the packaging are kept clean and safe so that the shelf life can be met. Some packaging also works to extend the shelf life by having oxygen absorbers or desiccants insider. Controlled atmosphere is also used in food packages.

9.     Security. Security risks can be reduced using packaging as they can deter tampering and have features that show when the packages have been tampered with.

10.   Marketing. Marketing information and designs can be used to help encourage customers to make a purchase.

Wednesday, 17 June 2015

Packaging History and Definition

In the early nineteenth century, cans were made by using tin plated steel and iron. Then the first fibreboard boxes and paperboard cartons were introduced. There were many advances in packaging made in the early twentieth century, such as:
  • Cellophane
  • Panels on cartons,
  • Bakelite used on bottle closures
  • Aluminium and plastics were also developed
The use of aluminium and plastic materials were mainly used to help to improve food safety and the function and performance of packaging.

Packaging is one of the important concerns of warehousing and material management. It is tied up with the efficiency and effectiveness of warehousing and can be used to improve handling, reduce costs and improve service. It has been defined as the art, technology and science for enclosing products so they can be sold, stored, used and distributed. Packaging also includes the design and production of packages.


Tuesday, 16 June 2015

What are the 5 Factors and their Effects on the Material Handling (MH) Costs?


Analysts need to review all the cost reduction projects so they can identify sources that could reduce costs. Most costs in MH relate to the five following factors:

Space – By improving the space unitisation the costs can be reduced. Cube space is one of the most effective options to consider.

Labour – Reducing labour costs could involve introducing automated and mechanised systems. These systems can also reduce the error rates and speed up the system.

Inventory – Minimising the inventory is a common objective and a great way for most businesses to reduce costs. There are different Material management programs that have been used in order to achieve this objective: just in time, and material requirement plans.

Equipment – Businesses can reduce costs with developments in MH equipment. Loading and unloading activities should be speeded up and made more efficient in order to reduce costs.

Waste – Decreasing the damage to the material works can reduce costs. To achieve this, efforts have to be focused on eliminating waste through optimum handling techniques and the training of personnel.



Monday, 15 June 2015

What is the Six Step Engineering Design Process in MH System Design Process?

In order to create a MH system that will meet all the objectives, it is necessary to design it well. The designer has many different design options and it is down to the designer to come up with one that will result in the system being both economical and efficient. Sadly, there isn’t a pre-defined algorithm that the designers are able to follow through to a successful end. The designer has to work through the procedures using their own art based skills using knowledge, engineering, ingenuity and experience.

The design process does involve the following a six-step engineering design process:

1.     Find the problem and come up with the system scope and the objectives for the MH system. The MH problems need to be identified in order to come up with solutions, which involve reviewing all current operations. The objectives are the end results that the system is working to achieve. This could be anything from reduced costs, customer satisfaction, reducing accidents or damages, improved efficiency or improved productivity.

2.     Work out what the requirements are for the system and analyse them for moving, controlling materials and protecting. Analysing the requirements mean going over all the information that has been gathered.

3.     Come up with some alternative designs that will satisfy the MH system requirements. MH equations can be helpful in this step – Materials + Moves + Methods = System. Materials, moves and methods are the three vital system components.

4.     Spend time evaluating the different MH system designs created in step 3. This will determine the value of the alternative systems in order to discover the best one. In this step it is also necessary to create a justification of the capital expenditures so they can be considered and approved by upper management.

5.     Decide which of the different MH design systems will be the best for moving, controlling materials and protecting them. The chosen one will be the one that meets the objective. If there are more objectives to meet the designer will pick the system that satisfies the majority of the objectives.

6.     Finally, implement the selected design and include selecting equipment and suppliers, training, installing the equipment and periodic auditing system performance.  The approved project becomes a physical operating system that moves materials.


Saturday, 13 June 2015

Chit Chat: Automotive Trends in 2015 – Part 4

Cars need to be designed to use within the city, and this is a trend that will be in focus in 2015 and the years that follow. 40% of the world population live in the cities with more than 1 million residents and 17% will be living in megacities, the cities with more than 5 million residents.  Cars must be designed in a way that will work best for these city dwellers.

For example, the cruising speed in megacities won’t average more than 6 miles an hour and drivers can expect to be sat driving their cars for around three hours per day. Therefore the design for these types of cars will take a different approach than the design of current cars. Here’s what we expect the focal points will be for designing cars for megacities:
  • Concealing the passengers so they cannot be viewed from people outside the vehicle
  • Ensuring passengers in the vehicles are safe and protected from the risk of attack
  • Entertaining passengers will be a major focus, ensuring they are kept entertained and have access to information systems
  • Making it easy to move between different positions in the car, from relaxation to driving positions
  • Protecting passengers from smog and providing adequate air conditioning
  • Providing automated stop and start traffic solutions
  • Reducing the emissions to as close to zero as possible to help fight pollution



Friday, 12 June 2015

What is Unit-Load Design?

Unit load is the standardisation combination of many different items that are integrated into one so that it can be handled as a single unit. There are many reasons why a unit load design might be used:
  • Reducing costs
  • Making materials handling easier
  • Improving the security during transportation
The main principle of unit load design is that the smaller units make it more economical, convenient and easier to store and to transport the materials. It is an extension of the building block concept to larger quantities. Based on the building block concept, the unit loads are secured onto the pallets and this becomes the unit load.

Unit load design is used because the cost of handling individual small items being moved and handled is expensive. Cost per unit can be reduced by moving larger loads as the unloading and reloading times and costs are reduced. It makes better use of space, reduces inventory, reduces travel times and facilitates receiving, transport and shipping.

The advantages of unit load designs include:
  • Pilferage is discouraged as it is hard to remove a single package when it is in a unit load.
  • Mechanical devices can be used instead of manual labour.
  • The pallets are secured using straps and shrink wrapping on the pallet so the cargo is better protected.



Thursday, 11 June 2015

What are the Unit-Load Criteria?

There are two limits that are used to decide on the unit load design, size and weight.  Standardising the unit loads is a mist as it makes it easier to handle and is more economical with the use of modern equipment.

The unit loads can be smaller or larger in order to meet the criteria and or the product characteristics. It is essential that the weight of the unit load is kept within the capacities of the storage facilities and the materials handling equipment.  However, sometimes the unit loads are kept smaller than the optimal size when moving high density materials, so that the unit load weight is kept within the limits.

When using unit load design it is necessary to have a standard container or a base. The commonly used options are:
  • Containers
  • Intermediate bulk containers
  • Pallets
  • Self-contained cartons
  • Skids
  • Slip sheets
  • Stillages

Wednesday, 10 June 2015

What are the Criteria for Selecting MH Equipment?

Materials management personnel need to be fully acquainted with the different types of MH equipment and their applications when they are involved with developing solutions in the MH system. Here are some of the criteria that are used when selecting materials handling equipment:

· Reliability and the ease of maintenance of the equipment
·  The cost of the equipment

The equipment that is used often involves a large capital expenditure when an organisation is being set up and often more than one type of equipment is required. Analysis of the equipment is a vital part of analysing the entire MH system.

Tuesday, 9 June 2015

What are the Material Handling (MH) Principles?

The solution to MH problems cannot be found using mathematical models alone. Experience is an essential part of the management process. The principles that are used in MH are built upon the practical experience that has been gained, sourced from decades of experience and used as guidance and perspective by anyone creating and designing a MH system. The principles are as follows:
  • Automation principle – Computer based systems and electronics that operate and control the entire system.
  • Computerisation principle – Computers are used in the operation of individual pieces of equipment and supply chains that can span over multiple continents.
  • Cost principle – Recognising the material handling alternatives and the costs involved – involving the top management approval on all investment proposals.
  • Designing capacity for present and future – Developing systems in the future system design.
  • Developing technological assessments – Preparation of assessments to make operations simple making use of technological facilities.
  • Ecology principle: Reduce the adverse effects on the environment when choosing the system components.
  • Energy principle – Reducing the energy consumption by the activities in MH.
  • Ergonomic principle – The working conditions are adapted to the abilities and needs of the workers.
  • Flexibility principle – Methods and components that can perform a variety of tasks and with reasonable tolerance.
  • Gravity principle - Using gravity to move materials with ease, whenever possible.
  • Layout principle – The organisation of an operating sequence and equipment laid out for variable systems solutions.
  • Maintenance principle – Creating a main tenance plan on the MH equipment used.
  • Mechanisation principle – Replacing human effort by using machines when it can be justified.
  • Minimum travel principle – Loads move the shortest distance.
  • Obsolescence principle – A long term economical program used that replaces the obsolete methods and equipment, with extra attention being paid to the after tax life cycle costing.
  • Orientation principle – when the entire system is examined to discover how it is operating and all the components are identified along with their relationships. The relationships to other systems are also looked at to find any physical limitations.
  • Planning principle – A plan that will meet the basic requirements is prepared. The plans will identify what material is being moved, when and where the material needs to be moved and how and who is going to move the materials.
  • Safety principle – The entire system is made of safe MH components.
  • Space utilisation principle – Space utilisation is optimised.
  • Simplification principle – Eliminating, combining or reducing movements and/or equipment that are not necessary.
  • Standardisation principle – Methods and equipment that are used in MH is standardised and customisation is reduced.
  • Systematically approach – The consideration of components and their relationships in the integrated system and unifying them to increase efficiency.
  • Systems flow principle – Data flow is integrated with the physical material flow in handling, creating a coordinated system.
  • Systems principle – Handling, storage activities and packaging is integrated to create a system that is fully coordinated.
  • The Just in Time Principle – Products are held until a time they are needed.
  • The team solution principle – Working together with MH teams to come up with the best system.
  • Unit- Load principle – products are picked up as a unit.
  • Using the correct equipment – Use the equipment that is required for MH.



Monday, 8 June 2015

Material Handling History and Definition

Material handling is as old as the first human beings on the planet that needed to move things. They required some form of transport to move themselves and the materials they relied upon to live. Material handling was used in what is considered to be one of the ancient world’s greatest achievements, the construction of the pre-Inca temple in Peru. It is estimated that 20 tons of stones were quarried and moved from a valley up more than 2000 feet to the site of the temple. It wasn’t until 1913 when the first mechanised progressive-assembly line was produced by Ford.

Nevertheless, the uses of mechanised and automated material handling equipment are now in effect these days. Material management is described as the systematic physical movement of materials, which includes the concepts of physical distribution management, business logistics and material management that all overlap together.

There are several definitions for material handling. Some that state that MH is the physical movement between short distances which occurs in warehouses, production facilities and retail stores, involving different forms of transport. Others put more emphasis on the concept of building blocks – MH is the movement of products such as bottles and boxes.

MH is a science that studies the physical movement of materials. It involves defining problems, collecting and analysing data, finding solutions and evaluating the alternatives, selecting the preferred method and performing frequent reviews. MH is also an art because scientific formulas and mathematic models are not enough to create the design of material handling.


Saturday, 6 June 2015

Chit Chat: Automotive Trends in 2015 – Part 3

Cars for the aging population will be a trend that continues to grow during 2015. The average age of buyers that are choosing new cars in 2014 is expected to reach 44 years old. These buyers must not be ignored and neither should their requirements. There are several factors to consider for this market, some of them may include:
  • Designing the car to be ergonomic especially for when boarding the vehicle and for when loading up the vehicle. So solutions in loading and the seating will be required.
  • Vision difficulties should also be worked on by improving the vision for drivers at night time and for poor weather conditions.
  • Design features need to be timeless and not of the moment.
  • Functions for the complicated features in the vehicle should be user-friendly and understandable.
  • The addition of technical features such as the side and rear view cameras.
  • Building cars that have customized mobility services.
  • Displays that make information such as the speed and the vehicle and special attention.

Friday, 5 June 2015

Warehouse Material Flow

The warehousing material flow involves many different steps that begin with the goods received in the warehouses and lasted until the goods are delivered to the customers. Below are some of the steps that are common in warehouses around the world:
  1. Goods are received at the warehouse, where they are unloaded from the vehicles and then delivered to the warehouse personnel.
  2. Once the goods have been received they have to be inspected and undergo quality control. This process normally involves checks taken at random rather than checking the entire shipment.
  3. The goods are then moved to the storage area.
  4. When the orders come in the goods are then retrieved – known as order picking.
  5. The next step is the aggregation of the SKUs, often involving orders with multiple SKUs being combined for shipment.
  6. The goods are then prepared for transportation to the shipment area – this could involve further steps including labelling or packaging.
  7. The orders that are ready to ship are then made available so they can be shipped to the customers.
There are the other tasks that may also be found in warehousing, such as:
  • Tracking inventory
  • Cross docking
  • Packaging
  • Outfitting, filling, light assembly
  • Shrink wrapping and labelling
  • Customer service and billing
  • Tracing
  • Importing and exporting services
  • Transportation
  • Breakbulk
  • The monitoring of the carrier
  • Postponements
  • Consolidation
  • The site location
  • Analysis of the network
  • Development of the systems being used
  • Real estate management

Thursday, 4 June 2015

What Factors Affects the Determination of Warehouse Size?

There are several determining factors to take into consideration in finding out the size of the warehouse, and they are:
  • The levels of customer services
  • How big or small the market is that is going to be served via the warehouse
  • How many products are being marketed
  • How big or small the product is – the size has to be taken into consideration
  • Production lead times
  • The type of material handling system that’s used
  • The inventory turnover (throughput rate)
  • The set aisle requirements
  • Economics of scale
  • The office area required in the warehouse
  • The type of shelving and or racks that are going to be used in the warehouse
  • The layout of the stock
  • The storage policy
  • The demand level

Wednesday, 3 June 2015

What is the Role of Distribution Centres and Warehouses in Logistics?

There are several reasons that support the use of distribution centres and warehouses. The reasons are as follows:
  • Storing goods – the basic function of a warehouse, it stores ready goods for a time when the goods are needed.
  • Distribution centres and warehouses are often used as part of the production process. There is a period in production where no operation is taking place. This is when the warehouses are able to keep the products until the time comes to complete the production process.
  • Reverse logistics requires warehousing so the goods returned by the customers can be accumulated before the decisions are made.
  • The orders on products are usually from different locations. Warehouses are able to gathered the products from multiple origins and before dispatched to customers & delivered.
  • Bulk break warehouses divide the large and bulky shipments that arrive from the manufacturers. The bulk orders will then be split up into smaller LTL truckload shipments before they’re delivered to the customers.
  • When the production process is postponed and space is required to store the goods until work is ready to commence, warehouses are able to perform some of the light manufacturing activities including packaging, labelling and marking. Goods can also be stored in the warehouse until the decisions are made.
  • Cross docking can take place in the warehouses. The inventories are kept for less than 12 hours. The inventory will be moved to different vehicles and delivered on to the retailers afterwards, which reduced the cost of inventory and lead times.
  • Transshipment could be performed for goods to be transferred from one vehicle to another.
  • Distribution centres and warehouses can be used as product fulfillment centres to connect with the final consumers, which provides a higher level of customer service. The installation of complex IT systems helps to achieve the delivery of smaller order sizes and at the same time settles payments and deal with returns electronically.

Tuesday, 2 June 2015

What are the Reasons for Storage Inventory?

We’re going to be having a quick look at the main reasons for storage inventory that are commonly used today. Keeping stock is expensive and the many factors that contribute to those costs include:
  • Capital costs
  • Warehousing
  • Protection
  • Deterioration
  • Loss
  • Insurance
  • Package
  • Administration
The cost of inventory storage can eat up between 25 and 40% of the whole logistics costs, which represents a large proportion to the organisations total assets. These expenses however could not be avoided due to the following reasons:  
  1. Storage inventory works to protect the company so they are able to react to changes in the customer demand, maintain excellent customer service and cope with any lead time changes.
  2. The storage inventory allows a firm to take full advantage of economies of scale in purchasing, manufacturing and transportation by reducing the cost per unit.
  3. Supply and demand can be balanced out by inventories storage as they are not always equivalent at the same time. Demand can sometimes increase and the supply availability suffers as a result, and vice versa. Demand can be catered more efficiently by keeping an inventory.
  4. It’s important for firms to hedge against contingencies and to be able to maintain a normal supply level over a period of time. Contingencies that may interrupt the normal flow includes labour strikes, flood and fire.
  5. Storage inventories can eliminate bottlenecks in manufacturing. The work in goods processing are maintained in good order and the bottleneck is eliminated – productivity increased.
  6. Keeping raw materials is economical and therefore the storage on such protects against the instability of price changes.

Monday, 1 June 2015

About the Shipper Decision-Making Problems

There are concerns for shipper to make decisions relating to the selection of the transportation mode, i.e. shipment consolidation and dispatching, with objective to maximize the profits of the shipper.

Shipment Consolidation and Dispatching

The shipment consolidation and dispatching problems are often faced by producers or contracted shippers who handle their delivery activities in-house. It is often the shipper or the manufacturer’s decision to create on-time delivery to keep customers satisfied and maximise profits at the same time. They have to decide the best mode of transports for each shipment & dispatch start time and design the consolidation of shipments.  All scheduling critical factors have to be considered in making the decisions.

The shippers have the choice of using LTL carriers. They can decide to hire one way truck trips instead. By using a set formula, the choices are made with a clear focus on minimising the total costs in shipment delivery. The parameters formula takes into account includes:
  • The destination
  • Weight
  • Ready time
  • Deadline
  • Rented trucks, LTL carriers