Improvements of the warehouse

packaging area

Ekaterina Tolstunova

Bachelor’s thesis
April 2019
Technology, communication and transport
Degree Programme in International Logistics
 Description

Author(s) Type of publication Date

Tolstunova Ekaterina Bachelor’s thesis 26.04.2019
Language of publication:
EN
Number of pages Permission for web
73 publication: x
Title of publication
Improvements of the warehouse packaging area

Degree programme
International Logistics
Supervisor(s)
Vauhkonen Petri
Assigned by
Logistikas Oy
Abstract
The packaging is one of the most significant elements in the efficient performance of the
organization, which should comply with all the company's stated requirements. Poor
packaging leads to failures and ultimately to losses of the company. Therefore, the
principal goal of the research work was to enhance the packaging zone effectiveness with
the purpose of improving the position of the Logistikas Oy firm.
During the research work, which included observations, surveys, and inspections, it was
found out that the packaging area was weakly organized because of the poor guidance.
Lack of the materials in the stock with unreliable data in the software was in the list of
potential causes of the main problem.
The key steps for achieving the goal of the thesis were analyzing the current situation of
the packaging site in the warehouse facility, identifying the problems caused by
bottlenecks and determining cost-effective solutions for the recognized bottlenecks.
Possible solutions for improving the packaging area were offered to Logistikas Oy. The
current layout of the warehouse hall where the packaging happens was measured and
created. Packaging instructions in an electronic form were made and suggestions
concerning the training of the employees, minimization of the extra movements of the
workers and new inventory procurement were suggested. As a result, increased labor,
machine productivity and a minimized number of mistakes should be achieved.
The completed study and proposed improvements are considered the initial phase of
solving the problem of optimization. Gained results will help to overcome failures while
operating, and hence, increase efficiency in Logistikas Oy.
Keywords/tags (subjects)
Warehouse, packaging area, bottleneck, improvement
Miscellaneous (Confidential information)
Appendices 1, 4, 5, 6 and 7 are confidential which have been removed from the public thesis. Grounds for
secrecy: Act on the Openness of Government Activities 621/1999, Section 24, 17 and 20: business or
professional secret. Period of secrecy is five years and it ends 26.04.2024.
 1
Contents

Figures ............................................................................................................................ 2

Tables ............................................................................................................................. 3

List of abbreviations ....................................................................................................... 4

1 Introduction............................................................................................................ 5
1.1 General description of the Logistikas Oy .................................................... 5

1.2 Overview of Logistikas warehouse in Säynätsalo........................................ 6

1.3 Thesis project and research methods ......................................................... 7

2 Warehouse ........................................................................................................... 10
2.1 A storage facility and its place within the logistics system ....................... 10

2.1.1 Three warehousing strategies of performance .................................... 11

2.2 Key storage functions ................................................................................ 12

2.2.1 Receiving and put away ........................................................................ 12

2.2.2 Picking and packing .............................................................................. 13

2.2.3 Dispatching, unification, and shipping ................................................. 16

2.2.4 Returns and value-adding..................................................................... 17

2.3 Space requirements planning and material flow design .......................... 18

3 Materials Handling ............................................................................................... 20

3.1 Manual and automated handling schemes ............................................... 20

3.2 Characteristics in the material processing ................................................ 23

4 Product packaging ................................................................................................ 25

4.1 Historical background................................................................................ 25

4.2 Organizational point of view on packaging ............................................... 27

4.3 Substantial role of the packaging process................................................. 28

4.4 Packaging types and related materials ..................................................... 28

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5 Case Logistikas...................................................................................................... 34
5.1 Layout at a starting point and relevant problems..................................... 34

5.1.1 Starting arrangement of the packaging zone ....................................... 34

5.1.2 Relevant issues ..................................................................................... 39

5.2 Current layout and relevant problems ...................................................... 42

5.2.1 Description of the current layout ......................................................... 42

5.2.2 Relevant issues ..................................................................................... 44

5.3 Optimal solutions ...................................................................................... 47

5.3.1 Implemented solutions for the starting layout .................................... 47

5.3.2 Solutions for the current layout ........................................................... 47

6 Conclusion ............................................................................................................ 52
6.1 Relevance, validity and reliability .............................................................. 52

6.2 Summary of results ................................................................................... 52

7 Ideas for future improvements ............................................................................ 54

References .................................................................................................................... 58

Appendices ................................................................................................................... 62

Figures

Figure 1. Packaging space in Säynätsalo, Logistikas ....................................................... 7

Figure 2. Fishbone diagram ............................................................................................ 8
Figure 3. The role of warehousing within the logistics system (Gourdin 2006, 130) .. 10
Figure 4. Types of storages in logistics (Gourdin 2006, 134) ....................................... 11
Figure 5. A sample of batch assembly (Batch picking, 2019) ....................................... 14
Figure 6. Voice picking technology (Advantages, disadvantages of a pick to voice
system, 2017) ............................................................................................................... 15
Figure 7. The roles of a warehouse in supply chain management (Frazelle 2002, 2) .. 17
Figure 8. Warehouse layout types (Warehouse Product Flow and Layout Options,
2019)............................................................................................................................. 19
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Figure 9. Example of non-automated storage handling system (Warehouse
management system) ................................................................................................... 21
Figure 10. Robotics in automated material handling system (Rockwell Automation
2019)............................................................................................................................. 23
Figure 11. Cast stretch film rolls and bubble wrap ...................................................... 30
Figure 12. Transparent plain and anticorrosion plastic packaging bags and rolls ....... 30
Figure 13. Cable ties with marking tabs ....................................................................... 31
Figure 14. Cardboard boxes of different shapes and brown craft paper rolls............. 31
Figure 15. Plastic crates and trays of different sizes and colors .................................. 32
Figure 16. Samples of wooden and plastic pallets ....................................................... 33
Figure 17. Duct tape, pliers, stationary knife, measuring tape, stapler ....................... 33
Figure 18. Labels and polypropylene (PP) strap........................................................... 34
Figure 19. The initial layout of Logistikas warehouse .................................................. 35
Figure 20. Autobad device ........................................................................................... 36
Figure 21. IPPC mark where TR (country code), 064 (represents the unique
certification number issued to NPPOs) and HT (heat treatment) ............................... 38
Figure 22. SWOT analysis of the warehouse organization in November 2018............ 39
Figure 23. The appearance of the present layout ........................................................ 41
Figure 24. The incoming area near pallet racks 1 ........................................................ 42
Figure 25. Two autobag machines ............................................................................... 43
Figure 26. SWOT analysis for the current warehouse organization ............................ 45
Figure 27. Suggested improvements for the current layout ........................................ 51
Figure 28. Real-time inventory effect on storage capacity and warehouse efficiency 55
Figure 29. Advantages of PTL system applied to Logistikas case ................................. 56

Tables

Table 1. Conclusion table with all findings concerning the company case.................. 52
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List of abbreviations

AS Automated storage
ASN Advance shipping notice
BC Before Christian
ERP Enterprise resource program
FL Full load
GPS Global positioning systems
GTP Goods-to-person
IPPC International Plant Protection Convention
ISPM International standards for phytosanitary measures
LED Light-Emitting Diodes
LTFL Less than full load
NPPO National plant protection organization
PET Polyethylene terephthalate
PTL Pick-to-light
RFID Radio frequency identification
RS Retrieval system
SKU Stock keeping unit
SWOT Strengths weaknesses opportunities threats
VLM Vertical lift modules
WMS Warehouse management system
WPM Wood packaging material
3PL Third-party logistics
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1 Introduction

Nowadays the key role of warehousing in the supply chain is the receiving and issuing
of items as well as their storage, packaging, assemblage, and forwarding. It is not a
secret that the present technological progress is at a high level and that such
innovations as automation or robotics are not considered future ones anymore.
From the majority’s point of view, a modern warehouse is fully automated with voice
picking applications, automated guided vehicles, automated storage and retrieval
systems, and many other mechanized options. Definitely, a perfect warehouse
should look like the one described above. However, the current situation of the most
present-day warehouses is far away from the ideal automated representation.

The basic warehouses of today face incidents, such as materials being out of stock,
item losses, and mismatches of the warehouse stock level with the records.
Moreover, human workforce instead of robotics is still used in big quantities.

Academic research on the topic of the warehousing improvements is relevant and

could be reviewed by international enterprises. The question concerning specifically
the packaging area innovations is not the most widely discussed topic at the
moment. Consequently, there is a need for further investigation of the existing
knowledge in the storage field to determine the paths for implementing changes in
the future.

The purpose of the thesis was to provide Logistikas Oy with possible solutions to
improve their packing area and at the same time minimize the packaging costs. This
procedure started by analyzing Logistikas's current situation and setting that as a
starting point that needed to be improved. The goal of this work was to understand
the factors that have an impact on the efficiency of packing.

1.1 General description of the Logistikas Oy

Logistikas is a Finnish company which was founded in 1997. Nowadays, it operates in

six different cities in Finland: Rauma, Olkiluoto, Nokia, Suolahti, Jyväskylä and
Uusikaupunki. According to the information on the company’s website (2019, 1),
generally 50 trucks with the carrying capacity of up to 40 tons are utilized, and
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100,000 square meters of space is used by all warehouses in total. Nowadays, 130
logistics experts are working for the company. Logistikas offers its clients the
opportunity to focus on their core business by leaving logistics to specialists.

Logistikas company provides 3PL services to its customers. According to Tran (2017,
1), 3PL refers to

a term that classifies an enterprise that provides complex outsourced logistics

services and supply chain management. A 3PL provider engages in a variety of
services that include receiving products or material from the manufacturer or
supplier, guiding commodities through the distribution or assembly channel, and
shipping them to the consumer or retailer.

Logistikas enterprise offers intralogistics, local warehousing, consultation, and

specialist services. Moreover, the company is able to offer value-added services to its
clients, which basically include kitting, product inspection and compliance, product
localization and labeling. (Logistikas 2019).

Logistikas has two warehouses under its Jyväskylän business unit which are located
in Säynätsalo and Suolahti. The Suolahti unit is focused on company A’s production
line and is used as a storage of components which go to the A’s factory. In addition,
company A is the main customer for Logistikas Oy firm.

1.2 Overview of Logistikas warehouse in Säynätsalo

The packaging process in the Säynätsalo warehouse is implemented mostly by

human force with the help of different electronic machines like forklifts and cranes
and small tools, such as stationary knives, staplers, and tapes. Pallets, collars, lids,
sealing straps and every other needed material for packing have their own places in
the warehouse. The packaging area consists of around 798 square meters of space
which is utilized by collecting all the required items from different storage places
within and out of the warehouse and finishing the products by putting those
together inside the pallet. After a package has been sealed, it is transferred and
stockpiled for the future transporting to the customer. The bigger and more occupied
the customers’ orders are, the more ready-made stock material and packing space
are required for the packers as well.
 7
Figure 1 below demonstrates the appearance of the packaging zone in the Säynätsalo
unit.

Figure 1. Packaging space in Säynätsalo, Logistikas

Säynätsalo mainly provides warehouse services, prepacking, labeling, spare part

logistics, and online shop logistics.

1.3 Thesis project and research methods

This thesis project familiarizes the reader with the packaging structure of the
warehouse called Logistikas and discusses the idea of the operating process from the
worker point of view and how to improve the warehouse packaging efficiency.
Analyzing the initial and current layouts in four months period gave the basic ideas of
working processes’ advantages and disadvantages. Types of packaging tasks,
materials and machines were identified. Therefore, possible and real human errors
and machine bottlenecks were traced during the various working shifts.

Analyzing the potential causes of a main problem within the warehouse facility is
shown in the shape of a fishbone diagram (see Figure 2). Every problem has its own
roots and in order to recognize them, the cause-and-effect diagram was created.
Inefficient packing was defined as the main issue which was mainly caused by
 8
machines, workers and materials. Accordingly, lack of knowledge about the
packaging material types, a wrong understanding of invoices and unpreparedness to
cope with stressful situations lead to ineffectiveness of the employees. Continuous
breakages of various devices and disruptions like stoppages while the working
process have an impact on the quality and reliability of the equipment. Lack of
materials in the warehouse stock and unreliable data concerning the availability of
the packaging materials in the software have an influence on the working
productivity.

Figure 2. Fishbone diagram

Initial and current layout plans were created for better visibility of feasible future
improvements. The measurements were taken with the help of a laser. Based on the
personal experience, the collected data and the opinions of the other full-time
workers, derivations, and solutions were identified and presented.

The topic of the thesis task was approved by the main warehouse manager Tuomas
Pohjola. Tuomas Aho, who holds the position of a Säynätsalo warehouse supervisor,
provided all the basic information via email (see Appendix 1 and 2) about the
company’s history and current operations, main suppliers and customers, main
requirements and background of the packaging materials, and packaging material list
itself.

During working in Säynätsalo, most of the observations and information, which were
collected are based on personal experience. The Säynätsalo warehouse has its own
 9
permanent workers but at the same time less experienced part-timers, who are
working on call. Furthermore, the research work contains some data which was
accumulated from the extensive working experience of some full-time employees. An
anonymous survey was held on January the 10th, 2019 by using a form of an
anonymous questionnaire. From seven to ten survey forms were given to the
personnel. Four questionnaires were received back, which was helpful for collecting
various points of view and ideas (see Appendix 3).

The theoretical material was taken from reliable sources, such as library books,
scientific articles, online sources and publications with the identification of the
author or publisher if the name was mentioned. The chosen research method was
qualitative. From the theoretical point of view, qualitative analysis is a type of
scientific research which consists of the following significant components:

1. Collecting records and evidence by using audio recordings, transcripts, surveys

2. Detecting answers to the unsolved question
3. Generating conclusions, which were not known beforehand
4. Providing results which can be used after the analysis

The present research aimed to see the issue from the angle of the local population.
Consequently, the approach was effective in gaining data about human actions and
the relationships of individuals, principles, and feelings. Moreover, the qualitative
method is useful for determining intangible aspects, such as ethnicity, social
standards, and gender duties. There are three most common qualitative procedures
which are used for obtaining data. The first process is in-depth interviews, which
collect facts from personal backgrounds, views, and experiences. The next method is
interviewing the focus groups about the cultural norms with a wide range of specific
questions. The last procedure is a participant observation in the normal
environment. (Qualitative Research Methods: A Data Collector’s Field Guide, 2.)

To sum up, the approach used for the thesis work shows the assembled data from
the human point of interpretation, which mainly included emotions, behaviors, and
beliefs (Qualitative Research Methods: A Data Collector’s Field Guide, 2). The key
tasks were based on observations, collecting third-party opinions from Logistikas,
 10
collecting evidence concerning the chosen difficulties and bottlenecks and presenting
findings and solutions that were not determined in advance.

2 Warehouse

2.1 A storage facility and its place within the logistics system

“A warehouse is a large building where raw materials or manufactured goods may be

stored prior to their distribution for sale” (Oxford Dictionary 2019).

Well-planned management of the warehouse functions takes an important place

inside the overall logistics structures as shown in Figure 3. Factors, such as choosing a
convenient location for a warehouse, calculating all possible costs and
implementation of automation have an impact on a good arrangement plan. In the
case of bad prearrangement, the storage will become the weakest part inside the
chain and decreases the efficiency level of the entire structure.

Figure 3. The role of warehousing within the logistics system (Gourdin 2006, 130)

The strategic role of warehousing composes from cooperation with valuable

suppliers, serving as an inbound materials control center and the usage of reverse
logistics. Further steps are providing the consolidation points for orders, the security
from variable manufacturing lead-times and the consolidation of outbound orders
for more cost-effective shipment. The last phase is the implementation of
procurement effectiveness. (Gourdin 2006, 131).
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Expansion of trade and commerce has enhanced the need for proper storage of
materials (Gopalakrishnan 2009, 3). A decent warehouse should have a particular
structure of an organization in order to reach a high level of reliability, efficiency,
safety, and security. One of the most important aspects of success is to be able to
manage a well-organized warehouse in today's trade sphere. Therefore, the main
purpose is not just to utilize the space for storing products and distributing them
afterward, but also to plan a multifaced and proficient storage system. (15
Characteristics of an efficient warehouse 2019.)

2.1.1 Three warehousing strategies of performance

Nowadays the warehouse can be utilized in three several ways according to the
business needs. Figure 4 illustrates the storages serving such as the consolidation
points which are also known as gathering facilities, the break-down centers and the
combination of both parts at the same time. (Gourdin 2006, 134.)

Figure 4. Types of storages in logistics (Gourdin 2006, 134)

A consolidation facility usually implements the working process in two stages.

Primarily, the procedure of obtaining the small quantities of the diverse products
 12
from the variety of vendors via the LTFL shipment is fulfilled. LTFL is a cost-effective
and ideal solution for small enterprises. In the second place, a combination of the
various items together based on client order and transportation in FL quantities is
performed. FL is faster than LTFL but also more suitable for the high consumer
demand and perfect for the fragile freight consignments. (Gourdin 2006, 134.)

As an alternative, a warehouse may perform the break-down function which includes

receiving the large volumes of the items from the suppliers via an FL transport,
division of the big quantities into the small lots and the implementation of the
shipment to the customers in LTFL shipments. The main objective of a break-down
center is to minimize LTFL transportation. (Gourdin 2006, 135.)

A warehouse should be used in both roles if a venture is dealing with the global
markets. Initially, the items are collected together in domestic storage to accumulate
the full load container loads. Afterward, the multiple containers are shipped to a
warehouse which is situated in an overseas market. Eventually, the goods are
distributed for onward delivery to the client. (Gourdin 2006, 135.)

2.2 Key storage functions

According to Frazelle (2002, 10), eight key warehouse processes, which make
warehouses effective have been determined. The eight different process methods
are receiving, put-away, picking, packing, dispatching, unification and shipping,
returns and value-adding.

2.2.1 Receiving and put away

Receiving is the collection of activities involved into the orderly receipt of all
materials coming into the warehouse and providing the guarantee on the declared
quality and quantity of goods which were ordered with their subsequent storage
(Frazelle 2002, 10). Goods are various in their physical characteristics. Objects can be
voluminous but light, small but heavy, fragile or durable. Bills can be made for whole
pallets or only for exact products, litters and crates. The most effective way of
receiving goods into a warehouse is through an ASN. If the supplier is able to send an
ASN to the warehouse before the delivery, the operators can scan the consignment
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barcodes, and items can be received by the system. The ASN is a document, which
contains data about the time of shipment, carrier information, type of transport
mode which will be used for freight, number of items or boxes, physical
characteristics, such as the shipment’s weight and packaging information. (Walker
2018.)

Put-away is the process of moving material from the loading bay and transporting it
to a warehouse’s storage, replenishment or pick area (Vitasek 2007). After the
storage operators receive a put-away task from the ERP or WMS, they are able to
start scanning the barcodes of the obtained products which need to be put away. In
case if a barcode is absent on the item, the manual entry should help with the
identification of the product. At this stage, specific warehouse personnel will receive
guidance from the system about the delivery of items to the relevant storage place.
(Walker 2018.)

2.2.2 Picking and packing

Picking is the procedure which includes finding and taking the items from a
warehouse to accomplish client orders. This procedure can be divided into two main
categories -primary and secondary. Primary is the first selection of items which can
be delivered to a staging area or packing zone for implementing finalization and
dispatching. The secondary includes chosen goods which must be distributed to
clustered orders (a group of orders) or discrete orders (single orders) with the help of
a sortation process. (Walker 2018.) The seven existing types of warehouse picking
are zone, discrete, batch, cluster, wave, voice and automated (Gwynne 2011, 73).

Zone picking is used when the warehouse is assembling the orders from different
components. The inventory is placed into “zones” where an operator or atomized
equipment is located with the unique SKUs for tracking inventory. (Glynn 2019.) To
clarify the term, SKU is a readable bar code of a product which supports the tracking
process. SKUs are meaningful nowadays. Companies are able to attach SKUs to
distinctive items in one category, which will help the customers to compare the
features of varying goods in the same class. This method inspires for additional
purchasing and increases the revenue of the company. (Gwynne 2011, 77.)
 14
In discrete picking, an employee collects each part of the necessary inventory in the
order, one line at a time. This is the way to minimize the amount of processing and
movements of the order before transportation and it does not require additional
sorting. Basically, such type of picking is suitable for warehouses with a limited
number of complex orders. (Glynn 2019.)

Batch picking requires operators who evaluate the popularity of the current
fulfillment orders and place them into batches according to their SKUs. After this
step, the pickers are able to take the orders very quickly. Multi-order-picking is the
best option for companies which are interested in selecting the pace to fulfill
predictable ordering trends. (Glynn 2019.) Figure 5 demonstrates the batch picking
process. The worker has combined products from multiple orders into one pick
instruction and placed them in a yellow plastic crate. After order picking, items will
be sorted according to the order or shipping destination. (Batch picking 2019.)

Figure 5. A sample of batch assembly (Batch picking, 2019)

Cluster picking describes the methodology which allows assembling a number of

orders at the same time. Such type of collection is location driven. Therefore, goods
may be collected to fulfill multiple orders during each location visit. The picking
instructions are based on the location sequence of the products. As a result, after the
ending of each operation, all items will be collected. This sequence is individually
identified by each enterprise. Equipment such as a trolley with several shelves or
spaces is required which will support the speed of implementing the coming orders.
(Wave and Cluster Picking 2018.)
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Wave picking means a process where a ‘wave’ order is stored for specific picking
times and transport routes. To simplify, one worker makes up each order line by line.
Afterward, the employee evaluates all warehouse orders to maximize shipping and
gathering operations prioritized by time and importance. (Gwynne 2011, 78.)

Voice picking has become significant for warehouse operations because of the
increased accuracy level. Voice eliminates the need to scan the items at all. It is a
hands-free, eyes-free and paperless system which guides workers with voice prompts
and directs them to the picking locations. The workers use hands only for collecting
the items from the shelves and putting them to their trolleys. (Glynn 2019.) Figure 6
shows how this technology looks like.

Figure 6. Voice picking technology (Advantages, disadvantages of a pick to voice

system, 2017)

Automated picking requires a large preparation for construction and

implementation. Procedures should be designed as simplified ones and any futile
phases should be excluded. In this structure, the arrival of pallets at the warehouse is
automatically de-palletized layer by layer. Each pallet layer is stored on a tray in a
retrieval system. Consequently, the described procedure reduces the number of
crane movements. The advantages of automation include increased space utilization,
narrow aisle systems, reduction of human intervention, coordination of product
flows, avoiding bottlenecks and constant performance levels. (Gwynne 2011, 82-83.)

Packing is the act of putting things into cases, boxes or bags. This process can be
successfully reached with the help of five important rules. Firstly, the chosen items
 16
must be tracked from the picking location, and batch dates and codes should be
traceable. In the second place comes the quality and accuracy check, which should
be implemented by workers according to the instructions and cannot be missed.
Thirdly, the size, quantity, value, fragility, hygiene, and legislative requirements
should be taken into consideration in the packing process. The final stage is
monitoring the system in order to check all necessary information about and
documentation for the consignments for the future traceability and for ensuring the
order completeness. (Walker 2018.)

2.2.3 Dispatching, unification, and shipping

Dispatching includes the capability of having items which are ready for departure at
the same time as the carrier load his truck. This process mainly depends on
forecasting the accuracy of packing and carrier pick-up times. (Glynn 2019.) In order
to implement the dispatching process as an efficient one, the procedure should be
defined and followed by every worker to prevent errors. Picking lists should be
prepared and printed before the picking team arrives at work each day. A good and
organized warehouse layout will save time on a daily basis for the workers. Forklifts
and the most frequently used products should be stored in easily accessible areas
close to the packaging area. Additionally, handheld scanners will improve the picking
accuracy and reduce human errors. Direct integration between the warehouse
system and chosen couriers will definitely save time. If the system is able to send
automatic shipping documents to the couriers, they will know in advance what to
collect each day. (Fenton 2016.)

Unification and delivery of the items consist of inspecting the order for its
completeness and further packaging of the merchandise in suitable shipping
containers. Next stage involves the preparation of shipping documents, including the
bills of lading and weighting the shipments to determine the price of transportation.
The last step is the accumulation of the orders by an outbound carrier and loading
the trucks. (Frazelle 2002, 11.)
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2.2.4 Returns and value-adding

A predetermined return process which describes the implementation actions after

receiving the items should be established in every organization, for example, for
recycling or repair. If a customer wants to return goods, a return management
authorization should be received. This document must include what will be returned
and why. Moreover, the reasons for return should be registered in the system. All
returns must be traceable to their order and process of billing. In addition, inventory
updates should be done after returning items to the stock. (Walker 2018.)

Value-adding defines the process of producing, kitting, assembling, relabeling and

modifying of the product. This procedure can be complex when a product is
combined from different ones. (Frazelle 2002, 2.) The significant chain components
of every warehouse in a logistics network (see Figure 7) play a distinctive role in the
supply chain of value-adding processes.

Figure 7. The roles of a warehouse in supply chain management (Frazelle 2002, 2)

The main idea for raw materials warehouses is to hold the untreated resources near
the induction phase into a production stage. Work-in-process storage places are
focused on keeping finished goods at several points near an assembly or
manufacturing line. Finished goods warehouses are responsible for holding the stock
which is balancing the difference between production plans and demand. (Frazelle
2002, 2.) The basic function for distribution stockrooms and centers is considered the
 18
process of accumulation and consolidation of goods and future combining the
shipments to the customers. Fulfillment centers and storages usually obtain, pick and
organize the shipments of small-scaled orders for the individual clients. Local
warehouses are distributed for the purpose of decreasing transportation routes and
reaching full customer satisfaction. (Frazelle 2002, 3.)

Good value-adding helps to acquire and retain clients, increase brand awareness and
distinguish the marketplace. In order to improve value-adding, the following aspects
should be noted. Firstly, the perspective of the customer should be taken into
consideration. Secondly, customer satisfaction should be continuously improved with
the help of systematic surveys. Thirdly, the implementation of popular marketing
models will help to forecast customer demands and identify the selling point of the
company. Next one is that memorable customer experience should be achieved by
paying attention to details during business communication, providing personalized
service and showing readiness for solving urgent problems. Eventually, additional
free materials such as calendars, cups or pens with brand logos can make good
advertising and increase brand awareness. (Power 2015.)

Taking everything into consideration, a warehouse plays a significant role in the

logistics sphere. The following characteristics determine an accomplished storage as
a system of interconnected bunch operations: high level of security and safety,
design of racking system and storage space, appropriate level of organization for the
receiving and picking processes, the right software for meeting the company’s needs,
training workers, mechanical appliances, planned quality checks and emergency
protocol, prompt delivery and customer service, easily accessible location for the
items to be loaded and unloaded and space surrounding the building. (15
Characteristics of an efficient warehouse 2019.)

2.3 Space requirements planning and material flow design

Before laying out the warehouse, its storage processes need to be defined and
assembled. Profiling, benchmarking, simplifying, computerizing and mechanizing
warehouse operations determine the types of material handling, the storing
procedures, systems and make laying out easier. (Frazelle 2002, 189.)
 19
Warehouse space designing is the process of finding an optimized approach to
organize a facility area by finding the creative storage solutions, material handling,
inventory control and connecting the individual storage procedures. The space
demands for each process have to be accurately calculated and summarized to
estimate the overall building requirements. Each zone should be equipped with the
necessary tools to ensure a favorable level of work for the personnel. (Frazelle 2002,
192.)

Material flow should be based on the available storage space, product throughput
needs, and material handling equipment used. U-shaped, I-shaped and L-shaped
patterns (see Figure 8) are the most common options for the warehouse flow
designing. (Warehouse Product Flow and Layout Options, 2019.)

Figure 8. Warehouse layout types (Warehouse Product Flow and Layout Options,
2019)

A U-flow takes place when receive and dispatch operations of the items are situated
at the same end of a storage facility. Goods with a higher throughput level are put
closer to the loading bays. Main benefits of the 'U' flow are first-rate utilization of the
dock resources and high yields security due to the usage of a single building side for
entry and exit. One more advantage is good lift truck utilization according to the
combination of the put-away and retrieval trips. The not less important benefit is the
minimization of product handling, which is offering the high cross-docking capability.
(Frazelle 2002, 196.)

I-shaped and L-shaped warehouse product flows, also known as through flow,
happen when outbound and shipping zones are placed at the opposite end of the
 20
warehouse. Consequently, more available storage space is required comparing to the
U-shaped layouts. (Warehouse Product Flow and Layout Options, 2019.) Items flow
in at receiving, move into storage, picking area and then the sorting and dispatch
area in a straight line. Goods with a higher throughput level are located at the center
of the warehouse for the minimization of the total travel distance. Additionally, this
layout is suitable for a warehouse which is connected to a production plan (Frazelle
2002, 197.)

3 Materials Handling

Material handling is the term which describes the movement, protection, storage
and control of materials and products throughout manufacturing, warehousing,
distribution, consumption and disposal (Material Handling Institute 2019). This
procedure includes various hand-operated, semi-automated and automated
appliances which maintain production planning, resource distribution, flow, process
and inventory management. Additionally, material handling is making lower general
maintenance costs in production, allocation, and shipping of the goods. (Material
Handling Institute 2019.)

3.1 Manual and automated handling schemes

All warehouse processes are connected to each other and the storage space
designing is not an exception. The insufficient planning of the storage will lead to
unnecessary movements and profit losses, the significant slowdown in the
displacement of the items and dissatisfaction of the clients. One of the approachable
ways of optimizing the available space is choosing the manual and automated
methods of operation or combining both at once. (Gourdin 2006, 145.)

Manual handling approach

Figure 9 represents a sample of the non-automated approach, which is mainly based

on human labor and includes the relatively simple systems of the racks and shelves
for effective storage. The items are placed to or exported from the warehouse by
hand or with the help of the electric equipment such as a forklift. The manual system
is restrained in vehicle storage because all the goods must be reachable for the
 21
operator or the forklift. Moreover, the non-automated handling arrangement
undoubtedly requires the broad aisles to allocate these vehicles. (Gourdin 2006,
146.)

Figure 9. Example of non-automated storage handling system (Warehouse

management system)

The human labor implements a versatility and flexibility in the order fulfillment. On
the other hand, people are capable to make mistakes, such as putting the commodity
in a wrong place, damaging the goods, inaccurately noting the location information
and picking the wrong order for the client. Most of the named errors are possible to
diminish through the automation system. (Gourdin 2006, 147.)

Automated handling approach

Automation is an excellent way of eliminating human workforce. The mechanized

comprehensive labor actions increase the warehouse’s efficiency and make the jobs
of the employees safer. Warehouses can be modified in very distinctive ways such as
automating of the picking, barcode labeling, scanning and vehicles. There are several
ways existed to automate basic storages like automated WMSs, GTP technologies,
AS/RS, PTL system and VLMs. (Saha 2019.)

Automated WMS is a software application which is implemented for every

warehouse on some scale. It gives the operator the possibility to monitor the
warehouse’s available recourses, performance, optimize functionality but also
 22
provides instructions to warehouse workers, for example, where to pick up the
orders. (Pontius 2019.)

GTP technologies are representing the picking solutions which are able to deliver the
items directly to the worker. This procedure excludes the necessity of traveling to
goods which should be picked up. Storage facilities with GTP systems usually retrieve
the order’s information from a central computer database, which guarantees the
accuracy of the received data. As a benefit for enterprises which utilize this
technology is the reduction of the operating and order fulfillment expenses. (Saha
2019.)

AS/RS is one type of GTP technology. This procedure automatically brings items out
of and then put them back into the storage. Commonly, warehouses software system
manages this automated process and assists facility employees in processing the
orders. (Saha 2019.)

PTL system is the technology, which gives the possibility for operators to scan the
barcodes while LED lights provide the illuminated route to the correct storage
location and to signify the right number of items which should be picked. A further
stage is placing these goods inside the container by the human workforce and
confirming the task completion by pressing a button near the display. Each
operator’s work zone is equipped with such displays for guiding to the next picking
location. (Saha 2019.)

The VLMs are able to operate at their optimal height which will significantly increase
productivity. Robotics which are shown in Figure 10 can be utilized in the cases of
heavy lifting and repetitive motion jobs. (Gourdin 2006, 147.)
 23

Figure 10. Robotics in automated material handling system (Rockwell Automation

2019)

Taking everything into account, each system has its own advantages and
disadvantages. Manual handling requires the human workforce to be responsible for
the preciseness of the processes. Health issues such as tiredness or headache may
cause productivity errors. In automated handling, the computer tracks all the goods,
consequently, the storage can be random. Equipment reliability is extremely crucial
in this approach. In the case of the maintenance issues, the system could be shut
down and this problem will lead to financial losses. (Gourdin 2006, 148.)

To sum up, the optimal storage scheme depends on the category of goods handled,
demand requirements, building layout, and personnel levels and may involve both
non-automated and mechanized components. (Gourdin 2006, 148.)

3.2 Characteristics in the material processing

According to Gourdin (2006, 150), material handling includes seven several essential
trends such as reliability, total integration, flexibility and modularity, upgradeability,
automated recognition, ease of use and maintainability and each from the list has its
own meaning and functions.

Reliability will demand the trustworthy robotics and well-organized system of the
working processes. Purchased inventory will be tested and the impact of the failure
rate will be analyzed before the implementation to the system. Based on the
received data, that device which needs to be duplicated will be identified. Finally, this
 24
machine can be isolated and later repaired without affecting the productivity of the
system. (Gourdin 2006, 151.)

Total integration describes the procedure where the material handling systems
connect all the equipment together in the warehouse with the usage of WMS. The
primary purpose of WMS is to regulate the shipping operation, storage of commodity
and deal with transactions. Nowadays, the system is responsible for the light
production, shipment organization, tracking the orders and billing the operations as
well. In addition, the WMS simplifies the application of an automatic data collection
with the help of modern technologies such as radio frequency identification, portable
terminals with barcode scanners or luminous-directed systems. (Gourdin 2006, 151.)

Flexibility and modularity are visible in the decision-making process and handling
the changes in the requirements. In the future, the solutions should be made
excluding the capability that material handling equipment can do the job. The facility
must be confident that the purchased equipment will be able to handle the
challenges. (Gourdin 2006, 151.)

Upgradeability describes the opportunity to incorporate all positive sides of modern

technologies. With the development of each new improvement, the material
handling schemes will be arranged in a way that improved components can be
replaced by old ones. (Gourdin 2006, 152.)

Automated recognition of the future is the RFID. This technology consists of the
reader and transponder. The transponders, also called tags, are attached to the
items. The central ingredient in an RFID tag is an inlay. The inlays usually consist of
two parts: a silicon chip and antenna. An RFID tag carries product identification,
history, dimensions, current status, and local information. RFID uses the radio waves
at a specific frequency to identify the individual items at a certain location. The
pressure, temperature, GPS positions, moisture, light, and other sensors can be
inserted and monitored. (Gourdin 2006, 152.)

Ease of use shows material handling as a broader operation. Hopefully, human labor
is not needed in the future to add new products inside the material handling system
 25
because the computer can do it itself. The voice recognition will become a part of the
everyday usage and increase the overall efficiency. (Gourdin 2006, 155.)

Maintainability will be demanded in the near future because most of the operations
will work continuously, seven days a week. Consequently, there will be no time for
planned maintenance. Due to a willing to reduce expenses, a smaller number of
workers will be needed. Moreover, the modern computer programs will be able to
organize schedule maintenance after the detection of the possible error indicators
and before potential failures have occurred. (Gourdin 2006, 155.)

To sum up, the outlays and benefits of the alternative approaches should be
evaluated in details and the material handling system which meets the high level of
customer needs should be established. The material processing of the future will
utilize the continuously improving technologies to perform their functions better,
quicker and with fewer expenses. (Gourdin 2006, 155.)

4 Product packaging

4.1 Historical background

Packaging matters the most when products are enclosed or protected from external
conditions for future storage, delivery or usage. Packaging has changed its form
through the ancient times till present days. (Gourdin 2006, 156.)

The packaging by its meaning is considered as an ancient method which has been
existed since the early days of humanity. The early wrapping technologies helped the
ancient man in transporting, gathering of the items and hunting process to survive.
(Packaging manufacturers association 2013.)

Ancient era

Packaging began in Egypt approximately in 3500 BC. From those times when the
ancient human has learned how to make primitive tools, fire, and store the products
for future use, the necessity of storing the items has occurred. Such natural materials
as animal skin, large plant leaves, hollow tree trunks and bark, woven sacks and
baskets made from a variety of plants depending on the geographical location were
 26
in use for the food collection and accumulation several millennia ago. (Packaging
manufacturers association 2013.)

The Establishment of Cities

The exchange of goods, the rise of the population and trading led to the increase of
life quality. The newly appeared materials put an imprint on the lifestyle of the early
era. First on the list is blown glass. This type of glass was able to be changed into a
large variety of shapes which helped craftsmen in the production of different types
of containers for transportation and storage. Further goes the timber barrel. The
wooden cask was obtained by using the steam which heated the wood and bent it
into the proper form. After the barrel was solidified, it was considered as the most
effective material for the bulk packaging, storage, and transportation of liquids and
dry goods in large quantities at that time. (U.S. Packaging & Wrapping LLC. 2019.)

Industrial Revolution

After the fall of Rome, many new advancements came to Europe from other cultures
around the globe. China has opened the way of producing the first paper. In 1310
this technology arrived in England and was proved to be valuable in the packaging
industry for centuries. Eventually, the evolution of paper became industrialized,
when a process for the extracting cellulose from the wood pulp was evolved in 1867.
(The evolution of packaging materials 2019.)

The history of carton started in 1817 from the invention of the first cardboard box by
the Victorians. Further, that innovation led to the first commercial production of
paper bags in England in 1844. Later, in 1852 American Francis Wolle invented the
bag-making machine. (The evolution of packaging materials 2019.)

Before the invention of the tin-plated steel can in 1935 by Krueger Beer, only glass
bottles were in use. The first created can was not equipped with the pop tab and
consumers had to use the key to open it. In a little while, Coors introduced the
aluminum beverage can in 1959. However, the difficulty of the opening procedure
remained the same. Nevertheless, the innovation was considered as the progressive
one at those times. Eventually, the solution of puncturing the can was founded later
in history. (The evolution of packaging materials 2019.)
 27
Plastic was originally found in the 1800s, but only in 1908, the cellophane was
invented. Decades later, PET plastic bottles appeared in 1977. (The evolution of
packaging materials 2019.) The evolution of those times brought materials and
technologies which are still commonly used nowadays.

4.2 Organizational point of view on packaging

The packaging is an internal part of the manufacturing, marketing, and physical

distribution. People face packaging everywhere. As an example of observing how
different goods are packed is shopping. It is pretty simple to find out that milk cover
is produced from cardboard boxes and fruits are put into the typical meshes.
(Gopalakrishnan 2009, 125.)

Despite the simplicity of the wrapping, humans encounter the phenomenon which
indicates that the average packaging cost in the industry may be as high as 26
percent of the item price itself. This applies mainly to fashion accessories, cosmetics,
perfumes, and some pharmaceutical items. (Gopalakrishnan 2009, 125.)

The manufacturers desire to increase profits by inserting low-priced items inside the
costly wrap. Moreover, it is an excellent way to attract customers and boost demand.
(Gourdin 2006, 157.) However, most of the buyers are interested in saving money
and not overpaying to the vendors (Gopalakrishnan 2009, 125).

Various departments of the organization are interested in packaging from different

perspectives. Logistics area prefers that the product will be made from the highly
durable and damage-resistant material for the easy transportation and handling. The
sphere of marketing is mainly caring about the appearance of the product for
capturing and keeping the clients. Legal service such as carrier (UPS, FedEx, DHL) is
responsible for the item safety and the legal restrictions in order to control the
provided product information to the customer. The production process is dealing
with the placement of each product in its particular package. Customers main wish is
to receive the product whole and be able to handle, store and use it after disposing
of its package. (Gourdin 2006, 156.)
 28
4.3 Substantial role of the packaging process

One of the various objectives of the packaging is conveying the data, which can be in
the form of instructions for the future usage, storage, and disposal process or may be
represented as a tutorial with the rules of transit. The legal requirements are obliged
to demonstrate the ingredients of the item, country and day of production, last day
of utilization and frames of use. Wraps which can also be considered as a second
layer of the product's protection can have several functions. Shielding from harsh
weather conditions, secure from interfering or contamination by other goods and
making safety while handling is probably the most known factors how wrapping
protects the product itself. Subsequently, the packaging contributes the effective
processing, transfer of goods and the unitization of unit loads for logistics purposes.
(Gourdin 2006, 157.)

The responsibilities of packaging are to involve, secure, present and offer the product
for the handling operations where wrapping is more likely the second layer of
protection which also draws customers attention. The well-made wrapping includes
information about the inside item. Good examples would be a precise description of
the item usage, the state in which the product can be utilized, the promotion
conditions for attracting the buyers, the legal aspects such as drug control approval,
a physic-chemical effect on humidity, lame, oxygen, light and a corrosion proof,
physical state, fragility, rigidity, density in order to meet the customer satisfaction.
(Gopalakrishnan 2009, 126.)

4.4 Packaging types and related materials

Nowadays the packaging industry utilizes a wide range of raw materials to develop
the packages which are able to keep the product secured from the external factors
and to provide an attractive appearance of the items for the customer. Packaging
consists of four main types: primary, secondary, tertiary and ancillary. (Decoding the
different types of packaging products 2018.) In addition, all samples of packaging
materials, which are directly relevant to the company case, will be included and
described in this section.
 29
Primary packaging

Primary packaging substantially includes the items which are directly in contact with
the actual products such as nutrition goods, clothing, accessories and various kind of
gadgets, spare parts. (Decoding the different types of packaging products 2018).

Plastic is considered as an invaluable packaging material in all industries around the

world because of a certain number of diverse properties. Plastic is suitable for
processing, storing, shipping, protecting and preserving the goods. The versatility of
this packaging enables the production of absolutely various packing solutions and the
transparency gives a chance to check how products look like without touching them
at the same time staying hygienic and safe. Described material is cost effective due
to the production efficiency which saves operating, time and labor costs. The
lightness of the material adds also convenience in handling. Furthermore, plastics
packaging shows long-life protection for perishable products. Durable and reliable
packaging prevents the possible item damages while the transportation processes.
(Insight into consumption and recovery in Western Europe - a material of choice for
the packaging industry 2019.) Plastic packaging types such as bubble wrap, cast
stretch film rolls, plastic packaging bags and rolls, cable ties with marking tabs are
actively used in the warehouse industry.

Bubble wrap has regularly a spaced air-filled pouch that plays the role of padding
which protects the goods from the bumps and damages. As a result, this packaging is
used as a protective layer and is utilized as a high-quality insulator during
transportation. (Decoding the Different Types of Packaging Products, 2018.) Stretch
film roll is the highly elastic film which keeps the items tightly bound. The most
common application is to secure the products of one type together in order to
reduce products loss and discourage load tampering while the shipment. Cast film
roll has excellent clarity and necessitates less force to stretch. Moreover, this stretch
film offers two-sided cling that secures the wrap to stay on the place without
moving. (A Guide to Stretch Wrap 2019.) Figure 11 shows two described packaging
materials.
 30

Figure 11. Cast stretch film rolls and bubble wrap

Plastic bags and rolls are presented in Figure 12. The main application is the
protection from the external factors, for instance, dirt or dust, optimization the
storage process and providing convenient transportation. Besides, bags with yellow
color are anti-corrosion ones and their main purpose is to preserve the goods which
can be easily influenced by air, moisture or dampness.

Figure 12. Transparent plain and anticorrosion plastic packaging bags and rolls

Cable ties (see Figure 13) are used in the cases when the items are too heavy or big in
their dimensions for putting them inside the plastic bags or the boxes. Additionally,
this packaging is fast.
 31

Figure 13. Cable ties with marking tabs

Cellulose is a raw component which is received from special trees and further used to
manufacture paper and cardboard packages. Such packages are durable, easy to
process, profitable to transport and favorable in the packaging industry. Paper is a
versatile material which is mainly used for producing thinner products such as labels
and paper bags. In case of lack of humidity protection, paper and cardboard must be
additionally processed. For example, extra treatment may consist of lamination by
another inner package component. (Cellulose 2016.) Cardboard boxes and brown
craft paper (an insulator) which is produced from cellulose, are frequently used in
the warehouse industry (see Figure 14).

Figure 14. Cardboard boxes of different shapes and brown craft paper rolls

Secondary packaging

Secondary packaging is intended to secure not only the product itself but also the
primary packaging. Plastic crates and trays are mostly used in storage locations for
these purposes. (Decoding the different types of packaging products, 2018.)
 32
Plastic crates are optimal product storage and shipment solution. Industrial plastic
ones are produced from hard plastics and represented reusable and stackable
containers with or without perforated walls. The main application is to store
products which are initially without packaging and which can easily suffer during
shipping or handling operations. In the warehouse industry, small packed items such
as screws can be placed in such crate in order to avoid product losses while
transportation. (Decoding the different types of packaging products, 2018.)

Plastic trays are another type of secondary packaging. Plastic ones are cheap to
produce, long-term reusable before wearing out and mainly utilized in retail stores,
shops and warehouses for keeping things in the right locations. (Decoding the
different types of packaging products, 2018.) Figure 15 illustrations the examples of
the described secondary packaging.

Figure 15. Plastic crates and trays of different sizes and colors

Tertiary packaging

Tertiary packaging is typically not visible for the end users because it is normally
eliminated by the retailers before products are placed for sale (Primary, secondary,
and tertiary packaging, 2018).

Plastic and wooden pallets are generally used in the warehouse industry in the role
of tertiary packaging. On the one hand, plastic is fairly cheap, but on the other hand,
it is not genuinely renewable, and the tooling required to produce complex forms is
costly. Consequently, WPM is ubiquitously used in the preparation packaging,
stockpiling and shipping. Moreover, wood is cheap, strong, environmentally friendly
and easy-to-work material. Additionally, a softwood that is grown in sustainably
 33
managed forests is a renewable resource. (Why wood is still a popular packaging
material, 2013.) Figure 16 represents the usual pallets, which are remarkable for its
simplicity, irreplaceable in modern trade and standardly used in the warehouse
business for the storage and shipment purposes.

Figure 16. Samples of wooden and plastic pallets

Ancillary packaging

The ancillary materials along with the primary packaging materials ensure the
product–package compatibility and the identification, preservation, consumers
convenience and protection of the item. (Decoding the different types of packaging
products, 2018.) Figures beneath reveal related extra packaging tools in the
warehouse industry.

Figure 17. Duct tape, pliers, stationary knife, measuring tape, stapler
 34

Figure 18. Labels and polypropylene (PP) strap

5 Case Logistikas

5.1 Layout at a starting point and relevant problems

5.1.1 Starting arrangement of the packaging zone

The scheme of the packaging area from November 2018 is shown in Figure 19.
 35

Figure 19. The initial layout of Logistikas warehouse

 36
The layout was organized in the following way. Receiving process was implemented
in the dedicated area which is shown in the scheme (see Figure 19). After each batch
of orders obtained, the supervisors checked the waybills and printed the receiving
notes (invoices) in the computer area 1. Invoices contained information about the
quantity of items inside the order, product and order numbers, packaging type,
storage location and country code. Afterward, the employees distributed the items
according to the date when they should be packed. Next stage was the movement of
the goods from the receiving to the incoming items area putting the oldest orders in
the front lines. Subsequently, the packers could firstly pack the earliest came
products.

Packaging process itself consisted of three various parts: glass packaging, autobag
machines and packaging area. Glass packaging was dealing with the glass processing
and further wrapping, and this zone required only one person. Basically, this area
was working approximately a couple times in a week. Some workers who were
already involved in the packaging procedure near the tables had knowledge of how
to use the tools in glass zone. Autobag machine area consisted of two devices which
were located one after another. One autobag appliance is indicated in Figure 20.

Figure 20. Autobad device

One to two employees could be involved in the working procedure. Metal trolleys
were used as a place for collecting the orders for these machines.
 37
The last part is packaging area, which was equipped with four functional desks
placed in a line. About three to four employees were able to work at the same time
without causing inconvenience to each other. The tables were equipped with two
manual bag sealing machines, which close plastic bags to prevent the ingress of air
and moisture inside the packages. Supporting instruments like duct tape, pliers,
stationary knives, staplers and measuring tapes could be also found at the same
place. Not all extra tools were placed nearby the packaging zone. For instance,
stapler, stapler brackets or working gloves could be found near the
inbound/outbound area which is situated in another part of the warehouse. The
placement of plastic bags and rolls was on and under the packaging tables. Two
automatic strapping machines were situated near the tables for closing the heavy
boxes with strap and ensuring further safe transportation. This strap protects boxes
from opening and makes it easier to carry such packed goods. The single rubbish bin
was situated not far from the packaging tables.

The computer area number 2 was located close to the packaging zone. The working
team used the computer to print the labels to the products and make papers for the
outgoing pallets, check the availability of the materials in Logmaster and verify the
appearance of the item according to its order number in a case where several orders
contained the same type and number of items. The paper bag machine was placed
between the computer area 2 and functional desks, which eliminated extra
movements of workers while packaging processes.

Overhead crane bridge was constructed above the autobag machines and mainly
used to pack heavy items.

The pallets were divided into three categories: ones which were going to Suolahti
marked as “SL”, pallets with letters S, Q, P, R which were placed in outgoing pallets
area and orders which were marked as A or B. The letters which were attached to
the pallets and also could be found inside the invoices referred to the storage
locations. Voluminous orders with big dimensioned items required the arrangement
of their own pallets in case if all commodity could not be placed inside the one pallet
at once. After fulfillment of such order, all pallets should be taken for stockpiling or
sending purposes in order to eliminate bottlenecks.
 38
Packaging and supporting tools were located within the same space. Boxes of
different sizes were placed on the pallet racks 1 -the opposite side of the working
space without any significant marks for identifying. Moreover, some racks had their
own barcode numbers and they were not matched with the number of the boxes.
The place for the collars and pallets was assigned near the pallet racks 4. Logistikas
has been utilizing wooden materials only with IPPC stamps, but more than half of the
coming collars and pallets were without the special marks. Consequently, such
wooden materials were not suitable for packaging purposes.

Importance of IPPC stamp

IPPC has developed a standard for wood packaging in international business, called
ISPM-15. IPPC does not appeal for domestic use. This global standard is applied for
softwood or hardwood packaging material such as pallets, totes, boxes, wedges,
braces, dunnage and the like. (PP Woven Bags & Packaging Products, 2014.)

IPPC mark (see Figure 21) should be registered under national, regional or
international procedures. Along with that, this stamp contains information about
producer code, country code and the treatment method, such as heat treatment and
fumigation with methyl bromide. (PP Woven Bags & Packaging Products, 2014.)

Figure 21. IPPC mark where TR (country code), 064 (represents the unique
certification number issued to NPPOs) and HT (heat treatment)

To sum up, companies like Logistikas who arrange the transportations for abroad is
mainly interested in IPPC regulations.
 39
5.1.2 Relevant issues

SWOT analysis describes all of the positive and negative sides, threats and
possibilities of warehouse organization in November 2018 (see Figure 22).

Figure 22. SWOT analysis of the warehouse organization in November 2018

For the starting point, Logistikas firm had a price wise location which was suitable for
the coming product capacity. The position for the computer area 2 was well-planned
due to the proximity to all zones (see Figure 19). The arrangement of the plastic bags
and rolls was well organized, because those materials took place literally on and
under the packaging tables, which positively affected on the working speed.

Regarding the existed weaknesses, the receiving and sending routes crossed during
the process implementation. Consequently, it was problematic to bring new orders
from the incoming items areas for the packaging team until the ready packed pallets
with voluminous items were taken out from the packaging area to the storing or
sending purposes. Packaging area was equipped only with four tables, which
restricted the number of working places.
 40
Main problems can be divided into three different categories: problems which are
caused by human force, equipment and materials.

A human factor is meaningful in a case of the not highly automated working

environment. Following sides could directly influence on effective and fast packaging
from the side of workforces:

1. Understanding of the packaging materials according to the printed list of

instructions
2. Ability to read the abbreviations and know their meaning concerning packaging
and paper terms
3. Knowledge of reading the receiving notes (invoices) and correctly division of the
products inside the pallets
4. The level of distracting factors such as temperature within the warehouse, other
colleagues, music or loud talking
5. Presence of common sense in order to understand that the worker is able to
follow the instructions and ready to leave "personal wants" outside the working
place
6. The workers’ skills to cope with problematic circumstances, such as tool breakage
or new unfamiliar situations

Machines are playing also important role in the warehouse industry. Such equipment
as paper and sticker machines, manual bag sealers and forklifts are necessary for
working procedure. In the case of Logistikas, the major bottlenecks were caused
because of the breakages. When paper in paper wrapping machine was over, only
some workers were able to fix it. As a result, the working productivity went lower
due to the waiting times. Manual bag sealers were making holes while sealing the
bags even if the temperature was set correctly. Therefore, the quality of packaging
products was lower which could cause dissatisfaction of the customer in the future.
Sticker machines stopped working at least two or even three times per day which
delayed the working procedure. Moreover, the material flow in autobag machine
area was not efficiently organized because of the limited space. According to the
workers’ opinion in the conducted survey, the space for using the overhead crane
was small and inconvenient. (Appendix 3.).
 41
Final and the third significant point on the list of weaknesses is materials, especially
concerning their availability and quantity. Packaging paper, sticker rolls, bags, boxes,
collars, pallets, bottoms and lids should be always available when needed. However,
in Logistikas case, the computer software, Logmaster, which should provide
trustworthy information, had not accurate data about the orders and quantities of
materials. The situations of mismatch in the real data and computer happened at
least a couple of times in a week. Problems of material presence can appear because
company A monitors the availability of packaging elements inside the Logmaster and
makes the orders for Logistikas by themselves. Moreover, the marked location of
collars and pallets did not guarantee that those materials could also be found
somewhere else within the warehouse. Sometimes, the regular location was
surrounded by other stuff which caused difficulty and obstacles from picking up
pallets or collars. Bad arrangement of the boxes caused unnecessary time-consuming
for the employees. In most cases, especially for new workers, it was hard to pick up
the correct box without external help or using a forklift.

Additionally, there was no organized place for the disposal of not suitable wooden
resources. The single rubbish bin was situated not far from the packaging tables, but
it was not continuously emptied by its filling. Therefore, this has been causing the
trash pile and reduced space for some movements.

In most of the cases, the tools for packing were missing, broken or out of stock.
Ready-made but not stockpiled products disturbed the working operations in the
packaging zone by taking up valuable space. Initial layout caused such significant
problems as poor space utilization and limited movement possibility for working
team and forklifts. Most of the issues led to the bottlenecks and made the packaging
process slower and less profitable. That is why the main threat for the initial layout
was the growth of the amount of coming orders. Despite the negative sides of that
layout organization, it had a possibility for upgradations and avoiding existed
weaknesses in order to reach significant amendments.
 42
5.2 Current layout and relevant problems

5.2.1 Description of the current layout

During the time frames from November 2018 and April 2019, layout of the
warehouse hall has been changed by the company itself. Figure 23 represents the
new design.
 41

Figure 23. The appearance of the present layout

 42
The receiving process remains the same as in the initial layout and present orders are
processed by supervisors in an identical way as earlier. The outgoing pallets area has
been moved next to the pallet racks 2. One more incoming items area (see Figure 23)
was added to the near the pallet racks 1 and currently it blocks the possibility to take
the materials from these stands (see Figure 24).

Figure 24. The incoming area near pallet racks 1

As a result of the amendments, the placement of some elements in the whole

packaging space has been modified. Firstly, glass packaging has been transferred to
another warehouse hall. Instead of that, two new areas have been created and they
are unclear and waiting packaging material area. The unclear area is responsible for
order invoices that do not specify the type of packaging. In a case when a worker
does not know by himself how to pack the item, bringing the items with an invoice to
the unclear area is considered the best solution. The waiting packaging material area
is a key zone for orders, whose packaging materials are not currently available at the
warehouse stock.

The position of autobag machines (see Figure 25) has been modified and now they
are located in parallel. The metal trolleys are still used as a place for collecting the
orders for these appliances.
 43

Figure 25. Two autobag machines

The number of tables in the packaging area has been increased by two pieces: three
functional tables are placed face to face with another three ones. Currently, three
working desks are equipped with one bag sealing machine per each -two devices on
one side and one machine on the another. Moreover, two old strapping machines
have been replaced with two new ones by Logistikas. The placement of strapping
devices is remained the same -near the working tables from the right side. On the
left side of the tables, the paper machine can be found.

New small packaging materials area was organized and supporting instruments, such
as small boxes, plastic bags, new rolls of stickers, gloves, and others can be found
directly there. Employees can take the materials in the needed quantities from the
new shelves and place them back after finishing the working operation.

The computer area 2 has been moved closer to the updated area where working
desks are positioned. The purpose of computer usage has not been changed.

The overhead crane bridge has not been moved. Currently this device is not
frequently used. There is one more crane in the other warehouse hall with larger
operating space.
 44
The outgoing pallets area has been transferred closer to the pallet racks 2 which
means that the ready-made pallets are not needed to transfer across the warehouse
hall. As a result, the routes of receiving and sending the pallets are not crossing each
other while moving to the right places before and after packaging processes.
Currently, all the used pallets are divided into the following categories. First ones are
going to Suolahti and they have the mark “SL” but also supplement letters A, B, P, Q,
R, S and “UUSI” which refer to storage places, for instance, “SL P”. The second type is
“Esipakattu” or “EP” pallets, which has the same supplement letters as Suolahti ones,
but the pallet stamp will look like “EP P”. Esipakattu is translated as prepacked from
the Finnish language. Third is “AA-TP” category and it indicates the pallets which are
staying within the Logistikas warehouse in Säynätsalo for storing purposes. The half
size of the EUR-pallets can be used in case of A01, A09, B01, and B09 have been
marked as a storage place to the invoice. Voluminous orders are mostly required
own pallets and will be closed after the completion of the order. As a conclusion, the
division of the pallets has been expanded compared with the initial working process.

Boxes of all sizes have been transferred to the pallets rack 4 and partly racks 3, right
next to the working desks. The most used boxes are placed on the available height,
so there is no need for using forklifts. Additionally, a stepladder can be used for
reaching the second shelf level if it is required. Each box has its own place and
identification code on the racks which helps employees to identify the correct one.

Space is now equipped with three rubbish containers instead of one compared to the
initial layout. One container is added and placed next to the autobag machine area
and another one is used to gather the wooden waste, which does not include IPPC
stamp. The current location of the collars for EUR-pallets can be found on the ground
level of pallet rack 3 and new EUR, half EUR and small pallets, lids, bottoms, and
small collars can be detected on the ground stage of pallet racks 2. Thus, employees
know where they can take the needed materials.

5.2.2 Relevant issues

Some problems and shortcomings which were occurred before within the Logistikas
warehouse are still present. However, the number of strengths have been increased
 45
due to the implemented modifications. SWOT analysis characterizes the current
storage facility from four diffrent angles (see Figure 26).

Figure 26. SWOT analysis for the current warehouse organization

Due to changes, which company has done, the number of strengths has been
increased. The outgoing pallet area has been moved next to the pallet racks 2, which
has removed the intersection between the receiving and sending pallets routes
during the fulfillment processes. The new packaging zone gives the possibility to
work at the same time up to six people at the tables. The new position provides the
chance to divide the order into the voluminous and small ones (see Figure 23). There
are four existed lines where new coming orders are placed according to the size of
the order and the deadline of the packaging–fresh items are at the end of the lines
and old ones are at the beginning closer to the functional desks for packaging
purposes. The new parallel placement of autobag machines has increased the
working space and improved the material flow of the ready packed products. Unclear
and waiting packaging area increase the working comfort and speed because
employees do not anymore spend time on unnecessary movements. The new
 46
placement of the cardboard boxes has enhanced the level of the comfortability for
the working team. The present situation concerning the machinery has been changed
compared with the initial storage organization. The sticker machine has been
replaced with another one, which works longer without stoppages. More workers
are able to handle with the paper machine and know how to fill a new paper roll if
previous is finished. Forklifts are in the access zone and each employee can utilize
them.

As a conclusion, new improved layout has provided possibility to increased amount

of the orders, efficiency and ensured Logistikas more profitable position as a
warehouse in logistics sphere. Growth has become also a threat while space inside
the warehouse is limited. Consequently, such negative sides as delays of packaging
and further customer claims may appear.

The human factor is still applicable as a weakness. Human does mistakes accidentally
even they understand the process of packaging. Tiredness and distractions decrease
the attentiveness which increases the risk of making mistakes. Current material list
instructions are obsolete and do not contain all presently used materials which can
lead to wrong packaging. Finally, the standard division of the items between the
pallets is unstable and may be changed quickly by the customer. Therefore, if an
employee was not present when the information was provided or did not understand
the new structure of the assignment, mistakes can happen which leads to incorrect
placement of goods.

The operating process of some machinery such as manual bag sealers remains the
same. At the current moment, there are three these machines and usually, only two
are functioning normally. Sometimes even these two devices start to overheat and
make holes during the sealing of the plastic bags.

The availability of some materials is still not stable. According to the increase of the
orders, the lack of certain components is more and more visible within the
warehouse. For instance, some anti-corrosion plastic bags are mostly out of stock,
but the orders which require this packaging type are still coming regularly. Thus, it
causes delays and possible claims from the customer.
 47
Ultimately, the packaging procedure has become more stable and structured in
comparison with the starting point. However, possible changes which will increase
the number of working places and positively influence on productivity can be still
discovered and presented to the Logistikas Oy.

5.3 Optimal solutions

5.3.1 Implemented solutions for the starting layout

Logistikas warehouse has already solved a certain number of problems while

renovating the structure of the packaging area. The change was made from
November 2018 till April 2019 and it had a positive impact on productivity. A big
number of present employees are more motivated to work with an appropriate
speed. According to personal observations, if the working collective is in a good
relationship with each other, even talkative colleagues or music will not be
considered as distractive factors. The cleaning shifts have been put into practice
which have decreased dirtiness and dust within the working area. A cleaner task has
become to bring the collars and pallets in this designated place after running out of
these materials.

Materials for packaging has been redistributed and stuff availability has been slightly
increased. Big boxes are situated right behind the tables for quick and easy access.
The newly established shelf storage near the autobag machines contain all needed
supporting materials and tools such as plastic bags, small boxes, sticker rolls,
replaceable tapes for duct tapes, blades for stationary knives and other items like
that. Two additional manual bag sealers have been purchased. However, the quality
of this new equipment is not at the highest level and old sealing devices are
sometimes broken.

5.3.2 Solutions for the current layout

Instructions always accompany the work and make it more productive. Creating
instructions in an electronic form like PDF, which is accessible and searchable, would
help employees and new workers to find solutions for problems by using keywords.
Regulations could be implemented easily as well. All this could be handled with a
 48
small tablet with instructions inside and a metal stand which will be located near the
computer area 2 (see Figure 23). PC is already highly utilized for purposes of printing
stickers and papers for outgoing pallets, checking the orders and the availability of
materials. If the computer also includes the instructions, the queue of the waiting
employees will appear. Thus, it will be easier to add updated information inside the
electronic document instead of continuously reprinting the paper instructions. List of
electronic instructions should involve succeeding parts:

1. Description of all packaging materials such as bags or boxes with their attached
photos and measurements for better visual understanding
2. Instructions for order implementation with all described preparation and
packaging steps
3. Instructions for the computer and all necessary software programs, which
employees tend to use during the working process
4. Guidance for switching safety systems ON and OFF

The accomplished instructions are divided into four main groups. Material list (see
Appendix 4) contains a description of boxes, plastic bags and rolls, pallets and other
recourses with its dimensions. The material list will give a possibility for better
understanding of the wrapping materials. The following support could help to
recognize the right box inside the warehouse, find the alternatives for the similar
sized boxes and will guarantee the right standards of packaging. Instructions for
completing the order (see Appendix 5) include the background information, which
worker should know before starting the work and the packaging process itself.
Provided guidance will give a good insight into different order types and their
documents, possible issues and solutions which can appear before packaging, the
process how to create pallets and rules and recommendations for packaging process.
Instructions for using computer and software programs (see Appendix 6) provide
important passwords for log in, the list and the stepwise assistance for computer
applications. The last instruction document (see Appendix 7) represents a guide,
which explains the steps for opening the gates and doors of Logistikas warehouse.
 49
Made instructions were based on Logistikas offered information. Appendices four,
five, six and seven include confidential information. Therefore, the data is limited,
and the full version will be provided only to Logistikas Oy firm.

Some important data can be placed on the information board, which is already
hanged near the computer area close by the functional desks. Following data should
be mentioned:

1. The list of abbreviations regarding the codes of each month

2. Announcements or news could be also found there
3. Key notes which needed to be taken into consideration when the next shift arrives
to work

Training is an essential phase towards the growth of work efficiency. Personnel

qualifications can be increased with the help of the additional guidance for the
workers. The implementation of cross-training will provide the knowledge and
experience of working in the multiple warehouse zones and assist the workers to be
more effective. Regarding the Logistikas company case, an employee should gain the
knowledge of working in various packaging zones in his first weeks. Subsequent areas
must be included in training -glass packaging, cleaning shifts, autobag machines
working area, packaging of heavy, small items and forming of kits. Moreover,
Logistikas can create a tutorial for changing the supporting materials inside the
machines. Such instructions can be relevant for paper machine, sticker machine, and
manual bag sealers. Each of the mentioned areas has its rules and nuances which will
be learned while practicing. Specifically, cleaning shifts provide the great training of
using a different type of forklifts and teach the placement of important materials
within the warehouse facility.

The standpoint of increasing the workers’ efficiency should be taken into account.
Therefore, the schedule shall include the responsible person who will print the
stickers to the orders. This role should be combined with packaging duties. Such a
procedure will diminish the movements of the packaging team. When the invoices
come with the printed stickers, personnel do not need to perform extra actions.
Currently, there are a lot of various small and voluminous orders within the
Logistikas warehouse. When the orders include only a few items, stickers need to be
 50
printed more often compared to voluminous orders. The worker who has received
this role for the whole week should come and immediately start printing the labels
for the orders which are prepared for the packaging operations. In the case when
stickers are not printed yet, for example, in the beginning of the morning shift, other
employees can already start packing while the responsible person will perform his
assigned duties.

Cleaning perspective has already been resolved. Despite the fact, that the present
timetable already includes cleaning shifts, each worker should also be responsible for
cleaning near their working table or zone where packing was done. The main tasks
for each employee are sweeping the floor and throwing out trash boxes if there are
any.

Quality of the materials and machines which are directly involved in the packaging
workflow plays a big role. Most of the devices are functioned well expect manual bag
sealers. Logistikas warehouse should purchase totally new and highly reliable
machines which provide more unfailing sealing even used longer time periods. One
more improvement, which will increase the comfortability level for working team is
exchanging the present tables to the electric ones where height can be regulated by
the worker according to his personal needs. Moreover, each table should be
equipped with personal lighting, rubbish bin, and the chair to increase the
convenience level of the working process.

Logistikas warehouse regularly deals with the maintenance problems. Accordingly,

machine stoppages cause continuous delays in the order implementation. For the
current moment, enterprise has an arrangement for a repair on call with the
maintenance firm, which is located in Tampere. That is why the repairman can visit
the storage facility only couple times in a month due to the different city locations. In
order to be able to handle any breakages immediately after the error occurrence, the
maintenance program shall be updated. Logistikas facility has two options. Firstly,
warehouse firm should consider hiring a repair master in the area nearby Jyväskylä
and making a working contract with him on a permanent basis. Secondly, signing a
contract with the maintenance firm, which will provide instant repair of breakdowns
can be looked through.
 51
The computer system of the warehouse facility is happened to have wrong data
about the amount of the inventory which is currently located in stock. As a result, the
purchasing department of company A is not able to correctly follow the stock and
organize the purchasing of the required materials in advance. That is why Logistikas
firm should find their own suppliers and arrange own deliveries of any kind of
recourses. This will give a chance to control the stock by Logistikas enterprise itself
and reduces the ending of packaging materials within the warehouse.

Suggested modified layout

During the arrangement of any layout, the following aspects should be taken into
consideration:

1. Full coordination of machine work and worker activities

2. Free material flow and minimum distance for a material to travel between
subsequent operations
3. Employee satisfaction with work conditions and flexibility of workstations
arrangement.

As the Logistikas has already successfully improved the initial version of the layout,
not many sides can be replaced due to the space limitation of the storage building.
However, the packaging area with the functional desks still can be improved.

Improvements were planned and arranged in the drawing (see Figure 27) after the
implemented measurement work. According to the space which is available inside
the warehouse hall, the storage facility was replenished with two new tables for the
main packaging area and one of the functional desks was placed near the small
packaging materials area opposite side of the shelves. The placement of original six
tables has not been changed. Currently, eight employees are able to work in the
main packaging zone. Separate packaging table from the current layout has been
moved closer to the small packaging materials area and was put in a row with a new
added functional desk. All described modifications are marked with revision clouds in
Figure 27.
 51

Figure 27. Suggested improvements for the current layout

 52

6 Conclusion

6.1 Relevance, validity and reliability

This research work delves into the problem of packaging organization from the
worker point of view and increases the understanding of how to enhance the
working efficiency, support the development of the working processes and
enterprise’s performance. At the same time, this study can be useful for starting a
small company, which main aim is to reduce the number of problems concerning the
packaging at the initial planning stage.

Concept and the basics of the warehouse organization and its functions, material
handling and product packaging were introduced as a theoretical part of this work.
The practical part of the thesis concentrates on the topics for improving the
packaging department of Logistikas.

Collecting the forms of an anonymous questionnaire from the full-time workers was
the starting point of gathering the empirical data in Logistikas company’s situation.
The chosen respondents had a very good insight into Logistikas warehouse as they
had already good aspect of company’s advantages and disadvantages. Therefore,
their answers could be relied upon and validated as well. Visual observations and
working experience during the four months were affected to the final results.

The meetings with the supervisor of the warehouse and the thesis teacher were
systematically organized and the thesis progress and ideas were discussed. As a
conclusion, the thesis presents the applicable solutions for improving the current
situation of Logistikas warehouse.

6.2 Summary of results

The main objective of the research work was to study the packaging process in
Logistikas warehouse, analyze the components which caused the bottlenecks and to
propose possible improvements for them. With the application of the qualitative
research method, the aim is met successfully. Completed research and development
of the available solutions are considered as the initial phase of solving the problem of

optimization. The summary table below demonstrates each problem with its cause
and feasible solutions.
Table 1. Conclusion table with all findings concerning the company case
Problem and cause
Packaging, printing labels,
unnecessary movements
of the employees, the
dirtiness of the working
space are caused by
human force.
Breakdowns of machines,
unstable working process
of devices are caused by
equipment failures.
53
Solution
1. Purchase of the electronic tablet. Download the created
PDF files inside the electronic device which comprises four
different categories of instructions – material list of boxes,
bags, pallets and others, instructions for order completion,
using computer and software programs and guidance for
entering Logistikas.
2. Include the list of abbreviations regarding the codes of
each month, notifications and important notes for the next
shifts to the information board close by the workings tables.
3. Logistikas can arrange cross-training which will provide
the knowledge of working in the multiple warehouse zones
and help workers to be more effective.
4. In case of minimizing the extra personnel movements, the
worker who will print the stickers for the orders and attach
them or the invoices should be assigned.
5. Each employee should clean the space after working shift
is over–sweep the floor and throw out the rubbish from and
under the function desk.
1. The maintenance program shall be updated.
2. Tutorials for changing the supporting materials inside the
machines within the packaging zone should be created.
Following instructions can be relevant for paper machine,
sticker machine, and manual bag sealers.
 54
3. Higher quality manual seal bag machines should be
purchased by the company. The main reason for such
acquirement is because bag sealers are working alternatively
bad.

4. Change the old functional desks to new electric ones with

individual lighting, rubbish bins and chairs can become an
excellent solution for the packaging area. The main benefit
of such a purchase is that height can be regulated, which will
make easier to pack heavy items.

5. Procurement of three more tables will enhance the

number of working places in the packaging area.

Shortage and 1. Logistikas should find the suppliers and arrange own
unobtainable materials in regular deliveries of any kind of resources from the wooden
stock are caused because pallets to cardboard boxes and wrapping paper. This
of the limited materials procedure will give a better chance to control the stock and
data system. reduce the ending of materials within the storage facility.

Initial objectives of the thesis were achieved and the Logistikas enterprise can use
provided solutions to improve their storage. Reaching these goals is a prerequisite
for the further adjustments and development of the organization. Available solutions
can positively impact on the working team’s comfortability, because the excess
movements of the personnel will be avoided. However, the research contains only
basic improvements. Therefore, there is still a lot of work to be done in the prospect.

7 Ideas for future improvements

According to the personal research and opinion of the supervisors, I find out that
warehouse space is really small for its purpose. Some pieces of the supporting
materials such as new coming wooden pallets, lids, collars and etc. are mainly stored
outside to bring more freespace. Packaging zone is still limited and cannot be more
expanded. That is why a first important step for Logistikas would be the construction
 55
or renting a new building for storage purposes. A new space of a warehouse gives big
advantages such as shortening the production cycle, increasing the number of
workers who can perform tasks, better and faster utilization of the manufacturing
resources. Such a project can be considered as a long-range one.

A warehouse is full of error-prone, repeatable and process-oriented missions, varying

from manual documentation errors to picking, stocking, transporting and receiving
mistakes (Pontius 2019). An essential step at some point is to implement automated
solutions for warehouse processes systems. The main goal of the mechanization is to
make gains upon existing processes by improving efficiency, working speed, level of
the reliability, accuracy and eventually cost savings. (Allais 2017.) There are several
automation schemes which can be suitable for Logistikas Oy such as WMS and PTL
system. Company can receive subsequent benefits after implementation of real-time
inventory information in WMS (see Figure 28).

Figure 28. Real-time inventory effect on storage capacity and warehouse efficiency

Inventory data is always out of date in usual manual storage. Typically, an employee
retrieves the item and manually enters the information into the manual inventory
tracking system, or the customers will update the inventory data by themselves. By
the time of this procedure, the numbers can become already unreliable because of
human mistakes. However, an automated system saves from any kind of errors or
delays and updates the data in real-time. (Curley 2015.)
 56
1. Improved storage space capacity
The WMS determines a specific location of each particular item, the capacity of
the storage units and the number of goods kept in the stockpile. The most used
items are located on lower shelves and near the shipping area, while infrequently
or lesser used inventory is often stored in higher racks or in out-of-the-way places
within the facility. (Curley 2015.)
2. Upgraded warehouse efficiency
Modern WMS gives the possibility to identify inefficiencies and remove them.
Moreover, such system can show important aspects in working cycle such as the
average time frame which requires the warehouse worker to pick the order and
recognition of the most efficient employees and those ones, who need extra
training. (Curley 2015.)

Pick-to-light system has a number of benefits which could positively influence on

Logistikas Oy firm. The Figure 29 below explains positive impacts of PTL
implementation.

Figure 29. Advantages of PTL system applied to Logistikas case

Implementation of the mechanized comprehensive labor for every aspect is not

needed and will not be even profitable for Logistikas, because it is a huge investment
 57
of money and such innovation will not pay off soon. However, manual labor can be
more eliminated, for example, in the autobag packaging area. Due to my
observations and knowledge, the zone receives lots of orders which consist from
1000 up to 5000 pieces per order. Basically, the most common items which are
coming for packaging are screws, nuts and other tiny parts, production of which is
usually cheap. The robotic system can do this work faster and avoid any kind of
possible mistakes starting from counting tasks to mistakes in the labels.

Taking everything into consideration, in my opinion, Logistikas should think about

automation implementations only after changing the location of the storage in order
to accomplish bigger growth and profit. For the current moment, the enterprise can
start with small non-automated improvements and they will surely increase the
working efficiency.
 58

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Appendices

Appendix 1. Email from warehouse supervisor Tuomas Aho which includes the
information about company Logistikas.

*Information inside the Word attachment is confidential and cannot be published.

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Appendix 2. Exel document contains all packaging materials which are utilized by
Logistikas warehouse. It was provided by Tuomas Aho.
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Appendix 3. Quiestionairs which were colleted anonymusly in Logistikas warehouse.
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Appendix 4. Material list of boxes, bags, pallets and others

*Information is confidential and cannot be published.

Appendix 5.Instructions for order implementation

*Information if confidential and cannot be published.

Appendix 6.Instructions for using computer and software programs

*Information is confidential and cannot be published.

Appendix 7. Instructions for entering Logistikas

*Information is confidential and cannot be published.