J Intell Manuf (2017) 28:111–129
DOI 10.1007/s10845-014-0965-9
A RFID-based storage assignment system for enhancing
the efficiency of order picking
K. L. Choy · G. T. S. Ho · C. K. H. Lee
Received: 29 October 2013 / Accepted: 9 September 2014 / Published online: 19 September 2014
© Springer Science+Business Media New York 2014
Abstract In today’s time-sensitive markets, effective stor-
age policies are widely accepted as a means for improv-
ing the efficiency of order picking. As a result of cus-
tomization, the variety of products handled by a warehouse
has increased, making storage location assignment prob-
lems more complicated. Different approaches have been pro-
posed by researchers for improving storage assignment and
order picking. However, many industrial practitioners find
it difficult to adopt such approaches due to complexity and
high associated costs. In particular, small and medium enter-
prises (SMEs), that generally, lack resources and who have
staff members with weak artificial intelligence backgrounds,
still rely on experience when assigning storage locations for
diverse products. In these circumstances, the quality of deci-
sion making cannot be guaranteed. In view of this, an intelli-
gent system which can be easily adopted by SMEs is designed
to improve storage location assignment problems. The pro-
posed system, an RFID-based storage assignment system
(RFID-SAS), is a rule-based system incorporating radio fre-
quency identification (RFID) provides decision support for
storage assignment in a warehouse. Unlike many existing sit-
uations, RFID tags are attached to products at the item level
instead of at the pallet level. As the knowledge embedded
in the system is represented in the form of rules, evaluation
is important and is outlined in this paper. The effectiveness
of the system is verified by means of a case study in which
K. L. Choy · G. T. S. Ho · C. K. H. Lee (B)
Department of Industrial and Systems Engineering, The Hong Kong
Polytechnic University, Hung Hom, Kowloon, Hong Kong
e-mail: 10902642r@connect.polyu.hk
K. L. Choy
e-mail: kl.choy@polyu.edu.hk
G. T. S. Ho
e-mail: george.ho@polyu.edu.hk
the system is implemented in a typical SME specializing in
machinery manufacturing. The results illustrate that RFID-
SAS can enhance the efficiency of order picking in a ware-
house.
Keywords Storage location assignment · Order picking ·
Small and medium enterprise · RFID · Fuzzy logic
Introduction
Warehouse operations are critical in the context of sup-
ply chain management. They facilitate storage of products,
ranging from raw materials to finished goods, between the
upstream and downstream regions of a supply chain. Order
picking is one of the warehouse operations which have the
highest priority for improving the warehouse efficiency (De
Koster et al. 2007; Chen et al. 2014). In particular, stor-
age policy is a major factor affecting the efficiency of the
order picking process (Brynzér and Johansson 1996; Petersen
and Aase 2004; Joe et al. 2012). The main storage location
assignment problem is to assign incoming products to stor-
age locations in particular storage zones so as to minimize
material handling costs while maximizing space utilization
(Gu et al. 2007). Without a systematic approach to assigning
stock keeping units (SKUs) to appropriate storage locations,
the efficiency of order picking, causes additional material
handling costs, as well as ineffective storage utilization in a
warehouse.
In addition, over past years, the variety of products han-
dled by a warehouse has increased because of customiza-
tion. This causes storage location assignment problems to
be more complicated. Conventional approaches for storage
assignment are not sophisticated enough to deal with the chal-
lenges that occur in dynamic markets. Many previous studies
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have been conducted that provide decision support for stor-
age assignments. However, it is observed that in many orga-
nizations they are not widely adopted; in particular small and
medium enterprises (SMEs). Due to the limited resources of
SMEs, and a lack of knowledge about artificial intelligence
(AI), they are reluctant to implement AI-based systems to
improve their operations. In practice, they still rely heavily
on personal experience to solve storage location assignment
problems and thus the quality of their decisions cannot be
guaranteed. Motivated by this situation, the objective of this
study is to provide a rule-based system, namely an RFID-
based storage assignment system (RFID-SAS), in order to
enhance the efficiency of order picking. Compared with other
existing systems, RFID-SAS is relatively easy to implement
in SMEs. Moreover, radio frequency identification (RFID)
has been widely accepted as the next generation of barcoding.
It can be used for automatic real-time data capturing at each
stage of a supply chain (Kwok and Wu 2009). However, based
on a recent study conducted by Lim et al. (2013), it was found
that interest in RFID for warehousing is relatively low, even
stagnant, in comparison to other research domains. To nar-
row the research gap, there is a need to investigate how RFID
can be used to improve warehouse operations in this context.
In this study, RFID-SAS is incorporated with RFID and
fuzzy logic. Data from SKUs are collected automatically by
using RFID devices and decision support for selecting appro-
priate storage locations for SKUs is provided using fuzzy
logic. To validate the feasibility of RFID-SAS, a case study
was conducted by running a pilot study of the system in
a machinery manufacturing company. Considering that the
SKUs involved in machinery manufacturing are expensive
items and require careful handling, RFID tags were attached
to each SKU at the item level instead of at the pallet level.
RFID readers were installed at the entrance to record the
arrival of SKUs while some were installed in the storage
areas for monitoring purposes. With reference to the data
captured by the RFID devices, warehouse operations were
visualized and the feedback obtained was used to improve
the knowledge stored in the RFID-SAS. The results illustrate
that RFID-SAS can enhance the efficiency of order picking
in a warehouse.
The remainder of this paper is organized as follows: “Lit-
erature review” section contains past literature related to this
study. In “A RFID-based storage assignment system” section,
the architecture of the proposed RFID-SAS is presented. This
is followed by a case study in “Case study” section. “Results
and discussion” section presents the results and discussion.
Finally, a conclusion is drawn in “Conclusions” section.
Literature review
New marketing techniques, together with the emergence of
e-commerce, are generating a huge demand for customiza-
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tion, and reducing delivery times (Gracía et al. 2007). This
poses a great challenge to a supply chain, especially for the
warehouses where increase in products variety generates the
need to perform last minute changes. Since order picking is
one of the most labor-intensive operations in a warehouse
and any weakness in performance can adversely affect the
entire supply chain (De Koster et al. 2007), there is a need
to improve order picking efficiency for survival in today’s
dynamic market.
Order picking is a process by which products are retrieved
from specific storage locations with respect to customer
orders (Hsu et al. 2005). Its labor-intensiveness implies not
only a reliance on manpower for retrieving items for customer
orders, but also reliance on human experience in making rele-
vant decisions. This results in inappropriate and biased deci-
sions (Singh and Benyoucef 2013), affecting not only the
usage of resources, but also cost and customer satisfaction
(Poulos et al. 2001). Great interest among researchers has
emerged in seeking ways to provide knowledge support to
decision makers so as to guarantee quality of their decisions.
The goal of artificial intelligence (AI) is to replicate human
level intelligence by a machine (Brooks 1991), so applying
AI tools is one of the possible ways to improve decision
quality involved in the order picking process. Case-based
reasoning (CBR) has been applied to determine the essential
resources and documentation needed for supporting order-
picking operations in warehouses (Poon et al. 2009; Lam et
al. 2011). A genetic algorithm has been used to determine
batch picking plans when there were a number of orders to
be picked simultaneously (Hsu et al. 2005; Tsai et al. 2008).
In addition, some researchers have focused on solving stor-
age location assignment problems. As products have to be put
into storage locations before they can be picked, it is believed
that appropriate storage location assignment can lead to an
improvement in order picking by, for example, reducing order
picking time (Brynzér and Johansson 1996) and the traveling
distance (Chiang et al. 2011).
Fuzzy logic is a method to formalize the human capacity
of imprecise or approximate reasoning (Adali et al. 2009).
It is one of the knowledge-based AI techniques that have
been adopted to assign incoming products to storage loca-
tions. Table 1 lists some existing methods used for storage
assignment. Fuzzy logic has been integrated with CBR to pro-
vide decision support for pick and pack planning (Tse et al.
2012) or hybridized with association rule mining to formulate
effective storage plans for products coming into a warehouse
(Ho et al. 2010). An intelligent fuzzy storage assignment
system has also been developed by using online analytical
processing and fuzzy logic (Lam et al. 2009). Considering
that SMEs have been rather slow in adopting tools and tech-
niques used in larger companies (Maravealkis et al. 2006). In
addition, their investment capability is limited (Mezgár and
Kovács 1998), fuzzy-based systems are easier to adopt in a
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Table 1 Comparison of RFID-SAS with other existing approaches

Category Method Objective Ease of adoption for a Author
SME

Fuzzy-based CBR and fuzzy logic To provide decision support
approach for pick and pack planning
RFID and fuzzy association To maximize put-away
rule mining efficiency with real-time
data retrieval features
OLAP and fuzzy logic To maximize the efficiency
of the put-away process
Non-fuzzy-based Tabu search To maximize the operation
approach efficiency of unit loading
multi-shuttle AS/RSs
Tabu search and simulated To minimize retrieval cycle
annealing time
Association rule mining To assign storage locations
based on associations
between products
Fairly low—requires Tse et al. (2012)
integration of AI tools
Fairly low—requires Ho et al. (2010)
hybridization of AI
and data mining
High—various software Lam et al. (2009)
are available
Low—requires AS/RS Yang et al. (2013)
in the warehouses
before adoption
Low—requires AS/RS Bosma et al. (2012)
in the warehouses
before adoption
Low—requires Chiang et al. (2012)
relatively long
computation time

SME due to the existence of available software programmes
available on the market. Non-fuzzy approaches such as tabu
search (Yang et al. 2013), simulated annealing (Bessenouci
et al. 2012) and modified heuristics based on association rule
mining (Chiang et al. 2012) require automated storage and
retrieval systems (AS/RSs) in warehouses or a relatively long
computation time, making it difficult to adopt the proposed
methods in an SME. In addition, according to De Koster et
al. (2007), academic order picking literature focuses more
on high-level picking and AS/RSs. This implies that most of
these approaches may not be applicable to typical SMEs in
which their automation and picking levels are low. Therefore,
research effort needs to focus on applying fuzzy approaches
for storage assignment, with particular consideration of the
characteristics of SMEs.
Furthermore, it has been observed that conventional expert
systems, which solely apply AI tools, may not be fully
applicable to improving the efficiency of order picking in
today’s warehouses as storage assignment problems have
been complicated by an increase in number of storage loca-
tions and products (Chiang et al. 2012). In particular, RFID
has emerged as a solution to such problems (Mcfalane et al.
2003). RFID is an automatic identification technology for
objects or people, using radio frequency transmission (Juels
2006; Vrba et al. 2008; Zhou and Shi 2009). It has been
applied to build a real-time data capturing environment by
equipping resources with RFID devices (Zhang et al. 2012).
According to Lyu et al. (2009), RFID outperforms barcodes
as, in real-time, it can store vast amounts of information that
cannot be seen directly but can still be identified. RFID can
identify multiple tags simultaneously. moreover, RFID infor-
mation can be overwritten. Despite the benefits RFID can
bring to warehouse management such as high-speed scanning
and penetration (Kuo and Chang 2013), it has been found that
interest in RFID in warehousing is basically stagnant and rel-
atively small in comparison to other research domains (Lim
et al. 2013). To narrow this research gap, this study proposes
an intelligent system incorporating RFID and fuzzy logic to
solve storage location assignment problems with the objec-
tive of improving order picking operation in a warehouse.
A RFID-based storage assignment system
In this section, the system architecture of the RFID-SAS is
introduced, followed by a methodology for implementing the
RFID-SAS in an SME.
System architecture
The architecture of the RFID-SAS is shown in Fig. 1. There
are two modules constituting the RFID-SAS; (i) Data collec-
tion module, and (ii) Decision support module. The data col-
lection module encompasses RFID devices to capture SKU
related data which are critical for storage location assign-
ment. SKUs are associated with RFID tags which store fea-
tures of SKUs such as their dimensions, weights, and load-
ing values. Whenever they pass through an RFID gateway,
RFID readers detect signals from the tags and pass them to
RFID middleware for processing. The processed data are then
stored in a centralized database linked to other internal sys-
tems such as the warehouse management systems (WMS),
enterprise resource planning (ERP), and customer relation-
ship management (CRM). The centralized database acts as a
bridge between the two modules by transferring the relevant
data to the decision support module. The decision support

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Fig. 1 Architecture of the RFID-SAS
module applies fuzzy logic to assign each of the SKUs to
an appropriate storage location. The recommended storage
locations are determined based on the fuzzy rules stored in
a knowledge repository. To guarantee the decision quality
determined by the system, evaluation of fuzzy rules is per-
formed on a regular basis. To achieve this, RFID readers are
installed at storage areas to detect tag signals from SKUs for
monitoring purposes, such as calculating SKU turnover fre-
quency. The monitoring results captured by RFID allow the
management to refine the fuzzy rules. Details of each module
are discussed in the following sections.
Data collection module
The data collection module employs RFID devices to capture
data which assists in decision making for storage location
assignment. Each SKU is initially associated with a RFID
tag which contains essential information related to the corre-
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sponding SKU. RFID readers are installed at the warehouse
for the receipt of RFID signals when SKUs with tags attached
arrive. The signals received are transmitted to RFID middle-
ware for decoding into meaningful information before being
stored in a centralized database. This centralized database
is used to transfer data to the decision support module for
determining storage location assignment decisions. In addi-
tion to the captured RFID data, other data which are ini-
tially stored in other internal databases could be important
for storage assignment location determination. Therefore, to
ensure the availability of all required data for decision mak-
ing in the decision support module, the centralized database
is linked with other internal systems such as WMS, ERP, and
CRM before data is transferred to the next module. Extensible
markup language (XML) is adopted as the standardized data
format in the centralized database in order to prevent any
problems from occurring during the data retrieval process.
When there is a tag signal detected by the RFID readers, the
J Intell Manuf (2017) 28:111–129 115

relevant data of the corresponding SKUs are passed from the

database to the decision support module for further analysis.

Decision support module

The decision support module is responsible for determin-

ing storage assignment location decisions, based on the data
input from the data collection module. It is a fuzzy system
which involves three main processes: (i) fuzzification, (ii)
operation of a fuzzy inference engine, and (iii) defuzzifica-
tion. Since data input from the data collection module are
in numerical form, fuzzification is conducted for conversion
into fuzzy sets according to pre-defined membership func-
tions. A knowledge repository is used to store a set of fuzzy
rules, in which each indicates the relationship between input
and output variables. In the fuzzy inference procedures, out-
put fuzzy sets are generated with reference to fuzzy rules.
They are then converted into numerical values by defuzzi-
fication. In RFID-SAS, the numerical values of the outputs
represent the storage assignment locations of the incoming
SKUs.
After the SKUs are stored, RFID readers installed in the
storage areas are used to monitor the warehouse operations
such as the popularity and turnover of the SKUs. The moni-
tored results which are enabled by the RFID devices, serve as
a reference for management to regularly evaluate the fuzzy
rules. Since the fuzzy reasoning process is based on stored
fuzzy rules, it is expected that refinement of these fuzzy rules
will provide better quality decisions for the assignment of
storage locations. Fig. 2 Methodology for implementing the RFID-SAS

Methodology
In order to implement the proposed RFID-SAS in an SME,
a generic methodology, as shown in Fig. 2, is designed. Five
phases are involved in implementation, each of which con-
sists of a series of procedures. Details of each phase are pre-
sented in the following sections.
Phase 1: Identification of the input and output variables of
the RFID-SAS
Phase 1 involves identification of input and output variables
of the RFID-SAS. In order to define appropriate variables,
knowledge acquisition is needed by conducting interviews
with domain experts. Since, in most warehouses, operators
are responsible for assigning SKUs to storage locations, they
are the domain experts who are expected to be capable of pro-
viding relevant knowledge. This knowledge is then refined
and verified at the management level before being stored in
the system. In this phase, there are four steps involved: (i)
Selection of input and output variables, (ii) Determination
of linguistic terms, (iii) Determination of membership func-
tions, and (iv) Fuzzy rule generation.
(i) Selection of input and output variables
In this step, both input and output variables of the RFID-SAS
have to be defined by the warehouse operators. The input
variables are those which influence decisions regarding stor-
age location assignment. Warehouse operators are required
to list the criteria which can affect their decision making.
All the variables defined in this step must, if possible be
expressed in crisp values for the use of fuzzy logic. More-
over, the output variables are the decision variables which
are currently determined by operator experience when deal-
ing with storage location assignment problems. It is believed
that warehouse operators are reluctant to adapt to any new
decision making processes if there are a many output vari-
ables generated, requiring them to interpret or to do further
analysis. Considering that a precise storage location is not
always necessary for most SMEs, the number of output vari-
ables is reduced to two; (i) storage shelf, and (ii) storage
level.

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(ii) Determination of linguistic terms
Compared to other methods, the fuzzy logic approach uses
qualitative descriptions to provide quantitative values. There-
fore, it is essential to determine some conventional terms for
describing the variables. In this step, all variables selected in
the previous step have to be associated with linguistic terms.
There is no restriction on the number of linguistic terms for
each variable. However, the linguistic terms determined in
this step must be easily interpreted by warehouse operators.
Otherwise, there will be difficulties when these operators are
required to define fuzzy rules during the following steps.
(iii) Determination of membership functions
Membership functions play an essential role in achieving a
successful design of fuzzy logic-based systems. Unlike clas-
sical set theory that classifies the elements of the set into
crisp sets, a fuzzy set has an ability to classify elements into
a continuous set using the concept of degree of membership
(Tahera et al. 2008). The membership function not only gives
0 or 1 but can also give values between 0 and 1. Furthermore,
the choice of membership function is based on subjective
decision criteria and the initial values rely heavily on trial and
error methods (Bosma et al. 2012). Warehouse operators are
asked to describe the fuzzy character of each linguistics term
by means of membership functions. Considering that most
operators have limited technical knowledge, only triangular
and trapezoidal membership functions are provided for their
selection. It is believed that people who lack AI knowledge
will find it easier to understand triangular and trapezoidal
membership functions, compared to other smooth functions
such as Gaussian functions. In addition, since the suggested
storage shelf and storage level are obtained by rounding up
the defuzzified outputs, precise membership function posi-
tioning is not essential in this case. Therefore, though the
choice of membership function becomes limited, the accu-
racy of the RFID-SAS will not be significantly affected.
(iv) Fuzzy rule generation
Unlike other non-rule based approaches, fuzzy logic relies on
a set of if-then rules to relate the input variables to the output
variables. As a result, fuzzy rules have to be collected before
the execution of fuzzy logic. The goal of fuzzy rule generation
is to define a rule base in which the relationship between the
input and output variables are represented in terms of fuzzy
IF-THEN rules. If the number of variables in the rules is too
large, the chance of having inconsistency between multiple
experts will be high. Therefore, a rule block format, as shown
in Fig. 3, is referred to when generating fuzzy rules so that
the maximum number of variables in a rule can be limited to
four. In this rule block format, each variable is described by
a linguistic term. The input and output variables form the IF
part and THEN part of the rules respectively. Another reason
for applying the rule block format is that it is easier to dis-
cover any inconsistencies in the rules. During this step, ware-
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Input Variable A (If part)
Input Variable B (If part)
Input Variable C (If part) Output Variable (Then part)
Fig. 3 Structure of a rule block format with three inputs and one output
house operators are required to discuss and share their knowl-
edge and experience so as to fill in the rule blocks. Finally,
the obtained rules are checked and verified at the manage-
ment level. Initial fine-tuning of the rules is allowed, if
necessary.
Phase 2: Physical setup of the RFID device
Phase 2 is the physical setup of the RFID device. After the
variables have been defined, a comprehensive hardware sys-
tem has to be built so as to collect data and update stor-
age assessment for decision support and fuzzy rule valida-
tion modules respectively. Therefore, the setup of the RFID
device is another important issue that directly affects the
performance of the entire RFID-SAS in terms of accuracy
and reliability. In general, the requirements and performance
measures of the RFID system have to be consolidated before
component selection in order to evaluate the feasibility and
effectiveness of the application. Typical measurements of
a RFID system include tag response rates, duration and
strength of radio frequency signals throughout a specified
period, effective areas of the read-zone and stability of the
system during each trial. To address the above considerations,
three steps have to be undertaken; (i) selection of the type of
RFID tag, (ii) selection of the number and locations of RFID
readers, and (iii) selection of tag orientation and placement.
(i) Selection of the type of RFID tags
After intensive development in the industry during recent
years, there are various choices of tags in the market. In this
step, an appropriate type of RFID tag has to be selected for
the specific requirements of the RFID application. Regard-
ing types of RFID tag, in general, there are three categories;
(i) active, (ii) passive and (iii) semi-active tags which enable
communication between tags and antennas. Apart from the
type power of tags, the frequency, involving low, high or ultra
high frequencies, is another critical issue affecting the effec-
tiveness of communication. It is difficult to trigger a tag and
response if the radio frequency is being blocked, reflected,
scattered or absorbed. Therefore, to select an appropriate type
of RFID tag, a company has to consider its needs in terms of
the capacity for information storage and processing power,
the nature of the target product and the surrounding environ-
ment, and the read range between the tag and antenna.
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(ii) Selection of the number and locations of RFID readers missing or incomplete entries. In addition, since data from
Today, the reader always has a built-in antenna and is respon- different sources can be in different formats, these formats
sible for (i) tag communication through the radio frequency are converted to XML for standardization which can then
signal transmission and receipt, and (ii) reading the identifi- prevent problems from occurring in data retrieval and data
cation and information stored in the tag. During this step, a updating.
number of trial-and-error experiments have to be conducted
(iii) Database composition
for determining the number, location and positioning of the
After preprocessing data, database composition is needed.
reader in order to create effective and stable coverage. With
Data are loaded into a data warehouse and organized in fact
the help of experimental data, an appropriate decision can be
and dimensional tables. In order to improve data integrity
made in the tradeoff between cost, mainly hardware value,
in the SME, a centralized database is an aggregation of
and overall performance of the system. In addition, these
data marts. Individual data marts are created for storing
experiments have to be carried out on-site taking environ-
data within each department, such as the Sales Department,
mental and practical factors, such as the path and speed of
Warehouse Department, and Production Department. Each
trucks passing through the gateway, into consideration so
data mart has the same structure as the data warehouse, but
that any unexpected behavior within the effective zone can
its stored data is organized according to the corresponding
be identified.
department.
(iii) Selection of tag orientation and placement
Similar to the above selection method, a number of experi-
Development of the decision support module
ments have to be performed for the selection of tag orientation
and placement. The placement of the tag is where the tag is
Phase 4 is the development of the decision support module.
to be located on the pallet, the carton or on any individual
The function of the decision support module is executed, and
product. For example, it can be placed on the front face, side
based on fuzzy logic. There are various software programmes
face, or top face of an item. In addition, the orientation is how
available for implementation of fuzzy logic inference proce-
the tag is to be placed on the item, say vertically, horizon-
dures. In particular, the MATLAB Fuzzy Logic Toolbox is
tally, or obliquely. A series of comprehensive experiments on
a popular choice due to its user-friendliness and the provi-
different orientations and placement combinations has to be
sion of good visualization. During this phase, there are three
conducted to determine the optimal setting under a particular
steps involved, namely (i) Retrieval of input variables, (ii)
environment.
Selection of a fuzzy inference system, and (iii) Generation
Phase 3: Development of the data collection module of a storage location assignment plan.
(i) Retrieval of input variables
Phase 3 is the development of the data collection module.
Since the input variables appear in the IF part (condition)
The main task is to construct a centralized database which is
of the fuzzy rules while the output variables appear in the
linked with other related data sources and RFID middleware.
THEN part (consequence) of the rules. The fuzzy inference
During this phase, the Information Technology (IT) Depart-
system can only predict the consequences when a particular
ment in an SME plays an important role in performing three
condition is given. Therefore, prior to the execution of the
steps, namely (i) Data extraction, (ii) Data preprocessing, and
fuzzy inference system, the input variables identified in Phase
(iii) Database composition.
1 have to be retrieved from the centralized database. After
(i) Data extraction that, they will be inputted into the fuzzy inference system to
During this step, the identified variables are extracted to assist predict the output variables.
in storage location. Since the data collection module employs
(ii) Selection of a fuzzy inference system
RFID devices to capture data from the SKUs whenever they
MATLAB fuzzy logic toolbox is used for the implementation
arrive at the warehouse, one of the sources for data extraction
of the fuzzy logic inference procedures. In general, Mamdani
is the RFID middleware. Moreover, additional data which is
fuzzy models are popular in low-level direct control (Karray
important for storage location has to be extracted as well.
and deSilva 2004) and a min-operator is considered as a nat-
It is believed that they can be initially stored in other inter-
ural choice for inference when the rules are fuzzy “AND”
nal databases such as WMS, ERP and CRM. Therefore, the
rules (Bellman and Giertz 1973; Zimmermann 1991). In
responsibility of the IT Department during this step is to
addition, the degree to which the combined rules are fulfilled
extract all relevant data from the appropriate sources.
is mostly calculated by taking the union of the rule output
(ii) Data preprocessing using the maximum operator (Bosma et al. 2012). In view
After the data is extracted, data errors are minimized by veri- of that, Mamdani with min-max operators are selected in the
fying accuracy, correcting spelling errors, and in filling in any MATLAB software. Before the retrieved input variables are

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fed directly into the software, the membership functions and
fuzzy rules are inputted and stored in the software for the
fuzzy inference process. For defuzzification, one of the most
popular defuzzification methods; center of gravity is chosen.
(iii) Generation of a storage location assignment
The storage shelf and storage level generated by MATLAB
Fuzzy Logic Toolbox are crisp values. However, in order to
adopt the generated output in an actual warehouse, rounding
up of the crisp values may be needed. For example, if the
storage level obtained after defuzzification is 2.7, it has to
be rounded up to 3, indicating that the third storage level
is suggested for storage. Therefore, in this step, warehouse
operators have to be well trained on interpreting the results
generated by the software.
Evaluation of the RFID-SAS
In order to verify the effectiveness of RFID-SAS, its evalu-
ation is conducted in Phase 5. There are four steps involved,
namely (i) Selection of key performance indicators (KPIs),
(ii) KPI Measurement, (iii) Comparison of KPIs, and (iv)
Rule assessment and validation.
(i) Selection of KPIs
To evaluate the RFID-SAS, KPIs have to be selected. It is sug-
gested that the selection of KPIs is performed at the manage-
ment level as this may be related to business objectives and
future company policy. For instance, traveling distance and
order picking time are commonly used KPIs for the scope of
such a study and this. Furthermore, the measurement method
of each KPI has to be considered during the selection of KPIs.
(ii) KPI measurement
With reference to the selected KPIs and their measurement
methods as defined in the previous step. Depending on the
nature of the KPIs, the measurement method could be system-
based or manual-based. If it is the former, the IT Department
has to ensure that the KPIs collected from the system are
accurate and up-to-date. If it is the latter, providing training
for corresponding staff members is suggested so that they
understand why and how to measure the desired KPI accu-
rately.
(iii) Comparison of KPIs
During this step, KPIs measured before system implemen-
tation and after system implementation are compared. For
each KPI, management has to obtain a consensus on the
desired improvement after system implementation and the
KPIs before system implementation are referred to as a
benchmark. Some remedial polices should also be planned
so as to tackle any possible problems when KPIs show sys-
tem implementation has not met expectation. In addition, the
comparison results serve as useful information for the com-
pany to assess fuzzy rules.
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(iv) Rule assessment and validation
To confirm the truthfulness of the outputs generated by the
RFID-SAS, rule assessment and validation are carried out.
There are two pieces of important information for the man-
agement to assess the rules. The first one is comparing
the results of KPIs. If the improvement cannot reach the
desired level over a specific period of time, an examination of
the rules is urgently needed. Individual fine-tuning is done
according to judgment by management personnel. If there
are rules which are always seen to be redundant, they can be
removed. A reduction in the use of rules can help increase
system efficiency and ease rule complexity in the future. The
second piece of information needed is concerned with the
RFID. Since there are RFID devices installed to visualize
the movements of SKUs in the warehouses, management
can monitor warehouse operations and identify any poten-
tial improvements. For example, management may find that
there are items that are always retrieved in the same batch.
However, these items could be stored separately according
to the fuzzy rules, thereby lowering order picking efficiency.
In such cases, management has to judge if it is necessary to
put these items together, and the feedback obtained is then
used for refinement of the fuzzy rules. It is suggested that rule
assessment and validation should be performed on a regular
basis so that the fuzzy rules can be challenged and improved.
As a result, a company can obtain a set of decision rules
which are of good quality.
Case study
The feasibility of the RFID-SAS is validated by means of a
case study in which a pilot run of the system was conducted
in a machinery manufacturing company located in Shenzhen,
China. Founded in 2009, the company is a typical SME and
has expertise in the manufacture of a wide range of automatic
machines. Some examples of the machines manufactured by
the company are shown in Figs. 4 and 5. Their machines are
useful for producing steel cores, as shown in Fig. 6. These
are used for products such as electrical adaptors, transform-
ers, and amplifiers. Based on requests made by customers,
the company customizes machine design which may entail
different parts and components. Because of customization, a
large variety of SKUs are stored in the warehouse, and the
company has found it difficult to manage these different items
effectively in its warehouse. Without a structured approach
to managing the SKUs, extra time and effort has been spent
in assigning storage locations as well as in retrieving partic-
ular items for production. Therefore, the company decided
to have a pilot run of the RFID-SAS in an attempt to improve
the current storage assignment and order picking processes.
These are described in the following sections.
J Intell Manuf (2017) 28:111–129 119

Fig. 4 Core production machine Fig. 5 Steep tape transfer machine

Existing problems faced by the company

Based on the existing storage assignment process in the case

company, two problems are observed:
(i) Lack of a standardized storage assignment strategy
Currently, SKUs are assigned to different locations based
on the perceptions and knowledge of warehouse operators.
Since different operators may have different perceptions,
there is a lack of a standardized storage assignment strat-
Fig. 6 Steel cores made by the core production machine
egy in the company. The quality of decision making cannot
be guaranteed and the space utilization of the warehouse may
not be fully utilized. In the existing approach, some SKUs SAS for improving the order picking efficiency by better
are stored on shelves while some are put on the ground, as storage assignment.
shown in Figs. 7 and 8.
(ii) Inefficient order picking process Existing storage location assignment workflow in the
The inefficient order picking process is attributed to unsys- company
tematic storage assignment. During order picking, it takes
a long time for operators to find the required SKUs which Prior to the implementation of the system in the case com-
are stored randomly. In addition, as there are no clear writ- pany, the existing storage location assignment workflow in
ten records showing the exact locations of SKUs. Moreover, the company is studied as shown in Fig. 9.
routes might be used repeatedly when there are several SKUs After the company receives an order from a customer, the
to be picked up from the same location, instead of picking design team evaluates the specifications and checks to see if a
them all up at the same time, thus reducing the efficiency of new machine needs to be designed to fulfill it. Following that,
the order picking process. a bill of materials is compiled and a list of items which have
In order to tackle the above mentioned problems, the man- to be picked for production is sent to the warehouse. After the
agement of the company decided to implement the RFID- warehouse receives the order picking list, they pick the items

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Fig. 7 SKUs stored on a 4-level shelf
Fig. 8 SKUs put on the ground
from the storage shelves and levels. If any items are out of
stock, they inform the Purchasing Department who create a
purchase order for replenishment. After inspection of incom-
ing items from the suppliers, they are stored by the warehouse
operators. If any storage locations are specifically dedicated
to items, they are transported and stored in these locations.
Otherwise, operators, use their experience in deciding upon
which shelf and level the item should be stored. Their usual
practice is to first check if there is any empty space near sim-
ilar items or items within the same class. If so, they will store
the items nearby these. It is observed that decisions involved
in storage location assignment are heavily reliant on operator
experience. Storage decisions are made without any objective
knowledge and the quality cannot be guaranteed, thus order
picking may be later adversely affected. This highlights the
need to develop an intelligent system to provide decision
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support in storage location assignment. With the use of the
proposed system, it is expected that the decision variables,
such as storage shelf and storage level, can be determined in
a more efficient manner, and decisions made will therefore
be of better quality.
Implementation of the RFID-SAS
To implement the RFID-SAS in the company, a five-phase
methodology presented in “Methodology” section is fol-
lowed. Table 2 summarizes the work achieved in each phase
of the implementation work. Details of each phase under-
taken in the company are discussed in the following sections.
(i) Phase 1: Identification of the input and output variables
of RFID-SAS
According to the warehouse operators in the company, there
are ten input variables and two output variables identified
for the operation of the RFID-SAS, as shown in Table 3.
The input variables include the weight (WE), length (LG),
width(WD), height (H), capacity (C), turnover frequency (F),
yield (Y), cubic frequency (CF), cost (WH) and fragility
(FG). The output variables are the storage shelf (SF), and
the storage level (ST).
Each variable has to be associated with a set of linguistic
terms, the fuzzy character of each linguistic term is repre-
sented by membership functions (Suhail and Khan 2009). In
order to determine the positioning of the membership func-
tions, the warehouse operators firstly define the discourse of
the variable with reference to historical data. They have to
define a range of values in which there are no clear-cut bound-
aries in order to associate most values to one single linguis-
tic term. Within this range, membership functions are posi-
tioned in such a way that the input values can be associated
with more than one complementary membership function.
For each triangular and trapezoidal membership function,
three points and four points have to be defined for position-
ing respectively, by trial and error.
The membership function of WE is illustrated in Fig. 10.
The linguistic terms describing WE are “Light”, “Fairly
light”, “Medium”, “Fairly heavy”, and “Heavy”. According
to the historical records stored in the centralized database,
the maximum weight of SKUs handled by the company is
24 kg. Therefore, the x-axis of the membership functions of
“Weight” is set in a range between 0 and 24 kg. After that,
based on their experience, warehouse operators get a consen-
sus that the weight of SKUs between 4 and 20 kg cannot be
easily described by using one linguistic term, Therefore, if
the input values are within this range, it is possible for them
to be associated with more than one membership function.
Triangular membership functions are used due to simplicity
and are easy to define in the MATLAB Fuzzy Logic Tool-
box. As an initial starting point, the membership functions
J Intell Manuf (2017) 28:111–129
Fig. 9 Existing storage location assignment workflow in the company
for “Fairly Light”, “Medium” and “Fairly Heavy” are posi-
tioned in such a way that the range of the graph from 4 to
20 kg can be evenly covered. As a result, the middle point
of the x-axis, i.e. 12 kg, is associated with “Medium” with
a membership of 1. Following that, 8 and 16 kg are associ-
ated with “Fairly Light” and “Fairly Heavy” both with mem-
121
berships of 1 respectively. To improve the accuracy of the
results, it is suggested that the three points of the triangular
membership functions be determined by trial and error. How-
ever, as previously mentioned, precise membership function
positioning is not essential in the RFID-SAS. Therefore, the
company agrees with the positioning if it is found that the
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Table 2 Work undertaken in the company during implementation
Phase Work achieved
Identification of the input and - 8 input variables and 2
output variables of the output variables are
RFID-SAS identified
- The fuzzy characteristics
of each variable are
defined
- A set of fuzzy rules is
prepared.
Physical set up of the RFID devices - 6 RFID readers are
mounted in the entrance
and stage areas
- RFID metal tags are
attached to SKUs at the
item level
- Tags are oriented at 0◦ on
the front face of SKUs
Development of the data collection - A centralized database is
module built
- Data are stored in the
centralized database
Development of the decision - MATLAB Fuzzy Logic
support module Toolbox is used
- Variables of 8 SKUs are
inputted into the software
Evaluation of the RFID-SAS - Travelling distance, order
picking time and the
number of missing items
are selected as KPIs
- KPIs before and after the
use of the system are
compared
- Non-firing rules are
eliminated
Table 3 Input and output variables identified in the company
Input variables Output variables
Weight (WE) Turnover frequency (F) Storage shelf (SF)
Length (LG) Yield (Y) Storage Level (ST)
Width (WD) Cubic frequency (CF)
Height (H) Cost (WH)
Capacity (C) Fragility (FG)
aggregated surface area of the membership functions covers
the x-axis of the graph. On the other hand, it is agreed that
the weight of SKUs is as “Light” if it is not greater than 4 kg.
According to the opinions of the warehouse operators, the
handling process Light SKUs is the same regardless of the
actual weight. Therefore, it is expected that the membership
values of “Light” should always equal to 1 when the weight is
less than or equal to 4 kgs. As a result, a trapezoidal member-
ship function for “Light” is positioned as shown in Fig. 10.
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Similarly, the weight is viewed as “Heavy” if it is greater than
20 kg and the handling process of heavy SKUs is also found
irrespective of the actual weights. Thus, a trapezoidal mem-
bership function for “Heavy” is positioned in such a way that
the membership values of “Heavy” should always be 1 when
the weight is larger than or equal to 20 kg. If the SKU has
a weight of 17.5 kg, it has a membership value of 0.375 for
Fairly Heavy and 0.625 for Heavy. Such an input fuzzy set
will be inputted to the fuzzy inference engine to generate the
output fuzzy sets based on some pre-defined fuzzy IF-THEN
rules. Through knowledge acquisition, the knowledge related
to the storage location assignment is shown in a rule block
format which can be seen in Fig. 3. An example of fuzzy
rules in a rule block format is shown in Fig. 11. Because the
chance of having inconsistency in judgment between multi-
ple experts will be high if the number of variables in the rules
is large, the initial maximum number of variables appearing
in a rule is limited to four. As illustrated in Fig. 11, each of
the four variables is described by a linguistic term. The input
variables and an output variable form the IF part and THEN
part of the rules respectively. With the use of the rule block
format, it is also easier to discover any inconsistencies in the
rules.
Warehouse operators can discuss and share their knowl-
edge and experience so as to fill in the rule blocks during
rule generation. During the process, consensus sometimes
cannot be reached among the operators. A set of sample data
are then extracted from the database for testing under dif-
ferent sets of rules. The results are then compared and only
those rules which generate better results are shortlisted dur-
ing rule generation. For example, the case company prefers
heavy SKUs to be stored at the bottom of each shelf. How-
ever, warehouse operators have different opinions when they
generate rules having the input variable “Weight” with its
linguistic term “Heavy”. In this case, 24 relevant historical
data were extracted for testing and different storage assign-
ment plans obtained based on different sets of fuzzy rules.
After comparison of the results, the rules which can provide
a better location for the heavy SKUs are shortlisted.
(ii) Phase 2: Physical set up of the RFID devices
After identification of the system variables, RFID devices
are set up in the warehouse for capturing data. In order to
notify the arrival of SKUs and monitor the SKUs stored,
RFID readers are mounted in the entrance and storage areas.
Due to the physical constraints of the warehouse, a total of
six readers are positioned at the door entrance and corners
of storage areas. In addition, RFID tags have to be attached
to the items. Since most items involved in machinery manu-
facturing are metal objects which can easily reflect the radio
frequency signals generated by the readers, the signals can-
not penetrate the RFID paper tags for identification before
being reflected. To overcome this problem, RFID metal tags
J Intell Manuf (2017) 28:111–129 123

Fig. 10 Membership functions

of the variable “Weight”

Turnover frequency
Fragility
Cost Storage shelf

Low Medium High

Low Medium High Low Medium High Low Medium High
Low Shelf 2 Shelf 1 Shelf 1 Low Shelf 3 Shelf 2 Shelf 2 Low Shelf 4 Shelf 4 Shelf 3
Medium Shelf 2 Shelf 1 Shelf 1 Medium Shelf 2 Shelf 2 Shelf 2 Medium Shelf 4 Shelf 4 Shelf 3
High Shelf 1 Shelf 1 Shelf 1 High Shelf 2 Shelf 2 Shelf 2 High Shelf 4 Shelf 3 Shelf 3

Fig. 11 Fuzzy rules in a rule block format

are adopted. These are attached to the items as they possess
magnetic materials for receiving and capturing the signals.
Tags are attached to items instead of pallets for ease of mon-
itoring each item, with better handling and greater security.
After tag selection, it is also important to decide tag orien-
tation and placement. RFID readers are in fixed positions,
so the tag is placed on one of the three faces of an item,
namely the top face, front face or side face, while the item
is moved across the RFID gateway to enter the warehouse.
It is oriented at vertical angles of 0◦ , 45◦ or 90◦ in front of
antennas. It is found that having the tag with 0◦ on the front
face performs best in terms of response rate and recognition
range. The readers can identify the tag from a longer distance
when the tag is placed on the front face at 0◦ . Furthermore,
it is observed that the total number of readings is the largest
when the tag is vertically placed on the front, showing that
there are more responses along the motion path of the items.
Thus, in order to successfully deploy RFID, metal tags are
used and they are placed vertically on the front face of each
item.
(iii) Phase 3: Development of the data collection module
Phase 3 is the development of the data collection module.
To ensure the availability of data for decision support, data
including the input variables identified in Phase 1 should be
stored in the centralized database in a structured way. For
instance, some data such as the item name and item code are
collected from the order receipt record of the company’s cur-
rent inventory management system. After the data are stored
in a centralized database, they are transferred to the decision
support module for determining storage location assignment
decisions.
(iv) Phase 4: Development of the decision support module
The decision support module of the RFID-SAS is developed
with the use of software, MATLAB Fuzzy Logic Toolbox.
After the knowledge identified in Phase 1 is inputted into the
MATLAB Fuzzy Logic Toolbox, users are allowed to enter
the input variables so that the software can compute and gen-
erate the output variables, based on the fuzzy rules reasoning
mechanism. When the SKUs with RFID tags arrive, the RFID
readers at the warehouse entrance identify the SKUs and the
RFID signals induce the system in order to extract all the
relevant SKU related attributes which are helpful for mak-
ing storage location assignment decisions, from the database.
Eight SKUs are selected in this example for demonstrating
the mechanism of the RFID-SAS. Table 4 lists the input vari-
ables of the SKUs extracted from the centralized database.
There are eight SKUs selected for the pilot run of the sys-
tem: laser sensor, 5 A relay, 2,000 W inverter, touch screen,

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Table 4 Input variables of eight

SKUs SKU Input variables for stor- Input variables for stor-
age shelf assignment age level assignment

F Y CF WE LG WD H C VH FG

Laser sensor 14 40 3, 200 2 4 4 5 80 350 H

5 A relay 35 55 13, 200 5 5 6 8 240 10 M
2,000 W inverter 34 60 140, 400 12 18 10 13 2, 340 220 L
Touch screen 16 28 21, 000 2 15 10 5 750 450 H
Gear decelerator 28 55 3, 300 3 5 3 4 60 60 M
Strong magnet 31 33 7, 920 4 6 5 8 240 25 L
3-colored warning light 17 24 57, 600 9 12 10 20 2, 400 100 M
Slider block 27 40 3, 360 3.5 7 3 4 84 80 L

gear decelerator, strong magnet, a 3-color warning light, and
a slider block. Quantitative values of the input variables of
these SKUs are inputted to the system for determining stor-
age locations.
The user interface of the system is shown in Fig. 12. Users
have to enter the numerical values of the input variables of
the SKUs via the interface. They are able to view the degree
to which each IF part of the rules has been satisfied (Tahera
et al. 2008). In addition, the output variables are displayed
for decision making purposes. Users are provided with the
suggested “Storage shelf” and “Storage level”.
Figure 13 illustrates the storage locations of the eight
SKUs assigned by the RFID-SAS. Based on the stored
knowledge, three of them are stored in Rack 1 while five of
them are stored in Rack 2. In addition, the turnover frequen-
cies of the 5 A relay, the slider block, the gear decelerator
and the 3-colored warning light are relatively high. There-
fore, Shelf Level 2 is suggested as their storage location, as
this allows warehouse operators to pick them more conve-
niently.
In the storage areas, RFID devices are installed to detect
tag signals from the stored items. The movements of SKUs,
whenever they are being stored or picked, are visualized
real-time. After the SKUs are stored, the company is able
to monitor the warehouse operations and evaluate the fuzzy
rules by referring to the information captured by the RFID
devices. For instance, when it is found that there are items
which are usually picked together each time, putting them
nearby each other will increase the efficiency of order pick-
ing. Such feedback is obtained by refining the fuzzy rules so
as to improve the storage location assignment plans gener-
ated by the RFID-SAS. Figure 14 shows the interface of the
MATLAB Fuzzy Logic Toolbox for users to define and/or
refine the fuzzy rules. The rules can be adjusted by changing
the linguistic terms of the variables in each rule. It is expected
that an improved storage assignment plan can be obtained if
the fuzzy rules are well adjusted.
(v) Phase 5: Evaluation of the RFID-SAS
The ultimate goal of improving the current storage location
assignment process is to enhance the order picking efficiency
for production. Therefore, to evaluate the effectiveness of
the RFID-SAS, order picking before system implementation
and after system implementation are compared. In particular,
the total travelling distance used for picking a list of items,
the order picking time and the number of missing items are
chosen to evaluate the RFID-SAS.
Results and discussion
In order to evaluate the effectiveness of RFID-SAS for
enhancing storage location assignment, a comparison between
the existing storage location assignment and that assigned by
RFID-SAS is conducted. Table 5 presents the existing stor-
age location and that suggested by the RFID-SAS of eight
selected SKUs. Based on the travelling distances between the
warehouse entrance/exit where the order picking starts and
the storage shelves. Presented in Table 6 is the total distance
moved by a warehouse operator to retrieve the eight selected
items is shown. It is assumed that the operator retrieves all
eight items at once and the route with the shortest travel-
ling distance is adopted. The total travelling distance for the
required order picking process based on the existing storage
location and that suggested by the RFID-SAS are compared
in Table 7.
In the above mentioned example, the travelling distance is
reduced by nearly 50 % when the company adopts the storage
location assignment suggested by the system. In addition,
the order picking time and the number of missing items are
improved, as shown in Table 8, after a nine-month pilot run
of the system. With the use of the RFID-SAS, the average
picking time per order is shortened by 75 %. This is because
additional time is wasted on searching for the items to be
picked before system implementation. On the other hand the

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Fig. 12 An interface of MATLAB Fuzzy Logic Toolbox
Fig. 13 Storage location assignment of eight SKUs
RFID-SAS can monitor the location of different SKUs stored
in the warehouse. As a result, the warehouse operators can
easily pick the desired items according to the given locations
with the use of the RFID-SAS, increasing the efficiency of
order picking. Furthermore, the systematic storage location
assignment scheme provided by the RFID-SAS prevents the
occurrence of missing items. The warehouse operators used
to store different items randomly before the use of the system,
causing some items to get lost in the warehouse. Now, the
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RFID-SAS suggests a specific location for the warehouse
operators to store different items. Consequently, no items
are missed or lost in the warehouse.
Rule assessment and validation is carried out in the com-
pany on a monthly basis. During a nine-month pilot run of the
system, reduction in travelling distance reached the desired
level. This implies that the rules selected in the rule firing
process during fuzzy inference are useful for the formulation
of storage assignment. Though the results prove that there are
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Fig. 14 Fuzzy rules stored in MATLAB Fuzzy Logic Toolbox

Table 5 Existing storage locations and that suggested by the RFID- Table 7 Comparison of travelling distances before and after system
SAS implementation
SKU Existing storage Storage location Existing stor- Storage loca-
location suggested by the RFID- age location tion suggested
SAS by RFID-SAS
Storage Storage Storage Storage Travelling path Travelling Travelling path Travelling
shelf level shelf level distance (m) distance (m)

Laser sensor S3 L3 S2 L4 Entrance→ S1 3 Entrance→ S1 3

5 A relay S2 L1 S1 L2 S1 → S2 3 S1 → S2 3
2,000 W inverter S1 L4 S1 L3 S2 → S3 3 S2 → Exit 5
Touch screen S3 L2 S2 L4 S3 → S4 3
Gear decelerator S4 L3 S2 L2 S4 → Exit 9
Strong magnet S2 L3 S1 L1 TOTAL 21 TOTAL 11
3-colored warning lightS3 L4 S2 L2
Slider block S2 L4 S2 L2
Table 8 Comparison of KPIs before and after system implementation
KPIs Before system After system Percentage of
Table 6 Travelling distance between the warehouse entrance and stor- implementation implementation improvement (%)
age shelves
Order picking 24 min 6 min 75.0
Travelling distance in meter (m)
time
From \ To Entrance/Exit S1 S2 S3 S4
Entrance/Exit – 3 5 7 9 No. of miss- 11 0 100.0
ing items
S1 – – 3 5 7
S2 – – – 3 5 useful rules stored in the rule base, it does not imply that all
S3 – – – – 3 rules are useful. Therefore, it is necessary to improve the rule
S4 – – – – – base by removing insignificant ones. The elimination of the

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non-firing rules after validation reduced the total number of
fuzzy rules from 180 to 156. Subsequently, three random sets
of data are generated and inputted into the system for testing.
It is found that the generated outputs after rule elimination
are identical to those before rule elimination. This indicates
that eliminated rules are redundant or not significant to the
company’s daily operations. With fewer fuzzy rules stored in
the RFID-SAS, it is expected that future rule assessment and
the validation process will become less complicated.
Improvement in the order picking efficiency can be con-
tributed by the following features of the system.
(i) Real-time data capturing functions enabled by RFID
devices
The RFID-SAS encompasses RFID devices to capture data
for decision making purposes. This reduces the data col-
lection process which requires consolidation of data from
diverse sources; this is time consuming and has a high chance
of human error. The RFID-SAS allows for automatic notifi-
cation of SKU arrivals when the RFID readers installed at the
warehouse entrance receive the tag signals from the incoming
SKUs.
(ii) Retention of tacit knowledge related to storage location
assignment
The tacit knowledge related to storage location assignment is
stored in the form of fuzzy rules in the knowledge repository
of the RFID-SAS. Because knowledge acquisition during
system implementation and fuzzy rule evaluation are con-
ducted on a regular basis after system implementation, the
tacit knowledge is captured and retained in the company in
a systematic manner. This is particularly useful as it enables
less experienced staff to obtain decision support when they
have to make any storage location assignment decisions.
(iii) Learning capability of the RFID-SAS
There is regular evaluation of the fuzzy rules to guaran-
tee decision making quality by the system. Management is
allowed to adjust the fuzzy rules according to actual ware-
house operations which are visualized by the RFID devices.
Since the decisions determined by the RFID-SAS are based
on the fuzzy rules, a proper refinement of the fuzzy rules can
enhance the quality of decision making. In the long term, this
can provide the RFID-SAS with a learning capability when
the fuzzy rules are recursively challenged and improved.
The RFID-SAS is tested in fuzzy environments for several
reasons. Firstly, it is found that in an industrial environment,
uncertainties or vagueness could arise from market demand,
capacity availability, process times, and cost (Aliev et al.
2007; Mula et al. 2007). When assigning SKUs to storage
locations, imprecision also arises from the characteristics of
SKUs, such as the weight and the turnover frequency. Thus,
fuzzy logic is an appropriate tool to solve the storage location
assignment problems by taking the fuzziness of data into
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consideration. In practice, the storage location assignment
decisions are based on imprecise or approximate reasoning.
For instance, it is more favorable to store popular SKUs,
which are always required for manufacturing, in a convenient
location for order picking. However, there are no clear-cut
theories to judge whether the SKUs are popular. In view
of this, the RFID-SAS adopts fuzzy logic to imitate human
capability of making decisions under uncertainty. In addition,
the knowledge acquired in terms of fuzzy rules is of more
physical meaning as conventional terms are used to describe
the characteristics of SKUs. This is a critical feature for the
application in SMEs because the knowledge representing a
human-understandable structure does not require additional
time or resources to enable the SMEs to do further analysis
work.
There are several existing works applying fuzzy set con-
cepts to assign storage locations. However, many of them
integrate the concepts with other DM or AI tools such as
association rule mining and CBR (Ho et al. 2010; Tse et al.
2012). As a result, compared with the RFID-SAS, the above-
mentioned work is less favorable to a SME as more resources
are required for integration, which could be a challenge for
a SME. For example, the use of CBR requires extra time to
build the case library and maintain the content of each case.
The hybridization of association rule mining and fuzzy logic
also requires a certain level of understanding of DM to define
different threshold values such as the support count of each
variable and the confidence values of the rules. On the other
hand, Lam et al. (2009) has incorporated both OLAP and
fuzzy logic to solve storage location assignment problems.
This method can be easily adopted by a SME as various soft-
ware can be employed directly for the application. However,
this work focuses on the put-away process, instead of the
order picking process as discussed in this paper.
On the other hand, there exist non-fuzzy-based heuris-
tic approaches with the aim of assigning incoming products
to appropriate locations in a warehouse. Bessenouci et al.
(2012) and Yang et al. (2013) have applied tabu searching to
improve the efficiency of order picking. However, their appli-
cations focus on warehouses which have AS/RS installed.
Consequently, compared with the RFID-SAS, they are less
feasible for solving the storage assignment problems in most
of the SMEs who do not have investments on AS/RS. Mean-
while, association rule mining has been proposed to assign
storage locations based on the associations between differ-
ent products (Chiang et al. 2012). This method is an applica-
ble solution but it requires a relatively longer computation
time than the RFID-SAS. In addition, the rule mining results
heavily rely on the definition of a predefined support count
threshold. If the threshold is set too low, trivial or inexplica-
ble rules could be mined. On the other hand, if the threshold
is set too high, it could be difficult to obtain any rules.
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As a result, it is believed that the RFID-SAS proposed in
this paper is superior to many existing approaches as it has
the aim of enhancing the order picking efficiency with better
storage assignment plans specifically for SMEs.
Conclusions
This paper has presented an intelligent system to provide
decision support in storage location assignment for enhanc-
ing the efficiency of order picking in a warehouse. The inte-
gration of RFID and fuzzy logic allows decisions determined
by the system to be more responsive to actual warehouse per-
formance. The knowledge embedded in the system is updated
regularly according to real-time data such as turnover rates
of SKUs, which are captured by RFID devices in the storage
areas. It also provides a method for companies to better retain
relevant tacit knowledge in a systematic manner. In this paper,
the proposed RFID-SAS is a rule-based system which is eas-
ily adopted in SMEs. Unlike much existing work, the generic
methodology outlined in this paper is customized to cater the
specific needs of SMEs that suffer from lack of resources,
advanced technological, and AI knowledge. Therefore, it is
expected that industrial practitioners will find the RFID-SAS
beneficial to their businesses. In addition, the pilot run of the
system in the case company helps narrow the research gap
by presenting another successful example of RFID applica-
tion in a warehouse. However, RFID application differs from
many previous research proposals as it applies RFID tags at
the item level rather than the pallet level. To address the spe-
cific needs of a machinery manufacturing company, metal
tags are adopted instead of paper tags. One of the limitations
of the RFID-SAS is that it only caters for fuzzy character-
istics in an environment faced by one SME. Thus, only the
need, role and importance of the fuzzy characteristics in this
problem are justified. Future work is suggested for testing
the RFID-SAS in non-fuzzy environments.
Acknowledgements The authors would like to thank the Research
Office of the Hong Kong Polytechnic University for supporting this
project (Project Code: G-UC66).
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