Warehouse management systems
Download as PPTX, PDF3 likes4,346 views
This document discusses warehouse management systems and their benefits. It describes how warehouses can consolidate shipments, perform light manufacturing like packaging and labeling, and act as mixing facilities. Warehouses allow stockpiling to support seasonal demand and provide local market presence. Information technologies like EDI, barcoding, voice picking, and RFID help improve inventory management and supply chain efficiency. The case of Toyota and Walmart are discussed as examples of successful warehouse and supply chain management.
![Benefits from RFID
1. Drastic decrease in Stock out situations
From $400 million to $1.2 billion for P&G
2. Lesser labor requirements
Almost $6.34 billion yearly
3. Decrease in merchandise thefts
Almost $2 billion
4. Real time tracking of consumption patterns
5. Would help enhance JIT Inventory management
system
6. Decrease in stock levels by around 25%[IBM]
Total savings expected to be 8.34 billion per
year](https://image.slidesharecdn.com/pptofwarehousemanagementsystems2-140915111910-phpapp01/85/Warehouse-management-systems-16-320.jpg)
Warehouse management systems
- 1. Warehouse Management Systems Presented By, Kannan Kartick Venkatesh Krishnamurthy Neha Agarwal Divya manukonda
- 2. WAREHOUSE MANAGEMENT A warehouse is typically viewed as a place to store inventory. However, in many logistical system designs, the role of the warehouse is more properly viewed as a switching facility as contrasted to a storage facility. Warehousing Consolidation Shipment consolidation is an economic benefit of warehousing. It receives and consolidates materials from a number of manufacturing plants destined to a specific customer on a single transportation shipment which would lead to lowest possible transportation rate and reduced congestion at a customer's receiving dock.
- 3. MANAGEMENT BENEFITS..., Consolidation combines the logistical flow of several small shipments to a specific market area. Is used by a single firm, or a number of firms may join together and use a for-hire consolidation service. This ensures lower total distribution cost than could be realized on a direct shipment basis individually. Break bulk warehouse operations are similar to consolidation except that no storage is performed. A break bulk operation receives combined customer orders from manufacturers and ships them to individual customers. It arranges for local delivery.
- 4. Warehouse and Packaging Warehouses can be used to postpone production by performing light manufacturing activities. A warehouse with packaging capability allows postponement of final production until actual demand is known. For example, vegetables can be processed and canned in "brights" at the manufacturer. Brights are cans with no pre-attached labels. Once a specific customer order is received, the warehouse can complete final processing by adding the label and finalizing the packaging. With this the risk is minimized because final packaging is not completed until an order for a specific label and package has been received. Also the required level of total inventory can be reduced by using the basic product (brights) for a variety of labeling and packaging configurations.
- 5. Stockpiling Benefits The economic benefit of stockpiling comes from the need of seasonal storage. For example, lawn furniture and toys are produced year-round and primarily sold during a very short marketing period. In contrast, agricultural products are harvested at specific times with subsequent consumption occurring throughout the year. Both situations require warehouse stockpiling to support marketing efforts. Stockpiling provides an inventory buffer, which allows production efficiencies within the constraints imposed by material sources and the customer.
- 6. Warehouse Mixing & Market In a typical mixing situation, truckloads of products are shipped from manufacturing plants to warehouses. Each large shipment enjoys the lowest possible transportation rate. Upon arrival at the mixing warehouse, factory shipments are unloaded and the desired combination of each product for each customer or market is selected. When plants are geographically separated, overall transportation charges and warehouse requirements can be reduced by mixing. A market presence benefit is often cited by marketing managers as a major advantage of local warehouses. It is based on the belief that local warehouses can be more responsive to customer needs and offer quicker delivery than more distant warehouses. As a result, it is also thought that a local warehouse will enhance
- 7. SUCCESS OF TOYOTA’S BUSINESS MODEL Market share of 14% in the first four months of this year. 2.3% jump from the previous year Toyota ranks fourth in United States sales
- 8. Facility: 1. Vehicles coming out of assembly line are moved into warehouse called “Marshaling yard” . 2. Fitting accessories, price tag and final quality assurance takes place here. Inventory: 1. Just-in – time based inventory method. 2. Pull based system and kanban methods are followed. Transport: 1. Majority of transport of raw material through truck , since suppliers stay close to plant. 2. Finished products transported through truck or rail for transport within the country and ships for export. 3. Road transport is provided by third party logistic providers. Information: 1. Parts and master database is maintained for part name, supplier, lot size information. 2. 13 week forecasting is given to suppliers to provide them with guidance.
- 9. WALMART’S CASE 1990 –Superseded ‘K-Mart’ rival retail chain as one of the largest retailing chain in US 1991- Superseded ‘Sears Roebuck & Company’ and became the largest retailing chain in US In November 2003, Wal-Mart, world’s largest retailer, planned to replace bar code technology with RFID. Objective: To enhance supply chain efficiency Expected they could save $8.35 million per year primarily in labor costs
- 10. IT in Warehousing 1. Using EDI (Electronic Data Interchange) for procurement 2. EDI saved time and made procurement efficient. 3. Using the bar code scanners, an analysis of daily, weekly, monthly sales data helped the store manager determine what products were selling and at what quantity. 4. Accordingly, the store manager would place orders in the manufacturing division.
- 11. EDI for procurement Wal-Mart placed orders for huge quantities of goods with its suppliers Cost of sales worked out to be 2-3 %(very low from industry average) Information of product, manufacturer, price was recorded on computer system That information was passed to centralized data warehouse
- 12. EDI at Wal-Mart Analysis of daily, weekly, monthly sales data helped store manager to determine which products were sold in which quantities So that they can place purchase order Edi also helped suppliers Right merchandize at the right time, and have it at right place at right price
- 13. Voice based technologies 1. Enhancing warehouse and logistics management 2. Wal-Mart could replenish stock at any of its 1525 stores in US within 24 hours 3. Cross-docking 4. It enabled the company to receive goods and dispatch them to stores in lees than a day 5. Store ready displays called PDQ(pretty darn quick) displays 6. Time saved per employees were not much but aggregate time saved was quite good
- 14. Internet in Warehousing 1. CPFR (Collaborative Planning Forecasting Replenishment) 2. Real time bases to determine product wise demand forecast 3. Wal-Mart shared past data, customer data, demographic data, stock positions 4. Both forecasted demand individually and then co-operated 5. Reduced inventory cost 6. Product availability across supply chain 7. July 2003 – Asked suppliers to place RFID(Radio Frequency Identity) tags on goods, packed in pallets and crates
- 15. Outcomes As a result lead time was cut to 11 days from 21 days On-hand inventory was reduced by two weeks Sales grew by $8.5 millions in six months Later on it was implemented to other stores By 1990’s, about 90% of suppliers were doing business through Retail Link
- 16. Benefits from RFID 1. Drastic decrease in Stock out situations From $400 million to $1.2 billion for P&G 2. Lesser labor requirements Almost $6.34 billion yearly 3. Decrease in merchandise thefts Almost $2 billion 4. Real time tracking of consumption patterns 5. Would help enhance JIT Inventory management system 6. Decrease in stock levels by around 25%[IBM] Total savings expected to be 8.34 billion per year
- 17. THANK YOU FOR YOUR PATIENCE AND PRECIOUS TIME !!