ULTRON – Managing Warehouse Space and Item Obsolescence

1. Best Option to Overcome the FIFO Problem:

Considering the options provided, the best choice for Ahuja to overcome the FIFO
problem in the warehouse would be the Pallet Flow Rack System.
Pros:
 Effective FIFO Management: The pallet flow rack system inherently facilitates FIFO
as it allows for the first pallet loaded to be the first to be unloaded due to its gravity-
based design. This ensures older inventory is consistently moved out first.
 Space Efficiency: It optimizes space utilization as it allows for high-density storage,
enabling more inventory to be stored within the same square footage.
 Reduced Labor Intensity: With the flow rack system, labourers don't need to manually
rearrange inventory to maintain FIFO, saving time and effort.
Cons:
 Capital Cost: The initial investment for setting up a pallet flow rack system is
relatively high compared to other options, ranging from USD 80–100 per square
meter.
 Implementation Time: Installing a pallet flow rack system may require some time for
planning, construction, and installation, which could disrupt warehouse operations
temporarily.
 Maintenance Cost: While ongoing maintenance costs may not be as high as software-
based solutions, there might still be expenses associated with occasional repairs or
adjustments.

2. Changing Warehouse Layout for Better Picking Efficiency:

Yes, the warehouse layout can be altered to enhance picking efficiency. One possible layout
modification could involve implementing a cross-aisle or angled aisle configuration to
optimize the pick path.
Pros:
 Improved Efficiency: Cross-aisle or angled aisle configurations can significantly
reduce travel time for laborers, allowing them to reach their desired locations more
quickly and retrieve inventory faster.
 Enhanced Accessibility: By reorganizing the layout to minimize travel distances,
laborers can access different parts of the warehouse more efficiently, leading to
improved overall productivity.
 Cons:
 -Potential Disruption: Implementing a new layout may require temporarily halting
warehouse operations or reorganizing existing inventory, which could disrupt
workflow and cause short-term inefficiencies.
 Space Considerations: Reconfiguring the layout to incorporate cross-aisles or angled
aisles may necessitate sacrificing some storage space, which could impact overall
storage capacity.

Evaluation of Parameters for Options:

Capital Cost:
 Mezzanine Floor: USD 20–40 per square meter
 Colour Coding: Approximately USD 1 for 100 color coded stickers
 Pallet Flow Rack System: USD 80–100 per square meter
 Dedicated Fast Pick Area: No capital investment required
Implementation Time:
 Mezzanine Floor: Relatively quick and easy setup
 Colour Coding: Minimal implementation time
 Pallet Flow Rack System: Longer implementation time due to planning and
installation
 Dedicated Fast Pick Area: Minimal implementation time, mainly involves
rearranging inventory
Maintenance Cost:
 Mezzanine Floor: Minimal maintenance cost
 Colour Coding: Negligible maintenance cost
 Pallet Flow Rack System: Occasional maintenance and repair costs
 Dedicated Fast Pick Area: Minimal to no maintenance cost
Overall, while the Pallet Flow Rack System requires a higher initial investment and longer
implementation time, it offers the most effective solution for FIFO management.
Additionally, implementing a cross-aisle or angled aisle configuration can further enhance
picking efficiency, although it may require careful planning and temporary disruptions to
operations.