Warehouse Assessment nxbhx

8/18/2019 Warehouse Assessment nxbhx

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C h a p t e r 3

W a re h ou s e A s se s sm e nti n a S i n g l e T o u r

M.B.M. De Koster

CONTENTS3 . 1 I n t r o du c t i on . . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . . . .. . . . . . .. . . . . . . .. . . . 4 03 . 2 A sse ssm e n t M e t h o d . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . 4 2

3 . 2. 1 A r ea 1 : C u s t om e r S a t i sf a ct i on . . .. . . .. . .. . . .. . .. . . .. . . .. . .. . . .. . .. . . .. . . .. . .. . . .. . .. . . .. . . 4 23 . 2. 2 A r ea 2 : Cl e an l in es s , En v ir o nm e nt , E rg o no m ic s , Sa f et y ,

a n d H y g ie n e . . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . 4 53 .2 .3 A re a 3: U s e o f S pa ce , C on di ti on o f B ui ld in g,

a n d T ec h n i ca l I n st al l a t i on s . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . . 4 73 .2 .4 A re a 4 : C o nd it i on a n d T ec hn ic al S ta te o f M a te ri al -H an dl in g

Equipment .............................. .................................... ........................ 483 . 2. 5 A r ea 5 : T e a mw o rk , M a na g em e nt , a n d M o ti v at i on . . . .. . . .. . .. . . .. . .. . . .. . . .. . 4 83 . 2. 6 A r ea s 6 a n d 7 : S t or a ge a n d O r de r -P i ck i ng M e t ho d s . .. . .. . . .. . .. . . .. . . .. . .. . 4 83 .2 .7 A re a 6 : S to ra ge S y st em s a nd S t ra te gi es a n d I nv en to ry

Management ............................... .............................. .......................... 493 . 2. 8 A r ea 7 : O r d er - Pi c ki n g S y st e ms a nd S t ra t eg i es . .. . . .. . .. . . .. . .. . . .. . . .. . .. . . .. . . 5 03 . 2 . 9 A r e a 8 : S u p pl y - C ha i n C o o r di n a t io n . . . . . .. . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . 5 33 . 2. 1 0 A r ea 9 : L e ve l a n d U s e o f I T . . . .. . .. . . .. . . .. . .. . . .. . .. . . .. . . .. . .. . . .. . .. . . .. . . .. . .. . . .. . .. . 5 43 . 2 . 11 A r e a 1 0 : C om m i t m en t t o Q u a l i t y . . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . .. . . . 5 53 .2 .1 2 A re a 1 1: M an ag in g E ff i ci en cy a nd F le xi bi li t y, a s a F un ct io n

o f Vo l u me , A sso rt m e n t, a n d Va r i e t y . . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . 5 6

2 0 0 7 b y T a y l o r & F r a n c i s G r o u p , L L C .

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3 . 3 R e sul t s a n d Va l i d at i o n . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . . . .. . . . . . .. . . . . . .. . . 5 63 . 4 C o n cl u si o n . . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . .. . . . . . . . . .. . . . . . .. . . . . . .. . . . . . . 5 8References............................. .............................. .................................. .................... 59

Abstract T hi s p ap er p re se nt s a n a ss es sm en t m et ho d f or w ar eh ou se sb as ed o n a s in gl e f ac il it y t ou r a nd s om e q ue st io ns a nd a ns we rs ( Q& A) .T he m et ho d h el ps m an ag er s a nd s tu de nt s w ho v is it a f ac il it y t o g et m or ei nf o rm a ti on f ro m t o ur v is it s t hr ou gh a s im pl e a n d r ap id a ss es s me nt f or m .S in ce i ts i nc ep ti on , i t h as b ee n a pp li ed t o a n u mb er o f c as es , s uc ce ss fu ll y i d en t if y in g w e ak a n d s t ro n g p o in t s o f t h e o p er a ti o ns .

3 .1 I nt rod uct io n

O ve r t he p as t d ec ad es , m a ny c om pa n ie s h av e o ff s ho re d m an uf a ct u ri nga ct iv it ie s t o A si a- Pa ci fi c a nd E as te rn E ur op e. B ec au se t he c on su mi ngm a r k e t s h a v e n o t m o v e d , t h i s h a s p u t a n i n c r e a s i n g b u r d e n o n t h e d i s t r i -b u ti o n o p er a ti o n s o f s u c h c o mp a ni e s. C o mp a ni e s h a ve c e nt r a li z ed w a re -

ho use op er at io ns i n f ew, but oft en l arg e fa ci li t i e s r e spon si bl e f ord i st r ib u t in g p r od u ct s o v er a l a rg e r e gi o n. M a na g in g e f fi c ie n c y a n d e f fe c t-i ve ne ss ( s er vi ce ) i s a g re at c h al le ng e f o r m an a ge rs o f s u ch f a ci li ti es . A s ar e su l t, t h ey f e el a g r ea t n e ed t o b e n c hm a rk w a re h ou s e o p er a ti o ns , n o t o n ly t h e i r o w n , b u t a l s o t h e i r c o m p e t i t o r s ’ . H o w e v e r , a s s e s s i n g t h e p e r f o r m a n c eo f a d i s t r i b u t i o n f a c i l i t y i s a t r i c k y b u s i n e s s . E v e n a f t e r h a v i n g v i s i t e d a l a r g en u m b e r o f t h e m , i t i s s t i l l d i f f i c u l t t o t e l l a f t e r a v i s i t w h e t h e r t h i s w a s a b e s t -i n - c l a s s o p e r a t i o n , j u s t a b o v e a v e r a g e , o r e v e n r e l a t i v e l y p o o r p e r f o r m i n g .N ev er th el es s, e ve n s ho rt -t ou r v is i ts c a n r ev ea l a l ot o f i n fo r ma ti on t o t he

t r a i n e d e y e .T hi s p ap er p ro po se s a m et h od t o h el p m an ag er s g et m or e i nf o rm at io n

f ro m t ou r v is it s, t hr ou gh a s im pl e a nd r ap id a ss es sm en t f or m. T he f or ms hould be filled out immediately after the vis it . Th e evaluation hasb ee n i ns pi re d b y t he i de as o f G en e G oo ds on i n Harvard Business Review o n r ap id p la nt a ss es sm en t ( Go od so n, 2 00 2) . S in ce i ts d ev el op me nt , t hem et ho d h as b een s uc ces sf ul ly a pp lie d i n s eve ra l vi sit s, wi th d if fe re ntg ro ups o f m an ag er s ( wi th a nd w it ho ut w ar eh ou se e xp er ien ce ) a ndstudents.

Th e m aj or f un ct io ns o f a w ar eh ou se a re t o s to re p ro du ct s t o m ak ea n a s so rt me nt f or c us to me rs , t o a ss em bl e c us t om er o rd er s, s o me ti me s t oa dd v al ue t o t he o rd er s b y c us to mi za ti on a ct iv it ie s, o rg an iz e t ra ns po rt


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3.2 Assessment Method

T h e t o o l i s b a se d on a f a ct o r- r at i ng m e th o d ( s ee , e . g. , He i ze r a n d R e nd e r,2 00 4) an d c on sis ts o f 1 1 a re as t ha t h ave t o b e a ss es sed , ea ch on a s ix-category scale (see Exhibit 1) . Se v en a re a s ( 1 to 5 , 8, a n d 1 0 ) a r e m o re o rl e s s g e n e r al l y a p p l i c a b l e t o i n d u s t ri a l f a ci l i t ie s a n d h a v e b e en a d a pt e d t o ware h ou se en vi ron ments from Go od so n (2002) . Areas 6 an d 7 (storage an do rd er -p i c k in g s y s te ms ) f o r m t h e h ea rt o f a ny w ar eh o u s e ( To m p k i n s e t a l . ,2 0 0 3 ) an d m ust , t he r e fo r e , b e i n c l ud e d i n a n a s s e s s m en t . A r ea s 9 ( l e v e l a n du s e o f I T) a n d 1 1 ( m an a g in g e f fi c i en c y a n d f l ex i b i l i t y ) a r e e qu a l l y i m po r t-a n t i n a n a ss e s sm en t. To a id f il l in g o u t t h e a ss e s sm en t f o r m, a n u mb e r o f

‘‘ye s o r n o ’’ q ue st io ns ha v e b ee n f o r mu l a te d (Exh ibit 2) , whic h se rve th epu rp os e o f co n veyi n g th e op inio ns o n the ar ea an d ai din g area s c o ri ng . A sc o re is measu red on a six-catego r y o rd ina l s c a l e a nd r an g es f ro m p o o r(1 p oi nt ) t o e x ce l l en t ( 9 p o i n t s ) w i t h a n a d d i t i o n a l c a t e go r y ‘ ‘ b es t - i n - c l a s s ’’( 1 1 p o i n t s ) . B e s t - in-cl ass means th at th er e is n o be t te r. We f i rs t d i sc u s s t h ear e as i n m or e de t ai l and t he n d i sc u ss r es u l ts a s w el l a s f ur t h e r v a l i d a t i o n o f the method .

3. 2.1 A rea 1: Custo mer Sa tisfa ction C us t om er s a ti sf a ct io n i s d if f ic ul t t o r at e i n a f ac il it y v is it . H ow ev er, a ll t h ep e op le i n t he fac i l it y —and p ar t i c ular l y w or k er s—shoul d c l e arl y k now w hot he c ust om e r s ar e , both i nt e r nal and e x t e r nal . M anage m e nt c an t ak e c ar e of t hi s b y e xp li ci tl y s ho wi ng e xt er na l q ua li ty p er fo rm an ce i nd ic at or s t o t he workers. Signboards with picking or shipping errors, customer complaints,a n d r et ur n s o ve r t im e, qu al it y g ui de li ne s f o r w or ke rs , a nd so on in di ca tes e ns i ti v it y to wi s he s o f c u st o me r s a n d q u a li t y a s su r a nc e . Tr y a s ki n g a n or d er

p i c k e r , p a c k e r , o r d i s p a t c h e r : ‘ ‘ W h a t i s t h e i m p a c t f o r c u s t o m e r s w h e n y o um a k e a n e r r o r ? ’ ’ W h e n t h i s p e r s o n a n s w e r s t h a t i t w i l l r e s u l t i n a c o m p l a i n t( o r r e t u r n , o r a c u s t o m e r c r e d i t n o t e ) , i t s h o u l d l e a d t o a h i g h e r s c o r e t h a n when the employee has no idea at all, or when she or he deems there aren o c l ea r c o ns e qu e nc e s.

E ve n w he n p ro du ct s a re p ic ke d b y a rt ic le ( ba t ch ed o ve r m ul ti pl e c us -t om er o rd er s) , t he p er so n s ho ul d h av e a n i de a o f t he c us to me rs ’ w is he s, whether there are deadlines for the (batch) order to be shipped (many large warehouses work with fixed departure schedules to reach their customers

t im ely ), a nd w ha t t he c on se qu en ces a re f or n ot f in is hin g t he w ork i n at i m e ly m anne r.

Q u e s t i o n s 1 , 4 , 1 4 , a n d 2 1 a r e r e l a t e d t o t h i s a r e a .



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E x h i b i t 1 : W a r e h o u s e R a t i n g S h e e t

Warehouse:D a te v i si t :Group:

Area Related

Questions Poor

(1)

Below Average

(3) Average

(5)

Above Average

(7) Excellent

(9)

Best- in-Class

(11) Total

1 Customersatisfaction

1, 14, 21

2 Cleanliness,environment,ergonomics,safety, hygiene

2a, 2b, 3,17, 21

3 Use of space,condition of building, andtechnicalinstallations

5a, 5b,6a, 6b,15, 21

4 Condition andmaintenance of material-handlingequipment

16

5 Teamwork,management,and motivation

1, 12, 21

6 Storage systemsand strategies,inventorymanagement

7a, 7b, 8,9a, 9b,19

7 Order-picking

systems andstrategies

10, 11a,

11b, 20

8 Supply-chaincoordination

19

9 Level and useof IT

20

10 Commitmentto quality

4, 11a,11b, 12,13, 14,17, 20

11 Managing

efficiency andflexibility

18

Total



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E x hi b i t 2 : Q u es t io n na i re


Yes No

1 Are visitors welcomed and given informationabout warehouse operation, customers, andproducts?

& &

2a Is the facility clean, safe, orderly, and well lit? Isthe air quality good and noise level low?

& &

2b Is the environment attractive to work in? & &3 Are the work processes ergonomically well-

thought over?& &

4 Do the employees appear committed to quality? & &5a Is the warehouse laid out in a U-shape rather than

an I-shape?& &

5b Does the layout prevent major crossing flows? & &6a Is material moved over the shortest/best-possible

distances?

& &

6b Is double handling prevented and are appropriateproduct carriers used?

& &

7a Are products stored on their right locations? Dostorage strategies lead to operational efficiency?

& &

7b Are the locations used dynamically? & &8 Is the number of different storage systems (with

different racks, material-handling systems, andstorage logic) justified?

& &

9a Is appropriate (non-)splitting of inventory in bulk-and forward-pick stock applied? & &

9b Is there an effective process management forintroducing new products, getting rid of nonmovers, and internal relocations?

& &

10 Is the organization of the picking process welldesigned without obvious improvementpossibilities?

& &

11a Are storage and receiving processes monitoredand controlled online?

& &

11b Is the response to mistakes and errors immediate? & &12 Are work teams trained, empowered, and

involved in problem-solving and ongoingimprovements?

& &

(continued )



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3 .2 .2 A re a 2 : C l e an li n es s, E n v ir on me nt , E r go n om ic s ,S af e ty , a nd H y gi en e

T h i s i s a n a r e a t h a t i s r e l a t i v e l y e a s y t o a s s e s s . I f a f a c i l i t y i s c l e a n , i t u s u a l l y i n di c at e s t h at m a n ag e me n t o r ga n iz e s t h e p r oc e ss e s w e ll . I n c l ea n f a c il i ti e s,i te ms d o n ot g et l os t, i nv en to ry a cc ur ac y i s h ig he r ( as w el l a s o rd er f ul fi ll me nt

Yes No

13 Are up-to-date operational goals andperformance measures for those goalsprominently posted?

& &

14 Are ratings for customer satisfaction and shipping

errors displayed?

& &

15 Are the buildings, floors, and technicalinstallations in good quality and well maintained?

& &

16 Are the material-handling systems used, the racksand the product carriers in good operatingcondition and well maintained?

& &

17 Are inventories accurate? & &18 Has a right balance been struck between order

customization, process flexibility, and efficiency?& &

19 Are receiving and shipping processes, andinventory levels tuned with suppliers andcustomers?

& &

20 Is the level of IT, picking, and storagetechnologies adequate for the operation?

& &

21 Is this a warehouse you would like to work in? & &

Total : Yes or No

T he t ot al n um ber o f ‘ ‘y es es ’’ o n t hi s q ues ti on na ire i s a n i nd ic at oro f t he w ar eh ou se ’s o ve ra ll p er fo r ma nc e. T he m or e y es es , t he b et te rt he p er fo r ma n ce . A q ue st io n s h ou ld b e a ns we re d a ‘ ‘y es ’ ’ o nl y i f t he warehouse obviously adheres to the principle implied by the ques-t i o n . I n c a s e o f d o u b t , a n s w e r ‘ ‘ n o . ’ ’

E x hi b it 2 : Q u es t io n na i r e ( c on t in u ed )




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a c c ur a cy ) , a n d t h er e i s a n o v er a ll s e ns i ti v it y t o o r de r li n es s . O r de r -p i ck i ng warehouses (where case and item picking occur) typically generatem uc h w as te ( pa ll et s h av e t o b e u nw ra pp ed , b ox es h av e t o b e o pe ne d)a nd workers have to be a ble to get rid o f it in an easy way. In well-run warehouses, one can find waste baskets in front of the racks, where wastec a n b e s ep ar at ed i mm ed ia te ly a t t he s o ur ce b y t yp e ( wh ic h i s c om pu ls or y i n t he E ur op ea n U ni on [ EU ]) . I n a w el l- ru n f ac il it y, t he a ir i s c le an , n oi sel eve ls a re l ow , a nd i t i s w el l l it . In s ho rt , i t i s c om fo rt ab le t o wo rk i n. A lll oc at io n c od es a re e as il y r ea da bl e ( al so f ro m a d is ta nc e) a nd b ar c od ed ,s uc h t ha t t he re i s n o c on fu si on a s t o w hi ch c od e r ef er s t o w hi ch l oc at io n( pa rt ic ul ar ly f or t he l ow er b ea ms i n a p al le t r ac k, o r i n a s he lf a re a w he re

l o ca t io n s i ze s a r e o f te n t i ny ) . Worker positions should have been designed with attention for ergo-n o mi cs . A s m uc h o f t h e w or k i s r ep et it iv e o r s tr en u ou s, i ll -d es ig ne d w or kp o s i t i o n s l e a d t o h i g h a b s e n c e r a t e s a n d l a b o r t u r n o v e r .

I n m a n y w a r e h o u s e s , p i c k e r s d o n o t h a v e f i x e d w o r k p o s i t i o n s b e c a u s et he y d ri ve t ru ck s o r w al k w it h p ic k c ar ts . E ve n i n s uc h c as es e rg on om ic sp a y s o f f . T h e u s e o f t i n y s c r e e n s a n d b u t t o n s o n m o b i l e t e r m i n a l s l e a d s t ol o w p r o d u c t i v i t y a n d e v e n t o e r r o r s ( r e d u c t i o n o f w h i c h o f t e n w a s t h e m a i nr e a s o n f o r t h e u s e o f s u c h t e r m i n a l s ) . I n t h e E u r o p e a n w a r e h o u s e o f a l a r g e

Japanese manufacturer of consumer electronics, pickers use mobile ter-m in al s t o re cei ve pi ck i ns tr uc ti on s a nd c on fi rm t he pi ck s. W he n t hey were asked about the contents of their work, it appeared that for a singleo r d e r ( o f a f e w u n i t s ) a b o u t 2 0 e n t r i e s h a d t o b e m a d e t o c o n f i r m t h i s . I f 2 0c a s e s o f t h e s a m e p r o d u c t h a d t o b e p i c k e d f r o m a p a l l e t , a n d t h e n l a b e l e d ,s c a n n e d , a n d p u t o n a c o n v e y o r b e l t , i t m i g h t t a k e m i n u t e s t o c o n f i r m t h i s via the radio frequency (RF)-terminal/scanner in the information system. Workers obviously find workarounds (do first and confirm when conveni-e n t ) , w h i c h m a y c o m p r o m i s e t h e s y s t e m i n t e g r i t y .

S af et y i s o f u tm os t i mp or ta n ce i n m a ny w ar eh ou se s, e sp ec ia ll y w he reh e av y -p a ll e t l i ft i ng o r o r de r -p i ck i ng t r uc k s o r c r an e s a r e u s ed . O r de r -p i cka n d f o r k l i f t t r u c k s m a y w e i g h u p t o s e v e r a l t o n s a n d c a n d r i v e a t c o n s i d e r -a b l e s p e e d s . W a r e h o u s e s s h o u l d h a v e s a f e t r a v e l p a t h s f o r p e d e s t r i a n s a n ds af et y c oll is io n pr ot ec tio n d evi ce s. Wo rk er s o n f oo t s ho ul d n ot w or ki n n ar ro w a is le s t og et h er w it h h ea vy o rd er -p ic k t ru ck s. U ns af e w or ki ngc o n d i t i o n s c a n b e d i s c e r n e d f r o m t h e a m o u n t o f d a m a g e a t t h e r a c k s , a t t h et ru ck s, o r s ign bo ar ds in di ca ti ng t he n um be r o f a cc id en ts , o r i f pe opl es mo ke i n a b at te ry -c ha rg in g a re a. U ns a fe w or ki ng c on d it io n s s ho ul d l ea d

t o a l o w s c o r e o n t h i s c r i t e r i o n .H y g i e n e ( b a s e d o n h a z a r d a n a l y s i s a n d c r i t i c a l c o n t r o l p o i n t s [ H A C C P ] )

i s o f p ar ti cu la r i mp or ta nc e f or w ar eh ou se s w hi ch p ro ce ss ( pe t) f oo ds ,drugs, o r raw materials for such products . If deep-frozen products wait for a considerable time in an insufficiently conditioned receiving or



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s h ip p in g a r ea , t h e c o nd i ti o n o f t h e p r od u c t m a y d e te r io r at e . Q u es t io n s 2 a ,2 b , 3 , 1 7 , a n d 2 1 r e l a t e t o t h i s a r e a .

3 .2 .3 A re a 3 : U se o f S p ac e, C on di ti on o f B u il di ng ,a n d T e c h n i c a l I n s t a l l a t i o n s

Although (particularly in distribution warehouses) labor is the most import-a nt i ng re di en t o f o pe ra ti on al c os t ( in p ar ti cu la r t he o rd er p ic ke rs , s eeTo mp ki ns e t a l. , 2 00 3) , f ac il it y c os t ( in cl ud in g t ec hn ic al i ns ta ll at io n s) i s ac lo se s ec on d . W he th er b u il di ng s a n d t ec hn ic al i ns ta ll at io n s a re o wn ed ,r en te d, o r l ea se d i s i rr el ev an t. T he re fo re , s pa ce s ho ul d n ot b e w as te d.

E xc es si ve ly l arg e w ar eh ou se s d o n ot o nl y l ea d t o h ig h c os ts , b ut o ft ena ls o t o i ne ff ic ie nt p ro ce ss es , d ue t o l on g t ra ve l t im es f or s to ra ge , o rd erpi ck in g, o r c ro ss do ck. In c as e o f s to ra ge o f la rg e n um be rs o f l oa ds o f s l ow - mo v in g p r od u ct s , h i gh - ba y s t a ck i ng i s p r ef e rr e d. T h er e i s , o f c o ur s e,a d i f f e r e n c e b e t w e e n c o u n t r i e s i n t h e c o s t s o f l a n d a n d l a b o r . I f l a b o r a n dl a n d a r e r e l a t i v e l y c h e a p ( U n i t e d S t a t e s ) , b u i l d i n g s a r e u s u a l l y l o w e r . I f l a n di s e x p e n s i v e ( J a p a n ) , b u i l d i n g s a r e h i g h e r .

O n t h e o t h e r h a n d , i n s u f f i c i e n t s p a c e m a y p r e v e n t a p r o c e s s f r o m b e i n ge xe cu te d e ff ec ti ve ly a nd e ff ic ie nt ly . I f p ro du ct s h av e t o b e d ro pp ed a t

t e m p o r a r y l o c a t i o n s b e c a u s e o f l a c k o f s p a c e i n t h e p r o p e r a r e a , i f p r o d u c t sh a v e t o b e d u g u p b e c a u s e t h e y a r e s t o r e d a t w r o n g l o c a t i o n s , o r i f m u c h waiting and delays occur because maneuvering spaces are used by other workers, this area receives a low score. It may be necessary that multiplep er so ns w or k i n t he s am e a re a ( e. g. , o rd er p ic ke rs a nd r ep le ni sh er s i n ap al le t- st or ag e a re a) ; n ev er th el es s, b lo ck in g a nd c on ge st io n s ho ul d b ea v o i d e d . T h i s c a n b e e n f o r c e d b y h a v i n g o n e - d i r e c t i o n a l t r a f f i c o r d i s t r i b u -t i on o f f a s t- m ov i ng a r ti c le s o v er m u lt i pl e s t or a ge z o ne s .

M a ny f a c il i ti e s h a ve u n d er go n e n a t ur a l e x pa n s io n : g r ad u al l y m o re a n d

m o r e b u i l d i n g s a n d s y s t e m s h a v e b e e n a d d e d . I n m a n y c a s e s , t h i s l e a d s t os u bo p ti m al l o gi s t ic p r oc e ss e s. Wa r eh o us e s s p re a d o v er m u lt i pl e l o ca t io n sl ea d t o n ec es sa ry t ra ns po rt m ov em en ts b et we en t he p ar ts . H ow i s t hi sp r o c e s s o r g a n i z e d ? C a n i n v e n t o r y g e t l o s t w h i l e i n t r a n s p o r t ? I f n o t h a n d l e dp r o p e r l y , i t s h o u l d l e a d t o a l o w s c o r e f o r t h i s a r e a .

T he t ec hn ic al s ta te o f b ui ld in gs , d oo rs , f lo or s, d oc k l ev el er s, d oc ks h e l t e r s , s p r i n k l e r i n s t a l l a t i o n , a n d h e a t i n g a n d c o o l i n g i n s t a l l a t i o n s i s f a i r l y e a s y t o a s s e s s d u r i n g a v i s i t . T h e q u a l i t y o f f l o o r s ( i . e . , f l a t n e s s a n d a b s e n c eo f p it s a nd r am ps ) i s p ar ti cu la rl y i mp or ta nt i f f or kl if ts , r ea ch t ru ck s, a nd

h i g h - b a y t r u c k s a r e u s e d f o r d i s c r e t e t r a n s p o r t .T he b as ic f ac il it y l ay ou t i s i mp or ta nt f or a ch ie vi ng t op p er fo rm an ce .

U - sh a pe d l a yo u t s, w h er e d o ck d o or s a r e m a in l y l o ca t ed a l on g o n e f a ça d e ,u s ua l ly l e ad t o b e tt e r p e rf o r ma n ce ( g re a te r e x pa n si o n p o ss i bi l it i es , m o ref l ex i bl e u s e o f d o ck d o o rs a n d r e ce i vi n g/ s h ip p in g p e rs o nn e l, l e ss c r os s in g



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f lo ws , s h or te r a ve ra ge t ra ve l d is t an ce s) t h an l ay ou ts w it h d o ck d oo rs o no p po s it e s i d es o f t h e b u il d in g s ( I -s h ap e d l a yo u t) .

Q u e s t i o n s 5 a , 5 b , 6 a , 6 b , 1 5 , a n d 2 1 s u p p o r t t h e a s s e s s m e n t o f t h i s a r e a .

3 .2 .4 A re a 4 : C on di ti on a nd T ec hn ic al S ta te o f M a te r i al - H an d li n g E q ui p m en t

Although it may seem wise at first sight to use a special truck for every d if f er en t t yp e o f w or k, m ul ti pl e b ra n ds o f m at er ia l- ha n dl in g e qu ip me ntl ea d t o l es s f le xi bi li ty , h ig he r r is k o f u na va il ab il it y, a n d h ig he r m a in t en -a n ce c os t . M at er ia l- ha nd li ng e qu ip me nt t ha t b re ak s d ow n f re qu en tl y o r

b at te ri es t ha t d o n ot c ha rg e s uf fi ci en tl y m ay l ea d t o a n i ne ff ic ie nt o pe r-a tio n a nd m is sed d ea dl in es . E ve n o ld t ru ck s c an wo rk pr ope rly i f w el lm ai nt ai ne d. Yo u m ig ht t ry t o a sk a d ri ve r w he th er h e o r s he e xp er ie nc esa ny prob lems with the trucks. While as kin g this in a wa rehous e of aS er bi an f oo d r et ai le r, i t a pp ea re d t ha t t he b at te ri es o f o ne o f t he n ar ro w-a is le p al le t t ru ck s c ha rg ed i ns uf f ic ie nt ly . T hi s m ad e t he t ru ck u na va il ab lef or a s ub st an ti al p ar t o f t he d ay , l ea di ng t o o rd er s t ha t c ou ld n ot b e f il le dc o mp l et e ly o n t i me .

P r op e r w o rk i ng m a te r ia l -h a n dl i ng e q ui p me n t s h o ws f r o m m a in t en a nc e

r ec or de d o n t he e qu ip me nt , t he l oo ks o f t he e qu ip me nt , a nd f ew f ai lu rer e c o r d s o r p e r f o r m a n c e o b s t r u c t i o n s i n t h e o p e r a t i o n . Q u e s t i o n 1 6 s u p p o r t st h is a r ea .

3 .2 .5 A re a 5 : T ea mw or k, M an ag em en t, a nd M ot iv at io n

As Bartholdi and Eisenstein (1996) and Bartholdi et al. (2000) showed,b u c k e t b r i g a d e s ( a t e a m w o r k o r d e r - p i c k i n g c o n c e p t ) c a n l e a d t o s u b s t a n t i a l

p e rf o rm a nc e ( p ar t ic u la r ly t h ro u gh p ut ) i m pr o ve m en t s i n p i ck e r- t o- p ar t sor de r - p i c k i ng sy st e m s. A l t houg h t he buc k e t - br i g ade c onc e p t i s onl y ap p l i c -a b le u nd er s pe ci al c ir cu ms ta nc es , p eo pl e w or ki ng a s a t ea m w il l p er fo r mb e tt e r t h an a s i n di v id u al s . T h is i s p a rt i cu l ar l y t r ue i n o r de r p i ck i ng , r e ce i v-i n g , a n d s h i p p i n g . I f p e o p l e a r e m u l t i s k i l l e d a n d r o t a t e i n d i f f e r e n t a r e a s o f t h e w a r e h o u s e , t h i s m i g h t b e a n i n d i c a t o r o f t e a m s p i r i t . I f p e o p l e a r e p r o u do f t h e i r w o r k a n d t h e c o m p a n y , t h i s i s a p o s i t i v e i n d i c a t o r . O n e m i g h t t r y t od i s c e r n t h i s f a c t o r b y a s k i n g q u e s t i o n s t o t h e e m p l o y e e s a n d m a n a g e m e n t .

Q u e s t i o n s 1 , 1 2 , a n d 2 1 s u p p o r t t h i s a r e a .

3 .2 .6 A re as 6 a nd 7 : S to ra ge a nd O rd er -P ic ki ng M et ho ds

S t or ag e a n d o rd er p ic ki ng f o rm t h e h ea rt o f m os t w ar eh ou s e o pe ra ti on s . Warehouse efficiency depends to a large extent on the methods used for



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s y st e ms a r e u s ed , c o ns i de r at i on s h o ul d b e gi v en t o m e rg i ng t w o o f t he m, w it h ou t d ec re as in g o rd er -p ic ki ng e ff ic ie nc y; o r w he re f ews t or a ge sy s te m s a r e u s ed pa r t o f t h e a s s or t me n t c o ul d b e t a ke n f r oma sy st e m and st or e d se p arat e l y t o i nc r e ase e ffi c ie nc y and hom og en-e it y of h an d li ng ( Qu es ti on s 7 a, 7 b, a nd 8 ).

& Is the inventory of cert ain products split into bulk storage andf or wa rd -p ic k s to ra ge ? I f i te ms a re p ic ke d i n a c on de ns ed fo rw ar d-st or age ar e a, t he or de r- p i c ki ng l e ad t i m e s ar e r e duce d c onsi der abl y a nd s to ra ge a ct iv it ie s c an b e d ec ou pl ed f ro m o rd er p ic ki ng . Su chs ys tem s c an be d es ig ned f or b ox pi ck in g ( bu lk s to re d o n pa ll et s,l ow er p al le t l oc at io ns u se d f or p ic ki ng t he b ox es ), o r i te m p ic ki ng

( bu lk s to re d o n b ox es o n p al le ts , s he lv es u se d f or i te m p ic ki ng ).P ar ti cu la rl y i f b ul k q ua n ti ti es t en d t o b e l ar ge an d o rd er -p ic k q u an -tities are small, s plitting invent ory pays off and outweighs ther e pl e ni s hm e nt e f f or t s ( Q ue s ti o n 9 a) .

& I s f am il y g ro up in g a pp li ed in st or ag e w it h t he o bj ec ti ve o f m ak in gpr oc es ses ef fi ci en t? M an y f or ms e xis t, su ch as g ro upi ng i te ms t ha ta re f re qu en tl y or de re d to ge th er. G ro u pi ng m et h od s t ha t d o no timmediately lea d to higher eff iciency, such as products o f thes am e s up pl ie r t og et he r, or p ro du ct s o f t he sa me ow ne r t og et he r,

s co re l ow er ( Qu es t io ns 7 a a nd 7 b) .& I s i n ve n to r y m a na g ed a p pr o pr i at e ly ? A r e i n ve n to r y l e ve l s a p pr o pr i -

a te ? I t m ay b e d if fi cu lt t o a ns wer t he se q ues ti on s, b ut c lea r vi si bl es ign al s s ho ul d n ot b e i gn ore d. Fo r ex am pl e, in a c om pa ny wi ths ho rt p ro d uc t l if e c yc le s, t he re s ho ul d b e a n e xp li ci t p ro gr am t o g etrid of ‘ ‘old’’ pro ducts. Lo ok for a cor ner in the wareho use wheres e em i ng l y n o nm o ve r s a r e s to r ed . T h es e c a n b e r ec o gn i ze d b y l i tt l ep ic k a c ti vi ty , g re at p ro du ct i nh o mo ge ne it y, a n d s om et im es s m al lq ua nt it ie s s to re d p er pr od uc t. I nve nt or y l ev el s ( as k f or i nve nt or y

t ur n ov er r at e) d e pe nd o n p r od uc t p ro pe rt ie s, w h er e s u pp li er s a rel o ca t ed a n d o n th e d e gr e e o f s u pp l y- c ha i n co o pe r at i on . I f s u pp l ie r sa re lo ca te d f u rt he r a nd pr od uc t s a re ch ea pe r, hi gh er i nv en to ry l e ve l s a r e j u s ti f ie d . E x pe n si v e p r od u c ts w i th s h or t l i fe c y cl e s s h o ul dh a v e l o w i n v e n t o r y l e v e l s ( Q u e s t i o n s 9 b a n d 1 9 ) .

3 .2 .8 A re a 7 : O rd er -P ic ki ng S ys te ms a nd S tr at eg ie s

B e f o r e m a k i n g a n a s s e s s m e n t , t h e o r d e r - p i c k i n g m e t h o d s u s e d ( o f t e n m o r et ha n o ne ) s ho ul d b e c la s si fi ed . A t yp ic al c la s si fi ca ti on a nd e xp la n at io n o f m e th o ds c a n b e f o un d in Exhib it 3. Have the weak point s of the order-p ic ki ng s ys te ms u se d b ee n a dd re ss ed a de qu at el y a n d s uf f ic ie nt ly ? E ve ry o rd er -p ic ki ng s ys te m h as s tr en gt hs a nd w ea kn es se s. T he s tr en gt hs a re



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E x hi b it 3 : O r de r -P i ck i n g M e th o ds

T he b el ow f ig ur e s h ow s d if fe re nt o rd er -p ic ki ng m et ho ds t ha t c a n b ef o u n d i n w a r e h o u s e s ( f o r a d e s c r i p t i o n o f s o m e o f t h e s e m e t h o d s , s e eTo mp ki ns e t a l. , 2 00 3) . I n m an y w ar eh ou se s, m ul ti pl e m et ho ds a reu s ed . T he l ar ge m aj or it y e mp lo ys h um an s f o r o rd er p ic ki ng . A mo ngt ho se , t he p ic ke r- to -p ar ts s ys te m, w he re t he p ic ke r w al ks o r r id esa lo ng t he i te ms , i s m os t c om mo n. P ar ts -t o- pi ck er s ys te ms i nc lu dea u t om a te d s t or a ge a n d r e tr i ev a l s y st e ms ( A S/ R S) , m o st l y u s in g a i s le -b ou nd c ra ne s t ha t r et ri ev e o ne o r m or e u ni t l oa ds ( bi ns : m in i- lo ads y s t e m , o r p a l l e t s ) a n d b r i n g i t t o a p i c k p o s i t i o n . A t t h i s p o s i t i o n , t h e

p ic ke r t ak es t he n um be r o f p ie ce s r eq ui re d b y t he c us to me r o rd er,a f t e r w h i c h r e m a i n i n g l o a d i s s t o r e d a g a i n . O t h e r s y s t e m s u s e v e r t i c a ll i f t m o d u l e s ( V L M ) , o r c a r o u s e l s t h a t a l s o o f f e r u n i t l o a d s t o t h e p i c k e r , who is responsible for taking the right quantity. Put systems arep o si t io n ed b e tw e en t h e p i ck e r- t o- p ar t s a n d p a rt s -t o -p i ck e r s y s te m s,b e c a u s e t h e y o f t e n c o m b i n e t h e t w o p r i n c i p l e s . F i r s t , i n v e n t o r y h a s t ob e r e t r i e v e d , w h i c h c a n b e d o n e i n a p a r t s - t o - p i c k e r o r p i c k e r - t o - p a r t sm a n n e r . S e c o n d , t h e c a r r i e r ( u s u a l l y a b i n ) w i t h t h e s e p a r t s i s o f f e r e dt o a p ic ke r w ho d is tr ib ut es t he i te ms o ve r c us to me r o rd er s. P ut s ys -

t e m s a r e p a r t i c u l a r l y p o p u l a r i n c a s e a l a r g e n u m b e r o f c u s t o m e r - o r d e rl in es h av e t o b e p ic ke d i n a s ho rt t im e w in do w ( e. g. , a t t he A ma zo nG e r m a n w a r e h o u s e ) a n d c a n r e s u l t i n a b o u t 5 0 0 p i c k s : o n a v e r a g e p e rp i c k e r h o u r ( f o r s m a l l p a c k a g e s ) i n w e l l - m a n a g e d s y s t e m s .

• AS/RS• Mini-load• VLM• Horizontical carousel• Vertical carousel

• A-frame• Dispensers

• Sort-while pick• Pick-and-pass• Pick-and-sort• Wave picking

Order-picking methods

Employinghumans Employingmachines

Picking

robots

Automatedpicking

Picker-to-parts

Parts-to-picker

Pick by articlepick by order not zoned (1 zone)zoned sequentialparallel (if zoned)

Put system

(continued )



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m ak in g o rd er t hr ou gh pu t t im es c lo se t o u n pr ed ic ta b le a t b us y m om en ts . Yet, Yamaha has a fixed truck departure schedule for all customer destin-a t i o n s . T h e p r o b l e m w a s s o l v e d b y b a t c h i n g m u l t i p l e s m a l l o r d e r s i n t o t h es a me o r de r b i n, t h er e by s t ro n gl y r e du c in g q u eu i ng . I n C - Ma r ke t ’s w a re h ou s e( a s up er m ar ke t c ha in ), p ic ke rs o n o rd er -p ic k t ru ck s t ra ve l l on g d is t an ce s i n al a r g e p a l l e t w a r e h o u s e t o p i c k o r d e r s f o r a s i n g l e s u p e r m a r k e t . I n c o m p e t i -t or s’ w ar eh ou se s, p ic ke rs o n l on g- fo rk t ru ck s p ic k t wo o r t hr ee s to re ss i m u l t a n e o u s l y i n r o l l c o n t a i n e r s i n o n e w a r e h o u s e z o n e o n l y , w h i c h l e a d st o a l a r g e i n c r e a s e i n p r o d u c t i v i t y .

T h e f o l l o w i n g q u e s t i o n s ( s e e a l s o Q u e s t i o n s 1 0 , 1 1 a , 1 1 b , a n d 2 0 ) m i g h tg u id e t h e e v al u at i on o f t h e o r de r -p i ck i ng p r oc e ss :

& Are throughput times sufficiently controlled?& D o es a v oi d a bl e d o ub l e h a n dl i ng o c cu r ?& Are obvious improvements possible in the picking process? You

m ig ht t hi nk o f s om e i mp ro ve me nt s a nd a sk t he p ic ke rs f or t he irevaluation.

& H ow i s t he p ro gr es s o f t he o rd er -p ic ki ng p ro ce ss m on it or ed a ndcontrolled?

& Are the used picking aids (order lists, labels, RF terminals, scanners,

p ic ki ng c ar ts ) w el l d es ig ne d a nd o f h el p t o i nc re as e q ua li ty a ndefficiency?

& H a v e m e a s u r e s b e e n t a k e n t o m a k e t h e p i c k i n g p r o c e s s s u f f i c i e n t l y ergonomic?

3 .2 .9 A re a 8 : S u pp ly -C ha in C oo rd in at io n

T he d eg re e o f s up pl y- ch ai n c oo rd in at io n i s v is ib le a t t he s ho p f lo or i ns ev er al a re as . A t t he y ar d, i nb ou nd t ru ck s m ay b e w ai ti ng t o b e a ll oc at ed

t o a d o c k d o o r , d u e t o i n a b i l i t y t o p r o p e r l y c o o r d i n a t e a r r i v a l t i m e s . I n t h er e c e i v i n g a r e a , t r a i l e r s a n d c o n t a i n e r s m u s t b e u n l o a d e d a n d g o o d s m u s t b ep r oc e ss e d. I s t h is a r a pi d , w e ll - or g an i ze d p r oc e ss , o r v e ry t i me c o n su m in gb e c a u s e t h e p r o d u c t c a r r i e r s a r e w r o n g a n d p r o d u c t s h a v e t o b e r e s t a c k e d ,i nf or m at io n c a nn ot b e f ou nd o r i s i nc om pl et e, b ox es o f t he s a me p ro du cta r e s p r e a d o v e r m u l t i p l e p a l l e t s o r o v e r t h e e n t i r e c o n t a i n e r ? I n c a s e m u c hp a p e r w o r k i s n e c e s s a r y t o c h e c k i n c o m i n g s h i p m e n t s , t h i s i s a l s o n o t a s i g nf or w el l-t un ed p ro ce ss es . Yo u m igh t a ls o a sk w ha t h ap pe ns in c as e o f wrong, under, or over receipts. Does this happen often? Does it delay the

p ro ce ss ? A tt en ti on a ls o h as t o b e p ai d t o t he f re qu en cy o f s up pl y a nd t hed ro p s iz e. D ro p s iz e m ig ht b e i de nt if ie d a t a v is it , f re qu en cy n ot w it ho uta s k i n g . I f y o u s e e s m a l l d r o p s i z e s , a s k t h e r e c e i v e r s t h e f r e q u e n c y o f s u p p l y o f t he se s up pl ie rs . A t s o me w ar eh ou se s, p ow er fu l c us to me rs t ry t o r ed uc e



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t he ir i nv en to ri es b y j us t -i n- ti me ( J IT ) p ol ic ie s: f re qu en tl y o rd er in g s ma llq ua nt it ie s. A lt ho ug h t hi s l ea ds t o i nv en to ry r ed uc ti on a t t he c us to me r’ sf a ci li ty , i t l ea ds t o h ig h h an d li ng a nd t ra ns po rt a ti on c o st f or t h e s up pl ie r, which might retaliate against the customer.

I n a n e xt re me c as e, w e a sk ed a U .S . w ho le sa le r w he re t he c us to me rr et ur ns w er e h an dl ed . I n r es po ns e t o t ha t q ue st io n w e we re t ake n t o a warehouse at the other side of the street, where an endless heap of mostly d a ma ge d b o xe s w er e w ai ti ng t o b e p ro ce ss ed . T he se w er e t he r et ur n s o f m ai nl y o ne c us t om er, w ho r et ur n ed ‘ ‘ su dd en ly ’’ a f ew d o ze n t ru ck lo ad so f e x c e s s s t o c k . T h i s w a s r e p r e s e n t a t i v e f o r t h e c o m p a n y ’ s e n t i r e r e c e i v i n gprocess.

E v e n i f p r o d u c t s a r e l o o s e l y s t a c k e d i n s e a c o n t a i n e r s , i t i s s t i l l p o s s i b l e t oh a v e a n e f f i c i e n t r e c e i v i n g p r o c e s s i f a d e q u a t e a g r e e m e n t s h a v e b e e n m a d e with suppliers. In the warehouse of Zeeman, a textile hard-discountingr et ai le r m ai nl y r ec ei vi ng pr od uc ts i n s ea c on ta in er s f ro m E as t-A sia ns up pl ie rs , t he b ox es a re g ro up ed b y p ro du ct i n t he c on ta in er, a nd b oxs iz es a re s ta nd ar di ze d. T hi s a ll ow s r ap id m an ua l u nl oa di ng o f t he c on -t a i n e r s u s i n g e x t e n d i b l e c o n v e y o r s , a f t e r w h i c h t h e b o x e s a r e a u t o m a t i c a l l y c o u nt e d, l a be l ed , a n d p a ll e ti z ed . C o nv e rs e ly S c h ui t em a , a f r a nc h is e r e ta i lo rg an iz at io n, h as t o r es ta ck a ll o f U ni le ve r’ s p al le ts ( a m ai n s up pl ie r) ,

b e c a u s e t h e y d o n o t f i t i n t o t h e s t o r a g e s l o t s .T he l ev el o f s up pl y- ch ai n c oo rd in at io n i s a ls o v is ib le i n t he s hi pp in g

a r e a . A n a b u n d a n c e o f p a p e r w o r k n e e d e d t o s h i p p r o d u c t s i s a n i n d i c a t o r ,a s w el l a s t he c ar ri er s o n w hi ch pr od uc ts a re s hi pped . If pr od uc ts a res h ip pe d o n p ro du c t c ar ri er s t ha t r et ur n ( e. g. , p oo l p al le ts o r c lo se d- lo o pb in s ), t hi s o f te n i nd ic at es a n e ff ic ie nt d is t ri bu ti on a nd c o ll ec ti on p ro ce ss ,c oo rd in at ed w it h t he r ec ip ie nt s. I t s av es o ne -w ay p ac ka gi ng m at er ia ls which, particularly in Europe, are expensive, not only because of materialc o s t , b u t a l s o b e c a u s e f e e s h a v e t o b e p a i d t o g r e e n - d o t s y s t e m s i n d i f f e r e n t

c ou n tr ie s t o o rg an iz e p ro pe r r ec yc li ng o f t he se m at er ia ls . I f p ro du ct s a res h ip pe d i n s ea c on ta in er s o n s li ps he et s ( lo a ds o n f la t c ar to n ‘ ‘ pa l le ts ’ ’ t h atc a n b e p u s h e d i n t o t h e c o n t a i n e r b y ‘ ‘ p u s h – p u l l ’ ’ t r u c k s ) , t h i s s a v e s s p a c e i nt he c on ta in er a nd i t s ug ge st s a dv an ce d c oo rd in at io n w it h t he r ec ei vi ngc u s t o m e r ( w h o a l s o n e e d s s u c h a t r u c k ) .

Q u e s t i o n 1 9 r e f e r s t o t h i s a r e a .

3. 2.10 Area 9 : L evel an d U se of IT

N o w a d a y s , w a r e h o u s e s d o n o t r u n w i t h o u t a s u f f i c i e n t l e v e l o f i n f o r m a t i o ns y st e ms . B e st - in - cl a ss w a re h ou s es u s e s y st e ms f o r e l ec t ro n ic - in f o rm a t io ne xc h an ge w it h s up pl ie rs , c us t om er s, c ar ri er s, c us to ms a ut ho ri ti es , a n db ro ke rs i n t he s up pl y c ha in . T he y u se a w ar eh ou se m an ag em en t s ys te m



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( WM S) f o r m an ag in g t he w ar eh o us e p ro ce ss es a nd t he y u s e a pp ro pr ia tet o o l s a n d a i d s t o s u p p o r t i m p o r t a n t w a r e h o u s e p r o c e s s e s . W M S c o m e s i n ag re at v ar ie ty , v ar yi ng f ro m s im pl e s pr ea ds he et a pp li ca t io n s, t o s ta nd a rdm od ul es o f E RP s o ft wa re p ac ka ge s, s pe ci al iz ed W MS p ac ka ge s, o r t a il or -m ad e a pp li ca ti on s. I n g en er al , t h e m or e c om pl ex t he o pe ra t io n ( ma in ly m ea s ur ed i n n u mb er o f o rd er l in es , a ss o rt me nt s iz e, d if fe re nt p ro ce ss es ,a nd u nc er ta in ty i n d em an d a nd s up pl y, s ee F ab er e t a l. , 2 00 2) , t he m or ej us ti fi ed o r e ve n n ec es sa ry s pe ci fi c o r t ai lo r- ma de s of tw ar e b ec om es . A WMS is necessary to find the best location where an incoming load canb e s to re d, t he b es t l oc at io n f ro m w hi ch a n o rd er l in e c an b e p ic ke d, t her i g h t p e r s o n t o p i c k a n o r d e r l i n e ( i n t h e r i g h t s e q u e n c e , m i n i m i z i n g t r a v e l

t i m e ) , t h e r e g u l a r u p d a t e o f a r t i c l e - t o - l o c a t i o n a s s i g n m e n t s ( b a s e d o n t u r n -o ve r f re qu en cy ) t o i nt er n al ly m ov e p ro d uc ts t o m ak e s u re t h at a rt ic le s a rec y c l e c o u n t e d r e g u l a r l y w i t h o u t d i s t u r b i n g t h e m a i n w o r k f l o w s , a n d s o o n .

T o o l s t h a t c a n b e u s e d t o s p e e d u p p r o c e s s e s a n d r e d u c e e r r o r s i n c l u d ep ic k- to -l ig ht a nd p ut -t o- li gh t s ys te ms a nd u se o f t h e r ig ht c om mu ni ca t io nm e an s w i th d r iv e rs a n d p i ck e rs t o g u ar a nt e e r e al - ti m e m o ni t or i ng o f w o rkp r o g r e s s . B a k k e r , a m a i l - o r d e r c o m p a n y w h i c h s p e c i a l i z e s i n f l o w e r b u l b s ,u s es a p u t- t o- l ig h t s y st e m f o r d i st r ib u t in g b u lb s t h a t h a ve b e en p r e- p ic k edo v e r t h e r i g h t c u s t o m e r - o r d e r b i n s . A g r a p h i c a l s c r e e n h e l p s t h e p i c k e r , a s i t

s ho ws vi su al ly wh ic h b in s h ave t o b e a dd res sed . T hes e a id s i nc rea sep r oduc t i v it y si g ni fi c ant ly .

Q u e s t i o n 2 0 r e f l e c t s t h i s a r e a .

3 .2 .1 1 A re a 1 0: C om mi tm en t t o Q u al it y

C o m m i t m e n t t o q u a l i t y c a n b e d e r i v e d f r o m a n u m b e r o f f a c t o r s i n a f a c i l i t y .F ir st , f ro m t he d es ig n i ts el f— at w hi ch p oi nt s i s i t e as il y p os si bl e t o m ak ee rr or s? I f a n o pe ra to r c an d et er m in e w he re t o s to re a n i nc om in g l oa d a nd

l at er p ro vi de c on fi rm at io n, t hi s i s a n o bv io us s ou rc e f or e rr or s. S to ra gee r r o r s a r e v e r y s e r i o u s , a s t h e y p o t e n t i a l l y i m p a c t m u l t i p l e c u s t o m e r o r d e r s .T h e s a m e i s t r u e f o r p i c k i n g : c a n a n o p e r a t o r e a s i l y p i c k t h e w r o n g i t e m o rt he w ro ng q ua nt it y? B es t- in -c la ss o pe ra ti on s d o n ot e ns ur e q ua li ty b y b ui ld in g i n a dd it io na l c he ck s o f t he p ic ke d o rd er s. I ns tea d, t he y t ak em ea s ur es t ha t p re ve nt p eo pl e f ro m m ak in g o bv io us e rr or s ( ‘p ok a- yo ke ,’o r f oo l- pr oo fn es s p ri nc ip le ). I n t he p re vi ou s ly m en ti on ed w ar eh ou se o f Yamaha, pickers at a mini-load workstation have to pick a unit from ac o mp a rt m en t ed b i n , c o nt a in i ng m u lt i pl e p r od u c ts . To p r ev e nt e r ro r s, t h e

c o m p u t e r s c r e e n i s d i v i d e d i n t h e s a m e w a y a s t h e b i n , w i t h t h e p r o p e r p a r ti l l u m i n a t e d . I n a d d i t i o n , a b a t t e r y o f s p o t l i g h t s i l l u m i n a t e s e x a c t l y t h e r i g h tc o m p a r t m e n t o f t h e b i n .

S e co n d, i s c o nt i nu o us p r oc e ss i m pr o ve m en t a c ti v el y p r op a ga t ed i n t h ef a c i l i t y ? A r e w o r k e r s s t i m u l a t e d t o i m p r o v e t h e i r p r o c e s s e s a n d c a n p r o o f b e



18/21

f o un d fo r t hi s? I nd ic a to rs f or t hi s c an b e an i de a b ox , im pl em en ta ti on o f s ix -sigma improvement projects or the number of master black-belts, or then u mb er o f p ro ce ss i mp ro ve me nt s r ec en tl y r ea l iz ed . Yo u m ig ht t ry an d a s ka bout this. In a recent tour of the Eu ropea n distribution center of a U.S.m a n uf a ct u re r, w e w e r e t o ld t h a t p e op l e c o ul d b e p r om o t ed t o m a n a ge m en tl ev el on ly if t he y a t l ea st o wn ed a s ix -s ig ma g re en be lt .

T h is a r ea i s a d d re s se d w it h Q u es t io n s 4 , 1 1a , 1 1b , 1 2, 1 3 , 14 , 1 7, a n d 2 0.

3 .2 .1 2 A re a 1 1: M an ag in g E ff ic ie nc y a nd F le xi bi li ty ,a s a Fu nc ti on o f V ol um e, A ss or tm en t, a nd V ar ie ty

I t i s v er y di ff ic ul t— if n ot i mp os si bl e— to m an ag e a l ar ge nu mb er o f o rd er s,together with a large assortment and a variety of customer wishes effi-c ie nt ly , i n a m an n er t ha t i s f le xi bl e e no ug h t o a c co mm od at e l at e c ha n ge s.Pr oc e ss aut om ati on and m e c hani z at i on w it h mul t i pl e sol ut i ons for di ffe re nts t or ag e a re as c a n h el p f o r e ff ic ie nc y, b ut u su al ly b ri ng d ow n fl ex ib il it y.Log i sti c s se r v ic e p r ov ide r s w i t h p ubl ic w ar e house s and shor t -t e r m c ont r act su s ua ll y o pt p ri ma ri ly f o r f le xi bi li ty a n d s a cr if ic e e ff i ci en cy t o s o me ex te nt .F le xi bi li ty i s e xp re ss ed a s t he e as e t o w hi ch d if fe re nt c us to me r- or de r p at -

t er ns ( la rg e v er su s s ma ll o rd er s) , di ff er en t c us to me r w is he s ( pr od uc t a ndo rd er c us to mi za ti on ) c an be a cc o mm od at ed , t he p ro ce ss es e xp an de d o rs h ru n k, a n d a ss or tm en t c ha ng es h a nd le d. D u ri ng a v is it , a tt en ti on c a n b ep ai d t o w ha t e xt en t a ny o f t he se p ri nc ip le s h av e b ee n s ac ri fi ce d. I f p ro -c es se s s ee m v er y e ff ic ie nt , y ou m ig ht a sk w he th er t he a bo ve -m en ti on edf l ex i bi l it y fe a tu r es c a n be a c co m mo d a te d . I n c as e a n o pe r at i on s ee m s v e ry f le xi bl e, i t i s i nt er es ti ng t o e st im at e w he th er c us to me rs a re r ea ll y w il li ng t op ay fo r t he in ef fi ci en cy . I f a r ig ht b al an ce se em s t o ha ve be en st ru ck , acompany scores higher than when there are obvious flaws. This is

a d d re s se d w i th Q u es t io n 1 8 .

3 .3 R es ul ts a nd V al id at io n

T h e a s s e s s m e n t h a s b e e n c a r r i e d o u t w i t h s e v e r a l g r o u p s o f m a n a g e r s a n ds t ud en t s. W it h in a g ro up , t he a re as a re d iv id ed o ve r d if f er en t g ro up m em -b e r s . I m m e d i a t e l y a f t e r t h e v i s i t , e a c h g r o u p f i l l e d o u t t h e w a r e h o u s e r a t i n gsheet as a team effort. E xh ib it 4 s ho ws t he o ut co mes o f s om e a ss es sm en ts

c a rr ie d o u t i n 2 00 4 a n d 2 00 5 w it h d if fe re nt g ro u ps o f i nt er n at io na l p eo pl e( i n t o t a l 9 6 p e r s o n s f r o m 2 2 c o u n t r i e s p a r t i c i p a t e d , a b o u t 3 0 – 4 0 p e o p l e p e r visit, with and without warehousing experience). For every facility, them ax im um s co re i s 1 21 . T he r es u lt s s ho w a c le ar d is ti nc t io n b et we en h ig h-a n d l o w - r a n k i n g f a c i l i t i e s . L o w - r a n k e d f a c i l i t i e s n e a r l y a l w a y s s c o r e ‘ N O ’ o n



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Q u es t io n 2 1 ; h i gh - ra n k ed f a c il i ti e s ‘ Y ES . ’ T h e o u t co m es o f a r ea r a ti n gs a r e

q ui te v ar ie d a s w el l, a lt h ou gh ‘ ‘C us t om er s at is f ac ti on ’’ ( a re a 1 ) o bv io u sl y s c o r e s f a i r l y h i g h i n g e n e r a l .

To v al id at e t he m et ho d, b a si ca ll y t hr ee d if f er en t m et ho d s w er e u s ed .F i r s t , w e i n d e p e n d e n t l y b e n c h m a r k e d t h e w a r e h o u s e s u s i n g D E A , b a s e d o na d a t a b a s e o f 7 1 w a r e h o u s e s . S e c o n d , w e c o m p a r e d t h e s t a n d a r d d e v i a t i o n so f a re a a nd t ot al s co re s a mo ng g ro up s. I f t he se s ta nd ar d d ev ia ti on s a rem od er at e, w e c an a t l ea st s ay t ha t t he s co ri ng i s r el ia bl e. T hi rd , w e a sk edt h e w a r e h o u s e m a n a g e r s f o r f e e d b a c k o n t h e s c o r e s p e r a r e a ( t h e m e t h o d was mailed to them prior to the visit).

To b en c hm ar k t he w ar eh ou s es w it h D EA , w e a s ke d t he w ar eh ou se o rl o g i s t i c s m a n a g e r t o f i l l o u t a q u e s t i o n n a i r e , a d d r e s s i n g p e r f o r m a n c e i n t h ea r ea s o f s h ip m en t q u al i ty , p r od u ct i on ( v ol u me a n d v a ri e ty ) , a n d f l ex i bi l it y ( fo r a f ul l d es cr ip ti on o f t he m et ho d s ee D e K os te r a nd B al k, 2 00 7) . T he

E x h i b i t 4 : S o m e E x a m p l e s o f t h e T o o l ’ s R e s u l t s

N ¼ n u m b e r o f g r o u p s

Warehouse Description Ave. Total Rating (N)

Std.Deviation*

Average (max) SD

Area

DEAEfficiency

Score (Percent)

A Multinational interior-decoration retailer

65.9 (8) 10.8 1.6 (2.5) 58.8

B Automotivemanufacturer,spare parts

82.5 (8) 8.9 1.7 (2.6) 95.5

C National wholesalersupermarketproducts

76.3 (6) 3.5 1.4 (2.0) 100

D National food retailer 59.2 (9) 7.2 1.5 (2.1) —E Multinational hard-

discounting non-food retail chain

64.0 (6) 10.0 1.6 (2.5) 66.2

F Multinational fashion

productsmanufacturer/ wholesaler/retailer

73.0 (6) 3.1 1.4 (2.2) 44.2

*In calculation, we interpreted the scores as measured on an interval scale.



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r es u lt in g e ff ic ie nc y s co re s ( th e m ax im um e ff ic ie nc y t o be ob ta i ne d i s 1 00percent) can be found in E xh ib it 4. A l t houg h t he fac t or - r ati ng and be nc h-m a rk i ng m e th o ds l o ok a t d i ff e re n t i n di c at o rs , t h e c o rr e la t io n b e tw e en t h et wo s co re s i s q ui te h ig h: 6 4 p er ce nt f or t he c om pa ni es l is te d i n E xh ib it 4 ,i n d i c a t i n g t h a t t h e a s s e s s m e n t m e t h o d i s a g o o d f o r e c a s t e r o f p e r f o r m a n c e( a l b e i t t h e n u m b e r o f i n c l u d e d w a r e h o u s e s i s s t i l l s m a l l ) .

E xh ib it 4 a ls o d is pl ay s t h e s t an da rd d ev ia ti on o f t ot a l a n d a re a s co re s.T h e m a x i m u m s t a n d a r d d e v i a t i o n o f t h e t o t a l s c o r e i s w i t h i n 1 6 p e r c e n t o f t he a ve ra ge . F or i nd iv id ua l a re a s co re s, t he a ve ra ge s ta nd ar d d ev ia ti on varies between 1.4 and 1.7 (less than 25 percent of the average areas c or e) . U su al ly t he re a re o n e o r t wo a re as o f s o me d is ag re em en t b et we en

g r o u p s , w i t h s t a n d a r d d e v i a t i o n s u p t o 2 . 6 . N o a r e a s c o n s i s t e n t l y s h o w e d ah ig he r s ta nd a rd d ev ia ti on i n t he s c or in g. T he s co re r el ia bi li ty i mp ro ve s when the assessment is done with more experienced people: having seenm or e f ac il it ie s o bv io u sl y h el ps i n c al ib ra ti ng o ne ’s j u dg me nt . H ow ev er, i ts h ou ld b e e mp ha s iz ed t ha t a ll f ac il it ie s w er e a ls o v is it ed b y s uc h i ne xp er i-e nc ed p eo pl e, l ea di ng t o t he a bo ve -m en t io n ed m od er at e s t an da rd d ev i-a t i o n s o f s c o r e s .

After every visit, the warehouse manager was confronted with the areas co re s. I n a ll c as es , t he y a gr ee d w it h t he r el at iv e r an ki ng o f t he ir s co re s.

O b v i o u s l y , w a r e h o u s e m a n a g e m e n t i s o f t e n a w a r e o f w e a k p o i n t s , b u t i t i sn o t a lw ay s e as y t o i mp ro ve . F or e xa mp le , a w ea k l ay ou t c a nn ot e as il y b ec ha n ge d b y t he m an a ge me nt ; s u ch a c on cl us io n s h ou ld s er ve a s i np ut f ort h e c o mp a ny ’ s f a ci l it y d e ve l op m en t s t af f .

3.4 Conclusion

T he m et ho d p re se nt ed i n t hi s p ap er m ay h el p m an ag er s a nd s tu de nt s t o

r ap id ly a ss es s w ar eh ou se f ac il it ie s. T he m et ho d s er ve s a s a n a dd it io n t om or e q ua nt it a ti ve m et ho ds , l ik e f in a nc ia l a na ly si s. We h a ve v al id a te d t h em et ho d w it h D EA b en ch ma rk in g. A lt ho ug h t he n um be r o f w ar eh ou se sb en ch ma rk ed w it h b ot h m et ho ds i s s ti ll s ma ll , f ir st r es ul ts i nd ic at e t ha ti nd ee d t he m et ho d s ho ws s om e v al ue i n a n a ss es sm en t. To ta l a nd a re as c o r e s a r e r e a s o n a b l y h o m o g e n e o u s a m o n g t h e d i f f e r e n t g r o u p s ( a l t h o u g he ve ry w ar eh ou s e s o f a r s ho ws o n e o r t wo a re as w it h s t an da rd d ev ia ti on sh ig her t ha n 2 , w hi ch m ay b e a s m uc h a s 40 pe rc en t o f t he a ve ra ge a re as co re ). I t is h el pf ul , i n t hi s r es pe ct , t ha t t he a ss es so rs h av e a ppl ied t he

m e t h o d m o r e t h a n o n c e .I n c o n c l u s i o n , i f a w a r e h o u s e a p p e a r s t o s c o r e w e l l , b a s e d o n t h e v i s u a l

i nf or ma ti on a nd Q &A , i t u su al ly i s. I f i t s co re s p oo rl y, t he re d ef in it el y i sr o om f o r i m pr o ve m en t , p a rt i cu l ar l y i n t h e l o w- r an k ed a r ea s .



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