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Warehouse & Distribution Science WAREHOUSE & DISTRIBUTION SCIENCE Release 0.98.1 Check for the latest version at www.warehouse-science.com John J. BARTHOLDI, III 1 Steven T. HACKMAN The Supply Chain & Logistics Institute H. Milton Stewart School of Industrial and Systems Engineering Georgia Institute of Technology Atlanta, GA 30332-0205 USA Revised August 16, 2019 1Copyright c 1998–2017 John J. BARTHOLDI, III and Steven T. HACKMAN. All rights reserved. This material may be freely copied for educational purposes — but not for resale — as long as the authors’ names and the copyright notice appear clearly on the copies. Corresponding author: [email protected] 2 Contents Prefacei 0.1 Why this book.............................. i 0.2 Organization............................... ii 0.3 Resources................................ iv 0.4 But first. ............................... iv I Issues, equipment, processes1 1 Warehouse rationale 5 1.1 Why have a warehouse? ......................... 5 1.2 Types of warehouses .......................... 8 2 Material flow 11 2.1 The fluid model of product flow .................... 11 2.2 Units of handling ............................ 12 2.3 Two fundamental resources ....................... 12 2.4 Storage: “Dedicated” versus “Shared” . 14 2.5 The warehouse as a queuing system . 18 2.6 Questions ................................ 20 3 Warehouse operations 23 3.1 Receiving ................................ 24 3.2 Put-away ................................ 24 3.3 Order-picking .............................. 25 3.3.1 Sharing the work of order-picking . 27 3.4 Checking and packing .......................... 28 3.5 Shipping ................................. 29 3.6 Summary ................................ 29 3.7 More ................................... 29 3.8 Questions ................................ 31 3 4 CONTENTS 4 Warehouse management systems 33 4.1 Receiving and shipping ......................... 34 4.2 Stock locator system .......................... 34 4.3 Menu of features ............................ 34 4.4 The market ............................... 35 4.5 Supply Chain Execution Systems .................... 36 4.6 Summary ................................ 36 4.6.1 More .............................. 36 5 Storage and handling equipment 37 5.1 Storage equipment ........................... 37 5.1.1 Pallet storage .......................... 38 5.1.2 Bin-shelving or static rack ................... 41 5.1.3 Gravity flow rack ........................ 43 5.2 Conveyors ................................ 44 5.2.1 Sortation equipment ...................... 44 5.3 Summary ................................ 45 5.4 On the lighter side ............................ 45 5.5 Questions ................................ 46 II Layout 47 6 Layout of a unit-load area 51 6.1 Space .................................. 51 6.1.1 Rack or stack? ......................... 51 6.1.2 Lane depth ........................... 54 6.2 Labor .................................. 60 6.2.1 Reducing labor by dual-cycle operations . 60 6.2.2 Reducing labor by careful product placement . 63 6.2.3 Location of receiving and shipping . 65 6.2.4 Aisle configuration ....................... 67 6.3 Summary ................................ 69 6.4 More ................................... 69 6.5 Questions ................................ 71 7 Layout of a carton-pick-from-pallet area 77 7.1 Layout for a forward area ........................ 77 7.1.1 Operating protocols ....................... 79 7.1.2 Quantities to store forward ................... 80 7.1.3 Choosing SKUs for the forward-pick area . 81 7.1.4 Allocating space by auction . 86 7.2 Redirecting uneconomical picks .................... 87 7.3 Summary ................................ 87 7.4 More ................................... 88 7.4.1 Pallet presentation ....................... 88 CONTENTS 5 7.4.2 Congestion........................... 88 7.4.3 Pallet-building ......................... 89 7.5 Questions................................ 91 8 Layout of a piece-pick-from-carton area 99 8.1 What is a fast-pick area? ........................ 99 8.2 Estimating restocks . 101 8.3 How much of each SKU to store in the fast-pick area? . 102 8.3.1 Minimizing labor to maintain a forward pick area . 103 8.3.2 Two commonly-used storage strategies . 106 8.3.3 Comparison with optimal . 107 8.3.4 Differing costs per restock . 109 8.3.5 Minimum and maximum allocations . 110 8.3.6 Reorder points and safety stock . 110 8.4 Which SKUs go into the fast-pick area? . 111 8.4.1 Selecting SKUs to minimize labor . 113 8.4.2 Stocking to equalize space or restocking frequencies . 115 8.4.3 Further comments on the model . 116 8.5 Additional issues ............................ 117 8.5.1 Storage by family . 117 8.5.2 Accounting for safety stock . 118 8.5.3 Limits on capacity . 118 8.5.4 Accounting for on-hand inventory levels . 119 8.5.5 Setup costs . 120 8.5.6 Redirecting uneconomical picks . 120 8.5.7 Multiple fast-pick areas . 120 8.6 Limitations of the fluid model . 121 8.7 Size of the fast-pick area . 123 8.7.1 How large should the fast-pick area be? . 123 8.7.2 How can the fast-pick area be made larger? . 125 8.8 On the lighter side ............................ 126 8.9 Summary ................................ 126 8.10 Questions ................................ 128 9 Detailed slotting 141 9.1 Case orientation and stack level . 141 9.2 Packing algorithms . 143 9.2.1 Next Fit ............................. 144 9.2.2 First Fit ............................. 145 9.2.3 More on packing algorithms . 145 9.3 Other issues ............................... 146 9.4 Questions ................................ 151 6 CONTENTS III Order-picking 153 10 Routing to reduce travel 157 10.1 The problem of pick-path optimization . 157 10.2 Heuristic methods of generating short pick paths . 158 10.2.1 Path outlines . 158 10.2.2 Product placement . 162 10.3 Pick-path optimization . 163 10.3.1 How to take advantage of optimization . 169 10.3.2 How much is optimization worth? . 169 10.4 Summary ................................ 170 10.5 Questions ................................ 171 11 Work flow and balance 175 11.1 Organizing a team of order-pickers . 176 11.1.1 A model of work and workers . 177 11.1.2 Improvements that are not . 181 11.1.3 Some advantages of bucket brigades . 183 11.2 Bucket brigades in the warehouse . 184 11.3 Summary ................................ 186 11.4 Questions ................................ 188 IV Automation 191 12 Carousels, A-frames, and AS/RS 195 12.1 Carousels ................................ 195 12.1.1 Control ............................. 195 12.1.2 Storage ............................. 200 12.1.3 Throughput . 200 12.2 A-frames ................................ 201 12.3 In-aisle cranes, AS/RS, and their relatives . 204 12.3.1 Throughput . 204 12.4 On the lighter side ............................ 210 12.5 Questions ................................ 212 V Special topics 215 13 Crossdocking 219 13.1 Why crossdock? ............................. 219 13.2 Operations ................................ 220 13.3 Freight flow ............................... 221 13.3.1 Congestion . 221 13.4 Design .................................. 223 13.4.1 Size ............................... 223 CONTENTS 7 13.4.2 Geometry............................ 224 13.5 Trailer management........................... 227 13.6 Resources................................ 227 13.7 Questions................................ 228 VI Warehouse performance 229 14 Activity profiling 233 14.1 Basics .................................. 233 14.2 Warehouse activity profiling . 234 14.2.1 ABC analysis . 234 14.2.2 Statistical analysis . 236 14.2.3 Doing it ............................. 246 14.2.4 Visualization . 251 14.3 Summary ................................ 251 14.4 On the lighter side ............................ 251 14.5 Questions ................................ 254 15 Benchmarking 255 15.1 Performance measurement . 255 15.2 Benchmarking .............................. 256 15.2.1 Ratio-based benchmarking . 256 15.2.2 Aggregate benchmarking . 257 15.3 Are smaller warehouses more efficient? . 264 15.4 Questions ................................ 266 16 Designing warehouses to be efficient 267 16.1 More space ............................... 268 16.2 More usable space ............................ 268 16.3 Fewer impediments to product flow . 269 16.4 Other improvements . 271 16.5 Conclusions ............................... 272 VII Miscellaneous 273 17 Warehousing around the world 277 17.1 North America ............................. 277 17.2 East Asia ................................ 277 17.2.1 India .............................. 278 17.2.2 China .............................. 279 17.2.3 Singapore, Hong Kong, Japan . 280 17.3 Central and South America . 282 17.4 Europe .................................. 283 18 In preparation 285 8 CONTENTS VIII Appendices 291 A The Economic Order Quantity 293 A.1 The Economic Order Quantity ..................... 293 A.2 Safety stock and reorder points..................... 296 A.3 Implications for the warehouse . 298 B The Knapsack Problem 299 C The Shortest Path Problem 303 D Glossary of Notation 309 List of Figures 1.1 With m vendors and n stores the transportation plan consists of mn direct shipments, each relatively small and likely subject to the higher, less-than-truckload rates......................... 7 1.2 There are only m + n shipments through an intermediate aggregator, such as a distribution center or crossdock. Furthermore, each shipment is larger and more likely to qualify for
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