Warehousing in manufacturing

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    WAREHOUSINGKrishnadeep Gupta Bhupesh Chetan

    Anchal Gautam Gautam Sood

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    Warehousing - Definition

    Storage of goods.

    Includes a wide spectrum of facilities and locations that provide

    warehousing, including

    the storage of finished goods in the production facility;

    the storage of raw materials, industrial goods, and finished

    goods while they are in transport.

    APICS dictionary defines warehousing as the activities related to

    receiving, storing, and shipping materials to and from production or

    distribution locations.

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    Warehousing Role ofIT

    Material direction and tracking - Warehouse Management System (WMS)

    Logistics personnel use the WMS to improve warehouse efficiency.

    SAP has WMS module which can be installed as a standalone system or

    can be integrated with other systems.

    Oracle 12i also has WMS which is enhanced by acquisition ofTMS system

    from G-Log and has been rechristened as Oracle TransportationManagement.

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    Modern trends & value addition

    Modern trends: Just In Time (JIT)Warehouse-style retail storesASRS RFID Kiva Systems 3 PL 4 PL

    Value addition by warehousing: Transportation consolidation Product mixing Cross-docking Service Protection against contingencies Smoothing

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    Some Activities ofWarehouse.

    Transportation consolidation

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    Some Activities ofWarehouse.

    Product mixing

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    Some Activities ofWarehouse.

    Cross Docking.

    Under a cross docking system, pallet loads can be moved directly across the warehouse

    floor from receiving to shipping (left). Boxes, however, first must pass through a sorting

    system (right)

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    ManufacturingOverview and Trends

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    Definitions ofManufacturing

    Manufacturing is the use of machines, tools and labour to makethings for use or sale.

    OrThe transformation of raw materials into finished products,usually on a large scale

    OrThe action or process of making goods systematically or on alarge scale

    OrChemical, mechanical, or physical transformation of materials,substances, or components into consumer or industrial goods.

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    Stages ofManufacturing

    Warehousing plays an important role in various stages mentionedabove

    Acts as a vital linkage between all the stages

    Procurement Fabrication Assembly TestingPackage andDistribution

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    Manufacturing Sector in India Growth Trends

    Robust growth of 16 per cent in the manufacturing sector for February 2010 as

    compared to February 2009.

    Large number of companies shifting their manufacturing base to India

    India has the largest number of companies, outside of Japan, that have been

    recognised for excellence in quality.

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    How is growth assessed for manufacturing?

    Trends and issues in manufacturing and investment around the world

    focus on such things as:

    Nature and sources of the considerable variations that occur cross-

    nationally in levels of manufacturing and wider

    industrial-economic growth;

    Competitiveness; and

    Attractiveness to foreign direct investors.

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    Reasons for the current growth

    India has a rich talent pool of scientists, researchers, and engineers

    along with its vast, educated English-speaking workforce and the democratic

    administration

    Possesses requisite skills in product, process and capital engineering

    Rapidly expansion in Indias capabilities in engineering design and embedded

    software development, Leverages modern-day manufacturing

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    Leading Industries in India

    Basic metals

    Electrical machinery and apparatus

    Transport equipment, other than motor vehicles

    Textiles

    Trailers and semi-trailers

    Leather

    Leather products and footwear;

    Coke, refined petroleum products, nuclear fuel;

    Chemicals and chemical products.

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    USToy IndustryA general outlook

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    USToy Industry

    Dolls,Action figures, Stuffed toys, Game sets, mechanical toys Toy and hobby stores 9000 - revenue - $15 billion

    Top 50 companies generate about 85 percent of revenue

    Population growth among young children (under 12)

    Top two Mattel (1st), Hasbro (2nd)

    Net revenues - $5.918 billion and $4.021 billion (2008)

    Large scale production shifted abroad reduction in employmentin toy industry from 42000 to 15000 in last 16 years

    Mostly exported to Canada and Mexico almost 45%

    Mostly imported from China almost 90%

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    Warehouse management system- Case Study 1Hasbro

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    Hasbro - Introduction

    US based multinational toy and board game manufacturing

    company.

    Formed in 1923 by Hassenfield brothers in Pawtucket, Rhode

    Island, USAOutsources much of its manufacturing to Chinese companies.

    Manufacturing facilities in Ireland and Longmeadow,

    Massachusetts.

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    Hasbro - Warehousing

    Raw material receiving warehouse that handles inbound shipments

    in East Longmeadow, Massachusetts

    Also store the finished toys here.

    Total area under these two warehouses >250000 sq feet

    More than 50 personnel have been employed for operations.

    It implemented SAP warehouse management module in 1998 for

    itsRM

    andWIP

    warehousing operations. Hasbro further integrated SAPs WM to RF system by Teklogix Inc.

    The RF system communicates with modules on vehicles as well as

    the ones with the workers handheld units.

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    Hasbro - Advantages

    Workers were now able to update inventory counts in real time via

    RF transmissions. The WMS was also updated real time.

    This boosted efficiency of the inbound warehouse operations.

    Paperless processes have saved 16 man hours of labor per shift.

    CSF of the WMS and RF integration

    Teknologixs training and field support

    In house experts trained by Teknologix

    Implementation of project in phases

    Adequate Human Resources deployment

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    Indian Automobile IndustryA General Outlook

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    Indian Automobile Industry

    Seventh Largest in the world

    annual production of over 2.6 million units in 2009

    By 2050, the country is expected to top the world in car volumes

    Rankings (sales wise) Maruti Suzuki, Hyundai, Tata Motors

    Electric Car manufacturers Mahindra, REVA, Tata

    Recent trends Rs. 1 L range cars Tata Nano

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    Average Annual Growth Rates in MajorAutomobileCompanies

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    Warehousing Management System- Case StudyMaruti Udyog Limited

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    Maruti Udyog Ltd

    Largest passenger car manufacturer in India

    Annual capacity of 1 Million cars - Turnover of $5 billion

    Ability to rollout a car in 45 min

    Exporting Cars to various countries

    Single Spares Distribution Center for the entire country-Annual spares

    turnover of $300 million

    Heavy Inbound and Outbound material flow

    In-house developed ERP System

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    Maruti Udyog Limited - Challenge

    A system to manage their end to end spares supply chain execution

    Highly scalable supply chain to meet the peaks in market demand

    Sub optimal Warehouse Layout - Long Process to bin a material

    High rate ofInventory discrepancies

    One Part-one Location

    Not having any systematic Process in Material Handling

    High rate ofManual errors

    Discrepancy between items ordered and items shipped to dealers

    Absence of real time data during binning and picking operations

    Pack list not available content of shipping carton not verifiable

    Long Order execution time

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    Maruti Udyog Limited The Solution

    Decided to revamp its spares distribution operations and implementMARC Warehouse Management System

    FloorWise Implementation

    Fast-breakApproach for initial phase

    Thin Client Installation

    Barcode and Dot Matrix Printers

    Re-printing option for all the reports on a specified printer using MARC

    Run SQL Procedures

    One Hub and one print server for each floor

    Wedge Scanners to scan Barcodes