WHEN PROBLEMS OCCUR IN WAREHOUSE OPERATIONS:

1
Investigating Warehouse Operations Chapter
2Activity Profiling Mining For Gold

• WHEN PROBLEMS OCCUR IN WAREHOUSE OPERATIONS
• REENGINEERING IS OFTEN DONE
• LAYOUT PROJECTS ARE COMMENCED
• WITH NO IDEA OF THE ROOT CAUSE OF THE PROBLEMS
  DUE TO
• LACK OF KNOWLEDGE
• LACK OF TOOLS
• LACK OF TIME

2
Warehouse Activity Profiling

• Systematic analysis of
• item activity
• order activity
• Profiling is designed to readily identify root
  causes
• Of material flow problems
• Of information flow problems
• Pinpoint opportunities for process improvement
• Provide an objective basis for decision making

3
Advantages of Profiling

• Can Quickly Reveal
• Design and Planning Opportunities
• Correct Baseline for Justifying New Investments
• People Feel a Sense of Involvement
• Picture is Worth a 1000 Words
• Capture the activities of the warehouse in
  pictorial form

4
CAUTION

• Dont get stuck on Analysis Paralysis
• Profiling becomes the goal
• Forget to solve the problems

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7 Key Planning Design Issues

• 1. Order Picking Shipping
• 2. Receiving Put-away
• 3. Slotting
• 4. Material Transportation System
• 5. Layout Material Flow
• 6. Warehouse Sizing
• 7. Level of automation Staffing

6
Picking Shipping

• Order Batch Size
• Pick Wave Planning
• Picking Tour Construction
• Shipping Mode Disposition

7
Receiving Put-away

• Receiving Mode Disposition
• Put-away Batch Sizing
• Put-away Tour Construction

8
Slotting

• Zone Definition
• Storage Mode Selection Sizing
• Pick Face Sizing
• Location Assignments

9
Material Transportation System

• System Selection
• System Size

10
Warehouse Layout Material Flow

• Overall Warehouse Flow
• Relative Functional Locations
• Building Configuration

11
Warehouse Sizing

• Space Requirements

12
Level of Automation

• Staffing Requirements
• Capital-Labor Substitution
• Level of Mechanization

13
What do Customers Want?

• their orders filled
• Some customers are High Demand
• Use a large portion of warehouse activity
• Have high customer service requirements
• May dedicate a portion of the warehouse to that
  customer or business unit
• 3rd Party Providers dedicate aisles to a customer
• Contract Warehouses have complete support to a
  customer
• Warehouse within a Warehouse

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Advantages of a Warehouse within a Warehouse

• Smaller warehouses are more efficient
• Provide better customer service
• Can sub-divide the warehouse into self-contained
  processing units (ie Divide Conquer)

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Types of Profiles Customer Order Profile

• Order mix distributions
• Lines/Order distribution
• Cubes/Order distribution
• Lines Cubes/ Order distribution

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Order Mix Distribution

• There are several order mix distributions that
  are helpful in plotting warehouse operating
  strategies.
• Family Mix overall warehouse operating strategy
  is dictated by order mix
• If Pure - (orders tend to be from one Product
  Family)
• indicates an advantage of virtual warehousing
  within a warehouse
• Results in good productivity customer service

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Family Mix Distribution
35 25 15 5 5 5 10
A Only B Only C Only A B A C B C A, B C
35
25
15
10
5
5
5
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Handling Unit Mix Distribution

• Full or Partial Pallet/Case Mix
• Separate pick areas for full pallets, partial
  pallets, cartons
• Separate areas for full vs broken case mix
  picking

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Handling Unit Mix Distribution
of Orders 50 30 20 55 25 20
of lines 75 10 15 60 30 10
Loose carton Full pallet Mixed Broken Case Full Case Mixed
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Order Increment Distribution

• Determine portion of full unit load (pallets,
  cartons)
• vs partial unit loads (½ pallet, ¼ pallet)
• Build partial unit loads
• At the supplier, if possible
• Upon receipt in necessary
• Storage space may be sacrificed

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Order Increment Distribution
of order lines
22
Lines/Order Distribution
of orders
23
Lines Cubes Per Order Distribution
Lines per Cubes per Order (ft3) Cubes per Order (ft3) Cubes per Order (ft3) Cubes per Order (ft3) Cubes per Order (ft3) Cubes per Order (ft3) Totals Total
Order 0-1 1-2 2-5 5-10 10-20 20 Totals Orders Lines Lines
1 176 15 16 7 3 3 220 49 220 17
2 - 5 100 24 27 15 10 2 178 40 623 47
6 - 9 8 6 6 6 4 3 33 7 248 19
10 2 1 1 6 4 1 15 3 225 17
Totals 286 46 50 34 21 9 446 100 1316 100
Orders 64 10 11 8 5 2 100      
Total Cube 143 69 175 255 315 270 1227  
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Purchase Order Profile

• For inbound material vice outbound material
• Use same distribution analyses as for outbound
  profiling
• Supports the same batching and processing
  strategies for receiving and putaway

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Item Activity Profiling

• Used to slot the warehouse
• What storage mode should be assigned
• How much space should be allocated
• Where should it be located
• Types of Activity Profiling
• Popularity
• Cube Movement/Volume
• Popularity-Volume
• Order Completion
• Demand Correlation
• Demand Variability

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Item Popularity Distribution

• Close to the door/Close to the floor
• Minority of items generate majority of the picks
• Uses Pareto Analysis or ABC Analysis
• A automated-highly productive storage mode
• Golden Zone close to aisle at or near waist
  high
• B semi-automatic moderately productive
  storage/picking mode
• Silver Zone next most readily accessible
• C manual offers high density storage

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Item Popularity Distribution

• Popularity may be based on
• Dollars of Sales
• Volume
• of Requests

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Cube Movement / Month
of Items
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Popularity-Cube Movement Mix

• High Popularity-High Cube
• Uses carton flow racks located for ease of
  replenishment
• High Popularity-Low Cube
• Many picks / unit of space use light directed
  carousels (carousels are not easy to restock,
  are expensive per foot of storage)
• Low Popularity Low Cube
• Lends itself to bin storage

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Item-Order Completion Distribution

• Small groups of items that fill large groups of
  orders
• List most to least popular
• Determine proportion of orders a subset can
  complete
• For example 10 of the items may fill 50 of the
  orders. (next slide is an example)
• Assign these to small order completion zones
• Productivity, processing rate, processing quality
  typically 2-5 time more efficient than general
  warehouse

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Item-Order Completion Distribution
50 of the orders are completed by 10 of the
items
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Demand Correlation Distribution

• Identify relationship (affinity) of demand
  between individual items or families.
• Determined based on frequency of being requested
  together on orders
• Often based on same style or size
• Sometime complementary items such as shoes
  purse
• This data can be used when slotting the warehouse
  to minimize movement when filling orders.

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Demand Correlation Distribution
Item Number Item Number Pair Frequency
189-2-4 189-2-1 58
493-2-1 493-2-8 45
007-3-3 007-3-2 36
119-2-1 119-2-7 30
999-1-8 999-1-6 22
207-4-2 207-4-4 15
662-1-9 662-1-1 12
339-7-4 879-2-8 9
112-3-8 112-3-4 6
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