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The design of a real-time Warehouse Management System that integrates

simulation and optimization models with RFID technology
Article in International Journal of Advance Research in Computer Science and Management · June 2013
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Ramírez Ríos, Diana, Ramírez Polo, Luis, Jimenez Barros, Miguel, Castro Bolaño, Lauren,
Maldonado, Erik ,The International Journal of Computer Science & Applications (TIJCSA), Vol.(02) No.(04), June,
2013
The design of a real-time Warehouse Management

System that integrates simulation and optimization
models with RFID technology
Ramírez Ríos, Diana (Author)
Chief Science Officer
Fundación Centro de Investigación en Modelación Empresarial del Caribe (FCIMEC)
Barranquilla, Colombia
dramirez@fcimec.org
Ramírez Polo, Luis (Author)

Associate Researcher
lramirez@fcimec.org
Jimenez Barros, Miguel (Author)

mjimenez@fcimec.org
Castro Bolaño, Lauren (Author)

ljcastro@fcimec.org
Maldonado, Erik (Author)

emaldonado@fcimec.org
Abstract
In this paper we approach a typical warehouse problem that is common to most industrial
businesses, were efficiency is given by the best arrangement of items in the warehouse
(slotting) and the best picking routes selected for each order (picking). Yet, when
implementing picking and slotting optimization techniques, the information used is historical
data that, in most cases, would fail to work given the many factors that affect daily
warehousing operations. On the other hand, simulation models have been used to make
virtual scenarios of a warehouse and can predict, with some accuracy, what would happen if
a specific decision was made, but these models also fail to work, due to the fact that the data
collected is not a reliable one. Given the complexity of most warehouses, we have designed a
Warehouse Management System (WMS) that functions dynamically with real-time data,
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through the use of RFID technology and the integration of simulation and optimization
models.
Keywords- Optimization, RFID, Slotting, Simulation, Warehousing, WMS
1. Introduction
Nowadays, businesses pay much more attention to their warehouses, how their products
are distributed and the time these spent before being dispatched. Their supply chains have
become more dynamic, customers are ordering at a faster rate and in smaller quantities
than they used to. This has demanded a much smaller warehouse and a higher rotation of
stock. Yet, there are no two businesses that work the same way, many factors affect the
dynamics of their supply chain and it’s only through their own experience that they can
rely on to make decisions that will affect the efficiency of their operations.
“In any Supply Chain, Inventory Management and Warehousing form a part of operations
intensive function and is one of the key building blocks in the entire chain. Most of the
inventory is held at the warehouses as compared to the pipeline, and the efficiency of the
warehouse operations will determine the further supply chain efficiency.”1
A warehouse is a physical infrastructure where goods are stored, it’s usually a commercial
building organized with racks and shelves, usually equipped with forklifts and other
equipment that enable products to be moved around the area. Warehousing involves all the
movement of goods within warehouses and distribution centers; it usually involves
receiving, storage, order-picking, accumulation and sorting, packing and shipping. Order-
picking is the process of gathering items that are requested in an order at one time. An
order usually has a list of SKUs (stock keeping units), with the corresponding quantities
that the customer is requesting.
A warehouse management system (WMS) provides information on the location, structure,

floor plans, design and layout in the outside and the inside of the warehouse, storage
infrastructure, material handling equipment and much more, depending on the type of
business and how complex is the warehouse they are using. The WMS is an interesting
tool that not only provides information, such as the mentioned before, but can also respond
to decisions made by the user. For example, the WMS not only locates an item in the next
available spot, it can be also configured to select the best place for that specific item, so
that it guarantees a greater efficiency in the picking operation. In general, it is used to
allocate warehouse resources efficiently and effectively to improve productivity and
reduce operation costs.
With some industry estimates suggesting that order picking represents more than 60% of
warehouse operating costs, few warehouse management decisions have as much effect on
profitability (Collins, 2008). Picking is a crucial part of a business and it has become
important to optimize picking operations. Usually picking optimization objectives involve
increasing productivity (number of items picked per unit of time) and reducing order cycle
1
http://www.managementstudyguide.com/warehouse-management-system.htm
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times. Many authors have referred to picking optimization and there are several algorithms
that are already designed and have obtained excellent results (Bartholdi III and
Subramanian, 2007;Shuhua and Yanzhu, 2009; Tang and Li, 2009).
On the other hand, slotting is also crucial for warehouses, given that storing inventory
requires space and space is everyday more valuable to businesses. So products must be
stored not only in the spaces available, but also in the areas where the products that have
higher rotation are more accessible than those that have a lower rotation. There is no
perfect rule to slotting and each warehouse is unique to how slotting should be done.
Slotting optimization has been studied broadly (Damodaran, et al., 2005;Jones and
Battieste, 2004;Kallina and Lynn, 1976;Li, et al., 2010;Mantel, et al., 2007; Petersen, et
al., s.f.;Petersen and Thompson, 2003;Trevino, et al., 2009) and in many of these papers it
is implicitly mentioned that a software is necessary to assign the spaces in an optimal
manner, given that warehouses today have to manage even more SKUs than before and at
a faster rate, for information must be processed quickly.
Yet, it is important to know that optimization can be done with information already given
to the system and it is usually relied on a forecast made with historical data, but in many
cases, the information given is not a reliable one because it does not account issues that
eventually appear in every day operations and significant changes that require of recent
data obtained and this can only be done if information is updated at a daily basis.
However, it is difficult to update daily operations of inventory level, locations of forklifts

and SKUs in real-time by using the bar-code-based or manual-based warehouse
management systems. For this to happen, a technology that facilitates the capturing and
sharing of data is required. RFID (Radio frequency identification) technology has become
an important tool that, not only captures data in real-time but can direct operations in real-
time too, giving a total control over warehousing operations. As Chow, Choy and Lee
(2007) stated, RFID is used to improve operational efficiency for generating a profit
eventually. This is true given that acquiring RFID technology requires of an important
capital investment but the experience has shown that a return over the investment is earned
in a short-term (CE RFID, 2004).
Given the complexity of businesses nowadays, no WMS is the same for every business
and many require an operating system that can give flexibility to the decisions made in the
warehouse. Simulation models have been implemented to create virtual warehouses in
order to validate optimization models (Petersen, 1997; Roodbergen and Sharp, 2008). The
importance of simulation, over other techniques, is its capacity to generate multiple
scenarios and thus, propose more alternatives into a decision that needs to be made.
This paper is based on a research done in a cosmetics and pharmaceutical business

warehouse, where a WMS was designed and integrated with RFID technology, in order to
capture real-time data, and simulation and optimization models that give an input to the
system that provides the best decisions to be made in terms of the allocation of items and
an efficient movement of them around the warehouse.
2. A Literature Review
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2.1. Warehousing
In order to understand the problems that occur at a warehouse, it is necessary to know how
a warehouse is characterized, the processes involved and resources used to operate the
warehouse.
In a warehouse, the movement of goods is the primary issue and so a warehouse must be
designed according to the type and quantity of goods that will be stored. In (Rouwenhorst,
et al., 2000), the authors presented the characterization of a warehouse, methods and
criteria for designing a warehouse and warehousing management. The study emphasizes
on three key aspects of the warehouse: processes, resources and decision-making. When
the products arrive to a warehouse, they follow a series of processes that are typical in a
warehouse, this are, reception, storage, picking and dispatching. The resources are referred
to the handling equipment and personnel used to move products and to operate the
information systems that may be implemented. This area also considers the packing units
and storage systems which may vary depending on how big the business is. The decision-
making done affects how the warehouse is operated how its areas are distributed, decisions
such as the type of picking done, the inventory policy used and how the products will be
located in the racks and shelves.
Van Den Berg (1999) presented a literature survey on the methods and techniques for the
planning and control of warehousing systems. The study presented the storage location
assignment problem at a tactical level for the planning of warehouse operations,
introduced as the Storage Location Planning Procedure. This procedure is composed of
four steps: distribution of products among warehousing systems, clustering of correlated
products, balancing of workload within warehousing systems and assignment of products
to storage locations. This survey also considered control problems in warehousing
systems, such as, batching of orders, routing and sequencing and dwell point positioning.
Relevant literature on these specific topics is referred in this paper. It can be observed that
many methods and procedures that have been developed significantly outperform those
methods that are used in practice. Modern information technology such as the WMS still
uses simple heuristics and in many cases, the warehouse performance would be improved
by at least ten intelligent planning and control procedures.
WMS, as software itself, can be wide used in any warehouse for its management. There
are small to huge WMSs with different integration options. One of the improvements of
automations in WMS is RFID. Although RFID has its limitations, most of them are due to
the type of products which has nothing to do with Software. Despite this, when speaking
about automation with RFID and its integration with a WMS, there is a lot to improve in
the system and have better and more precise information processing (such as counting
inputs and outputs) and have information up to date, any time of the year. Some
applications like software alerts (i.e.: low stock products) are tools that a WMS may have
to improve the overall system and its processes.
Given that order picking is considered a key process in any warehouse and estimated to
occupy a significant proportion of the total warehouse operating costs, Le-Duc and De
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Koster (2005) presented a literature review on the basic decision problems in design and
control of order picking processes, focusing on an optimal internal layout design, storage
assignment methods, routing methods, order batching and zoning.
Other significant research has been done on warehouses (Amato, et al., 2005;Baker and
Halim, 2007;Bozer and Cho, 2005;Caputo and Pelagagge, 2006;Caron, et al.,
2000a;Castillo and Peters, 2002;Chakraborty, et al., 2007;Chang, et al., 2006;Cormier and
Gunn, 1999;Dotoli and Fanti, 2005;Goh, et al., 2001;Heragu, et al., 2005;Ito and Abadi,
2002;Jane and Laih, 2005;Johnson and M.L., 1996;Kim, et al., 2002;Kim, et al.,
2003;Kuo, et al., 2007;Lee and Elsayed, 2005;Lee, et al., 2005;Malmborg, 2003;Mason, et
al., 2003;Petersen and Aase, 2004;Petinis, et al., 2005;Sari, et al., 2007;Van den Berg and
Gademann, 2000;Wong, et al., 2007;Wu, 2006;Yin and Rau, 2006;Zhang and Lai, 2006)
yet little has been said on the integration of RFID technology, Simulation Models and
Warehousing.
2.2. Slotting Optimization
The algorithms that have been developed in the optimization of warehouses are principally
about picking and slotting optimization, given that it’s important to know where to locate
an item that moves frequently, such that the distances in picking are minimized and, at the
same time, know the best picking route to take. Yet, we have decided to emphasize on
slotting optimization given the type of warehouse that is approached in this warehouse.
Slotting optimization is studied in order to identify the most efficient way to locate items
in a warehouse or distribution center, taking into account that each warehouse has
different infrastructure and manage different kind of goods. An efficient allocation of
goods in a warehouse, not only makes material handling more efficient but it also reduces
the risks of accidents around the warehouse. Studies in slotting optimization have been
approached by several authors (Amirhosseiniand Sharp, 1996; Chew and Tang,
1999;Chincholkar and Krishnaiah Chetty, 1996; Damodaran, et al., 2005.; Hwang, et al.,
2003; Jones and Battieste, 2004;Kallinaand Lynn, 1976; Li, et al., 2010; Marvel, et al.,
2001; Mantel, et al., 2007; Petersen, et al., 2005.; Petersen and Thompson, 2003; Trevino,
et al., 2009; Yang, 2001), and it is interesting to know how this research affects order
picking. Kallina and Lynn (1976) presented a technique that is still used today, is the
Cube-per-order heuristic algorithm, which finds a solution to the location of items in a
warehouse based on its rotation and the volume it takes in the warehouse. Petersen and
Thompson (2003) evaluated the slotting measures, given the application of storage
strategies in Golden Zone locations of a warehouse, in terms of picking time and
distances. Results demonstrated a significant improvement in material handling with the
strategies implemented as compared to the pick density strategy. Jones and Battieste
(2004) presented an application of storage processes through slotting and searched for an
optimal picking performance. Petersen, Siu and Heiser (2005) used Montecarlo simulation
in order to evaluate the slotting and storage allocation measures by also using the Golden
Zone strategy, which resulted in important savings given the resulting time reduction as
compared to other storage allocation policies. Damodaran, Koli and Srihari (2005)
presented a mathematical model that searches for the best location of the items in a
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warehouse in order to minimize the distances in picking routes. Mantel, Schuur and
Heragu (2007) made a study of the most common slotting techniques and introduced a
strategy named Order Oriented Slotting (OOS), which is explained as an allocation of
goods in an empty warehouse, given a list of orders to be picked, minimizing the total time
it takes in the picking operation. Trevino, Wutthisirisart, Noble, and Chang (2009) studied
a slotting technique approach based on sequential orders. They also developed a
mathematical model and solutions are compared among several heuristics in order to
compare it to the approximated value generated by this approach. Metaheuristics were also
used in slotting optimization, Li, Fang and Ji (2010) proposed an algorithm based on
particle swarm optimization in order to solve the storage allocation problem, where the
optimal is reached according to the lowest energy principle and the shortest time principle.
A simulation model was used to validate results generated, which suggested that the
technique reduced energy consumption and overall warehousing costs.
2.3. Warehousing Simulation Models
As observed in the previous section, the results given in the optimization many times
require simulation models in order to validate the results obtained and, thus, evaluate the
performance indicators of the warehouse, usually throughput and operation costs. In this
section, a literature review of simulation model cases will be presented, in order to show
how simulation has been of great influence in warehouses.
Simulation models have been applied since the early 1980’s through basic simulation
packages (Ashayeri, et al., 1983; Banks, 1990), and then software was introduced such as
SIMULAP (Dangelmeier and Bachers, 1986) and later ARENA by Rockwell Automotion,
which has been started to be part of many warehousing applications (Liong and Loo,
2009), including this research. Some literature present simulation models as a way to
evaluate specific strategies for already automated warehouses, for example, a discrete
event simulation model of the logistics operations at a real high throughput warehouse was
presented in (Gagliardi, et.al., 2007). Another example is a study of automated
storage/retrieval systems (AS/RS) in warehouses, where a heuristic recursive
optimization/simulation procedure is developed in (Rosenblatt, et.al., 1993).
Much of the research done is simulation is also due for optimal warehouse design. Caron,
et. al., 2000) present a simulation approach to efficient layout design of the picking area in
picker-to-part systems using random or cube per order index (COI)-based storage policies.
Antonio E.S. Carvalho and J.M. Feliz Teixeira (1998) introduced a simulation study made
on the project of a warehouse layout, designed by the Portuguese company with the
purpose of installing it in Brazil. Joseph Macro and Reino E. Salmi (2002) presented a
universal warehouse storage simulation model that is scalable and can be modified,
depending on the layout desired in a warehouse. In their research they were able to
analyze the storage capacity and rack efficiency of a medium volume, low SKU
warehouse, the same as a medium volume, large SKU warehouse.
2.4. RFID Applications in Warehousing

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One step ahead of barcodes are Radio frequency identification technologies. RFID allows
reading items that have tags in wireless form, while barcode readers need to scan the
labels directly. Yet, there are some problems associated to the application of RFID in
warehouses, for example, liquids absorb the signals and metals reflect them, thus, making
the tags unreadable and un-writeable, most of the time. These problems are being treated
and RFID is evolving to avoid them.
RFID technology has gained importance all over the world, especially among the wireless
communication devices since it has been of great influence to many industries (Chao,
Yang and Jen, 2007). According to McFarlane and Sheffi (2003), an auto-identification
system such as RFID is made only for the identification of a number, which is assigned to
an item in particular, through a tag that contains a chip that is easily detected, even at high
speeds and is capable of storing large amount of data. Also, as mentioned in (Bendavid Y.,
Castro L., Lefebvre L., Lefebvre É., 2006), RFID technologies can also have implications
at strategic levels of the company allowing the user to implement new business models,
reengineering and process automation.
Some papers refer to applications made of the implementation of RFID in warehousing.

Most of them have been very successful, especially in the dock/port facilities (D’Amico,
2002; Dornheim, 2002), in the retail businesses (Chappell, et.al, 2002) and the supply
chain of the printing industry (Hou and Huang, 2006).
Moreover, research done has considered the sustainability of logistic systems, through the
use of knowledge-based systems (KBS). That’s why in many logistic facilities, especially
in warehouses, intelligent systems are proposed and are integrated with RFID technology
(Smirnov, et.al, 2004). Harry Chow, Choy and Lee (2007) presented a real-time
knowledge-based system application, which incorporated RFID and mobile technology to
gather information in a dynamic way and through a multi-agent approach. Chow, Choy,
Lee and Lau (2006) presented an RFID-based resource management system using RFID
and artificial intelligence technologies to collect dynamic and static logistic data and then
formulate a real-time based resource usage package for warehouse operations.
2.5. RFID Applications in Warehousing to the Colombian Industry
In Colombia it is observed that the application and use of RFID technologies is extremely
low; based on the fact that still most medium and small-sized businesses have no
Information and Communication technologies, which are required for RFID
implementation. Even so, RFID is one of the technologies that are most frequently used in
Colombian warehouses nowadays, according to Correa, Gómez and Cano (2010). In this
paper the authors made a survey on the companies that have implemented RFID and
mentioned businesses such as Almaviva, Alpopular, Colcerámica, Éxito, Procter &
Gamble, Colgate, Nestle and Unilever, and focused on Éxito’s case, where the
implementation of RFID improved significantly the programming of their resources and
the management of their warehouses. Díaz and Arias (2010) presented a case applied to
the distribution center of Regional Pereira in which RFID technologies were applied to
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improve picking, obtaining thus, higher productivity rates, logistic operation efficiency,
time reduction and flexibility in the time shifts given any unexpected event. Correa,
Alvarez and Gómez (2010) also made a review on the international applications,
emphasizing on the Colombian case, presenting how RFID has been applied to supply
chain management of business like Noel, Hermeco, Familia, Exito-Noel, Grupo Corona
and National Coffee Federation. The Gollo group case is also an interesting case of RFID
implementation, which contemplated integration with WMS software (Gollo, 2008).
3. Heuristic solution procedure developed

3.1 Formulation of the mathematical model
The problem studied is based on a typical warehouse for storing products for further use in
production or commercialization, composed of multiple isles and racks/blocks with fixed
capacities. Each rack may have multiple levels and each slot has a capacity of a Standard
American Pallet (1x1.2m). The height can be modified depending on the type of rack that
is built up. It has been observed that in a warehouse, two basic problems are approached;
one is about achieving an optimal sequence of the orders to obtain the minimum distance
and the second is about optimizing the space available while obtaining the maximum
throughput. The mathematical problem associated is the following:
Sets:
i= products
j= racks
t= period of time ,
Variables:
= trips the forklifts take to pick up product
Parameters:
quantity of product requested at time
= volume of the product in m3
= capacity of the rack
= distance from entrance to rack
= distance from rack to rack
= distance from rack to exit
= forklifts available at time
= capacity of forklifts in m3
Objective Function:
(3.1)
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 
  q it ' vi / Cequip  xit  u it , i  N (3.2)
 t 'T 
 u it  equip t ,
iN
t  T (3.3)
 
   q
(3.4)
v yijt '   cap j , j  J
it ' i
i t 'T 
(3.5)
x
iN
it  1, t  T
(3.6)
y
iN
ijt  1, j  J
The mathematical model above contemplates the order in which the products should be
located, wherever they are just entering the warehouse (first term in eq.3.1), moving inside
the warehouse (second term in eq.3.1) or leaving the warehouse (third term in eq.3.1) in
order to obtain the minimum distance travelled by the forklifts. It takes into account the
capacity of the forklift (eq.3.2), the number of forklifts available (eq.3.3) and the capacity
of the racks (eq.3.3).
An analysis done to this mathematical model show that this is an NP-Hard problem, thus it
is not possible to obtain an optimal solution of the problem for large-scale problems. For
the sake of this research, given that it has been implemented to real-life applications, a
heuristic approach was used to get an initial “good” solution and simulation was used to
generate several scenarios to choose from when obtaining the daily sequencing of the
orders.
3.2 RFID and WMS
Actually any WMS works with different types of automation or manually for warehouse
processes. Standards like barcodes labels and RFID tags are commonly used in the
warehouses to help count inputs and outputs of raw material, package material and
products, etc., in an easier and faster way, with high ranges of reliability (more barcodes
than RFID tags).
WMS can be used without these automation types, since it can print out reports as a list of
activities to be done and workers are in charge of counting everything manually. On top of
that, they have to manually write everything back on the WMS (through a pc terminal or a
mobile device). But it is not possible to use a barcode or RFID standard without having a
WMS. These technologies are used to count and keep track of inventory in the most
accurate way. Moreover, WMS helps to make important decisions about all processes that
are attached to the warehouse.
For the implementation of RFID, it is necessary to obtain at least one antenna or a mobile
device to read and write the codes in the tags. The device sends a signal (read or write) and
the tag (passive chip with an antenna) responses with the code (if is a reading operation) or
an ok status (in case of writing).
But the reasons to have RFID as identification standard for raw material, package material
or products are very important when observing the supply chain as a whole system. In case
the supplier sends all the items with RFID tags, the only activity that needs to be done is to
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corroborate the inputs through the RFID readers, where the items received should be
exactly what the supplier is supposed to send. If this is not the case, before storing the
items, the RFID tags can be generated before items enter the warehouse as a way of
controlling them.
4. Optimization-Simulation Model
The simulation model developed operates in ARENA and integrates database from
Microsoft Access through Visual Basic. It is known as an optimization-simulation model
because it integrates a heuristic to optimize slotting and generates solutions to several
scenarios in order to obtain the best sequence of orders at a daily basis.
The information is stored in this database and the algorithms were programmed in Visual
Basic in order to obtain the input required in the simulation model and process the results
generated, so the user can access it in the WMS and be able to make decisions. Figure 4.1
shows a description of the general model designed.
Figure 4.1 The general model designed
4.1 Characteristics of the model designed
The initial part of the model consists of registering information of the actual state of the
warehouse, the products handled and the process and information flow within the system.
The key input data recorded consist of the following:
-Product families and references
-Quantities of products entering, moving internally and exiting the warehouse each day
-Floor print with dimensions of the warehouse and rack dimensions.
-Initial inventory for each product and its location in the warehouse
-All routes that can be accessed by forklifts along the warehouse
-Product dimensions and volume
-Times associated to the operation of the warehouse
-Number of forklifts available
-Number of workers associated to each activity
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-average reception/dispatching time
An initial improvement was made to the warehouse, where the location of the items is
based on the initial solution generated by the slotting optimization heuristic adapted in
(Manotas, L. and Ramirez, D., 2011). Additional to this, in order to get a better
organization of the SKUs being processed, products were grouped according to similar
characteristics that each one possesses and these are strategically located in nearby
locations, in order to facilitate the worker’s daily operations. These restrictions were easily
adapted to the model for this particular application, yet they are not fixed for every
warehouse.
4.2 Decision Making Model
As soon as the model recognizes in organizes all the data described previously, which is
stored in the Microsoft Access database, Visual Basic captures this information in order to
feed the simulation model implemented. ARENA will generate the different scenarios in
order to obtain different options for the decision maker as to how to allocate resources,
what will be the locations of the product and what will be the sequence of orders to be
processed; all this, as a result of the chosen scenario.
The optimization models were integrated through Visual Basic to the ARENA interface
through an approximated algorithm in order to obtain more than one solution instead of
trying to get the optimal solution. Thus, more than one “good” solution was generated in
order to evaluate the performance indicators analysed.
4.3 Implementing the Simulation Model
Simulation through ARENA is performed in order to replicate what would occur in a

warehouse at a daily basis, according to the storage strategies implemented and criteria
used to analyse the feasibility of the scenario. Information gathered is processed and
executed by ARENA in order to obtain performance indicators in the daily operation of a
warehouse. It also generates reports that show the statistics generated in order to support
decision making in the warehouse. Figure 4.2 shows the Simulation Model designed.
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Figure 4.2 Simulation Model designed
The simulation model was implemented to a cosmetics/pharmaceutical business and initial

runs were executed for an overall diagnosis of the warehouse and the results generated
were compared to real data. Performance indicators measured were the following:
-quantity dispatched per unit of time
- average quantity moved per zone
-resource utilization per unit of time (worker, machines, racks)
-distance travelled to perform an operation per resource
-throughput per product
The identification of products and zones are shown in tables 4.1 and 4.2
Workers at its maximum capacity at a busy day Workers at its maximum capacity at a normal day
ACTUAL MEJORADO ACTUAL MEJORADO
ME PT ME PT ME PT ME PT
Entrance 62 38 63 40 50 30 52 35
Exit 75 52 84 58 62 45 74 55
Table 4.1 Initial Results Generated- Evaluating Workers Capacity
Hours required to perform an operation at

a 90% capacity
Operario caso actual caso mejorado dif
Alm ME 7 5.8 1.2
Alm PT 7.4 5.5 1.9
Table 4.2 Initial Results Generated- Hours required performing an operation at a 90% capacity
For the generation of results, three scenarios were contemplated. S0 considered the actual
state scenario, S1 considered the double entries and S2 considered only one resource.
5. Analysis of Results
Based on the results shown in the implementation of the model, it can be concluded that
there is no significant improvement in the average values, but we can observe that the
distance travelled by the resources had a significant reduction and that is an indicator of an
improvement in the picking operation and is based on the fact that products that have a
higher rotation are located near the enlistment area. On the other hand, there was no
change in the utilization of the resource because it can be seen that the warehouse studied
has plenty of capacity and so does the resources. The only way the utilization of these
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resources is increased is given by the increase in the quantity of products managed. This
was reflected in the scenario S1 which considered the double of entries, where the
utilization of the resources increased. This was also reflected in the scenario S2, where
only one resource was used and compared to the actual state scenario, S0, its utilization
increased. This suggests that the warehouse is working under its capacity and so are its
resources.
Detailed results also show improvements in the management of several zones that had
their capacities completely full and others which had space available were filled with other
type of products.
6. RFID Integration Model
Up to this point, the RFID helped to count the received items to store it on the WMS
database, yet much more was done for this research. Given the integration made to the
WMS, information could be send back and forth, enabling the WMS to automatically let
the operators know where to store the items, through the optimization procedures that
were included in the simulation software. The simulation software integrates with the
WMS, providing a decision that is sent back to the warehouse operator. Once placed, the
items can be moved internally (i.e., position changes given to business’ policies) or
externally. In the first case, the physical movement can be changed via the WMS with or
without reading the RFID tag. The reading can be used just to make sure that the items
moved are the correct ones; this can be used as control process business politics.
There are several scenarios for output items; it can be sent as devolution to the supplier, it
can be sent to production for transformation (as a product) or can be sent to the client
directly (without transformation, prior storage), and other company options are allowed. In
all cases, picking routines with optimization algorithms are implemented to choose the
best order sequences that accomplish the business politics, for example, by using FIFO
(First in, First Out).
As an integrated process, the algorithms will work with Wave Picking, as the WMS will
have the resources (personal, vehicles, tools, etc.) to schedule all the activities that incur in
an output movement from the warehouse.
The business may also use the RFID mobile devices to check if the items listed in the
picking order are the ones that are being ready to leave the warehouse. Also, just by
having a report with a list of items and their locations in the warehouse, the personnel can
bring the items to the enlistment area or take directly to the place they need to be located.
At this point, the items with RFID tags are discharged from the inventory by only passing
through a RFID portal or mobile reader. This process also liberates the slot in the
warehouse to be used in an input operation. If the clients (that can be themselves, as an
industry or business that runs a distribution center for their consumers) want to implement
RFID in their business, a supply chain can be completed, as items already have RFID tags
that will allow them to control their inputs, internal movements and outputs, in general
terms. Integration of the supply chain will reduce the times and costs, as no RFID tags
need to be generated in every echelon of it. Mobile RFID tag reader devices can be used to
2013
take physical inventory verification just by passing them over to the RFID tags to count
the items.
Items Presentations
Warehouse
Product
Racks for storage
Internal inventory
Box of Products movements
Overhead Door Overhead Door
Workplace
with WMS
Outputs: Picking Process

application
Inputs: Slotting Process

Provider’s items Slotting / Picking
with RFID tags
Palet of Boxes implementations
RFID reader
mobile device Report Guide to
with WMS application Slotting/Picking
Antenna RFID
Reader
RFID Tag
(Sticked to an item)
Provider’s items Client / End customer
without RFID
tags
RFID tags
Printer/Writer
(Codes generated by WMS)
Figure 6.1 RFID integration to WMS design
In the following model designed, observed in Figure 6.1, we present a physical and
software system to manage the warehouse with RFID. At the left, the SKUs that are
managed by the business are shown; it can be just one or it can be all of them (other SKUs
may apply). These items are delivered to the warehouse from the supplier (the supplier can
be external or internal: like a production plant that is part of the business) given any of
these two cases:
• Ready with RFID tags: In this case, there will be a direct input process.
• Not ready with RFID tags: In this case, the RFID tags need to be generated in order to
mark the items.
In any case, there will be an input process that will be dependent of the slotting
optimization process (this one tells the operator where should the items will be stored).
This input process will be confirmed when the items pass through an overhead entrance
door (can be the same exit door) with one or more antennas than can be on the sides and
up; these antennae will read the code stored on the RFID tags, and will count up the items
in inventory. The internal inventory movements can be done via WMS process, according
to business storage politics, like temporary quarantined items that, once checked, needs to
be moved. This process is both done physical and virtually. Finally, the outputs of the
items stored will be picked, according to the needs of the client or clients (once again, the
client can be an external or internal one). The picking sequence options are given by the
optimization algorithm executed in the WMS and the rest of the items in the inventory
have to pass the exit door (can be the same entrance door), to be discharged by the system.
In any part of the process, mobile RFID tag readers with WMS application are used for
checking and to record any movement detected of the items around the warehouse. Report
guides will be generated to guide the operator locate the items’ location or to apply any of
the other processes mentioned before.
2013
7. Conclusions and Future Research Directions
Typical Warehouse Management Systems contain the basic functions that permit the
operation of any warehouse, yet, as the business grows and as we move into a faster and
much more dynamic environment; a need to speed up processes is everyday more
demanding.
On the other hand as a business adapts to new technology, it requires of a simple and more
flexible way of managing the information. RFID technology has become an interesting
tool for gathering and storing information in a rapid and easier way. Additional to this,
simulation and optimization models helps the decision making to be more flexible and
efficient, offering the user, through simulation, an animated view of the warehouse, and
through optimization, more productive warehousing process operations.
The integrated model is a representation of how all the excellent tools can be managed in a
single application, which is able to operate and make decisions at a daily basis, offering
the warehouse operator, the best way of managing this area of business. Results to the
implementation done to the pharmaceutical and cosmetic industry demonstrate the
effectiveness of this model in all the performance indicators analyzed. Yet, still future
results of the implementation have not been measured in order to obtain an overall
performance of the RFID benefits over the entire warehouse system. This is due to the fact
that the system has just been implemented and indicators concerning accuracy in receiving
and putting away each product, inventory location accuracy and visibility, percentage of
inventory damaged, on-time delivery, order fulfillment rate, among others, cannot be
measured at the time. Future publications of this research will concentrate on these issues.
Further research is directed on learning mechanisms for stochastic optimization that can be
also integrated with RFID technology and Real-time enterprise (RTE) as suggested by
other studies performed (Smirnov, et.al, 2004; Harry Chow, Choy and Lee, 2007; Chow,
Choy, Lee and Lau, 2006). Also, research is open for the inventory replenishment
problem, given that with real-time information; a dynamic model can be developed that
may change inventory policies used in a warehouse (Sahin and Dallery, 2005).
Acknowledgments
This paper was supported by the Colombian Institute for Development in Science and
Technology “Francisco José de Caldas” (COLCIENCIAS) and Centro de Investigación en
Modelación Empresarial del Caribe (FCIMEC) through the project titled: “Diseño e
implementación de centros de almacenamiento automatizados mediante la aplicación de
tecnologías EPC-RFID” No. 2233-454-25947.
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The design of a real-time Warehouse Management System that integrates

Diana Gineth Ramirez Luis Ramirez Polo

SEE PROFILE SEE PROFILE

Miguel Angel Jimenez Barros Lauren J. Castro- Bolaño

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The design of a real-time Warehouse Management

Ramírez Polo, Luis (Author)

Jimenez Barros, Miguel (Author)

Castro Bolaño, Lauren (Author)

Maldonado, Erik (Author)

Keywords- Optimization, RFID, Slotting, Simulation, Warehousing, WMS

A warehouse management system (WMS) provides information on the location, structure,

However, it is difficult to update daily operations of inventory level, locations of forklifts

This paper is based on a research done in a cosmetics and pharmaceutical business

2.2. Slotting Optimization

2.3. Warehousing Simulation Models

2.4. RFID Applications in Warehousing

Some papers refer to applications made of the implementation of RFID in warehousing.

2.5. RFID Applications in Warehousing to the Colombian Industry

3. Heuristic solution procedure developed

= trips the forklifts take to pick up product

3.2 RFID and WMS

Figure 4.1 The general model designed

4.1 Characteristics of the model designed

-average reception/dispatching time

4.2 Decision Making Model

4.3 Implementing the Simulation Model

Simulation through ARENA is performed in order to replicate what would occur in a

Figure 4.2 Simulation Model designed

The simulation model was implemented to a cosmetics/pharmaceutical business and initial

ACTUAL MEJORADO ACTUAL MEJORADO

Table 4.1 Initial Results Generated- Evaluating Workers Capacity

Hours required to perform an operation at

Operario caso actual caso mejorado dif

Alm ME 7 5.8 1.2

Alm PT 7.4 5.5 1.9

6. RFID Integration Model

Racks for storage

Outputs: Picking Process

Inputs: Slotting Process

Figure 6.1 RFID integration to WMS design

7. Conclusions and Future Research Directions

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