CLIENT BACKGROUND

Michael Cheng | Natasha Mamoun | Kanhai Patel | Jessica Podoloff | Ashish Sridhar | Indrajit Vishwanath | Rachael Weber | Ryan Youngblood | Faculty Advisor: Sebastian Pokutta

1-2 hr delivery

Barcode Inventory Management System

38 cities nationwide

~200,000 customers

PROBLEM DESCRIPTION Problem 1:

Problem 2:

Stowing protocol is hard to follow

Uninformative quality control process

This document has been created in the framework of a student design project, and the Georgia Institute of Technology does not sanction its content.

Potential accumulation of defects in high valued items

Lack of associate accountability

Inefficient use of space in bins & pallets

Inventory spillage onto adjacent pallets

BIN PACKING INVENTORY LAYOUT QUALITY CONTROL

PROJECT OBJECTIVES

FUTURE RECOMMENDATIONS

8.2% picking rate

55ft per route

PURPOSE: Use ABC results to improve space utilization

METHODOLOGY: 1.  Applies first-fit heuristic to mirror stowing technique 2.  Constraints: Maximum number of items, maximum

volume & “Golden Area” stowing

PURPOSE: Minimize the distance traveled during picking

METHODOLOGY 1.  Locations ranked based on the distance from aisles’

midpoints to outbound area 2.  Average distance to A < B < C

PURPOSE: Incorporate ABC into defect quality control checks

METHODOLOGY 1.  Applies Monte-Carlo method to determine number of

locations to check & time 2.  Number of hours spent on A > B > C

PURPOSE Identify highest valued items to develop inventory management guidelines

METHODOLOGY 1.  Inventory is ranked by units sold and

categorized into velocity bands 2.  Validates the Pareto Principle

1 Increase picking ratesImprove space utilizationIncrease labor efficiency

INVENTORY MANAGEMENT TOOL

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Current Potential

Facility Item Stowage Breakdown

Pallets Bins

Legend:

ABC ANALYSIS

23

Inventory Velocity Analysis

Total % of SKUs

% o

f Tot

al U

nits

Sold

A

B C

1

0

2

4

6

8

10

12

14

12 inch 9 inch 18 inch 24 inch Pallets

A class B class C class

Aisles Required Per Class

Num

ber o

f Aisl

es

12 inch 9 inch 18 inch 24 inch Pallets

Item Stowage Breakdown

Current Potential

15%

85%

4%

96%

VALU

E

1341 labor hours

0%

5%

10%

15%

20%

25%

A Defects B Defects C Defects

A Defects B Defects C Defects

16.41%

11.09%

7.98%

Percent Of Defects Per Class

•  Final order quality checks •  Use IMS to compare weights

•  % of locations that follow 3 constraints •  Determine a spot check threshold

•  Determine which associates cause errors •  Based on item size and incorrect stowing

MAGIC WALL WEIGHT STATION DAILY SPACE UTILIZATION METRIC VIRTUAL SPOT CHECKS

Increase picking rates

2Improve space utilization

3Increase labor efficiency

HEALTH & QUALITY CONTROL IMPROVING INVENTORY