improving product location and order picking activities … · improving product location and order...

Congrès conjoint SCRO/Journées de l’Optimisation 2006, MontréalCIRRELT

Improving Product Location and Order PickingActivities in a Distribution Center

Jacques Renaud – Angel RuizUniversité Laval

Centre Interuniversitaire de Recherche sur les Réseaux d’Entreprise, la Logistique et le Transport - CIRRELT

Presentation Outline• Introduction• Warehouse design and operations• Conveyor belt layout• Order picking procedure• Actual product location strategy• New product location strategies• Computational results• Further results using a Traveling salesman model


Introduction

Both distribution centers (DC) and warehousing operations are key elements in supply chain efficiency.

DC efficiency and throughput are the result of technological and design choices.

Although modern supply chain management strategies focus on reducing inventory, product diversification and customization require handling additional stock keeping units (SKU’s).

For modern DC, the flowthrough is a competitive element.


Introduction

Warehousing decisions

Storage strategies : Assign SKUs to storage location

Dedicated storage

Random storage

Classed-based storage

AA AA AA AA AA AA AA AA AA AA

AA AA CC CC CC CC CC CC

DD DD DD DD

BB BB EE EEBB BB


Introduction


Order picking strategies : How the SKUs are grouped into picking lists and subsequently retrieved from their storage locations by one or many pickers.

Discrete picking

Zone picking

Batch picking

Wave picking


Introduction


Routing strategies : Determine the sequence in which the SKUs on a given picking list are collected, the objective being to minimize the distance covered by the pickers.

Objective of this study

Optimize both product location and order picking activities (includingthe routing) of a high throughput DC.


Literature Review

Order Picking

The general discrete order picking problem is a traveling salesman problem (Np-Hard).

Many researchers studied special warehouse configurations which lead to polynomial solvable cases :

– Ratliff & Rosenthal (1983)– Goetschalckx & Rafliff (1988)– De Koster & van der Poort (1998)– Vaughan, Roodbergen & De Koster (2001)

No work related to conveyor like the one studied here.


Literature Review

Product locationConsiderably less attention

Product location is highly dependent on warehouse configuration and order picking strategy and technology.

Most of the work deals with specific cases.

– Heskett (1963), cube-per-order index,– Jarvis & McDowell (1983), minimize average order picking time– Vickson & Fujimoto (1996), optimal location in a bi-directional carousel– Jewkes, Lee & Vickson (2004), product location along a picking line

No work related to conveyor like the one studied here.


Warehouse design and operationsIn this study

External retailers may order any quantity of any product.

Products for these customers are assigned to storage locations (slots) in a mezzanine shelving system on both sides of a conveyor belt, according to a dedicated storage policy.

For a given order, a single picker walks along the shelves, gathers the required quantities of the products from the various locations along the route (broken case picking), and puts them on the conveyor belt which automatically moves them to the right truck in the shipping area.


Warehouse design and operations

Detailed objective :

Improving the storage and order-picking operations by :

(1) optimizing the allocation of products to storage locations, and (2) reviewing the picking (routing) strategy.


Conveyor belt layout2 PAL 4 PAL 5 PAL 3 PAL 4 PAL 5 PAL

F E D C B AESCALIER

F301 PF302 C302 B302 PF303 D303 P C303 B303 A303F304 D304 C304 B304 A304F305 E305 D305 C305 B305 A305F306 E306 D306 C306 B306 A306F307 E307 D307 C307 B307 A307F308 E308 D308 C308 B308 A308F309 panneaux E309 D309 panneaux C309 B309 panneaux A309F310 E310 D310 C310 B310 A310F311 panneaux E311 D311 panneaux C311 B311 panneaux A311F312 E312 D312 C312 B312 A312F313 E313 D313 C313 B313 A313F314 E314 D314 C314 B314 A314F315 E315 D315 C315 B315 A315F316 E316 D316 C316 B316 A316F317 E317 D317 C317 B317 A317F318 E318 D318 C318 B318 P A318F319 panneaux E319 D319 C319 B319 panneaux panneaux A319F320 E320 D320 panneaux panneaux C320 B320 A320F321 E321 D321 C321 B321 A321F322 P panneaux E322 D322 C322 B322 A322F323 m PASSAGE PASSAGE PASSAGE A323F324 E324 D324 P C324 B324 A324F325 E325 D325 C325 B325 A325F326 E326 D326 C326 B326 A326F327 E327 D327 C327 B327 panneaux A327F328 E328 D328 C328 B328 A328F329 E329 D329 C329 B329 A329F330 E330 D330 C330 B330 A330F331 panneaux E331 D331 panneaux C331 B331 A331F332 E332 D332 C332 B332 A332F333 panneaux E333 D333 panneaux C333 B333 A333F334 E334 D334 C334 B334 panneaux P A334F335 E335 D335 C335 B335 panneaux A335F336 E336 D336 C336 B336 A336F337 E337 D337 C337 B337 A337

D338 C338 B338 A338D339 panneaux C339 B339 A339D340 C340 B340 A340D341 C341 B341 A341D342 panneaux C342 B342 panneaux A342D343 C343 B343 panneaux A343D344 C344 B344 A344D345 C345 B345 A345D346 C346 B346 A346D347 C347 B347 A347D348 panneaux C348 B348 A348D349 P C349 B349 A349D350 A350

ESCALIER

P

Panneaux Panneaux

D351 D352 D353 D354 D355 D356 D357 D358 D359

Emptywooden board

Picking listsprinter

Doors for crossing the belt

A total of 240 storage locations

Heavy products section

Products to the trucksin the shipping area

The conveyor belt


Conveyor belt layout

2 PAL 4 PAL 5 PAL 3 PAL 4 PAL 5 PALF E D C B A

ESCALIERF301 PF302 C302 B302 PF303 D303 P C303 B303 A303F304 D304 C304 B304 A304F305 E305 D305 C305 B305 A305F306 E306 D306 C306 B306 A306F307 E307 D307 C307 B307 A307F308 E308 D308 C308 B308 A308F309 panneaux E309 D309 panneaux C309 B309 panneaux A309F310 E310 D310 C310 B310 A310F311 panneaux E311 D311 panneaux C311 B311 panneaux A311F312 E312 D312 C312 B312 A312F313 E313 D313 C313 B313 A313F314 E314 D314 C314 B314 A314F315 E315 D315 C315 B315 A315F316 E316 D316 C316 B316 A316F317 E317 D317 C317 B317 A317F318 E318 D318 C318 B318 P A318F319 panneaux E319 D319 C319 B319 panneaux panneaux A319F320 E320 D320 panneaux panneaux C320 B320 A320F321 E321 D321 C321 B321 A321F322 P panneaux E322 D322 C322 B322 A322F323 m PASSAGE PASSAGE PASSAGE A323F324 E324 D324 P C324 B324 A324F325 E325 D325 C325 B325 A325F326 E326 D326 C326 B326 A326F327 E327 D327 C327 B327 panneaux A327F328 E328 D328 C328 B328 A328F329 E329 D329 C329 B329 A329F330 E330 D330 C330 B330 A330F331 panneaux E331 D331 panneaux C331 B331 A331F332 E332 D332 C332 B332 A332F333 panneaux E333 D333 panneaux C333 B333 A333F334 E334 D334 C334 B334 panneaux P A334F335 E335 D335 C335 B335 panneaux A335F336 E336 D336 C336 B336 A336F337 E337 D337 C337 B337 A337


ESCALIER

P

Panneaux Panneaux

D351 D352 D353 D354 D355 D356 D357 D358 D359

Product categories

Regular product (80%) : can be ordered by any retailer.

Vending product (20%) :Are shipped only to New Brunswick. They arerestricted to section F.


Conveyor belt layoutConveyor modelingWe modelled the belt as an undirected connected graph, in which each storage location corresponds to a node and in which an edge (undirected arc) exists between each pair of adjacent nodes.

C321 B321C322 B322 B333 A333

Footbridge B334 - B D A334C324 B324 B335 A335 - BC325 B325

C321

C322

C324

C325 B325

B324

B322

B321 B333

B334

B335

B333

B334

B335

5

10

5 5

10

5 5

5 5

5

645

45

50

50


Order Picking Procedure


ESCALIERF301 PF302 C302 B302 PF303 D303 P C303 B303 A303F304 D304 C304 B304 A304F305 E305 D305 C305 B305 A305F306 E306 D306 C306 B306 A306F307 E307 D307 C307 B307 A307F308 E308 D308 C308 B308 A308F309 panneaux E309 D309 panneaux C309 B309 panneaux A309F310 E310 D310 C310 B310 A310F311 panneaux E311 D311 panneaux C311 B311 panneaux A311F312 E312 D312 C312 B312 A312F313 E313 D313 C313 B313 A313F314 E314 D314 C314 B314 A314F315 E315 D315 C315 B315 A315F316 E316 D316 C316 B316 A316F317 E317 D317 C317 B317 A317F318 E318 D318 C318 B318 P A318F319 panneaux E319 D319 C319 B319 panneaux panneaux A319F320 E320 D320 panneaux panneaux C320 B320 A320F321 E321 D321 C321 B321 A321F322 P panneaux E322 D322 C322 B322 A322F323 m PASSAGE PASSAGE PASSAGE A323F324 E324 D324 P C324 B324 A324F325 E325 D325 C325 B325 A325F326 E326 D326 C326 B326 A326F327 E327 D327 C327 B327 panneaux A327F328 E328 D328 C328 B328 A328F329 E329 D329 C329 B329 A329F330 E330 D330 C330 B330 A330F331 panneaux E331 D331 panneaux C331 B331 A331F332 E332 D332 C332 B332 A332F333 panneaux E333 D333 panneaux C333 B333 A333F334 E334 D334 C334 B334 panneaux P A334F335 E335 D335 C335 B335 panneaux A335F336 E336 D336 C336 B336 A336F337 E337 D337 C337 B337 A337


ESCALIER

P

Panneaux Panneaux

D351 D352 D353 D354 D355 D356 D357 D358 D359

A picker starts the tour at location A303, where a computer prints the picking list. S/he visit sections B, C, F, E, D and A in that order before returning to location A303.

In this strategy, the pickeruses a predetermined route (but he can skip useless part of the belt).


Order Picking ProcedureF E D C B A

F301 StartingF302 C302 B302 D pointF303 D303 D C303 B303 A303F304 D304 C304 B304 A304F305 E305 D305 C305 B305 A305F306 E306 D306-X C306 B306 A306F307 E307 D307 C307 B307 A307F308 E308 D308 C308 B308 A308

F309-B E309 D309 C309-B B309-B A309F310 E310 D310 C310 B310 A310F311 E311-B D311-B C311 B311 A311-BF312 E312 D312 C312 B312 A312F313 E313 D313 C313 B313 A313F314 E314 D314 C314 B314-X A314F315 E315 D315 C315 B315 A315F316 E316 D316 C316-X B316 A316F317 E317 D317 C317 B317 A317F318 E318 D318 C318 B318 D P A318

F319-B E319 D319 C319 B319-B A319-BF320 E320 D320-B C320-B B320 A320F321 E321 D321 C321 B321 A321F322 D P E322-B D322 P C322 B322 A322F323 Footbridge Footbridge A323F324 E324 D324 D C324 B324 A324F325 E325 D325 C325 B325 A325F326 E326 D326 C326 DISC B326 A326F327 E327 D327 C327 B327 A327-BF328 E328 D328 C328 B328 A328F329 E329 D329 C329 B329 A329F330 E330 D330 C330 B330 A330

F331-B E331 D331 C331-B B331 A331F332 E332 D332 C332 B332 A332F333 E333-B D333-B C333 B333 A333-XF334 E334 D334 C334 B334-B D P A334F335 E335 D335 C335 B335 A335-BF336 E336 D336 C336 B336 A336F337 E337 D337 C337 B337 A337

D338 C338 B338 A338D339-B C339 B339 A339D340 C340 DISC B340 A340D341 C341 B341 A341D342 C342-B B342-B A342D343 C343 B343 A343-BD344 C344 B344 A344

D345-X C345 B345 A345D346 C346 B346 A346D347 C347 B347 A347

D348-B C348 B348 A348D349 D P C349 B349 A349D350 P A350

D

D358 D359-BD357D356D355D354D353D352D351-B

A 5 products example.

The storage locations aresorted automatically on the picking list followingthe sequence BCFEDA.


Actual Product Location Strategy

At present, products are assigned to locations based solely on theexperience and knowledge of the logistics manager.

The rule-of-thumb used by the logistics manager is that products withthe highest sales forecast are placed as near as possible to the startingpoint, filling sections A and B first followed by C, D and E (theallocation is revised 4 times a year).


Actual Product Location Strategy2 PAL 4 PAL 5 PAL 3 PAL 4 PAL 5 PAL

F E D C B AESCALIER

F301 PF302 C302 B302 PF303 D303 P C303 B303 A303F304 D304 C304 B304 A304F305 E305 D305 C305 B305 A305F306 E306 D306 C306 B306 A306F307 E307 D307 C307 B307 A307F308 E308 D308 C308 B308 A308F309 E309 D309 C309 B309 A309F310 E310 D310 C310 B310 A310F311 E311 D311 C311 B311 A311F312 E312 D312 C312 B312 A312F313 E313 D313 C313 B313 A313F314 E314 D314 C314 B314 A314F315 E315 D315 C315 B315 A315F316 E316 D316 C316 B316 A316F317 E317 D317 C317 B317 A317F318 E318 D318 C318 B318 P A318F319 E319 D319 C319 B319 A319F320 E320 D320 C320 B320 A320F321 E321 D321 C321 B321 A321F322 P E322 D322 C322 B322 A322F323 PASSAGE PASSAGE A323F324 E324 D324 P C324 B324 A324F325 E325 D325 C325 B325 A325F326 E326 D326 C326 B326 A326F327 E327 D327 C327 B327 A327F328 E328 D328 C328 B328 A328F329 E329 D329 C329 B329 A329F330 E330 D330 C330 B330 A330F331 E331 D331 C331 B331 A331F332 E332 D332 C332 B332 A332F333 E333 D333 C333 B333 A333F334 E334 D334 C334 B334 P A334F335 E335 D335 C335 B335 A335F336 E336 D336 C336 B336 A336F337 E337 D337 C337 B337 A337

D338 C338 B338 A338D339 C339 B339 A339D340 C340 B340 A340D341 C341 B341 A341D342 C342 B342 A342D343 C343 B343 A343D344 C344 B344 A344D345 C345 B345 A345D346 C346 B346 A346D347 C347 B347 A347D348 C348 B348 A348D349 P C349 B349 A349D350 A350

ESCALIER

P

D351 D352 D353 D354 D355 D356 D357 D358 D359

Products havingthe highest salesforecasts


New Product Location StrategiesTo obtain a product allocation, two decisions are needed:

- in which order product should be considered,- in which order storage locations should be assigned.

Solution ProcedureTo determine the location allocation, the first non-assigned product in the list was selected and assigned to the first available position in the location list.

This procedure was repeated until all the products have been assigned.

We used 2 product sorting rules and 3 locations sorting rules.


New Product Location Strategies

1) Product sorting rule : QuantitySorts the products in decreasing order accordingly to their forecast demand

2) Product sorting rule : FrequencySorts the products in decreasing order of their ordering frequency (the number of times that a product is ordered by customers, independent of the requested quantity)

If vending products are taken into consideration, they are automatically allocated to section F.


New Product Location Strategies1) Location sorting rule : Shortest distanceSort the locations according to their distance from the starting point.

2) Location sorting rule : ABCDEFThe second rule, ABCDEF, first sorts the locations by section, following the order A-B-C-D-E-F; then sort the locations within a section according to their distance from the starting point, with those closest to the starting point coming first.

3) Location sorting rule : BCFEDAAs the second rule but sections are sorted in the order BCFEDA which is the order followed by the picker.


ESCALIERF301 PF302 C302 B302 PF303 D303 P C303 B303 A303F304 D304 C304 B304 A304F305 E305 D305 C305 B305 A305F306 E306 D306 C306 B306 A306F307 E307 D307 C307 B307 A307F308 E308 D308 C308 B308 A308F309 E309 D309 C309 B309 A309F310 E310 D310 C310 B310 A310F311 E311 D311 C311 B311 A311F312 E312 D312 C312 B312 A312F313 E313 D313 C313 B313 A313F314 E314 D314 C314 B314 A314F315 E315 D315 C315 B315 A315F316 E316 D316 C316 B316 A316F317 E317 D317 C317 B317 A317F318 E318 D318 C318 B318 P A318F319 E319 D319 C319 B319 A319F320 E320 D320 C320 B320 A320F321 E321 D321 C321 B321 A321F322 P E322 D322 C322 B322 A322F323 PASSAGE PASSAGE A323F324 E324 D324 P C324 B324 A324F325 E325 D325 C325 B325 A325F326 E326 D326 C326 B326 A326F327 E327 D327 C327 B327 A327F328 E328 D328 C328 B328 A328F329 E329 D329 C329 B329 A329F330 E330 D330 C330 B330 A330F331 E331 D331 C331 B331 A331F332 E332 D332 C332 B332 A332F333 E333 D333 C333 B333 A333F334 E334 D334 C334 B334 P A334F335 E335 D335 C335 B335 A335F336 E336 D336 C336 B336 A336F337 E337 D337 C337 B337 A337

D338 C338 B338 A338D339 C339 B339 A339D340 C340 B340 A340D341 C341 B341 A341D342 C342 B342 A342D343 C343 B343 A343D344 C344 B344 A344D345 C345 B345 A345D346 C346 B346 A346D347 C347 B347 A347D348 C348 B348 A348D349 P C349 B349 A349D350 A350

ESCALIER

P

D351 D352 D353 D354 D355 D356 D357 D358 D359


New Product Location Strategies

Improvement procedure

Given an initial solution and a number of picking lists, the heuristic evaluates, for each possible pair of products, the decrease in the distance walked if their storage locations were exchanged.

After all the possible exchanges have been evaluated, the one that offers the most improvement is selected and implemented.

This procedure continues until no improvement can be obtained.


Computational ResultsTest Data

Real data provided by our industrial partner.Orders from 372 customers between March 21st and May 15th 2004.

4 forecast sets of 20 orders eachUsed in the place of the manager’s sales forecast to assign products to specific locations.

4 test sets of 20 orders eachUsed to evaluate the company’s product allocation and the product allocations produced by our algorithms.


Computational Results

Total picking distances obtained with the Quantity product sorting ruleWithout any product category With vending/regular products

handled separately Data set

Shortest ABCDEF BCFEDA Shortest ABCDEF BCFEDA

Current location

5 6 7 8

25 118 25 473 25 082 25 504

24 108 22 315 23 122 23 325

28 256 27 815 27 881 27 140

19 545 20 057 18 571 19 706

20 453 20 913 19 401 20 119

20 437 21 161 19 423 20 044

21 446 21 617 21 713 22 159

Global 101 177 92 870 111 092 77 879 80 886 81 065 86 935 % -16.38 -6.83 -27.79 10.42 6.96 6.75

These results demonstrates thatvending products

should be assigned to section F



Total picking distances obtained with the Frequency product sorting rule

These results demonstrates thatvending products

should be assigned to section F

Without any product category With vending/regular products handled separately

Data set

Shortest ABCDEF BCFEDA Shortest ABCDEF BCFEDA

Current location

5 6 7 8

23 743 23 951 22 739 23 583

21 880 21 642 22 341 21 970

25 439 26 163 24 722 25 514

19 575 20 307 18 094 19 180

19 929 20 558 19 744 20 389

19 833 20 968 19 183 19 749

21 446 21 617 21 713 22 159

Global 94 016 87 833 101 838 77 156 80 620 79 733 86 935 % -8.15 -1.03 -17.14 11.25 7.26 8.28



Total picking distances after the improvement procedure

% Percentage of reduction of the picking distances produced by the improvement procedure%% Reduction of the picking distances compared to the current company’s location

[Quantity; * ; Vending] [Frequency; * ; Vending] Data set Shortest ABCDEF BCFEDA Shortest ABCDEF BCFEDA

Company’s improved location

5 6 7 8

17 975 18 485 16 672 18 208

17 609 18 228 16 791 17 734

18 383 19 354 16 878 17 759

18 306 18 546 17 299 17 855

17 859 18 503 16 339 17 448

18 433 19 205 17 162 17 824

17 941 18 786 17 578 18 207

Global 71 340 70 362 72 374 72 006 70 149 72 624 72 512 % 8.40 13.01 10.72 6.67 12.99 8.92 16.59

%% 17.94 19.06 16.75 17.17 19.31 16.46 16.59


Further Results using the TSP

Actually, the order picker follows a predetermined route through all the sections (skipping useless sections).

Clearly this problem is a symmetrical traveling salesman problem which we solved by using the classical 3-Opt (Lin 1965).


Further Results using the TSPD C B A

X D XX D X

X X XX X

XX

X

X X X

XX X X

X XX

D P X

XP

FootbridgeD X

X

X

XX D P X

X

XX

D PP

D

D C B A

X D XX D X

X X XX X

XX

X

X X X

XX X X

X XX

D P X

XP

FootbridgeD X

X

X

XX D P X

X

XX

D PP

D

Predeterminedroute908 feet

TSProute798 feet

A saving of110 feet onthis smallexample


Further Results using the TSP

[Quantity; * ; Vending] [Frequency; * ; Vending] Data set Shortest ABCDEF BCFEDA Shortest ABCDEF BCFEDA

Company’s improved location

5 6 7 8

17 025 17 926 16 068 17 046

16 368 16 758 15 819 17 734

15 446 16 897 14 913 15 392

16 829 17 902 16 136 16 837

16 585 17 401 15 479 15 942

16 281 16 794 15 901 15 921

16 830 17 231 15 881 17 111

Global 68 065 66 679 62 668 67 704 65 407 64 897 67 053 % 4.59 5.23 13.41 5.97 6.76 10.64 7.53

%% 21.71 23.30 27.91 22.12 24.76 25.35 22.86

Improvement obtained by scheduling order-picking operations by solving a traveling salesman problem

% Percentage of reduction in term of distance obtained by solving a TSP%% Total reduction of the picking distances compared with the current company’s location


Conclusion

• Improvements of up to 11.25% can be achieved if product location is done using a shortest distance rule

• Using a post-optimization procedure, reduction up to 19% can be achieved

• Using a TSP to schedule order pickers provide an additional 5 to13% distance reduction

• Overall, these procedures reduce the total picking distance from21 to 28% which significantly increase warehouse productivity

improving product location and order picking activities … · improving product location and order...

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