STORAGE AND WAREHOUSING

INTRODUCTION
Many manufacturing and distribution companies maintain large warehouse to store WIP and components received from external suppliers Warehousing is a time-consuming activity that does not add value (Waste) JIT philosophy suggests that companies should do away with any kind of temporary storage and maintain a pull strategy

INTRODUCTION
But, due to the need to maintain a sufficient inventory of items (unreliability of suppliers), to improve customer service, respond to their need quickly make it not possible to completely do away with the temporary storage. Nike has recently built a large distribution warehouse in Belgium to serve 75% of customers within 24 hours, because many of its manufacturing plants and suppliers are overseas in the Far East.

INTRODUCTION
Members club stores allow members to shop in their stores. They sell merchandise in bulk and directly out of their warehouse and hence eliminating the need to build and maintain costly retail stores. These two examples indicate the need for establishing warehouses to service customers despite the lack of value-added services in many of them.

Supply Chain Context

Outlet Store
WH WH Large Retail Factory WH Factory Factory Small Retail

WH
WH Customers

Supply Chain Specifics

Manufacturing company Warehouse has little control over incoming products Large retail vs. small retail customers Average order size Shipping mode (truckload vs. UPS) Storage/picking Customers pull (large customers can get special treatment)

Factory

Large Retail
WH Small Retail

WAREHOUSE FUNCTIONS
The main function of a warehouse is warehousing that is the temporary storage of goods Warehouses also perform other functions:
Provide temporary storage of goods Put together customer orders Serve as a customer service facility Protect goods Segregate hazardous or contaminated material Perform value-added services Inventory

Warehouse Functional Areas

Receiving

Reserve Value Add Pick-Line

Sort/Accumulate
Pack/Ship

Receiving - receive incoming product Reserve - store products efficiently (pallets) Value-add - transform products (labeling, kitting) Pick-line - store product so that it can be picked efficiently (cases/items) Pack/ship - package and ship products

MATERIAL HANDLING & STORAGE SYSTEMS USED IN WAREHOUSE

A typical warehouse consists of two main elements:
A storage medium A material handling system

There is also a building enclosing the storage medium, the goods, and the storage/retrieval (S/R) system. Warehouses come in different shapes, sizes, and heights depending on such factors goods stored, the volume, the type of S/R used.

MATERIAL HANDLING & STORAGE SYSTEMS USED IN WAREHOUSE

The Nike warehouse
Total area: 1 million square feet; High-bay storage: 100 feet Utilization: 50% (roughly) Served by 26 man-aboard stacker cranes

Storage Media
The primary reasons for using storage racks: Maximizing space utilization in a warehouse. Each rack has multiple storage spaces The types of storage racks (See Fig. 12.212.6)
Stacking frames Cantilever racks

The types of storage racks

Stacking frames Cantilever racks Selective rack Flow rack Racks for Automated Storage and Retrieval Systems

Storage and Retrieval Systems

Two types of Storage and Retrieval Systems Person-to-item:
The storage racks are stationary and a person or machine picks the items

Item-to-person
The items come to the end of an aisle and then send them (by an operator or a transportation mechanism) to their point of use (e.g. flow racks, food vending machines, etc.)

Storage and Retrieval Systems

S/R systems can be manual or automated and degree of automation can vary from simple automation (e.g., flow racks) to full automation (e.g., robotic retrieval systems) known as AS/RS There are several types of S/R systems
S/R done by people standing on one or more levels using movable ladders

Types of S/R systems

Several other widely used in practice
Storage carousels Miniload AS/RS Robotic AS/RS High-rise AS/RS

AUTOMATED STORAGE & RETRIEVAL SYSTES IN ACTION

Please read Heragu Section 12.4

WAREHOUSE DESIGN
How many and where to locate warehouses? Layout of warehouse Location and Layout of Docks Rack Design Block Staking Storage Policies Design Models for storage policies

Warehouse Location
Three main questions that need to be answered
How many warehouses must be built? Where should each warehouse be built? How large should each warehouse be?

Overall Layout of Warehouse

Depends on the items stored, space available, height, storage medium, S/R methods, the layout of road and rail tracks around the warehouse, and other factors. Typical warehouse layout in a member club store and a high-rise automated warehouse See Figs 12.23 and 12.24.

Location and Layout of Docks

Some typical dock layouts See Fig. 12.25 The number of docks required has also a major impact on the layout and location of docks.

Rack Design
The required length and width of the warehouse depend on the number of items to be stored, number of storage spaces required, number of rows and columns of racks, and height. Askin and Standridge, 1993 developed a model to determine the length and width of the warehouse (called Model 1).

Block Staking
Used when the item is not fragile and a box or carton is strong enough to bear two or three levels of similar boxes or cartons, and the inventory turn over is high. For such item, we may be able to stack up pallets to a desired level (called block stacking) For a fixed aisle width, stacking height, and lot size, what depth of storage maximizes space utilization? ( See a simple formula developed by Kind,1975)

Storage Policies
Random storage policy Dedicated policy Cube-per-order index (COI) Class-based storage policy Shared storage policy

DESIGN MODEL FOR DEDICATED STORAGE POLICY

Consider the following problem: A warehouse has p I/O points through which m items enter and leave the warehouse. The items are stored in one of n storage spaces or locations. Each location requires the same storage space. To assign the items to storage spaces such that minimizes the cost of moving the items in and out of the I/O points (A mathematical model is given by Model 2)

DESIGN MODEL FOR COI POLICY

Items use the I/O points in the same proportion The cost of moving a unit load of an item is independent of the I/O point. Model formulation (See Model 3).

DESIGN MODEL FOR RANDOM STORAGE POLICY

Items coming into a warehouse are stored randomly in one of several storage spaces that are empty and available Each storage space has an equal probability of being selected for storage (May not be the case in practice). Given that n storage spaces are required, determine the storage space layout that minimizes the total expected travel distance between each the storage space and p I/O points (discuss Example 4)

WAREHOUSE OPERATIONS
The manager of a warehouse faces numerous problems:
What is the sequence in which orders are to be picked up? How frequently are orders to be picked up from the high-rise storage area? Should we consider batch picking operations, or should we pick whenever an order comes in? Is there a limit on the number of items picked? If so, what is the limit?

WAREHOUSE OPERATIONS
How are operators to be assigned to stacker cranes? How do we balance the picking operators workload? Do we release items from the stacker crane into the sorting stations in batches or as soon as the item is picked? Surveys have shown that order picking is more than 50% of the activities in a warehouse.

Order Picking Sequence Problem

Two basic picking methods: Order picking
An operator is responsible for picking all the items in an order

Zone picking
An operator assigned to a zone is responsible for picking only items in an order that are within his/her zone

Order Picking Sequence Problem

Order picking sequence problem
An AS/RS or a person on board retrieves items listed in an order from their respective locations. The item in a list are called picks. Beginning from a pick-up/drop-off (P/D) or I/O location, the AS/RS retrieves the picks listed in the order in a particular sequence and then places the picked order back at the I/O point. The operations are reversed when items are to be stored in the rack spaces.

Order Picking Sequence Problem

Managers try to find a sequence that minimizes the time required to pick items in a list or order. Order picking problem can be modeled by TSP A TSP with the Tchebychev metric (TTSP) is given in Section 12.6.1.

WAREHOUSING
PERENCANAAN FASILITAS

WAREHOUSING
Warehousing is expensive 2-5% of cost of sales Warehouse is playing a more vital role in the success (or failure) of businesses today than it ever has

Warehouse Master Planning Methodology

Investigating warehouse operations through warehouse activity profiling and warehouse performance benchmarking Innovating, optimizing, and simplifying warehouse operations Implementing new warehouse designs

Warehouse Activities

PROFILING

Warehouse KPI

Performance Gap Analysis

Warehouse Space Requirement