Warehousing Design

©CII Institute of Logistics

Warehouse Activity

Profiling for Operational

Efficiency


4.11 4.09 3.88 3.86 3.84

3.63 3.49

3.12

World Bank ranks

India 47th in

logistics efficiency

Performance Indicators Customs

Infrastructure

International Shipments

Logistics Competence

Tracking and Tracing

Timeliness

Logistics Performance Index (LPI) WORLD BANK 2010


• India spends around 13% of its GDP on logistics, compared to a global average of 10-11 %. Globally better supply chain

management has reduced logistics costs by nearly 1% over last 10 years. However Supply Chain Management still remains a very new

concept for Indian industries which are increasingly looking to gain competitive edge by adopting logistics and Supply Chain

Management concepts and practice.

• Key trend in the industry is towards outsourcing logistics requirements to Third Party Logistics (3PL) players. The demand is specially

driven by the entry of MNCs and increasing export focus of Indian companies .The estimated market for 3PL players in 2003 was US$

250 mn and is likely to grow at a CAGR of more than 20% during next five years.

• Consistent good performance of the economy (over 8% growth rate), is the key force, driving the growth in the logistics sector. Vibrant

economic scenario of the country has ignited the activities in manufacturing/infrastructure sector.

Indian companies can

save substantial cost by

adopting modern supply

chain and logistics

solutions

Functions At 13% of GDP

(US$ bn)

At 12% of GDP

(US$ bn

Amount Saved

(US$ bn

Transportation 32.45 29.95 2.50

Inventory 23.18 21.40 1.78

Packaging 10.20 9.41 0.78

Handling and Warehousing 8.34 7.70 0.64

Others 18.54 17.12 1.43

Total Logistics Costs 92.72 85.58 7.13

Estimated Cost Saving by Reducing Logistics Cost by 1%

*(source: Credit Analysis & Research Limited)

Logistics : Evolving Landscape in India


Current Indian Scenario • The Indian warehousing sector is expected to grow at the rate of 35-40 % every year

• 45 million sq ft warehousing space is expected to be developed in the country in next

five years supplemented by around 110 logistics parks.

• Warehousing activities account for about 20 per cent of the total Indian logistics industry and offer tremendous growth potential

• The entry of global third party logistics players is fast changing the face of the logistics industry

• From a mere combination of transportation and storage services, logistics is fast emerging as a strategic function that involves end-to-end solutions that improves efficiencies

• The total share of organized warehousing space is less than 8% of the total warehousing space in India

• The industry is fragmented and largely unorganized and is dominated by small players with small capacities

Source – Cushman & Wakefield


The Changing Landscape

In view of the quantum increase in logistics and warehousing requirements in the country, the way these

needs are addressed has to be different…


To summarize

10 -15% reduction in net logistics cost is definitely achievable with greater efficiencies in the changing landscape of warehousing in

India…


Understand the Role of your Warehouse

C1

C2

C3

C4

C5

C6

VENDOR INBOUND

TRANSPORTATION PLANTS INTERFACILITY

TRANSPORTATION

DISTRIBUTION

CENTERS

OUTBOUND

TRANSPORTATI

ON CUSTOMERS

• Supply chain Management(SCM) is the management of network of organizations that are involved through upstream and downstream

linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate

consumer.

Godown

Stores DC /

RDC /

Depots W/h

Yard


Distribution Centre Vs Warehouse

• a distribution center (DC / RDC) is a

"facility from which wholesale and retail

orders are filled”, adding that "the term is

used to describe a high-velocity operation

as opposed to a static storage warehouse.“

• DCs evolved from warehousing and share

much of the same DNA


Challenges of Warehouse

Centre of Excellence - Supply Chain Management Institute

of Logistics

Execute more, smaller transactions

Handle and store more items

Provide more product and service customization

Offer more value-added services

Process more returns

Receive and ship more international orders


Challenges of Warehouse


of Logistics

Less time to process an order

Less margin for error

Less young, skilled, English speaking personnel

Less WMS Capability


Design & Related Issues

Sl. No Planning &

Design Issues Key Questions

Required Profile

Profile Components

1

Receiving and Put

Away Process

Design

Receiving Mode Disposition

Put away batch sizing

Put away tour construction

Purchase

Order

Profile

Order Mix Distributions

Lines per receipt distribution

Lines and cubes per receipt

distribution

2 Storing Zone Defining

Storage Mode selection /sizing

Pick face sizing

Item location assignment

Item

activity

profile

Popularity profile

Cube Movement volume profile

Order completion profile

Demand correlation profile

Demand Variable profile

3 Order Picking &

Shipping Design

Process

Order Batch Size

Pick wave Picking

Picking Tour Construction

Shipping Mode Disposition

Customer

Order

Profile


Lines per order distribution

Line & cube per order

distribution


of Logistics


Design & Related Issues

Sl. No

Planning & Design Issues

Key Questions Required

Profile Profile Components

4 Material Transport

Systems

Engineering

Material handling Systems

selection & sizing

Calendar

Clock profile

Seasonality Profile

Daily Activity Profile

5

Warehouse layout &

Material Flow

Design

Overall warehouse flow design

:U, S, I or L

Relative Functions Locations

Building Configuration

Activity

Relationship

Profile


Lines per receipt distribution

Lines and cubes per receipt

distribution

6 Warehouse Sizing Overall Warehouse space

requirement

Inventory

profile

Item family inventory

distribution

Handling Unit inventory

distribution

7 Level of Automation

& Staffing

Staffing Requirements

Capital Labor Substitution

Level of Mechanization

Automation

Profile

Economic factor distribution


of Logistics


Longer term – next 2 years

Needs both Capital and facility changes

Short term changes

Next 3 to 6 months

Quick Fixes

This week or next Savings

Savings

Suggested methodology to improve Warehouse Operational Efficiency in 3 stages …


Factors that impede the WH efficiency

• Cluttered In bound docks

• Trucks waiting in parking lot

• Over flow warehouses

• Difficulty in locating empty slots / Pick Locs

• Congested Aisles

• Partially Executed orders

• Pick errors., ‘look like errors’

• Time efficiency

Goods IN Check

inventory & Storage

Order Processing

Goods OUT

Transportation Delivery Increase the Velocity of

“FLOW”


Quick Fixes – This week

• Procedural changes

• No change to layout or the warehouse facility.

• No capital required

• Do it this week (or the next)

©CII Institute of Logistics 16

Understand : Products, Orders ( Customer & Purchase Indents ), Processes

INV.

MASTER

Inventory Snapshots Maximum, Average

Inventory Levels,

Service levels

ORDER

MASTER

Order Detail Customers’ ordering

pattern, Seasonality,

UOM.,

Receiving frequency,

UOM

ITEM

MASTER

SKU Number

Description

Item Cube

Pieces Per Case

Cases Per Pallet

Product Group

Item Weight

WH space cal.xls


Transportation

Receiving

Put-away

Picking

Inventory Management

(cycle counting, stock reconciliation etc.)

Customer Service

Delivery

Delivery & confirmation

Line replenishment request

billing of material

LS

Ps

(Carr

iers

) L

SP

(W

are

housin

g)

Su

pp

lie

r

Cu

sto

mer

Shipment booking

Pre-advise creation

Cargo flow

updates

Materials ready

Receive Payment

Transportation Process

Material and Inventory Management

Mapping the Processes


Understanding of processes is necessary

Process Functionality Impact if not done properly

Gate Entry

ASN based gate entry. The GE stickers

(with barcodes) printed and travels along

with the truck to the receipt dock.

Need manual entry, longer truck turn around time

Putaway into Receipt

bins

System-directed put away into the Goods

Inward locations. Put away slips in different

colors for single / multiple inventory

locations. Immediate updation in the master

Low Flexibility and High Stock Discrepancy

Picking process

System-directed picking - online updation of

picking confirmation by scanning the pick

location and the part being picked.

Simultaneous updation of system stock

accordingly.

Longer lead time or more pickers, Low traceability

resulting in High Stock Discrepancy

Creating transfer

instruction

On completion of primary packing, system-

directed creation of transfer instruction

(transfer order) indicating the completion of

primary packing and instructing the putaway

location into the stock

Low traceability resulting in High Stock

Discrepancy

Dynamic Storage

Location

Changing storage bin for SKUs depending

on availability Very low flexibility resulting in more area


Location Numbering…(with Logic)

• XX XX X XX

Position on a Level, counting from left

to right between rack supports

Level or shelf, counting from the floor

Section, or bay, the portion of the storage aid

between uprights

Aisle

TRAVEL

Stage,Pack,ship

PICKING

Picklist


Row, Aisle, Bin numbers & signages


Smart Slotting thru’ Item Popularity

Distributions

• Principle:

• A place for Every thing and Every thing in its Place

“Assign the most popular items to the most accessible locations.”

A

B

C

A

B

C

A

B

C

A

B

C


Slotting based on Item Popularity

Popularity Profile

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

1.000

0.000 0.200 0.400 0.600 0.800 1.000

% of items

% o

f p

icks


Slotting based on Item Popularity

Highly Popular

Medium Popular

Slow Movers


Multi Dimensional Pareto Analysis

ABC based on Volume

ABC based on Frequency

ABC based on Turnover

STOCK TURNOVER

FREQUENCY

VOLUME


Share of Consumer Care Division

sales


Non-Moving ?

After the Item Popularity calculation, some items are found to

be ‘non moving’.,

>> ideally dispose them immediately, alternatively,

move them to remote area.

4 ft 4 ft

At 100 orders/day, 4feet per pallet, extra dist=100000ft/day. At 200ft/min, 500

mins/day, 2499 hrs/yr, Rs55/hr, Wasted is Rs.137500/yr

2500

pallets,

250 are

NM.,


One storage location only per part number

• One product (part number) must be stored in only one location (i.e. no separate

locations for the same part)

• The location will obviously be dimensioned according to the quantity stored

• In case the quantity demands more than one location, these will be grouped

together and managed as one

• This location shall be kept stable in order to create work habits, although it

must be periodically revised in accordance to turnover

A1 A1

A1

B2

B2 D4

B2

D4

D4

C3 C3

C3

A1 D4

B2

B2

D4 A1

C3

C3

B2

D4 A1

C3


• Cube – Movement / Volume distribution

- to assign items to storage modes based on their cube

movement.

Inventory Container Graph

0

5000

10000

15000

20000

25000

0.125 1.5 8 40 320

Cubic Feet of Storage Needed

# o

f S

KU

s

Drawers


Popularity - Cube-movement

Distribution

Popularity

Cube

movement

Storage

drawers

Bin shelving Carousels

Flow rack


Volume Vs Storage Medium


Once the storage mode assignments have been made, the

preference regions for each storage mode are determined

Golden zone

Silver zone

Bronze zone

Popularity

Cube

movement


Slotting based on Item Family affinity

0

10

20

30

40

50

60

70

Month 1 Month 2 Month 3

Item A

Item B


Storage by family

• Storage, within the same zone, of different products of the same type, as:

• Exhaust systems of different models or different spirit drinks...

• Storage, within the same zone, of different products that are usually sold together as:

• Paint and paint brushes

• Seeds and gardening tools

• Storage, within the same zone, of different products having similar weights,

dimensions and shapes

The aim here is also to create work habits that improve

the productivity of operations


Deciding on a Picking Approach

Single Order Picking Multi-Order Picking Batch Picking

Order 2 Order 3

Order 1

Single Line Orders


Changes over Short Term


Material Flow in a Warehouse

RECEIVING

PALLET RESERVE

CASE PICK

ITEM PICK

SORTING A

SORTING B

UNITIZING

SHIPPING

pallets pallets cases overpacks mul

(items totes) cases

(items cases) pallets

pallets pallets

cases cases cases

totes (cases) items

(items cases) totes

totes totes

(items cases) totes

totes cases overpacks

totes cases overpacks

mul pallets

Breakdown

function

Consolidation

Function


Understanding Customer ordering

pattern

• It is a good idea to establish separate areas for pallet and

case picking, especially if mixed orders are a small % of

all orders >> “Warehouses inside Warehouse”

0

10

20

30

40

50

60

70

Loose

carton

Full pallet Mixed

% of orders

% of lines


SKUs…

• DABUR CHAWANPRASH (Regular) 24 x 500 gm. (17.5 Oz.)

• DABUR CHAYWANPRASH (Regular) 12 x 1 Kg. (2.2 Lbs.)

• DABUR HONEY ( SHELF LIFE 18 MONTHS) 120 x 50 gm. (1.75 Oz.)

• DABUR HONEY 72 x 100 gm. (3.5 Oz.)

• DABUR HONEY 32 x 250 gm. (8.75 Oz.)

• DABUR HONEY 16 x 500 Gm. (17.5 Oz.)

• DABUR HONEY 9 x 1 Kg. (2.2 Lbs.)

• DABUR PUDIN HARA 200 x 30 Ml.

• GLUCOSE D DABUR 80 x 200 gm. (7 Oz.)


Distribution hierarchy

Depots ( 50 ~ 60 )

CFA ( 3000 ~ 4000 )

Distributors / Stockists (50 k ~ 60 k )

Large Retailers (Hyper

markets)

Small Retailers (Grocery

shops)

Medium Retailers (Super

markets)

Consumers - 20-30 Millions

1.5 ~ 2 Million


A schematic representation of the warehouse material flow

Receiving Shipping

Reserve Storage

and

Pallet Picking

Case

Picking

Broken

Case

Picking

Accumulation, Sortation & Packing

Cross-docking

Direct putaway to reserve

Direct putaway to primary

Replenishment Replenishment


Organizing Principle

• Tasks correspond to flow in a functional network

• Handling unit conversions

• Processing options

• Total workload

Material flow Function - to - department mapping

Receiving

Shipping

Order picking

Carton storage

and picking

Inspection

Bulk storage

Order sort/

accumulate

Material flow Function - to - department mapping Material flow Function - to - department mapping

Receiving

Shipping

Order picking

Carton storage

and picking

Inspection

Bulk storage

Order sort/

accumulate


• Warehouse layout must be designed in order to separate inbound and outbound flows

• This means providing physically different spaces and aisles for replenishment and for picking or operating inbound and outbound at different times

• The result will be increased productivity, reduced stock loss and reduced accidents

Separate inbound and outbound flows

Inbound / replenishment flow

Outbound / picking flow


• The warehouse layout must ensure there is no wasted transport or movement

• Long journeys

• Empty returns

Elimination of wasted transport and movement

Dist Travelled = 118 ft (4 ft pallet & 9ft aisle)

Dist Travelled = 74 ft (4 ft pallet & 9ft aisle)

Cross Aisle


Number of Docks

Number of Docks Needed :

Daily demand of orders (T) * Time for load/unload a truck

Truck capacity (T) * Daily time available to load/unload

= 360 * 30 / 16 * 420 = 10800/6720 ~ 1.6

= 2 docks

> 3 docks would be good,


Storage Subsystem – Capacity

• Dedicated space

– each product is stored in a specific area

– assign storage location to products

• Random space: products can be stored anywhere

– the products are randomly distributed over the

warehouse

product batch size safety stock dedicated random

1 1000 200 1200 700

2 2500 400 2900 1650

3 11600 1250 12850 7050

4 850 300 1150 725

5 1750 500 2250 1375

6 4500 1000 5500 3250

7 2600 950 3550 2250

total space: 29400 17000

space

)(max1

tIm j

n

jt

d

n

j

jt

r tIm1

)(max


Location of shipping and

receiving

• U shaped or cross docking configuration

– Receiving and shipping on the same side of the

warehouse

– Provides dock flexibility.If one experiences

surge of activity, can make use of additional

doors from the other function

– Minimizes truck apron and roadway


Location of shipping and

receiving

• Flow through configuration

– Receiving and shipping on opposite side of the warehouses

– Makes many storage locations of equal convenience

– More appropriate for extremely high volume

– Preferable when building is long and narrow


Example Layout 1


Example Layout 2


Angled aisles can enable more direct travel between

receiving / shipping and storage locations.


• For Long Term…


Storage and handling equipment…


• Load – 1000 kg / 1500 kg

– 1200mm deep x 1000mm x 1000mm

– 1200mm deep x 800mm x 1000mm

– Stable Load

• Product – 2400 Pallet Locations

Typical Storage Facility

Material Handling equipments Selection


CONVENTIONAL SYSTEM NARROW AISLE SYSTEM VERY NARROW AISLE

SYSTEM

Gas, LPG or Electric Trucks Electric Reach Trucks Electric Very Narrow Aisle

Trucks

Clear aisle 4200mm Clear aisle 2700mm Clear aisle 1650mm

Stack 4 high (1 on the ground; 3 in the air)



The truck loads & unloads trailers, loads & unloads rack

plus pick up & deliver to manufacturing

The truck pick up & deposits loads from staging and pick &

deposits loads in the rack systems

The truck pick up & deposits loads from staging and pick &

deposits loads in the rack systems

80% Travel. 20% Lift 60% Travel. 40% Lift 50% Travel. 50% Lift†

76% Aisle 71% Aisle 59% Aisle

† Travel & Lift are simultaneous

Material Handling equipments Selection...


Counter Balance System vs Very Narrow Aisle

2980 sq meters – 1730 sq meters = 1250 sq meters

1250 sq meters x ### per sq meter per month =

Narrow Aisle Reach Truck vs Very Narrow Aisle

2147 sq meters – 1730 sq meters = 417 sq meters

417 sq meters x ### per sq meter per month =

Total Savings: Rs. Xx,xx,xxx per annum

1

Total Savings: Rs. Xx,xx,xxx per annum

2



• 17,000mm lift height • Very high bay warehousing further

leverages property footprint potential

• Global trend, with projects and installed

facilities on most continents.



Automated Monorail & AGV


Warehouse Space Requirements Worksheet

• Receiving,

• Pallet Storage

• Case Picking

• Broken Case Picking

• Packing & Unitizing, Shipping, Staging

• Cross Docking

• Warehouse Offices – Front Office, Support Services

• Rest Rooms, Dining Hall

• Customizing (VAS)

• Consumables Storage area

• Material Handling Equipments Parking / Maintenance

• Returned or Rejections storage

• Future expansion Detail

SKUs.pptx

SKUs.pptx

VAS.ppt

WH Project.xlsx

Warehousing Design

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Transcript of Warehousing Design