6/1/2014 IENG 471 Facilities Planning 1 IENG Lecture 17 Introduction to Order Profiling Major portion courtesy of Dale T. Masel, Ohio University and the 2009 Material Handling Teachers Institute

Order Profile Definition: Order Profiling A summary of the important characteristics of the orders that a warehouse needs to fill Examples of important characteristics Demand for items Whats popular? Quantities ordered Whats the workload? Unit loads What equipment is needed?

Importance of Order Profiling Provides information about our population, which is what we usually need when we design anything We dont design cars for individual drivers We dont design clothes for individual wearers We dont design warehouses for individual orders Profile gives us insight on the characteristics of the individuals that comprise the population

Order Profiling as Art & Science Art Determining which characteristics are relevant for a particular situation Turning the characteristics of the order population into an order fulfillment system Requires expertise in warehouse design Science Converting available data into data required for a profile Summarizing the order population from the available data Focus of this presentation

Where to Start: Data Requirements SKUs Whats being stored, and possibly how it is being contained Inventory How much is being stored Orders Whats being processed, and How much is being processed

Why bother profiling? Trying to sort through data can be overwhelming Profiles are ways to organize the data Dont want to just rely on averages Demand would exceed capacity 50% of the time Value of profiling is that it provides a quantitative description of what a distribution center needs to be designed to handle

Example of a Typical Order Order#8 # of LinesSKU #Qty

A months worth of orders... Order#1 # of LinesSKU #Qty Order#2 # of LinesSKU #Qty Order#4 # of LinesSKU #Qty Order#3 # of LinesSKU #Qty Order#5 # of LinesSKU #Qty Order#6 # of LinesSKU #Qty Order#7 # of LinesSKU #Qty Order#8 # of LinesSKU #Qty Order#9 # of LinesSKU #Qty Order#10 # of LinesSKU #Qty Order#11 # of LinesSKU #Qty Order#12 # of LinesSKU #Qty Order#13 # of LinesSKU #Qty Order#25 # of LinesSKU #Qty Order#15 # of LinesSKU #Qty Order#16 # of LinesSKU #Qty Order#17 # of Lines SKU #Qty Order#18 # of LinesSKU #Qty Order#19 # of LinesSKU #Qty Order#20 # of LinesSKU #Qty Order#21 # of LinesSKU #Qty Order#22 # of LinesSKU #Qty Order#23 # of LinesSKU #Qty Order#24 # of LinesSKU #Qty Order#26 # of LinesSKU #Qty Order#27 # of LinesSKU #Qty Order#28 # of LinesSKU #Qty Order#29 # of LinesSKU #Qty Order#30 # of LinesSKU #Qty Order#31 # of LinesSKU #Qty Order#32 # of LinesSKU #Qty Profiling gives us a way to make sense out of all this data

Examples of Order Profiles Item Family Profile Order quantity Unit Load Lines per order Cube per order

Item Family Profile Want to find families of SKUs Family = group of SKUs that can completely fill a large number of orders Items in a family are stored together and not spread over facility Reduces travel for pickers to get all items for the order

Orders by Item Family Order#1 # of LinesSKU #Qty Order#5 # of LinesSKU #Qty Order#15 # of LinesSKU #Qty Order#21 # of LinesSKU #Qty Order#29 # of LinesSKU #Qty Order#22 # of LinesSKU #Qty Order#28 # of LinesSKU #Qty Order#30 # of LinesSKU #Qty Family – A Order#6 # of LinesSKU #Qty Order#7 # of LinesSKU #Qty Order#9 # of LinesSKU #Qty Order#20 # of LinesSKU #Qty Order#24 # of LinesSKU #Qty Order#27 # of LinesSKU #Qty Family – B Family – C Order#2 # of LinesSKU #Qty Order#3 # of LinesSKU #Qty Order#4 # of LinesSKU #Qty Order#8 # of LinesSKU #Qty Order#13 # of LinesSKU #Qty Order#16 # of LinesSKU #Qty Order#17 # of LinesSKU #Qty Order#31 # of LinesSKU #Qty Order#32 # of LinesSKU #Qty Order#14 # of LinesSKU #Qty Order#18 # of LinesSKU #Qty Order#19 # of LinesSKU #Qty Order#23 # of LinesSKU #Qty Order#10 # of LinesSKU #Qty Order#25 # of LinesSKU #Qty Order#26 # of LinesSKU #Qty Order#11 # of LinesSKU #Qty Order#12 # of LinesSKU #Qty Family-A & B & C Family-A & B Family-B & C Family-A & C

Plotting Item Family Percentages

Information from the Profile We get a lot of orders for only family A items and only family B items Items from family C are usually ordered with items from family A or family Brarely alone Use this information to group items by family in separate areas Maximize number of orders that can be filled from a single area Minimize the size of each area (to keep travel distance small) If room for three aisles, where would you put aisles for A, B, C?

Order Quantity Profile Look at what unit loads are needed to fill an order Pallets Cases Eaches A mix of these (progressive dimension system) Store in quantities to make appropriate unit loads available for picking Easier for picker to handle Efficient to pick Improve picking accuracy

Plotting Order Quantity Percentages

Information from the Profile Most orders are filled with full cases, so most of the inventory will be stored as cases stacked on a pallet Storage equipment will be some kind of pallet rack For less than pallet quantities, different storage equipment is possible, depending on conditions Pick from an open carton stacked on pallet with rest of full cartons Store individual cartons on separate shelving or bins

Unit Load Profiling Look at what unit loads (full or partial) customers order The unit loads that SKUs are shipped in should be the unit loads you store Avoids wasted time repacking the SKUs

Unit Load For SKU 1481 the most-ordered SKU in this example Order#1 # of LinesSKU #Qty Order#13 # of LinesSKU #Qty Order#19 # of LinesSKU #Qty Order#5 # of LinesSKU #Qty Order#22 # of LinesSKU #Qty Order#29 # of LinesSKU #Qty Order#14 # of LinesSKU #Qty Order#4 # of LinesSKU #Qty Order#8 # of LinesSKU #Qty Order#12 # of LinesSKU #Qty Order#31 # of LinesSKU #Qty Order#15 # of LinesSKU #Qty Order#21 # of LinesSKU #Qty Order#32 # of LinesSKU #Qty Order#17 # of LinesSKU #Qty Order#2 # of LinesSKU #Qty Order#23 # of LinesSKU #Qty units ordered (½ case) 6 units ordered (1 case) 15 units ordered (2½ case) 12 units ordered (2 case) 9 units ordered (1½case) 18 units ordered (3 case)

Plotting Unit Load Percentages For a single SKU

Information from the Profile 50% of orders for this SKU require only full- carton quantities 6, 12, 18 items More than 75% of orders require a mix of only full-carton and half-carton quantities 3, 6, 9, 12, 15, 18 items Packaging the items in bundles of 3 within the main carton would reduce picking time for orders needing 3, 9, or 15 items 1 move to get 3 items

Lines per Order Profile Each SKU on an order represents a line No. Lines = No. Locations a picker must visit May need to pick multiple units of each line item No. Lines No. Units ordered by a customer

Lines per Order Order#1 # of LinesSKU #Qty Order#13 # of LinesSKU #Qty Order#14 # of LinesSKU #Qty Order#16 # of LinesSKU #Qty Order#19 # of LinesSKU #Qty Order#20 # of LinesSKU #Qty Order#22 # of LinesSKU #Qty Order#23 # of LinesSKU #Qty Order#24 # of LinesSKU #Qty Order#29 # of LinesSKU #Qty Order#5 # of LinesSKU #Qty Order#26 # of LinesSKU #Qty Order#27 # of LinesSKU #Qty Order#9 # of LinesSKU #Qty Order#17 # of LinesSKU #Qty Order#30 # of LinesSKU #Qty Order#32 # of LinesSKU #Qty Order#3 # of LinesSKU #Qty Order#6 # of LinesSKU #Qty Order#10 # of LinesSKU #Qty Order#7 # of LinesSKU #Qty Order#8 # of LinesSKU #Qty Order#11 # of LinesSKU #Qty Order#12 # of LinesSKU #Qty Order#15 # of LinesSKU #Qty Order#18 # of LinesSKU #Qty Order#21 # of LinesSKU #Qty Order#25 # of LinesSKU #Qty Order#28 # of Lines SKU #Qty Order#31 # of LinesSKU #Qty Order#2 # of LinesSKU #Qty Order#4 # of LinesSKU #Qty

Plotting Lines per Order Percentages

Information from the Profile Provides insight on amount of travel involved collecting all of the items for an order Provides insight on equipment / method for carrying items picked by pickers Profile also indicates percentage of items that consist of just 1 line These orders could be packed as they are picked, since items from other zones arent needed May have a dedicated area for packing these orders since they dont need sortation (most appropriate when 1 unit of a line is ordered)

Cube per Order Profiling Cube is used to describe the space in a warehouse All three dimensions are used for storage, so were concerned about volume, not area Can be… Amount of space occupied by a unit load Amount of space available for storage in the racks/shelves

Cube per Order assuming 0.1 ft 3 /unit for all SKUs Order#16 # of LinesSKU #Qty Order#22 # of LinesSKU #Qty Order#9 # of LinesSKU #Qty Order#6 # of LinesSKU #Qty Order#10 # of LinesSKU #Qty Order#2 # of LinesSKU #Qty Order#4 # of LinesSKU #Qty Order#3 # of LinesSKU #Qty Order#31 # of LinesSKU #Qty Order#13 # of LinesSKU #Qty Order#20 # of LinesSKU #Qty Order#24 # of LinesSKU #Qty Order#32 # of LinesSKU #Qty Order#1 # of LinesSKU #Qty Order#23 # of LinesSKU #Qty Order#26 # of LinesSKU #Qty Order#27 # of LinesSKU #Qty Order#28 # of LinesSKU #Qty Order#29 # of LinesSKU #Qty Order#17 # of LinesSKU #Qty Order#18 # of LinesSKU #Qty Order#30 # of LinesSKU #Qty Order#5 # of LinesSKU #Qty Order#8 # of LinesSKU #Qty Order#25 # of LinesSKU #Qty Order#7 # of LinesSKU #Qty Order#19 # of LinesSKU #Qty Order#21 # of LinesSKU #Qty Order#15 # of LinesSKU #Qty Order#11 # of LinesSKU #Qty Order#12 # of LinesSKU #Qty Order#14 # of LinesSKU #Qty to 2.5 ft to 7.5 ft to 5.0 ft ft 3

Plotting Cube per Order Percentages

Information from the Profile Cube of an order represents size of shipment to the customer Can affect method used to pack the order Pallet vs. Carton Size of carton May also affect shipping method Parcel delivery vs. Less-than-Truck Load (LTL)

Item Activity Profile Item Activity reflects how frequently its ordered and picked Each order for an item represents additional work for warehouse Travel to storage Retrieval from storage Considering Item Activity when assigning a storage location can reduce the amount of work when the item is ordered Especially for travel

Typical Item Activity SKU #1481 Units 21,330/week Pallets 150 units Cube 0.6 ft 3 /carton

Activity of many SKUs… SKU #1481 Units Pallets Cube SKU #1979 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #2840 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #1901 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #2705 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #3906 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #6079 Units 48/week Pallets 90units Cube 1.2 ft 3 /carton SKU #1524 Units 48/week Pallets 90units Cube 1 ft 3 /carton SKU #5422 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #1956 Units 48/week Pallets 90units Cube 1 ft 3 /carton SKU #1972 Units 1,2400/week Pallets 90 units Cube 1 ft 3 /carton SKU #3927 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #6717 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #1955 Units 1,2400/week Pallets 45 units Cube 1.2 ft 3 /carton SKU #3122 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #2777 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #1981 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #4800 Units 1,2400/week Pallets 90 units Cube 1ft 3 /carton SKU #4817 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #5100 Units 19/week Pallets 45 units Cube 1.2 ft 3 /carton SKU #2811 Units 18/week Pallets 45 units Cube 1.2 ft 3 /carton SKU #3079 Units 1,2400/week Pallets 150 units Cube 1.2 ft 3 /carton SKU #3979 Units 1,2400/week Pallets 150 units Cube 1ft 3 /carton SKU #2839 Units 12/week Pallets 150 units Cube 1.2 ft 3 /carton SKU #4060 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #5340 Units 12/week Pallets 45units Cube 1.2ft 3 /carton

Creating the Item Profile Rank SKUs from most units/week to least Usually divided into three classes (A, B, C) A – Fastest movers Probably 5% – 10% of SKUs Consider keeping these in a special Forward Pick Area B – Average Probably 10% - 15% of SKUs Consider keeping these near front end of aisles C – Slowest movers Probably 80% or more of SKUs Store these in longer travel locations

Demand Profile SKU #1481 Units Pallets Cube SKU #1979 Units Pallets Cube SKU #2840 Units 1,2400/week Pallets 150 units Cube 0.6 ft 3 /carton SKU #1901 Units Pallets Cube SKU #2705 Units Pallets Cube SKU #3906 Units Pallets Cube SKU #6079 Units Pallets Cube SKU #1524 Units Pallets Cube SKU #5422 Units Pallets Cube SKU #1956 Units 48/week Pallets 90units Cube 1 ft 3 /carton SKU #1972 Units Pallets Cube SKU #3927 Units Pallets Cube SKU #6717 Units Pallets Cube SKU #1955 Units Pallets Cube SKU #3122 Units Pallets Cube SKU #2777 Units Pallets Cube SKU #1981 Units Pallets Cube SKU #4800 Units Pallets Cube SKU #4817 Units Pallets Cube SKU #5100 Units Pallets Cube SKU #2811 Units Pallets Cube SKU #3079 Units Pallets Cube SKU #3979 Units Pallets Cube SKU #2839 Units Pallets Cube SKU #4060 Units Pallets Cube SKU #5340 Units 12/week Pallets 45units Cube 1.2 ft 3 /carton

Plotting the Demand Profile A

Information from the Profile Most popular SKUs represent most of demand, but a small portion of total SKUs Paretos Law: 20% of the SKUs account for 80% of the items ordered We need to do a good job storing and picking these SKUs because they represent most of the work A large percentage of SKUs (maybe even more than half) represent the smallest category of demand

Applications of the Item Profile Grouping SKUs into classes for storage Identifying assignments in Forward and Reserve storage areas Storage and material handling strategies

Getting Started Profiling requires data Need several months, to provide a picture of the long-term situation (seasonality) Data will probably require preparation Identify which data fields in the Work Management System (WMS) contain the needed data May have data values that need to be fixed Design shouldnt start until you have a profile that describes your warehouse situation

Data Preparation Data may not be complete Empty fields where data wasnt available or recorded Data may not be accurate Invalid SKUs Negative inventory levels Need to clean up this information Fix values where possible Delete entries if fix isnt possible Probably will need to be done manually

What comes next… Completed profiles give data that is needed for an effective facility design Amount of space (cube) for storage Types of storage equipment Profiles are also used to design operations Methods for order picking Equipment for order picking

In Summary Order profiling… … needs to be done before a warehouse is designed (or redesigned) … is never complete because the order characteristics change and the warehouse design and management need to be updated to reflect these changes … if done accurately, yields excellent results and useful information … if done incorrectly, can produce inaccurate conclusions and lead to bad decisions

Sources for further reading Warehouse and Distribution Science, John Bartholdi and Steven Hackman (2008). Available on-line at Facilities Planning, James Tompkins, John White, Yavuz Bozer, and Jose Tanchoco, 3 rd Edition (2002) Wiley. World-Class Warehousing and Material Handling, Edward Frazelle (2001) McGraw-Hill.

6/1/2014IENG 471 Facilities Planning 42 Questions & Issues?