5.6 Key Terms, References, and Accessibility Descriptions

Key Terms

Cross-docking: The process of moving merchandise from the receiving dock to shipping dock for shipping without placing it first into storage locations.

Demand Planning: The process to forecast consumer’s demand in future.

Downstream: Consumer side

Electronic Data Interchange: Exchange of business documents from computer to computer.

Enterprise Resource Planning: ERP systems provide an integrated and continuously updated view of core business processes using shared databases maintained by a database management system.

Inventory Management: Managing the stock of goods in warehouse

Inventory: Aggregate list of items, several goods in stock or stock of the product an organization produces for sale and the components that make the sale.

Lead Time: The time gap between placing an ordering and receiving it.

Materials Requirement Planning: A system that ensures that the materials, labor, and equipment needed for production are at the right places in the right amounts at the right times.

Order Fulfillment: The process of delivering what was promised, when it was promised, and how it was pledged are key drivers of customer satisfaction

Safety Stock: back up inventory

Semi-finished materials: work in progress

SKU (Stock-keeping unit): A unique number given to products when they arrive in warehouses.

Stock outs: Shortages or availability of less than required Inventory.

Stock: The goods or materials such as stationery, office equipment, plant, machinery, consumables, etc., available for use or sale.

Storage: The act of storing something in a warehouse.

Sustainability: Environment friendliness

Upstream: Supplier side

Value Chain Visibility: Making a company’s operations visible to all stakeholders.

Warehouse Associates: Persons working in Warehouses

Warehouse Management System: An application that helps to monitor and handle the day-to-day tasks of a warehouse.

Chapter References

Bartholdi III, J.J. & Hackman, S.T. (2014, August 19). Warehouse and distribution science (Release 0.96). The Supply Chain and Logistics Institute School of Industrial and Systems Engineering Georgia Institute of Technology Atlanta, GA 30332-0205 USA. https://www2.isye.gatech.edu/~jjb/wh/book/editions/wh-sci-0.96.pdf.

Belle, J.V., Valckenaers, P. & Cattrysse, D. (2012). Cross-docking: State of the art. Omega, 40(6): 827–846. https://doi.org/10.1016/j.omega.2012.01.005.

Casper, C. (2008). Demand planning comes of age. Food Logistics. https://www.foodlogistics.com/software-technology/article/10315689/demand-planning-comes-of-age?msclkid=5e0929b5cebf11eca68a5d38d81a26e2.

Chalotra, V. (2013). Inventory management and small firms growth: An analytical study in supply chain. Vision: The Journal of Vision Perspective, 17(3): 213-222. https://doi.org/10.1177/0972262913496726.

Chambers, D. & Lacey, N. (2011). Modern corporate finance (6th ed.). Michigan: Hayden McNeil Publishing.

De Lollis, B. (2008, March 25). CEO Profile: At Goya, it’s all in la familia. ABC News. https://abcnews.go.com/Business/story?id=4507435&page=1.

Distribution Center. (2021, August 15). In Wikipedia. https://en.wikipedia.org/wiki/Distribution_center.

Dulebenets, M. (2018). A diploid evolutionary algorithm for sustainable truck scheduling at a cross-docking facility. Sustainability, 10(5): 1333. https://doi.org/10.3390/su10051333.

Faramarzi, H. & Drane, M. (n.d.). Introduction to operations management. Seneca College Pressbooks System. https://pressbooks.senecacollege.ca/operationsmanagementintro/. CC BY-NC-SA 4.0.

Fellows, P. & Rottger, A. (n.d.). Business management for small-scale agro-processors [Working Document]. Food and Agriculture Organization of the United Nations, Rome. https://www.fao.org/3/j7790e/j7790e.pdf?msclkid=07d8911bcee611ecbad3109427dc6047.

Hertini, E., Anggriani, N., Mianna, W. & Supriatna, A.K. (2018). Economic order quantity (EOQ) optimal control considering selling price and salesman initiative cost. IOP Conference Series Materials Science and Engineering, 332(012013). https://doi.org/10.1088/1757-899X/332/1/012013.

Hudson, M. (2020, February 02). The top resources of retail shrinkage. The Balance Small Business. https://www.thebalancesmb.com/top-sources-of-retail-shrinkage-2890265.

Jenkins, A. (2020, December 14). Guide to inbound and outbound logistics: processes, differences and how to optimize. Oracle Netsuite. https://www.netsuite.com/portal/resource/articles/inventory-management/inbound-outbound-logistics.shtml.

Kotler, P., Roberto, N., & Lee, N. (2002). Social marketing: Improving the quality of life. (2nd ed.) Sage Publications.

Kulwiec, R. (2004). Crossdocking as a supply chain strategy. Target Magazine. https://www.ame.org/sites/default/files/target_articles/04-20-3-Crossdocking.pdf.

Kumar, S. and Craig, S. (2007). Dell, Inc.’s closed loop supply chain for computer assembly plants. Information Knowledge Systems Management, 6(3): 197–214. https://dl.acm.org/doi/10.5555/1369880.1369882.

Ladier, A.L. & Alpan, G. (2016). Cross-docking operations: Current research versus industry practice. Omega, 62, 145–162. https://doi.org/10.1016/j.omega.2015.09.006.

Luenendonk, M. (2021, July 7). Economic order quantity (EOQ): Definition, formula and guide. Founderjar. https://www.founderjar.com/economic-order-quantity/?msclkid=93119f86ced111ec89d89547f76336ee.

Manos, T. (2006). Value stream mapping – An introduction. American Society for Quality, 64-69. http://faculty.washington.edu/apurva/502/Readings/Lean/value-stream-mapping–an-introduction%20lean.pdf.

Mavi, R. K., Goh, M., Mavi, N.K., Jie, F., Brown, K., Biermann, S. and Khanfar, A.A. (2020). Cross-docking: A systematic literature review. Sustainability, 12(11): 4789. https://doi.org/10.3390/su12114789.

Ministry of Labor, Training and Skills Development. (2022, March 31). Workplace health and safety. https://www.ontario.ca/page/workplace-health-and-safety.

Moghadam, S.S., Ghomi, S.M.T.F., & Karimi, B. (2014). Vehicle routing scheduling problem with cross docking and split deliveries. Computers & Chemical Engineering, 69, 98–107. https://doi.org/10.1016/j.compchemeng.2014.06.015.

Oluwaseyi, J.A., Onifade, M.K., and Odeyinka, O.F. (2017). Evaluation of the role of inventory management in logistics chain of an organisation. LOGI – Scientific Journal on Transport and Logistics, 8(2): 1-11. https://doi.org/10.1515/logi-2017-0011. CC BY-NC-ND 3.0.

Patel, R. (2022, April 20). What is warehouse management system? (Process, benefits, features, & types). Space-O Technologies. https://www.spaceo.ca/blog/warehouse-management-system-wms/.

Popovic, V.,Kilibarda, M., Andrejic, M., Jereb, B., & Dragan, D. (2021, Feb. 13). A new sustainable warehouse management approach for workforce and activities scheduling. Sustainability, 13(4). https://doi.org/10.3390/su13042021.

Purdue University. (2021, May 30). What is value steam mapping? https://www.purdue.edu/leansixsigmaonline/blog/value-stream-mapping/.

Rosenblatt, M.J. (2001). Material handling. In Encyclopedia of Operations Research & Management Science. pp. 492 – 495. Springer.

Saylor Academy. (2019, April 9). Inventory management. https://learn.saylor.org/mod/page/view.php?id=9328%23%3a%7e%3atext%3dBasic+economic+order+quantity+model+(EOQ)+Used+to%2ccosts+of+holding+inventory+and+ordering+inventory+Assumptions%3a&msclkid=93111cd4ced111ecbc6e755f8192bbbd. CC BY 3.0.

Thirumalai, S. & Sinha, K.K. (2005, April). Customer satisfaction with order fulfillment in retail supply chains: Implications of product type in electronic B2C transactions. Journal of Operations Management, 23(3-4): 291-303. https://doi.org/10.1016/j.jom.2004.10.015.

Tompkins, J.A., White, J.A., Bozer, Y.A., FrazeUe, E.H., Tanchoco, J.M.A., and Trevino, J. (1996). Facilities planning (2nd ed.). John Wiley: NY.

University of Minnesota. (2015, Oct 17). Principles of marketing. University of Minnesota Libraries Publishing Edition. https://doi.org/10.24926/8668.1901. CC BY-NC-SA 4.0.

Value-stream mapping. (2022, April 5). In Wikipedia. https://en.wikipedia.org/wiki/Value-stream_mapping#:~:text=Value-stream%20mapping%2C%20also%20known%20as%20%22material-%20and%20information-flow,the%20specific%20process%20until%20it%20reaches%20the%20customer.?msclkid=a8934dd9cec011ec99c04dead3225f54.

Image Descriptions

Figure 5.2: The figure shows upstream and downstream flow of material and information. Upstream, the supplier end is at the top left corner and moves through downstream, the consumer end at the top right corner. The flow from upstream to downstream starts with Tier 2 Suppliers and moves to Tier 1 Suppliers to Manufacturer to Distributor to Retailer to finally end-consumer. The image also shows that forward flow of information is from left to right i.e. from upstream to downstream. Reverse flow of information is from right to left same as flow of money and flow of information. [Return to image].

Figure 5.6: The figure presents Tags used by readers and then stored into local servers representing ‘How RFID tags work’. [Return to image].

Alternative Text-Based Activities

Check Your Understanding: Inbound and Outbound Storage

Question 1:

From Logistics Cycle perspective, which activities are a part of Storage?

1. Order Processing (Incorrect)
2. Transportation (Incorrect)
3. Warehousing and Inventory Management (Correct)

Feedback: In the logistics cycle, Storage includes both Warehousing and Inventory Management.

Question 2:

Forward flow of materials/ goods happens ________ to ________. Conversely, Reverse flow of materials/goods happen _________ to _________.

1. Upstream to Downstream; Downstream to Upstream (Correct)
2. Downstream to Upstream; Upstream to Downstream (Incorrect)
3. Both happens through out the supply chain (Incorrect)

Feedback: There is a forward flow of materials/goods for the regular flow that happens all the way from higher- tier suppliers (upstream) to the end-consumer (downstream). In addition, if there are returns for any reason, there will be a reverse flow of materials/goods in the opposite direction to the forward flow.

Question 3:

Storage of goods received by a firm is known as ___________, and storage of goods which are scheduled to move out of a firm is known as __________.

1. Inbound Storage; Outbound Storage (Correct)
2. Outbound Storage; Inbound Storage (Incorrect)
3. Inbound Logistics; Outbound Logistics (Incorrect)

Feedback: Storage of goods received by a firm is known as ‘Inbound Storage’, and storage of goods which are scheduled to move out of a firm is known as ‘Outbound Storage’.

Question 4:

____________ is a computerized system to control the flow of resources and inventory.

1. Inbound Storage System (Incorrect)
2. Outbound Storage System (Incorrect)
3. Material Requirement Planning (Correct)

Feedback: Many manufacturing companies have adopted computerized systems to control the flow of resources and inventory. Materials requirement planning (MRP) is one such system.

Overall Activity Feedback

The Logistics Cycle is a complex process involving a series of stages that must run smoothly to ensure that goods reach their destination on time and in good condition. In the logistics cycle, Storage includes both Warehousing and Inventory Management. There is a forward flow of materials/goods for the regular flow that happens all the way from higher- tier suppliers (upstream) to the end-consumer (downstream). In addition, if there are returns for any reason, there will be a reverse flow of materials/goods in the opposite direction to the forward flow. Material Handling is an integral part of Inbound and Outbound Storage. Many manufacturing companies have adopted computerized systems such as Materials requirement planning (MRP) to control the flow of resources and inventory. [Return to activity].

Check Your Understanding: Warehousing

Question 1:

What are benefits of having a Warehouse? Check all that apply.

• It helps in matching Supply with Consumer Demand. (Correct)
• It helps in reducing transportation cost and providing customer satisfaction. (Correct)
• It enables postponing product differentiation and product configuration close to customers. (Correct)
• It helps proper storage and arrangement of goods within the storage space. (Correct)

Question 2:

What is an SKU (Stock Keeping Unit)?

• Product’s identification number given by manufacturer. (Correct)
• Products number defined by Supplier. (Incorrect)
• Products number that generates when consumer orders a product. (Incorrect)

Question 3:

All activities are the part of Warehouse Management System Except:

• Inventory Management (Incorrect)
• Order Management (Incorrect)
• Reporting & Analytics (Incorrect)
• Role Play (Correct)

Question 4:

What is the difference between Warehouse Management & Inventory Management?

Feedback: Warehouse management solutions provide a more holistic framework that covers all facets of operating and developing business warehouse systems, while inventory management takes a simple approach to manage stock volumes.

Question 5:

Crossdocking is the process of moving merchandise from the receiving dock to shipping dock for shipping without placing it first into storage locations.

• True (Correct)
• False

[Return to activity].

Check Your Understanding: Demand Planning, Inventory Management & Control

Question 1:

Demand Planning is important because it helps in forecasting demand and taking supply decisions accordingly.

• True (Correct)
• False

Question 2:

Value Chain Visibility makes value chain transparent and helps suppliers to know what your customers want.

• True (Correct)
• False

Question 3:

What is the difference between Inventory and Stock? Fill in the blank to show your understanding.

________ is the aggregate list of items, several goods in stock or stock of the product an organization produces for sale and the components that make the sale.

_________ consists of a wide range of goods or materials – stationery, office equipment, plant, machinery, consumables, etc., available for use or sale.

Feedback: Inventory is the aggregate list of items, several goods in stock or stock of the product an organization produces for sale and the components that make the sale.

Stock consists of a wide range of goods or materials – stationery, office equipment, plant, machinery, consumables, etc., available for use or sale.

Question 4:

Inventory Stock outs happen when inventories are more than required and Surplus when inventories are less than required.

• True
• False (Correct)

Question 5:

All are Inventory Control techniques except:

• Vendor Managed Inventory
• Just-In-Time
• ABC Analysis
• Simulation (Correct)

[Return to activity].