A State-of-the-Art Warehouse

1. A State-of-the-Art Warehouse

2. A Forklift Driver Brings Down the Warehouse

3. Outline 1Introduction 2Optimized Warehouse Design 3Operations Based on Best Practices 4Best-of-Breed Applications – Warehouse Management System 5New Technologies in Warehousing 6Personnel Skills and Knowledge 7Continuous Improvement Program

4. Who we are 4 26 100 37 % Supply Chain Consultants Projects Completed Last Year Success Rate Offices The1 thing we do Supply Chain

5. Our customers

6. Introduction • From store management to full blown warehousing logistics • The warehouse is at the heart of any supply chain • The warehouse constitutes one of the largest capital expenditures of any company • Warehouse Operations constitute one of the largest operating expenses of any company • Warehousing is now a science and even taught as majors in universities

7. Introduction • Elements of warehousing: • Facility (land, building, flooring, racking systems) • Material Handling Equipment (riders, reach trucks, dock levelers…) • Systems (Warehouse Management System) • Technology (Voice Picking, Pick-to-light, AS/RS) • People and operations • Having a State-of-the-Art warehouse implies optimizing all elements together to achieve the best results

8. How to optimize your warehouse design?

9. Optimized Warehouse Design • Having the right warehouse design is critical to: • Optimizing storage capacity • Streamlining Throughput and Operational Flow • Minimizing Shrinkage • Maximizing Stock Safety • Ensuring Overall Facility Security • Ensuring Compliancy with Warehousing Best Practices i.e. FEFO/FIFO, ABC Slotting, Replenishment, etc…

10. Optimized Warehouse Design • Some of the common mistakes in design: • Not benefiting from full building height • Maximized storage capacity that slows down the whole operations (full VNA design in an FMCG warehouse) • Large storage areas that increase travel distance • Reduced marshalling and staging areas that generate congestion in loading/unloading activities • Non-energy efficient designs (lack of skylights, non-colored roofs…) • Non safety compliant system

11. Optimized Warehouse Design + • Required Storage Systems • Different racking systems to suit operations • Aisle Spaces • Data Analysis • Total Pallet Storage required • Total non-pallet storage required • SKU classification • Average movement of goods Required Docks Required Warehouse Size

12. Optimized Warehouse Design • Sample Racking Systems: • Standard Selective: • Aisle Width = 3.3 m • Good Order Picking: (100% selectivity; average pick rate) • Poor floor Area Utilization: 31% net pallet area • VNA: • Aisle Width = 2.2 – 2.4 m • Good Order Picking: (100% selectivity; average pick rate) • Average floor Area Utilization: 50% net pallet area

13. Optimized Warehouse Design • Sample Racking Systems: • Drive-In/Drive-Through: • Drive-through: Stock Rotation FIFO • Drive-In: Stock Rotation LIFO • Selectivity limited • Good Floor Area Utilization: 60% net pallet area • Pallet Flow Racks: • Stock Rotation FIFO • Selectivity Limited • Good Floor Area Utilization: 60%+ • Expensive (cost per pallet position)

14. Link between Storage Systems

15. Optimized Warehouse Design • Security – Column Guards: • Ensure the security of racking material

16. Optimized Warehouse Design

17. How to optimize your warehouse operations?

18. Operations Based on Best Practices • Receiving • Put-away • Inventory Management • Picking • Loading and Shipping

19. Operations Based on Best Practices • What Not to Do • Excessive Labeling • Double Safety Stock • Pick from Permanent Storage Areas

20. Operations Based on Best Practices • What Not to Do • Pick from bottom of the stack • Cycle Counting Using Labels

21. Operations Based on Best Practices Receiving Putaway Cycle Counts Picking

22. Operations Based on Best Practices • Receiving : • Use Real-time or Online systems • Use barcodes • Standardize palletization • Capture data at receiving docks • Segregate damages • Respect products validations • QC received goods

23. Operations Based on Best Practices • Putaway: • System driven strategies • Optimize storage space • Respect products specs • Classify items based on A B C analysis

24. Operations Based on Best Practices • Cycle Counts: • Daily, weekly counts • Partial stock counts • Maintain high accuracy throughout the year • Investigate problems progressively • Reach the 99+% mark on location level

25. Operations Based on Best Practices • Picking: • Reserve stocks based on FIFO, FEFO • Pick based on unit of measure • Slot items in locations • Use real-time or online picking • Use Paperless picking • Label pallets or cases on picking • Pick to assigned door

26. What are the Best-of-Breed applications for warehouses?

27. Best-of-Breed Applications – WMS • A Warehouse Management System (WMS) is an advanced solution that will Control and Monitor all the activities performed within the 4 Walls of your Warehouse. • A WMS will organize work and align resources and labor to satisfy your customer requirements. • A WMS is not an inventory system

28. Best-of-Breed Applications –WMS • Differentiating Functionalities: • Storer specific, inventory separation based on account, division and SKU • Multi-warehousing, enterprise control • SKU references, alternative and substitute capabilities • Flexible, user defined lotting capabilities • Ability to capture Expiry Dates, Manufacturing Dates and other SKU attributes • Ability to capture Weight and Serial Numbers • Full tracking and visibility of different data/lot attributes • Shelf Life Validations on Inbound and Outbound • Bill of Materials

29. Best-of-Breed Applications –WMS • Differentiating Functionalities: • Traceability • Full Traceability of a product from Receiving to Shipping • Ability to easily recall products from the market • Cycle Counts • Highly developed modules for daily counts • Ability to generate counts by Class, SKU, Location… • User defined rules for automatic stock update based on counts • Access on full counts history • RF Directed Functionalities

30. Best-of-Breed Applications – WMS

31. What are some of the new technologies that can be used in warehousing?

32. New Technologies in Warehousing Pick to Light

33. New Technologies in Warehousing • Pick to Light • 3 -5 errors per 1,000 or 99.50% • Order picking productivity can range between 100 –350+ lines / hour depending on the industrial application • Most suitable for high hit-frequency “split case” products as measured in order line activity or “reaches”

34. New Technologies in Warehousing Voice Picking

35. New Technologies in Warehousing • Voice Picking • 0.2 -2 errors per 1,000 or 99.8 –99.98% • Order picking productivity can range between 100 –300 order lines / hour depending on the industrial application • Suitable for both low-hit and high-hit frequency environments • Suitable for “full case” and “split case” products

36. How to improve of the personnel skills and knowledge?

37. Personnel Skills and Knowledge • Think Tank • Training Curriculum • Pay for Performance • Employee of the month • Affix Billboards • Suggestion box in warehouse • Annual events • Rotate people in warehouse • Clean environment

38. How to continuously improve your warehouse performance?

39. Continuous Improvement Program • Define list of KPIs to evaluate warehouse • Calculate KPIs and identify lowest score • Design and implement solutions to increase KPIs • Re-measure KPIs and select new ones

40. Thank you