DECISION MAKING METHOD RELATING TO OUTSOURCING OF FINISHED GOODS STORAGE ACTIVITIES

Transcription

1 ALS Adanced Logistic Systems DECISION MAING METHOD RELATING TO OUTSOURCING OF FINISHED GOODS STORAGE ACTIVITIES Péter Tamás, György oács, Béla Illés Uniersity of Misolc, Department of Materials Handling and Logistics Abstract: In this study we elaborated ariations for warehouse enlargement possibilities. Logistics indicators were determined which hae effect on ealuation of warehousing actiities. The calculated alues were normalized and transformed for easier handling. The most effectie ariation can be defined by the application of multi objectie optimization. The elaborated procedure can be also suitable for selection of best alternatie of main ariations. eywords: Outsourcing, decision maing method, warehouse. Introduction Number of product types required by customers is increasing which has influence on the capacity demand of finished good storage at manufacturers. Due to the ariety of product structure minimum stoc leel of lot of components should be proided to fulfil the customers demands. The shorter ordering lead times as a ery important competitie factor can generate the high number of consumer orders. Because of the increasing of the finished goods storage stoc leel in most of cases the existing storage capacity is not enough. We can determine some solution alternaties for the solution of this problem. Main ariations can be the followings: main ariation I. : increasing of storage capacity of the central warehouse (by reorganization of the existing storage system, or increase of the warehouse capacity), main ariation II. : renting of an new distribution warehouse beside the existing central warehouse, main ariation III. : renting of a higher capacity distribution warehouse (which storage capacity is higher than the existing warehouse), instead of the existing central warehouse. 2. Main ariations for finished goods storage capacity enlargement We defined three possible main ariations introduced in chapter. for elimination of storage capacity lac of finished products. One central warehouse and one central warehouse with more distribution warehouses are taen into consideration in case of main alternaties.

2 Adanced Logistic Systems Vol In case of a gien distribution system we suppose that: the distribution warehouses if these exist hae optimal formation, so the capacity can not be improed and the customer supply is not possible to complete from better place, there are full and released loading units (LU) stored in the locations of the analyzed warehouse system, loading units should be homogenous in the storage locations. Alternatie I.: Increasing of storage capacity of the central warehouse In this case the elimination of the storage capacity lac can be realized by capacity growing of the central warehouse: at the alternatie /a. the customer can be supplied from the enlarged central warehouse, at the alternatie /b. the customer supply is completed generally from distribution warehouses, but in some cases (e.g. lac of product olume): o from central warehouse, o from other rented distribution warehouse. Notation T : Manufacturer : Central warehouse E : Distribution warehouse V : Customer γ V T T V E E z E V V a) Enlarged central warehouse b) Enlarged central warehouse with more distribution warehouses Figure. Alternatie II.: Renting of a new distribution warehouse beside the existing central warehouse In the case of main ariation II. the elimination of the storage capacity lac is realized by the application of a new distribution warehouse. At the alternatie /a. the customer supply is generally completed from central warehouse and one of distribution warehouses, but in some cases (e.g. lac of product olume): o the customer is supplied from the distribution warehouse, who originally supplied from the central warehouse,

3 22 o the customer is supplied from the central warehouse, who originally supplied from the distribution warehouse. at the alternatie /b. the customer supply is completed generally from distribution warehouses, but in some cases (e.g. lac of product olume): o from central warehouse, o from other rented distribution warehouse. E V T T V E E z E V E z + + V V a) Application of a new distribution warehouse b) Application of more distribution warehouses Figure 2. Alternatie III.: Renting of a higher capacity distribution warehouse instead of the existing central warehouse In this case the central warehouse should be eliminated, renting of a higher capacity distribution warehouse will complete the fulfilment of a higher storage capacity demand. In extreme cases it can be occurred that the nearby distribution warehouse(s) also will be eliminated. V V T ER T ER E E z E V V a) Renting of a new higher distribution b) Renting of a new higher distribution warehouse instead of the central warehouse warehouse and more distribution warehouses Figure 3.

4 Adanced Logistic Systems Vol The supply of customers will be completed similarly than in the main alternatie I., but the different is only that a higher distribution warehouse will receie the tass of the central warehouse. 3. Determination of olume of finished goods storage capacity enlargement in case of the main ariations Margin of storage capacity of the existing warehouse system and the forecasts relating to the future stoc leels should be nown for the determination of olume of capacity enlargement. In case of main ariations I.-II. The olume of capacity enlargement can be defined based on the following equation: where n bő = ij i j = / + j nö r C Max q C Q C [LU] () - q : quantity of j th product stored at the i th day [piece], ij - C : quantity of the j th products located on a loading unit [piece/lu], j - Q : forecasted capacity enlargement [LU], nö - C : actual storage capacity of the central warehouse [LU], r - i: days of analyzed term [day], - j: number of stored products [piece], - : identification of main ariation I. or II. In case of main ariation III. Enlargement of the central warehouse can be aoided by the application of this ariation, which is ery adantageous because of decrease of the inestment cost and we can use arising area for other tass. The required capacity can be defined by equation 2.. In extreme cases it can be occurred that the nearby distribution warehouse(es) also will be eliminated. Lower stoc leel and lower specific warehousing cost can be realised. n bő C = Max / q C Q ij j + (2) nö i c Θ j= where - c: storages to be merged, - Θ : storages to be merged in case of th main ariation, - : refers to main ariation III.. 4. Logistics indicators for ealuation of warehouse enlargement alternaties Authors followed the systematic approach during the determination of logistics indicators. In other words we had to examine such indicators which hae influence on the total costs of the

5 24 distribution system, e.g. storage and transportation costs directly or indirectly. In addition the efficiency and the serice leel (subjectie factor) were also important part of the ealuation that represents the efficient operation of the system. 4.. Material flow wor Supply of costumer can be completed from different warehouses in case of indiidual main ariations. Thus on purpose to compare the alternaties we hae to tae into consideration where it is possible the material flow wor of the partial distribution system (for example in case of central warehouse, rented warehouse, newly rented warehouse, etc.). We suppose that the material flow wor is proportional to the cost of transportation. where: W = SpurQ L [t. m] (3) T Q : the matrix which describes the quantity of products to be transported from the gien warehouses in case of th main ariation [LU], T L : length of material flow routes of the products to be transported in case of th main ariation [m] Specific storage cost (cost per loading unit) In case of eery single main ariation f refers to the specific storage cost per unit loads. where: f = ( + B P)/ q [EUR\LU] (4) i : operation cost of warehouses in case of th B : annual amortization of the inestment in case of th main ariation [EUR], main ariation [EUR], P : annual surplus returns comes from the utilization of arising free area [EUR], q : the product olume transported in the examined time period [LU]. i 4.3. Efficiency of order picing, loading in and loading out actiities Efficiency parameters are important indicators of warehousing processes, because a higher efficiency can result better ability of deliery or lower stoc leel. Efficiency of order picing actiity can be defined by the following equation: where: Q =ψ 60 d [LU /Hour] (5) T ψ : factor for loss of time caused by disturbance of parallel order picing processes in case of th main ariation, T : aerage cycle time of order picing process in case of th main ariation, d : number of parallel order picing processes in case of th main ariation,

6 Adanced Logistic Systems Vol : related to order picing actiity. Efficiency of loading in and loading out actiities can be described similar to the before mentioned equation Standard of serice Standard of serice is a subjectie indicator, it is a general impression about the examined ariation (e.g.: deelopment leel of the applied information system, conditions of equipments, etc.). Volume of scoring of it is from to 0 points. 5. Description of decision maing method The aim is to achiee the highest alue of one of logistics indicators introduced in chapter 4. (e.g. standard of serice). On the other hand there are some indicators which lowest alues are more faourable (specific storage cost; material flow wor; efficiency of order picing, loading in and loading out). By application of multi objectie programming we can tae components must be maximized or minimized into consideration at the same time. The objectie function components should be normalized and transformed to use the method. Normalization of objectie function components to be minimized:. step: we determine the aerage alue of logistics indicators to be minimized; 2. step: differences between the minimum alue and the aerage alue as well as the maximum alue and aerage alue will be diided up to 5-5 interals; 3. step: we hae to score the alues of examined ariations from to 0 by the help of earlier defined scale; if the alue of examined component is lower the alue of objectie function will be more adantageous. Normalization of objectie function components to be maximized:. step: we determine the aerage of logistics indicators to be maximized; 2. step: differences between the minimum alue and the aerage alue as well as the maximum alue and aerage alue will be diided up to 5-5 interals; 3. step: we hae to score the alues of examined ariations from to 0 points by the help of earlier defined scale, 4. step: transformation of objectie functions to be maximized should be completed on behalf of easier handling (the gien points should be subtracted from 0, so the objectie function components to be maximized will be transformed to objectie function components to be minimized); After this conersion the aim is to achiee the minimal alue of the components to be originally maximized. Objectie function used to obtain the optimal alue The objectie function is described by the equation 6.. p { * } 0 δ l l j X = Min δ Y l = p δ = (6) j j =

7 26 where δ : weight of a gien objectie function component, l Y : alue of the l th objectie function component in case of th main ariation, l l: analyzed objectie function component. The most effectie ariation can be defined by the application of aboe mentioned multi objectie optimization method. 6. Summary In this study we elaborated ariations for warehouse enlargement possibilities. Logistics indicators were determined which hae effect on ealuation of warehousing actiities. The calculated alues were normalized and transformed for easier handling. The most effectie ariation can be defined by the application of multi objectie optimization. The elaborated procedure can be also suitable for selection of best alternatie of main ariations. References [.] CSELÉNYI, J., ILLÉS, B.: Logisztiai rendszere I. Tanöny, Misolci Egyetemi iadó, [2.] CSELÉNYI J., ILLÉS, B.: Anyagáramlási rendszere terezése és irányítása. Tanöny, Misolci Egyetemi iadó, [3.] CSELÉNYI J., ILLÉS B., 2006.: Anyagmozgatás-Logisztia, Tudomány a gyaorlatban. Transpac folyóirat álogatott tanulmányai, Misolci Egyetemi iadó, [4.] TAMÁS, P., CSELÉNYI, J. : Termelő állalato észárú ratározásána teljes-, illete részleges outsourcingba adására onatozó döntési modell és módszer ismertetése, Dotoranduszo Fóruma, Misolc, 2007