Warehouse Processes Part 1

Section 4
Lean Warehousing

Kaizen = Continuous Improvement

Cerasis.com Copyright D.G. Richards 2015

 Warehouse processes and flow
Item
picking
Reserve storage Replenishment Replenishment
Case picking
and full pallet pick

Direct movement
To pick faces

Sortation, Consolidation, Value adding

Direct put-away services and packing
to reserve stock

Receiving Despatch

Cross-docking

Adapted from Schmidt & Follert 2011

Copyright D.G. Richards 2015
 Warehouse functions

• Goods inward/receipt
• Inward sortation and Cross-docking
• Storage
• Replenishment
• Order picking
• Secondary sortation
• Collation
• Postponement
• Value adding services
• Despatch
• Housekeeping
• Stock counting
Cranfield University
• Returns processing

Copyright D.G. Richards 2015

Pre-receipt

• Agree specifications with supplier

• Inform supplier of requirements regarding:
• Size and type of delivery vehicle
• Size and type of pallets
• Size of cartons
• Labelling requirements
• Delivery documentation
• Pre-notification
• Delivery procedures
• Unloading requirements
• Role of the driver

Copyright D.G. Richards 2015

Pallets
• Pallet rental companies
• Charged on a pence per day basis
• Pallets are normally in very good condition
• Does require both suppliers and buyers to be part of the
rental scheme
• Removes requirement to collect pallets from customers

V
Copyright D.G. Richards 2015
Pallet Dimension (Continued…)

The following website provides a tool for calculating the

pallet dimension and weight as well

http://onpallet.com

 Open this website and play with the web page using
different dimensions and weights.
Checking in Loads

 TiHi describes the arrangement of cases on a pallet.

 It stands for Timarandum Height or ‘layers of’ × height.

 ‘Ti’ means the number of boxes or cases in a pallet layer.

 ‘Hi’ means the number of layers high on a pallet.

 TiHi refers to the number of boxes/cartons stored on a layer, or

tier, (the Ti) and the number of layers high that these will be

stacked on the pallet (the Hi)

Checking in Loads

Example:

A TiHi of 8 × 6 means 8 cases

per layer; 6 layers high.

Ti and Hi 
Ti × Hi = Pallet quantity

TiHi = 8 × 6
Pallet quantity = 48
Checking in Loads
When pallets arrive, the TiHi must be the same as on the delivery
note.

Imagine this:

Pallet A = 120 cases with a TiHi of 20 × 6

Pallet B = 120 cases identical to those on pallet A, but with a TiHi

of 6 × 20

 Which TiHi gives the taller pallet?

 Which TiHi gives the larger ‘footprint’?

 How many cases make this larger ‘footprint’?

Checking in Loads

What problems might occur if a tihi of 6 × 20 is accepted when a

tihi of 20 × 6 is on the delivery sheet?
Receiving
• Allocate the supplier a time for delivery
• Estimate time to unload, check and put-away
• Allocate sufficient labour and MHE for unloading
• Check if load requires special handling
• Check for any special handling instructions (Hazardous, fragility etc)
• Unload and check quantities and quality of delivery
• Record variances
• Check status of goods
• Label or ID tag
• Record quantities
• Clear dock area and ensure goods are on system and available to pick –
dock to stock time is crucial!
• Locate - Quarantine, cross dock, pick face, reserve storage

Copyright D.G. Richards 2015

Booking in sheet
DOOR One

Time slot Supplier Units Unit type Time Eqpt Actual time Comments
estimate

0700 ARCO 24 Pallets 45 mins PPT 40 mins Vehicle was

2 hours late

0750 TCO Deli 10 Parcels 10 mins 10 mins Urgent

delivery

0805 SBH Ltd 12 Pallets 24 mins PPT 25 mins

0835 Delta ltd 24 Pallets 45 mins PPT 45 mins

0925 Argo.com 1000 cases 3 hours x FLT 2hrs 50 Container

3 staff mins x 3

Copyright D.G. Richards 2015

In-handling equipment

Copyright D.G. Richards 2015

 Dock Equipment

Dock Levelers
• Hydraulic
• Air Bag
• Mechanical
• Power Assisted

• Bumper Pads

• Dock Shelters

• Dock Lights

• Safety lights/warnings

• Operating procedures

• Signage in different languages

Copyright D.G. Richards 2015

Labelling and Put-away

• Ensure supplier has labelled products correctly

• Produce own labels although not as efficient
• Scan labels
• System determined put-away
• Location allocation by system or manual
• Take into account size, weight, velocity, compatibility
• Quarantine areas
• Fixed or random locations?
• Check stock rotation policy
• Consolidate stock if FIFO rules allow
• Record stock against the location
• Task interleaving or dual cycling – put-away and retrieve in same movement

Copyright D.G. Richards 2015

Inbound and put away processes

Inbound check
Location verification
and put-away

WMS

Copyright D.G. Richards 2015

Fixed v Random storage
Fixed locations total = 453

Code Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Κ1 100 155 100 140 100 120 120 100 100 120 150 150

Κ2 50 20 51 30 30 30 40 50 50 40 40 50

Κ3 10 5 12 17 10 10 5 10 10 5 5 10

Κ4 90 80 80 75 75 75 80 80 95 90 80 90

Κ5 40 40 50 50 135 130 130 130 50 40 40 40

SUM 290 300 293 312 350 365 375 370 305 295 315 340

Random locations
Copyright D.G. Richards 2015
Packaging

• Be involved when initially discussing new products

• It’s not all about the product!! – think about the packaging!
• Nature of the product – size, selling quantities, hazard, cost
• Arrival packaging, returnable plastic pallets, stillages etc
• Labelling
• Nature of storage medium
• Despatch quantities
• Recycled packaging

The protective packaging company

Copyright D.G. Richards 2015

 Unitisation
• An approach aimed at creating an appropriate standard
module for handling, storage, movement, loading and
unloading during the transport and distribution process.
• Small containers used in small parts storage and handling.
• Wooden pallets which have become a key unit load within the EU market.
• Totes and Dollies
• Cage and box pallets
• Roll cage pallets used in wholesale operations, e.g. grocery distribution
• Stillages – used in automotive
• Intermediate bulk containers in ranges of one to two tonnes payloads

Copyright D.G. Richards 2015

 The importance of Unit Loads
Used by manufacturers, retailers and service providers,
unit loads are key cost drivers. They impact on
transport, storage, handling and packaging, which
together represent 12-15% of the retail sales price.

Developing more Efficient Unit Loads is critical to the

success of Efficient Consumer Response and is estimated to save
1.2% of the retail sales price.
E.g. Prescribed length and width is seen as a must by
manufacturers and retailers, with the 600x400 master
module accepted as the basis in Europe for 1200 x 800mm
pallets.

Copyright D.G. Richards 2015 Copyright © March 1997 by ECR Europe

Order Picking Methods
• Paper pick lists
• Pick by label
• Pick by voice https://www.youtube.com/watch?v=yy53EMEmx_c https://www.youtube.com/watch?v=BcbhbGRXZRE

• Barcode scanning https://www.youtube.com/watch?v=CJW5D5SDAgw

https://www.youtube.com/watch?v=Xe7UaH20n7A https://www.youtube.com/watch?v=86ttdESB9_g

• Radio Frequency identification https://www.youtube.com/watch?v=gEQJxNDSKAE

• Pick By light /Pick to light https://www.youtube.com/watch?v=tPIQpKi_-Ko
Location I.D.

• 4 E 14 C 1 or
• 04.05.14.03.01
Where 4 (04) = zone
E (05) = Aisle
14 = Bay
B (03) = Level
1(01) = Pallet, Shelf or bin position

Copyright D.G. Richards 2015

 Picking systems
• Picking is paramount to any warehouse operation
• It is the most labour intensive
• It is fundamental to customer service
• There are often extensive floor space requirements
• There may be limited scope for automation

On average up to 65% of the warehouse operating expenses

can be attributed to the Picking function.

On average travel time accounts for 50% of the total picking

time (Petersen C.G. 2002).

Copyright D.G. Richards 2015

Pick volumes

Copyright D.G. Richards 2015

78
Picking – The set up

Pareto or the 80/20 rule

• Sales (80% of sales from 20% of product lines)

• Sales (20% customers provide 80% of sales)

• Suppliers (80% of volume from 20% of suppliers)

• Value of product (20% of product lines – 80% of value)

• Cost of servicing clients (20% of clients – 80% of problems)

• Labour (20% of staff – 80% of problems)

• Labour (80% of efficiency from 20% of staff)

Copyright D.G. Richards 2015

ABC/Pareto Analysis
Ranking (by Order frequency Cumulative Cumulative % of Cumulative % of Category
frequency) in period frequency total frequency number of stock
lines

1 300 300 30 5 A

2 225 525 52.5 10 A

3 150 675 67.5 15 A

4* 125 * 800 * 80 20 A

5 40 840 84 25 B

6 30 870 87 30 B

7 25 895 89.5 35 B

8 25 920 92 40 B

9 15 935 93.5 45 B

10 15 950 95 50 B

11 10 960 96 55 C

12 8 968 96.8 60 C

13 6 974 97.4 65 C

14 5 979 97.9 70 C

15 5 984 98.4 75 C

16 4 988 98.8 80 C

17 4 992 99.2 85 C

18 3 995 99.5 90 C

19 3 998 99.8 95 C

20 2 1,000 100 100 C

Copyright D.G. Richards 2015
Why is ABC Analysis Important?

Take an example:
200 full pallet, ground floor pick positions
5 aisles

Copyright D.G. Richards 2015

Why is ABC Important ?

Apply sku –
ABC Analysis

Copyright D.G. Richards 2015

Why is ABC Important?

Generate a 10 Item Pick

Copyright D.G. Richards 2015

Why is ABC Important?

Add the Route Travel Time: 209 seconds

Copyright D.G. Richards 2015

Why is ABC Important?

Apply a Slotting Strategy

Copyright D.G. Richards 2015

Why is ABC Important?

Reduced Travel Time

Shorter
Distances 116 sec vs 209 sec

Copyright D.G. Richards 2015

% Benefit
Non-
Slotting Slotting

Journey Time 116 209

Pick Time 75 75
(10 items @ 7.5 sec)

Start & End 70 70

Total 261 344

24%
Reduction
Courtesy of
Copyright D.G. Richards 2015
ABC layout

C Zone
Slow movers
45% SKU,
5% frequency

B Zone
Medium movers,
35% SKU,
15% of frequency

A Zone
Fast movers,
20% SKU, 80%
of order
frequency

C B A B C
Despatch
Copyright D.G. Richards 2015
Actual example (1350 stock items in total)
No.Orders Cumulative Cumulative % Current stock Stock item Y/N ABC Pallet/shelf
CC214 1600 1600 4.94 317 Stock A Pallet
CC208 1166 2766 8.55 107 Stock A Pallet
CC216 1099 3865 11.94 117 Stock A Pallet
BC301 1055 4920 15.21 60 Stock A Pallet
CC114 731 5651 17.46 119 Stock A Pallet
BC028 728 6379 19.71 20 Stock A Pallet
BC010 715 7094 21.92 42 Stock A Pallet
BC031 626 7720 23.86 5 Stock A Pallet
KE977 549 8269 25.56 382 Stock A Pallet
KE976 547 8816 27.25 128 Stock A Pallet
CC116 521 9337 28.86 68 Stock A Pallet
CC109 521 9858 30.47 83 Stock A Pallet
BC296 501 10359 32.01 0 Stock A Pallet
BC300 355 10714 33.11 10 Stock A Pallet
KE978 352 11066 34.20 592 Stock A Pallet
BC302 343 11409 35.26 11 Stock A Pallet
CC217 343 11752 36.32 44 Stock A Pallet
BC011 315 12067 37.29 18 Stock A Pallet
BC503 312 12379 38.26 10 Stock A Pallet
BC012 285 12664 39.14 18 Stock A Pallet

Copyright D.G. Richards 2015

270 stock items produced 80% of the orders!
ABC Analysis – volume and frequency
Frequency

Aa Ab Ac

Ba Bb Bc
Sales

Ca Cb Cc

Ac – products sold less frequently but with high impact on sales

Ca – Products sold often but in fewer quantities

Copyright D.G. Richards 2015

Pick face examples

Copyright © John J. BARTHOLDI, III. All Rights Reserved

Copyright D.G. Richards 2015

Pick sequence and aisle numbering

Copyright D.G. Richards 2015

 Picking procedures
 Pick by order
 All lines are collected for a specific customer order
 Minimal handling, order sizes are typically high.

 Pick by label
 All lines are collected for a specific customer order and labels attached to each item during the picking process
 Minimal handling, order sizes are typically high.

 Cluster picking
 Take several individual orders out at the same time
 Can be confusing without technology

 Pick by batches
 Products collected for a large number of orders with the same product lines
 Fewer runs but increased handling and sortation, mainly large quantities of small orders

 Pick by zones
 Products are categorised into specific groups and picked from defined areas
 Reduced walking distance, increased sortation

 Pick by waves
 Large batches of orders are collected for defined time periods e.g. arrival of vehicle

Copyright D.G. Richards 2015

Main types of storage systems

 Block stacking
 Wide aisle racking
 Cantilever racking
 Narrow aisle racking
 Automated
 Manual
 Drive-through/ Drive-in racking
 Sliding or Mobile racking
 Double deep racking
 Push-back racking
 Flow or Live racking
 Mezzanine
 Carousels
Copyright D.G. Richards 2015
Storage Equipment
Bulk Storage/Block Stack
• High density storage on the warehouse floor.
• Unit loads stacked on top of each other
• Best for large quantities of a single SKU (stock keeping unit)
• Allowable stack heights (3 or 4)
• Low utilization threshold

Copyright D.G. Richards 2015

Storage Equipment
Adjustable Pallet Rack APR
• Consists of uprights, beams and back supports
• Anchored to floor with adjustable beams
• Must know weight capacity, width of rack opening and the distance between load
bearing beams
• Flexible and easily reconfigurable

Copyright D.G. Richards 2015

Rack configuration options

(ground access)
Picking Zone

Layer Pallet Pick Half Pallet Pick Full Pallet Pick

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Rack tunnels

Copyright D.G. Richards 2015

Storage Equipment
Cantilever Rack
• Storage of long materials such as piping or wood products
• High capital cost per square foot
• Higher density for multiple SKU’s

Copyright D.G. Richards 2015

Warehouse storage methods
Very Narrow aisle racking
 Consists of uprights, beams and back supports
 Anchored to floor with adjustable beams
 Requires less space than APR
 Must know weight capacity, width of rack opening and the distance
between load bearing beams

Copyright D.G. Richards 2015

Storage Equipment
Drive-in/Drive Through Rack
• Similar to pallet racking but the forklift can drive into the rack
• High density storage medium for large quantities of single SKUs
• Need good quality pallets
• LIFO - Drive In
• FIFO - Drive Out

Copyright D.G. Richards 2015

Storage Equipment
Sliding Rack or Shelving
• Mounted on guides or rails
• Highly space efficient
• Very effective for small parts and high SKU
• Strong medium for slow moving parts

Copyright D.G. Richards 2015

Storage Equipment
Double Deep Rack
• High Density Storage medium
• Must use reach truck only with extendable forks
• Requires multiple pallets of Single SKUs

Copyright Constructor
D.G. Richards 2015
Storage Equipment
Push back racking
• Supports slow moving product
• Needs same product in the line
• LIFO
• No individual pallet access

Copyright D.G. Richards 2015

Storage Equipment
Flow or Live Rack
• Great for carton flow or piece pick
• Many SKU’s in small footprint
• Supports high speed and slow moving product
• Designed for High speed picking

Copyright D.G. Richards 2015

Gravity flow versus static shelving

Courtesy of Cisco Eagle

Copyright D.G. Richards 2015

Storage Equipment
Satellite/Shuttle racking
• No aisles
• Many pallets in small footprint
• Supports high speed and slow moving product
• Good utilisation of space at the loading bay
• Continuous flow

Copyright D.G. Richards 2015

Capacity utilisation
• Warehouse managers are tasked with making use of the whole cubic
volume of the warehouse taking into account accessibility, practical
utilisation limits, cost and accountability
• Consider introduction of mezzanine floors for example – e.g. space
above dock doors

Courtesy of AWS Ltd and Cisco Eagle

Copyright D.G. Richards 2015
Storage Equipment
Horizontal and vertical Carousel
• High capacity storage for pick and pack
• Brings parts to operator
• High speed picking solution, reduction of travel by SKU
• High security
• Good ergonomics

Copyright D.G. Richards 2015

Decision table
Wide Narrow VNA Drive Double Live Mobile
aisle aisle in deep storage racking

Floor space utilisation 2 3 4 5 3 4.5 4.5

Cubic space utilisation 3 4 5 3.5 4 3.5 4
Access to each pallet load 5 5 5 1 3 4 3.5
Speed of access 4 3 3 2.5 3 5 2
Stock rotation 4 4 4 1 3 5 3
Stock control and mgt. 4 4 4 2 2 5 3
Specialised mhe (in terms No Yes Yes No Yes No No
of cost) 5 2 1 5 3 5 4
Ease of re-location 5 4 2 3 3 1 1
Speed of installation 5 4 2 3 4 3 1
Beam adjustments 5 4 1 1 2 1 3
Total 42 37 31 27 30 37 29
Advantages/disadvantages – marks out of 5 Copyright D.G. Richards 2015
Calculating Dock Requirements
• Using heuristics

• Space =
{ Roundup (Number of loads x Hours/load) } X (size of Load x space/pallet)
time of shift

= receiving 20 loads per day

- each load is 26 pallets
- each pallet is 1m x 1.2 m
-45 minutes per load to unload vehicle
- 30 minutes per load to stage prior to put-away
- 8 hours per day work shift

Additionally
• Office space required
• Empty pallet and sundry space requirements
Copyright D.G. Richards 2015
Calculating Dock Space Requirement

• {Roundup (20 x 1.25)/8} x (26 x (1.2 x 1.0))

• = 3.125 (4) x 31.2 = 124.8 square metres
Dock space = 124.80 sq. metres

Add double space for working and travel area = 249.60

Total space = 374.40 square metres

Copyright D.G. Richards 2015

Calculating Storage Space Requirement
• Determine the type of storage medium and the sq.m./pallet configuration

• Determine the Height of the storage chamber and the max lift height of the MHE

• Include Aisle spacing and work space requirement for the end of the aisle

H = H1 + H2 + ..... + Hn + (n-1) * Z
H2

H1

W1 W2 T T
W = W1 + W2

Copyright D.G. Richards 2015

Pallet quantity calculations - width
Module Width = width of aisle + 2 pallet length (short side) + 100 mm
Aisle = 2,500mm (variable with type of MHE used)
Two pallets = 2,000mm (2 x 1,000mm)
Clearance = 100mm between back to back pallets

Aisle Aisle Aisle

Therefore:
Width of module = 4,600 mm (the sequence is pallet – aisle – pallet -
clearance)

Copyright D.G. Richards 2015

Pallet quantity calculations - length

Module Length = width of upright + clearance +2 pallets (long side)

Rack upright plus clearance = 420 mm (120 mm + 3 x 100 mm)
Two pallets (long side) = 2,400 mm (2 x 1,200mm)

Therefore:
Length of module = 2,820 mm
(the sequence is upright/clearance/pallet/clearance/pallet/clearance)

Copyright D.G. Richards 2015

Pallet quantity calculations - height

Module Height = Height of goods on pallet (e.g. 1.20 metres) + 150

mm (pallet height)
Total Pallet height = 1,350 mm

Clearance above pallet = 150 mm

APR beam width of 140 mm

Therefore:
Height of module = 1,640 mm

Copyright D.G. Richards 2015

Pallet calculation
Total pallets stored within cubic capacity of a
warehouse section, excluding receiving and
despatch areas, gangways and other areas

(No. of width modules x pallets in module width) x (No. of length modules

x pallets in module length) x (No. of height modules) = No. of pallets into
cube volume of warehouse.
So for a warehouse section with a width of 48 metres, a length of 120 metres
and a height of 10 metres.
Width = 48/4.6 = 10
Length = 120/2.82 = 42
Height = 10/1.64 =6

Therefore total = (10 x 2) x (42 x 2) x (6) = 10,080 pallet locations in a this

warehouse storage space

Copyright D.G. Richards 2015