Supply Chain Management Assignment
SUPPLY CHAIN MANAGEMENT Course code: BBA311
WAREHOUSING & PACKAGING (1) UNIT 7
• “ABC item segmentation”
• Strategic Warehouse – Economic Benefits
– Service Benefits
• Warehouse Operations
• Warehouse ownership arrangements
• Rigid and flexible containers. Pallets.
• Materials handling: – Mechanized systems
– Semi-automated systems
– Automated systems definitions
Unit 7: index
ABC segmentation
• Calculation and graphical representation tool that allows us to classify any element, event, item, value by its degree of importance considering a specific factor.
• The methodolgy we will be using is the PARETO analysis, also called the 80/20 rule
• Related to the warehouse, we can look at three diferent point of attention for our analysis
20 %
80%
FACTORS TO CONSIDER
ABC segmentation
VALUE VOLUME MOVEMENTS
FINANCIAL COST AND
ASSURANCE LEVEL
STORAGE COST AND
SPACE
HANDLING COST
ELEMENTS TO MANAGE
ABC segmentation
ABC is grouping items in 3 categories:
20%
30%
50%
80%
10%
10%
A
B
C
Category Items Factor
ABC segmentation: stock ITEM CODE STOCK UNIT VALUE
1 200 0,5 2 10 0,75 3 12 0,48 4 11 0,16 5 13 1 6 9 0,96 7 8 0,74 8 14 1 9 15 0,47
10 125 0,99
ITEM CODE ITEM order % order STOCK UNIT VALUE TOTAL VALUE Add up stock Pareto 1 1 10% 200 0,5 100 200 48%
10 2 20% 125 0,99 123,75 325 78% 9 3 30% 15 0,47 7,05 340 82% 8 4 40% 14 1 14 354 85% 5 5 50% 13 1 13 367 88% 3 6 60% 12 0,48 5,76 379 91% 4 7 70% 11 0,16 1,76 390 94% 2 8 80% 10 0,75 7,5 400 96% 6 9 90% 9 0,96 8,64 409 98% 7 10 100% 8 0,74 5,92 417 100%
10 417 287,38
ABC segmentation: value ITEM CODE STOCK UNIT VALUE
1 200 0,5 2 10 0,75 3 12 0,48 4 11 0,16 5 13 1 6 9 0,96 7 8 0,74 8 14 1 9 15 0,47
10 125 0,99
ITEM CODE ITEM order % order STOCK UNIT VALUE TOTAL VALUE Add up value Pareto 10 1 10% 125 0,99 123,75 123,75 43% 1 2 20% 200 0,5 100 223,75 78% 8 3 30% 14 1 14 237,75 83% 5 4 40% 13 1 13 250,75 87% 6 5 50% 9 0,96 8,64 259,39 90% 2 6 60% 10 0,75 7,5 266,89 93% 9 7 70% 15 0,47 7,05 273,94 95% 7 8 80% 8 0,74 5,92 279,86 97% 3 9 90% 12 0,48 5,76 285,62 99% 4 10 100% 11 0,16 1,76 287,38 100%
10 417 287,38
Warehouse
Warehouse
Defining WAREHOUSE:
Source: dictionary.cambridge.org
Warehouse
Why do we need a WAREHOUSE:
• MAIN USE: – Store goods while they are not moved to another location
– Store goods in a safe manner (avoid damages or avoid perishable goods going bad)
• OTHER USES – Shipment hub
– Assembly line
– Rental storage space
Warehouse
Sprinklers
Fire hoses
Fire extinguisher
Ventilators
Pedestrians path
CCTV (closed circuit tv)
Crash protections
Protective fences
“Everything you thing can protect and save lives”
Forklift trucks
AGV
Cobots and Robots
Rack
Automatic order preparation line
Order picking trolleys
Packaging machinery
Computers
Repacking and handling areas
SAFETY FIRST
WMS
Pillars and walls
Docks
Emergency exits
Charging batteries room
Warehouse
TO TAKE INTO ACCOUNT WHEN DESINING AND DEFINING A WAREHOUSE
• Company size
• Business industry the company belongs to
• Movements
• Stocks
• Legal requirements
• Customer requirements
• Activities
• Processes
• Location
Warehouse
• LOCATION: centre of gravity calculation. This is the exact location where the transport costs are the lowest ones.
A B ¿C?
Distance Volume
# Shipments Transport costs
Delivery lead-times Topography
Country specifics
Sourcing Customer
Warehouse
• Assumptions: – same €/km cost
– same amount of shipments to the Customers
Customer Location
Coordinate X
Coordinate Y
Kg Sold
C1 150 125 2.300 C2 225 50 1.500 C3 420 270 3.300 C4 230 380 1.750
Warehouse
• Assuming same €/km cost in the area
• Assuming that I ship the same amount of times to the Customers
Xo ∑(Xc * Qc)
∑ Qc
Yo ∑(Yc * Qc)
∑ Qc