BM_M0110/GSLM52700 Warehouse Planning and Operations Systems

1. BM_M0110/GSLM52700 Warehouse Planning and Operations Systems Yat-wah Wan Room: C317; Email: ywan; Ext: 3166 Office Hour: Wed 3  5 pm, or by appointment

2. Outline • importance of warehouses • housekeeping issues • functions and types of warehouses • operations in warehouses

3. The Importance of Warehouses

4. Finished Goods WH Finished Goods WH Raw Material WH Factory … Factory WIP WH WIP WH Distribution Center Fulfillment Center Local WH … … Retailer Retailer … Home Home A Supply Network Raw Material WH

5. Finished Goods WH Finished Goods WH Raw Material WH Factory … Factory WIP WH WIP WH Distribution Center Fulfillment Center Local WH … … Retailer Retailer … Home Home A Supply Network Raw Material WH

6. Warehousing & Storage Industryin Taiwan#1 Year 2011 # of Employees Earning (NT$/M) male female male female Industry 1,976,818 1,136,561 49,245 34,729 Services 1,713,415 1,979,479 51,569 43,546 #1 http://win.dgbas.gov.tw/dgbas04/bc5/earning/ht4561e.asp

7. Warehousing & Storage Industryin Taiwan#1 Year 2011 Earning (NT$/Mon) # of Employees male female male female ng Manufacturi 1,562,495 1,055,992 49,459 34,763 trade & retail Wholesale 714,473 761,036 46,272 39,633 storage & 184,046 78,362 52,574 45,432 on Transportati #1 http://win.dgbas.gov.tw/dgbas04/bc5/earning/ht4561e.asp

8. Warehousing & Storage Industryin Taiwan#1 Year 2011 # of Employ. Earnings(NT$/Mon) 561,485 50,967 Electronic parts & components manufacturing 208,208 50,423 Computer, electronic & optical products manufact 956,930 46,977 Wholesale trade 381,036 34,401 Retail trade Retail sale of general merchdise 137,543 37,513 Truck freight transportation 67,285 34,942 8,374 40,055 Warehousing & storage #1 http://win.dgbas.gov.tw/dgbas04/bc5/earning/ht4561e.asp

9. The Unimportance of Warehouses?

10. Competition of Two Companies • 1979 • Kmart • best national discount retailer • 1,891 stores, ave. annual revenue $7.25 mill/store • Wal-Mart • a small local discount retailer • 228 stores, each being about half as profitable as Kmart’s

11. Competition of Two Companies • Wal-Mart in 2011 • number of stores (worldwide): • number of employees: • sales: • January 22, 2002, Chapter 11 (of the US Bankruptcy Code) for Kmart Corporation • merged with Sears in 2005 • Reasons? (Stalk et al. (1992) Competing on Capabilities: the New Rules of Corporate Strategy, Harvard Business Review, March-April, 57-69) GDP of Taiwan: $423.0 billion (2010, Wiki) $504.6 billion (2011, CIA Factbook) 8979 2.1 millions US$421.849 billions

12. Strategy of Amazon • fulfillment centers /warehouses/distribution centers

13. Course Objectives • to enable students to have the basic knowledge to manage and to improve modern warehousees • to understand roles of warehouses in a supply chain • more from the business and management perspective • issues to learn • operations and processes in different types of warehouses • equipment for warehouses • material handling, communication, information processing and system control • design, status assessment, benchmarking, and improvement of warehouses

14. Words of Caution • learning is …(teaching is also …) • learning is … • The real battlefield is out there … • Be prepared • Always try your best, and your best only

15. House-Keeping Issues

16. Structure of the Course • introduction (1 lecture) • examples of warehouses (3 lectures) • functions of warehouses (0.5 lectures) • material handling equipment in warehouses (2.5 lectures) • special functions & equipment of warehouses (2 lectures) • benefit analysis & benchmarking of warehouses (2 lectures) • papers and cases (3 lectures)

17. Structure of the Course • introduction (1 lecture) • examples of warehouses (3 lectures) • warehouses for standardized goods • completely automated warehouses • distribution centers • cargo freight stations

18. Structure of the Course • functions of warehouses (0.5 lectures) • material handling equipment in warehouses (2.5 lectures) • storage and retrieval of • pallets • cases • small pieces

19. Structure of the Course • special functions and equipment of warehouses (2 lectures) • identification and communication equipment • layout of warehouses

20. Structure of the Course • benefit analysis and benchmarking of warehouses (2 lectures) • benefit analysis and justification • profiling and benchmarking • papers and cases (3 lectures) • papers and cases also in other lectures

21. Assessments • assignment 50% • various forms: literature search, literature review, essay, problems, presentation, etc. • project 50% • proposal • presentation • report

22. References • Books • Abernathy, Frederick H., et al. [1999] A Stitch in Time: Lean Retailing and the Transformation of Manufacturing -- Lessons from the Apparel and Textile Industries, New York: Oxford University Press. • Adams, Nicholas D., et al. [1996] Warehouse and Distribution Automation Handbook, New York: McGraw-Hill. • Bartholdi, John J. and Steven T. Hackman [2011] Warehouse and Distribution Science, http://www.warehouse-science.com. • Frazelle, H. Edward [2001] World-Class Warehousing and Material Handling, McGraw Hill: New York. • Heragu, Sunderesh [1997] Facilities Design, PWS Publishing Company, Boston, MA. • webpages: many

23. Functions and Types of Warehouses

24. Types and Functions of Warehouses Inter-modal Interface Value-added service Increase Service Level … Distribution Storage Consolidation private warehouses warehouse operators 3PL warehouses distribution centers e-fulfillment centers cargo terminals courierservices …

25. Operations in Warehouses

26. Operations in Warehouses • receiving • prepackaging (optional) • putaway • storage • order picking • packaging and/or pricing (optional) • sorting and/or accumulation • unitizing and shipping

27. An Example • http://www2.isye.gatech.edu/~jjb/wh/sites/sites.html • a telecommunications DC in Denmark

28. Examples • Eslite (誠品開發物流) • Shiseido(台灣資生堂:資生堂物流中心) • Anway (台灣安麗:安麗體驗廣場) • Yes Logistics (好好國際物流) • Cold Chain (嘉豐冷凍冷藏股份有限公司) • Taoyuan Free Trade Zone (遠雄自由貿易港區)

29. Preparation for Next Week • container terminals: warehouses with standardized goods • Hongkong International Terminal Limited (HIT) & MPA (The Maritime Port Authority of Singapore)

30. Finished Goods WH Finished Goods WH Raw Material WH Factory … Factory WIP WH WIP WH Distribution Center Fulfillment Center Local WH … … Retailer Retailer … Home Home stores or (private) warehouses in manufacturers and retailers A Supply Network Raw Material WH

31. A 3PL Warehouse • 3 PL: e.g., members of HAFFA • travel agents of cargoes • consolidation of cargoes • value-added services …

32. Warehouse Operators • operators providing warehousing services • storage, distribution, consolidation, value-added services … • for example, Kerry Logistics • offices: 600+, in six continents • area of logistics facility: 3 mill m2 (3 km2; 300 h;  300 Jia) • employees: 19,000 • 2011 revenue: US$2 bill

33. Cargo Terminals • inter-modal interface, e.g., between air and land, or between sea and land • temporary storage, information processing, value-added service, … • examples for air and sea

34. sin () = x Learning is Far More Important than …