Optimize Warehouse Layout and Distribution Center Processes

Goodwill Distribution Center

Chandler Franklin, Alonso Garcia, Juan Garcia, and Kristen Kramer

Faculty Advisor: Dr. NovoaIndustry Advisor: Kelly Freeman

Team 1, IE 4390 Spring 2015

Project Goals

1. Improve Operations Efficiency

2. Live Inventory Tracking

3. Optimize Traffic Logistics

4. Optimize Dock Processes and Material Handling

Operations Efficiency

Truck Arrival Unloading Tilters Retail Outlet Store Sorting/RecyclingDecide if Trash

Trash

If yes

If not

Inventory Storage

Decide if recycle/trash/

inventoryTrash

LoadingTransport/Shipment

GOODWILL DISTRIBUTION CENTER PROCESS FLOW CHART

Logistics

• 16 Hour Working Days• Truck Arrival Every 2 Hours, Fully loaded• Boxes Tilted Into Table• 900 tables/day Average Outlet Store Throughput• Capacity 200 tables inside Outlet Store at once• Left over material is sorted in Categories and stored

in boxes in inventory until shipping• Workers split into teams, complete tasks randomly

Process Constraints(Obtained from live time studies and industry advisors)

Arena Full Model

Model Assumptions

• One Month Worth of Manifest Data Used To Determine Box Size used percentages and amount of each type of material percentages.

• No Worker Downtime, No Machine Downtime

Simulation Report

• Longest Queues Formed at Tilters and Unloading Processes

• Caused by Outlet Store capacity

Simulation Report

• Average 891 Tables/Day Outlet Store Throughput

• Resembles Distribution Center Characteristics

• With 95% confidence, the average time spent per box in the system before stored in inventory is between 8.9 and 10.7 hours.

Average Time In System

Improvement

• Tables spend from 30 minutes to 2 hours maximum inside outlet store depending on material quality & popularity.

• Decrease in Average Time Spent in System by 9%• C.I. 8.3 hours to 9.7 hours spent in system

Cost Analysis• Cost per Box decreased by $0.15• Cumulative savings up to $4049.40 after 30 days

Recommendations

1. Change the times tables spend inside retail store to 30 minutes for lower quality or less popular Materials.

2. Keep a maximum of 2 hours for higher quality or more popular material types.

3. Perform a study inside retail store to identify material popularity.

Outcomes:• Lower Average time spent in system per box• Decrease processing costs • Potential Increase in Sales inside retail store

Facility and Docking Layout

Docking Recommendations

• Implement cross-docking • Prioritize trash and recycling processes• Loading of trucks should be done with intent

to unload (by category of inventory and/or container).

• Divide docks into groups of four; alternate designation of loading/unloading trucks every four docking stations.

Facility Layout

• Plastic, Nestable, and metal pallets should be implemented if they are cost-effective.

• Loose items can be secured using recycled materials, and loose cases can be secured onto pallets to eliminate inventory damage.

• Items should be stored by ‘popularity’.• Storage depth should range from 2 to 3

depending on the items’ popularity.

Inventory Tracking System

• Wasp Inventory control• $800-$5600• Stock added, removed, transferred, checked

in or out, cost of inventory, inventory aging, transaction history, etc.

• Notification alerts when stock is low, ensuring that needed inventory is available on hand.

Truck Routing• VRP solver used to find

route trends– Sort Manifest data by end

location and find trends using Arena Input Analyzer. Use random number generator on Minitab to find random value in data fit.

– Use google maps to create from/to chart of each distance

– Use longitude and latitude in order to create a reference point for the GRC to the locations

Groupings found• Dripping Springs

• Kyle

• Buda

• San Marcos-----------------------------------------------------------------------------------------------------------------------------------------------------------------------

• Georgetown

• Round Rock

• Wells Branch

• Pflugerville

Sometimes Hutto, Norwood, & Scofield with that group.

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• Bee Caves

• Marble Falls------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• Fredericksburg

– always alone

• Lakeway

• Lake Austin--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• Westbank only ever paired with South Lamar

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• South Lamar never alone, always changing groupings

• Riverplace

• Cypress Band

• Balcones--------------------------------------------------------------------------------------------------------------------------------------------------

• Southpark Meadow

• Brodie

• Oak Hill

• Marbridge Hut--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• Bastrop

• Elgin

• Shadow Glen------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• Airport

• 10th Street

• Sometimes Lakeway

Routing Recommendations

• Goodwill should download VRP solver in order to plan routes based off demand ordered by the locations

• Drivers should fill out an excel sheet of items on manifest in order to find volume used.

• Goodwill can use this data to simulate different routes to prepare for the future.

Traffic Trends• The GPS information

we received allowed us to create boxplots to show trends in the times it takes to travel to the various locations.

• The plots are sorted by location from, location to, and time interval

Location from

Location to

Interval

GRC

Chimney CornersCedar ParkBrodieBee Caves

7654321765432176543217654321

60

50

40

30

20

Mov

ing

Tim

e(m

in)

Boxplot from GRC 2

Boxplot Time Interval KeyTimes Interval

5:00 am - 7:00 am 17:00 am - 9:00 am 29:00 am - 11:00 am 311:00 am - 1:00 pm 41:00 pm - 3:00 pm 53:00 pm - 5:00 pm 67:00 pm - 9:00 pm 75:00 pm - 7:00 pm 8

Traffic TrendsLocation from Location to

5:00-7:00 am

7:00-9:00 am

9:00-11:00 am

11:00-1:00 pm

1:00-3:00 pm

3:00-5:00 pm

5:00-7:00 pm

7:00-9:00 pm

10th Street GRC Airport GRC Balcones GRC Bastrop GRC Bee Caves North Lamar Bee Caves Riverside Brodie GRC Cedar Park GRC Chimney Corners GRC Cypress Bend Round Rock Dripping Springs GRC Fredericksburg GRC Georgetown GRC GRC 10th Street GRC Airport GRC Balcones GRC Bastrop GRC Bee Caves GRC Brodie GRC Cedar Park GRC Chimney Corners GRC Dripping Springs GRC Elgin GRC Georgetown GRC Hutto GRC Kyle GRC Lake Austin GRC Lakeway GRC Macfarlane GRC Marble Falls GRC New Hope GRC North Lamar GRC North Star GRC Norwood GRC Oak Hill GRC Parmer GRC Pflugerville

Location from Location to5:00-7:00 am

7:00-9:00 am

9:00-11:00 am

11:00-1:00 pm

1:00-3:00 pm

3:00-5:00 pm

5:00-7:00 pm

7:00-9:00 pm

GRC Riverplace

GRC Riverside

GRC Round Rock

GRC San Marcos

GRC Scofield

GRC Shadow Glen

GRC South Lamar

GRCSouthpark Meadow

GRC Wells Branch

GRC West Bank

Hutto GRC

Kyle Chimney Corners

Lake Austin GRC

Lakeway GRC

Lakeway Riverside

Macfarlane GRC

Marble Falls GRC

Marbridge Macfarlane

New Hope GRC

North Lamar GRC

North Star Airport

North Star GRC

Norwood GRC

Oak Hill GRC

Parmer GRC

Pflugerville GRC

Riverplace North Star

Riverside GRC

Round Rock 10th Street

Round Rock GRC

San Marcos GRC

Scofield GRC

Shadow Glen Round Rock

South Lamar GRC

Wells Branch GRC

West Bank Airport

West Bank Norwood

These charts show the different trends in traffic during the shown time intervals.

AcknowledgementsThis project is sponsored by Goodwill Industries with help from the following people:

•Leslie Bailey-Smith, LCSW Internship Program Coordinator•Joseph Hnatow, Logistics Manager•Ryan Schlickeisen, Inventory Analyst•Kelly Freeman, Sustainability Director•Allan Whitley, Sr. Director