Materials handling: the short distance movement, storage and control of items.
Pallets: there are two
types of pallets. The two-way entry pallets (where they can be picked up from
front and back) and four-way entry pallets (picked up from any side).
·
Pallets are manufactured in standard sizes. ISO 6780 specifies 6 standard pallet dimensions
·
The size of racks is dependent on the pallet sizes. Slip sheets might be used to sit on top of a pallet and
separate it from the goods sitting on it. This makes it easier to remove a
pallet later
·
If the supplier’s pallet sizes are compatible with the buyer’s,
there can be efficiencies
·
Pallets are re-usable, but those provided by the supplier would be returned once no longer in use. This means that pallets will be
stored in a part of the warehouse for return to suppliers
·
Pallets aren’t required if other storage types are used e.g. tote boxes,
storage bins
Unitisation: the use of unit
loads for handling items. Unit loads are a grouping together of similar items for storage
on pallets. This allows them to be stacked on uniform
shelving.
·
Items in a unit load are held together by strapping which allows
them to be moved as a single unit.
·
Tote boxes could be held together as unit loads.
Storage without
racking: some goods
could be stored without need for racks:
·
Block stacking: stacking items
on top of each other without racks / pallets
·
Post pallets and cage pallets: where
stacking might be unstable, post / cage pallets might be used. These are
pallets with upright columns in each corner. The pallets sit on the columns
o
Post pallets are used for regularly shaped goods, cage pallets for
irregularly shaped goods
Manual handling equipment: this could be
equipment on wheels (e.g. trolleys) or moving stock by hand.
·
Trolleys: can be used as
containers. Could be supermarket trolleys
·
Dollies: platforms
on four wheels, steered using a handle
·
Pallet truck: for
moving heavier loads. Hydraulic systems are used to raise pallets
·
Roll cages: cages on
four wheels that can be moved manually
·
Order picking trolleys: trolleys
used by operators to move items around or pick items for customer orders
Powered materials handling equipment: batter powered
pallet trucks could be used for longer distances, larger weights.
Forklift trucks: they have a
counterweight at the back of the truck to balance against weight carried at the
front.
·
The most common type is the driver-operated counterbalanced
forklift truck (usually powered by LPG or electric)
·
If operated indoors,
forklifts should be electric
·
Reach trucks: these are
designed for narrower aisles with tall racking. The forks can
reach higher
·
Drum handlers: for
moving cylindrical drums
Some of the downsides of forklifts include the cost, need for training, requirement for wide aisles.
Selected other equipment:
·
Cranes: for moving
heavy loads
·
Rollers: a line of rollers connecting one location to another. Items
roll along it
·
Conveyor systems: moving along a conveyor belt
·
Monorails: variant
of conveyor system, where there is an overhead rail
·
Carousels: series of
trays / bins, linked together to create a chain. Carousel revolves to
bring the appropriate tray to the
operator
A weighbridge might be used to measure the weight of a truckload of items (a large weighing machine). This might
be needed when goods arrive into a warehouse, or leave.
Packing and packaging:
·
Packing means putting
items into packages and can also refer to the package itself.
·
Packaging can use bubble wrap, polystyrene etc for protection.
·
ISO 18602 classifies packaging into 3 categories:
o
Primary packaging: packaging in
immediate contact with item e.g. food held in
tins
o
Secondary packaging: packaging
that holds a number of items
together, that are in primary packaging
o
Tertiary packaging: packaging
for transporting goods
·
ISO 14001 would be relevant for the environmental aspect of
packaging
Containers:
·
Shipping containers are built for intermodal freight transport i.e.
across ship, rail, road
·
Most containers are dry freight
·
Containerisation: using standardised containers for storing and
transporting loose units
Warehouse
management systems (WMS): IT-based system
that integrates stock management activities. E.g. forecasting, stock control,
recording receipts etc.
Automated
guided vehicles (AGV): driverless
vehicles for use in warehouse. Now there are robotic forklift
trucks, which are mobile robots (more advanced).
·
AGVs needed markers, lasers etc to direct themselves whereas mobile robots don’t
·
Other robotic equipment include cranes and packers
·
Automated packaging machinery are now used along
conveyors. These might be computer-controlled conveyor systems
Inventory
In a manufacturing company, there are 4 categories of inventory:
·
Raw materials and components
·
Work in progress
·
Finished goods
·
Other supplies or indirect supplies
The first category can be divided into raw
materials, components and
subassemblies:
·
Components are partly manufactured products
·
Subassemblies are party assembled elements (larger than components, manufactured using raw
materials and components)
Opening and closing stock:
·
Opening stock: total inventory
quantity held at the beginning of the financial year (measured by cost)
·
Closing stock: inventory quantity held at end of the financial year
The above are used to calculate costs of
production and cost of goods sold.
·
There are different ways of measuring stock: e.g. recording stock movements in
an inventory management system, or physically counting stock.
Safety stock
When demand for
stock exceeds quantity held in store, there’s a stockout.
·
If the stockout relates to an item used for production, production
may need to stop
·
If stockout relates to finished goods, there might be delayed or
lost sales
·
Safety / buffer stock is needed:
extra quantity held in stock. This is the difference between quantity expected
to be sufficient and the actual quantity held
o
This should be based on the need to keep inventory costs relatively low, but cater for the
uncertainty of demand
Obsolescence and redundancy of stock
Stock obsolescence: when stock
becomes out of date, such that it’s no longer of use. Obsolete items should be ultimately written off if demand is no longer there, and disposed of.
Stock redundancy: this is when an
item has no use for its owner. It can happen if a
company changes its requirements, or is holding too much inventory and therefore doesn’t expect to use
the item at all.
Obsolete stock might be difficult to sell because it is out of date. It might be possible to recover
some of the cost. You might be able to sell redundant stock though, if other
businesses still have use for it.
Direct and indirect supplies
Direct
supplies: raw materials,
components, subassemblies that go into manufacturing end-product.
Indirect
supplies: items that don’t go directly into manufacturing, but are used for operational purposes. These are also
known as MRO supplies (maintenance, repairs and operations).
·
Indirect supplies can be used by manufacturing, sales and
marketing, general admin activities etc
·
In manufacturing, they could be consumables, tools or machine spares
ABC classifications of stock
Pareto analysis has shown that 20% of stock generally accounts for 80% of
the value of stock turnover. This has been developed into ABC analysis:
·
A: small number of stock items with high turnover (10-20%)
·
B: between categories A and C (10%)
·
C: low value of turnover, large number of stock items (70-80%)
With Category A, one should avoid excess
stockholding because there would need to be larger inventory. But stockout can
have severe consequences.
With Category C, if an item is used
infrequently, no items might be held in stock (may just be ordered as needed).
If an item is in high turnover, there may be large quantities held (as items are small).
MRP systems will use a forecast of sales demand for each product item to
develop bill of materials.
Dependent and independent demand items
Dependent demand items: this is when
demand for an item depends on the quantity of the product manufactured. The bill of materials will contain all dependent
demand items.
Independent
demand items: this is when
demand isn’t directly dependent on how much is produced. This would
apply to most indirect supplies.
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