Location factors

16 05 2011

Location factors are the sum of all factors that an enterprise considers when choosing a location, for setting up a new plant, office, warehouse or distribution centre.

Thereby the location factors are decisive responsible for the attractiveness of potential or actually used sites for companies and influence them in their choice of location.

The location factors could be divided into two groups. On the one hand the hard location factors and on the other hand the soft location factors.

Hard location factors are quantifiable and can be involved directly in the balance sheet of a company. They can be used to measure profitability. In some cases the hard location factors are prerequisite for the establishment of a company. For example, the proximity to a sufficiently source of water as a coolant supplier is necessary for a power plant.

Among others the following are hard factors which have to be considered by the decision for a location:

  • Infrastructure
  • Subsidies
  • Taxes
  • Access to resources
  • Lease Costs
  • Labor Costs
  • Customs duties
  • Buying power
  • Market transparency
  • Competitors
  • Market entry barriers
  • Climate etc.

One the other hand soft location cannot be integrated into the accounting of a company, but they are becoming more and more important for choosing a location. Soft factors are among others the following for instance:

  • Research and development partners
  • Political situation
  • Economic climate
  • Residential environment
  • Quality of environment
  • Medical care
  • Education
  • Leisure time facilities etc.

Coming closer to the optimum locations for warehouses there are two main questions to be considered. Firstly how many distribution centers do the company need to serve their customers and how could they minimize the costs of warehousing by finding the optimum location. Therefore have a look on the following video, which handles this problem and analysis the following five cost impacts:

  • Cost of storage
  • Innventory holding cost
  • Linehaul cost
  • Customer delivery costs
  • System cost

As you see the challenge is to find the optimum number of facilities which minimize the total cost curve and still maintains the customer service.

Furthermore some distribution centers or storages have some special requirements to the location. Especially handling hazardous materials needs special locations. For example nuclear waste handling and storage have high requirements to the storage location but also to the transportation and the whole logistics process as you see in the video below:

Sources:

http://www.handelswissen.de/data/themen/Marktpositionierung/Standort/Standortfaktoren/index.php

http://wirtschaftslexikon.gabler.de/Archiv/5808/standortfaktoren-v6.html

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VW Car-Towers: Not just a high bay warehouse

15 05 2011

The two VW car towers, located in Wolfsburg are the highlight of the VW car city. The two fully automated high – bay warehouses are able to store 800 cars and ensure the delivery of an average of 600 cars per day.

But the car towers act not just as a warehouse. They are built to give the customer a special adventure and experience when they receive their new bought cars. They are also build in a very stylish way and illuminated at night as you see below:

As you will see in the following video, also some amazing special light-shows were performed:

The towers have a high of 48 meter and its fully glazed, hot-dipped galvanized steel frame construction allows having a look into the tower from the outside.

A conveyor belt and lift system transports the cars from the close Volkswagen factory to the basement of the towers. From there, they are lifted into their position, the parking lot, and wait for the arrival of the new owners.

To have a better imagination of the inside, the parking lots and the lift system have a look on the following video:

Another video illustrates the processes within the tower from another view:

If the customers want to pick up their new car, a signal from a personal account manager brings the high-bay warehouse in motion. An electric device picks out the car and put it in the center of the tower. From there it is hovered down by a lift. Then the new car is rolling through an underground tunnel in the Customer Center. Here in the finishing area, the number plates are fitted before the customer takes his new car in reception.

Source: http://www.autostadt.de/de/autostadt-erkunden/autotuerme/





Bin location – Organization within the warehouse is everything

11 05 2011

Within a warehouse, thousands of items of various shapes, volumes and types could be stored at once.  In order to use the rare space in a warehouse at the optimum and find specific articles quickly a clear and coordinated storage space allocation is necessary. Without this assumption, a warehouse is not able to operate in an economically and efficient way.

In general there are two different ways of storage space allocation:

  • The fixed storage space allocation
  • Entire free or chaotic storage space allocation

Fixed place for each article:

A very simple way to allocate articles bin locations is to store articles always at the same place.

Characteristic of this fixed storage space allocation is that every class of goods is stored separately. The advantage thereby is that items are found easily. Furthermore articles are also accessible if for instance the warehouse software fails. On the other hand, the utilization of the warehouse’s capacity is low, especially when the warehouse stock is fluctuating.

Another way to allocate the storage areas effectively is to separate them in product groups, for example, to separate them by their access frequency and to define specific areas for each product group.

Articles which are frequently transferred and released to stock should be placed closed to the delivery entrance. On the other hand, items with a large volume per sales unit should be stored away from rolling in and out point in order to keep the required transportation ways for most of the items as small as possible.

Therefore articles could be classified by for instance an ABC – Analysis.

In general ABC analysis divide customers, products, or delivery chains depending on a
certain value like for example sales or consumption into three classes. After that this classes are going to be prioritized.

Regarding logistics an ABC analysis provides information about the allocation of capital to individual goods or article groups in the warehouse. Often a large part of tied capital is spread just over a piece of numerically small number of articles. An ABC analysis clearly points out at which goods should be paid special attention in terms of stock optimization. Therefore the capital commitment and transport- such as packaging cost could be minimized.

The following video introduces you in an easy way to ACB – analysis:

Chaotic organization within the warehouse:

If there isn’t a specified fixed storage space allocation by type of goods within a warehouse, then it is called a free storage space allocation, single-location storage or chaotic storage.

Every single good could be stored on every currently free storage place.  This procedural method aims to exploit the storage room ideal – if possible even when the demand is highly fluctuating.

Because every good is stored in this chaotic storage at a random available storage place, with a large number of storage places, an electronic control and monitoring of storage and removal from storage is required.

This is managed by an electronic data processing system, which instructs an item to be stored automatically a storage place of the required size. The system registers how much of a specific good is stored on which place in the warehouse.

Sources:

http://www.dhl-discoverlogistics.com/cms/de/course/tasks_functions/warehouse/assignment.jsp

http://www.dhl-discoverlogistics.com/cms/de/glossary/buchstabe_a.jsp#abcanalyse





Triple E: The largest, most efficient ship in the world

2 05 2011

Maersk Line, one of the biggest shipping companies in the world, has ordered 10 of the world’s largest, most efficient container vessels from Korea’s DSME shipyard. The vessels will be delivered from 2013 to 2015.

The giant Triple E vessel will be 400 meters long, 59 meters wide and 73 meters tall, and therefore it will be the largest vessel in operation. The vessel will have a capacity of 18,000 TEU. Imagine if all these containers were transported by a train – the train would need to be 110 km long. And if the containers were put on top of each other they would almost reach a high of 47 km. The costs per vessel will be USD 190 million.

The name Triple E of the vessel stands for the three values economy of scale, energy efficiency and environmentally improved.

Economy of scale:

The Triple E vessel is the new benchmark for size in the shipping industry. Its 18,000 twenty-foot container capacity is 16 % greater, which is equivalent to 2,500 TEU, than the parent vessel Emma Mærsk as you see in the following figure:

To get a better imagination of the ships size watch the following video:


Energy efficiency:

A Triple-E class vessel is equipped with a waste heat recovery system. Thanks to this system it’s possible to save up to 10% of the main engine power. This is equal to the average annual electrical consumption of 5,000 European households. Furthermore the vessel is equipped with innovative ‘ultra-long stroke’ engines and an effective shape with specially optimized hull and bow forms in order to improve its energy efficiency.

Environmentally improved:

The Triple E vessel will produce 50% less CO2 emissions than the industry average on the Asia-Europe trade line per container moved. In comparison to Emma Mærsk the ship will reduce CO2 emissions by 20%.

The video below summarizes the characteristics of the Triple E vessel:

If you want to get more information follow the link http://www.worldslargestship.com/





Energy-efficient green warehousing

1 05 2011

Due to rising energy costs and legal requirements warehouses have to be designed and operated in an energy efficient way in order to meet new requirements and remain competitive.

However, on this subject just a few best practice cases are known. Therefore, it seems likely that the energy-efficient storage, the “Green Warehousing”, isn’t really noticed by all the industry and there are a lot of areas to improve.

Therefore let’s have a look on the following video which presents the methods and tools for increasing energy efficiency in warehouses:

Different types of renewable energies are used in order to realize energy-efficient warehouses as you have seen. For example energy-efficient green warehouses are equipped with solar panels on their vast roofs to generate electricity. Furthermore the facilities could be equipped with underground geothermal energy systems in order to provide a very effective cost saving renewable energy for such large buildings.

Moreover a green warehouse should be equipped with plenty of windows to provide natural lighting in order to save electricity. If there is no daylight available common lightning should be replaced with energy efficient lightning like LED’S for example. http://www.ehow.com/video_4754733_build-energyefficient-green-warehouse.html

An example for a high efficient lightning in warehouses is WOW Logistics, an Appleton-based warehousing company. The company replaced all of its high-pressure sodium lighting and mercury vapor lighting with 6,000 fluorescent lighting fixtures in all of its public-owned distribution centers.

The lights are also set on five-minute timers and equipped with photo sensors. This ensures that when a part of the warehouse is in use, it’s lit up appropriately for employees. On the flipside, for those areas not in use, energy is not wasted.

The energy savings resulting from the project is significant: In each distribution center, the new fixtures decrease air pollution and environmental damage by 43 pounds of carbon dioxide, 722,779 grams of sulfur dioxide and 1,676,848 grams of nitrogen oxide each year. http://www.allbusiness.com/energy-utilities/oil-gas-industry-oil-processing/8897441-1.html

As a result the warehouse can save up to 70-80% on energy bills like shown in the video:





Cargo Cap – innovative way of transportation

1 05 2011

As mentioned in my blog Transport facilities the today’s available transport facilities are road, railway, air and water. But some companies try to research alternatives to this common ways of transportation.

One innovative fifth alternative are underground drive-tube-pipelines which are developed by the CargoCap GmbH in order to compete to the common transportation facilities as a fast, reliable, on time, environment-friendly and economically way of transportation and distribution.

Have a look on the picture below which introduces you to the system:

As you see the transports are handled by individuell driven intelligent vehicles, the Caps, through underground tube-pipelines, independent from above-ground traffic jams and weather conditions.

The Caps are designed to accommodate two Euro pallets and can thus be directed through pipes with a diameter of only 2,0 meters.

CargoCap is designed for transportation of freight in city regions in regional terminal areas up to 150 km. The Caps run 24 hours a day in an extensive underground pipeline network and drive to many stations. At the destination one or more caps lock themselves in the station for a automatic loading and unloading as you see in the following picture:

The transports are operated by computerized caps with a capacity of two Euro-pallets with the dimensions of 800 x 1,200 x 1,050 mm. The Euro-pallet is a standardized and proven carrier, therefore their use guarantees an easy implementation of CargoCap into existing supply chains. Through the loading with only two Euro-pallets per Cap a high flexibility of distribution is ensured. If more goods are required to be delivered to a destination, more caps transports the goods in a composite. Flexible, fully automatic loading and unloading make the stock turnover quickly and economically.

Also the construction of the drive-tube-pipeline network is easy, as you see in the picture above. The driving pipes were modified on the basis of low cost, proven propulsion pipes with an inner diameter of 1,600 mm. To install the pipes precise and unnoticed by the population the pipe propulsion procedure is used. This underground construction method is inexpensive, fast and environmentally friendly.

The following video illustrates the whole system of CargoCap:

The benefits of such an underground transportation system are that the Caps are independent, unaffected and uninfluenced by other modes of transport and traffic jams. Therefore a significant reduction in transport time in comparison to truck transportation in city regions results.  The CargoCap system doesn’t affect the environment in terms of noise or exhaust and minimizes the traffic on the road.

http://www.cargocap.de/content/was-ist-cargocap?q=node/27