LGMT 682 ASSIGMENTS

LGMT 682

Answer one topic from each group below. ;Begin your post with the question you are answering and then make your response.

Group 1:

1. What is cross-docking and why is it an important concept for many corporations?
2. Using the internet, look up and briefly describe the capabilities and proposed benefits of at least one warehouse management software application (or warehouse management solution).
3. Select one or more technologies related to warehouse management (RFID, voice recognition, bar coding, scanners, robotics, etc.) and briefly describe the potential impact of that technology on the design and management of a warehouse or distribution center.

Group 2:

1. Using the internet, look up and briefly describe the capabilities and proposed benefits of at least one inventory management software application (or inventory management solution).
2. Many business analysts use inventory turnover as one of several major metrics to assess the financial health and future success of a corporation. How can inventory turnover ratios offer insight into the health of a company's operations?
3. If you were the decision maker, would you choose to let another firm manage your inventory (i.e., Vendor Managed Inventory). Why or why not?

Reply to at least two of your classmates on different topics than your original post.

CLASSMATES POSTS:

1) TIMOTHY

Group 1

1. What is cross-docking and why is it an important concept for many corporations?

Cross docking is a logistics procedure where products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time. Cross docking takes place in a distribution docking terminal; usually consisting of trucks and dock doors on two (inbound and outbound) sides with minimal storage space. The name ‘cross docking’ explains the process of receiving products through an inbound dock and then transferring them across the dock to the outbound transportation dock. Some of the main reasons cross docking is implemented is to:

• Provide a central site for products to be sorted and similar products combined to be delivered to multiple destinations in the most productive and fastest method.
• Combine numerous smaller product loads into one method of transport to save on transportation costs. This process can be described as consolidation.
• Break down large product loads into smaller loads for transportation to create an easier delivery process to the customer. This process can be described as deconsolidation. (What is Cross-docking – Understanding the concept & definition, 2011)

I searched the Internet and found a west coast company Weber Logistics. Weber's cross-dock services address four major areas: supply chain flexibility, speed, reliability and cost management. Our cross-dock operations provide large staging areas where inbound materials are sorted and outbound shipments are staged and ready to ship within hours.

Another advantage they offer is their close proximity to all major West Coast transportation and hub points, making Weber a natural choice for importers and rail customers. We operate distribution centers strategically located just minutes from the ports of Los Angeles, Long Beach, Oakland, and San Diego, and many of their facilities have direct rail access.

They provide two examples of the services they provide. One to the world’s largest candy companies which ships freight via line haul to several Weber cross dock warehouses on the West Coast, where they sort product and manage final mile deliveries to area retailers, and a mid-sized children’s clothing supplier, they receive containers from the Port of LA, deconsolidate freight by P.O. at a Weber warehouse in Los Angeles, then ship to named consignees.

Advantages of Weber Cross Dock Services in Los Angeles and Other West Region Markets include:

• Location flexibility.
• Cold chain management. Many Weber cross dock facilities are temperature-controlled to maintain your cold chain requirements.
• Trans-load services. We can receive your products via one mode (containers, rail cars, trailers) and immediately transfer them to a new mode. (Weber Logistics, 2015)

In conclusion, cross-docking is a vital role for organizations. The service that they provide defers cost of facilities and employee expenses onto those of these service providers. This is especially important since many smaller companies may not have enough of a load for a FTL and their requirement is a LTL which helps in shipping cost when loads are consolidated. On the flip side, FTL of products can be deconsolidated at these facilities and then consolidated with other products to ship to multiple firms. I stated the smaller companies utilize this but I have hauled out a facility in Savannah, Georgia and these loads went to multiple Home Depot locations and the employees also said the products they were handling also went to Lowes. There are numerous LTL motor carriers that strictly provide this service and make deliveries to individuals based on the size and weight of the package. I know from hauling into the Home Depot Stores, Southeastern Freight was a LTL provider that had daily deliveries and pickup from the Home Depot stores I was delivering to.

Reference:

WEBER Logistics, (2015),West Coast and Los Angeles Cross Dock Services, Retrieved from

http://www.weberlogistics.com/warehousing-distribution/cross-dock-facility-warehouse-services (Links to an external site.)

What is Cross-docking – Understanding the concept & definition, (2011), http://www.aalhysterforklifts.com.au/index.php/about/blog- (Links to an external site.)

post/what_is_cross_docking_understanding_the_concept_definition

Group 2:

1. If you were the decision maker, would you choose to let another firm manage your inventory (i.e., Vendor Managed Inventory). Why or why not?

As the name implies, vendor-managed inventory (VMI) is inventory that is managed by the vendor (supplier). And while there can be more to it than this, at a minimum this means the vendor determines when to replenish and how much to replenish. Vendor-managed inventory is nothing new; in fact it's been around a long time and is far more common than you may think. If you ever worked in a restaurant, you would have seen the "bread guy" show up every day or so, check your inventory (physically look at your breads, buns, etc.), then go out to his truck and stock you up. At the old independent hardware store, items like nuts, bolts, washers, O-rings, etc. were often managed by the vendor. In larger businesses, you may have your shipping cartons, office supplies, or cleaning/maintenance supplies managed by the vendor.

The term “vendor-managed inventory” covers a wide range of tasks related to managing inventory. A specific VMI program may cover a single task, all tasks, or any combination of tasks. Here are some examples.

• Vendor shows up at customer’s facility, physically reviews inventory levels, immediately replenishes with inventory he has with him (actually physically stocks the inventory on the customer’s shelves).
• Vendor shows up at customer’s facility, physically reviews inventory levels, and places an order for replenishment inventory that will be delivered at a later date. Depending on delivery method, the vendor may do the physical restocking, or may leave it for the customer to do.
• Customer periodically (daily, weekly, etc.) provides vendor with current inventory levels. Vendor reviews inventory levels and creates replenishment orders. Replenishment orders are shipped to customer. Customer performs all physical tasks related to the inventory at his facility.
• Vendor has direct access to customer’s inventory system and can get real-time information related to on-hand levels, open orders, forecasts, production schedules, etc. Vendor makes replenishment decisions based on this data and ships orders to customer.
• Vendor provides on on-site inventory planner that works full-time at the customer’s facility managing the inventory supplied by that vendor.
• Vendor leases space within the customer’s facility and run’s their own warehouse and inventory planning operation with their own employees from within the customer’s facility

The reality is customers tend to choose to use VMI because it relieves them of the burden and responsibility of managing the inventory. And vendors choose to offer VMI because they feel it gives them a marketing advantage or because VMI is expected in their industry. I’m not saying these aren’t valid reasons, but when these are the only reasons for using it, businesses tend to not take full advantage of what VMI can actually do for them.(Piasecki, D. 2011)

The Benefits of VMI are numerous for both Manufacturer & Distributor. Here is a Listing of potential benefits:

DUAL BENEFITS:

• Data entry errors are reduced due to computer to computer communications. Speed of the processing is also improved.
• Both parties are interested in giving better service to the end customer. Having the correct item in stock when the end customer needs it, benefits all parties involved.
• A true partnership is formed between the Manufacturer and the Distributor. They work closer together and strengthen their ties.
• Stabilize the timing of Purchase Orders - PO's are now generated on a predefined basis.

DISTRIBUTOR BENEFITS:

• The goal is to have an improvement in Fill Rates from the manufacturer and to the end customer. Also, a decrease in stock-outs and a decrease in inventory levels.
• Planning and ordering cost will decrease due to the responsibility being shifted to the Manufacturer.
• The overall service level is improved by having the right product at the right time.
• The manufacturer is more focused than ever on providing great service.

MANUFACTURERS BENEFITS:

• Visibility of the Distributor’s Point of Sale data makes forecasting easier.
• Promotions can be more easily incorporated into the inventory plan.
• A reduction in Distributor ordering errors (which in the past would probably lead to a return)
• Visibility of Stock Levels helps to identify priorities (replenishing for stock or a stock-out?). Before VMI, a manufacturer has no visibility of the quantity and the products that are ordered. With VMI, the manufacturer can see the potential need for an item before the item is ordered. (Benefits of Vendor Managed Inventory, 2015

The answer to the question of would I utilize a VMI is probably yes if the benefits outweigh the disadvantages. There are large firms like Walmat and Proctor and Gamble that utilizes these services and have successful programs. As is in any business decision, the metrics used to make a sound business decision has to be one that is well constructed and requires input from multiple sources, both internally and externally. As illustrated by the bread man, this service is an excellent fit for a gas/corner convenience store since; storage space is limited, inventory replenishment and restocking is conducted by the manufacture, reduced risk in having expired shelf-life products, and reduced employee requirements. All of this can free up capital for the firm but can ad additional cost to the products. Conducting your research and being methodical, will ensure the proper decision is made and that the program will be effective and successful if implemented.

References:

Piasecki, D., (2011), Vendor-Managed Inventory (VMI): What is it and When Does It Make Sense to Use It., Retrieved fromhttp://www.inventoryops.com/articles/vendor_managed_inventory.htm

Benefits of Vendor Managed Inventory, 2015, Retrieved from http://www.vendormanagedinventory.com/benefits.php

2) RAYMOND

6.2 - Discussion: Module 6

Group 1:

1. What is cross-docking and why is it an important concept for many corporations?

Cross-docking is a process of rapidly unloading and re-shipping commodities within 24 hours without placing them into storage. This process allows commodities be shipped over an extended distance or placed out on the retail floor without delay. Although the text covers this in great detail the most practical example I found was displayed in the example of DHL handling of the Cranberry apple pie from VA to Hawaii. It revealed several examples of cross-docking when the pie was pick-up from VA. The pie was placed onto a vehicle and then transferred to an aircraft. The aircraft was flown to Hawaii Airport and then the commodity was placed back into a vehicle, where it was transferred to its final destination in Honolulu, Hawaii. The whole process only took 24 hours without any damage to the pie. (Donvan, 2012)

Group 2:

1. Many business analysts use inventory turnover as one of several major metrics to assess the financial health and future success of a corporation. How can inventory turnover ratios offer insight into the health of a company's operations?

Inventory turnover ratios can offer insight into the health of a company's operations through a low or high return. A high turnover could signify a low level of inventory, possible signaling that supply is running out.

Reason for Investing in Inventory

• Avoid disruption in operational performance
• Support operation requirements
• Support customer service requirements
• Hedge against marketplace uncertainty
• Take advantage of order quantity discounts

An indication of a low turnover could signify that is taking longer to sell its inventory, possible signaling that the price of merchandise is too high.

The Wrong Reasons for Investing in Inventory

• Poor Quality and material yield
• Unreliable supplier delivery
• Extended order-cycle times from global sourcing
• Inaccurate or uncertain demand forecasts
• Specifying customer items for standard applications
• Extended material pipelines
• Inefficient manufacturing processes

Reference:

Donvan, J. (2012). Inside FedEx's 'Superhub' During Christmas Rush. Accessed Sept 14, 2015.https://www.youtube.com/watch?v=lSZdKK14zgg

Moncka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2011). Purchasing and supply chain management (5^th ed.). Mason, OH: South-Western/Cengage.

Murphy, P., & Knemeyer, A. (2015). Contemporary logistics (11th ed.). Upper Saddle River, NJ: Prentice Hall.

PS: PLEASE ANSWER THE QUESTION AND REPLY TO BOTH OF MY CLASSMATES POSTS...YOUR RESPONSE TO THEM CAN BE NEGATIVE OR POSTIVE...AND RESPOND AS YOU WAS TALKING TO THEM DIRECTLY.

II)

Submit your responses to the questions below (taken from the textbook's questions for discussion and review).

Chapter 8:

1. Question 3 - Distinguish among cycle, safety, pipeline, and speculative stock.
2. Question 5 - What are ordering costs and what is the trade-off between inventory carrying costs and ordering costs?
3. Question 7 - Distinguish between a fixed order quantity and fixed order interval system. Which one generally requires more safety stock? Why?
4. Question 8 - Explain the logic of the EOQ model.
5. Question 12 - Define what is meant by dead inventory. What are several ways to manage it?
6. Question 15 - What are substitute items and how might they affect safety stock policies?
7. Question 18 - Why should organizations carefully consider potential trade-offs before adopting a lean philosophy?

Chapter 10:

1. Question 1 - Why does warehousing exist in a supply chain?
2. Question 2 - Explain the four ways that warehousing facilitates the regrouping function.
3. Question 5 - What are the advantages and disadvantages of private warehousing.
4. Question 6 - Discuss why contract warehousing is a preferred alternative for many organizations.
5. Question 7 - How does multiclient warehousing mix attributes of public and contract warehousing?
6. Question 11 - Discuss the trade-offs associated with order-picking versus stock-replenishing functions.
7. Question 14 - What are some potential nonstorage space needs that might impact warehousing design?
8. Question 19 - Discuss how warehousing security can be enhanced by focusing on people, facilities, and processes.