- Pages: 25
- Word count: 6160
- Category: Management
A limited time offer! Get a custom sample essay written according to your requirements urgent 3h delivery guaranteedOrder Now
a) The Warehouse Functions
The warehouse are a vital part of industrial or business concern, public and private undertaking, etc, and it must be designed to suit the particular needs of the organization concern. There is therefore no standard system, which can be universally recommended or applied, but of course of time, certain principle and practices of more or less general applications have been evolved.
The warehouses in most organization is an area in which all kind of materials needed for production, distribution, maintenance, packaging etc, are warehoused, received and issued. The warehouses and warehouse functions are therefore basically concerned with holding of stocks. However as will be evident later, warehouses and warehouse management covers great deal more than just these aspects include the following activities.
• Holding, control and issuing of stocks
• Control of all warehouse or warehouses, stockyard and outside storage units
• Material handling functions
• Quality control activity
• Training of warehouse and warehouse staff
• Clerical administration of warehouse and warehouses operations
• Security of warehouse and warehouses
b) Basic Functions of Warehouse
Modern warehouses or warehouse has a wide variety of functions to perform efficiently. The manner in which the store and warehouse management carries out these tasks will be reflected in the overall efficiency of the organization. The primary objective may be regarded as on of providing service to the operating functions – all other warehouses and warehouse functions are subordinate to this main responsibility although they have they own relative importance.
The functions includes:-
• To supply all materials and related services to ensure continuation of the operations. The flow must be balanced. • To warehouse, control and issue all work in progress and part completed items or products. • To warehouse, control and issue all tools, equipment and spare parts needed by the operations of the organization. • To receive, warehouse, control and utilize all scrap and excess materials produced or manufactured by the organization. • To ensure adequate health and safety precautions are taken in relation to the whole warehouses and warehouse functions. • To control all training and staff development within warehouses and warehouse area. c) Type of Materials Held
The following is generalized list of typical items or products that are commonly found in a medium to large size warehouses or warehouse productive system:-
• Raw materials
• Component parts
• Packaging materials
• Spare parts
• Tools, gauge 7 jigs
• Work in progress
• Finished goods
• Maintenance materials
However, the range, value and the complexity of the items held by any particular warehouses or warehouse will depend upon the size and the complexity of the operations involved. Different type of organizations have different type of items or products in stocks e.g. :-
A PRODUCTION OPERATION will have raw materials, component parts, work in progress, and packaging and associated materials.
A DISTRIBUTION OPERATION will have finished goods, component parts, part competed work and sales and marketing support materials.
AN ENGINEERING OPERATION will have spare parts, tools, equipment and cleaning and servicing materials or maintenance materials.
Because of this wide variation in the kind of items or products found in warehouses or warehouse, storekeeper or warehouse supervisor need to have a wide working knowledge or experience of a great number of materials types and operations.
d) Duties and Responsibilities of warehouse and warehouses Management.
There is a wide range and responsibilities that warehouse and warehouses management has to perform at various stages of the warehouse and warehouses operations. All are very important to the overall efficiency of the organizations add its objectives :-
• ECONOMY: One of the basic duties of warehouses and warehouse is to ensure that all operations within the warehouses and warehouse system are perform as efficiency and is economically as possible. The concept of economic level of stock is part of this responsibility. This duty is to ensure minimum costs should be clear to every member of the warehouse and warehouses team. • STOCK CONTROL: It is the responsibility of warehouses & warehouse management to ensure that the process of stock control is performed within the warehouses and warehouse section. The warehouses and warehouse management must ensure that the basic aims of stock control are achieved. Warehouses must analyze the information concerning production, sales and distribution needed to maintain the stock control system. • STOCK RECORDS: It is the responsibility of warehouses and warehouse management to ensure that adequate and up to date stock records are maintained for every items held in stock, whether on site or any other locations within the stock control system.
These records must provide the kind of information required to control and maintain the levels of stock established, i. e. level of stock, order levels, code number, supplier’ s reference, etc. • STOCK TAKING AND CHECKING: The warehouses or warehouse manager shall be responsible for organizing, supervising and collating all stocks checks carried out by the organization. He or she should be required to formulate counting sheets, allocate staffs, check results, investigate discrepancies and produce final figures for the use in the final accounts. • STORAGE OF STOCKS: It is one of the basic duties of warehouse and warehouses to unload and warehouse all goods delivered to the warehouse. Storage of materials entails the correct location of goods in connection of with suppliers’ instructions, and requires skills and knowledge on the part of warehouses and warehouse staff, baring in mind that some materials needed particular conditions of storage, e.g. must be kept dry, etc. it is the duty of warehouses to ensure that goods do not suffer damage or deterioration because of inefficiency storage.
• IDENTIFICATION AND LOCATION OF STOCKS: It is the responsibility of warehouses and warehouse management to formulate and update a system of warehouse coding, so as to allow efficient identification location of all goods or products and services held within the warehouse operations. It is also the duty of warehouses and warehouse to ensure that, if the item required is not available, then a suitable alternative is commended (where one exists) • ISSUES AND DESPATCH: It is the duty of warehouses and warehouse to ensure that goods and services required from the operations are issued as and when required, bearing in mind the need for authorization and strict clerical control of all issues of stocks. The issue procedures should be smooth and efficient. It is often the issue of stock procedures that determines the status that determines the status of warehouses thought the whole organization.
• INSPECTION: It is the duty of the warehouses and warehouse to inspect and check all the deliveries made to the warehouse or warehouses, these checks to include such factors as quantity, type, quality, damage and shortage. In many cases supplier will not accept responsibility for damage of goods unless they are reported within a specified number of days of delivery. Information arising from such inspection has to be passed to purchasing department. • SECURITY OF WAREHOUSE AND WAREHOUSES: It is the duty of the warehouse and warehouses manager to ensure that security is maintain at all time within the warehouse building and stockyard. The security elements of the warehouse manager’s job cover not only theft, but also damage, fire and spillage.
It is also included ensuring that doors, windows, and stockyards fencing are secure. • MATERIAL HANDLING: One of the basic jobs of any warehouses team is the handling of all materials, quickly and safely. Moving goods from the warehouses to the factory or warehouse is very important duty of warehouse and warehouses manager and his subordinates. • RECEIPT OF STOCK: It is the duty of the storekeeper or warehouse supervisor to receive and handle all items delivered to warehouses or warehouse to check the documentation (delivery notes, packing notes, etc) and to inform purchasing and warehouses and warehouse management of all goods received.
e) Organizing the Warehouse Function
In any enterprise it is desirable that appropriate authority, should issue a written directive covering warehouse policy and organization, clearly defining the limits within which the function operates and conveying authority to act within these limits. A directive is usually supplemented by departmental instructions regarding details of systems and operations and these may in turn be instructions together with specimen form and list of duties of personnel concerned.
In small organization, the warehouses functions may be operated from a single office run by one storekeeper but in a large organization it is necessary to apportion the various duties to separate sections e.g.
• Identification or vocabulary section
• Standardization section
• Warehouse section
• Stockyard section
• Stock control section
• Record section
• Accounts section
The importance of the warehouses functions is being increasingly recognized and in large concern overseas, the man in charge of it occupies a senior supervisory position of managerial status being described as the warehouses superintendent or warehouse officer.
In an industrial field particularly, the specialization of production an increasing complexity of modern products and machinery requires a high standard of organization and performance in warehouses work, and the range of materials, components and spares is continually expanding. Warehouses and purchasing are large interdependent and any inefficiency or lack of cooperation on either side is soon reflected in other.
There are occasionally special circumstances in industry which would justify a split in control but more progressive concern show an increasing tendency to set up a completed integrated purchasing and warehouse management or commonly known as “Logistics” or “Material Management” responsible for all the activities bringing the work under on responsible department manage. Such arrange has advantages, some of which are:-
i. One department head only reports to the line management and his responsibility for the price and availability of material is clear and an avoidable. ii. A single department control eliminates friction and ensures maximum cooperation of each section. iii. It is easier to give more comprehensive training to staff and improves promotion prospects iv. It avoids duplication of records and activities
f) Relationship with other Departments with the organization or business units.
The warehouse or warehouses, by virtual of its functions or activities must be seen as providing a service to rest the organization it serves. The standard of service will affect the overall efficiency of the organization – its relationship to other major departments is of paramount important. Although, warehouses is providing the service, it needs certain amount of participation and information from the other major department to ensure that the service provided is efficient and meets the organization needs in every sense.
• PRODUCTION: is obviously one of the most important users. Warehouse or warehouses management has too ensure that all materials needed for continuation of production are available as and when required. The production management part in this relationship is to ensure that adequate warning is given to warehouse or warehouses about the needed of materials together with the information about the type, quantity and quality required future demands and also the performance of materials already issued. • DISTRIBUTION: is very important when warehouse or warehouses management has control of finished stock or goods – to be distributed to transit depots, wholesalers depots or warehouses and throughout the organization’s marketing channels or distributions networks. Warehouse management has to ensure that adequate stocks are available in correct quantities and marshaled ready for loading onto the method of transport employed. Distribution is responsible for supplying up to date information about the needs and wants of the distribution system and must make every effort to give warehouse or warehouses management adequate notice of loading quantities, destinations, types and marshalling points to ensure efficient services.
• ENGINEERING DEPARTMENT: the engineers are responsible for ensuring the plant and machinery operated bye the organization is kept in working order and is performing at is designated efficiency. Warehouses management has to ensure that all the necessary spare parts, tools and equipment are in stock or easily available from the suppliers stock. The engineering department will often work to an engineering schedule ( a timetable of engineering activities covering 2 – 3 months ). A copy of this schedule must be given to the warehouse or warehouses manager so that stocks can be checked and items brought in that will be needed during the time period covered by schedule. This will ensure that the item required bye the engineers will be available, as and when they are required, thus avoiding the situation of stripping down machines being left for weeks awaiting spare parts.
QUALITY CONTROL AND INSPECTION: quality control is the department which is responsible for administrating the standards set by the organization in relation to all the materials both used and produced by the organization. Inspection is very important process. The warehouses or warehouse management has to ensure that all deliveries of goods are held a side checked and passed by quality control, and must set up a system for informing quality control that the item have been delivered. All items checked and subsequently rejected have to be held by the warehouse or warehouses. During this period warehouse have to be ensure that the stock labeled “for rejection” is not allowed to become part of the acceptable working or sound stock. Problems of rejected stock being used in production can be very costly in terms of loss of output and reputation.
• PURCHASING DEPARTMENT: the links between the warehouses and purchasing in term of their activities have always been very close. In many cases these two departments are united under the heading of “Supply Management”. Where two separate operations do exist, the relationship between them is vital. Purchasing is responsible for buying all the goods and services needed by the organization. Purchasing is relies on warehouses for a wide variety of supportive activities. Purchasing need warehouse to keep it inform about the level of stock at any given time, and it is up to warehouse to keep purchasing up to at any given time, and it is up to warehouse to keep purchasing up to date as to the total stock situation. This will enable purchasing to ensure that stocks are procured and that a balance and economic flow of goods and services is provided.
Purchasing, because of its physical separation from the warehouses area and the factory floor relies on warehouses for up to date and accurate information, based on factory and user’s feedback to warehouse supervisor, about performance of stock can be very important in ensuring maximum efficiency of the purchasing operations and its evaluation of the material purchased.
Warehouses must also remember that it is the purchasing department, which is responsible for the buying of goods and materials and all that it involved with suppliers, unless directed by purchasing department. It can cause problem if warehouses management makes decisions regarding the delivery, quality, progressing and selection of goods without the full background information that purchasing department will have. The organization that employs the “Supply Management” concept or approach to its warehouses and purchasing operations will tend to suffer less from this kind of problems.
• SALES & MARKETING DEPARTMENT: The relationship between warehouses and sales department is very important one. Warehouse is responsible for ensuring that all stocks held for sales are warehoused issued and controlled as efficiently as possible. The sales staff will often rely on warehouses to ensure that marshalling of stock is carried out and that the process of stocking up in relation to sales promotion and other marketing activities is carried out effectively. Warehouses may also be responsible for control of spare parts and accessories used in connection with finish product, which may have to be supplied as and when required by the sales department. Warehouses management must also be aware of the forecast about the future sales, so as to be able to make plans in term of stock levels, storage space, outside warehousing and staff levels.
• MAINTENANCE DEPARTMENT: Warehouses has to ensure that all the materials, tools, spare parts and equipment needed by the maintenance department are in stock as and when required. This will include the general maintenance items, i.e. cleaning materials, paints, carpentry tools, etc., as well as the more specialized items used in ventilation system, heating system and other elements for operations. To ensure that these items are in stock. Warehouses must be aware of all long and short-term maintenance plans, as produced by maintenance department. In some cases, specialized materials will have to be ordered in advance of need, and warehouse management will therefore need to have a complete knowledge of all plans, dates, requirements and possible consequences of maintenance.
• GENERAL ACCOUNTING DEPARMENT: The relationship between warehouses and accounts covers several very important areas. An account relies warehouses for information concerning the value of stock held, and about items damaged and therefore to be written off the assets list. The accounts department will often ask the warehouse to confirm the receipt of goods as invoiced, especially in cases of doubt or query. Warehouses also provides a continues supply of data regarding the use of stock in operations and therefore aids the accounts department in its functions of cost allocation to a particular batches or jobs as carried out by the operations functions.
1. WAREHOUSES, WAREHOUSES AND STOCKYARD DESIGN & LAYOUT
1. There are three probable warehouse/stockyard situations which will involve design and layout considerations
• An assessment of an existing layout
• A survey of a building or area to decide if it is suitable for warehouse or stockyard
• The design, planning and commissioning of a new warehouse / warehouse
2. In any of this situation the basic principles to be followed are the same; when, however, a new building project is involved there are special additional procedure, which will be considered in a later chapter.
Warehouse, Warehouse Design & Layout – Basic Principle
3. There are two basic principle concerning warehouses design and layout which must receive maximum consideration:
• The operations in a warehouse or warehouses must be sited so that work flows directly from one operations to another in a straight line
• The maximum used for storage must be made of cubic space and the minimum used for essential functions ( for example, receipt, storekeeping, issues)
4. Any warehouse or warehouse which is laid out with these principles in mind will be much more efficient that one in which there is no flow, or which is wasting considerable areas of the stores or warehouse by not making maximum use of cubic space. The two basic principles must be remembered constantly, but in addition there era a number of factors, which must also be taken in account.
Warehouses Design and Lay Factor
5. There factors can be used, combine with the basic principles, in the following ways:
• To judge the efficiency of the existing design and layout
• To assess the suitability as a warehouse of an existing building
• A requirements for a new warehouses building
6. Factors – The Task of the Building or Are
• SIZE, how big is it? How long, how broad, how high?
• Method of construction (Building only). Bricks? Concrete? Metal? Timber? Open shelter roofed by canvas, reed, and thatch?
• Access. Can be the building / areas only be approached by road or is there rail access as well? Is there outside hard standing? Where does the road or railway line?
• Lightning, Ventilation (Building only). Is the lightning adequate? Is there good natural light? Is it being artificial lightning? If a stockyard, could it operated at night? Is the building ventilated? Naturally, by ventilation openings? Artificially by fans? Both? Or neither? What is the afternoon temperature? Can sunlight be shaded?
• Doors. How wide? How high? Position in the building?
• Obstacles. Pillars supporting the roof? Roof beams? Existing equipment, conveyers? Cranes?
• Floor. Concrete? Metal? Timber? Earth? What is the design and strength? How many lbs per sq ft or kg per m2?
7. Factor – The Task of the Building or Area
• What is being warehoused or what is to be warehoused?
o (Timber? Metal? Piece Parts? Finished Goods?)
• How much activity? How many receipts? How many issues?
8. Factor – The Storage Methods in Use or to be used
• What are the characteristics of the items warehoused? Are they bulky? Are they awkward shapes? Are they heavy? Are they light? Are they difficult to handle?
• Are the item warehoused a fire risk? Is there a hazard in storing them, for example chemical?
• Are they a security risk? Is there explosive? Ammunition? Weapons? Precious metals?
• How much maintenance wills the warehouses requires? How often must they be inspected? How often repaired, maintained, repackaged?
• What manpower is or would be required? What manpower is or would be available?
9. Factor – Material Handling
• What mechanical handling equipment (MHE) is required?
• What is currently available? How is it used? How could it be used?
• What gangways are required? What fuel or power sources?
10. Factor – Fire & Security
• Fire – how great is the risk? What fire precautions must be taken?
• Security – What security orders must be instituted? How is theft is detected, prevented?
• What effect will these various precautions and safeguards have on the layout?
11. Factors – Welfare
Provision must be made and space allocated for:-
• First Aid Facilities
• Rest Rooms
12. Factors – Flexibility
A vital question:-
• Storage task and requirements tend to change. Can the existing or proposed layout be adjusted quickly to cope with change?
A firm grasps of the principles and factors governing warehouse and stockyard design and planning is essential if correct judgments are to be made and advice given on either existing or proposed layouts. If the design and planning is not carried out properly the result will be:-
• Poor service to customer
• Poor control of the warehouses & warehouse operations
• Costly administration
• Duplication inability to react to unforeseen circumstances
Factors – The factors have been written as a series of questions. They will be very useful if used as a checklist when inspecting an existing or suggested warehouse location and will form the basis of any reports to be written afterwards.
Although many different kinds of warehouses, storeroom and stockyards exists. Many of them in the same company, it must be remembered that the factors and principles apply to them all.
2. MATERIALS HANDLING EQUIPMENT (MHE)
There is a bewildering variety of handling aids available, from sack barrow to stacker crane or powered conveyors. It is also highly competitive market in which buyer is in a strong position to there is no recent why the equipment to meet the requirement exactly cannot be acquired at an advantageous price.
The modern concept is to start a warehouse from starch, using the system approach, linking the building, storage aids and MHE into package. But there are many storage aids and MHE into a package. But there are many warehouses, which were set up some years ago and have been gradually modernized. These are the warehouses that have found that increases in efficiency and productivity are possible by the use of some form of mechanical handling aids or assistance.
One of the greatest risks is that sometimes organizations are persuaded to buy equipment, which is not appropriate for the task or functions. Mangers involved must have a clear understanding of the various types of equipment and the characteristics of each.
Equipment can be divided broadly into hand operated and power operated types:
1. Hand Operated MHE
• Hand pallet and still age trucks – lateral movement of pallets and still ages. Capacities up to 2000 kegs or 2 tones
• Hand stacking trucks – lifting device often manually operated and useful when frequency of lifting operations not very great. Capacity of up to 1 tone or 1000kgs.
• Monorails – “I” sections rails with small trolleys bearing suspended loads.
2Power Operated MHE
Motive power is generally diesel or battery electric, although LP gas and mains electricity also exists. Lateral Movement
Powered pallet and still age trucks – powered version of the hand-operated types. Variations so that operators can sit or stand and order picking versions. Capacity up to about 2 tones. Battery electricity tractors – tractors and trailers most efficient when loads to be moved laterally over about 100m. Towing capacity up to 20 – 30 tones generally available but up to 100 tones and beyond for special requirements. Battery electric or diesel.
2. Lifting & Stacking
Counter balance Fork Lift Trucks
The weight of the load carried on the fork lift at the front is balanced by the weight of the truck behind the front wheels. Pedestrian or rider operated. Available in 3 or 4 wheels versions in capacities from 500kgs to 40 tones. Battery electric, diesel, LPG or gasoline power, although battery electric stops after about 4 tones capacities the size of the battery required begins to make the truck prohibitively large. A 2 tones capacity truck needs an operating gangway of 4m and can obtained with lift heights of at least 6m.
Narrow Aisle Trucks
Reach Truck – in a counter balance truck the mast and fork are fixed and forward movement involves the whole truck however, the mast only, supporting the forks, moves forward and having picked up the loads retracts within the wheelbase of the truck. This has the effect of greatly reducing the counterbalance requirements and therefore the overall length. Reach trucks, with capacity up to 2 tones, are either stand on or rider operated with operator standing or seated side on to reduced overall length. Lift heights are the order of 6m and gangway requirement for 2 tones machine would be about 2.3m. Reach trucks are invariably battery powered and are only suitable for operations within the warehouse.
Side loading fork lift truck – the mast and forks are built into the centre of a four wheel vehicle on one side. The mast moves forward, at the right angles to the truck, picks up the load and retracts within the wheelbase. Particularly useful for loads, timber, metal, etc. Invariably engine powered with capacity up to 10 tones.
Turret Truck – fitted with rotating head so that it can enter a narrow aisle of 1.7m and swivel the load through a 90degree from the direction of travel for insertion or withdrawal from the rack. Used in conjunction with high raise pallet racking with lift heights in excess of 11m. requires extremely smooth and level floor (1mm in 750m) and guide rails in aisle although wire guidance development will remove the need for guide rails. Also available with rotating mast rather than rotating head. Invariably battery powered. Some developments are reducing the aisle width too less than1m. There must be enormous pressure on space to justify the expenditure required for the type of truck.
Stacker Crane – not a fork lift truck but in large warehouse or warehouse economic considerations may lead to adoption of stacking crane. These operation from and over head fixed track set above the aisles. Suspended from these track runs a carriage with a driver cab below, which is post reaching practically to ground level. Forks travel up and down this post and also rotate about it. Pallets can thus be raised or lowered and inserted and withdrawn from the racks. The aisle width can be reducing to space required for the maneuver of the post and forks. Installation costs are high and crane is restricted to the fixed route of the track.
There is a range of attachments, which add to the versatility of a forklift truck. For example,
• Rotating forks – facilitating tipping
• Clamp Jaws – oil drums, bales
• Crane beam & hook
• Boom – coils of wire, carpets
• Side shift – manipulating and moving pallets in confined space
Track crane – overhead gantry cranes running on girders Goliath type – tracks at ground level
Mobile crane – they have advantage of not being track bound and therefore more versatile than track crane. Normally they can only be used within a warehouse building or complex. The motors for highways use require special rating.
Moving Bulk Material
Conveyors – there are two main categories, gravity operated and power operated. Gravity operated, both the chute and the roller type have been dealt with under hand operated equipment.
Power driven – the most commonly used type in warehouse is the portable type. This may be fitted with an electronically controlled belt for solids and packages. The belt may be fitted with slates and driving or push bars.
Specialist conveyance methods will be used for powders and liquids.
3. Which MHE to Choose
For most of companies, the acquisition of MHE represents a major purchase and it is therefore important first to select the first type of equipment and then to acquire the right make and the model. The type selection criteria break down into the following representative questions; clearly for given situations there may be more or fewer questions.
Have I a problem?Shortage of space?
Need quicker throughput?
What items?Bulk, detail, liquid, & solid?
Heavy, light, easy & awkward?
What sort of storage?Pallet racking, narrow aisle, very high, block stacking?
How much money available?What options for acquisition?
Operating Costs?Maintenance? Breakdown? Depreciation?
Environment questions?Noise? Fumes? Non-sparking?
Union attitude?Will they change? Is some thing not being suggested?
The decision as to the board type of MHE required having been taken, and say a forklift truck appears to be the answer, what then? Remember that any thing from about $8000 upwards is to be committed first is buying – clearly it should not be undertaken without a specification. Such a specification should be a statement of the functional requirement. For an example, for a fork lift truck the specification should include information on the size and weight of the load, how high it is to be lifted, aisle, width, etc.
Generally speaking the problem resolves itself into selecting the right make and model from a number, all of which will probably satisfy the requirements. It should rarely be necessary to have to accept equipment that falls short of the specifications it some way. That assumes that the specification is realistic and practicable and does not call for something, which cannot be achieved.
A frequently arising situation is that in which the equipment’s have been shortlists, say to three, each of which meets the specification in every particular. Prices vary, how then do you select the winner? In some environments an answer to the problem is simple – lowest prices wins. This is s powerful argument and often marshaled when public money is involved. The danger in this policy is that account is only being taken of the initial price not the cost over the whole of the equipment’s life, which can be, for a fork lift truck in reasonable operating conditions, 10 or 12 years.
Consideration should be given to running costs, forecast breakdowns and their effect, cost of repair, cost of spares, cost of rental of short term replacements. No one pretends that this information is readily available but it should be obtained from other users, servicing organization. Very few companies maintain proper records of MHE usage, servicing and repair although there is usually a wealth of such detail for a vehicle fleet. Perhaps a little more regard should be paid to a piece of equipment possibly costing rather more that the chairman’s Jaguar.
A whole – life-costing exercise will clearly identify the “best buy” which will not always be the one with the lowest purchase price.
The likely methods by which MHE will be acquired are as follow:-
Outright purchase this assumes that cash is immediately available or can be borrowed easily at an acceptable cost. The buyer is strongly placed and ought to be able to take advantage of discounts and special deals, which are offered in what is a highly competitive market. The buyer must make his own arrangement for servicing and repair, there are a number of reputable and capable firms specializing in MHE maintenance – there are also numbers of cowboys.
LeasingAn alternative to outright purchases and permits the spreading of the cost over a number of years. The buyer specifies the exact make, model and type of equipment, which is then purchased by the leasing company and leased for a 3 or 5 years period. At the end of this time the leasing agreement may be extended for a further period at a reduce rate. At the conclusion of the agreement the equipment, depending on the type, may be sold and a major of the proceeds passed to the lessee. It is well worthwhile examining all the options offered by the leasing company in order to secure the most convenient and favorable arrangement to suit the particular circumstances. Under a leasing agreement, the lessee is must make his own arrangement for maintenance and servicing, although sometimes-servicing inspections are included.
RentalThis option is frequency taken up for portable items of MHE when requirement is likely t be of relatively short durations or when there is a need to supplement existing MHE, for example, because of increased seasonal business. The user specifies his requirement in term of a task to be performed rather than a specific make or model; the renting company will make available a piece of equipment which will be capable of performing the specific task. The rental period can be as short as a month or as long as a year and the price will include and agreed level of servicing and maintenance and provision for replacement in the event of breakdown.
RebuildA further option, which exists for a pallet trucks, industrial tractors and some fork lift trucks. Rebuilt equipment will be completed exploded, constituent parts and components checked, some rebuild, some new for old. The finished product is offered with the same specification and usually same warranty as the new product but at about 60% of the new price. This is clearly a cheap way of acquiring particular type of MHE and is often used by the first time buyer. At its best the rebuilt option is cheaper and the average user as an effective as a new product. The life of the truck in normal operating condition will not be disproportion ally less than a new product and it therefore very good value for money. Great caution must however be exercised in the selection of the re-builder and in the definition of “rebuilt”.
Not all the above option are suitable or available for every kind of MHE; rental and rebuilt and some leasing arrangements will tend to be used for the more mobile items, like forklift trucks, tractors, crane etc. some fixed items like conveyors and some storage equipment lend themselves to leasing options.
A considerable amount of money is usually involved and it is well worthwhile examining all available options with care.
Efficient storage and handling can make an enormous contribution to the effectiveness and profitability of the warehouse & warehouse operations. Attention to the concepts outlined in this paper will undoubtedly yield benefits but there is no substitute for a detailed
analysis of the problem followed by careful selection of the correct equipment. Warehouse or Warehouse Managers need to keep abreast of developments in this fast moving yield and to that end should make every effort to attend trade exhibitions and read the relevant technical periodicals and, when necessary, seek the advice of experience consultants.
– Aertsen, F.,, “Contracting out the Physical Distribution Function”, Inter.J.of Phy.Dist. & Log. Man. V.23(1),
– Ballou,R.H., , Business Logistics Management Planning and Control (3rd Ed.), Prentice-Hall, Englewood Cliffs,N.J.,
– Bowersox,D.J. and Closs,D.J., , Logistical Management, McGraw Hill, New York.
– Buxton, G.,, Effective Marketing Logistics, Macmillan, London,
– Lambert,D.M. and Stock,J.R., , Strategic Physical Distribution, Richard D.Irwin, Homewood, III.
– Rand,G.K., , “Methodological Choices in Depot Location Studies”, Oper. Res.Q. V.27(1),
– Rushton,A. and Oxley,J., Handbook of Logistics and Distribution Management, Kogan Page, London
– Internet Articles on warehousing 1999 – 2002