warehousing layout-design-and-processes-setup
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Private & Confidential
An Introduction to Warehousing
Table of Contents
• Warehouse and Its Need
• Warehouse Set - Up– Warehouse Site Selection
– Warehouse Management Processes
– Warehouse Process Flow SchematicI. Types of Material Flow
II. Types of Inspection
III. Put – Away Process
IV. Types of Storage
V. Picking and Packing Process
– Warehousing Support Needs
• Designing Warehouse– Warehouse Site Selection and Layout Design - Understanding Business Needs
– Usual Challenges
– Designing Layout
– Parameters to be considered while designing
– Sample Layout
• Implementation
• O-Links’ Solution
Types of Warehouses
Definition – A designated place where goods are stored to balance demand & supply uncertainty, to serve
customers in much better way, to consolidate upstream flow and distribute downstream flow as per requirement,to do last mile value addition such as packaging, kitting etc. and to reduce last mile distribution cost.
Factory Retail Distribution Catalog RetailerManufacturing Support
• Interface production with wholesalers
• A Comparatively small number of orders are picked up on daily basis
• Advance information about the order composition is required
• High focus on cost and order accuracy
• Responsiveness heavily depends on production schedules
• Serves a number of captive retail units
• Advance info about order composition is needed
• Carton and item picking is done from a forward area
• More orders per shift than consolidation/shipping lanes
• High focus on cost, accuracy, and fill rate of the packages
• Responsiveness depends heavily on truck routing schedules
• The only critical point is that if the retails units are not captive then responsiveness becomes a crucial issue
• Fills orders from catalog sales
• A large numbers of small, frequently single – lines orders are picked up
• Item and, sometime, carton picking
• Daily compositions of orders are usually unknown
• Only statistical information available
• High focus is on cost and response time
• Stock room providing raw material and work in process items to manufacturing operations
• Contains many small orders• Only Statistical information
available about order composition
• Stringent time requirement for response time
• Primary focus on response time but accuracy and cost also are important
Warehouse and Its Need
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Warehouse Set-up
Warehouse Site Selection
Key Criteria (Cost vs. Service Reliability)
Cost (Warehouse Operations
and Maintenance)
Serviceability (Proximity to Customers or
Ports)
Additional Factors
• Roads • Power• Water• Other utilities
Availability of Transportation
Infrastructure
Availability of Skilled Manpower
Government Regulations
Strategic Factors – monitoring & control, pre-
determined sites, future plans
Environmental Factors
Warehouse Site Selection
Sample comparative analysis of possible Sites for a Customer needing warehouse closer to Port in the West Zone
Factors Zone 1 Zone 2 Zone 3 Zone 4 Zone 5
Infrastructure cost Low cost Higher as compared to Zone 1 but much lower than Zone 3,4 and 5
Higher than Zone 1 and 2
Very High – attributed to high land cost
High cost as compared to zone 1 and 2
Transportation cost (Inbound )
Lowest – Close proximity to port
Low Very High –attributed to distance
High High
Distance (Port to Wh.)
0 km 17 km Inbound 100+ km 66 km 32 km
Connectivity Good Very good for Inbound and Outbound
Average Good Average
Availability of Manpower (Other facilities)
Good Good – due to warehousing hub
Average Good – due to warehousing hub
Good
Probable Locations
JNPT Panvel Vasai Bhiwandi Kalamboli
Here the comparison is based on few key parameters. Similar analysis can be done taking in to consideration criticalparameters, as mentioned in the earlier slide.From the comparative analysis Zone 2 is the best option and the warehouse can be set up in this Zone to cater toCustomer requirement of having the warehouse strategically closer to the Port
Warehouse Management Processes
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1 - Inbound
2 - Dock / Unload
3 - Receipt of goods
4 - Create GRN
5 - Putaway
6 - Picklist Creation
7 - Order picking
8 - Value-added services (Kitting)
9 - Rework
10 - Packing line
11 - Dispatch
12 - Tracking
13 - MIS & Documentation
The general flow of material in thewarehouse is as depicted in theadjacent figure
The logical flow of the process is:1. Receipt2. Inbound Inspection3. Putaway4. Storage5. Order Picking6. Order Sorting and Packing7. Dispatch/Shipping
Each Process itself can beperformed in a number of ways.
For example there are numerousways in which the materials can bestored – Racks, On ground, Pallets,etc. These topics are furtherexplained in the following sections
Typical Warehouse Process Flow
Warehouse Process Flow Schematic
Type of Material Flows: U Flow
A 'U' flow occurs when the goods receipt and dispatch functions are located at the same end of a warehouse building
Products flow in at receiving, move in to storage at the back of the warehouse, and then to shipping, which is locatedadjacent to receiving area, on the same side of the building
Fast moving items are located closer to the loading bays
Advantages of 'U' Flow
Excellent utilization of dock resources because the receiving and shippingprocesses can share dock doors
Facilitating cross-docking because the receiving and shipping docks areadjacent to one another and may be co-mingled
Excellent lift truck utilization because put away and retrieval trips areeasily combined and because the storage locations are closest to thereceiving and shipping docks, they become natural locations to house fastmoving items
Yields excellent security because there is a single side of the buildingused for entry and exit
Types of Material Flow: Straight or Through Flow
Through' flow happens when separate loading bay facilities are available for Inbound and shipping are provided, oftenat opposite ends of warehouse
Products flow in at receiving, move into storage, picking area and then the staging area and despatch area in astraight line
Items with a higher throughput level are located at the centre of the warehouse because the total distance travelledwould be shorter
The major disadvantage of a 'Through' flow layout is goodsneed to travel the full length of the warehouse, even forgoods that are fast moving
It is also harder to control and less flexible
When is it better to adopt a 'Through' flow?
When there is a risk of interference or confusion betweenGoods In and Goods Out
When goods inwards vehicles and dispatch vehicles are verydifferent; for example differences in platform height ornature of unit load
When the warehouse is connected to a production Plant
Types of Inspection
Sampling Inspection is a process in which parts of theInbound material is checked for consistency and expectedquality
This process is followed in case of materials, which come ingood number per batch. The underlying principle is that thequality of a small representative parts, is good enough togauge the quality of the entire batch
This type of Inspection is usually used for material likeautomobile components, Spares, toys, etc.
Complete Count is a process in which the quality of eachcomponent/material or part coming in has to be checked forquantity, quality and consistency
This process is followed in case of materials, which come insmall lot sizes per batch OR even if they come in largenumbers per lot, there exists no way to say that there wouldbe consistency of quality. The underlying principle is that thequality of a small representative may not indicate the qualityof the whole batch
This type of Inspection is usually used for materials likeapparels, electronic products, etc.
Sampling
Complete Count
Put – Away Process
Label products with Incoming date to facilitate FIFO / FEFO are stuck on
the carton and pallets and converted into palletized loads.
In the Put away “Add” function, The Part to Location Mapping is done
based on the logic
The allocation of the cartons to the location will also follow the logic of
load clustering and rack optimization and Pick balancing and
routing
Multiple Putaway run sheets are created based on the putaway methodology – Batch putaway,
Zone wise putaway for GRN clusters etc.
In the automated system, the RF handhelds reflects the putaway in
their specific zones.
The pallets and Cartons are then physically transported to the Stage
for Putaway location which is at end of the rack columns.
The Put away team which works in the rack columns puts away the pallets and cartons to the racks,
Single rivet slotted angle racks as per the part to location mapping in
the Putaway run-sheet.
The Pallet label is scanned and then the location label is scanned and
confirmed which acts as a trigger to the WMS to confirm the Putaway
list.
Once the Putaway confirmation is done, the material is available in the ATP (Available to Promise) Stock.
Types of Storage System
Block Stacking
Pallet RackingDrive – In Racking Broad Aisle Installation
Push Back
Dedicated Storage
Product is assigned a designated slot. With multiple product storage, the space required is thesum of the max storage requirements for each of the product
Randomized Storage
Product is randomly assigned a storage location close to the input/output point. The spacerequirement will be equal to the max of aggregate storage required for the products. Dj is thespace location, Summation dkj where k=1 to m (no I/O ports )
Class-Based Storage
A mixed policy where products are randomly assigned within their fixed class. Theclassification is done based on the movement of the SKU
1. The 20% items which have 80 % Storage/Retrieval activity are termed as Class A2. The next 30% items which have 15% Storage/Retrieval activity are termed as Class B3. The next 50% items which have 5% Storage/Retrieval activity are termed as Class C
Types of Storage System
Selection of Storage System
Parameter Push Back Racks Drive Through Racks
Storage Density Offers high storage density coupled
with selectivity
Can store large amount of inventory
in a smaller area increasing Storage
Density
Selectivity of Inventory Ideal for selectivity – up to 400%
improvement in selectivity
Selectivity is sacrificed
Type of Goods Can store a variety of inventory Ideal for large amount of similar
items (like seasonal goods) that move
quickly - Not ideal for an inventory of
wide variety
Storage System Selection through Comparative Analysis
Picking and Packing Process
Receive shipment authorization document / label in the system
The shipment orders are sorted by customer and geography and then converted into Picklists.
There are multiple possibilities of a picklist – 1) Batch/ Wave Picks for the Bulk Pick area 2) Pick for Kitting – Batch Picking 3) FIFO Model
The Pick Zone wise picklists are created.
The Print copy of the Picklist will also have the Carton Labels (Packing list) for full carton picks.
Batch picking is done for Kitted part IDs.
Pick List Creation
Picking and Packing Process
Picking
The Picks are done by reach Stacker /Retriever from the Storage area
Manual picking with Picking trolleys are used in the Slotted angle area
All completed picks are signaled by sticking the picklist to the pallet/Carton
These are then moved to the Packing Zone for further process
The carton/material is scanned along with the location scan and confirmed to complete the activity of picking
Picking and Packing Process
Kitting/Rework
The batch picked materials are sorted and re-assembled.
The re-assembled materials are scanned and cartonized
The cartonized packs are then moved to the Packing line.
Picking and Packing Process
Packing
The cartons from the bulk pick is transferred to the Packing line for taping/Strapping.
Picklist ID is selected and Dispatch Labels are generated and stuck to the Cartons
The loose picks are cartonized by scanning the individual material and Packing list is created and the Dispatch labels created and stuck to the Cartons.
The high value material picked loose are shrink wrapped for safe transit.
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Support Requirements
Warehousing Operational Needs
Material Handling Equipment and Parking Area Policies
Office Space Space for Employee Needs Safety Equipments
Fire Extinguishers CCTVs
Sprinklers
Men’s
Room
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Designing Warehouse
Warehouse Site Selection and Layout Design (Understanding
Business Needs)
1. What is the need for the Warehouse?2. What business is it catering to?3. Where should the warehouse be located?4. Is the warehouse location well connected?5. Is there good telecommunication connection?6. What should be the size of the Warehouse?7. What should be the height?8. How many bays should the Warehouse have?9. What are the different SKUs expected to be stocked up at the Warehouse?10. What are the markets or locations that the Warehouse would be catering to?11. How to segregate the SKUs?12. What should be the stocking policies?13. What should be the replenishment policies?14. What should be the Health and Safety policies?15. What should be the Security arrangements?
The answer to these questions will give us a strategic perspective to the need for the Warehouse and the LayoutDesign, thereafter.
Usual Challenges to be Handled while designing
1. Product information in terms of throughput and storage level is uncertain or notavailable
2. Need to minimize the existing cost of establishing and operating the warehouse3. Setting the Inventory Policy to store and maintain stock of Inventory of all SKUs, ready
for distribution, at all time to meet demands of all items4. Assemble product batches prior to delivery, to stockpile critical parts, and to facilitate
regional distribution network for quick and cost-efficient delivery
Designing Layout
1. Ensuring Maximum utilization of space2. Maintaining a balance between Service and Operating Cost3. Using the most suitable unit load4. Minimizing movement 5. Planning and controlling movement and location 6. Providing Safe, Secure and Environmentally sound conditions
In case of existing warehouse
• Analyzing current and projected data on the activities in each of the areas of receiving, shippingand inventory levels.
• The data should be supported by other considerations such as process flows, material handlingequipment, type and styles of racking equipment, special handling requirements, and personnel
In case the New Warehouse
• The designing will start for the Strategy document of the Organization and then further drill downto the Need and possible benefits of the Warehouse
• Once this is established only then the designing of the new Warehouse begins
Objective
Designing Basics
Layout Designing Process
Cost Considerations
Parameters to be Planned when Designing
Material Handling Equipment
1. Picking Equipment
• Static Shelving• Carton Flow Rack• Carousels• Automatic storage and retrieval system• Automatic picking machines• Pick to Light• Voice directed picking• Automated Conveyor and Sorting systems
2. Receiving/Shipping Equipment
• Conveyors• Industrial Vehicles• Automated Storage and Retrieval
Machines• Automated Guided Vehicles
Number of Docks
• Number of Receipts and Shipments• Type of Loading and Unloading• Types and sizes of vehicles• Number and timing of carriers• Different areas in which materials will be
utilized, stored, prepared for shipment
Type of Docks
• Saw Tooth Dock• Straight dock• Open Dock• Interior dock
Location of Docks
• Traditionally at the rear end of facility and outof sight
• Receiving/Shipping at the same area generally• However Multiple docks drastically reduce the
flow of material with in a facility
Designed Layout (Illustration)
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OptiWare – OLinks’ Solution for Warehouse Optimization
OptiWare – Warehousing Simplified
Optiware is a 3-D warehouse Design, Simulation and
Optimization product which helps you handle the warehousing
challenges, while achieving your strategic and operational
goals.
Optiware helps you in:
• Optimal Layout Design
• Planning the number of MHEs and
Resources
• Designing the Process and
Material Flows
• Scenario Analysis
Leading to:
• Customer Satisfaction
• Utilization of Space,
Equipment and People
• Employee Safety and
Morale Building
Warehouse Optimization and Simulation
Challenges Warehouse Owners Face
Warehouse Space Utilization
Un-optimized Layout
Higher Cost of running warehouse
Sub – optimal throughput in warehouse
Challenges in implementing warehouse Processes
Managing Peak hours Inbound and Outbound Material
Flow
Resource planning
Ensuring DIFOT ( Delivery In Full on Time)
Questions That Need to be Answered?
What should be the Layout Design of the warehouse?
Is the Flow Streamlined?
How can I improve the throughput of the warehouse?
How can I plan and support multiple customers from the
same warehouse?
How is the inbound and dispatch scheduling being
planned?
How many MHEs do I require?
Result: Economic Layout
Optimal Space
Utilization
Efficient Operations
