Investigating Warehouse Operations

Chapter 2
Activity Profiling: Mining For Gold
WHEN PROBLEMS OCCUR IN WAREHOUSE OPERATIONS:
REENGINEERING

IS OFTEN DONE
LAYOUT PROJECTS ARE COMMENCED
WITH NO IDEA OF THE ROOT CAUSE OF THE PROBLEMS

DUE TO:
LACK

OF KNOWLEDGE
LACK OF TOOLS
LACK OF TIME

Warehouse Activity Profiling

Systematic analysis of
item activity &
order activity
Profiling is designed to readily identify root causes
Of material flow problems
Of information flow problems
Pinpoint opportunities for process improvement
Provide an objective basis for decision making

Advantages of Profiling

Can Quickly Reveal:

Design and Planning Opportunities

Correct Baseline for Justifying New Investments
People Feel a Sense of Involvement

Picture is Worth a 1000 Words

Capture the activities of the warehouse in pictorial form

CAUTION

Dont get stuck on Analysis Paralysis

Profiling becomes the goal

Forget to solve the problems

7 Key Planning & Design Issues

1. Order Picking & Shipping

2. Receiving & Put-away
3. Slotting
4. Material Transportation System
5. Layout & Material Flow
6. Warehouse Sizing
7. Level of automation & Staffing

Picking & Shipping

Order Batch Size

Pick Wave Planning
Picking Tour Construction
Shipping Mode Disposition

Receiving & Put-away

Receiving Mode Disposition

Put-away Batch Sizing
Put-away Tour Construction

Slotting

Zone Definition
Storage Mode Selection & Sizing
Pick Face Sizing
Location Assignments

Material Transportation System

System Selection
System Size

Warehouse Layout & Material Flow

Overall Warehouse Flow

Relative Functional Locations
Building Configuration

Warehouse Sizing

Space Requirements

Level of Automation

Staffing Requirements
Capital-Labor Substitution
Level of Mechanization

What do Customers Want?

their orders filled
Some customers are High Demand

Use a large portion of warehouse activity

Have high customer service requirements

May dedicate a portion of the warehouse to that

customer or business unit

3rd Party Providers dedicate aisles to a customer

Contract Warehouses have complete support to a customer

Warehouse within a Warehouse

Advantages of a Warehouse within a Warehouse

Smaller warehouses are more efficient

Provide better customer service
Can sub-divide the warehouse into self-contained

processing units (ie: Divide & Conquer)

Types of Profiles: Customer Order Profile

Order mix distributions

Lines/Order distribution
Cubes/Order distribution
Lines & Cubes/ Order distribution

Order Mix Distribution

There are several order mix distributions that are

helpful in plotting warehouse operating strategies.

Family Mix overall warehouse operating strategy is dictated

by order mix

If Pure - (orders tend to be from one Product Family)

indicates an advantage of virtual warehousing within a
warehouse
Results in good productivity & customer service

Family Mix Distribution

35%

25%

15%

5%

5%

5%

10%

A Only

B Only

C Only

A&B

A&C

B&C

A, B & C

35

25

15
10
5

Handling Unit Mix Distribution

Full or Partial Pallet/Case Mix

Separate pick areas for full pallets, partial pallets, cartons

Separate areas for full vs broken case mix picking

Handling Unit Mix Distribution

% of Orders

50

30

20

55

25

20

% of lines

75

10

15

60

30

10

Loose
carton

Full pallet

Mixed

Broken
Case

Full Case

Mixed

Order Increment Distribution

Determine portion of full unit load (pallets, cartons)

vs partial unit loads ( pallet, pallet)

Build partial unit loads:

At the supplier, if possible

Upon receipt in necessary

Storage space may be sacrificed

Purchase Order Profile

For inbound material vice outbound material
Use same distribution analyses as for outbound

profiling
Supports the same batching and processing

strategies for receiving and putaway

Item Activity Profiling

Used to slot the warehouse

What storage mode should be assigned

How much space should be allocated
Where should it be located

Types of Activity Profiling:

Popularity
Cube Movement/Volume
Popularity-Volume
Order Completion
Demand Correlation
Demand Variability

Item Popularity Distribution

Close to the door/Close to the floor

Minority of items generate majority of the picks

Uses Pareto Analysis or ABC Analysis

A automated-highly productive storage mode
Golden Zone close to aisle at or near waist high
B semi-automatic moderately productive storage/picking
mode
Silver Zone next most readily accessible
C manual offers high density storage

Item Popularity Distribution

Popularity may be based on:

Dollars of Sales

Volume

# of Requests

% of Items

Cube Movement / Month

Popularity-Cube Movement Mix

High Popularity-High Cube:

Uses carton flow racks located for ease of replenishment

High Popularity-Low Cube:

Many picks / unit of space use light directed carousels

(carousels are not easy to restock, are expensive per foot of
storage)

Low Popularity Low Cube:

Lends itself to bin storage

Item-Order Completion Distribution

Small groups of items that fill large groups of orders:

List most to least popular

Determine proportion of orders a subset can complete

For example; 10% of the items may fill 50% of the orders. (next
slide is an example)

Assign these to small order completion zones:

Productivity, processing rate, processing quality typically 2-5 time

more efficient than general warehouse

Item-Order Completion Distribution

50% of the orders are

completed by 10% of the items

Demand Correlation Distribution

Identify relationship (affinity) of demand between

individual items or families.

Determined based on frequency of being requested
together on orders

Often based on same style or size

Sometime complementary items such as shoes & purse

This data can be used when slotting the warehouse

to minimize movement when filling orders.

Demand Correlation Distribution

Item Number

Item Number

Pair Frequency

189-2-4

189-2-1

58

493-2-1

493-2-8

45

007-3-3

007-3-2

36

119-2-1

119-2-7

30

999-1-8

999-1-6

22

207-4-2

207-4-4

15

662-1-9

662-1-1

12

339-7-4

879-2-8

112-3-8

112-3-4