Warehousing

Storage (Location)

Balancing act

Warehousing

• An act of storing and assorting the finished goods so as to create maximum time utility at minimum cost

• Sub function – Storage, movement, assorting, hold, consolidation, break bulk, packing,

Advantage of Warehousing

• Serves as safeguard• Make provision for unloading• Serves economically at lower prices• Helps in determining the channel of distribution• Assist in maintaining continuous sales• Balancing demand & supply• Stabilizing prices • Reduces need for instant transportation

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Warehouse Operations

• Receive and Inspect Goods• Identify Goods• Sort and Dispatch Goods

to Storage• Hold Goods• Recall, Select, or Pick Goods• Organize the Shipment• Dispatch the Shipment• Prepare Inventory Records

Warehouse

Types of warehouses

• A. On the basis of place of necessity

Inplant warehousing

Field warehousing

Bonded warehouses – located near ports• A. On the basis of ownership

Private

Public

Contract

Types of warehouses

• Special warehouses

General merchandise warehouses

Special commodity warehouses – require special treatment

Refrigerated

Yard & ground storage

Types of warehouses

• On the basis of operation

Centralised

Decentralised

Warehouse site selection factor

• Infrastructure• Market• Access• Primary transportation cost• Availability• Product• Regulation• Local charges

Transportation

• The movement of products from where they are made to where they are used

• Involves loading & unloading of productd

• Confers time & place utility

Modes of Transportation

RailRail

AirAir

PipelinePipeline

WaterWater

MotorMotor

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Modes of Transportation

• RailMeritsmass movement of goodsFaster than road transportConvenient for long distance low unit costSuitable in carrying heavy goodsOperation less affected by adverse conditionDemeritsLesser accessibilityRelatively expensive for short distance InflexibilityNot suitable for local transport Involves heavy losses of life in case of accident

Roadways

• Meritspoint-to-point service flexibleSafetyCheapnessPerishable goods at faster speed for short distance

• DemeritsFlexible IrregularitiesLimited carrying capacityHeavy goods in bulk involves high costSlow speed Affected by adverse weather condition

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Modes of Transportation (Cont’d)

• Water• Merits

lowest costs, for bulky goods large capabilities mass movement of bulk commodities International trade Cost of maintaining & constructing routes is low, naturally

made Safe mode with respect to occurrence of accidents

• Demerits Low speed Seasonal Not suitable for perishable goods Affected by weather conditions

Airways

• Merits fastest for long distancesbroad service rangeUseful in non accessible area Most convenient during calamities

• DemeritsHigh costLimited productNot suitable for heavy & short distanceHeavy losses in case of accidentsAffected by adverse weather condition

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Modes of Transportation (Cont’d)

• Pipeline

• Meritsmass movement of liquids and gassesEconomicalUn-interrupted serviceNo damageUndergroundlowest operating cost and unit costs

• DemeritsInitial heavy investmentDanger of enemy attacks

PipelinePipeline

Combination Of Modes

• Piggy - back

• Fishy - back

• Air - Truck

• Roll on – Roll off

Transportation modes for various products

Comparison of various modes

Importance of transportation

• Confers time & place utility on products• Where production location & markets are

distanced transpn helps• Help to build clientele• Widening the markets• Increase in mobility of labor & capital• Stabilization of prices• Service to customer & rise in std. of living• Facilitates production

Main Task In Transportation

• Assessment of the transportation

• Choosing the mix of transport modes

• Deciding the routing

• Development of operational plan

• Implementation

• Control of transportation cost

Managerial Aspect of Transportation

• Deciding mode of transportation

• Cost

• Speed

• Handling damages

• Regularity

• Flexibility

Factor Affecting Transport Choice

• Product

• Packaging

• Distance

• Monetary resource availability

• Urgency

• Lead time

Choice Of Transportation Modes

• Speed

• Dependability

• Availability

• Costs

Inventory

• Refers to a stock of goods or other economic resources that are held by firms at a particular time for future production requirements & meeting demands

• Inventory can be direct or indirect – Direct includes goods in manufacturing of product & become part of finished goods. Ex. Raw material, WIP goods, finished goods

• Indirect include goods that are necessary to run production process not part of end product. Ex. Lubricants, oil, grease, stationary

Objectives Of Inventory

• To improve customer service

• To reduce investment in inventories

• To increase productivity

• To optimize space required for inventory

• To rationalize material movements

• To reduce losses due to obsolescence, deterioration