In this article, I propose a classification for static facilities in supply chains, i.e., those that are not mobile. Furthermore, as these facilities are static, their location becomes essential, and selecting a location is accompanied by strategic costs. Supply chains of physical items, e.g., physical products, were considered for the classification presented below.
A brief overview of static supply chain facility categories
A compact overview of static supply chain facility categories is provided below:
|Acronym||Facility||Role in the supply chain|
|PF||Factory||Supplier, or manufacturer|
|SO||Service outlet||Retailer/Service provider|
The above table is an overview of the classes. I now proceed by presenting detailed explanations for each class.
1. Plant/Factory (PF): A static facility in supply chains
Plants, factories, or gigafactories are buildings of different sizes with multiple departments and stations to produce items. The production may be triggered by order or forecast of demand. The operations inside them can be conducted by a single machine, parallel machines (identical, different speed, non-identical), flow shops (e.g., assembly line), job shops, and open shops. Moreover, the manufacturing system may be dedicated, flexible (with multiple stages), cellular, reconfigurable, or additive. Finally, the time items will spend in a plant is relevant to their characteristics and the production schedule. The produced items may directly be shipped to final customers.
2. Warehouse (WH): A static facility in supply chains
Warehouses are classic facilities to store items for a considerable amount of time for commercial purposes. The operations inside a warehouse include receiving (inbound), unloading, sorting, stockpiling, loading, and dispatching (outbound). They have material handling equipment, temperature control systems, automated storage and retrieval systems (AS/RS), unloading/loading docks, crane and forklifts, pallets, racks, and so on. They can be a separate building very close to or a department inside a plant, hub, or store for the loading and unloading of items directly. The time items will spend in a warehouse is relatively high.
3. Distribution Center (DC): A static facility in supply chains
Distribution centers are evolved forms of warehouses that can respond directly to incoming orders (order fulfillment) (no matter who is the recipient, a business, or a customer) and offer value-added services. Therefore, they are more demand-driven, hold inventory for a shorter time, and their operations may include screening, quality assurance, packaging as well as those of warehouses. The focus is on the amount of stock held (inventory management), order processing (order management), and optimized delivery (transportation management). The time items will spend in a distribution center is shorter than in warehouses.
4. Fulfillment Center (FC): A static facility in supply chains
A fulfillment center (marketplace) is a distribution center operated by a third-party logistics provider, optimized to speed up delivery to customers (and usually not businesses). Accordingly, these specialized distribution centers are more location-dependent than general distribution centers.
5. Cross Dock (CD): A static facility in supply chains
A cross-dock is a distribution center in which the items do not spend too much time. Items are unloaded and then sorted, screened and packed, and loaded as fast as possible. The goal is to increase responsiveness. At first, inbound trucks traverse a tour to pickup items from suppliers (milk run), and then, after reaching the cross-dock the items are consolidated on different delivery vehicles for different destinations.
6. Hub (HB): A static facility in supply chains
A hub (or a transport hub) is a transportation terminal where many routes meet, and the traffic is distributed, dispensed, or diverted. For instance, seaports, airports, post offices, etc., all are examples of hubs. That is, hubs are where cargo is exchanged between vehicles or transport modes. Overall, the flow inside a hub network is higher than outside it. Accordingly, hubs can result in more cost-efficient transport, convert less than truckloads to truckloads, and many-to-many transport to many to one (origins to hub), one-to-one (hubs to hubs), and one-to-many (hub to destinations) transport reducing the total traffic congestion. That is, hubs decrease the complexity and number of transportation links.
7. Micro-Fulfillment Center/Dark Store (MC): A static facility in supply chains
These are fully automated fulfillment centers with tight aisles. They reduce total order retrieval and delivery time due to their spatial proximity to customers.
8. Locker (LK): A static facility in supply chains
Lockers (or parcel lockers) are outlets of the supply chain in which the order of the customer arrives at a specific time. Accordingly, customers themselves reach it to pick up their ordered items.
9. Store/Service Outlet (SO): A static facility in supply chains
Retailers, wholesalers, supermarkets, banks, hospitals, clinics, universities, libraries, restaurants, refueling stations, charging stations, etc., who serve customers or businesses in person or by home/contracted delivery (e.g., online shopping or home health care) are called stores or outlets of a supply chain.
10. Parking Lot (PL): A static facility in supply chains
A place where delivery vehicles are idle to be called for a delivery. It can be inside or close to any of the mentioned facilities. It can also be used as a warehouse/distribution center for automotive manufacturers.
11. Collection Center (CC): A static facility in supply chains
A place where items returned from customers is reworked, repaired, recovered, etc. It can be integrated with a distribution center or even a plant.
12. Disposal Center (PC): A static facility in supply chains
A place where the cradle-to-grave life cycle of the physical item finishes.
In this article, I introduced 12 classes of static facilities involved in a physical item supply chain to serve customers or other businesses. Besides, upcoming articles would detail more operational aspects of these facilities and would be about mobile supply chain facilities.
If this article is going to be used in research or other publishing methods, you can cite it as Tafakkori (2022) (in text) and refer to it as follows: Tafakkori, K. (2022). Static facilities in supply chains. Supply Chain Data Analytics. url: https://www.supplychaindataanalytics.com/static-facilities-in-supply-chains
Industrial engineer focusing on leveraging optimization methods and artificial intelligence technologies using multiple programming languages to empower a business to achieve its goals!
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