1

Warehouse Inbound and Storage

Chen ZhouFall, 08

4/14/2005

Major operations in a DC or warehouse

Receiving Function

Unload/stage Inspect Put Away

StorageFunction

Shipping Function

Load Pack Order Pick

CrossDock

Avg Operation Cost 55%

2

4/14/2005

Receiving

TasksCheck, inspect, unload, Record, stage, re-palletize

FacilitiesDocks, lift trucks, forklift, mobile conveyors, cart, Computer terminals, bar code printer

DecisionsSchedule of arrivalsPrioritiesStagingProblem handling

Cost ~ 10% of operation cost

4/14/2005

Putaway

TasksMove goods storage locations

FacilityPallet truckLift truck… more in following slides

DecisionsWhere WhenEquipment

Cost ~ 15% 2-pallet pallet truck

3

4/14/2005

Counter-balanced forklift

Most popularRequires 12’ - 18’ aisleCapacities 3000 lbs - 80,000 lbsCan stack two upCan go highGasoline, propane, natural gas, electric

4/14/2005

Narrow Aisle straddle trucks

Require 7’ - 8’ aislesCapacities available are 3000# & 4000#Load must be uniformLoad must fit between outriggersBottom beam in rack recommendedTypically custom built

Require floor with high flatness, especially when heavy loads are going high

4

4/14/2005

Turret truck (for very narrow aisles)

Requires 48” - 72” aisle25’ & higherUp to 4000# capacityAbility to be maneuvered in & out of aisleServices both sides of aisleFull pallet put awayFull or partial pallet pickingLoads must be positions at the aisle by other equipmentDemand high quality floors

Storage and Handling

Chen ZhouSummer, 08

5

4/14/2005

Storage

TasksHold inventory

MethodsFloor, floor stackingPallet rackGravity flow rack, push back Bin shelving

ObjectivesSpace utilizationResponseLabor cost

DecisionsFloor, equipment, slotting,

How to measure the efficiency of storage?

4/14/2005

Warehouse parameters: pick face

2 – D space with direct access of unique skus

6

4/14/2005

Warehouse parameters: sku density

Sku density = No. of skus / unit floor footageIn floor stacking example

Floor: 30 foot length, 4 skus. Sku density = 4/30 = 0.133

In binsRack: 12 foot, 360 skus, Sku density = 360/12 = 30

The higher the sku density, the higher the potential for shorter travel in order pickingWhat do we loose with higher sku density? Volume

4/14/2005

Warehouse parameters: pick density

Pick density = picks / unit distance traveledEg.

In a large warehouse, the distance from the I/O to the far most corner is 400 meters. Each pick is for one pallet which is uniformly distributed throughout the warehouse. The average pick density is 1 per 200 meters traveled. In a picking zone that is 50 meters long, a picker on an averagepicks 100 skus in each sweep, the average pick density is 2 skusper meter traveled.

Is higher density good?How to gain higher pick density? A major design and operation challenge.

7

4/14/2005

Storage: floor stacking

No storage equipment is requiredItems must be able to support the weight: special packaging may be requiredCan achieve good space utilization with limited SKUsDoes not support FIFOLow sku density

4/14/2005

Floor storage with tier rack

More flexible than pallet racksOften used for storage centric applications

8

4/14/2005

Pallet racks and bin shelving

4/14/2005

Gravity flow racks

Allows higher sku density while maintain high volume for each skuYOU may have seen gravity flow storage in supermarket: milk

9

4/14/2005

Effectiveness of pallet flow racks

4/14/2005

Carousels: parallel processing

10

4/14/2005

Vertical carousels

Small itemsValuable items

4/14/2005

AS/RS with stacker crane

AS/RSMiniloadUnitload

11

4/14/2005

Space requirements estimates

Recall 3PL for home appliance company?Throughput per day

Receiving 50 - 75 truckloads, Assume 2,560 ft3/truck

Holds 4 weeks of inventoryLittle’s Law

WIP = TH * CT

WIP = 75 * 2,560 ft3/day * 4 weeks * 5.5 days/week = 4,224,000 ft3

Assume stacking 20 ft high, space for storage = 211,200 ft2

Space utilization: 50 (70%), plus aisles, etc. Reality: 657,000 ft2 (14 football fields), 140,000 unit storage

4/14/2005

Slotting priority: cubit-per-order index (activity ratio)

What factor (s) should we consider to prioritize the slotting with known economic terrain (contours)?

Pick (restock) frequency: fast movers should occupy better locations.

Space requirement for the item. This may not be obvious.

12

4/14/2005

E.g.

Skus A and B have same pick frequency of 10/day. A takes 2 pallet slots and B takes 1 slot (can be due to lower inventory turns or smaller cases). Which one should be placed in more convenient location?

A A BI/O

B A AI/O

355.2*101*102

1

=+== ∑=i

iiAB DfTC

252*105.*102

1

=+== ∑=i

iiBA DfTC

4/14/2005

Does this make sense

The objective is to visit closer cell more frequently, regardless of what is in there.pi pick frequency picks/weekvi vol in storage ft3

The cell visit frequency is equal to

For the example: ARA = 10/2=5, ARB = 10

A A BI/O

B A AI/O

355.2*101*102

1

=+== ∑=i

iiAB DfTC

252*105.*102

1

=+== ∑=i

iiBA DfTC

i

i

vp

= COI)(or RatioActivity

13

4/14/2005

What can impact the storage requirements

Item size, storage/handling characteristicsReplenishment frequency

4/14/2005

E.g.

Top 6 items has steady daily demand in a small warehouse using dedicated storage. All orders consists of single item and there is no batching. The items are stored in pallets on shelves. Someone used EOQ model to decide the replenishments frequencies. Please find assignment priority. Let 1 week = 5 days.

A B C D E F Daily demand (cases) 200 100 1000 30 50 50

Cases/pallet 50 50 500 30 10 25 Replenishments Weekly Weekly Bi-wkly Daily Weekly Bi-wkly

Daily demand (pallets) 4 2 2 1 5 2 Space required (pallets) 20 10 20 1 25 20

AR 10 10 50 30 2 2.5 Priority 3 3 1 2 5 4

14

4/14/2005

Dedicated vs. randomized (shared) storage

Dedicated storage is more convenientShared storage provides higher storage efficiencyHybrid

Dedicated zones but shared within zonesDedicated in pick and and shared in reserve

∑≤≤

≤≤=

niijmj

D vV1 1

max :storage Dedicated

∑≤≤

≤≤=

niijmj

vVS

11max :storage Shared

4/14/2005

Comparison of randomized/dedicated

Randomized takes less storage requirements since averages variability across productsWhich provides higher pick density?

If all skus have similar activity ratio, the smaller space in ramdomized storage should lead to higher pick densityIf activity ratios vary a lot, the frequent visit to convenient locations in dedicated storage can lead to higher pick density

Hybrid - zone based storage

15

4/14/2005

Inbound and storage summary

DC operationsInbound operationsStorage methodsEquipment and handlingStorage metricSlotting priorities

4/14/2005

Questions

What are the important operations in a warehouse or DC?What are the pros and cons of high sku density?What can be used to achieve high sku density while maintain volume?Why DCs often use different equipment for transport and rack handling?What factors affect slotting priorities?What affect the storage volume requirement?

16

Order processing and order picking

Fall 08Chen Zhou

4/14/2005

Order picking

Most demanding: ~ 63% of operating costs in a typical warehouse, survey by the Warehouse Education and Research Council. It was identified as #1 area for improvementBecome more significant due to emphasis on just-in-time (JIT), cycle time reduction, quick response, and marketing strategies such as micro marketing and megabrand strategies

Smaller orders more frequently and more accuratelyMore stock keeping units (SKUs) be available for the customers.

What is involved to ensure high efficiencyLayout and storage strategiesSlottingOrder processingOrder picking system designOrder picking operational specifics

SequencingBatching…

17

4/14/2005

Order processing

AvailabilityLoca tion

Generate

4/14/2005

Form of pick list: sequenced labels

Sequenced sticky labels

18

4/14/2005

Other form of pick list

Data table for PLC for pick to lightSequenced voice instructions to pick to voice (later)Instructions to automated systems

4/14/2005

Issues in order processing

ObjectivesMinimize travel (or other handling)

Subject toThroughputCycle timeLine balancingTime window, batch to waves

Day in a weekDeparting timeItems to pass to other DCs

…WMS normally support this function.

It requires customization and adaptation

19

Order picking

Chen ZhouSummer 08

4/14/2005

What is involved in order picking

TravelSearchPick(sort)Put(sort)

20

4/14/2005

What affects order picking

StorageType of storage affects sku densitySku density affect pick densitySlotting affect total travel

Order picking system designOne at a timeBatching in various ways…

OperationsSequencingSchedule …

TechnologiesPick to light can reduce search time and improve accuracy

4/14/2005

Parameters of orders

Number of line itemsNumber of items in a lineSize and weight of an item

PalletCases (cartons)Break pack…

21

4/14/2005

Picking strategies

One item or one line per tripBigSorting or consolidation is needed later

One order per trip

201361

No

…54

321

NameSku ID

4/14/2005

Picking strategies

A batch of orders per tripSort while pick or sort after

6

1No

2

1

NameSku ID

2

6

1No

3

2

1

NameSku ID

22

4/14/2005

Picking strategies

A portion of an order (zoning)Too bigFor faster responseConsolidation while picking or later

…

20

19

18

17

16

15

14

13

12

11

10

9

8

7

20

1

3

6

1

No

6

5

4

3

2

1

NameSku ID

4/14/2005

Picking strategies

A portion of many orders (batching + zoning)

Economy of scaleHigher pick densitySorting while picking or sort after

…

20

19

18

17

16

15

14

13

12

11

10

9

8

7

20

1

3

6

1

No

6

5

4

3

2

1

NameSku ID

…

20

19

18

17

16

15

14

13

12

11

10

9

8

7

20

1

3

6

1

No

6

5

4

3

2

1

NameSku ID

20

19

18

17

16

15

14

13

12

11

10

9

8

7

20

1

3

6

1

No

6

5

4

3

2

1

NameSku ID

23

4/14/2005

Travels

Pick one at a time

4/14/2005

One order at a time

Benefit/drawbackTravel: downSearch: no changePick: may have some change due to handlingPut: may have some change

24

4/14/2005

Batch picking: multiple-order–one-picker

Benefit/drawback Travel: downSearching: not muchPicking: not muchPutting:

up if sorting on the tourno change if sort later but sorting is required downstream

Almost always good for single line orders

4/14/2005

Batch picking of large orders with truck

25

4/14/2005

Batching picking with push carts

Pick to order specific containers, no sorting is required afterwards

4/14/2005

Time based batching: wave picking

Many DCs organize batches based on time window Truck/ship/train departure timesShiftsCycle timesDelivery requirements

DesignationsMacon wave10 AM waveYellow wave

26

4/14/2005

Zone picking: one-order-multiple-picker

Benefit/drawbackTravel: not much changeSearch: downPick: no changePut: no changeLess training, higher accuracy

4/14/2005

Zone picking examples

No Sorting is required Sorting is required

27

4/14/2005

Batching + Zoning

Very useful in regional distribution centers that supply many storesBenefit/drawback

Travel: downSearch: downPick: can go down with sophisticaded design.Put: down because sorting is normally later

4/14/2005

Order picking strategy: fast pick area

Benefit/drawbacksTravel: down in pick areaSearch: not muchPick: may reduce if more convenientPut: similarRequire replenishment or double handling

ReserveForward/Fast pick

Restock

28

4/14/2005

Forward/reserve

The forward takes convenient locationsNear the shippingAt floor levelNear conveyor

The reserve takes less convenient locationsFar awayHigher levels that require special equipment for picking

Forward requires Quick searchEasy managementOften dedicated storage

Reserve requiresSpace utilizationOften shared or randomized storageThe share may be restricted to a special area, like one rack - hybrid

4/14/2005

A pick/reserve module

The pick at the bottom Reserve above

29

4/14/2005

Pick from pallet in a rack module

Fast pick from frontPick from reserve in the backReplenish from back

4/14/2005

Pick from reserve

Requires expensive equipmentTakes more time

30

4/14/2005

Pick from pallet to conveyor

4/14/2005

Finding skus and volume for fast pick area

Engineering for fast pick areaWhich sku should go to fast pick areHow much if know number of skus to share know number of volume?

n no. of skus in fast pickfi flow vol/year, m3 / year (month) pi pick frequency, picks / year, cpoi cubic per order, m3 / order, vi vol of restock to fast pick area of i, m3 / restockV total volume available in fast pickcr cost of restock, $/restock (assuming constant)s savings of a pick: fast pick vs. reserve.

31

4/14/2005

Fast pick calculatoin

Fast pick priority, descending order of

i

i

cpop

i = ciencyLabor Effi

4/14/2005

E.g. Please prioritize the claim to fastpick area

1333330.0060.10.30.1400200I

415630.2560.80.40.4800400H

59410.850.81.01.0850800G

92051.01.02.0250100F

72890.8640.60.60.61000250E

81110.450.50.51.09050D

66940.721.00.80.6750500C

343220.23140.51.50.2512341000B

255560.450.510.545002500A

PriorityEfficiency^2

Cpo

VB/A

H

E

W

D

L

C

No/mthB

Picks/mthA

Sku

32

4/14/2005

Fast pick volume assignment, n skus, vol V

Equal volume

Equal time

Optimum with respect of total cost

nVvi =

Vf

fv n

jj

ii

∑=

=

1

Vf

fv n

jj

ii

∑=

=

1

4/14/2005

E.g.

Consider 2 skus. The flows are 16 and 1 m3/ yr. They are to share 1 m3 storage in fastpick.

Equal Space Equal time Optimal V f/v v f/v v f/v

A 0.5 32 16/17 17 4/5 20 B 0.5 2 1/17 17 1/5 5

Total 1 34 1 34 1 25

DiscussionsWhat does optimum mean?

33

4/14/2005

Order picking summary

The most important operation in a DCTry to reduce time for travel, search and othersStrategies

Storage and handling SlottingBatchingZoningForward/reserveTechnologies (to follow)

ConveyorsPick to light (voice), put to light

4/14/2005

Order picking review questions

What is pick list?What are the order picking strategies?Are the priorities for slotting and fastpick the same?What strategy is suitable for which type of orders?What is one of the most important direct efficiency objectives in a DC?

34

Order Picking Technologies

Chen ZhouFall, 2008

4/14/2005

Popular technologies that assist order picking

ConveyorsPick to light and put to lightPick to voice“A” framesHigh speed sorting systems

35

4/14/2005

Conveyor

ConveyorsTransportBuffer: smooth flow and improve utilizationExtends the good locations throughout the facilityCan yield very high throughput

Important for high throughput systems, more and more popular in US, often miles to tens of miles in a facilityRequires significant investment

North

EASTCENTRALSOUTHWEST

Satellite Merges

Final Merge

Main Merge

: Accumulation

‘A’

‘B’

‘C&D’

Sortation Reciculation Zone for PickCrossdocked items

SorterSpurs

How to draw economic terrain

contours

4/14/2005

Schematic of a picking zone

Receiving docks

Sort to shippingdocks

Pick module Forward

Reserve

36

4/14/2005

A graphical view of a pick module

A case picking zone

Restockpick

pick

pickRestock

4/14/2005

Pick to light in station lighting

Reduce search timeIncrease accuracyReduce training

37

4/14/2005

Put-to-light

Present one sku to the pickerScan the skuLights associated with order containers will come onPut items into light indicated boxes

Put as indicated

4/14/2005

Differences between pick to light & put to light

Pick to lightSkus are stationary and wait to be pickedOrders triggers the light

Put to lightOrders are batched and waitSku triggers the light

38

4/14/2005

Application example

A DC has two types of productsStapleFlow through

Sales would try to convince you their technology is best for bothWhat do you think?

4/14/2005

Pick to voice

Scan the orderActivate voice instructions for the pickerPicker pick and place into the order containerPicker confirm picking complete verballyNo Sorting is required in this example

39

4/14/2005

Comparison of pick to light and pick to voice

Sales people will try convince you their technology is the best in terms of

CostAccuracy…

Voice: number of players required is proportional to Light: number of lights required is proportional to

Voice: Serial mediaVision: Parallel media

4/14/2005

Automated picking with A - Frame

A frameAutomated dispensing

40

4/14/2005

Automated order fulfillment initiation

Container typesLabels and tracking

4/14/2005

Sorting

ManualBarcode directedVision directedHigh speed sorters

41

4/14/2005

Sorting: High Rate Tilt Tray

12,000 items/hr.Unit sorterCan sort to two sides

4/14/2005

High speed conveyor sorters

Shoe sorter

Roller sorter

42

Other Outbound Operations

4/14/2005

Checking, packing and packaging

43

4/14/2005

Shipping

4/14/2005

Other: returns

44

4/14/2005

Warehousing review questions

What does SLP stand for and what does it involve?What is the default measure of distance between activities in typical software?What is the most direct quantitative measure of operational efficiency in layout problems?Are you comfortable with equal distance contours?

4/14/2005

Warehousing intro

What are the purposes of a warehouse (DC)?What are the main operations in a warehouse?Inventor positioning considerationsWhat are the direct and concrete objectives in a warehouse?

45

4/14/2005

Warehouse operations

What are some of the material movement equipment used?What are categories of loads moved?What are the storage methods?How do you measure the storage methods?What factors are the most important in deciding an sku’s location?What are the advantages of carousel vs. bin shelving?What is the advantage of flow racks (pallet or case)?

4/14/2005

Order picking

How do storage strategies affect order picking?What are the order picking strategies?What strategy is suitable for which type of orders?What are some of the technologies used to improve accuracy and speed?What does conveyor achieve in a DC?What are the pros and Cons of pick to light, put to light and pick to voice?What is one of the most important efficiency objectives in a DC?

46

4/14/2005

Wal-Mart DC Examples

Chen ZhouFall, 2008

47

4/14/2005

Port DC and RDC for Wal-Mart

Pallets are separate, some cases contain multiple skus

Fast movers are in palletsComments

400500People ~

100 cases/man hour45 cases/man hourProductivity

15,000/hour6,250/hourThroughput

Support 85 storesSupport RDCs and storesFunction

5,0003,000Skus ~

1.3 mil ft22 mil ft2 (35 football fielsds)Size

RDCPort DCMeasure

4/14/2005

Wal-Mart DC

48

4/14/2005

Overview of port DC and RDC

Port DCGoods come in mostly in cases in containersPalletizationStorage

Pick area: shared slots in zones in pallet racksReserve: tier racks, deep lane storage, floor stacking, high density difficult to pick

PickingPalletsCases

RDCGoods comes in from

Port DCManufacturersOther RDCs

Depalletization/palletizationStorage

RacksStaging

PickingCasesBreak pack23 miles of conveyors

4/14/2005

Robotic de-palletizer

49

4/14/2005

Port DC case picking

Order -> Barcode -> pallet(s), An associate place the pallet into pick areaPicker drives a fork lift picks cases in that aisle to the pallet, scan the case and the palletOnce completed, a pallet truck driver is informed to move the pallet to the dock

4/14/2005

Order picking schematic in port DC

Vertical economic terrainPallet picking vs. case picking

Slow moving takes better locations

Separation of picking and transporting

50

4/14/2005

Lagrange DC OperationMaterial Flow

MainMerging(16 to 4)

MiniMerging(4 to 2)

Sorter

Staple Goods(By Conveyor)

Distribution Goods(By Conveyor)

Distribution Goods(By Pallet Truck)

All Goods(By Conveyor)

Staple Goods(By Pallet Truck)

4/14/2005

Pick module in conveyorized system

Receiving docks

Sort to shippingdocks

Pick module Forward

Reserve

51

4/14/2005

Order picking

Pick to conveyorStack of bar code labelsPlace the label on carton, put the carton on conveyorBase pick rate: 450 cases/hour, or 8 second/case, including other times.Conveyor capacity: 20,000 cases/hour

Break packPeople to storagePick to lightPut to light

Wal-Mart do not open a case unless the orders will require its entire contentWhat does this mean in fill rate and inventory level?What will be the alternatives?

4/14/2005

Discussions

What additional “engineering” is needed to achieve high pick rate?

Sequence in SKU sequence along the pathUse large time windows to “batch” orders…

52

4/14/2005

Questions and discussions