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Supply Chain Logistics Management
Chapter 14: Material Handling and Packaging
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Material Handling Systems
• Mechanized
• Semi-automated
• Automated
• Information directed
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Mechanized Systems
• Moderate fixed cost, variable cost and flexibility• Examples
– Forklift– Walkie-Rider pallet trucks– Towlines– Tow tractors– Conveyors– Carousels– Pick-to-light
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Semi-Automated Systems
• High fixed, low variable, low flexibility
• Examples– AGVS
– Sortation systems
– Robotics
– Live racks
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Automated Systems
• High fixed, lower variable, low flexibility
• Examples– Order selection systems
– ASRS
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Information Directed Systems
• Moderate fixed and variable cost, high flexibility and utilization
• Examples– PC directed forklifts– RF controls
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Packaging Factors Influencing Material Handling
• Product characteristics– Cube utilization
• Unitization– Rigid containers (Containers)– Non-rigid containers (Pallets, slipsheets,
shrinkwrap)– Flexible containers (Knock down)– Unit load building
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Role of Packaging
• Consumer packaging (Marketing emphasis)
• Industrial packaging (Supply chain emphasis)– Unitization
– Handling
– Security
– Stowability
– Information
– Protection
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
INTEGRATED LOGISTICS SERVICES
• Mission-Provide services to meet all or significant part of a shipper’s total logistical requirements
• Titles-Third party logistics, contract logistics, logistics utilities, and integrated logistics service providers
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Defining Contract Logistics
Types and Categories of 3PL’s• Asset-based Asset-based • Data-basedData-based• Exclusive Service ProviderExclusive Service Provider
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Drivers of Logistics Outsourcing
Debt reduction
Strategic focus of ...Financial resources
Human resources
Information technology
CompetitionFaster (agility)
Better (quality)
Cheaper (low cost provider)
Investment Rationing
Defining Contract Logistics
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Advantages
•Less asset investment
•Lower operating costs
•Focus on core competence
•Gain management skills
•Provide higher service level
•Increased flexibility
•Entry mode to new markets
Disadvantages
•Switching costs
•Unseen “hidden” costs
•Less customer contact
•Dependency
•Loss of control
Defining Contract Logistics
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Implementation
Steps to Outsourcing• Strategic decision to outsource• Determine the first impact area clearly• Define the objectives of outsourcing activity• Supplier selection process• Contractual issues• Work the project• Review the operating plan and budget• Implementation plan• Frequent feedback - CIP• Partnering
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and CooperCopyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
CONCLUSION
• Warehouse strategy is evolving to more focused and flexible
• Technology and expertise are key warehouse alternative determinants
• Operating and industry synergies are more important factors