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