Supply Chain Logistics Management

Chapter 14: Material Handling and Packaging

Material Handling Systems

Mechanized Semi-automated Automated Information directed

Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper Copyright 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 Cooper Copyright 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 Cooper Copyright 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 Cooper Copyright 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 Cooper Copyright 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 Cooper Copyright 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 Cooper Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

INTEGRATED LOGISTICS SERVICES

Mission-Provide services to meet all or significant part of a shippers 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 Cooper Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Defining Contract Logistics

Types and Categories of 3PLs Asset-based Data-based Exclusive Service Provider

Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Defining Contract Logistics

Drivers of Logistics Outsourcing Debt reduction Strategic focus of ... Investment
Financial resources Human resources Information technology

Rationing

Competition
Faster (agility) Better (quality) Cheaper (low cost provider)
Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Defining Contract Logistics

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

Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper Copyright 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 Cooper Copyright 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

Supply Chain Logistics Management, First Edition , Bowersox, Closs, and Cooper Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.