Summary chapter 10/11: Warehousing
and materials handling (10) /
Technology in the supply chain (11)
Pg 189-207 + pg 208-2019 + extra content
1. Warehousing in global supply chains
Global supply chains require multiple echelons (levels), spread across various international
locations
The supply chains are part of networks
Inventory (chapter 9) is stored in the various (international) locations, in various states of
manufacture or assembly.
Various states:
- Raw material
- WIP
- Semi-finished
- Finished
The role of warehousing and materials handling is to maintain the flow of goods through the
production/manufacturing process, all the way to the end customer.
à The objective of supply chain management is to minimise inventory holding (see chapter 9) and
handling costs
BUT in contemporary supply chains, customisation and responsiveness to market demands
more than ever require multiple inventory holding points.
PARADOX!
The more standardisation in finished products and SC processes, the easier to automise
BUT in e-commerce customisation is a key element, which makes it more difficult to automise
Therefore, material storage and handling systems have 2 main objectives:
- minimise cost
- add value (e.g. service)
Warehousing and distribution centres are essential to global supply chains, they are
complementary to other supply chain activities
Need to find the correct balance ! Make trade-offs between cost & service
Value-adding activities
à Customer value added to a product by:
Improving quality
E.g. maturing whiskey, wine, cheese or cured meats
Improving service
E.g. delivery information availability or specialist packaging
Reducing costs
E.g. reduced packaging or administration costs
Reducing the lead time of a product
E.g. cross-docking (see later)
Also, on top:
‘Value-adding’ is the additional value a product can obtain in a logistical chain as a consequence
of being subjected to form, place or time-related changes.
VAL (value added logistics) involves the transmission of manufacturing activities into distribution
environments (postponement performed in the distribution activities)
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