Supplies management

Supplier management is key for an effective supply chain that is properly optimised and

accountable, find out how Achilles can help you manage your supply chain.

"Suppliers sit at the heart of almost every organisations activities and processes," Peter Smith from
the OFS Portal explained in his paper Why Supplier Management should be central to your
procurement thinking.

Indeed, suppliers touch on every part of a business and to ensure a company can run as it should, it
needs to ensure the seamless flow of goods and products.

Should a supply chain fail, organisations stand to accrue substantial losses. Outsourcing firm
Proxima found that between 2009 and 2011, 69.9 per cent of revenues from 1,954 global businesses
were spent on suppliers, compared to 12.5 per cent on staffing. This average is even higher in the oil
and gas industry, where 76.7 per cent of revenue was spent on suppliers in 2011.

To limit financial, business and reputational risk, it's crucial to properly manage suppliers. Gartner
defines this as a process that "enables organisations to control costs, drive service excellence and
mitigate risks to gain increased value from their vendors throughout the deal life cycle".

However, effectively managing suppliers is a challenge, especially when you're doing it alone.

At Achilles, we know how important it is you have control of your supply chain and we offer an
auditable process covering your suppliers that we manage on your behalf.

We use a single platform and questionnaire for supplier management, streamlining the process for
all parties involved and lowering costs. Our registration, pre-qualification and risk management
model is developed by buyers within specific industry sector communities, making it an effective way
to on-board and manage suppliers.
To get the most from suppliers and hold them to account, it's important to track and measure their
performance.

"That is essential to ensure suppliers meet immediate needs and to enable performance and value
improvement activities to be pursued through the course of the contractual relationship. That
requires the right data of course which must be relevant and usable," Mr Smith explained in his
report.

However, it isn't just data that should form the basis of an effective supplier management policy and
to ensure a supply chain runs smoothly, relationships should be a key area of focus.

Indeed, the human element and a lack of communication can often be why relationships crumble.
Similarly, when a supplier holds multiple contracts within an organisation, there is a risk that things
will be managed in silo, harming the overall relationship. Mr Smith explains that where there is a
case for supplier relationship management, the programme needs to be effectively structured and
managed.

However, in some cases supplier management doesn't get the recognition or attention that it should.
According to Mr Smith, this is the result of the fact that the two standard procurement cycles -
transactional and sourcing - don't align with the supplier management perspective.

It's crucial to pick a solution that places supplier management at its heart in order to ensure the
supply chain runs as effectively as possible.

Achilles Supplier Management is our standard community supplier pre-qualification and

management solution that gives buyers information on all current suppliers that subscribe to a given
community, as well as the ability to find and view future partners.

Difference between Logistics

and Supply Chain Management
Logistics Management is a small portion of Supply Chain
Management that deals with management of goods in an efficient
way. Although, if we talk about Supply Chain Management, it is a
broader term which refers to the connection, right from the suppliers to
the ultimate consumer. People are quite puzzled between these two
concepts.

It has been noticed that, there has been a drastic change in the manner in
which business is conducted many years ago and now. Due to the
improvement in the technology, you can see all the areas of business has
been developed. Supply Chain Management also evolved as an
improvement over Logistics Management, from past years. Now coming
to the point, lets start understanding the difference between Logistics
and Supply Chain Management.

Content: Logistics Vs Supply Chain Management

1. Comparison Chart

2. Definition

3. Key Differences

4. Conclusion

Comparison Chart

BASIS FOR LOGISTICS SUPPLY CHAIN

COMPARISON MANAGEMENT MANAGEMENT

Meaning The process of integrating The coordination and

 the movement and management of the supply
maintenance of goods in chain activities are known
and out the organization is as Supply Chain
Logistics. Management.

Objective Customer Satisfaction Competitive Advantage

Supply Chain
The concept of Logistics Management is a modern
Evolution has been evolved earlier. concept.

How many
organizations are
involved? Single Multiple

Supply Chain
Logistics Management is a Management is the new
fraction of Supply Chain version of Logistics
One in another Management. Management.

Definition of Logistics Management

The management process which integrates the movement of goods,

services, information and capital, right from the sourcing of raw
material, till it reaches its end consumer is known as Logistics
Management. The objective behind this process is to provide the right
product with the right quality at the right time in the right place at the
right price to the ultimate customer. The logistic activities are divided
into two broad categories they are:

Inbound Logistics: The activities which are

concerned with procurement of material, handling,
storage and transportation

Outbound Logistics: The activities which are

concerned with the collection, maintenance and
distribution or delivery to the final consumer.

Apart from these, other activities are warehousing, protective packing,

order fulfillment, stock control, maintaining equilibrium between
demand and supply, stock management. This will result in savings in
cost and time, high quality products etc.

Definition of Supply Chain Management

Supply Chain Management (SCM) is a series of interconnected activities

related to the transformation and movement from raw material to the
finished goods till it reaches to the end user. It is the outcome of the
efforts of multiple organizations that helped in making this chain of
activities successful.

These organizations may include the firms with whom the organization
is currently working like partners or suppliers, manufacturers,
wholesalers, retailers and consumers. The activities may include
integration, sourcing, procurement, production, testing, logistics,
customer services, performance measurement, etc.

Supply Chain Management has a multi-dimensional approach which

manages the flow of raw materials and work in progress (semi finished
goods) within the organization and the end product outside the
organization till it reaches the hands of the final consumer with a
complete emphasis on the customer requirement.

Key Differences between Logistics and Supply Chain Management

The following are the major differences between logistics and supply
chain management:

1. The flow and storage of goods inside and outside the

firm is known as Logistics. The movement and
integration of supply chain activities is known as
Supply Chain Management.

2. The main aim of Logistics is full customer

satisfaction. Conversely, the main aim behind Supply
chain Management is to gain substantial competitive
advantage.

3. There is only one organization involved in Logistics

while a number of organizations are involved in
Supply Chain Management.
 4. Supply Chain Management is a new concept as
compared to Logistics.

5. Logistics is only an activity of Supply Chain

Management.

Conclusion

Logistics is a very old term, firstly used in the military, for the
maintenance, storage and transportation of army persons and goods.
Nowadays, this term is used in many spheres, not specifically in military
after the evolution of the concept of Supply Chain Management. It has
also been said that SCM is an addition over Logistics Management as
well as SCM comprises of logistics. Both are inseparable, hence they do
not contradict but supplement each other. SCM helps Logistics to be in
touch with the transportation, storage and distribution
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This article includes a list of references, but its sources remain unclear because it has insufficient

Integrated logistics support (ILS) is an integrated and iterative process for

developing material and a support strategy that optimizes functional support, leverages existing
resources, and guides the system engineering process to quantify and lower life cycle cost and
decrease the logistics footprint (demand for logistics), making the system easier to support. Although
originally developed for military purposes, it is also widely used in commercial product
support or customer service organisations.[1]

Contents
[hide]

1ILS defined

2Adoption

3Maintenance planning
 4Supply support

5Support and test equipment

6Manpower and personnel

7Training and training devices

8Technical data

9Computer resources support

10Packaging, handling, storage, and transportation (PHS&T)

11Facilities

12Design interface

13See also

14References

o 14.1Standards

o 14.2Specifications - not standards

o 14.3Handbooks

15Resources

16Article References

ILS defined[edit]
In general, ILS plans and directs the identification and development of logistics support and
system requirements for military systems, with the goal of creating systems that last longer and
require less support, thereby reducing costs and increasing return on investments. ILS therefore
addresses these aspects of supportability not only during acquisition, but also throughout the
operational life cycle of the system. The impact of ILS is often measured in terms of metrics such
as reliability, availability, maintainability and testability (RAMT), and sometimes System
Safety (RAMS).
ILS is the integrated planning and action of a number of disciplines in concert with one another to
assure system availability. The planning of each element of ILS is ideally developed in coordination
with the system engineering effort and with each other. Tradeoffs may be required between elements
in order to acquire a system that is: affordable (lowest life cycle cost), operable, supportable,
sustainable, transportable, and environmentally sound. In some cases, a deliberate process
of Logistics Support Analysis will be used to identify tasks within each logistics support element.
The most widely accepted list of ILS activities include:
 Reliability engineering, maintainability engineering and maintenance (preventive, predictive
and corrective) planning

Supply (spare part) support (e.g. ASD S2000M specification)/acquire resources

Support and test equipment/equipment support

Manpower and personnel

Training and training support

Technical data/publications

Computer resources support

Facilities

Packaging, handling, storage and transportation (PHS&T)

Design interface
Decisions are documented in a life cycle sustainment plan (LCSP), a Supportability Strategy, or
(most commonly) an Integrated Logistics Support Plan (ILSP). ILS planning activities coincide with
development of the system acquisition strategy, and the program will be tailored accordingly. A
properly executed ILS strategy will ensure that the requirements for each of the elements of ILS are
properly planned, resourced, and implemented. These actions will enable the system to achieve the
operational readiness levels required by the warfighter at the time of fielding and throughout the life
cycle.[2][3] ILS can be also used for civilian projects, as highlighted by the ASD/AIA ILS Guide. [4]

Adoption[edit]
ILS is a technique introduced by the US Army to ensure that the supportability of an equipment item
is considered during its design and development. The technique was adopted by the UK MOD in
1993 and made compulsory for the procurement of the majority of MOD equipment.

Influence on Design. Integrated Logistic Support will provide important means to identify
(as early as possible) reliability issues / problems and can initiate system or part design
improvements based on reliability, maintainability, testability or system availability analysis

Design of the Support Solution for minimum cost. Ensuring that the Support Solution
considers and integrates the elements considered by ILS. This is discussed fully below.

Initial Support Package. These tasks include calculation of requirements for spare parts,
special tools, and documentation. Quantities required for a specified initial period are calculated,
procured, and delivered to support delivery, installation in some of the cases, and operation of
the equipment.
The ILS management process facilitates specification, design, development, acquisition, test,
fielding, and support of systems.
Maintenance planning[edit]
Main article: Reliability engineering
Maintenance planning begins early in the acquisition process with development of the maintenance
concept. It is conducted to evolve and establish requirements and tasks to be accomplished for
achieving, restoring, and maintaining the operational capability for the life of the system.
Maintenance planning relies on Level Of Repair Analysis (LORA) as a function of the system
acquisition process. Maintenance planning will:

Define the actions and support necessary to ensure that the system attains the specified
system readiness objectives with minimum Life Cycle Cost (LCC).

Set up specific criteria for repair, including Built-In Test Equipment (BITE) requirements,
testability, reliability, and maintainability; support equipment requirements; automatic test
equipment; and manpower skills and facility requirements.

State specific maintenance tasks, to be performed on the system.

Define actions and support required for fielding and marketing the system.

Address warranty considerations.

The maintenance concept must ensure prudent use of manpower and resources. When
formulating the maintenance concept, analysis of the proposed work environment on the health
and safety of maintenance personnel must be considered.

Conduct a LORA repair analysis to optimize the support system, in terms of LCC, readiness
objectives, design for discard, maintenance task distribution, support equipment and ATE, and
manpower and personnel requirements.

Minimize the use of hazardous materials and the generation of waste.

Supply support[edit]
Main article: Spare part
Supply support encompasses all management actions, procedures, and techniques used to
determine requirements to:

Acquire support items and spare parts.

Catalog the items.

Receive the items.

Store and warehouse the items.

Transfer the items to where they are needed.

 Issue the items.

Dispose of secondary items.

Provide for initial support of the system.

Acquire, distribute, and replenish inventory.

Support and test equipment[edit]

Main article: ground support equipment
Support and test equipment includes all equipment, mobile and fixed, that is required to perform the
support functions, except that equipment which is an integral part of the system. Support equipment
categories include:

Handling and Maintenance Equipment.

Tools (hand tools as well as power tools).

Metrology and measurement devices.

Calibration equipment.

Test equipment.

Automatic test equipment.

Support equipment for on- and off-equipment maintenance.

Special inspection equipment and depot maintenance plant equipment, which includes all
equipment and tools required to assemble, disassemble, test, maintain, and support the
production and/or depot repair of end items or components.
This also encompasses planning and acquisition of logistic support for this equipment.

Manpower and personnel[edit]

Manpower and personnel involves identification and acquisition of personnel with skills and grades
required to operate and maintain a system over its lifetime. Manpower requirements are developed
and personnel assignments are made to meet support demands throughout the life cycle of the
system. Manpower requirements are based on related ILS elements and other
considerations. Human factors engineering (HFE) or behavioral research is frequently applied to
ensure a good man-machine interface. Manpower requirements are predicated on accomplishing the
logistics support mission in the most efficient and economical way. This element includes
requirements during the planning and decision process to optimize numbers, skills, and positions.
This area considers:

Man-machine and environmental interface

 Special skills

Human factors considerations during the planning and decision process

Training and training devices[edit]

Training and training devices support encompasses the processes, procedures, techniques, training
devices, and equipment used to train personnel to operate and support a system. This element
defines qualitative and quantitative requirements for the training of operating and support personnel
throughout the life cycle of the system. It includes requirements for:

Competencies management

Factory training

Instructor and key personnel training

New equipment training team

Resident training

Sustainment training

User training

HAZMAT disposal and safe procedures training

Embedded training devices, features, and components are designed and built into a specific system
to provide training or assistance in the use of the system. (One example of this is the HELP files of
many software programs.) The design, development, delivery, installation, and logistic support of
required embedded training features, mockups, simulators, and training aids are also included.

Technical data[edit]
Technical Data and Technical Publications consists of scientific or technical information necessary to
translate system requirements into discrete engineering and logistic support documentation.
Technical data is used in the development of repair manuals, maintenance manuals, user manuals,
and other documents that are used to operate or support the system. Technical data includes, but
may not be limited to:

Technical manuals

Technical and supply bulletins

Transportability guidance technical manuals

Maintenance expenditure limits and calibration procedures

Repair parts and tools lists

 Maintenance allocation charts

Corrective maintenance instructions

Preventive maintenance and Predictive maintenance instructions

Drawings/specifications/technical data packages

Software documentation

Provisioning documentation

Depot maintenance work requirements

Identification lists

Component lists

Product support data

Flight safety critical parts list for aircraft

Lifting and tie down pamphlet/references

Hazardous Material documentation

Computer resources support[edit]

Computer Resources Support includes the facilities, hardware, software, documentation, manpower,
and personnel needed to operate and support computer systems and the software within those
systems. Computer resources include both stand-alone and embedded systems. This element is
usually planned, developed, implemented, and monitored by a Computer Resources Working Group
(CRWG) or Computer Resources Integrated Product Team (CR-IPT) that documents the approach
and tracks progress via a Computer Resources Life-Cycle Management Plan (CRLCMP).
Developers will need to ensure that planning actions and strategies contained in the ILSP and
CRLCMP are complementary and that computer resources support for the operational software, and
ATE software, support software, is available where and when needed.

Packaging, handling, storage, and transportation (PHS&T)

[edit]
This element includes resources and procedures to ensure that all equipment and support items are
preserved, packaged, packed, marked, handled, transported, and stored properly for short- and
long-term requirements. It includes material-handling equipment and packaging, handling and
storage requirements, and pre-positioning of material and parts. It also includes preservation and
packaging level requirements and storage requirements (for example, sensitive, proprietary, and
controlled items). This element includes planning and programming the details associated with
movement of the system in its shipping configuration to the ultimate destination via transportation
modes and networks available and authorized for use. It further encompasses establishment of
critical engineering design parameters and constraints (e.g., width, length, height, component and
system rating, and weight) that must be considered during system development. Customs
requirements, air shipping requirements, rail shipping requirements, container considerations,
special movement precautions, mobility, and transportation asset impact of the shipping mode or the
contract shipper must be carefully assessed. PHS&T planning must consider:

System constraints (such as design specifications, item configuration, and safety precautions
for hazardous material)

Special security requirements

Geographic and environmental restrictions

Special handling equipment and procedures

Impact on spare or repair parts storage requirements

Emerging PHS&T technologies, methods, or procedures and resource-intensive PHS&T

procedures

Environmental impacts and constraints

Facilities[edit]
The Facilities logistics element is composed of a variety of planning activities, all of which are
directed toward ensuring that all required permanent or semi-permanent operating and support
facilities (for instance, training, field and depot maintenance, storage, operational, and testing) are
available concurrently with system fielding. Planning must be comprehensive and include the need
for new construction as well as modifications to existing facilities. It also includes studies to define
and establish impacts on life cycle cost, funding requirements, facility locations and improvements,
space requirements, environmental impacts, duration or frequency of use, safety and health
standards requirements, and security restrictions. Also included are any utility requirements, for both
fixed and mobile facilities, with emphasis on limiting requirements of scarce or unique resources.

Design interface[edit]
Design interface is the relationship of logistics-related design parameters of the system to its
projected or actual support resource requirements. These design parameters are expressed in
operational terms rather than as inherent values and specifically relate to system requirements and
support costs of the system. Programs such as "design for testability" and "design for discard" must
be considered during system design. The basic requirements that need to be considered as part of
design interface include:

Reliability

Maintainability

Standardization
 Interoperability

Safety

Security

Usability

Environmental and HAZMAT

ADDED VALUE CONCEPT IN SUPPLY LOGISTICS

Value-Added Functions and Differentiation of Supply ChainsThe
purpose of supply chains is to add value to production and
distribution. Depending upon the markets and the value chains they
are servicing, supply chains can be differentiated according to
criteria such as costs, time reliability and risk. Efficient logistics
contributes to added-value in four major interrelated ways:

Production costs. Derived from the improved efficiency of

manufacturing with appropriate shipment size, packaging and
inventory levels. Thus, logistics contributes to the reduction of
production costs by streamlining the supply chain.

Location. Logistics adds value by taking better advantage of

various locations, implying access to expanded markets (more
customers) and lower distribution costs.

Time. Added value derived from having goods and services

available when required along the supply chain (e.g. lower lead
times) with better inventory and transportation management.
 Control. Added value derived from controlling most, if not all,
the stages along the supply chain, from production to
distribution. By better synchronizing cycles and lead times,
logistics enables better marketing and demand response, thus
anticipating flows and allocating distribution resources
accordingly.

A variety of factors are jointly shaping the configuration of supply

chains:

Logistics costs. Considers the full array of costs to make

products available to the final consumer, namely transport,
warehousing and transshipment. Supply chain managers are
particularly sensitive to the stability of the cost structure
(consistent costs) implying that routes having cost fluctuations
may be discarded in favor to routes of a higher cost, but with
less volatility. Costs are therefore a standard criteria where the
cheapest routing option is sought, as long as the cost structure
remains stable as supply chains are unlikely to be modified if a
cost advantage is only temporary. The concept of cost is
relative since its importance is in relation to the value of the
cargo being carried. Cost considerations tend to concern more
containerized goods that have a low value, such as
commodities (e.g. paper) than high value goods (e.g.
electronics).

Transit time. A factor that is increasingly being considered

since it strongly influence inventory carrying costs and
inventory cycle time in supply chain management. So, for
cargo that has a higher value (clothing) or is perishable
(reefers) the routing option that is the fastest and/or shortest
will be preferred.

Reliability. Relates to a factor that is mitigated by

contemporary supply chain management practices. For several
supply chains, time can be a secondary factor as long as
shipments arrive at the distribution center within an expected
time frame. If shipments are regular and that this reliability
remains consistent, it is possible to organize supply chains
accordingly by having more inventory in transit.
 Supply chain risk. Relates to a factor that is generally
imponderable and generally involving the level of confidence
that the shipment will reach its final destination within
expected costs, time and reliability considerations. In some
cases, risk can also involve potential cargo damage or theft.
Low risks routes are obviously preferred over higher risk
routes.

Source: adapted from McKinnon, A. "The Effects of Transport

Investment on Logistical Efficiency", Logistics Research Centre,
Heriot-Watt University, Edinburgh, UK.Total Logistics Costs
TradeoffTotal logistics costs consider the whole range of costs
associated with logistics, which includes transport and warehousing
costs, but also inventory carrying, administration and order
processing costs. Administration and order processing costs are
relative to the total volume being handled. However, for the same
volume being handled transport and warehousing costs will vary
according to the distribution strategies being adopted. The above
graph portrays a simple relationship between total logistics costs
and two important cost components; transport and warehousing.
Based upon the growth in the shipment size (economies of scale) or
the number of warehouses (lower distances) a balancing act takes
place between transport costs and warehousing (inventory carrying)
costs. There is a cutting point representing the lowest total logistics
costs, implying an optimal shipment size or number of warehouses
for a a specific freight distribution system. Finding such a balance is
a common goal in logistical operations and will depend on numerous
factors such as if the good is perishable, the required lead time and
the market density.

Trade-off
From Wikipedia, the free encyclopedia
A trade-off (or tradeoff) is a situation that involves losing one quality or aspect of something in
return for gaining another quality or aspect. More colloquially, if one thing increases, some other
thing must decrease. Tradeoffs can occur for many reasons, including simple physics (into a given
amount of space, you can fit many small objects or fewer large objects). The idea of a tradeoff often
implies a decision to be made with full comprehension of both the upside and downside of a
particular choice, such as when a person decides whether to invest in stocks (more risky but with a
greater potential return) versus bonds (generally safer, but lower potential returns).
The term is also used widely in an evolutionary context, in which case natural selection and sexual
selection act as the ultimate "decision-makers".[1] In biology, the concepts of tradeoffs and constraints
are often closely related.[2] In economics, a trade-off is commonly expressed in terms of
the opportunity cost of one potential choice, which is the loss of the best available alternative. [3]
 Contents
[hide]

1Examples from common life

2Tradeoffs in economics

3Tradeoffs in other specific fields

4Analytical methods to support a trade study

5See also

6Further reading

7References

Examples from common life[edit]

The concept of a trade-off is often used to describe situations in everyday life. [4][5] The old saying "do
not put all of your eggs into one basket" implies a trade-off with respect to spreading risk, as when
one buys a mutual fund composed of many stocks rather than only one or a few stocks that may
have a higher expected value of return. Similarly, trash cans can be small or large. A large trash can
does not need to be put out for pickup so often, but it may become so heavy when full that one risks
injury when trying to move it.
In cold climates, mittens serve well to keep the hands warm, but they do not allow the hands to
function as well as do gloves. In a like fashion, warm coats are often bulky and hence difficult to
store or even to hang up.
When copying music from compact disks to a computer, lossy compression formats, such as MP3,
are used routinely to save harddisk space, but information is thrown away to the detriment of sound
quality. Lossless compression schemes, such as FLAC or ALAC save less space but do not affect
the sound quality.
Large cars can carry many people, but they also tend to be heavy (and often not very aerodynamic)
and hence have relatively poor fuel economy.
In the Olympics, the best sprinters are not the same individuals as the best marathoners, a trade-off
based on various morphological, physiological (e.g., variation in muscle fiber type), and
possibly motivational factors.

Tradeoffs in economics[edit]
In economics a trade-off is expressed in terms of the opportunity cost of a particular choice, which is
the loss of the most preferred alternative given up. A tradeoff, then, involves a sacrifice that must be
made to obtain a certain product, service or experience, rather than others that could be made or
obtained using the same required resources. For example, for a person going to a basketball game,
their opportunity cost is the loss of the alternative of watching a particular television program at
home.
Many factors affect the tradeoff environment within a particular country, including availability of raw
materials, a skilled labor force, machinery for producing a product, technology and capital, market
rate to produce that product on reasonable time scale, and so forth.
A trade-off in economics is often illustrated graphically by a Pareto frontier, which shows the greatest
(or least) amount of one thing that can be attained for each of various given amounts of the other. As
an example, in production theory the trade-off between output of one good and output of another is
illustrated graphically by the production possibilities frontier. The Pareto frontier is also used in multi-
objective optimization. In finance, the Capital Asset Pricing Model includes an efficient frontier that
shows the highest level of expected return that any portfolio could have given any particular level of
risk, as measured by the variance of portfolio return.

Tradeoffs in other specific fields[edit]

In biology and microbiology, tradeoffs occur when a beneficial change in one trait is linked to a
detrimental change in another trait.[6]
Tradeoffs are important in engineering. For example, in electrical engineering, negative feedback is
used in amplifiers to trade gain for other desirable properties, such as
improved bandwidth, stability of the gain and/or bias point, noise immunity, and reduction
of nonlinear distortion. The Golden Gate Bridge is a prime rare example where
few engineering and aesthetic tradeoffs had to be made[citation needed].
In demography, tradeoff examples may include maturity, fecundity, parental
care, parity, senescence, and mate choice. For example, the higher the fecundity (# of offspring), the
lower the parental care. Parental care as a function of fecundity would show a negative sloped linear
graph. A related phenomenon, known as demographic compensation, arises when the different
components of species life cycles (survival, growth, fecundity, etc) show negative correlations across
the distribution ranges[7][8]. For example, survival may be higher towards the northern edge of the
distribution, while fecundity or growth increases towards the south, leading to a compensation that
allows the species to persist along an environmental gradient. Contrasting trends in life cycle
components may arise through tradeoffs in resource allocation, but also through independent but
opposite responses to environmental conditions.
In computer science, tradeoffs are viewed as a tool of the trade. A program can often run faster if it
uses more memory (a space-time tradeoff). Consider the following examples:

By compressing an image, you can reduce transmission time/costs at the expense of CPU
time to perform the compression and decompression. Depending on the compression method,
this may also involve the tradeoff of a loss in image quality.

By using a lookup table, you may be able to reduce CPU time at the expense of space to
hold the table, e.g. to determine the parity of a byte you can either look at each bit individually
(using shifts and masks), or use a 256-entry table giving the parity for each possible bit-pattern,
or combine the upper and lower nibbles and use a 16-entry table.

For some situations (e.g. string manipulation), a compiler may be able to use inline code for
greater speed, or call run-time routines for reduced memory; the user of the compiler should be
able to indicate whether speed or space is more important.
The Software Engineering Institute have a specific method for analysing tradeoffs, [9] called the
Architectural Tradeoff Analysis Method or ATAM.
Strategy board games often involve tradeoffs: for example, in chess you might trade a pawn for an
improved position; in Go, you might trade thickness for influence.
Ethics often involves competing interests that must be traded off against each other, such as the
interests of different people, or different principles (e.g. is it ethical to use information resulting
from Nazi human experiments to prevent disease today?)
In medicine, patients and physicians are often faced with difficult decisions involving tradeoff. One
example is localized prostate cancer where patients need to weigh the possibility of a prolonged life
expectancy against possible stressful treatment side-effects (patient trade-off).
Governmental tradeoffs are among the most controversial political and social difficulties of any time.
All of politics can be viewed as a series of tradeoffs based upon which core values are most core to
the most people or politicians. Political campaigns also involve tradeoffs, as when attack ads may
energize the political base but alienate undecided voters.
With work schedules, employees will often use a tradeoff of "9/80" where an 80-hour work period is
compressed from a traditional 10 working days to 9 to facilitate an "off-friday".

Analytical methods to support a trade study[edit]

Trade studies are essentially decision-making exercises. In the FAA Systems Handbook.[10] the
decision analysis matrix (aka Pugh's method) is suggested to support the activities, but this method
cannot support uncertainty, a mix of quantitative and qualitative information, or teams. To manage
uncertainty, the authors suggest supplementing point estimates of the outcome variables for each
alternative with computed or estimated uncertainty ranges. The Standard Approach to Trade
Studies,[11] an INCOSE paper from 2004, suggests a similar approach.
In the NASA Systems Engineering Handbook[12] NASA suggests using multi-attribute utility theoretic
(MAUT) or the Analytic Hierarchy Process (AHP). But, these too are not good with uncertainty, mixed
information and teams. The authors suggest using probability based methods to maximize utility
when uncertainty predominates, but give little detail on how to approach this.
In many situations, linear programming methods like the simplex algorithm can be used but these
too do not support uncertainty. Another approach to supporting trade studies with uncertain
information is to use the Bayesian methods.[13]

Inventory control
From Wikipedia, the free encyclopedia
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article by adding citations to reliable sources. Unsourced material may be challenged and
removed. (October 2016) (Learn how and when to remove this template message)
See also: Stock management
Inventory control or stock control can be broadly defined as "the activity of checking a shops
stock".[1] More specifically inventory control may refer to:

In operations management, logistics and supply chain management, the technological

system and the programmed software necessary for managing inventory

In economics and operations management, the inventory control problem, which aims to
reduce overhead cost without hurting sales. It answers the 3 basic questions of any supply
chain: When? Where? How much?

In the field of loss prevention, systems designed to introduce technical barriers to shoplifting

Contents
 [hide]

1Systems

o 1.1Advantages and disadvantages

2Inventory optimization

3Inventory management software

4See also

5References

Systems[edit]
Inventory control is also about knowing where all stock is and ensuring everything is accounted for at
any given time.[citation needed] An inventory control system or a computerized inventory system is a process
for managing and locating objects or materials.[citation needed] In common usage, the term may also refer to
just the software components. Many shops now use stock control systems. The term "stock control
system" can be used to include various aspects of controlling the amount of stock on the shelves
and in the stockroom and how reordering happens. Typical features of stock control software
include:[citation needed]

Ensuring that the products are on the shelf in shops in just the right quantity.

Recognizing when a customer has bought a product.

Automatically signalling when more products need to be put on the shelf from the stockroom.

Automatically reordering stock at the appropriate time from the main warehouse.

Automatically producing management information reports that could be used both by local
managers and at head office.
These might detail what has sold, how quickly and at what price, for example. Reports could be used
to predict when to stock up on extra products, for example, at Christmas or to make decisions
about special offers, discontinuing products and so on. Sending reordering information not only to
the warehouse but also directly to the factory producing the products enables them to optimize
production.
Wireless barcoder reader with docking station.

Modern inventory control systems often rely upon barcodes and radio-frequency identification (RFID)
tags to provide automatic identification of inventory objects. Inventory objects could include any kind
of physical asset: merchandise, consumables, fixed assets, circulating tools, library books, or capital
equipment. To record an inventory transaction, the system uses a barcode scanner or RFID reader
to automatically identify the inventory object, and then collects additional information from the
operators via fixed terminals (workstations), or mobile computers.[citation needed] The new trend in inventory
management is to label inventory and assets with QR Code, and use smart-phones to keep track of
inventory count and movement. These new systems are especially useful for field service
operations, where an employee needs to record inventory transaction or look up inventory stock in
the field, away from the computers and hand-held scanners.
Advantages and disadvantages[edit]
Stock control systems ensure that shelves are appropriately stocked. If there is too much stock, it
ties up a company's money, money that might be better spent on reducing their overdraft,
on advertising the business or on paying for better facilities for customers, for example. Too much
stock means that some perishable products might not sell and would have to be thrown away and
this would reduce a stock control system outweigh the disadvantages.

Inventory optimization[edit]
Main article: Inventory optimization
Inventory optimization is a method of balancing capital investment constraints or objectives and
service-level goals over a large assortment of stock-keeping units (SKUs) while taking demand and
supply volatility into account.

Inventory management softwaRE

Main article: Inventory management software
Inventory management software is a computer-based system for tracking inventory
levels, orders, sales and deliveries. It can also be used in the manufacturing industry to create
a work order, bill of materials and other production-related documents. Companies use inventory
management software to avoid product overstock and outages. It is a tool for organizing inventory
data that before was generally stored in hard-copy form or in spreadsheets. It is often associated
with and is similar to distribution software, as distributors that can compete with less cash tied up in
inventories have a distinct advantage over their
Types of Inventory Control Systems

In business, an inventory control system is a system that integrates all

aspects of administering a companys inventories including shipping,
purchasing, receiving, warehouse storage, turnover, tracking, and re-ordering.
These systems often differ based on the type of business being run. From
stretch film packaging to warehouses to manufacturing, and even small
businesses, inventory control systems are unique tools that help you measure
and balance your operations.

Today, there are various types of inventory control systems to help you track
and keep your inventory at hand. Here are the two main types of inventory
control systems that you could consider using. The main difference between
the two is how often inventory data is updated.

Perpetual Inventory System

The perpetual inventory system is by far
the most favored method of tracking
inventory in stretch film packaging. In this
system, inventory data is entered
perpetually or continuously. Once an order
is placed or received, the data is updated into the system right away.
Compared to the periodic inventory system, a perpetual inventory system is
superior because it allows real-time tracking of sales in addition to monitoring
individual inventory levels for each item.

However, the calculated inventory levels obtained from a perpetual inventory

system may steadily deviate from the actual inventory levels due to theft or
unrecorded transactions. It is therefore vital to periodically compare the
physical inventories to the actual on-hand quantities and adjust accordingly.

Periodic Inventory System

In this system, inventory data is not kept consistently up to date. Instead,
inventory information is updated after a particular interval of time (usually once
a year). Although this method is not as efficient as the perpetual system, it
appeals to many people because you do not have to expend as much cash
upfront to set up the technology and software needed to keep track of data.

One major shortcoming with this system is that for the entire year, you do not
have access to inventory data. For stretch film packaging business, this
system can prove humongous especially when there is an increase in sales.

Valuation Methods
After selecting between one of the two methods, value your inventory. The
following inventory three methods are used to compute the cost of goods sold
and the cost of ending inventory.

First-in-First-Out Method (FIFO)

Under FIFO, it is assumed that the oldest inventory items are recorded as sold
first, and newer inventory remains unsold. This implies that the cost of older
inventory/stock is allocated to cost of goods sold, and that of fresh inventory is
allocated to ending inventory.

Last-in-First-Out Method (LIFO)

This method is almost the exact
opposite of FIFO. Under LIFO, it is
assumed that the last items recorded
in the inventory are the first to be
sold. However, the inventory is
valued according to the cost of items
purchased earlier in the year. When inflation occurs, LIFO can result in the
highest estimate of cost of goods sold and the lowest net income.

Average Cost Method (AVCO)

Under this method, the average cost of all items available for sale during that
particular period is taken to determine the cost of goods sold and ending
inventory. If there is a rapid inventory turnover, AVCO can more closely be
similar to FIFO than LIFO.

It is important to remember that the key decision in stretch film packaging is

how much inventory to keep in hand. If you are not properly keeping track of
your inventory, you are not maximizing your profit. Therefore, whatever your
customer service requirements, Paragon Films is here to meet your needs for
your stretch film packaging materials.

The Importance of Storage.

Warehouse perform a number of functions. These are:

Creation of time utility: There are products which are produced

continuously throughout the year while consumption is seasonal.
Storage enables goods to be made available to buyers whenever they
are in demand.

Creation of place utility: Another function of storage is to make

goods available to a buyer at his place of business when he needs
them. It creates place utility by warehouses location, e.g., a retailer can
obtain goods within a few hours or minutes by contacting the
wholesalers storage.
Finance function: Storage helps to obtain or raise loans by
providing collateral security of the goods stored.
Creation of form utility: Certain commodities improve in quality
or desirability while in storage, e.g., curing of tobacco, liquor etc. Thus,
storage creates form utility in certain goods.
Stabilizing prices: Another functions of storage is to stabilize price
by making the goods available in the market whenever there is
demand.
ADVERTISEMENTS:

Regular production: Storage performs the function of smoothing

out irregularities in production, in the present age of competition,
every manufacturer tries to produce in anticipation of demand so as to
provide free supply in the market well in time.
Ability to Face Natural Calamities: Storage enables the society to
face natural calamities such as floods, famine, drought, etc. In such
emergencies, commodities can be made available from the storage.
Reduction of Risk: Storage reduces the risk of owner of goods as
the owner of goods can store merchandise with reputed warehouses
which absorb a part of the risk.
Saving in Transportation Costs: Storage allows accumulation of
stock to be transported in bulk quantities so as to reduce the
transportation costs.

Economies of large-scale: Storage enables a concern to achieve the

economies of large-scale production, large scale buying and selling,
etc. as the goods may be kept in stores.

Warehouse Design Key Factors to Consider

Jul 24, 2009 | Videos, Warehouse | 5 comments

Colin Airdrie introduces to you in this video, the key factors that will impact on the optimum
warehouse design to meet your warehousing or storage requirements.

Hello, my name is Colin Airdrie, and one of my main areas of expertise in Logistics and
Supply Chain Management is in the field of Warehouse Design. I would like to introduce
you to the key factors that will impact on the optimum design required to meet your
warehousing or storage requirements.

Four factors should be considered when designing or laying out any storage or distribution
facility. Be it a large multi temperatured composite distribution centre servicing a high
market network, a spare parts store in a north mobile service centre, or raw materials store
supporting a manufacturing operation.

The four basic factors can be easily remembered using the pneumonic FAST or fast
standing for:

F-Flow
A-Accessibility
S-space
T- Throughput
These are not in any order of priority. Each is as important as the other and your aim is to
obtain the best compromise of these often conflicting influences. As one factor is
considered and altered, each of the other should be revisited to see what is the impact of
that change on the whole process.

1. Flow- What were looking for here is a logical sequence of operations within the
warehouse where each activities located as close as possible to that which precedes it and
also the function that follows it. We are concerned with the controlled and uninterrupted
movement of materials, people and traffic with, if possible, no cross flow clashes or areas of
high traffic or work density. It is also concerned with the awareness of where material is
located within the system, and the status and location in the storage and handling
equipment and medium. Our aim is to site and position the various warehouse activities in
order to contribute to a smooth flow of operations with a minimum amount of movement and
disruption.

2. Accessibility We are not only talking about whether or not we can get to the product.
But can we get to the required level of pack? Take the example of bottled water for
instance, from major FMC distribution centre well be looking at being able to receive and
issue product by the pallet load possibly even by the truck load. So you only need to access
full pallets and since it is very fast moving with a fairly long shelf life, strict first in first out by
row to individual pallet level need not be followed. At the wholesaler or distributor level, you
might be accessing down to case level and then in the convenience store stock room
individual bottles. It can go further than this. For pharmaceuticals, accessibility may need to
beyond individual item level down to specific lock and batch number. The requirements of
levels of accessibility must be achieved especially in the pick base and fast moving stock
holding areas with a minimum compromise to the next factor, which is the use of space.

3. Space When considering how to use the available spac,e the maximum should be
allocated to operational storage and stock processing purposes. And the minimum space
given up for associated functions such as offices, working areas, empty pallets storage,
battery charging, etc. Todays wide range of storage media available on the market allows
us to make optimum use of a cubic capacity of the available space, not just the floor area.
As most of these equipment is free standing and requires no structural support from the
building itself, it means that the building can be of the simplest and cheapest big box
design. It also allows us to build inflexibility to the operation by selecting the storage media
to meet the current stock profile and then change it as the operation evolves to meet future
requirements. This can be done without expensive and disruptive changes to the actual
building. But remember, you still have to consider flow accessibility and now finally:

4. Throughput When we look at throughput, where not only looking at the categories of
product parting through the warehouse but also the nature of the product and its velocity
through the flow. By nature, we mean the handling characteristics, dimensions and any
other factors that will impact on how it is moved through the flow such as hazard, bulk,
 fragility, security requirements and compatibility with other products. The velocity of the
product will consider the volumes moving through the warehouse on a daily basis. Link
lanisis analytic. Pick period activities need to be determined as do minimum activity levels.
A high degree of availability of accurate throughput data will assist greatly in the outcome of
the design or layout exercise. The better the data and the longest spent on collecting and
analysing it, the less the risk, however it is still possible to come up with an acceptable
solution when one does not have the luxury of accurate data going back into history. You
have to do the best with what is available.

So in summary, when considering your warehouse layout or design, the factors of Flow,
Accessibility and Space must be balance to enable the demand to Throughputin terms
of volume passing through and the time parameters to be met.

5 Main Types of Warehouse Storage

What are the main forms of warehouse storage?

There are 5 principle kinds of warehouse storage:

Pallet racking
Shelving
Mobile shelving
Multi-tier racking
Mezzanine flooring.
They all have very particular applications, which depend on the size, weight and nature of your
stock, as well as the size and layout of the warehouse.

Within each category, especially pallet racking and storage there are many subcategories.

Heres a rundown of them all, to give you an idea of which one(s) will suit your warehouse best.

Pallet Racking
Pallets: the most common and essential component of logistical stock storage and movement. Made
of wood, metal or plastic,

Anything which is delivered and stored in boxes and requires inventory logging is a prime candidate
for pallet racking.
 The most important considerations with pallet racking are access/movement, weight, stability and
space. Weight limits must be strictly adhered to and all pallet racking must be inspected and
maintained regularly to make sure that it is stable enough not to risk toppling. Aisle space required
will depend on your specific space requirements or limitations, but consider whether forklift access
will be just forwards and backwards or require a turning circle with a pallet attached.

There are 13 main types of pallet racking:

Carton Flow Racking/Carton Live Storage bays with roller tracks and gradients, so that
stock can roll down and be replaced. Better for smaller, unboxed stock, hence the name.
Cantilever Racking Storage utilising beams which anchor at one end, primarily used for
timber, piping, plasterboard and other long loads.
Coil Racking You might have seen this used to store chains and cables in DIY stores, its
just a system of spooling cools, allowing lengths to be cut.
Double Deep Racking Pallets stored two rows deep, requires a specialised forklift or a
double deep handling attachment.
Drive-In Racking Pallets placed so that they can slide back on a rail, good for creating
more space.
Drive-Through Racking The same as drive-in racking, but goods can be accessed from two
sides instead of one
High-Bay Racking Racking with racks fixed to the walls and roof for higher storage, a fully
automated retrieval system is usually involved.
Mobile Racking Racking with sensor technology for automated retrieval.
Narrow Aisle Racking A narrower system for increased storage, recently forklifts have been
developed which can work effectively in these systems.
Pallet Live Racking Racking with inclined rollers, also known as gravity flow racking
Push Back Racking Racking with deeper aisles so that stock can be pushed further into
the racking
Shuttle Racking A shuttle is built into the shelving system which moves the pallets to the
back of the aisle.
Vertical Racking Upright storage for long stock, secured by metal arms. Stock is usually
stored individually for easy access.
Shelving
This one is fairly self-explanatory. Stock sits on static shelves rather than mobile pallets, so cannot
be retrieved via forklift. But shelving is ideal for quick, easy access to stock, just as if you were in
aisles at a shop.

For this reason, its far more applicable for small, light items requiring manual picking and placement
such as agricultural produce, clothing, machine parts and components and small products.
Anything too heavy to carry alone cant be stored this way.

Many shelved items need to be handled with care. Height is the main thing to take into consideration
after weight, as high shelves require ladder access. There are two main types of static shelves:

Short Span Shelving Better suited to smaller stock items, although most systems are
adjustable.
Long Span Shelving Larger units with space for bigger items.
Mobile Shelving
Often used for archiving and data storage, mobile shelving uses storage shelves fitted with a traction
system.

The kind of stock kept in this environment can be kept in closely packed, compact storage when
access isnt needed, making it an ideal solution for archiving and retail store back areas.

For smaller premises where space is at a tight premium, mobile shelving represents an ideal way of
making the most of the available storage space.

Typically, mobile shelving units are on a level track way, with the track either built into the floor or
mounted on top.

In order to specify the tracks, a clear definition of the type of flooring in the premises is needed, and
in particular whether it is possible to lay tracking which will be stable, remain in place and not
degrade the floor integrity.

Mobile shelving solutions also use a locking mechanism on the shelves to keep them secured when
they arent in use. Consideration should also be given to whether manual or mechanical mobile
shelving system is required.

Multi-Tier Racking
Multi-tier racking is ideal if you want to take full advantage of the vertical space you have in your
warehouse. Multi-tier racking systems have different tiers, much like floors, so that stock can be
accessed manually all the way up to the maximum limit of vertical storage.

Often this is achieved with a system of mezzanine flooring and stairs, although sometimes scissor
lifts are also used. The storage they offer is very dense, so its most effective when you have large
quantities of stock with a relatively small individual unit size.

Mezzanine Flooring
A warehouse mezzanine floor can yield a massive amount of extra storage space. Effectively, youre
just constructing a second floor above existing aisles, which provides extra shelving space, working
areas for staff to pick and pack or check and move stock on.

Mezzanines dont always need to be restricted to a single level; they can provide two or even three
extra levels.

Mezzanine flooring technology has advanced dramatically in recent years, with a whole variety of
custom designs on offer.

Because of these advances, virtually all mezzanine flooring is custom designed and fitted to
integrate with most storage situations in virtually any warehouse situation.
Its best to use a company that can manage the whole process for you from designing and
installing bespoke mezzanine systems to advising on how you should fit out and make best use of
your additional space, as well as embedding the important additional features you may need.

Options typically include suspended ceilings, integrated light fixtures, lift systems (automatic or
manual), through-floor conveyers and fire safety appliances. Take careful note of how heavy or
fragile your stock is when deciding.

Acorn Warehouse Solutions has decades of experience in warehouse planning, fit-outs,

maintenance and expansion including installation of mezzanine floors and flooring and repurposing
of racking space. For us, warehouse safety is second nature.

Professional Warehouse Layout and

Design
Proper and professional Warehouse Layout Design are essential to the success of your business
when moving into a new facility or distribution center. No matter the space, if your warehouse is
not optimized or laid out correctly youll probably incur losses in productivity, experience space
capacity issues, and be forced to deal with storage inadequacies. Not only will our rack systems
design specialists help you avoid these common pitfalls, theyll elevate your warehouse and
material handling processes to peak efficiency and production. To talk to a warehouse layout and
design expert about how we can help you achieve the best use of your storage space, give us a
call at 800-722-5908 or get a fast, hassle-free quote.

Space Planning
Before designing your pallet rack system and developing the optimal warehouse layout design,
you usually need to make business decisions concerning your operation. Well help you assess
your current space and determine whether youll need to upsize, downsize or simply make better
use of the space youre in right now. Space planning isnt always easy, and in fact involves
business decisions and careful analysis of current operations, as well as planned growth.
Fortunately, our Design Group is here to help you do it. Well meet with you in order to
determine your warehouse space needs and budget before helping you find a space that will
facilitate optimal productivity, efficiency, and, most important, help you reach your goals.

Warehouse Design
Part of what sets AK Material Handling Systems apart from our competition is the fact that we
understand that every business, and therefore every warehouse, is unique. We tailor our rack
systems design process to each individual client, ensuring that rack systems are built specifically
to achieve the clients long-terms goals. Whether its a push-back or drive-in, pallet flow or a
combination of rack systems that meets your storage needs, well work with you through each
step of the process. From the initial stages of choosing which system will help you get to your
goals to the completion of the installation process, well be your turnkey pallet rack system
provider. Consultation, design, planning and execution.

Warehouse Layout
Warehouse design is only part of the picture. We know that when it comes to storage and
material handling, space is money. To achieve maximum space efficiency, youll need to have
your pallet rack system laid out in a way that makes the best possible use of the available floor
and vertical space in your warehouse. Our systems design experts will leverage the latest
Computer Aided Design (CAD) technology to design a warehouse layout that will maximize the
amount of product you can store in any given space. Warehouse layout and design work
synergistically to create a warehouse system that is both scalable and able to meet the demands
of your current operations.

Most importantly, we listen. Experience and technology may be important components of an

effective material handling outfitter, but only when combined with professionalism and a will to
meet your individual storage needs will they results youll come to expect when working with us.

Budgeting Warehouse Numbers

Whether the budgetary numbers are needed for allowances or build-outs, our warehouse design
specialists can get it done fast. We know time is of the essence, and we have the experience to
provide the accurate numbers you need to move forward with your project.

Example Warehouse Layout Design Budget:

Option #1 $140,000 New Selective Teardrop Pallet Rack, including delivery and professional
installation
Option #2 $110,000 Used Selective Pallet Rack, including delivery & professional installation

Less Trade-In Credit on Used Pallet Rack = $25,000

Warehouse Rack Layout Summary: 240 8 Bays of Racking with 9 aisles, 6 pallets high
storing a total of 2,880 Pallet Positions.

If you are interested in obtaining free budgetary numbers for your warehouse facility
please contact us.

Is 35,000 sq feet enough space for my operation?

Can I store my pallets five high in this 24 clear space?

I need to move in two weeks, who can help?

 These building columns are on 30 centers, will that work with my reach trucks?

Can we combine push-back & drive-in to maximize our space?

Top 10 Reasons Why Warehouse Design

Specialists are needed during warehouse moves
and/or expansions.
1. Help clients determine how much warehouse space they need before they begin property
searching.

2. Provide unbiased opinions on storage rack systems and forklift options as we work with
multiple manufacturers.

3. Provide detailed building Computer-aided design (CAD) drawings, offering multiple

layout and design options.

4. Offer high density storage rack options that can reduce your square footage requirements
saving you greatly.

5. Stock over a million dollars of inventory in new & used pallet rack products at three
different warehouses across the United States, and we can rack your warehouse property in
days if needed.

6. Offer our recommendations on your real estate options.

7. Understand and know typical building code requirements

8. Think up!- We can help you utilize Modular Offices and work platforms

9. Offer Trade-in- We can work with you on your existing equipment

10. Know rack!- Cantilever, structural, pushback, pallet flow, selective and we help you
determine which style is right for your operations.