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Warehouse & Distribution Science WAREHOUSE & DISTRIBUTION SCIENCE Release 0.96 Check for the latest version at www.warehouse-science.com John J. BARTHOLDI, III 1 Steven T. HACKMAN The Supply Chain and Logistics Institute School of Industrial and Systems Engineering Georgia Institute of Technology Atlanta, GA 30332-0205 USA Revised August 19, 2014 1Copyright c 1998–2014 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 .................................. 59 6.2.1 Reducing labor by dual-cycle operations . 59 6.2.2 Reducing labor by careful product placement . 62 6.2.3 Location of receiving and shipping . 64 6.2.4 Aisle configuration ....................... 67 6.3 Summary ................................ 68 6.4 More ................................... 69 6.5 Questions ................................ 70 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................................ 90 8 Layout of a piece-pick-from-carton area 97 8.1 What is a fast-pick area? ........................ 97 8.2 Estimating restocks ........................... 99 8.3 How much of each sku to store in the fast-pick area? . 100 8.3.1 Minimizing labor to maintain a forward pick area . 101 8.3.2 Two commonly-used storage strategies . 104 8.3.3 Comparison with optimal . 105 8.3.4 Differing costs per restock . 107 8.3.5 Minimum and maximum allocations . 108 8.3.6 Reorder points and safety stock . 108 8.4 Which skus go into the fast-pick area? . 109 8.4.1 Selecting skus to minimize labor . 111 8.4.2 Stocking to equalize space or restocking frequencies . 113 8.4.3 Further comments on the model . 114 8.5 Additional issues ............................ 115 8.5.1 Storage by family . 115 8.5.2 Accounting for safety stock . 116 8.5.3 Limits on capacity . 116 8.5.4 Accounting for on-hand inventory levels . 117 8.5.5 Setup costs . 118 8.5.6 Redirecting uneconomical picks . 118 8.5.7 Multiple fast-pick areas . 118 8.6 Limitations of the fluid model . 119 8.7 Size of the fast-pick area . 121 8.7.1 How large should the fast-pick area be? . 121 8.7.2 How can the fast-pick area be made larger? . 123 8.8 On the lighter side ............................ 124 8.9 Summary ................................ 124 8.10 Questions ................................ 126 9 Detailed slotting 137 9.1 Case orientation and stack level . 137 9.2 Packing algorithms . 139 9.2.1 Next Fit ............................. 140 9.2.2 First Fit ............................. 141 9.2.3 More on packing algorithms . 141 9.3 Other issues ............................... 142 9.4 Questions ................................ 147 6 CONTENTS III Order-picking 149 10 Routing to reduce travel 153 10.1 The problem of pick-path optimization . 153 10.2 Heuristic methods of generating short pick paths . 154 10.2.1 Path outlines . 154 10.2.2 Product placement . 158 10.3 Pick-path optimization . 159 10.3.1 How to take advantage of optimization . 165 10.3.2 How much is optimization worth? . 165 10.4 Summary ................................ 166 10.5 Questions ................................ 167 11 Work flow and balance 171 11.1 Organizing a team of order-pickers . 172 11.1.1 A model of work and workers . 173 11.1.2 Improvements that are not . 177 11.1.3 Some advantages of bucket brigades . 179 11.2 Bucket brigades in the warehouse . 180 11.3 Summary ................................ 182 11.4 Questions ................................ 184 IV Automation 187 12 Carousels, A-frames, and AS/RS 191 12.1 Carousels ................................ 191 12.1.1 Control ............................. 191 12.1.2 Storage ............................. 196 12.1.3 Throughput . 196 12.2 A-frames ................................ 197 12.3 In-aisle cranes, AS/RS, and their relatives . 200 12.3.1 Throughput . 200 12.4 On the lighter side ............................ 206 12.5 Questions ................................ 208 V Special topics 211 13 Crossdocking 215 13.1 Why crossdock? ............................. 215 13.2 Operations ................................ 216 13.3 Freight flow ............................... 217 13.3.1 Congestion . 217 13.4 Design .................................. 219 13.4.1 Size ............................... 219 CONTENTS 7 13.4.2 Geometry............................ 220 13.5 Trailer management........................... 223 13.6 Resources................................ 223 13.7 Questions................................ 224 VI Measuring warehouse performance 225 14 Activity profiling 229 14.1 Basics .................................. 229 14.2 Warehouse activity profiling . 230 14.2.1 ABC analysis . 230 14.2.2 Statistical analysis . 232 14.2.3 Doing it ............................. 242 14.2.4 Visualization . 247 14.3 Summary ................................ 247 14.4 On the lighter side ............................ 247 14.5 Questions ................................ 250 15 Benchmarking 251 15.1 Performance measurement . 251 15.2 Benchmarking .............................. 252 15.2.1 Ratio-based benchmarking . 252 15.2.2 Aggregate benchmarking . 253 15.3 Are smaller warehouses more efficient? . 260 15.4 Questions ................................ 262 VII Miscellaneous 263 16 Warehousing around the world 267 16.1 North America ............................. 267 16.2 East Asia ................................ 267 16.2.1 India .............................. 268 16.2.2 China .............................. 269 16.2.3 Singapore, Hong Kong, Japan . 270 16.3 Central and South America . 272 16.4 Europe .................................. 273 17 In preparation 275 VIII Appendices 281 A The Economic Order Quantity 283 A.1 The Economic Order Quantity . 283 A.2 Safety stock and reorder points . 286 8 CONTENTS A.3 Implications for the warehouse . 288 B The Knapsack Problem 289 C The Shortest Path Problem 293 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 the lower, full-truckload rates. 7 1.3 The failure rate of many mechanical components follows a “bathtub” distribution, which means demand for these parts is higher at the be- ginning and at the end of life. ...................... 9 2.1 If two pipes have the same rates of flow, the narrower pipe holds less fluid. In the same
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