1. Investigating Warehouse Operations Chapter 2 Activity Profiling: Mining For Gold
WHEN PROBLEMS OCCUR IN WAREHOUSE OPERATIONS:
REENGINEERING IS OFTEN DONE
LAYOUT PROJECTS ARE COMMENCED
WITH NO IDEA OF THE ROOT CAUSE OF THE PROBLEMS DUE TO:
LACK OF KNOWLEDGE
LACK OF TOOLS
LACK OF TIME

2. Warehouse Activity Profiling
Systematic analysis of
item activity &
order activity
Profiling is designed to readily identify root causes
Of material flow problems
Of information flow problems
Pinpoint opportunities for process improvement
Provide an objective basis for decision making

3. Advantages of Profiling
Can Quickly Reveal:
Design and Planning Opportunities
Correct Baseline for Justifying New Investments
People Feel a Sense of Involvement
Picture is Worth a 1000 Words
Capture the activities of the warehouse in pictorial form

4. CAUTION Don’t get stuck on Analysis Paralysis
Profiling becomes the goal
Forget to solve the problems

5. 7 Key Planning & Design Issues
1. Order Picking & Shipping
2. Receiving & Put-away
3. Slotting
4. Material Transportation System
5. Layout & Material Flow
6. Warehouse Sizing
7. Level of automation & Staffing

6. Picking & Shipping Order Batch Size Pick Wave Planning
Picking Tour Construction
Shipping Mode Disposition

7. Receiving & Put-away Receiving Mode Disposition Put-away Batch Sizing
Put-away Tour Construction

8. Slotting Zone Definition Storage Mode Selection & Sizing
Pick Face Sizing
Location Assignments

9. Material Transportation System
System Selection
System Size

10. Warehouse Layout & Material Flow
Overall Warehouse Flow
Relative Functional Locations
Building Configuration

11. Warehouse Sizing
Space Requirements

12. Level of Automation Staffing Requirements Capital-Labor Substitution
Level of Mechanization

13. What do Customers Want? their orders filled
Some customers are High Demand
Use a large portion of warehouse activity
Have high customer service requirements
May dedicate a portion of the warehouse to that customer or business unit
3rd Party Providers dedicate aisles to a customer
Contract Warehouses have complete support to a customer
Warehouse within a Warehouse

14. Advantages of a Warehouse within a Warehouse
Smaller warehouses are more efficient
Provide better customer service
Can sub-divide the warehouse into self-contained processing units (ie: Divide & Conquer)

15. Types of Profiles: Customer Order Profile
Order mix distributions
Lines/Order distribution
Cubes/Order distribution
Lines & Cubes/ Order distribution

16. Order Mix Distribution
There are several order mix distributions that are helpful in plotting warehouse operating strategies.
Family Mix – overall warehouse operating strategy is dictated by order mix
If Pure - (orders tend to be from one Product Family)
indicates an advantage of virtual warehousing within a warehouse
Results in good productivity & customer service

17. Family Mix Distribution
35%
25%
15% 5%
10%
A Only
B Only
C Only
A & B
A & C
B & C
A, B & C 35 25 15 10 5 5 5

18. Handling Unit Mix Distribution
Full or Partial Pallet/Case Mix
Separate pick areas for full pallets, partial pallets, cartons
Separate areas for full vs broken case mix picking

19. Handling Unit Mix Distribution
% of Orders 50 30 20 55 25
% of lines 75 10 15 60
Loose carton
Full pallet
Mixed
Broken Case
Full Case

20. Order Increment Distribution
Determine portion of full unit load (pallets, cartons)
vs partial unit loads (½ pallet, ¼ pallet)
Build partial unit loads:
At the supplier, if possible
Upon receipt in necessary
Storage space may be sacrificed

21. Order Increment Distribution
% of order lines

22. Lines/Order Distribution
% of orders

23. Lines & Cubes Per Order Distribution
Lines per
Cubes per Order (ft3)
Totals %
Total
Order
0-1
1-2
2-5
5-10
10-20
20+
Orders
Lines 1
176 15 16 7 3
220
49%
17%
2 - 5
100 24 27 10 2
178
40%
623
47%
6 - 9 8 6 4 33 7%
248
19%
10+ 3%
225
286 46 50 34 21 9
446
100%
1316
% Orders
64%
10%
11% 8% 5% 2%
Total Cube
143 69
175
255
315
270
1227

24. Purchase Order Profile
For inbound material vice outbound material
Use same distribution analyses as for outbound profiling
Supports the same batching and processing strategies for receiving and putaway

25. Item Activity Profiling
Used to “slot” the warehouse
What storage mode should be assigned
How much space should be allocated
Where should it be located
Types of Activity Profiling:
Popularity
Cube Movement/Volume
Popularity-Volume
Order Completion
Demand Correlation
Demand Variability

26. Item Popularity Distribution
Close to the door/Close to the floor
Minority of items generate majority of the picks
Uses Pareto Analysis or ABC Analysis
A – automated-highly productive storage mode
Golden Zone – close to aisle – at or near waist high
B – semi-automatic – moderately productive storage/picking mode
Silver Zone – next most readily accessible
C – manual – offers high density storage

27. Item Popularity Distribution
Popularity may be based on:
Dollars of Sales
Volume
# of Requests

28. Cube Movement / Month
% of Items

29. Popularity-Cube Movement Mix
High Popularity-High Cube:
Uses carton flow racks located for ease of replenishment
High Popularity-Low Cube:
Many picks / unit of space – use light directed carousels (carousels are not easy to restock, are expensive per foot of storage)
Low Popularity – Low Cube:
Lends itself to bin storage

30. Item-Order Completion Distribution
Small groups of items that fill large groups of orders:
List most to least popular
Determine proportion of orders a subset can complete
For example; 10% of the items may fill 50% of the orders. (next slide is an example)
Assign these to small order completion zones:
Productivity, processing rate, processing quality typically 2-5 time more efficient than general warehouse

31. Item-Order Completion Distribution
50% of the orders are completed by 10% of the items

32. Demand Correlation Distribution
Identify relationship (affinity) of demand between individual items or families.
Determined based on frequency of being requested together on orders
Often based on same style or size
Sometime complementary items such as shoes & purse
This data can be used when slotting the warehouse to minimize movement when filling orders.

33. Demand Correlation Distribution
Item Number
Pair Frequency 58 45 36 30 22 15 12 9 6