Transport

Goods should be moved from Point A to Point B as efficiently as possible. The specific strengths and weaknesses of each means of transportation within a freight-transport system must be weighed and possibly linked.

Definition of transport

Efficient movement from place to place

The author Jules Verne once dreamed of traveling around the world in 80 days. Phileas Fogg, the British hero of his novel, achieved this speed of travel, which was incredible for the conditions of Verne’s time, by cleverly networking various means of transportation as a practitioner of travel logistics. Today, solving the transport problem is a central task of logistics in shipping a good from one place to another.

The transport chain as solution to transport problems

In general or profession terms, transport involves covering distances or changing the location of cargo through the use of a means of transport.
A distinction must be made here between internal transport within an operation and external transport. For instance, internal transport takes place from one production line to another in a factory or between different departments in a warehouse. External transport, on the other hand, is a shipment from the supplier to the customer, between various factories or between warehouses of a company.
External transport consists of the cargo, the means of transport and the transport process. Means of transport involves the "hardware" of transport - that is, the means of transport that will carry the goods. The transport process, in turn, concerns the “software” of transport and refers to the procedural-organizational rules governing the transport process.
For any given transportation problem, two questions must be generally answered:

• Which means of transport is the most advantageous?
• Which transport process is the most advantageous?

Ultimately, the solution of the transport problem lies in the composition of a transport chain. In a transport chain, goods are moved from Dispatch Point A to Receiving Point B in accordance with procedures that are connected in technical and organizational terms. Transport, handling and storage solutions are often offered by large, networked logistics service providers for an entire transport chain.

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Packaging

Optimal packaging of a product is a critically important factor in logistics. It serves as a protective layer, a source of information and a prerequisite for efficient and safe storage and rapid transport.

Functions of packaging

External cover with functional content:-
Optimal packaging of a product is a critical factor in logistics. And the reason is clear: Without it, many logistics processes could not be performed at all or could be carried out only at great additional cost. The function of the packaging is not just to protect the product. It performs many other jobs as well. These include providing information about the contents as well as enabling and facilitating other logistics processes - including transport and handling as well as storage, order processing and warehousing.

No logistics without packaging:-
The different logistics functions of the packaging - that is, protection, storage, transport, information and handling - are an outstanding example of the interdependencies that exist in logistics. As a result, the packaging may be regarded only as a part of the entire logistics system. In packaging design, a compromise that addresses all functional areas must be found. The correct design of packaging can help lower overall logistics costs and raise the level of supply and/or delivery service.
In addition to the logistics functions, packaging must also fulfill production functions, marketing functions and usage functions. This means :

• Through the choice of suitable packaging, it is possible to produce directly from the packaging or into the packaging without intermediary processing procedures.
• Packaging can lend a special character to a product, enabling it to be distinguished from the competitors’ products. Important functions can also be assigned to packaging, including roles in advertising and sales promotions.
• In light of environmental considerations, it is essential for packaging design to meet these needs. Ideally, the design should make it possible for a customer to recycle the packaging or facilitate its use for other purposes.

Protective function:-
Good service includes the ordered good’s arriving in satisfactory condition. The packaging should protect the product from mechanical and climatic stresses during delivery.

Warehouse function:-
Packaging is required to facilitate the storage of a product. If possible, the packaging should be stackable and meet the demands of the storage equipment. In addition, it should facilitate practical storage of the packaging supplies - e.g., through collapsible boxes.

Transportation function:-
The packaging also has the task of facilitating the transport of a product or actually enabling the product to be transported. Likewise, the packaging’s form and size should permit the optimal use of the transport space with the lowest possible packaging weight.

Handling function:-
The goods should be combined by the packaging into units that simplify their processing during transshipment and delivery. The form and size of the packaging units must also facilitate the employment of technical aids such as forklifts or storage and retrieval systems. If the commodity is handled manually, then grip holes in the packaging can be necessary.

Information function:-
The packaging should be marked in such a way that the products in it can be identified easily - e.g., by color, pictures or labels. Furthermore, packaging of fragile, perishable or similar products requiring special treatment during delivery should be clearly marked with pictures, symbols or explanations. During automated transportation and processing procedures, automatic product recognition is facilitated by suitable information appropriate to the packaging, e.g., barcodes or RFID tags.

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Inventories

A warehouse is a valuable facility for a company only when it is put to effective use. This requirement leads to the question about the optimal level of inventories in a warehouse.

Functions of inventories

The reasons for inventories

For many reasons, inventories are necessary and desirable for a company. Large producers, for example, have to use inventories in response to seasonal needs in order to offset swings in sales. A system that is unthinkable in retailing may be common in the warehouse of a chocolate maker: chocolate Santa Clauses stored right next to marzipan Easter bunnies. There are other reasons for inventories as well - including economic aspects like volume discounts from a shipper. The size of inventories is strongly linked to the goals associated with them.

The pros and cons of holding inventories

Inventories generate costs. This fact leads to a question: Wouldn’t it make sense to eliminate stored stocks entirely? If this were the case, only those raw materials directly used in manufacturing would be ordered. The finished products would then be delivered to the customers directly without having to be stored by the manufacturer. And the customer would immediately put these end products to use.
Just-in-time delivery in the automotive industry closely reflects these ideas. Individual components are delivered directly to the producer’s assembly line - and this is done just when they are required in the manufacturing sequence. The producer has no need to store the components. In just-in-time delivery, reducing stocks is considered a part of long-term efforts to exploit efficiency-improving potential. Stocks mask disruption-prone processes, uncoordinated capacities, deficient flexibility and delivery capability as well as structural weaknesses in the coordination of flows of material and information. As a result, they prevent the logistics chain from being organized in a way that reflects the flow process. To avoid such inefficiencies, the just-in-time concept aims to consistently reduce inventories to the point where no stocks exist at all.
Yet, it is not always so simple. The following points show the reasons why it makes sense for companies to maintain stocks in procurement, output and distribution warehouses.

Economies of scale

Procurement warehouses can result from a company’s desire to get volume discounts from a supplier or more favorable conditions from a carrier. Similarly, the creation of inventories in distribution warehouses can lead to better transport terms that come with larger quantities. Like production warehouses, inventories in distribution warehouses may also lead to lowering the cost of individual items by enabling larger production batches.

Seasonal fluctuations

In the case of consumer goods with a seasonal demand, the establishment of inventories in distribution and production warehouses also ensures that production can run continuously at full capacity despite swings in seasonal demand.
Agricultural goods frequently have a seasonal supply as well. To sell goods continuously throughout the year, inventories in distribution or production warehouses are required.

Specialized production

Production specialization, in which different parts are produced at separate company sites, lowers costs. If just-in-time delivery of parts to an assembly line is not possible, this specialization can be carried out only by increasing inventories.

Price speculation

Inventories of procurement and distribution warehouses are increased if the price of a good is expected to rise. In such a situation, the purchasing company aims to amass the good at the current low price. The supplier may speculate that supply shortages will drive the prices higher, and he uses the warehouse to store the good.
Speculation that leads to increased inventories is not always related to price. Generally speaking, inventories are generated by speculation about the scarcity of goods. For example, they can result from expectations that a strike will threaten the logistical operations of a supplier.

Protection against uncertainties

Creation of inventories in procurement, production and distribution warehouses can result from uncertainties, e.g., when demand from customers or from a company’s own production operation is not always predictable or when delivery from suppliers or from production is not always reliable or goods are supplied from geographically remote areas.

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Key indicators in the warehouse

The crucial factors of efficient warehousing

Operating figures are needed in order to evaluate a warehouse’s efficiency and effectiveness. In the process, quantitative indicators for both capacity utilization and movement processes must be used. Expenditures include the warehouse’s capital costs, equipment and payroll.

Key indicators in the warehouse

The tasks of a warehouse can be divided into time-bridging processes when the goods are stored and movement processes associated with storage. These must be depicted in a system of key indicators in order to determine efficiency and effectiveness. The resulting efficiency indicators are storage capacity, the number of available storage positions and stock movements. On the input side, they are matched by performance measures of warehousing costs, which are divided into personnel costs and operating costs.
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Assignment of storage space

Organization is the key to warehouse logistics

Thousands of the different types and forms of goods can be stored simultaneously in the same warehouse. To optimally use this costly space and enable a specific item to be retrieved quickly, a clear, coordinated organization of storage space is necessary. This is the only way to economically and efficiently operate a warehouse. Storage space can basically be organized in two different ways: fixed storage space allocation and completely free or random space allocation.

Giving each item its own warehouse location

A very simple way to determine the location of a stored item is to always assign it to the same place. A key feature of assigned storage space is the separate storage of each group of goods. As a result, goods are easy to find. With this system, a product can still be retrieved even when the inventory-management system crashes. In this system, however, the capacity utilization of the warehouse can be limited, especially with fluctuating inventories for individual groups of goods.
In one variation of this warehouse organization system, a storage space is assigned within fixed areas. This can be accomplished through lateral distribution or a free assignment of storage space within fixed zones.

Several storage units in various aisles

One problem associated with the fixed assignment of storage space is that an item cannot be retrieved if, for example, a permanently installed means of conveyance like a storage and retrieval unit in a high-bay warehouse malfunctions. This problem can be avoided by distributing several storage units of an item in various aisles. The strength of this system, known as lateral distribution, is that it provides simultaneous access to high-demand goods in several aisles. This system requires an IT system that can show which goods are stored in which areas.

Storage space assigned within dedicated areas

Another way to efficiently assign storage space is to segregate groups of goods, for example, by picking frequency, and allocate specific groups of goods to certain sectors. In this Zoning system, goods that are frequently stored and retrieved are stored closest to the storage and retrieval points. Goods that have large quantities of selling units, by contrast, should be stored far from the storage and retrieval points in order to keep the movement distances short for as many goods as possible. For this purpose, the goods can be classified with the help of ABC analysis. One strength of the free assignment of storage space within fixed zones is that goods can be handled more frequently. The storage capacity, of course, is reduced in the process. But an IT system that provides efficient zoning and manages the storage space of specific goods is a prerequisite.

Random storage in the warehouse

A warehouse that lacks a fixed form of goods assignment is known as free assignment of storage space, random storage or chaotic storage. Any kind of good can be stored in the first space that becomes available. The goal is to optimally fill the storage space - even if demand fluctuates considerably. Since the goods in random storage are placed in the first available storage space, a system that performs electronic management and control of storage and retrieval is required for warehouses with a large number of storage spaces. This task is handled by an electronic data processing system that automatically shows a storage space of the required size for a good requiring storage. It registers which product is stored in which quantity and in which space.

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Picking systems

The question that arises especially in large warehouses is: Where is a specific item located among the maze of shelves? Modern order-picking systems assist stock pickers by showing them the location of the goods. The systems include the use of light signals (pick-by-light) or even information transmission by headset (pick-by-voice).
In this process, the information “Row 14, Position 2” is passed to the picker over the headset. As a result of this communication, the worker learns about the optimal path to the pick location and the pick list [pick list]. He then identifies the storage shelf and parts of the EAN code for the items stored there, possibly including the code’s last two digits. If the item number matches, this system then informs the picker over the headset how many items need to be picked. The picker takes the goods from the shelf, checks the quantity and receives an “OK.” This procedure is repeated until the prescribed stack height is reached or an order is completely filled.
A new addition to this order-picking system is pick-by-vision. With this technology, the picker receives information through data goggles. This system is only in the prototype phase at the moment.

Picking list

The picking list is the traditional management and information instrument used in manual picking processes.

Pick-by-light

Pick-by-light is frequently used to pick fast-selling items. The system is especially useful to companies with small product quantities.

Pick-by-voice

Pick-by-voice is primarily used for picking. The system is also useful in quality control as well as in packing and shipping - e.g., for communicating the carton size to be used. These systems are well suited for those areas where workers need to be able to use both hands for picking purpose due to safety concerns.

Pick-by-vision

Pick-by-vision is only a research prototype at the moment. Application areas are picking of fast- and slow-selling items. The system is an alternative to pick-by-voice and pick-by-light.


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Stations in the warehouse

An inside look at a storage facility

Modern warehouses are equipped with all sorts of technical equipment that enables goods to be efficiently stored. This equipment includes operator-less conveyor systems that move through various warehouse zones as though they were guided by an invisible force or stock pickers who select products from the pick locations in racks based upon instructions they receive on headsets from a central computer. The following graphic and detailed explanations provide insights into the most important processes in a warehouse.

Stations in the warehouse

From receiving to shipping

Goods that arrive in the warehouse are accepted by receiving and prepared for storage. This includes unloading and identifying incoming goods. Identification is usually done by scanning a barcode attached to the good. However, new innovative technologies like RFID (Radio frequency identification) allow for contactless scanning of goods. As a result, the contents of a whole pallet can be read at once by the radio signal emitted by RFID chips as soon as the shipment passes a gate or similar checkpoint. But this method of identification is relatively more expensive than the barcode and is less used.
After being inspected at receiving, the goods are prepared for storage. In this process, they may be placed onto the appropriate load-carrying device such as pallets or into parts containers or repacked. The time the goods spend at receiving should be as short as possible. The receiving area for incoming shipments where goods that will be stored are processed is often called the I Point, or information point.
In theory, there are two types of warehouses: single-line stores and order-picking warehouses – but in reality, many warehouses combine these two activities.
Single-line stores are designed to store and retrieve identical units of the same type of good. For instance, a pallet of goods will be placed in storage, and the complete pallet will be retrieved again. Due to the great similarity of activities, single-line stores can be highly automated. Since movement processes are greatly simplified, space can be used very efficiently. The single-line store is also called a reserve warehouse if units are not sent directly to shipping but are placed in an order-picking warehouse instead. Reserve warehouses are used to store large volumes and units of goods for a relatively long time.
In general, small quantities and units of goods are stored for shorter periods in the order-picking warehouse. This warehouse area carries out movement processes that are used to consolidate or break down the flow of goods, the picking. This means the goods do not leave the storage area in the state in which they were stored. To keep the time required for manual picking to a minimum, efficient picking procedures and short transport routes must be considered in the organization of the order-picking warehouse. Order-picking warehouses also frequently rely on modern technologies such as pick-by-light and pick-by-voice, which not only make the order picker’s job easier but also increase productivity and accuracy.
In the packing station, the picked order is consolidated into a unit for shipment, which can also involve a transfer to another internal station.
Shipping involves both the dispatch of goods to the recipient and delivery-related activities. This includes receipt of the goods from the packing station, set-up of interim storage sites that extend back to pick-up, arrangements for pick-up vehicles and loading. Transport-related processes are the primary job of shipping. Goods stay in shipping for lengthy transition periods only in extraordinary cases.
In addition, warehousing and means of conveyance used in the warehouse must be directed and coordinated. This is the job of the warehouse management, which forms the interface between the logistics subsystem warehouse and the logistics subsystem order processing.

Warehouse technology

Business trends have a strong impact on intralogistics, i.e., the material flow within a business operation and, thus, the technology associated with the warehouse. These trends include the accelerating pace of innovation, the increasing individual nature of customers’ requirements, the growing diversity of product variations and the extreme volatility of the order inflow.
The main task of conveyor technology is to transport, store, pick and handle goods. Increasingly, discussions are centering on solutions that can combine all conveyor equipment and systems in an efficient way that uses a minimum amount of time. This will enable conveyor technology to be flexibly adapted to different types of shipped goods.
Ground conveyors are used today in many industries. Their flexibility allows them to be adjusted to the appropriate job with little effort. They are much easier to adapt to configuration changes or system expansion than automated conveyors.
But the basis for these systems remains the warehouse technology with its storage racks, means of conveyance and picking systems.

Storage racks

Products can be stored in all sorts of ways in modern warehouses. Key criteria that apply here are not only which product is to be stored but also how quickly it must be available again. Shelf-type racks and space-saving storage carousels are frequently used for such things as non-palletized small parts, while pallet-racking systems are particularly suited for large quantities of items.
Here, just like drive-in racks and drive-through racks, transport-related processes for storing heavy, bulky goods are used. A distinction is also drawn among drive-through racks that are primarily used for picking. Push-back racks are designed for infrequently needed products, and high-bay racks are frequently employed by industrial and retail companies.

Rackings
Rackings are frequently used to store non-palletized goods, small parts or bulky items. Generally speaking, they are suited for storing small to medium quantities of goods involving a large number and wide array of items.

Pallet racks

Pallet racks store pallets or stillages. They are used to store small to large quantities involving a large number of goods or assortments of goods.

 Drive-in racks
Drive-in racks are used to store large quantities involving a small number of heavy items. They are also suited for fragile goods and non-stackable load units.

Drive-through racks Just like drive-in racks, drive-through racks are used to store large quantities involving a small number of heavy items - as well as fragile goods and non-stackable load units.

Flow-through racks
Flow-through racks are frequently used for picking in distribution warehouses. Medium quantities involving small and intermediate-range numbers of items are stored on the racks.

Push-back racks Push-back racks are primarily used to store items that are infrequently needed. Special areas of use are archiving records, documents or electronic data carriers. Medium quantities involving intermediate-range and large numbers of items are stored in push-back racks. They are also frequently used in freezer warehouses.

Storage carousels Storage carousels are frequently used for small-parts storage systems, replacement-parts storage, tool storage, pharmaceuticals storage or document storage. Small to medium quantities involving intermediate-range to large numbers of items are stored in storage carousels for picking purposes.

High-bay racks High-bay racks are most frequently found at industrial and retail companies. They store small to large quantities involving large numbers of items or assortments.



Means of conveyance

Various work-saving means of conveyance can be used to efficiently move products in the warehouse as well as to store and retrieve products. On one hand, these means of conveyance include permanently installed systems such as overhead conveyor systems, cranes [cran], wheel conveyors [Wheel conveyor] and electric trolley conveyors [Electric trolley conveyor]. On the other hand, they encompass such unattached means of conveyance as forklift trucks, forklifts and automatic-guided transport systems [Automatic-guided transport system]. Special storage and retrieval equipment is also available. It simplifies warehousing and retrieval in things like pallet-rack, high-bay-rack or tank-rack storage.

Overhead conveyor system Overhead conveyor systems are frequently used in machinery and installation manufacture and in fashion warehouses. They transport items between production segments and can perform jobs in the manufacturing process as well - including cooling and drying. They can also be used as safety stocks.

Wheel conveyor Wheel conveyors are used widely because of their simple design, their robustness, and their low investment and operating costs. They are only suited for the transport of goods that have a solid, even surface. Otherwise, operations cannot be carried out smoothly. Wheel conveyors are frequently used at the front end of the warehouse, and in production for jobs related to the loading and unloading of road vehicles, rail cars, ships and airplanes.

Crane Cranes are used to serve warehouses and to supply and dispose of equipment and facilities used in production. Typical tasks are warehouse operations and transport of goods.

Electric trolley conveyor
Electric trolley conveyors can be used in all areas of a company, from the receiving area, warehouse and picking area to shipping. Their main area of use is for short trips requiring little to mid-range throughput that can be covered quickly. They are frequently used in the electronic, textile and food industries as well as in vehicle-body assembly in the automotive industry.

Forklift trucks
Forklift trucks facilitate ground transport of horizontally stacked goods throughout a business operation. They are particularly suited for short trips and mid-range transport frequency. Favored areas of use are between workstations and in confined spaces - including the loading and unloading of containers, trucks and rail cars.

Forklifts
Forklifts combine the horizontal transport of goods with stacking jobs. They are used to move goods onto load-carrying devices like pallets, wire-mesh boxes or individual parts. Favored areas of use are storing and retrieving pallets in rack storage.

Operatorless transport system
Operatorless transport systems are frequently used to move large loads and trailing loads with a low to medium throughput over short to medium distances. In such facilities as production operations and product distribution centers, they are used in irregular horizontal and vertical transports in the areas of receiving, production, warehousing, the front end of the warehouse and shipping.

Storage and retrieval system
Storage and retrieval systems are used in pallet-rack, high-bay-rack or tank-rack warehouses to store and retrieve goods placed on load-carrying devices that have been standardized to the largest extent possible, including pallets, wire-mesh boxes and containers.


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