World Class Logistics Warehouse

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					  World Class Logistics:
       Warehouse




        รศ ดร ดวงพรรณ กริ ชชาญชัย
         ศูนย์การจัดการโลจิสติกส์
คณะวิศวกรรมศาสตร์ มหาวิทยาลัยมหิ ดล ศาลายา
        egdkc@mahidol.ac.th
   Let’s talk about Warehouse
        (Typical, not one size fits all)

1. Warehouse in logistics
2. Warehouse design (storage system)
3. Managing your warehouse- Basic
   warehouse operations
4. Warehouse management system (WMS)
What do we Warehouse?
•   Finished Product
•   Raw Materials
     – Liquids
     – Drums
     – Bags
     – Silos
•   Promotion Material
•   Packing Material
       Why do we Warehouse?
•   Temporary storage for raw material and
    finished product inventory
•   To balance manufacturing capacity with
    customer demand e.g. Nestle’
•   Initiative buildup
Role of the Warehouse in the logistics system
 1. Transportation consolidations

     Supplier

     Supplier     warehouse           plant

     supplier
Role of the Warehouse in the logistics system
  2. Product mixing
  Plant 1
                                             Customer
  Product A,B               A,B,C               W
  Plant 2                    B,C, F,G        Customer
  Product B,C   warehouse                       x
                                 A,G
  Plant 3
  Product D,E                                Customer
                               A,B,C,D,E,F      y
  Plant 4
  Product F,G                                Customer
                                                 z
Role of the Warehouse in the logistics system

  Raw material
      A

  Raw material                 A,B,C,D
      B          warehouse               Plant
   Vendor
   Source
     C
   Vendor
   Source                Supply mixing
     D
Warehouse Design
             Storage System
                   Outlines

•   Storage Platform and Unit load
•   Conventional Storage system
•   Storage options
•   Automated Storage/Retrieval Systems
    (AS/RS)
               Definitions
• Storage platform: is a device or mechanism
   that facilitates the storage of product,
   maximizing storage utilisation
 e.g. Pallet
• Unit load: an accumulation of product
   stacked on a pallet for storage or
   transportation
          Unit load optimization
• Optimal unit load: technical packaging group
• Consider:
   –   Load stability
   –   Weight, physical dimension
   –   Movement/month
   –   Ergonomics
   –   Equipment
   –   Pallet fit
                 Pallet fit
• Defines the unit load configuration on the
  pallet
• Underhang: smaller than pallet
• Overhang: larger than pallet
Underhang creates loss of storage space utilization




Overhang creates loss of storage space (can’t store
Another pallet)
   Overcoming Pallet fit issues
• Pallet fit is an area where continuous
  improvement opportunity exists, look for
  ways to:
  – Change the number of existing cases on the
    pallet
  – Change the number of products in the case
  – Design product dimensions to maximize the
    pallet fit
    Conventional Storage system
1. Floor Storage System
2. Rack Storage System
•   Drive-in Racks
•   Dynamic Flow Through Storage Systems
•   Push Back Racks
•   Selective Rack Double Deep
•   Selective Racks
•   Very Narrow Aisle
          Floor Storage System
•   Floor storage is generally the easiest and fastest
    storage technique to implement.
    –   Low capital cost if building exists
    –   Flexible
    –   Low tech; easy to support
    –   Limited utilization of height depending on strength of
        product
    –   Higher damage
    –   Lower space utilization
         Floor Storage System
•   Floor Storage Example




                            Aisle
           Rack Storage System
•   Rack storage better utilizes the warehouse
    facilities since utilizes full height of the building
•   Requires higher skill level of fork truck operators
•   Less flexible to changing business
•   Requires increased level of safety protection
•   More capital investment
          Rack Storage Option
•   Drive-in Racks
•   Dynamic Flow Through Storage Systems
•   Push Back Racks
•   Selective Rack Double Deep
•   Selective Racks
•   Very Narrow Aisle
                Drive-in Racks
Description: Like floor storage but with pallets
supported on the edges by racks.
Features:
    –   High density
    –   6-8 pallets deep
    –   1 sku/row - low selectivity
    –   Filled from the deepest position (bottom to top)
    –   Emptied from closest position(LIFO) from top to bottom
    –   Pallet handling equipment physically drives into rack to
        unload or retrieve pallet.
    –   Slower put away and retrieval.
Consider for:
    –   Large quantity/SKU
Drive-In Rack Example
                     Top level
                     storage

                     Level 3
                     storage

                     Level 2
                     storage




            Drive in to store pallets
Drive-In Rack Example
 Flow Through Storage Rack
Description: Pallets “flow” from one end of storage
rack row to the other
Features:
   –   High density storage
   –   FIFO is provided automatically.
   –   Each storage lane can be a different sku
   –   Storage lane is usually at a slope or angle.
   –   3 times the capital cost
Consider for:
   –   Transportation is needed
   –   FIFO is needed
   –   Lower number of SKUs
Flow-Through Storage Rack Example

  Pallets stored from one side, flow through rack
     to next available position.


                                                    Input Side




            Output Side
            Push Back Rack
Description: Multi level high - product is accessed
from one aisle for both the store and pick functions.
Features:
    –   Storage up to 5 deep
    –   Each level a different sku
    –   Fork truck does not enter rack
    –   Product moves by a set of carriers on rails at each level
    –   LIFO within a storage level
    –   3 times the capital cost
Considered for:
    –   Large number of SKUs
    –   When a smaller number of pallets per lot size comes from
        production
Push Back Rack Example
             Load 1st pallet
             on top carrier


              Load 2nd pallet,
             push back 1st pallet
               - exposing 2nd
                   carrier


               Load 3rd pallet,
                push back 1st
               and 2nd pallets
Push Back Rack Example


               4th pallet load
               3rd pallet load
               2nd pallet load
               1st pallet load
Selective Rack - Double Deep
Description: Selective rack which is 2 pallet loads
deep at each level of storage
Features:
    –   Each level can be a different sku
    –   For small lot sizes
    –   Require special fork trucks with attachment that
        extends into rack
    –   Require high operator skill
    –   1 times the capital cost
Considered for:
    –   Lot sizes which are 8 pallets or less
Selective Rack Double Deep
          Example




                    2 deep
                    5 high
                    storage
               Selective Racks
Description: Provide storage for one pallet load per
location.
Features:
    –   Each pallet load can be accessed without handling
        other loads.
    –   For very small lot size
    –   Typically positioned back to back
    –   Provides lowest storage density
    –   1 times capital cost

Considered for:
    –   4 pallets per lot or less
Selective Rack Example




               1 deep
               5 high
               storage
         Very Narrow Aisle
Description: Single deep selective rack with narrow
aisle
Features:
   –   Typical aisle width of 2m (versus 4 m for conventional
       rack)
   –   Requires specialized fork truck
   –   Provides for high density storage
   –   Up to 40 feet(+/-13 meters) in height
   –   Driver may ride up with the load
   –   Vehicle is usually wire guided.
Considered for:
   –   High storage density with small lot size
Very Narrow Aisle Example




                   1 deep
                   5 high
                   storage
 Very Narrow
 Aisle Turret
    Truck
                     Selectivity
•   Selectivity is defined as the ability of an
    operator to have direct contact with a specific
    unit load without re-handling other loads.
                                             Storage
                                             Aisle




                 G       H       I       J       K       L
               LOT
                A    B       C       D       E       F

                             Storage Aisle                   Traffic
                                                              Aisle
                          Accessibility
•   Access is defined as the ability of an operator to
    have direct contact with a pallet load from a
    particular lot without re-handling other loads.

                                  A               B               C           D               E               F
                              A               B               C           D               E               F
                          A               B               C                           E               F
                      A               B               C               D           E               F
                  A                               C                           E               F
              A                   B           C                           E               F
            LOT A                         C                           E

                              B
            LOT A                         C                           E               F



                                      Storage Aisle
           Storage option comparison
           1 very low, 3 low, 5 med, 7 med high, 10 high

 System         cost       access    In/out   thru-put         density


Floor       1          1            LIFO      5            10

Selective 3            10           FIFO      10           1


2 Deep      3          7            LIFO      7            3

Pushback 7             7            LIFO      7            5

Drive in    5          1            LIFO      3            9

Flow thru 10           3            FIFO      10           7
 Which option we should go for?
  Storage system & Lot size

• Inventory lot size: is the term used to
  describe the number of units of a production
  run stored in the storage system

• Storage lot size: is the number of SKU’s
  that are stored together in a storage row
Inventory Lot Size (Production) is the
 term used to describe the number of units of a production run
                 stored in the storage system



            1 Batch

             Tank

                                                  9 Pallets

                      1st Shift     2nd Shift   3rd Shift




            9 Pallets             6 Pallets          8 Pallets
Inventory Lot Size (Import)


    Lot A = 9 Pallets




     Lot B = 6 Pallets




     Lot C = 3 Pallets
              Storage Lot Size
•   The number of pallets that are stored together in
    a storage row
                          9



                                  4



                                      1




                      Storage Aisle
                 Selectivity
     Storage method    Storage lot size (pallets)
Selective rack                     1
Double deep                        2
Push back                         3-5
Flow through
Drive in                         6-20
                                 >10
Using storage lot size to select storage method

Storage method   Storage lot size    ILS
Single deep             1             1-3
Double deep             2             4-7
4D push back            4            8-15
8D flow rack            8            16-31
4D/4H drive in         16            32+
                    AS/RS
• Automated Storage and Retrieval Systems
  are control systems and automated
  mechanisms to perform the storage and
  retrieval functions in a variety of equipment
  configurations
  – Stacker crane
  – Carousels
       Stacker crane systems

• A computer
  driven stacker
  crane performs
  the store/pick
  function
  handling
  pallets or cases
            Vertical Carousels
 Shelving units rotate in the vertical axis. Operator
            access from front of carousel


           Horizontal Carousels

A group of vertical bins which rotate in the
  horizontal axis. Operator access at either end of
  carousel
            ตัวอย่างของ
Key Performance Indicators : KPIs
• วัดด้านการบริ หารต้นทุน (Cost Management) เช่น Cost per unit , Total
operations cost , Cost of damage , Cost of service failures ,
Overtime ,….
• วัดด้านการบริ การ (Customer service) เช่น Order cycle time , Customer
complaints ,….
• วัดด้านคุณภาพของผลงานที่ทา (Quality) เช่น Stock accuracy , Damage
frequency , Damaged stock , Order entry accuracy , picking
error , Document/Invoicing accuracy ,…
• วัดด้านผลิตภาพ (Productivity) เช่น Unit shipped per employee, Order
entry productivity , Equipment downtime,…
• วัดด้านการบริ หารสิ นทรัพย์ (Asset management) เช่น Space utilization ,
Return of investment,…
              ตัวอย่างการคานวณ KPI
                                                     ั
• Storage area utilization (การใช้ประโยชน์จากพื้นที่จดเก็บ)

       Utilization = พื้นที่ใช้งานจริ ง =       ?
                                         ั
                        พื้นที่เก็บได้ท้ งหมด
Basic Warehouse Operations
& Warehouse
Management System
(WMS)
                 Outline
1.   Basic Warehouse Operations
2.   Generation of WMS
3.   Basic WMS design
4.   Warehouse QA
    Basic Warehouse Operations
•   Movement and Storage
•   Product movement occurs at four
    operations
     1. Receiving – goods into WH from the transport
     2. Put-away – transfer to location in the WH
     3. Order picking – select particular combinations for
        orders
     4. Shipping – load goods for shipping
        Movement + Storage
1. Receiving
  •   Schedule carrier
  •   Unload vehicle
  •   Inspect for damage
  •   Compare to P/O
        Movement + Storage
2. Put-away
     • Identify product
     • Identify storage location
     • Moe product
     • Update records
        Movement + Storage
3. Storage
     • Equipment
     • Stock location
       – Population
       – Unit size
       – cube
        Movement + Storage
4. Order picking
     • Information (pick slip)
     • Walk & pick
     • Batch picking
     • AS/RS (Automated storage and Retrieval
       system)
        Movement + Storage
5. Shipping preparation
     • Packaging
     • Labeling
     • staging
        Movement + Storage
6. Shipping
     • Schedule carrier
     • Load vehicle
     • Bill of lading
     • Record update
                                  Receiving
                                •       Schedule carrier
                                •       Unload vehicle
                                •       Inspect for damage
   input
                                •       Compare to P/O


Put-away                                            Storage

•Identify product                                   •Equipment

•Identify storage location                          •Stock location

•Moe product
                               Warehouse
•Update records
                               process
                                                 Order picking
 Shipping preparation                            •Information (pick slip)
 •Packaging                                      •Walk & pick
 •Labeling                                       •Batch picking
 •staging                                        •AS/RS



                             Shipping
                             •Schedule carrier                output
                             •Load vehicle
                             •Bill of lading
                             •Record update
             Order Picking
• Picking quantities
• Picking frequency
     Order picking operations
• Discrete order processing (picking one
  order)
• Batch order processing (picking multiple
  orders simultaneously)
         Discrete order picking
• Each individual order is picked at a time
• Operator picks from the storage or assigned
  picking location to a tote, cart, or to a pallet truck
• The order picker moves through the entire storage
  area collecting all items for one order
• Traditional
• Good for small warehouse, small number of SKUs
         Batch order picking
• The consolidation of several individual
  orders (a batch)
  – All demand for a batch are picked at one time,
    simultaneously
  – The output from the order picking process is
    moved to a order sort area, where individual
    orders are picked from the product supplied
• Commonly used when several products are
  required in a large number of orders
        SKU     SKU        SKU   SKU
ORDER    A       B          C     D
 124     2       5          0     6
 222     3       6          3     0
 234     4       3          1     2

                                 Discrete
              Batch pick         Order pick
            Loading from storage
• Loading picked orders offers two primary
  options
  – Direct live loading (Pick and load)
  – Direct loading buffers (Pick and stage)
                                     staging


  Order                    Order
  packing                  packing
             Order staging
• Orders are picked and routed to the staging
  area queue for subsequent loading.

                        staging

              Order
              packing
            Cross docking
             Product is received and loaded
             Directly to the shipping truck




           receiving              shipping

• Cross dock reduces labour and double handling
  while improving order picking and reducing
  storage requirements
• Reduces the time to pick orders
                  Cross Docking
                      Temporary Buffer storage




                 receiving             shipping

• Another technique of cross docking (most commonly
  found) utilizes a buffer to temporarily hold product for
  later loading and shipping
• Less than one day hold is desired
                      *Communications*
                 Outline
1.   Basic Warehouse Operations
2.   Generation of WMS
3.   Basic WMS design
4.   Warehouse QA
            Generation of WMS
•   1st :    Manual record
•   2nd :    Batch input system
•   3rd :    Real time system
•   4th :    AS/RS
        System VS Non-System
• Non System
  –   Low productivity: manual search
  –   Easy to cause human error
  –   Low space utilization
  –   No capability for report generation
  –   No linkage to other business modules
       System VS Non-System
• System
  – Improve productivity: search for suitable location,
    search for FIFO control
  – Improve space utilization: reduce broken stack loss
  – Reduce human error
  – Capability for traceability
  – Easy for report generation
  – Link to other business modules
        Manual record system
• Use of a stock card for each storage location
  to record what is currently store in that
  location and its quantity
           Manual record system
• Advantages                   • Disadvantages
  – Virtually no investment      – Low productivity
  – Need lower skills in         – No capability for report
    operation                      generation
  – Electricity independence     – No linkage to other
                                   business modules
         Manual record system
• Selection of this system:

  –   Small area, few locations
  –   Low throughput
  –   Low labor cost
  –   * Use as the back up system
          Batch input system
• Use of computer logic to:

  – suggest for location to putaway or retrieve
    material
  – generate pick list for operators to perform the
    work
  – Operator confirm completion of their tasks in
    the system
               Batch input system
• Advantages                  • Disadvantages
  – Low investment              – Discrepancy between
  – Reduce risk of human          physical data and system
    error                         data
  – Moderate productivity       – Need operator’s skills
  – Capability of report        – Electricity dependence
    generation and link to
    other business module
  – Improve W/H utilization
          Batch input system
• Selection of this system:

  – Medium to large area
  – Low to medium throughput
  – Limit budget for investment
           Real time system
• Use of computer logic to perform the task
  as batch input system plus, the radio
  transmission system to transmit the data to
  update information as soon as material is
  moved
            Real time system
• Advantages                 • Disadvantages
  – High productivity          – High investment cost
  – Higher W/H utilization     – Need operators’ skills
  – No data discrepancy as     – Electricity dependence
    batch input system
           Real time system
• Selection of this system:

  – Large area, many locations
  – High throughput
                 AS/RS
• Use of computer software + hardware (stack
  crane robot or carousel racking) program
  will control all material handling and
  control
                      AS/RS
• Advantages:                • Disadvantages:
  – Very high cubic            – High Investment cost
    utilization & density      – Impossible for any
    (very narrow aisle and       back up procedure in
    no height limitation-        case of electricity
    although laws and            shutdown
    nature conditions must
    be considered)
  – Virtually no error and
    damage
  – Few workers required
  – High speed
                 Outline
1.   Basic Warehouse Operations
2.   Generation of WMS
3.   Basic WMS design
4.   Warehouse QA
         Basic WMS design
• WMS: Warehouse management system
• Controlling the various warehouse
  operations
• Computer software system in receiving, put
  away, picking, packing, shipping, storage
  location, work planning, warehouse layout,
  analysis activities
        What does WMS do?
1. Begins at the receiving dock where the
   item bar code is scanned into the system
2. Verify the item against PO
3. Add the item to inventory
4. Determine the stock location
5. Keeps track of item’s location
        What does WMS do?
6. Determine the item-picking arrangement on
  the pick slip
7. Determine and keep track of the staging
  location of the completed orders
    Methods for simple set up for
              WMS
•   Goods
•   Storage
•   Information
•   mechanism
 Basic information needed for WMS
 Goods (item master)                     SKU
1. Name,code,shelf life        (specific info for this SKU)
2. Type indicator –           1. Date – receive date,
   indicating characters in       manufacture date,
   SKU for setting strategy       expired date,
   in storing or picking      2. Batch number
3. Section indicator – sub    3. Receive document
   in each type for               number
   indicating throughput      4. Unit load ID (optional) –
4. Unit load quantity –           barcode sticker or tag
   quantity per unit/pallet       running number, good
                                  for tracking order
    Type indicator and strategy
• Telling each piece the group’s characters in
  SKU
• Make any changes in group
• Placement strategy
• Retrieval strategy
          Placement strategy
• Character of the group for putting away
• Set location/ storage type (zoning)
           Storage type

           01     02   05   xxx
          Retrieval strategy
• Character of the group for order picking
• FIFO – check receive date
• FEFO – check manufacture date, shelf life,
  expired date
              Storage
Telling the system types of storage and
             location-zoning
              Types of storage
1. Selective storage : capacity =1
2. Block storage
     •    drive in rack, Floor storage
     •   contains several unit load but same SKU, batch,
     •   area utilisation
3. Infinite
       Setting storage type
Telling the zoning characters according to
 types of storage, referred to type indicator
      Air con                          Selective,
                                       Small batch
      5.food    4.soap                 size
                           2.shampoo

Food only

                           1.diapers   Far from soap
                3.lotion               Block storage
                                       Large batch
                                       size
Small batch        Search strategy
Size,slow moving   diapers 1,2,3
                   Food 5 only
                   lotion 3,2,***
                Section type
• Refer to section indicator on SKU
• Set with location
  – 1-50 at location a: rabbit
  – 51-100 at location b: turtle

         Large warehouse, traffic congestion
           What else in WM?
1.   Traceability
2.   Link to finance
3.   Utilization report
4.   Age report
5.   Inventory record accuracy (IRA) check
     sheet
  Thank You

egdkc@mahidol.ac.th

				
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