WHEN PROBLEMS OCCUR IN WAREHOUSE OPERATIONS:

REENGINEERING IS OFTEN DONELAYOUT PROJECTS ARE COMMENCED

WITH NO IDEA OF THE ROOT CAUSE OF THE PROBLEMS DUE TO:

LACK OF KNOWLEDGELACK OF TOOLSLACK OF TIME

Investigating Warehouse Operations Chapter 2

Activity Profiling: Mining For Gold

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 improvementProvide an objective basis for decision making

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

CAUTION

Don’t get stuck on Analysis Paralysis Profiling becomes the goal Forget to solve the problems

7 Key Planning & Design Issues

1. Order Picking & Shipping2. Receiving & Put-away3. Slotting4. Material Transportation System5. Layout & Material Flow6. Warehouse Sizing7. Level of automation & Staffing

Picking & Shipping

Order Batch Size

Pick Wave Planning

Picking Tour Construction

Shipping Mode Disposition

Receiving & Put-away

Receiving Mode Disposition

Put-away Batch Sizing

Put-away Tour Construction

Slotting

Zone Definition

Storage Mode Selection & Sizing

Pick Face Sizing

Location Assignments

Material Transportation System

System Selection

System Size

Warehouse Layout & Material Flow

Overall Warehouse Flow

Relative Functional Locations

Building Configuration

Warehouse Sizing

Space Requirements

Level of Automation

Staffing Requirements

Capital-Labor Substitution

Level of Mechanization

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

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)

Types of Profiles: Customer Order Profile

Order mix distributions

Lines/Order distribution

Cubes/Order distribution

Lines & Cubes/ Order distribution

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

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

15

5 5 5

10

25

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

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

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

Order Increment Distribution %

of

ord

er

lin

es

Lines/Order Distribution%

of

ord

ers

Lines & Cubes Per Order Distribution

Lines per

Cubes per Order (ft3)Totals

% Total %

Order 0-1 1-2 2-5 5-10 10-20 20+ 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  

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

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

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 modeSilver Zone – next most readily accessible C – manual – offers high density storage

Item Popularity Distribution

Popularity may be based on:

Dollars of Sales

Volume

# of Requests

Cube Movement / Month%

of

Item

s

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

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

Item-Order Completion Distribution

50% of the orders are completed by 10% of the items

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.

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