Appunti completi del corso Logistics Managment

HOW TO CREATE VALUE

Logistics Management: part of supply chain management.

Objectives:

• Effectiveness in serving the market = to meet customers' requirements (high revenues)
• Efficiency in leveraging resources = to control costs (lower cost)

Return on Assets (ROA): how much money the company can achieve compared to the capital used, we want to make it higher.

NB:

• Most important cost is transportation >50%
• To increase revenues better customer service or outsource
• KPI related to the revenues
1. Product range
2. Fill rate
3. Time related
4. Accuracy
• To reduce current assets: reduce inventories or C2C
• C2C: cash to cash cycle time = the average days required to turn a dollar invested in raw material into a dollar collected from a customer C2C=DSO+DIH-DPO (DSO=days to collect accounts from a customer DIH=days of inventory holding DPO=days allowed by suppliers to pay).
• To reduce fixed assets: improve logistics planning so you have less unpredictability or outsource.

You must manage the trade-off between the 4 aspects.

In order to understand what supply chain strategy we must adopt to maximize the ROA we must:

1. know your supply chain
2. choose the approach
3. define policies
4. review over time

Lee's model: Lean VS Agile Supply Chain strategies:

Lean supply chain: max the ROA minimizing wastes ...

Agile supply chain: MIN variability of ROA, the flexibility is the most important feature.

Responsive supply chain: aims to mitigate risks on the demand side.

Risk hedging supply chain: aims to reduce risks in supply disruption (interruzione).

Time-based, Asset-based, Technology-based, Relationship-based Supply Chain Strategies:

These strategies affect all the 4 dimension of ROA:

Time-based supply chain: reduction of Lead time and Replenishment time in order to reduce cycle time (pull approach=chase the demand).

Asset-based supply chain: efficiency in the use of logistics assets.

Technology-based supply chain

Relationship-based supply chain: collaboration

Tra i fornitori e i clienti ci sono i magazzini. Tipi di magazzini: - Magazzini/centri di distribuzione: funzioni di stoccaggio e gestione del flusso. Gli ordini al magazzino vengono soddisfatti con le scorte -> gestione delle scorte e politica di riordino. - Piattaforme logistiche/punti di transito: funzioni di gestione del flusso -> attività di cross docking. Le 4 principali attività in un magazzino coordinate dal WMS: - Aree funzionali principali: - Stoccaggio (massimizzare l'utilizzo dello spazio) - Picking/assemblea degli ordini (massimizzare l'efficienza del picking) - Ricezione/spedizione (numero di porte per camion funzionali ai flussi in entrata e in uscita e bisogna considerare le dimensioni dei camion) Il sistema di stoccaggio: - Parametri di progettazione: - Capacità di stoccaggio (SC) - Capacità di flusso (TC) - Parametri descrittivi: - Tasso di utilizzo dell'area (AUR) - Tasso di utilizzo del volume (CUR) - Selettività: posizioni UL direttamente accessibili/SC <= 1 - Coefficiente di saturazione dello SC: numero medio o massimo di UL stoccate/SC - Indicatori di costo: - Costo di stoccaggio/posizione UL

• Handling cost

NB: Storage system and handling system must be chosen jointly.

Typologies of storage systems for pallet UL:

• Block stacking: low selectivity, low cost of investment, for items with high inventory level.
• Rail racks: drive-in (LIFO) or drive-through (FIFO low performance in cycle time) - pallet stored from the long side so the forklift can enter, for fragile products, 50 €/pallet location, 1 item per lane so low selectivity, higher exploitation in height, for high inventory level.
• Flow racks: gravity or push-back (LIFO) - high maintenance, 200 €/pallet location, low selectivity, for items with a medium-high stock level.
• Selective pallet racks: most important solution, minimize use of iron, high selectivity, both for stock full pallet and picking stocks, 20-30 €/pallet location.

Typologies of pallet handling trucks:

• Walkie stackers: to horizontally move PL and load or unload trucks (trans pallet)
• Front loading forklift trucks (need space for

curves) (move pallet horizontally and vertically)(counterbalance more flexible or straddle reach)

Side loading forklift trucks (take PL from sx and dx and front, no curves) (move PL horizontally and vertically, more expensive) (side loaders bilaterali or turret trilaterali)

2 main management policies:

Management of the operative cycles (single or dual command cycles).

Criteria to allocate the UL.

Dual command (DC) cycle compared to single command (SC) cycle:

• No empty return -> more efficient
• It is required that storage and retrieving activities are concurrent
• The WMS finds the best combination of UL per a DC

Index to choose the criteria to allocate the UL (the higher is the index the more important is the item):

• Retrieving index RI= for a generic item I is the number of full or cut UL retrieved from the storage system during the period T
• Access index AI (to reduce cycle time)

Allocation policies:

• Randomized storage (better use of storage capacity)
• Dedicated

storage (items with biggest AI must be stored closer to I/O, bad use of storage capacity)

Class based storage (creation of family of items with the same AI, each zone has randomized storage, the boundary curves between zones are equal time curves starting from the I/O) (it is a good trade off)

NB: In class based storage we never work with more than 2/3 classes because after that the advantage given by the reduction of operative cycle times is very low and the disadvantage given by the complexity and storage capacity is high.

NB: The triangles are not equilateral because we must consider the different speed of the forklift in the 2 dimensions.

Design principles:

1. Clustering the items according to the storage system
2. Find required SC TC
3. Constraints (urban, technical, safety, economical)
4. Storage system selection
5. Storage area pre-design
6. Modelling e simulation
7. Technical-economical checks and assessments
8. Design AUTOMATED WAREHOUSES

AS/RS= automated storage and retrieval system

(equipped with telescopic forks, can move horizontally and vertically at the same time)

 People is just for supervision and maintenance

 The floor must be perfectly leveled and the contraction accuracy very high

 Selective pallet racks

 The I/O system takes the pallet to the beginning of the aisles, an example is the conveyor (trasportatore)

 Aisle width (AW) is very short 1,4m

 Very high AURShape factor= SF= Tv/Th is optimal when is a rectangle because horizontal speed is more important

Design variables:

 Structure (standard building, sunk building, rack supported building in which is easier to get taller buildings)

 S/R machines/number of aisles (=1 or <1 if the resulting TC is too high and we want to lower the cost)

 Rack depth (single or double in which you have better SC but worst TC)

 Number of telescopic forks for each S/R machine (1 or 2 one in front of the other or one below the other)

Investment costs:

 Equipment cost (S/R, racks, I/O system)

 Building

cost (floor levelling, information system)

Fire protection system cost (if present)

Operating costs:

• Supervision people cost
• Maintenance cost
• Energy cost

2 main management policies:

• Management of the operative cycles
1. Operative cycles types (single or dual)
2. Optimization of the dual command cycles (NCZ or MTB)
• Allocation policies (only in the aisle)

Optimization of the dual command cycles to maximize the TC:

• Minimum travel between (MTB): couple a storage/retrieval in a specific PL with a retrieval/storage in the closest PL in terms of time, we want to minimize the travel without load
• No cost zone (NCZ): couple a storage/retrieval in a specific PL with a retrieval/storage without increasing the variable time of the cycle so the DC has the same VT of the SC without increasing the cost, we always try to use this solution.

APPLICATION FIELDS:

• High storage capacity required (>5000 UL)
• High TC required (25-35 UL/h per S/R machine)
• Low availability or high cost

of the ground

Need to protect goods (ex. From fire)

Need to control environmental conditions

Main drawbacks:

• Low flexibility in terms of changes of TC, SC, UL size
• High investment costs and PBT 4/5 years
• High dependability on the system reliability, you can work on the allocation policies to mitigate the risk of fail in one aisle

NEW AUTOMATED SOLUTIONS:

• AVS/RS: autonomous vehicle storage and retrieval system (based on the decoupling of vertical and horizontal movements, it tries to overcome the low flexibility of the AS/RS, you can work with different lifts and vehicles up to 2 per aisle, you can work with full PL or totes/cartons) (this solution can improve the service level, has a good scalability and flexibility, high reliability and a lower energy consumption but costs 20% more than AS/RS)
• AGV automated forklifts (central system in the WMS, fixed ruts, limited tasks, limited application field)

PICKING

Picking: selective retrieval of UL from high-level UL in order to

• Fulfil customer orders.
• Customer order: collection of several order lines, each one requesting a defined quantity of a specific item.
• NB. We do the picking if the quantity of an item requested is smaller than a pallet, otherwise we do the full pallet retrieval.
• To transform the customer order in a warehouse order we use the picking list.
• Picking list: list of pick locations, items to be picked and quantities to be picked, it may correspond to one customer order, a part of a customer order or many customer orders. The sequence on the picking list is chosen in order to optimize the picking activities (in terms of efficiency and/or effectiveness). It may be on-paper or electronic.
• Sorting: process through which the goods are divided according to their destination. It is required only if the goods have been picked in batch picking policy (collected together the goods of more than one order). It can be manual or automated (sorting machine).
• Packaging: process by which single pieces are assembled in

ility)Picker to lightThe picker carries out a picking mission within the picking area visiting in sequence all the locations whichare detailed in the picking list. The picker is guided by a light system that indicates the location to pick from.(medium investment, medium productivity, medium space cost, medium flexibility)Picker to voiceThe picker carries out a picking mission within the picking area visiting in sequence all the locations whichare detailed in the picking list. The picker is guided by a voice system that indicates the location to pick from.(medium investment, medium productivity, medium space cost, medium flexibility)Picker to displayThe picker carries out a picking mission within the picking area visiting in sequence all the locations whichare detailed in the picking list. The picker is guided by a display system that indicates the location to pick from.(medium investment, medium productivity, medium space cost, medium flexibility)Picker to light and voiceThe picker carries out a picking mission within the picking area visiting in sequence all the locations whichare detailed in the picking list. The picker is guided by a light and voice system that indicates the location to pick from.(medium investment, medium productivity, medium space cost, medium flexibility)Batch pickingThe picker carries out a picking mission within the picking area visiting in sequence all the locations whichare detailed in the picking list. The picker picks multiple items at once to fulfill multiple orders.(medium investment, high productivity, medium space cost, low flexibility)Zone pickingThe picker carries out a picking mission within a specific zone of the picking area. Each picker is assigned toa specific zone and is responsible for picking all the items within that zone for multiple orders.(high investment, high productivity, low space cost, high flexibility)