Chapter 8

1. Chapter 8 Auxiliary Services Space Requirements

2. Objectives • After reading the chapter and reviewing the materials presented the students will be able to: • Understand the need for supporting activities in a manufacturing enterprise. • Identify support activity departments such as receiving, storage, maintenance, and so on. • Calculate space requirements for such support functions.

3. Introduction • Manufacturing departments need support services and these services need space. • Major services are receiving and shipping, storage, warehousing, maintenance and tool room, utilities, heating, and air conditioning.

4. Receiving and Shipping • Receiving and shipping are two separate departments, but they have very similar people, equipment, and space requirements. • The receiving department is the start of the material flow, whereas the shipping department is the end of the material flow. • Receiving and shipping could be placed next to each other or across the plant from each other.

5. Advantages and Disadvantages of Centralized Receiving and Shipping • Loading and unloading trucks are very similar functions, so the facilities are similar. • Dock doors, dock plates, fork trucks, and aisles are needed for both receiving and shipping. • Responsible people who know the value of proper counts, proper identification, and control of the company’s most valuable assets are receiving and shipping clerks. • The disadvantages of centralized shipping and receiving are space congestion and material flow. • Material flow is more efficient if the material could flow straight through the plant: receiving on one side of the plant and shipping on the other side.

6. The Trucking Industry’s Effect on Receiving and Shipping • The trucking industry is organized nationally to deliver raw materials and parts to industry in the morning and pick up shipments in the afternoon. • The trucks are unloaded at a local company’s warehouse. • The materials are sorted by company to be delivered the next morning. • The first stop is loaded last and the last stop loaded first. • In the afternoon the same truck could return and pick up shipments. • One truck could pick up 50,000 pounds of shipment.

7. Functions of a Receiving Department • RecievingTrailers are backed up to the receiving dock doors, the tires are chocked, the trailer doors are opened, a dock board or dock plate is positioned between the trailer and the floor of the plant, and the driver gives the receiving clerk a manifest that tells the receiving clerk what to unload. • Unloading: The material is removed from the trailer and placed in the holding area. The receiving clerk signs the trucker’s manifest acknowledging receipt of containers and the truck leaves. Visible carton damage should be noted on the driver’s paperwork. • Recording Receipts: When material is unloaded it is checked on a log. A number is stamped on the Bates log, the packing slip, and the receiving report. The Bates log is a 6 digit number (For example: July 3 is the 185 day of the year and 21st truck arriving would give a Bates number of 185021). • Opening, Separating, Inspecting, and Counting: Before the day is complete, everything received today must be opened, separated, inspected, and counted. A quality check must be made to see if this is what the company ordered. The quantity must also be checked.

8. Functions of a Receiving Department • Preparing Overage, Shortage, and Damage Report (OS&D): Each problem becomes a project for the purchasing department which has to work it out with the supplier, but the eyes and ears are within the receiving department (OS&D report). • Preparing Receiving Reports: After checking quality and quantity , the receiving department sends the receiving report to accounting. The accounting department (accounts payable) collects copies of the purchase order, receiving report, and invoice. Only after all 3 documents are received is the bill paid for only what receiving said they received. Errors can be very costly. • Sending to stores or Production: A significant portion of problems associated with manual operations of identification, counting, sorting, routing, and inventory management and the resulting human errors can be alleviated through the use of automatic identification and capture (AIDC) technology such as PDF417, a two dimensional bar code. The use of AIDC technology can increase efficiency and throughput and reduce human errors.

9. Facilities Required for a Receiving Department • Door Docks: The number of door docks depends on the arrival rate (trucks per hour) at peak time, and the service rate (unloading time). For example, if 12 trucks arrive during a peak hour, and it takes 15 minutes to unload an average truck, three dock doors would be needed (4 trucks per hour per door). • Door Plates, Dock Levelers, and Door Boards: These are tools to bridge the gap between the floors of buildings and the floors of trailers, so the material can be moved on and off the trailer easily. • Aisles: Generally aisles into trailers are 8 feet wide because that is the width of the trailer. • Outside Areas (fig 8-1, page 216): Trailer parking alone can take up 65 feet out from the plant wall. Maneuvering space is usually about 45 feet. Roadways are 11 feet one way or 22 feet for two way traffic. • Offices: Depending on the number of people assigned to the receiving area, 100 square feet per clerk is necessary.

10. Functions of a Shipping Department • Packaging Finished Goods for Shipping: The package may be a box, a pallet, or a cargo container. Packaging must include careful placement of individual items so that they are not damaged in shipment. • Addressing Cartons or Containers: Some systems use a computer generated shipping label. • Weighing Each Container: The trucking company will charge by the pound, so you have to know the weight to determine trucking costs. If a container does not weigh enough, something must have been left out. When customers receive the shipment and claim shortage, you can check the weight to verify shortage. Pounds shipped per person is also good indicator of performance. • Collecting Orders for Shipping: All day long as orders are filled and packed, the finished packing is placed in the proper staging area for the proper truck line. • Spotting Trailers: Some big shippers may talk the trucking company into leaving a trailer at the plant all day. Then you can stage the shipment on the trailer and save plant space. • Loading Trailers: Loading the trailer can be done very quickly if pallets are used. Most trailers will hold 18 pallets, 36 if stacked two high. • Creating Bills of Lading: A bill of lading lists every order and the weight of the product. It will eventually come back as a bill for the trucking service. • Space Requirements for the Shipping Department: Use of a bar code can simplify the item tracking process and ensure that relevant and accurate information accompanies the shipment. Space for shipping must include areas for packaging, staging, aisles, trailer parking, roadways, and offices (fig 8-7, page 223).

11. Storage • Stores is a term used to denote an area set aside to hold raw materials, parts, and supplies. • A items are those parts that account for 80% of the inventory, B items make up 15%, and C items 5%. • The less inventory you carry, the lower the costs, if you do not run out of material. These costs are real costs that add no value to the product. • Just-in-Time Inventories: Manufacturers depend on their suppliers to deliver parts as often as every 4 hours, thereby eliminating the need for raw material inventory storage area. • Maximizing the Use of Cubic Space: Use racks, shelves, and mezzanines. Safety stock is necessitated due to variation in usage rate. The reorder point is the inventory level where you need to reorder material to prevent a stock outage (fig 8-8, page 226). Reorder time (lead time) is the time (in days) between the ordering of new material and the receipt of that material in the stores. • Providing Immediate Access to Everything (selectivity): Put anything anywhere, but keep track of it. A location system is needed to keep track of what you put where. Each location in the storeroom has a location code (fig 8-9,page 228). The storekeeper makes a location ticket (fig 8-12, page 231) - one copy is attached to the pallet and one copy is kept at the store’s control desk in part number order. When the part is needed for production, the part is retrieved, and the ticket is pulled and sent to data processing to reduce the inventory.

12. Storage • Storage Facilities Requirements Spreadsheet: Every part must be measured for cubic size, multiplied by the number of parts to be stored, and converted to cubic feet (fig 8-13, page 231). The procedure for storeroom size starts with an analysis of storage space needs. • Aisle Feet: Aisles for serving shelves can be much smaller than aisles serving pallet racks, so use a 4 foot wide aisle for shelving that is 3 feet wide. Fork trucks are needed to service pallet racks and 8 feet wide aisles are required for this equipment. • Providing Safekeeping: Having proper storage equipment like racks, shelves, and trucks will protect the products. Good containers can prevent dust and grime. A security checkpoint and restrictions to entry are important parts of storeroom design. Special racks and floor storage areas are needed for flat steel stock , tubing, and bar stock. Also special material handling equipment will be required.

13. Warehousing • Warehousing is the storage of finished product. Management must tell facility planners how many units or how many days supply to allow space for. A warehouse can be a department or an entire building. A warehouse building will have a receiving department, a stores department, a warehouse department, a shipping department, and an office. After assembly and packout, finished products are moved to the warehouse where they are kept until ready to be shipped to the customer. • Warehouse Design Criteria: Warehousing is the storage, order filling, and preparation for shipping of products. To increase productivity, the most popular items should be in the most convenient location. By keeping only a small amount of everything in a fixed location, the order picker can pass all the products in a few feet of travel. An ABC analysis would place the most important inventory (A items) closest to shipping, and the least important parts (C items) at the back of the warehouse (fig 8-18, page 238).

14. Functions of a Warehouse • The 3 basic functions of a warehouse are: 1. To safe keep the finished product. 2. To maintain some stock of every product sold by the company. 3. To prepare customer orders for shipment. • Containers, shelves, racks, fences, gates, control desks, and inventory control systems are all a part of this safekeeping requirement and the responsibility of warehousing. • The efficiency of the warehouse will be determined by the layout. • A first design criterion of warehouse layout is to keep a small amount (one to 5 day supply) of everything in a small fixed location. • To maximize efficiency, you want to identify those products that account for most of the sales (A products that account for 80% of sales) and keep them closer than B (15% of sales) or C (5% of sales) products.

15. Warehouse Space Determination • The size of the finished product multiplied by the quantity manufactured each day times the number of days supply will equal the cubic footage of warehouse space required. • Pallets are 42 by 48 inches (standard width) and can be stored 8 pallets deep. • Doubling the space will allow for aisles.

16. Warehouse Equipment • Tool warehouses use heavy duty shelving which measure 3 feet wide, 1 ½ feet deep, and 1 foot high with an average of 7 shelves high. Each shelf will hold 4 ½ cubic feet of parts. • A one week supply is warehoused on the shelves. The overstock is kept in the store room. • A mezzanine, a form of balcony, can be built over the shelving area for additional shelves. • Two wheeled hand carts are often used to stock shelves. • Boxes of material may be brought to the warehouse by fork truck. • Picking carts are 4 wheeled shelf carts that are pushed around to pick customer orders. The carts are unloaded as the packer fills cartons to ship to the customers. • Racks are used to store larger products.

17. Maintenance and Tool Room • The maintenance and tool room function is to provide and maintain production tooling. • Some maintenance, such as office equipment maintenance is often contracted to outsiders. • The tool room size is the sum of all the equipment space requirements times 200 percent. • Maintenance usually accounts for 2 to 4 % of the plant personnel (3 maintenance people for every 100 production people). • Provide the maintenance people with 400 square foot of space each.

18. Utilities, Heating, and Air Conditioning • Heating, air conditioning, electrical panels, air compressors, and so on must be considered when determining space. • These areas must be kept separate from normal traffic.

19. Summary • Material flow is more efficient if the material could flow straight through the plant: receiving on one side of the plant and shipping on the other side. • The trucking industry is organized nationally to deliver raw materials and parts to industry in the morning and pick up shipments in the afternoon. • The Bates log is a 6 digit number (For example: July 3 is the 185 day of the year and 21st truck arriving would give a Bates number of 185021). • The accounting department (accounts payable) collects copies of the purchase order, receiving report, and invoice. Only after all 3 documents are received is the bill paid for only what receiving said they received. Errors can be very costly. • A significant portion of problems associated with manual operations and the resulting human errors can be alleviated through the use of automatic identification and capture (AIDC) technology. • Trailer parking alone can take up 65 feet out from the plant wall. Maneuvering space is usually about 45 feet. Roadways are 11 feet one way or 22 feet for two way traffic. • Space for shipping must include areas for packaging, staging, aisles, trailer parking, roadways, and offices. • Stores is a term used to denote an area set aside to hold raw materials, parts, and supplies. Safety stock is necessitated due to variation in usage rate. The reorder point is the inventory level where you need to reorder material to prevent a stock outage. • Just-in-Time Inventories: Manufacturers depend on their suppliers to deliver parts as often as every 4 hours, thereby eliminating the need for raw material inventory storage area. • Warehousing is the storage of finished product. A warehouse building will have a receiving department, a stores department, a warehouse department, a shipping department, and an office. • A first design criterion of warehouse layout is to keep a small amount (one to 5 day supply) of everything in a small fixed location. • To maximize efficiency, you want to identify those products that account for most of the sales (A products that account for 80% of sales) and keep them closer than B (15% of sales) or C (5% of sales) products.

20. Home Work • Which arrangement of material flow for shipping and receiving is more efficient? • What is the Bates log? Give an example. • What needs to be included in the space for shipping? • What needs to be included in a warehouse building?