VALUE ADDITION THROUGH WAREHOUSING

Submitted to
Prof. Dr Jagendra Prasad Saxena
Operations Management

Done by

G.KARTHIKEYAN
A0101911223
SECTION D-43 MBA-GENERAL

Value addition through warehousing
Definition - VALUE ADDITION
The enhancement added to a product or service by a company before the product is offered to customers. Value addition refers to the additional value of a commodity over the cost of commodities used to produce it from the previous stage of production. The value added to any product or service as the result of a particular process.
A broad definition of value addition is to economically add value to a product and form characteristics more preferred in the market place. There are two main types of value addition, Innovation or coordination. Innovation focuses on improving existing processes, procedures, products or services.
Value-added services are those which complement and enhance warehousing, transportation, and logistics offerings. Using value-added logistics services enables companies to lower inventory footprints of finished goods by delaying the labelling and final assembly of products until customer orders are received. This is a cost effective supply chain strategy that gives companies more flexibility over their inventory. WAREHOUSE
The warehouse has loading docks to load and unload goods from trucks. Warehouses are designed for the loading and unloading of goods directly from Roadways, Seaways and Airways They have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks. Stored goods can include any raw materials, packing materials, spare parts, components
The facility is properly slotted. Slotting addresses which storage medium a product is picked from using the part number of the specific part that is stored according to supplier and with a proper slotting plan, a warehouse can improve its inventory rotation requirements
CLASSIFICATION OF PARTS ACCORDING TO THE LOCATION OF SUPPLIER: * LOCAL PARTS * LONG DISTANCE PARTS * KNOCKDOWN PARTS
The parts are kept in specific warehouse locations that are allotted for the specified storage locations in the different warehouses in the plant.
Value-Added Warehousing
E.W.Taylor provided value added warehousing and distribution services throughout the UK. The main mission is to offer customized solutions for the clients, intended to meet the necessities of today and set the standards of tomorrow.
In addition to the normal warehousing solutions such as pick and pack, import / export services, and inventory management, E.W.Taylor offers bespoke handling solutions including packing, processing, labeling, fumigation and assembly.
Value-added services are those which complement and enhance warehousing, transportation, and logistics offerings. Using value-added logistics services enables companies to lower inventory footprints of finished goods by delaying the labeling and final assembly of products until customer orders are received. This is a cost effective supply chain strategy that gives companies more flexibility over their inventory.
Value addition can be done through following ways. 1. Space planning 2. Equipment planning 3. Layout planning 4. Space utilization & 5. Effective supply methods
These are deeply discussed below.
1. SPACE PLANNING Randomized Storage * An individual stock keeping unit SKIDS can be stored in any available storage location. * An inbound load is assigned to the closest available storage location. * Retrievals are first-in, first-out (FIFO).

Dedicated Storage * Each SKID is assigned to a specific storage location or set of locations. * Storage locations can be arbitrarily determined such as part number sequence, or they can be determined based on the SKIDS activity level and inventory level. * Number of storage locations is the sum of the maximum inventory level for each SKID. * Maximize Throughput * Assign SKIDS to storage locations based on the ratio of their activity to the number of locations assigned to the SKIDS. * SKIDS with the highest ranking are assigned to the preferred openings.
Class Based Storage * Hybrid configuration which assigns SKIDS to classes based on their activity-to-space ratios, but uses randomized storage within the classes. * Yields some of the throughput benefits of dedicated storage and the space benefits of randomized storage. Supermarket Storage * Combination of random and assigned storage.

2. EQUIPMENT PLANNING Storage Equipment Types * Bulk Storage includes block and tight-blocking stacking * Portable Racks or Stackable Racks * Pallet Rack , Flow-Through Rack * Bin Racks or Shelving * Sliding Racks or Gravity Flow Racks

3. LAYOUT PLANNING
Objectives
* To utilize space effectively * To provide efficient materials handling * To minimize storage cost while providing the required levels of service * To provide maximum flexibility * To provide good housekeeping Layout Principles * Similarity * Items that are received and shipped together should be stored together. * Size * Provide a variety of storage location sizes to accommodate a variety of products. * Utilize adjustable racks or shelves if product and unit load sizes are uncertain or change periodically.

4. SPACE UTILIZATION
Conservation of Space * Maximizing concentration * Maximizing cube utilization * Minimizing honeycombing Limitations of Space * Clearance height * Stacking height * Floor loading * Columns * Gangways
PALLET RACKING Pallet racking is a material handling storage aid system designed to store materials on pallets (or “skids”). Although there are many varieties of pallet racking, all types allow for the storage of palletized materials in horizontal rows with multiple levels. All types of pallet racking create some level of increase storage density with the least dense being the least expensive and cost increasing with storage density. Selective rack is the least dense at a cost of about $50–$70 per pallet position up to gravity flow pallet rack which can cost $250 –$400 per pallet position. Forklift trucks are usually an integral part of any pallet rack system as they are usually required to place the loaded pallets onto the racks for storage. Pallet racks are an essential and ubiquitous element in most modern warehouses, manufacturing facilities, retail centers, and other storage and distribution facilities.

Pallet Flow System Flow Storage consists of two elements: a static rack structure and dynamic flow rails. The flow rails are a track/roller system set at a decline along the length of the rack. Flow rails allow loads to move by gravity from the loading end to the unloading end. Each flow lane includes self-energized speed controllers (brakes) to gently control the speed of movement within the flow lanes. As a load is removed, the loads behind it move forward to the unloading position. The flow system depth, height, and width are limited only by the size of your facility and the capabilities of your material handling equipment. Flow Storage solutions are used in situations where storage density and inventory rotation are priorities.
METHODS USED FOR STORAGE OF PARTS * Floor storage * Highbay rack storage * Storage in stillages and trolleys
The ware house receives part from almost 82 part suppliers and these parts are either from Chennai warehouse (Vantec) which is a direct outsourcing unit or direct from the suppliers from Chennai, Delhi, Pune, and Bangalore.

STACKING:
The stacking is done using the forklifts that are available in the warehouse and the maximum stacking height that is maintained in the warehouse is 4.2metres. The stacking procedure includes placing of the modules i.e., skids according to the standard number in package (SNP) and the size of the package and type of package.
Basics for Goods Movements
In the Warehouse, there are two types of goods movements: * Movements that affect only the warehouse, such as stock transfers within a warehouse * Movements that affect not only the warehouse but also other departments, such as stock transfers to production
5. SUPPLY METHODS
There are four types of supply methods on the basis of type of parts and ease of use. Another important issue while deciding about the supply method is how easily the parts are available for the Assembly process.
Depending on the requirement parts are supplied by following four methods * Kitting * Syncro * Direct & * Fastener

Kitting:
The practice of feeding components and subassemblies to the assembly line in predetermined quantities that are placed together in specific containers is known as kitting in the industry. For discussion purposes, a kit may be generally viewed as a container which holds a specific assortment of parts that are used in one or more assembly operations in the plant.
In kits, all items are presented in a logical order so they can be removed from the container as quickly as possible without damage. It is important to keep it simple and the kit itself is structured or laid out in a predetermined and effective way.
The type of components and subassemblies required for each kit type is given by the kit structure. Kit assembly is an operation where all the components and/or subassemblies that are required for a particular kit type are physically placed in the appropriate kit container. Conceptually, kit assembly is an order picking operation.
Syncro:
The Parts are synced or ordered according to the requirement in the trolleys & chutters and then brought to the assembly line. Two sorts.. * Syncro done by the supplier and then shipped to the Plant * Syncro done inside the warehouse
Requirement is sent to the supplier from the central control room (Order of car flow in the assembly line) to make Syncro order of parts. It is usually done for the parts which vary according to the variants of a vehicle. For example Mirrors, Tyres, Seat kit, Door Tinte etc…
Direct:
The parts which are loaded directly to the assembly line, are called direct parts. Ex: Hub drum, fuel valves, Brake valve etc.
Fastener:
These are also direct parts but common for all the vehicles. Ex: bolts, nuts.

Talking about value addition, the flow racking system is a great boon on warehousing
The Advantages of Flow Rack Systems: * First-in, first-out (FIFO) inventory control.
Loads are transported, via the flow rails from the loading end to the unloading end of the storage system. The first load in is always the first load to be taken out. This constant stock rotation is especially beneficial with perishable or time-sensitive goods, such as food or pharmaceuticals, where a lost product becomes a lost profit. * Reduced handling costs.
Once loaded, product rotation is automatic. The SK3400 rack eliminates labor and fork truck operation to rearrange loads. And Steel King flow rails are powered by gravity, requiring no electricity or other utilities. * Reduced handling equipment costs.
Fork lifts are required only for the initial loading and final unloading. Because only two aisles are necessary, aisle space can be reduced by 75 percent. Fewer fork lifts, operating fewer hours, and consuming less fuel can accomplish the same handling function. * Time and labour savings.
With only two aisles, each dedicated to specific functions (loading or unloading), traffic is more orderly, employees are more efficient and overall productivity is improved. * Space savings.
Because storage density can be doubled, storage capacity can be increased within the same storage area, or a portion of your existing storage area can be made available for other uses. * Construction cost savings.
By increasing storage capacity within existing facilities, the need for new construction could be eliminated. When new construction is necessary, building size and cost can be reduced by up to 50 percent. A smaller warehousing area, in turn, can reduce insurance, land acquisition costs, and taxes.

* Operating expense reduction
Higher density storage and consequently smaller storage areas also mean less area to heat, illuminate, air condition, and/or refrigerate. * Decreased fork lift damage
Decreased fork lift handling of loads can result in less product damage and less potential for collision damage to the rack structure. * Flexibility
Flow storage systems have been successfully installed as a part of virtually every storage function, including raw materials receiving and storage, work-in-process, buffer storage, finished goods, order picking, and cross docking.

Hence the Warehousing facilities play a vital role in the overall supply chain process that are fundamental for warehouses to achieve both efficiency and effectiveness in supply chains, and provide some perspective on current challenges and the future.