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Agenda:
Define Consolidation Warehousing How can it be used in your organization? Nuts and Bolts How it Works Real-World Example Exercise
How it Works:
1.Customer places several small orders from multiple manufacturers in the same area
How it Works
2. Several Less-than-truckloads (LTL) of product from manufacturers in the same area arrive at the consolidation warehouse
How it Works
3. The 3PL strategically consolidates these small orders from multiple manufacturers into one full Truck Load (TL) headed to the customer using tactical transportation modeling tools
How it Works
Tactical Transportation Modeling Tools
Input = Customer and purchase order date requirements Look to minimize cost by selecting:
Most appropriate mode of transportation Most appropriate carrier within that mode of transportation
How it Works
4. Customer receives product orders from various manufactures in one transaction
-As load size increases, shared transportation costs among manufactures decreases
Allows manufactures to focus on their core competencies Lower product costs for customers Lower inventory levels required
Takes immediate control of product transportation out of the manufacturers hands Requires collaboration among suppliers, customers and carriers
May be hard to coordinate
Truck shortage
Shipping LTLs became very costly
An Exercise
Summary
Consolidation Warehousing = pulling together small shipments from a close geographical area and combining them to make larger, more economical, shipments to the customer
Used to minimize transportation costs and maximize efficiency Beneficial for manufacturers and retailers Applicable across many industries
Readings list
Bozarth, Cecil C., Handfield, Robert B. Introduction to Operations and Supply Chain Management. Pearson Prentice Hall, United States of America, 2005.
Frazelle, Edward H. Supply Chain Strategy. Blacklick, OH, USA: McGraw-Hill Education Group, 2001. p 228. http://site.ebrary.com/lib/byuprovo/Doc?id=10041412&ppg=240
Chill Challenge. Food Logistics Age. July 2005. Cygnus Business Media Inc. US Logistics 2005. Transport Intelligence Ltd. June 2005 USL0506. Warehousing Education and Research Council (WERC): www.werc.org