Warehouse Management Flashcards
(20 cards)
Is inventory a waste?
As shown in Figure 13.1, one of the best known metaphors in manufacturing is that of inventory as
water covering up problems in the form of rocks on the bottom. The word “inventory” figures promi-
nently in Taiichi Ohno’s list of 7 types of waste. As a consequence, when discussions of inventory or
warehouse management arise, several participants immediately say that, since “inventory is waste,” it
should just be disposed of. But Ohno never said that all inventory was waste, only that excess inventory
was a type of waste that should be targeted for reduction. His point was to draw attention to the improve-
ment opportunities lying in factories’ tendency to hoard more than they need. Lower the inventory, or
the “water level,” and you expose the “rocks” or the problems to be solved.
Warehouse layout
The prudent approach is to
start cheap and simple, then invest in refinements and automation as operations reveal the needs. There
is no one-size-fits all to warehousing.
The most common type of warehouse is the single-deep pallet rack shown in Figure 13.3. It provides
random access to slots, meaning that every pallet can be retrieved without moving anything out of the
way first. All levels are accessible through forklifts, narrow-aisle trucks, or order pickers, but the bot-
tom level is more easily accessible, using pallet jacks to retrieve whole pallets or carts to retrieve boxes
from pallets.
WMS
Warehouse Management System
Frying pan example: expansion of volume (steel to package)
his expansion in volume has consequences:
* Warehouse space that can hold a month of raw materials may hold only a day of finished goods.
Forgetting this may lead to wrong conclusions about existing warehouse sizes, or to mistakes in
warehouse design.
* Shipping from the factory may involve many more trucks than receiving. Docks used for shipping
may be much busier than those used for receiving, or there may be many more of them. As shown
in Figure 13.9, a flow-through building with equal dock capacity for receiving and shipping may
not be as well-suited as one where both activities are collocated on the same side.
* These considerations have an impact on plant location. If there are 20 trucks going to customers for
each truck delivering materials, then you want to minimize the transportation of finished goods by
locating plants near customers. If, on the other hand, the plant refines a raw material and 90% of the
output bulk is scrap, then the volume shipped to customers is small and it makes sense to locate the
plant near the source of raw materials.
Warehouse visibility
In the management of a warehouse, visibility is essential. Surprisingly, it is often obvious when walking
through plant warehouse areas that simple visual techniques are often left unattended. Warehouses need
good visibility for effective, efficient, and safe operations. In factories, however, we often encounter
warehouses with the following problems:
* No addresses. The location addressing scheme is not used and the racks are uncharted space.
* Inconsistent location addresses. In some aisles, the ground floor is level 0; in others, level 1. In
some aisles, level numbers go up from bottom to top; in others, down from top to bottom.
* Inadequate displays of location addresses. People must search for location labels written in small
or complex letters.
Again, no solution fits all. Steel bars need other storage systems than screws; paint barrels other systems
than computer parts. There are, however, some commonalities that are generally smart:
* Fit for purpose. Fit storage systems to the parts, not the other way around. It depends on volumes,
weight, turnover time, and other product and process characteristics.
* Consistency. A labeling regime should be consistently followed in a warehouse. There is no global
standard, but there should be a local one.
* Completeness. Every location should have a an address. No product should be allowed where
there is no address.
* Visibility. Print visual labels with large bold characters for human readability, and include bar-
codes or RFID tags for automatic identification. Use arrows to indicate where to look.
* Logical. Label racks from the ground up. The lowest level should be named “01,” the second level
“02,” and so on. Use a zero in all numbers less than 10.
- Aisle:
- Rack:
- Bay, also known as rack unit): columns.
- Levels:
- Bin:
The walk way between two shelf racks. Each aisle can be marked with one identification –
same for left/right racks – or with two, one for each left/right rack.
A rack is a storage system that stores materials in horizontal rows with multiple levels.
A bay is the basic storage unit in a rack and defines the pace
between two vertical rack
A level refers to the vertical storage places in a rack.
A bin is a a defined location that contains one or more spaces or slots for products. It is
marked with a location identifier, usually a barcode. It is the most specific warehouse location.
Floor storage
Block stacking
Floor storage is
as the name suggest storage of pallets or other stock units directly on the warehouse floor; it does not
require any type of storage rack. In block stacking, loaded pallets are placed directly on the floor and built
up in stacks to a maximum stable storage height
Serpentine and standard rack labeling
Two “best practice” labeling schemes for
racks has been suggested by industry experts. It separates the serpentine and the standard method. In the
standard method (see Figure 13.18), parts are stored as if pickers always start from the same ends of the
aisles. In the serpentine system (see Figure 13.19), the picker will follow U-patterns in aisles to pick
products for several orders. In the standard system, the picker usually has to double back to the begin-
ning of the aisle.
Many experts argue in favor of the serpentine system. Why? Because when provided with a pick list
that is in order by location, pickers can weave, like a snake, up and down the aisle and collect products for
several orders without having to double back or skip around their pick list. It means a more organized
and efficient route for pickers to follow.
Slot allocation -> From simple to more advanced, 3 types of shelving systems are:
- Fixed slot allocation by item number – such as the library system
- Semi-permanent slot allocation by item number
- Dynamic slot allocation with manual card-based tracking
- Dynamic slot allocation with WMS
Organizing by item number harms operations in several ways:
1 The most frequently used items may be in hard-to-reach places.
2 Items that go into the same product may be located far from each another.
3 Introducing a new item requires shifting all the items that are after it in the number sequence.
Dynamic slot allocation
Instead, we should use a classification criteria, as a guide in slotting items:
1 Frequency of use. Frequently used items have easily accessible, dedicated locations; infrequently
used items, dynamically allocated slots.
2 Volume. High-volume frequently used items may use flow racks; low-volume frequently used
items, dedicated slots in racks or shelves.
3 Destination. Items from reliable suppliers used only in one area of the production floor should be
collocated, as should items shipped exclusively to one customer.
4 Source. Items from a supplier with quality or delivery problems may be collocated for easier
monitoring. This does not apply only to inbound materials, but also to internally made products
about which customers have issued quality or delivery problem reports.
Differentiated use of the vertical levels
The multiple levels in a pallet rack can be given different roles. It is common to keep the first or two
lowest shelf levels as picking zones and the higher levels as full storage units.
At IKEA, for example, customers pick at the lowest 2 levels, and IKEA utilizes the rest of the higher
shelf space for warehousing. Sometimes the second lowest shelf is used to display the assembled prod-
ucts.
Manual versus automated storage and retrieval
Automated negative points:
- As a consequence, AS/RSs are designed before the organization has an opportunity to understand and
specify its requirements, and this often results in discovering a mismatch after the fact
- Besides very high investment costs, the biggest challenge with an AS/RS is when it doesn’t work. Many
manufacturers have experienced the painful retrieval of needed parts from an AS/RS that has
unplanned downtime.
- Lack of visibility.
- Lack of flexibility
- Impact on manual storage and retrieval operations.
- Focus of attention
Carousels and storage lifts
Carousels are simpler and cheaper than an AS/RS, primarily because they move along only one axis, as
shown in Figure 13.30 in both a horizontal and a vertical version.
The vertical carousel is a more com-
plex machine but uses less floor space. The movement of a carrousel may be controlled by the operator
or by a control system that knows which items are stored where.
Pick-by-voice and pick-to-light
With pick-by-voice, logistics operators gets instruc-
tions via headphones where to go and what to pick.
Pick-to-light directs manual picking by lighting up bins.
Organizing the warehouse
Don’t fill the warehouse full: In general, productivity of a warehouse suffers as occupancy exceeds 85% to 90%
Withdrawals of parts from a warehouse should be based on the following principles:
1 Allow only materials handlers to touch items in a warehouse. Production operators or team
leaders should not need or be allowed to fetch parts directly from the warehouse, and they
shouldn’t have the time to do it anyway. Delivering parts to production is the purpose of the
materials organization, and it should fulfill it.
2 Withdraw parts from a warehouse only based on some authorization signal from Production.
This is the pull principle applied to the warehouse. Materials handlers should not take the initia-
tive of delivering unsolicited parts, and their supervisors should not instruct them to do so.
3 Materials handlers always record item numbers and quantities when withdrawing parts from the
warehouse. Most warehouses have WMSs that reduce the transaction work to scanning a barcode.
The move to the IIoT should completely automate the transaction and relieve the materials han-
dlers of the need to enter data manually in any form.
4 Make parts visible and easy to count. For liquids or powders, use partially transparent containers
to make fill level visible. For discrete parts, use dunnage to support counting.
5 Maintain inventory accuracy by cycle counting. The accuracy of inventory records should be
enhanced by cycle counting, a practice in which materials handlers make physical counts of a few
items every day on a rotating basis.
finished goods
semi-finished goods
In principle, finished goods are ready to ship, and all a manufacturer has to do is load them on a truck. However, in reality, what is usually referred to as “finished goods” in the plant still has hurdles to clear
before getting out the door.
In the previous section, we called “semi-finished goods” items that are stored inside the plant in generic form, and retrieved for customization prior to shipping.
Semi-finished goods are generic units made in much larger quantities than
they are consumed in. Semi-finished goods stores should exist only to support customization.
Security and access control
The chal-
lenge is to provide the appropriate level of security without interfering with the flow of work, while
treating employees with trust and respect. Most of the methods used to provide security generate more
work or waiting time both for production operators and for materials handlers
The following are a few approaches that management can use to increase security:
1 Communication. The need for security must be communicated to all employees through the
management chain, from plant wide all-hands meetings to the daily start-of-shift meetings of
every team.
2 Visible management. The lack of visible management makes it unlikely that disappearances will
be noticed.
3 Ease of execution of authorized actions. Security procedures must be designed not only to prevent
unauthorized actions but also to make sure that authorized, legitimate actions proceed unimpeded.
This is also an area where auto-ID technology has a key role to play: On parts or bins, RFID tags
can be used to detect unauthorized movements; on badges, to automatically open doors to autho-
rized work areas for employees who previously had to key in a code, place a magnetic key on a
reader, or use a key on a padlock.
4 Employee discounts at company stores. Where feasible, company products should be offered at
deep discounts in employee stores. In a prestige cosmetics plant, for example, employees can buy
obsolete promotional goods at prices that go a long way towards eliminating any temptation on
regular goods.
5 Tight inventory control. If inventory is tracked closely, discrepancies will be flagged quicker,
which lowers temptation of pilferage.
6 Surveillance. The last resort is CCTV cameras. Surveillance can have detrimental effects on
morale and should only be used where managers see no other way.
