Chapter 94Company Z Storehouse Center LayoutOptimization

Jianguo Zheng and Wanhua Zhang

Abstract The modern storehouse provides not only the traditional storage service,but also other value-added services such as package, OEM, and customer service,which are related to postponement strategy of manufacturing, so as to improve cus-tomer satisfaction. Storehouse is a value-added service center in the supply chain.This paper aiming at Company Z storehouse center activity and management prob-lems, using the system facility planning layout SLP (systematic layout planning)method, optimizes the layout of Company Z storehouse center, improves the effi-ciency of Company Z storehouse center activity and management, and increasesrevenue for the enterprise.

Keywords Storehouse center · Layout · Optimization · Efficiency

94.1 Current Situation and Problems of Company ZStorehouse Layout

Our team did three days’ research in Company Z storehouse center, recorded storagecenter activity and management process in details, and drew a map of Company Zstorehouse layout (see Fig. 94.1).

Storehouse activity and management problems in Company Z storehouse layoutare as follows:

J. Zheng (B)Business School, Sichuan University, Chengdu 610065, People’s Republic of Chinae-mail: Joan1221@sina.com

W. ZhangXinBeiCun, Sichuan University, Chengdu 610065, People’s Republic of China

© Springer Science+Business Media Singapore 2017J. Xu et al. (eds.), Proceedings of the Tenth International Conferenceon Management Science and Engineering Management, Advances in IntelligentSystems and Computing 502, DOI 10.1007/978-981-10-1837-4_94

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1152 J. Zheng and W. Zhang

Fig. 94.1 Company Z storehouse layout

(1) There is no independent picking up space in the storehouse. Goods which areremoved off shelves stack on the nearest passageway, which causes congestion.Forklifts can’t put inventory goods on shelves in time, which causes the overflowof the buffer space and leads to additional work such as transferring storehouse.Therefore, storehouse activity efficiency is very low.

(2) Tools are misplaced. Tools are left about after used, which causes tool damage.(3) The storage of each batch of goods. Because the paper storehouse and laundry

detergent storehouse are far away from the substitute storehouse, increases thelogistics cost.

(4) Some goods need the secondary package before delivery, but the secondarypackage workshop is far away from the paper storehouse and laundry detergentstorehouse, which increases the handling and human cost.

(5) The goods for sorting store in chaos, leading to inventory error. The team leaderspends most of the time doing the inspection work every day.

94.2 The Data Collection

According to the classification of Company Z’s goods, we reach the goods type table(see Table94.1). Company Z’s monthly average amount of inbound, outbound anddistribution (see Table94.2).

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Table 94.1 The goods category table of company Z storehouse

Serial number Product name Nature of product Storehouse

1 Pampers Solidity Paper storehouse

2 Whisper Solidity

3 Naturella Solidity

4 Soap (Safeguard, Olay) Solidity Kkincare and washingstorehouse

5 Shampoo (5 series) Liquid

6 Toothpaste Solidity

7 Toothbrush Solidity

8 Detergent powder(Tide, Ariel)

Solidity Detergent storehouse

9 Laundry detergent(Tide, Ariel)

Liquid

10 Skincare (Olay, SK II) Liquid Strong room (storehousefor goodsto-be-transferred)

11 Gillette series Solidity

12 Pringles Solidity

13 Duracell Solidity

14 Lang liquor Liquid Lang liquor storehouse

Table 94.2 Goods Q quantity table

Storehouse name Monthly average shipment Characteristics of distribution

Detergent storehouse 420,000 pieces Parallel distribution (equalmonthly)

Paper storehouse 380,000 pieces Quadratic distribution

Skincare and washingstorehouse

580,000 pieces Quadratic distribution

Lang liquor storehouse 50,000 pieces Parallel distribution

Strong room 110,000 pieces Parallel distribution

94.3 Optimization Process of Company Z StorehouseCenter Layout

Using clear, logical SLP (system layout planning) method, we optimize the storagecenter layout of Company Z.

(1) The department division and logistics flow chartName list of activity department division (see Table94.3).According to the process flow of all kinds of products in the storage center, we

draw the logistics process table of the various products (see Table94.4), in which Ais the entrance, and B is the exit.

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Table 94.3 Code table ofeach activity space

Serial number Name of activity unit

1 Office building

2 Dispatching room

3 The second package workshop

4 Receiving platform

5 Stocking buffer space

6a Detergent storehouse

6b Paper storehouse

6c Skincare and washing storehouse

6d Lang liquor storehouse

6e Strong room

7 Appliance storage space

8 Sorting activity space

9 Shipping buffer space

10 Shipping platform

Table 94.4 Logistics processtable

Product type Logistics process

Detergent A→4 →5→6a→8→9→10→B

Paper A→4→5→6b→8→9→10→B

Skincare and washingproducts

A→4→5→6c→8→9→10→B

Lang liquor A→4→5→6d→8 9→10→B

Valuables A→4→5→6e→8→9→10→B

(2) P-Q analysisAccording to theprinciple ofSLP, importingquantity of thegoods (seeTable94.2),

it concludes the results of the analysis of the products and production (P-Q) (seeTable94.5).

(3) Logistics strength analysisEach type of goods is packed into packages. Forklifts deliver all goods in the

storehouse Z. When there are multiple products going through the same starting andending departments, the different products going through the starting and endingunits are accumulated, and the monthly transportation volume is summarized, thenit concludes the transportation volume from-to table (see Table94.6).

By SLP method, the strength of logistics is divided into five grades A, E, I, O,U. A, E, I, O, U logistics route rate and the logistic volume rate is as follow (seeTable94.7), thus related logistics table of different activity space is concluded (seeTable94.8). According to Strength grade proportion and logistics related table ofdifferent activity space, design the activity units relationship table. (see Fig. 94.2).

94 Company Z Storehouse Center Layout Optimization 1155

Table 94.5 Product P-Q analysis result table

Product type Difficulty level of handle Quantity (ten thousand pieces)

α Monthly average

Detergent 4 42

Paper 3 38

Skincare and washing products 2 58

Lang liquor 1 5

Valuables 1 19

Table 94.6 Transportation volume table from place-to place (Unit: ten thousand pieces)

Number A 4 5 6a 6b 6c 6d 6e 8 9 10 B

A – 162 – – – – – – – – – –

4 – – 162 – – – – – – – – –

5 – – – 42 38 58 5 19 – – –

6a – – – – – – – 42 – – –

6b – – – – – – – – 38 – – –

6c – – – – – – – – 58 – – –

6d – – – – – – – – 5 – – –

6e – – – – – – – – 19 – – –

8 – – – – – – – – – 162 – –

9 – – – – – – – – – – 162 –

10 – – – – – – – – – – – 162

B – – – – – – – – – – – –

Table 94.7 Logistics strength grade partition table

Logistics strengthgrade

Symbol Logistics routepercentage (%)

Logistics volumehandling percentage(%)

Absolutely necessary A 10 40

Especially important E 20 30

Important I 30 20

Ordinary important O 40 10

Unimportant U

(4) Comprehensive relationship between the activity unitsConsidering relationship between logistics and non-logistics, solve the close

degree level of comprehensive relationship (see Table94.4).

(5) Activity units relationship diagramAccording to the sheet size, select the unit length of the distance, and regulate:

the distance between two work units whose relationship close grades are classifiedas A is one length unit, E is two length units, and so on.

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Table 94.8 Rrelated logistics table of different activity space

Work unitnumber

4 5 6a 6b 6c 6d 6e 8 9 10

4 – 162 A – – – – – – – –

5 – – 42 E 38 E 58 E 5 O 19 I – – –

6a – – – – – – – 42 E – –

6b – – – – – – – 38 E – –

6c – – – – – – – 58 E – –

6d – – – – – – – 5 O – –

6e – – – – – – – 19 I – –

8 – – – – – – – – 162 A –

9 – – – – – – – – – 162 A

10 – – – – – – – – – –

Fig. 94.2 Activity space logistics intensity correlation

By Table94.8, conclude the logistics intensity contrast diagram (see Fig. 94.3).According to the comprehensive relationship level, i.e., A, E, I, O, U level

sequence, successively determine the activity unit arrangement of different levels,and the activity units of the same level are arranged according to the high and loworder of the comprehensive close degree score (Fig. 94.4).

Final correlation diagram of positions of the activity units is as follow (seeFig. 94.5).

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0 20 40 60 80 100 120 140 160 180

5-6d/6d-8

5-6e/6e-8

5-6b/6b-8

5-6a/6a-8

5-6c/6c-8

4-5/8-9/9-10

Fig. 94.3 Logistics intensity contrast figure

Fig. 94.4 Activity units comprehensive relationship

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Fig. 94.5 The activity unitposition relevant

(6) The layout schemeConsider correction factors: material handling, factory building structure, road,

utility piping layout, greening, and environment.Actual restrictions: the factory space, the transformation cost, the existing factory

building restrictions, policies and regulations, etc.Combined with correction factors and the actual restrictions, get the following

storehouse layout (see Figs. 94.6, 94.7 and 94.8).

Fig. 94.6 Storehouse layout scheme one

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Fig. 94.7 Storehouse layout scheme two

(7) Project evaluationWith SLP method, draw the above three storehouse optimization layout schemes.

In order to do the comparison between schemes better, select factors which affect thestorehouse activity and management, and use the analytic hierarchy process (AHP),do the comparison between each scheme and select the better one.

Defining the scale between elements (see Table94.9), we use square root methodto calculate the normalized relative importance degree of each factor relative to thecorresponding factor of the upper layer.

Wi =⎛⎝

n∏j=1

ai j

⎞⎠

1n

, (94.1)

W 0i = Wi∑

iWi

i = 1, 2, . . . , n. (94.2)

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Fig. 94.8 Storehouse layout scheme three

Table 94.9 Judgment matrix scale definition

Scale Implication

1 Comparing two elements, the importance is the same

3 Comparing two elements, the former is more important

5 Comparing two elements, the former is obviously more important

7 Comparing two elements, the former is especially important

9 Comparing two elements, the former is absolutely important

2, 4, 6, 8 Median of above adjacent judgments

Count backwards Comparing two elements, the latter is more important

Consistency Test method: Consistency index

C .I . = λmax − n

n − 1. (94.3)

λmax ≈ 1n

∑ni=1

(AW )iWi

= 1n

∑ni=1

∑nj=1 ai j W j

Wi, AWi stands for the i th component of

AW .

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E storehouse improvement effect

F1 management

convenience

F2 shortest path F3 flow Adaptability F4 external

compa bility

G1 Scheme 1 G2 Scheme 2 G3 Scheme 3

Fig. 94.9 The storehouse improvement evaluation structure model

Table 94.10 Index class one weight distribution table

E F1 F2 F3 F4 Wi W 0i λmi

F1 1 5 3 7 3.201 0.583 4.078

F2 2016/1/5 1900/1/1 2016/1/2 2 0.707 0.129 3.858 λmax =4.0215

F3 2016/1/3 1900/1/2 1900/1/1 3 1.189 0.217 4.078 C.I. =0.0072 <

0.1

F4 2016/1/7 2016/1/2 2016/1/3 1 0.393 0.071 4.072

To meet the requirements of storehouse activity and storehouse management,choose management convenience, path, the adaptation of process, the accessibilityof external coordination as evaluation factors. These factors form the evaluationstructure model. (see Fig. 94.9).

The Table94.10 shows: management convenience, shortest path, and processadaptability and external coordination factors respectively account for 0.583, 0.129,0.217, 0.071 of storehouse optimization index weight. Ci < 0.1. Consistency checkpassed. Table94.11 shows: plan one, two, three respectively accounts for 0.648,0.230, 0.122 of management convenience indices weight. Ci < 0.1. Consistencycheck passed.

The Table94.12 shows: plan 1, 2, 3 respectively accounts for 0.637, 0.258, 0.105of the shortest path index weights. Ci < 0.1. Consistency check passed.

The Table94.13 shows: plan 1, 2, 3 respectively accounts for 0.075, 0.592, 0.333of the process adaption index weights. Ci < 0.1. Consistency check passed.

The Table94.14 shows: plan 1, 2, 3 respectively accounts for 0.600, 0.200, 0.200of the external coordination index weights. Ci < 0.1. Consistency check passed.

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Table 94.11 Management convenience weights allocation chart of all the schemes

F1 G1 G2 G3 Wi W 0i λmi

G1 1 3 5 2.466 0.648 3.004 λmax =3.004

G2 2016/1/3 1900/1/1 2 0.874 0.23 3.002 C.I. =0.002 <

0.1

G3 2016/1/5 2016/1/2 1 0.464 0.122 3.005

Table 94.12 Shortest path weights allocation chart of the program

F2 G1 G2 G3 Wi W 0i λmi

G1 1 3 5 2.466 0.637 3.04 λmax =3.039

G2 2016/1/3 1900/1/1 3 1 0.258 3.04 C.I. =0.02 <

0.1

G3 2016/1/5 2016/1/3 1 0.406 0.105 3.036

Table 94.13 The process to adapt to the weights allocation chart of the program

F3 G1 G2 G3 Wi W 0i λmi

G1 1 2016/1/7 2016/1/5 0.306 0.075 3.012 λmax =3.014

G2 7 1900/1/1 1900/1/2 2.41 0.592 3.015 C.I. =0.007 <

0.1

G3 5 2016/1/2 1900/1/1 1.357 0.333 3.016

Table 94.14 External coordination scheme weights allocation table

F4 G1 G2 G3 Wi W 0i λmi

G1 1 3 3 2.08 0.6 2.999 λmax = 3

G2 2016/1/3 1 1 0.693 0.2 3 C.I.=0 <

0.1

G3 2016/1/3 1 1 0.693 0.2 3

Table94.15 shows: plan one, two and three respectively accounts for 0.519, 0.310,0.171 of relativeweight in improvement effects on storehouse layout scheme. Knownby the evaluation result, plan one is better than scheme 2, scheme 2 is better thanscheme 3, therefore, choose plan one to improve the layout scheme.

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Table 94.15 External coordination scheme weights allocation table

Fi F1 F2 F3 F4 Ci =3∑

i=1bi c j

0.583 0.129 0.217 0.071

G1 0.648 0.637 0.075 0.6 0.519

G2 0.23 0.258 0.592 0.2 0.31

G3 0.122 0.105 0.333 0.2 0.171

To sum up, after the evaluation analysis of factory general layout and storehouselayout schemes, come to the conclusion that the result of comprehensive evaluationof the combination of general layout and storehouse layout is as follows:

The best layout is the combination of general layout plan 2 and storehouse layoutplan 1.