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Computers in Industry
journal homepage: www.elsevier.com/locate/compind
A R T I C L E I N F O
A B S T R A C T
Article history:
Received 24 May 2013
Received in revised form 15 July 2013
Accepted 29 August 2013
Available online 4 October 2013
The issue of material handling involves the design and operative control of warehousing systems (i.e.,
distribution centres), which allow matching vendors and demands, smoothing with seasonality,
consolidating products and arranging distribution activities. Warehousing systems play a crucial role in
providing efciency and customer satisfaction. The warehouse design entails a wide set of decisions,
which involve layout constraints and operative issues that seriously affect the performances and the
overall logistics costs.
This study presents an original decision-support system (DSS) for the design, management, and
control of warehousing systems. Specically, the proposed DSS implements a top-down methodology
that considers both strategic warehouse design and operative operations management. The DSS can
simulate the logistics and material handling performances of a warehousing system. Heuristic methods
and algorithms address several critical warehouse issues, such as the order picking process, which is
responsible for 55% of the overall costs in a distribution centre. The benets due to the adoption of the
proposed decision-support system are summarised as a dashboard of key performance indicators (KPIs)
of space and time efciency that allow logistics providers, practitioners, and managers as well as
academicians and educators to face real-world warehousing instances and to nd useful guidelines for
material handling.
2013 Elsevier B.V. All rights reserved.
Keywords:
Logistics
Warehousing systems
Industrial storage systems
Decision-support system
Order picking
Material handling
* Corresponding author. Tel.: +39 051 2090468; fax: +39 051 2090484.
E-mail address: riccardo.manzini@unibo.it (R. Manzini).
0166-3615/$ see front matter 2013 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.compind.2013.08.007
176
(see Fig. 1), executes low-level picking from the easily accessible
forward area, which holds the bulk of the inventory for every
product in a larger, reserve storage area. When given a product for
which the inventory is low in the forward area, replenishment is
realised from the reserve. For an exhaustive description of the
patterns that are depicted in the proposed framework, a denition
of zoning, batching and routing in warehousing is given. The
zoning comprises partitioning the warehouse into different zones,
which correspond to work stations. Pickers are assigned to zones,
and workers progressively assemble each order, passing it along
from zone to zone. The batching comprises making a picker
retrieve multiple orders in one trip. Even though batching
represents a very useful approach to reduce travelling, it requires
the retrieved SKUs be sorted into a single order. Lastly, the routing
denes an appropriate sequence of items on the order list to ensure
a good route through the warehouse.
Overall, two main aspects lead to enhanced performance: the
warehouse design (1) and the operations control (2).
The rst aspect refers to the layout constraints and parameters
(illustrated in Fig. 1), the storage equipment and the high-level
strategic decisions on the total inventory of the facility. The second
addresses the warehouse operative activities, such as put-away,
replenishment and order picking, focusing on models, techniques,
and methodologies to enhance the operative performances (e.g.,
zoning, batching, routing). These two aspects signicantly affect
warehouse performances and have a direct inuence on the level of
service of the overall logistic chain (i.e., the steps before and after
the warehousing system of Fig. 1).
The literature proposes a wide set of warehouse KPIs that
include the throughput capacity (the material ow processed
through the warehouse per time unit), the storage capacity, the
response time (the time within the order arrival and its shipment),
the cost rate, and the cost per unit of material ow shipped by the
warehouse. All of these metrics are affected by the management of
space and time, which are critical for every logistic process.
Generally, the contributions of the literature address the
problem of warehouse design rather than the management of
warehouse operations separately. Gu et al. [2] describe inbound/
outbound processes and review the literature, classifying the
papers on the basis of the scope of analysis, the adopted method
and the type of the observed warehouse (e.g., automated,
conventional multi-aisle storage systems).
177
vehicle congestions, parking areas, costs of travelling, maintenance, labour, and other outcomes.
Thus, the feedback ow illustrated in Fig. 2 allows for the user to
rearrange his/her decisions to achieve efciency in both the
warehouse design and the operations. The following sub-sections
focus on the main decision steps.
2.1. Layout
The rst decision involves the design of the warehouse layout.
The study of a warehouse layout is based on the assessment of the
facility storage capacity. The proposed methodology is based on
the historical inventory and customer demand (or the demand
forecasts) that are assumed as input for a stock out risk evaluation
analysis that is aimed to establish the required storage capacity of
the warehousing system (i.e., designed from a green-eld).
The purpose of this step is to set the facility layout through the
denition of a set of parameters (see Fig. 1), such as the shape
factor, the number of aisles, the number of bays per aisle, the rack
sizes and types, and the characteristics of the unit load (i.e., the
pallet size or other container solutions). The DSS rationalises the
whole storage space by devoting different zones for different SKUs
in terms of the shape and size, which likely require specic racks or
equipment.
2.2. Allocation
The storage allocation strategies establish a fraction of the
overall available storage space in the forward area to be devoted to
the generic SKU according to specic criteria, given a certain time
horizon. An equal space (EQS) strategy devotes the same fraction of
space to each SKU, while an equal time strategy (EQT) ensures the
same number of restocks for each SKU given a selected time
horizon. Both of these strategies are renowned in industry and are
suitable for every storage context (i.e., cartons-cases picking). The
optimal strategy (OPT), as proposed by Bartholdi and Hackman
[17] and previously by Hackman and Rosenblatt [18], minimises
the restocking to the forward area for pieces-picking (i.e., the order
picking for the small parts). The proposed DSS implements
different so-called allocation strategies by which to congure
alternative scenarios of stock for every SKU. In the forward area
(i.e., the fast-pick area or the low-level locations), the choice of the
stock level to devote to each SKU affects the replenishment
activities as well as the picking processes because this choice
inuences the locations of the SKUs [16]. The system also supports
a pattern [17] to determine the sub-set of SKUs that maximise the
net-benet of the forward area, considering both the time savings
per pick (i.e., the pick from the forward vs. the pick from the
reserve) and the time for replenishment.
At this step, the decision-maker matches the allocation results
with layout features and eventually considers the opportunity to
return to the top for re-layout planning.
2.3. Assignment
The storage assignment strategies establish the appropriate
locations to assign to the SKUs in accordance with different
heuristics. The DSS asks the behaviour of selected SKUs within the
demand prole for a selected time horizon. Information on the
picking processes is collected to compute a panel of metrics used
for SKU classication. Specically, an index-based assignment
policy classies the overall set of SKUs according to the effective
criteria as the popularity (P) (i.e., number of requests per each
SKU), the turn-over (T) (i.e., the ratio of the demand to the
inventory for each SKU), the cube-per-order index (COI), the order
closing (OC) (i.e., the ability of an item to close an order). For a
178
detailed description of such heuristics and methods for indexbased assignment policies, a recent literature contribution [16] is
recommended.
Another relevant aspect that can be considered through the
proposed DSS is the correlation among the SKUs that are requested
together by customers. Correlated-based assignment policies can
be applied to group SKUs that are requested together and assign
them to storage locations that are close to each other, to save on the
travelling needed for the picking activities. The implemented
correlated-based approach comprises the following three main
steps:
Correlation analysis. The level of correlation is generally
measured by introducing a similarity index among the SKUs. This
procedure allows comparing general-purpose similarity indices,
e.g., the Jaccard index proposed by McAuley [19] and certain
problem-oriented issues.
Clustering. This step concerns the adoption of hierarchical
clustering algorithms (e.g., single linkage, complete linkage, group
179
180
SKU
ORDERLIST
PK
PK
PK,FK1
INVENTORY
PK
ItemCode
FK1
Period
Description
Category
CartonLength
CartonWidth
CartonHeight
CartonVolume
CartonWeight
ULCode
WeightPerVolume
CartonPerUL
PiecesPerUL
WHCode
Period
OrderCode
ItemCode
PkdQty
PkdVolume
PkdWeight
PK,FK1
PK
ItemCode
Period
CartonStockFW
CartonStockRS
ULStockFW
ULStockRS
WH
PK
FK1
FK2
RACK
WHCode
PK
WHType
WHLength
WHDepth
Aisle
Bay
AisleWidth
CrossingAisleWidth
BMLength
BMWidth
BMHeight
LayerPerBM
ULPerBM
ULPerBMLayer
BMDepth
RackLevel
ColumnCode
BeamCode
CrossingCode
LevelsFW
ULCode
Routing
DockIn
DockOut
Code
Period
WHCode
PeriodFrom
PeriodTo
Batch
SimilarityIndex
ClusteringAlg
ThresholdPercentile
ThresholdValue
VehicleCode
OrderList
MBCode
FK1
WHCode
CoordinateX
CoordinateY
CoordinateZ
MBLength
MBWidth
MBHeight
FK1
LocCode
MBCode
ItemCode
Carton
ULCode
ULLength
ULWidth
ULHeight
ULWeight
OUTPUT
PK
Code
Period
OrderCode
Trip
ItemCode
PkdQty
DistanceHz
DistanceVt
DistanceHzDockOut
DistanceTotal
Time
DistanceRestock
SCENARIO
PK
UL
SIMULATION
PK
PK
PK
PK
RackType
Length
Tollerance
BaseX
BaseY
LOC
MB
VEHICLE
PK
VehicleCode
Description
VehicleType
VehicleLength
VehicleWidth
VehicleHeight
CurveRadius
LoadWeight
LoadUL
LoadVolume
SpeedHz
SpeedVt
AccelerationHz
AccelerationVt
LiftLimit
WHCode
RackCode
SimCode
WHCode
InvMngStrategy
StorageCapacity
ShapeFactor
AisleNum
BayNum
LocNum
RackLevel
PlantLength
PlantDepth
PlantHeight
ULCode
LayerPerMB
ULPerLayer
AisleWidth
CrossingAisleWidth
FWLevel
AllocationStrategy
AllocationFrom
AllocationTo
AssignmetIndex
AssignmentFrom
AssignmentTo
SimilarityIndex
POI1
POI2
POI3
POI4
POI5
ClusteringAlg
ThresholdPercentile
ThresholdValue
ClusterSorting
RoutingStrategy
DockIn
DockOut
181
Warehouse
Data Input
SKU Master
File
Order History
File
Item Code
Item Description
Category
Package Size
Sales Price
Item Turn Class
Customer Code
Customer Address
Due Date
Item Ordered
Ordered Qty,
Weight or Volume
Inventory File
Item Code
Snapshot Date
Stocks Qty per Item
Storage Area
Inbound
Activity File
Layout
Features File
Delivery Code
Arrival Date
Due Date
Cross-docking
Item Code
Delivered Qty,
Weight or Volume
Table 1
DSS database tables.
Data
SKU
ORDERLIST
INVENTORY
WH
MB
UL
LOC
RACK
SCENARIO
VEHICLE
SIMULATION
OUTPUT
Contains data regarding the SKUs properties and characteristics and generally accounts for ten thousand rows
Contains the order history le of a horizon of analysis (e.g., a couple of years) and generally comprises millions of lines
Includes the inventory le for every SKU for all of the storage areas. Multiple inventory snapshots report the stock trends
Involves properties and features of the layout and storage areas (e.g., the shape factor, rack size, number of aisles and bays,
number of levels, location sizes). Through such a table, the DSS imports an existing warehouse system to be evaluated
according to allocation-assignment analysis
Includes the list of bays within the warehouse
Contains the properties and characteristics of the holding units and pallets in which the items are stored
Reports the list of locations with details on the bay, level, aisle, lling product and related quantity
Describes the type and characteristics of the commercial rack uploaded into the database. The sizes and load tolerance are reported
Summarises the setting of the layout leverage, allocation and assignment policies and all of the parameters and choices selected by
the decision-maker through the top-down analysis methodology. The results from each scenario by iteration are illustrated in Fig. 2
Includes the list of storage equipment (i.e., vehicles) and the related properties in terms of the operative performances
Reports the list of simulations that were conducted by the decision-maker. Multiple simulations might refer to different scenarios,
to compare their performances or to different time horizons adopted for the same scenario (i.e., to assess the trend in the
performances for a scenario)
Summarises the statistics of the simulation in terms of the travelled distance and time for each line of inbound (i.e., put-away,
replenishment) and outbound (i.e., picking) activities
182
183
storage zones), the decision-maker imports the location coordinates for each zone and arranges them according to the overall
warehouse layout conguration.
The DSS calculates, for every location, the forward area and
reserves the travel path (in terms of distances) from the shipping
and receiving docks and those from/to each other (see Fig. 8b).
The what-if simulation analysis involves inbound (e.g., putaway, restocking) and outbound (e.g., order picking) operations
and provides a useful tool to assess system performances,
including costs (i.e., in terms of the travelled distance and time)
within a specic horizon of analysis. The DSS reports a complete
panel of statistics and KPIs to evaluate the efcacy and efciency of
the layout, allocation and assignment conguration. A list of
statistics includes the travelled distance (horizontal and vertical)
and time due to pick-path, travelled distance (horizontal and
vertical) due to put away and replenishment, time waste due to
stock-out, number of replenishments per each SKU, number of
visited aisles, as a metric of the vehicles congestions, spatial pickdensity, and other aspects.
4. Case study
In this section, the proposed DSS has been applied for the design
and performance assessment of a real-world warehousing system. In
particular, this case study addresses a spare parts management
system for an international brand of the automotive industry. A
logistic rm operating worldwide provides the logistics services of
transportation (inbound and outbound) and warehousing for an
important automotive company to supply the demand of spare parts
to hundreds of Italian dealers. This system is a regional distribution
centre (RDC) that accounts approximately 8000 SKUs as spare parts,
ranging from bonnets to screws. The high variability of SKUs in size,
weight, and shape is typical for automotive industry, and requires
proper storage management practices. The analysed system accounts
twenty-four aisles arranged in a multi-zones warehouse, which holds
four storage zones grouping homogeneous SKUs in size and shape of
unit load and similar in weight. Each storage area presents a different
type of racks, which is suitable to allocate a specic set of SKUs (e.g.,
cantilever for door, bin shelving for air-lter, etc.).
184
Table 2
The results of a multi-scenario analysis.
3
4
1
1
185
Table 3
Some tips from DSS implementations on real case studies.
Prole
Case 1
Case 2
Case 3
Client business
Product category
Client role
Grocery/catering
Food/drinks
Warehouse owner
Automotive
Spare parts
3PL
Heavy machinery
Spare parts
Warehouse owner
Complexity
Picking approach
Warehouse system
# SKUs
# Storage area
Storage area (m2)
Observed period (months)
Picking (lines/period)
Replenishment (lines/period)
Put-away (lines/period)
Carton-picking-by-pallet
Forward-reserve
1667
3
9000
12
19,953
Carton-picking-by-pallet
Forward-reserve
7386
4
25,000
12
970,147
25,426
44,729
Carton-picking-by-pallet
High-level forward
3235
1
5500
6
37,000
Allocation
Assignment
Allocation
Assignment
Allocation
Assignment
6
Picking
EQS; Correlated & P
18.11%
12
Picking; Replenishment;
EQS; P
16.73%
4
Picking
EQS; COI
22.57%
Purpose
Results
Simulated period (months)
Simulated process
Best Scenario
Travelling savings (D%)
186
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Riccardo Manzini is Associate Professor of Logistics and Operations, Reliability
& Maintenance in the Department of Industrial Engineering at the University of
Bologna (ALMA MATER STUDIORUM), Italy. His academic research principally deals
with planning, design and control of production systems with particular reference
to logistics and operations, optimisation and decision support systems, reliability
modelling and maintenance. He is the author of about 130 published papers on
production systems, logistics and reliability. Director of the Warehousing Center
and the Food Supply Chain Center at Bologna University. Author and Editor for
Springer of the book Warehousing in the Global Supply Chain. Advanced models,
tools and applications for storage systems (2012). Editor of the Special Issue
Decision models for the design, optimisation and management of warehousing
and material handling systems (IN PRESS 2013) for the International Journal of
Production Economics, Elsevier. He has carried out several research projects in
cooperation with and funded by private and public companies on logistics,
industrial plants and maintenance problems.
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