MATERIALS HANDLING SYSTEM DESIGN - Environmentally Conscious Materials Handling - page 24

8. Each MH equipment selected must perform at least one operation:
n

H

H P(i) S(ip)

X ijph he ≥ D e ∀ e.

(10)

i = 1 h = 1 h p = 1 s = 1 j ∈ J ips

= 1

9. The MH equipment capacity cannot be exceeded:
n

H

P(i) S(ip)

H

d i X ijph he ≥ D e ∀ e. (11)

i = 1 h = 1 h p = 1 s = 1 j ∈ J ips

= 1

6 WAREHOUSING

Many manufacturing and distribution companies maintain large warehouses to
store in-process inventories or components received from an external supplier.
They are involved in various stages of the sourcing, production, and distribution
of goods, from raw materials through the finished goods. The true value of ware-
housing lies in having the right product in the right place at the right time. Thus,
warehousing provides the time-and-place utility necessary for a company and is
often one of the most costly elements. Therefore, its successful management is
critical.

6.1 Just-in-Time (JIT) Manufacturing

It has been argued that warehousing is a time-consuming and non-value-adding
activity. Because additional paperwork and time are required to store items in
storage spaces and retrieve them later when needed, the JIT manufacturing phi-
losophy suggests that one should do away with any kind of temporary storage
and maintain a pull strategy in which items are produced only as and when they
are required. That is, they should be produced at a certain stage of manufacturing,
only if they are required at the next stage.
JIT philosophy requires that the same approach be taken toward components
received from suppliers. The supplier is considered as another (previous) stage
in manufacturing. However, in practice, because the demand is continuous, that
means that goods need to be always pulled through the supply chain to respond
to demand quickly. The handling of returned goods is becoming increasingly
important (e.g., Internet shopping may increase the handling of returned goods),
and due to the uncertainty inherent in the supply chain, it is not possible to
completely do away with temporary storage.

6.2 Warehouse Functions

Every warehouse should be designed to meet the specific requirements of the
supply chain of which it is a part. In many cases, the need to provide better