Page 243 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes Potential of Automation

The appeal of automation is that it substitutes capital investment in equipment for labour
required in mechanized handling systems. In addition to using less direct labour, an automated
system operates faster and more accurately. Its shortcomings are the high degree of required
capital investment and the complex nature of development and application.
To date, most automated systems have been custom-designed and constructed for each application.
The six guidelines previously noted for selection of mechanized handling systems are not
applicable to automated systems.

Example: Storage equipment in an automated system is an integral part of the handling
capability and can represent as much as 50 percent of the total investment.
The ratio of deadweight to payload has little relevance in an automated handling application.
Although computers play an important part in all handling systems, they are essential to
automated systems. The computer provides programming of the automated selection equipment
and is used to interface the warehouse with the remainder of the logistical system. The warehouse
control system is vastly different in automated handling. One factor that prohibited rapid
development of automated systems was the high cost of minicomputers. Breakthroughs in
microprocessors have eliminated this barrier.

Self Assessment

Fill in the blanks:
11. Within the warehouse system, …………………… is the prime consumer of labour.

12. …………………… handling consists of all movement within a warehouse facility.
13. …………………… consists of checking and loading orders onto transportation vehicles.
14. …………………… can move loads of master cartons both horizontally and vertically.
15. …………………… consist of either in-floor or overhead-mounted drag devices.

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Case Study ASRS at IBM’s Charlotte

fter more than 16 years of continuous service, the ASRS at IBM’s Charlotte, North
Carolina, manufacturing facility was showing extensive wear and tear. Much of
Athe existing control system was quickly becoming obsolete. Parts were either
proprietary or very difficult to find. Plus, there were Y2K problems. Safety was also an
issue, as cracks had appeared in the rails used to guide the system’s Storage and Retrieval
Machines (SRMs). IBM faced either the purchase of a new system or a total upgrade to its
existing ASRS, which serves as the primary warehousing system for raw materials used in
production of PCs and point-of-sale terminals. About one-fifth of the ASIRS capacity is
also used for finished goods. After investigating the alternatives, it was determined that a
true systems upgrade would provide substantial savings-about one-tenth the estimated
cost of a new system.
Since completing the upgrade, the ASRS’ operating costs have been greatly reduced.
Productivity has increased, storage density is higher, and better tracking systems have
Contd...

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