Logistics Information Management

Efficiency improvement in manual warehouses through ERP systems implementation and redesign of the
logistics processes
Antonio Rizzi Roberto Zamboni
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Antonio Rizzi Roberto Zamboni, (1999),"Efficiency improvement in manual warehouses through ERP systems
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Charles G. Petersen, (1999),"The impact of routing and storage policies on warehouse efficiency", International Journal of
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A. Gunasekaran, H.B. Marri, F. Menci, (1999),"Improving the effectiveness of warehousing operations: a case study",
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Efficiency improvement
in manual warehouses
through ERP systems
implementation and
redesign of the logistics
processes
Antonio Rizzi and
Roberto Zamboni
Downloaded by State University of New York at Binghamton At 03:22 14 May 2015 (PT)
The authors
Antonio Rizzi and Roberto Zamboni are Lecturers in
the Department of Industrial Engineering, Parma
University, Parma, Italy.
Keywords
Warehousing, Logistics, Channel management,
Information systems
Abstract
Deals with the issues related to the implementation, in a
manual finished goods warehouse, of an ERP information
system aimed at improving warehouse internal logistics
efficiency. Specifically it is observed that the mere
implementation of an integrated warehouse management
information system does not actually guarantee the
optimization of warehouse logistics. Rather, to improve
the overall systems efficiency, it is required that ERP
implementation be combined with the redesign and the
reorganization of warehouse logistics and processes. This
means that to achieve an effective synergic effect and
thus effectively increase systems efficiency, both these
steps have to be undertaken concurrently, grounding the
reorganization and redesign phase on the implementation
fallouts (in first place higher traceability levels gained).
The whole project is then applied to a real case of a
finished goods manual warehouse, with pile storage
systems.
Electronic access
The current issue and full text archive of this journal is
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Logistics Information Management
Volume 12 . Number 5 . 1999 . pp. 367±377
# MCB University Press . ISSN 0957-6053
367
Introduction
Traceability is one of the basic requirements
for firms to achieve high quality management
levels, as explicitly required by ISO 9000
standards for quality certification. By trace-
ability it has to be the intention to thoroughly
identify materials in any manufacturing
phase, from raw materials, through work in
progress and up to finished goods. Trace-
ability ensures on the one hand the possibility
to trace back the position of any material
inside the entire production system (the
storage allocation of raw materials and fin-
ished goods, the actual position of work in
progress in the production cycle, etc.), and on
the other it allows, for all finished goods, to
trace back every single component of bill of
materials (Vieider, 1996; De Benedetto,
1996). Improving traceability in productive
systems is then a requirement for modern
firms, since it means more efficiency for
internal functions, and consequently, more
efficiency for the whole system.
Focusing on finished goods warehouse
systems, high traceability standards do mean
the possibility to increase internal processes'
efficiency. Warehouse fill rates can be in-
creased, bettering space utilization, mean
orders shipping times can be reduced both
through specific allocation policies grounded
on item turn rates, and knowing the exact
position of items stored inside the warehouse
during material handling operations. More-
over, the adoption of such allocation policies
permits the management of shelf life issues by
means of ad hoc storage/issuing strategies
(Hill, 1996; Waymann, 1995). Finally errors
and time waste due to hand keying data into
computer databases can be thoroughly elimi-
nated by means of automated information
systems, such as for instance warehouse
managing systems (WMS) (Hill, 1996;
Brown, 1996).
However, even though automation is a first
prerequisite to improve traceability in a
productive environment, stand alone mana-
ging applications for different firm functions
are not sufficient to ensure high and reliable
global traceability levels. To accomplish high
data reliability and to reduce errors from
occurring, integration between data flows and
different applications is required. Strictly
interwoven modules, with peculiar function-
alities for different firm functions, must then
run upon a common database, constantly and
 Efficiency improvement in manual warehouses
Antonio Rizzi and Roberto Zamboni
automatically updated by an integrated in-
formation system. Global traceability levels
are then linked both to the automation and to
integration of the information system, since
the higher the automation and integration of
the information system, the easier to trace
back items' position and the more reliable the
data available.
The implementation of an enterprise re-
source planning (ERP) can be considered one
of the most effective ways towards traceabil-
ity, since one of its major features is
integration between modules, data storing/
retrieving processes and management and
analysis functionalities, combined with the
typical functionalities of stand alone applica-
tions (Wortmann, 1998; Hoffman, 1998;
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Davenport, 1998). ERP implementation must
be seen only as a preliminary step towards
internal process efficiency improvement. In-
tegrated information systems are in fact
seldom the foundations to support the adop-
tion of proper optimization and redesign
techniques. As for a finished goods ware-
house, such improvements are reached only
through supporting the implementation of an
ERP module for warehouse and inventory
management, with proper optimization and
redesign techniques, such as turn rate based
product, re lay-outs, proper identification
systems design, and the adoption of suitable
policies for item storing and retrieving.
Based upon the considerations sketched
above, this paper, after describing the main
features of ERP systems and the main issues
connected with their implementation, shows
that higher traceability levels gained through
the implementation of an ERP informative
systems module, (specifically Warehouse
Management module of SAP R3), have
allowed the creation of foundations to im-
plement suitable optimization techniques in
order to improve warehouse efficiency para-
meters, such as mean order shipping time,
inventory accuracy, space utilization rates,
shelf life issues. The case, for the problems
presented, can be representative of all manual
finished goods warehouses with piling storage
systems of perishable goods, both from a
theoretical point of view, and for practical
implications.
ERP systems
ERP is an integrated application program for
enterprise business organization, management
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Logistics Information Management
Volume 12 . Number 5 . 1999 . 367±377
and supervision. ERP gathers inside a single
standard software all the functionalities of
stand alone applications, making it compati-
ble with different business processes. These
functionalities operate with a client server
architecture, that means a single core data-
base, fiscally located on a central server
machine, with different applications installed
and run on clients. Clients are networked with
the server and needed data are from time to
time retrieved from the server database by the
applications. Data access is controlled by
different admissions levels, reducing error
occurrence and granting more reliable data.
Furthermore, applications can also be run on
clients remotely from the Internet, without
the need to reinstall programs or data.
This architecture overtakes the issues of
data duplication and updating, typical of
stand alone applications. Since a single core
database is used for all the business processes
instead of multiple dedicated databases, all
required data are available at the same time
for all applications; furthermore operating
with a single database means the availability
of constantly updated data, as all the appli-
cations update at each run the whole data
structure. These features bring about a gen-
eral reduction of error occurrence (due for
instance to non-up-to-date data or manual
data transfer operations between applica-
tions), that means higher levels of processes
efficiency, as the system provides better
information which leads to better decisions.
Figures 1 and 2 underline the logical differ-
ences between stand alone and integrated
architecture for enterprise business manage-
ment.
ERP client server architecture also allows
the interfacing and interaction of different
applications. In fact ERP applications operate
through a parallel design and vision of
different firm business functions and pro-
cesses. This means that procedures entailing
different firm functions are concurrently and
automatically performed by the applications
involved, without the need of manual inter-
vention. Time wasting, bureaucracy and
chance of error occurrence are then reduced,
since the system itself automatically updates
all the tasks that have to be performed by
operators (Wortmann, 1998). As an example
consider a customer order which prompts the
system to concurrently generate an order
for the warehouse management application
and for the administration and control
 Efficiency improvement in manual warehouses
Antonio Rizzi and Roberto Zamboni
Figure 1 ERP integrated architecture
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Figure 2 Stand alone applications architecture
management application. While the first
module deals with it through issuing items
and updating inventory levels, the second one
considers it under its administrative dimen-
sion, releasing for instance an invoice order.
Main ERP software available on the market
(SAP R/3, BAAN IV, Oracle r11,
PEOPLESOFT r.7.5, etc.), have a modular
structure, that is a package shared into
different applications/modules, each one
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Logistics Information Management
Volume 12 . Number 5 . 1999 . 367±377
function-specific and based upon a core
common database. Each module can be
considered as a single application from both a
user interface and program structure point of
view. This structure enables, on the one hand,
operators to develop module-specific compe-
tencies, such as for stand alone applications,
and on the other, the vendors to swiftly
modify software structure and releases up-
dating.
 Efficiency improvement in manual warehouses
Antonio Rizzi and Roberto Zamboni
Since ERP software must be suitable for
firms operating in different lines of business, it
has to be very flexible. SAP R/3 for instance is
a product suitable both for manufacturing
and service firms; however, products like
BAAN IV are typically manufacturing
oriented. The reverse side of flexibility is
generality and complexity. Since these soft-
ware programs have all the functionalities to
meet requirements of firms operating in
different fields, all ERP software requires a
foremost implementation phase, where all
parameters and fields are initiated. This
process can be extremely cumbersome, both
in terms of time and money. Roughly speak-
ing, the larger and less structured the
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organization implementing the system, the
more difficult the implementation phase.
To overcome this problem, many vendors
have developed different approaches to set
software parameters, varying from expert
systems to enterprise modeling tools.
Through these tools, all processes required
for a general firm of a specific line of business
have been already modeled, allowing a re-
duction in the implementation phase by
tailoring the model to the specific environ-
ment (Wortmann, 1998; Hoffman, 1998;
Davenport, 1998).
The implementation of ERP requires high
investments both in terms of the money
required to purchase all the software and the
hardware, and in terms of time wasted for the
initialization phase. It also necessitates ex-
tensive training of systems users, to the point
that they become strategic resources for the
firm.
If ERP systems provide companies with a
solid operational backbone for processes
transactions, they are often lacking in the
delivery of special processes optimization
features. ERP systems and applications are in
fact rarely characterized by direct optimal
decision-making features; they can provide a
substantial assistance in deriving all the
information required, but the optimal deci-
sion has to be taken autonomously.
Therefore, to effectively improve enterprise
processes efficiency, ERP systems have
usually to be coupled with the concurrent
application of ad hoc optimization
techniques, synergically sustained by the
information provided by ERP systems them-
selves.
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Optimization techniques for warehouse
system management
This section describes the main problems
related to the design and management of the
logistic processes of a manual piling storage
warehouse for perishable finished goods.
Three main issues can be pointed out:
(1) high traceability levels have to be reached
to efficiently deal with perishable goods;
(2) optimization of warehouse fill rates;
(3) reduction of order lead times.
When dealing with made to stock perishable
goods, a warehouse management system that
allows item retrieval on the ground of
expiration dates becomes a fundamental
necessity. In fact, for perishable finished
goods, it is profitable to adopt first-in, first-
out picking policies, thus items with the
longest storage time and then the closest shelf
life expiration date are always retrieved. The
adoption of such policies could be more or
less strict; the warehouse management system
has to automatically generate a picking order
list based upon the storage date, giving the
operators exact instructions about where
items are located inside the warehouse and
what items have to be issued for that specific
order. Traceability becomes very important,
in order to optimize shelf life expiration dates
and to grant efficiency to warehouse issues
and logistic processes.
A second way to improve efficiency in a
manual pile storage warehouse is by fill rates
optimization. For pile storage warehouses,
pallets (usually European pallets A4T
12,000 6 800 are used) represent the storage
units that have to be managed. Their place-
ment inside the warehouse can heavily affect
warehouse space exploitation, and, therefore,
the global space utilization rate has to be
computed. The optimization of storage units
and piles inside the warehouse must also take
into account possible constraints, such as
pallet features, pile limits, spacing required
between piles, possible obstruction to storage
blocks, etc.
Finally, the average time required to issue a
customer order or to receive and store units in
the warehouse is crucial. Once the critical
point has been found, item allocation inside
the warehouse has to be optimized on the
grounds of order line turn rates and average
area requirements. Allocation policies can
range from shared storage to dedicated
 Efficiency improvement in manual warehouses
Antonio Rizzi and Roberto Zamboni
storage policies. In the first case item alloca-
tion is not consequent to a specific storage
rule, but depends upon spaces that are from
time to time available. Shared storage is
typically suitable for warehouses with a high
value of the ratio warehouse average storage/
warehouse capacity, and appropriate when
there are not specific needs to reduce average
issuing times. On the other hand, dedicated
storage allocation strategy considers every
allocation inside the warehouse as item-
dedicated. This storage policy is appropriate
for warehouses with opposite features, that is
short times required to ship customers' orders
and high values of ratio warehouse average
storage/warehouse capacity. A storage strat-
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egy that can be considered in between the
above mentioned is class-based storage
policy. In this case the warehouse is shared
into class-dedicated blocks and items are
assigned to blocks on the grounds of turn
rates and average space requirements ratio.
The issues represent the main leverages to
improving and optimizing warehouse perfor-
mance parameters; since these leverages are
strictly correlated, a mutual balance is re-
quired to effectively improve the efficiency of
organizational and logistics processes inside
the warehouse.
Design of the logistic system
With the tools described in the previous
sections, a manual pile storage warehouse for
a firm manufacturing perishable goods is
redesigned in this section. It is shown that the
implementation of an ERP module joined by
the design of an automatic data collection
system leads to the required traceability level,
which, in turn, represents the foundation
upon which to apply and manage the ware-
house's optimization techniques (redesign of
item allocation policy inside the warehouse,
space utilization rates improvement, the
application of required item movements
policies). The case studied, even though
carried out on a real situation, can none-
theless, for the problems presented, be
considered representative of all warehouses of
the same type. The case studied refers to a
manual pile storage warehouse of a firm
manufacturing polystyrene cups for food
packaging. Finished goods are stored in a
6,000m2 warehouse whose plant is shown in
Figure 3.
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Logistics Information Management
Volume 12 . Number 5 . 1999 . 367±377
The high number of perishable order lines
stored and the wide warehouse area require a
first-in, first-out item retrieving strategy; high
traceability levels are also required to shorten
average order lead times and thus to process
several customer orders per day.
Since order retrieving represents the critical
issue, item allocation must be determined in
order to improve logistic flows related to
customer orders collection. Item turn rates
data show about 100 order lines stored inside
the warehouse. ABC analysis conducted on
these items highlight a quite steep movement
rate, since about 80 percent of total items
movement is made by 20 percent of total
items stored (see Figure 4). It would therefore
be advantageous, even though the warehouse
fill rate would slightly worsen, to turn from a
shared storage allocation strategy to a class-
based one, shortening average shipping times.
Thus, the higher the item request, the closer
to the loading zone it has to be stored.
Items have been shared into classes on the
grounds of an ABC analysis of percent items
movement as a function of percent of average
space required, determined through a one
year inventory data analysis. Three turn rate
classes have been agreed: high (35 percent of
total space, 65 percent items movement),
medium (27 percent of total space, 22 percent
items movement) and low (38 percent of total
space, 13 percent items movement). Class-
based storage strategy leads to a sensible
reduction in the average order lead times, and
can be computed by considering operators'
average times to access different blocks from
the receipt/issue area. In the particular case
considered, the average time required for a
storage unit movement (comprehensive of
order retrieval, time to get to the storage unit
and return load to shipping area) decreases
from 95 seconds for shared storage strategy to
78 seconds for class-based storage (±18
percent). This reduction means a feasible
unitary reduction for the number of operators
required.
Once the items storage strategy has been
chosen, the possible unit placement inside the
storage areas has to be computed. This will
maximize space fill rates. Possible constraints
have to be taken into account, such as, the
need of storage units common orientation and
spaces required between piles and for aisles.
Using European pallets A4T 1,200 6 800
two configurations are feasible; both allow for
 Efficiency improvement in manual warehouses
Antonio Rizzi and Roberto Zamboni
Figure 3 Warehouse plant; loading zone on the left side, items storage blocks highlighted with hatched lines
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Figure 4 ABC inventory curve
87 percent of warehouse fill rate and are for
this reason equivalent.
An effective management of the above
described logistics system needs high trace-
ability, that can be reached, as thoroughly
described in the previous paragraphs, through
the implementation of an integrated infor-
mation system. The ERP system
implemented is warehouse management
(WM) module of a primary ERP software,
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Logistics Information Management
Volume 12 . Number 5 . 1999 . 367±377
already successfully adopted by the firm to
manage other enterprise functionalities.
The WM module provides an automated
support to define and manage complex
warehouse structures, in order to be compa-
tible with different situations. First, the
warehouse has to be thoroughly defined from
a logical and physical point of view, beginning
with its main features such as the types of
storage (for example, high rack storage, block
 Efficiency improvement in manual warehouses Logistics Information Management
Antonio Rizzi and Roberto Zamboni Volume 12 . Number 5 . 1999 . 367±377

storage, picking areas) and other areas within
the warehousing complex (such as interim
staging areas for goods receipt and goods
issue), up to the definition of storage types
and single storage bins, which represent the
elementary addressable storage units to iden-
tify item allocation inside the warehouse
(often referred to as storage slots). Storage
bins can be grouped into blocks (called
storage types) for easier identification of item
storage position or to apply storage strategies,
for instance a class-based storage. Storage bin
dimensions can therefore range from a single
pallet up to the entire storage type. Inside
storage bins, items can be managed either by
means of a quant entity or storage units. While
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An efficient methodology to choose the best
storage/retrieving strategy would be as fol-
lows: first of all, all the needs required to
manage warehouse logistics flows have to be
clearly pointed out; after this preliminary
phase, requirements are cross-matrixed with
all the different management strategies avail-
able in the module under implementation,
in order to underline principal pros and cons
for every possible solution. Let i = 1, . . ., n
the available management strategies, be
j = 1, . . ., m the requirements needed. The
generic position ij will be a plus if the
requirement j is fulfilled by the strategy i,
minus otherwise.
In the specific case analyzed, the main

a quant identifies only the existence of a
quantity of material or a batch of a material in
a storage bin, through a storage unit it is
possible to set a code and then manage each
unit of material stored (for example pallets).
The following implementation step defines
a strategy for receiving and retrieving items
inside the warehouse. Several strategies can
be used to store items. Table I reports the
main strategies that can be adopted.
On the other hand, stocks removal can
follow different policies, as reported in
Table II.
Stock storage and removal strategies ob-
viously depend upon the contingent
warehouse situation.
exigency was to keep the same referring
system both in the logical and in the physical
warehouse. The warehouse had been then
shared in logical storing blocks; for each
logical storing block the system was required
to:
. store more than a single storage item;
. store additional storage units if room was
available;
. store an elevated number of storage units
per block (about 400);
. activate a numeric control for storage
units allocated in each block;
. store partial storage units;
. set a code for each pallet to manage every
single storage unit;

Table I Adoptable strategies to store units in the warehouse

Strategy code Description
``±'' According to user entry
The storage bin for allocation is decided by the operator; suitable for small warehouses
``F'' Dedicated storage (fixed bin)
Strict correspondence between items and storage bins. Ensures high tracking levels
``L'' Next empty storage bin
The system locates the storage unit in the first empty storage bin available; a sort variable
is used to vary search purpose; strategy suitable for shelf warehouses
``I'' Storage bin that already contains stocks
The system checks for room in storage bins that already store items of the same kind,
otherwise the next storage bin is used
``C'' Open storage section
Every storage bin is filled to its capacity always with items of the same type (pallets,
boxes, etc.)
``P'' According to storage unit type
Every storage bin can be filled with whatever storage unit and is filled with next empty
storage bin strategy. Once occupied, the storage bin can be filled only with storage units
of the same type (i.e. different kind of pallets)
``B'' Block storage
The warehouse is shared into blocks where rows, columns and heights are defined to
store storage units

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Antonio Rizzi and Roberto Zamboni Volume 12 . Number 5 . 1999 . 367±377

Table II Stock removal strategies adoptable

Strategy code Description
``F'' FIFO
First-in, first-out; default strategy whenever compatible
``L'' LIFO
Last-in, first-out; available for every configuration
``A'' Partial quantities
Fifo strategy with priority given to partial quantities. Used to reduce the number of storage
units with partial quantities in the storage type
``M'' According to quantity
The same items can be taken from different storage types according to quantities required.
Suitable to differently handle small and large quantities of the same type
``H'' Stringent FIFO
For materials with the shortest remaining time before the shelf life expiration date
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. manage different storage areas for differ-
ent storage units;
. remove stocks according to FIFO strat-
egy;
. store different pallets sizes.
To evaluate all possible solutions, Table III is
compiled, placing in rows the above men-
tioned requirements and in columns possible
warehouse management strategies. Embol-
dened requirements are considered
fundamental for warehouse management and
have then to be fulfilled. Gray boxes may be
used to underline strategy's inadequacy to
accomplish a requisite.
As shown in Table III, in the case analyzed
none of the highlighted strategies entirely
fulfilled the needs required to efficiently
manage warehouse blocks, since there was at
least a main weakness for every strategy. In
particular, the inability of strategy B to store
inside a single block storage items of different
kinds, can be easily overcome by sharing each
logical block into coded storage bins, where
only items of the same kind must be stored
(i.e. A01-001 means storage bin number 1 for
logical block number A01). In this way, items
of different kinds can be stored in the same
block but in different storage bins (that is,
physically speaking, different rows), thus
overcoming strategy B's weakness. Actually
this is the solution that has been adopted.
Once the ERP module has been imple-
mented, the implementation project must be
followed by the design of an automated data
transmission system (DTS), through which
the information system interacts with opera-
tors, managing warehouse stocks, and
updating inventories. Whilst item retrieval
does not present specific problems, item
storage is deeply influenced by the DTS
adopted.
One of the main benefits of adopting an
ERP system derives from application inte-
gration upon a single main database, that
means modules update at each data structure
run. As mentioned before, this feature

Table III Comparison of pros and cons for different storage strategies according to requirements needed.
Emboldened requirements are considered as essential for warehouse management
B B + SU P P + SU C C + SU Man Man + SU
a ± ± + + + + + +
b + + + + + + + +
c + + Max.16 ± + + + +
d + + + + + + + +
e + ± + ± + ± + ±
f ± + ± + ± + ± +
g + + + + + + ± ±
h + + + + ± ± + +
i ± ± ± ± ± ± + +

374
 Efficiency improvement in manual warehouses
Antonio Rizzi and Roberto Zamboni
increases data reliability and reduces error
occurrence probability. From a storage point
of view, the initializing input is given by the
production function. When the information
system is input with the production of a single
storage unit, it automatically updates the
inventory management system, then the
warehouse management system, and then the
physical allocation structure, generating a
transfer order that has to be confirmed by the
operator employed once storage operations
have been completed. The logical warehouse
stock charge process is shown in Figure 5.
The DTS has then to take advantage of this
potential, communicating data only once to
the system that will automatically update in
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real time.
The functionalities that have to be per-
formed by DTS can then be summarized as
follows:
. congruency and synchronicity of data
updating processes of all modules oper-
ating with the same fields;
. automatic and univocal store units iden-
tification through bar codes labels;
. reliability, both through transaction ac-
curacy and the prevention of possible
human errors;
. rapidity of checking data input correct-
ness;
. user-friendliness, i.e. reducing the num-
ber of operations that have to be manually
generated by employees, since these
could lead to higher error occurrence
probability and to an unprofitable use of
time;
. low investment and maintenance costs.
Possible technical solutions that match the
above mentioned requirements are radio
frequency data transmission devices
(RFDTD) and communication systems based
upon bar code labels printing and reading,
(Bucaneve, 1996; Modern Materials Hand-
ling Survey, 1996).
Using RFDTD (Salvetti, 1997) items are
charged directly to the system by means of
radio frequency terminals. These portable
Figure 5 The logical warehouse stock charge process
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Logistics Information Management
Volume 12 . Number 5 . 1999 . 367±377
devices have to be considered as ERP
terminals, directly available in the warehouse
and connected through radiowave technology
to the central management system. Storage
units, whose general identification data have
been tagged by means of pre-printed bar code
labels, are charged to the warehouse directly
when the label is read, according with the
process reported in Figure 5. The process
output consists of a system placement pro-
posal, directly displayed on the terminal. This
proposal has to be confirmed by the operator
at the end of the storage phase. RFDTD are
extremely flexible solutions, for terminals
allow the operator real time interactions with
the management system, simplifying transac-
tions such as allocation modifications, items
position queries, etc. On the other hand,
RFDTD solutions are often quite expensive
(the larger the warehouse area, the higher the
number of transmitters required), being af-
fordable and convenient only for high turn
rate warehouses.
When using printing and reading bar code
label devices (Iseni, 1996), items are inven-
toried at the end of production lines by means
of data collection terminals, networked with
the information system through local area
networks (LAN). ERP systems process the
inventory order and give out the transfer
order to bar code printers, where storage unit
placement proposal is printed on the label. In
this case the label is then the communication
device between the information system and
the operator, and it has then to embody all the
information required to store the unit inside
the warehouse. When the bar code label is
read by the warehouse operator, the alloca-
tion proposal printed on the label is displayed
on the bar code reading device. The storage
unit is then stored in the warehouse and
storage confirmation memorized by the bar
code reading device once item storage is
completed. When the device memory is full,
data are unloaded to the information system
and updated. This system is clearly less
flexible than RFDTD, since it does not allow
 Efficiency improvement in manual warehouses
Antonio Rizzi and Roberto Zamboni
direct interaction between warehouse opera-
tor and the information system, but has also
some advantages, mainly due to lower in-
vestment costs.
The choice between different solutions can
not be generalized but has to be evaluated
for the specific warehouse. Pros and cons for
the solution described are summarized in
Table IV.
In the specific case analyzed, a LAN bar
code printer solution has been adopted, since
it allows good performance with limited
investment costs.
Conclusions
Downloaded by State University of New York at Binghamton At 03:22 14 May 2015 (PT)
The introduction of ERP systems for modern
enterprises has become one of the most
effective tools to achieve high efficiency
standards. It provides the firm with an
operational backbone that, through a parallel
process vision, grants integration between
processes, and ultimately provides higher
traceability standards. ERP systems are on the
other hand rarely characterized by direct
optimal decision-making features; they can
provide substantial assistance in deriving all
the information required, but the optimal
Table IV Comparison between radio frequency data collection devices and bar code LAN printers and reading
devices
Congruency and synchronicity of
updating processes
Data updating
Labeling storage units
Storage unit identification
Transaction accuracy
Flexibility to contingencies
Wasted times
Querying the system with portable
terminals
Use simplicity
Application of warehouse
management strategies
Paper reports and printout flows
Investment and maintenance costs
Electromagnetic pollution
Logistics Information Management
Volume 12 . Number 5 . 1999 . 367±377
decision has seldom to be taken
independently. Therefore, in order to achieve
an effective improvement of enterprise
processes' efficiency, ERP system imple-
mentation has often to be combined with the
application of ad hoc optimization techniques.
This paper deals particularly with the
implementation in a manual piling storage
warehouse for perishable finished goods of an
ERP application module for warehouse
management. The main steps that have to be
undertaken for the implementation process
have been shown, beginning from the defini-
tion of a warehouse's logical and physical
structure, up to the definition of the main
features for data transmission systems design.
The project, carried out on an actual ware-
house that can be considered representative of
manual piling storage warehouses of the same
kind, both from a theoretical point of view
and for practical implications, has revealed
that the mere ERP implementation is not
sufficient to effectively improve warehouse
performance parameters. Higher levels for
traceability and data reliability granted by the
adoption of such integrated information
systems, represent the foundation to concur-
rently apply ad hoc optimization techniques to
internal logistical processes, such as
Bar code LAN printing and
Radio frequencies devices reading devices
Yes Yes
Real time Depending on device memory
size
Preprinted labels Online printed labels
Indirect, through information Direct, through label reading
system query
Yes Yes
High Low
Lower (preprinted label and no Higher (labels print and
need to download data) periodical data download)
Yes No
Higher Lower
Yes Yes
Lower, items issue list directly Higher, list of order lines to be
displayed on terminal monitors retrieved has to be printed out
Higher (depending on warehouse Lower
area and lay out)
High Absent
376
 Efficiency improvement in manual warehouses
Antonio Rizzi and Roberto Zamboni
class-based unit storage, improvement of
warehouse fill rates, and the adoption of
particular strategies for item receipt/issue.
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