WEBVTT Kind: captions Language: en 00:00:09.280 --> 00:00:15.920 Warehouses add value to the supply chain in many  ways, from performing basic warehouse activities   00:00:15.920 --> 00:00:22.400 with excellence to providing specialized  functions. Let’s start with the basic activities.  00:00:23.760 --> 00:00:30.560 Receiving records physical receipt of material,  inspects deliveries for damage, validates the   00:00:30.560 --> 00:00:37.200 purchase order quantity, moves materials to  their destination, and creates receiving reports.  00:00:38.400 --> 00:00:44.560 When bulk items are received, prepackaging may  be done to package them in smaller quantities   00:00:44.560 --> 00:00:50.800 or to create kits or assortments. Put-away involves moving materials from   00:00:50.800 --> 00:00:58.000 receiving to a staging area and then to a storage  area such as bulk storage or single selective rack   00:00:58.000 --> 00:01:06.320 storage. Logging the new location is a vital step. Order picking involves selecting the right number   00:01:06.320 --> 00:01:11.840 of the right products, sending them to  the packaging area, and logging the move.  00:01:12.720 --> 00:01:19.200 Packaging and marking involves placing the correct  type and quantity of materials into a container   00:01:19.200 --> 00:01:24.800 with materials in place to protect goods from  damage for the mode of transportation selected.   00:01:25.680 --> 00:01:30.640 It also involves marking and labeling the  container with the customer destination   00:01:30.640 --> 00:01:37.280 and so on. This step can add value such  as by minimizing packing for air transport   00:01:37.280 --> 00:01:44.160 since it is a gentle ride and space is at a  premium. Conversely, rail has a rough ride   00:01:44.160 --> 00:01:50.240 and sufficient packaging is essential. Shipping includes the prior packaging   00:01:50.240 --> 00:01:54.560 and marking step, plus weighing  and loading goods for shipment. 00:01:55.680 --> 00:02:01.440 Warehouses have two main efficiency issues when  it comes to adding value to put-away and order   00:02:01.440 --> 00:02:07.920 picking. First, there needs to be an efficient  way to find the inventory when it is needed,   00:02:07.920 --> 00:02:13.840 and second, there needs to be an efficient  way to put away or collect inventory in a   00:02:13.840 --> 00:02:22.320 way that minimizes pick or put-away time. Two ways to organize storage include random-   00:02:22.320 --> 00:02:30.400 and fixed-location storage. Random location uses  space most efficiently because any empty bay can   00:02:30.400 --> 00:02:38.800 be used. Warehouse management systems track these  locations easily. Fixed locations are relatively   00:02:38.800 --> 00:02:45.520 permanent locations that become familiar. Fixed  locations may be useful for special items like   00:02:45.520 --> 00:02:53.440 hazardous goods or if an information system is  not used. For the minimizing travel objective,   00:02:53.440 --> 00:02:59.200 there are numerous ways warehouse management  systems can route pickers to minimize steps   00:02:59.200 --> 00:03:06.160 taken. Advanced warehouses may instead use  robots to bring inventory to stationary pickers. 00:03:08.160 --> 00:03:12.720 Another way to minimize travel with  either random or fixed locations   00:03:12.720 --> 00:03:20.240 is to locate high-velocity SKUs in the areas  that are most convenient to pick from. An ABC   00:03:20.240 --> 00:03:25.680 analysis that ranks items by velocity  could help select goods for each zone.   00:03:26.640 --> 00:03:31.920 Now that we have an idea of how a  warehouse might add value internally,   00:03:31.920 --> 00:03:38.560 let’s take a step back and look at how warehouses  can specialize in certain value-added services. 00:03:40.160 --> 00:03:45.360 Consolidation warehouses are used to  take materials from multiple sources   00:03:45.360 --> 00:03:49.600 and combine them into full  truckload or containerload shipments   00:03:50.240 --> 00:03:55.360 rather than needing to send many less  than truckload or containerload shipments   00:03:55.360 --> 00:04:00.400 at greater expense. It also reduces  traffic at the receiving docks.  00:04:02.160 --> 00:04:06.960 Break-bulk is basically a warehouse  that specializes in prepackaging. 00:04:08.240 --> 00:04:13.600 Cross-dock omits the storage step  entirely and sorts what is received   00:04:13.600 --> 00:04:18.000 rapidly into different loads so  that inventory is never at rest.   00:04:18.800 --> 00:04:25.360 This eliminates warehouse put-away and picking  labor. Such warehouses may be long and narrow. 00:04:26.720 --> 00:04:32.320 Postponement involves warehouses performing  final assembly of components or modules   00:04:32.320 --> 00:04:39.760 to enable differentiation after actual customer  orders come in. This reduces forecast error   00:04:39.760 --> 00:04:44.880 and warehouse space needs relative to  multiple finished unit types being held. 00:04:46.960 --> 00:04:53.440 Anticipation or stockpiling involves the  warehouse providing seasonal or on demand storage. 00:04:54.880 --> 00:05:01.600 Mixing is simply break-bulk from multiple  sources. Each customer gets custom product mixes.   00:05:02.560 --> 00:05:09.840 We hope you enjoyed this overview  of value-added warehousing.