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Week 9 Logistics management and warehousing - Coggle Diagram
Week 9 Logistics management and warehousing
Logistics Management
Logistics
manufacturers
freight forwarder---principal abroad
customs brokerage
common carrier
by sea/air/land
distribution
consumers
freight forwarder---delivery agent
internal and international logistics goals
Increasing Efficiency
Rapid Response
Fewer Unexpected Events
Minimum Inventory
Reduced Transportation and Logistics Cost
Quality Improvement
definition
The planning, execution, and control of the movement / placement of goods and / or people, and the related supporting activities, all within a system designed to achieve specific objectives.
Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements
Logistics is one of the last frontiers of opportunity for organizations wishing to improve their
corporate efficiency.
Objectives of logistics
Operating objectives
Rapid response
Minimum variance
Perfect service quality
The outputs of the logistics system
Help to create competitive advantage,
Manage time and place in an effective way,
Cost effective and efficient movement of products/services to the customer,
Provide a logistics service mix such that logistics becomes a proprietary asset of the organization.
The Five Rights of Logistics (5R’s)
Right Items, needed for consumption or production,
Right Place
Right Time
Right Condition
Right Cost
Challenges faced by the logistics industry
Lack of quality infrastructure
Railroad transportation
Lack of a border crossing
Too many regulations
The lack of trained staff
Limited use of information technologies
Lack of certainty in the business
Trends shaping the logistics and trp industry*
Digitalization,
Shifts and changes in international trade,
Software-driven process changes (IoT and AI)
Changes in markets and commerce (e-commerce)
Machine-driven process changes (robotics)
The new play ground of logisticians !
The play ground is complex
Exponentially increasing e-commerce requirements
Split of logistics cost---transport 49%+inventory management 22%+warehousing 21%+ order processing 5%+administration 3%
Developments in logistics
The Belt and Road Initiative
construct a unified large market and make full use of both international and domestic markets
through cultural exchange and integration, to enhance mutual understanding and trust of member nations
ending up in an innovative pattern with capital inflows, talent pool, and technology database.
PwC report regarding changes in logistics
key drivers of digitalization
consumer pull
----consumers and particular generation C are already fully adapted to the digital environment, they naturally expect to be always connected and they are increasingly willing to share their data
Technology push
----digital technology continues to expand its influence, the infrastructure backbone of the digital world now brings affordable broadband to billons of consumers
Economic benefits
---the economic benefits to be captured through digitization are real. a wave of capital has poured into the new digitalization technologies and companies, and the public markets reward early innovators and unprecedented valuations.
impact on T&L
----the transport corridors between china and the EU with the belt and road initiative as well as other connections of emerging economies are expected to grow rapidly over the next few years, such developments will lead to lower costs of transport and will enable the creation of new services
Logistics 4.0
definition
Logistics 4.0 in the narrower sense implies the networking and integration of logistics processes within and outside of trading companies and production facilities, right up to decentralized real- time control of logistics networks.
The goals of Logistics 4.0 are cross-company automation and optimization of material flows and resource utilization in both inbound and outbound logistics.
Without log. 4.0 there is No 4th industry revolution
Some of the main objectives of the fourth industrial revolution can only be achieved if logistics are adapted accordingly. These adaptations include in particular the main features of industry 4.0 such as
Networking
Decentralization
Real-time capability
Service orientation
An end-to-end digital supply chain is the basic prerequisite for the log. 4.0
Tools to adopt are
AI
İoT
Robotics
Big clean data
Autonomous vehicles
significant future areas for the implementation of industry 4.0
IoT
ROBOTICS
high flexibility
intuitive operation
Human-robot cooperation
intelligent control
INNOVATIVE PRODUCTION SYSTEMS
complete cross linkage
cyber-physical systems
self-configuation
additive manufaturing
SENSORS
built-in intelligence
Real-time capability
traceability
completeness
ICT
Cyber security
cloud computing
big data
wireless und mobile vernetzung
Logistics
CUSTOMERS(B2B,B2C)
SUPPLIERS
PRODUCT DESIGNER
EQUIPMENT SUPPLIER
Internet of Things-----everything is autonomous
cloud
people----arrange, control, interlink
TRUCKs----deliver goods autonomously
CONRAINER----organize their supply chain and global networks
AGVs and TRUCKs-----interact like a swarm
BINs----display what to pick
SHELFs---organize their replenishment
Process view to Logistics Management
inputs into logistics
natural resources(land, facilities, and equipment)
Human Resources
financial resources
information resources
outputs of logistics
competitive advantage
time and place utility
efficient movement to customer
proprietary asset
management actions
planning
implementation
control
logistics management
suppliers
raw materials
in-process inventory
finished goods
customers
logistics activities
customer service
demand forecasting
distribution communications
inventory control
materail handling
order processing
parts and service support
plant and warehouse site selection
procurement
packaging
reverse logistics
traffic and transportation
warehousing and storage
Main functions in logistics
Transportation
Warehousing
Inventory Management
Packing & Utilization &
Information & Communication
Transportation and Logistics
Transportation takes a crucial part in the Logistics Operation. It makes up 25 % of the total cost of a product.
Therefore, transportation is the base of efficiency and economy in business logistics and expands to other functions of logistics system
Principles of transportation
Economies of scale
Economy of distance
Factors influencing the transportation decisions
Economic factor
Technological factors
Environment factors
Geographical factors
Transportation is geared by
Demand trends
Distance
Location
Geography
Weight and volume
Network design techniques
Characteristics of Transportation Modes
Speed-----Air is the fastest
Availability----Road is the best since they can drive from origin to destination
Dependability----Pipeline ranks best-As the service is continuous and there is no stoppage due to traffic or congestion
Capability----Sea is the best-Can handle all types and size of cargo
Frequency----Pipeline is ranked best-As the movement is continuous
Composite Score----Lowest rank is the Best----TRUCK
Cost Structure For Each Mode
Rail---High fixed costs- Equipments, Terminals , Tracks , Cars etc----Variable Costs Low
Road---Low fixed costs-Highway provided by government (transit taxes though)----variable costs Medium-Fuel , Maintenance, etc
Water---Fixed Costs Medium-Ships and Equipment----Variable Costs Low-As capacity is huge
Pipeline----Fixed Costs Highest-Right of the way , construction, Equipment for control station and Pumping capacity---Variable Costs Lowest-Insignificant labor costs
Air---Fixed Costs Low-Aircraft and cargo handling systems----Variable Costs High- Fuel, labor, Maintenance
Conditions Affecting Transport Costs
Geography----Distance and accessibility----Long distance rates
Type of product----Packaging, weight, perishable---Seafood; time sensitive goods
Economies of scale---Shipment size---Container vs less than container
Trade imbalance---Empty travel- “back haul rates”---Import/export imbalance
Infrastructure----Quality of Surface--Natural disasters
Mode---Capacity, limitations, operational conditions---Air cargo; rail bulk; distance limits
Elasticity of Demand---High value versus Low value goods--Electronics...
Fabrication in transit---Uniform rate to capture business---Toyota car fixtures in transit
Competition and regulation---Cost reductions to capture traffic---Rail vs. highway
Weight – volume conversion in freight management
Air freight----1 m3 = 167 kg
Truck---1 m3 = 333 kg
Sea freight---1 m3 = 1,000 kg
Warehousing
Warehousing
receipt of merchandise
merchandise sorting and storage area
picking and packing area(gift processing area
shipping area
merchandise shipment
merchandise receiving area---returned merchandise storage area+merchandise measuring area
The role of the warehouse in the logistics system
The warehouse is where the supply chain holds or stores goods.
Functions of warehousing include
Transportation consolidation
Product mixing
Docking
Order preparation
Value added services
Warehouse management Starts with
The purpose
Type of activities
Characteristics of products
Service requirement
Return process (y/n)
Shares services or private
Bonded or free
The site Selection
The primary factors in site selection are the availability of services and the level of related costs.
Location analysis techniques (i.e simulations) are available to assist in selecting a general area for warehouse location.
Once location analysis is completed, a specific building site must be selected.
Three areas in a community may be considered for location
1) commercial zones,
2) outlying areas served by motor truck only, and
3) central or downtown areas.
Principles of warehouse The facility design
Maximum capacity deployment
Allowing goods to move in a straight line
Allow material handling equipment space
Responsive to storage plan
Minimum space for isles
Deployment of height at its maximum
Costs of operating a warehouse and Operating rules
Capital costs
Costs of space
materials handling equipment
Operating costs
Cost of labor-----Measure of labor productivity is the number of units that an operator can move in a day
electricity, heating et
Warehouse activities
Receive goods
Identify the goods
Dispatch goods to storage
Hold goods
Pick goods
Control/prepare shipment
Dispatch shipment
Operate an information system
Impact of 4.0 on warehousing
business operations
improve productivity
reduce risk
removing or reducing delays and improving response time
maximizing asset utilization and minimizing downtime
automating activities
driving further direct and indirect labor efficiency
Dynamic localisation
: This allows smart boxes, smart bins and smart racks to be localised and disposed of in real time.
Wearables
: The use of devices such as headsets, smart glasses, smart contact lenses, data clocks and forearm computers, RFID and data gloves, RFID bracelets and sensor bracelets to locate products.
Smart robotics
: to pick, pack, ship, report, count.
In the ideal case, end products are created directly where they are used or consumed by the customer himself using 3D printing (Additive Manufacturing).