What is Activity Profiling?

Warehouse Activity Profiling is the analysis of historical

sales transaction data for the purposes of projecting warehouse activity and

determining storage mode, physical layout, work flow processes, and labor and equipment requirements.

2

Profiling Database Source Data

INV. MASTER

Inventory SnapshotsAverage Inventory

Levels

ORDERMASTER

Order HeaderOrder Detail

ITEM MASTER

SKU NumberDescriptionItem CubePieces Per CaseCases Per PalletDivisionProduct GroupItem Weight

Item OrderedQtyUnit of Measure

3

Developing Profiling Reports & Graphs

STEP #1: CONSOLIDATE

& CALCULATE

InventoryMasterData

ItemMasterData

OrderData

STEP #2: ANALYZE (Sort / Rank)

& PRESENT

Rank ItemNumber Of Order

Lines

Total Quantity Ordered

% Of Total

Volume

Cumulative Volume

# Pick Days

Daily Pick Frequency

1 355 1895 8971 0.5742% 0.574% 57 33.25 2 138SA 1820 7238 0.4633% 1.038% 57 31.93 3 353 1734 6630 0.4244% 1.462% 57 30.42 4 SW95A 1669 5266 0.3371% 1.799% 57 29.28

How Do You Design a Warehouse?

• Two Ways To Design a Warehouse– Storage Driven Approach

via Cube Analysis– Picking Driven Approach

via Order Analysis

Sto

rag

e D

riven

Pic

king D

riven

What is the Storage Driven Approach to Design?

• PART I:

• PART II:

• PART III:

Define Your Storage Zones

Design Your Forward Pick Areas

Define How You Will Plan &Pick Orders

Designing a Warehouse

Part IDefine Your Storage Zones

Categorize Items By Cubic Ft of Inventory

.125 1.5 40.0 320.0

Calculate the cubic feet of storage that each item requires and then assign it to an “inventory container” of the appropriate size.

Cubic Feet of Storage Required For An Item

Multi-PalletDrive In

Rack

Pallet Rack

Bin Shelving

Drawers

Develop an Inventory Container GraphInventory Container Graph

0

5000

10000

15000

20000

25000

0.125 1.5 8 40 320

Cubic Feet of Storage Needed

# o

f S

KU

s

Now you can begin to think about what storage modes might be reasonable candidates for the merchandise you are storing…

Drawers

Develop a Pick Size Classification SchemeNext develop a classification scheme for picks based on the size of the pick. Usually designers will use pallet”, “case”, and “piece” pick sizes

Piece Pick Case Pick Pallet Pick

Assess the Activity In Each Inventory ContainerInventory Container Graph

0

5000

10000

15000

20000

25000

0.125 1.5 8 40 320Cubic Feet of Storage Needed

# o

f SK

Us

Assess the activity in the larger containers to see if there is the possibility that some of the items should be moved to a forward pick area. The decision will be driven by the # of such picks in the container and the overall size of the larger container storage area.

Piece Picks Within the Pallet Inventory Area

0

200

400

600

800

1000

1200

Cummulative # of SKU's

# of

Pic

ks/ D

ayPiece PickActivityCurve

Move these to Case Storage

Designing a Warehouse

Part IIDefine Your Forward Pick Areas

Forward Pick Areas

Reserve Areas

General Process for Forward Pick Design

• Questions that Must Be Answered About the Forward Pick Area(s):• How many forward pick areas do you

need?• Determine how many SKUs should go on

the pick line • Removing unusual SKUs from the pick line• Sequence the SKUs on each pick line

% Items

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

% Orders Complete

Full Case OrdersBroken Case OrdersOverall

Order Completion Analysis By Size of P ick

% Items

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

% Orders Complete

Full Case OrdersBroken Case OrdersOverall

Order Completion Analysis By Size of P ick

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

% Orders Complete

Full Case OrdersBroken Case OrdersOverall

Full Case OrdersBroken Case OrdersOverall

Order Completion Analysis By Size of P ick

You will likely have multiple forward pick areasFor each Pick Size you need to decide if there are a lot of picks associated with a relatively small subset of the items. If so, you will likely want to set up a forward pick area for that Pick Size.

80% of Picks from

20% of Items

These Items should go intoa forward pick area.

Determining How Many Items in Forward Pick

Number of SKUs

% Case Picks Filled

% Days Picked

20 33 9930 46 9740 52 9550 67 9360 73 9270 79 9080 81 83

90 84 79100 88 68110 92 63120 92 52130 95 44140 98 33150 98 25160 100 22

Number of SKUs

Trade Off: Space Utilization and Efficiency

0

20

40

60

80

100%

20

40

60

80

10

0

12

0

14

0

16

0

0

20

40

60

80

100%

% Case Picks Filled% Days Picked

Generally to determine how many items you are going to put in the forward pick area you look at the tradeoff between adding an item into the forward pick area and the % of additional orders you are then able to complete in that area.

Determining How Many Items in Forward Pick

Rank ItemDays

Shipped

% Of Frequency (By Day)

Case Picks

% Of Total Case Picks (541,786)

Cummulative Case Picks

(Out of 104)1 S118R 104 100.0% 20045 3.6998% 3.6998%2 S12DC 104 100.0% 10757 1.9855% 5.6853%3 S23DC 104 100.0% 4732 0.8734% 6.5587%

4 522X 104 100.0% 3212 0.5929% 7.1515%5 SP2I 104 100.0% 507 0.0936% 7.2451%6 2091I 104 100.0% 14350 2.6486% 9.8938%7 3232W 103 99.0% 16270 3.0030% 12.8968%8 3232I 103 99.0% 16173 2.9851% 15.8819%9 SPT8W 103 99.0% 8208 1.5150% 17.3969%

10 SP8I 103 99.0% 5385 0.9939% 18.3908%11 SP8W 103 99.0% 5082 0.9380% 19.3288%12 P8I 103 99.0% 3345 0.6174% 19.9463%

90

Designing a Warehouse

Part IIIDefine How To Plan & Pick Orders

Wave Planning & Picking ApproachesDaily Order Pool

Orders of this “type” get released to the floor and picked in the following manner every X hours

While designers make assumptions at the start of a design about how the bulk of the orders will be released and picked, the details behind their thinking are not usually flushed out until the end of the project. They often also wait until the end to define the planning and picking approaches for the exceptional orders.

Orders of this “type” get released to the floor and picked in the following manner every Y hours

Ways in which you can process orders differently

• Order Selection Criteria & Groups– Rush vs Regular Orders– Geography (West Coast vs East Coast)– Orders Requiring Personalized

Merchandise– Single vs Multi-Line Orders– Types of Picks Needed to Complete

Order– Order Cube (Sm Pkg vs LTL vs TL)

Forced UponYou By

TheBusiness

EfficiencyOpportunity

Assess the Significance of Single Unit OrdersUnits/Order as a Percentage of Total Orders

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 2 4 6 8 10 12 14 16 18 20

Units Per Order

Cu

mu

lati

ve %

of

Ord

ers

.

One of the greatest opportunities to improve warehouse efficiency is choosing a different mechanism for picking single unit orders from multi-unit orders.

45% of all Orders are single unit orders.

Assess the significance of grouping by area

Reserve(Pallet)Area

Case Forward Pick

Area

Piece Forward Pick

Area

Broken Case Only

Full Case Only

Mixed

55%

60%

25%

30%

20%

10%

0% 10% 20% 30% 40% 50% 60% 70%

% Pick Lines

% Orders

Broken Case Only

Full Case Only

Mixed

55%

60%

25%

30%

20%

10%

0% 10% 20% 30% 40% 50% 60% 70%

% Pick Lines

% OrdersMixed

55%

60%

25%

30%

20%

10%

0% 10% 20% 30% 40% 50% 60% 70%

% Pick Lines

% Orders

Orders Completed By Area

Orders that require merchandise coming from different storage areas within the warehouse may need to be picked differently.

Deciding on a Picking Approach

Single Order Picking Multi-Order Picking Batch Picking

After the different groups of orders have been identified, the designer has to make a decision about how each group of orders will be picked.

Order #1Order #2

Sorting Picks at End of Tour

How Will Orders in Forward Pick Be Picked?

75%

10%5% 5% 3% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

% o

f T

otal

Ord

ers

0.5 1 2 8 32 64

Order Cube (Cu Ft)

Multi Line Order Cube

Good candidates for Multi Order Picking

Multi-Order Picking Cart

Order #2Order #3

Order #1

Deciding on a Picking Medium

Radio Frequency (RF) Barcode Picking

Voice Picking

Label Picking

Pick To Light

For each picking approach you need to decide on a mechanism for how picks will be communicated to pickers.

How Do You Plan & Pick Different Orders

Small Cube Multi-Line Orders

Order Group Pick Method Pick Medium

Single Line Orders

Multi-Order Picking

Batch Picking

RF Terminals

Labels

Summary of Warehouse Design Process

• PART I:

• PART II:

• PART III:

Define Your Storage Zones

Design Your Forward Pick Areas

Define How You Will Plan &Pick Orders

Observations

• Every descriptive tool or technique seems to be based on a specific “need”

• Profiling/design is less about “describing” an “as is” warehouse, than about saying how it “should have been”

• It’s hard to integrate the different descriptive tools and techniques

• Can we build a comprehensive, computational “description” from which all the different “needs” can be met?

Domain

InstanceModel

Schema

Process

Reference

Model

AMPL, AIMS, GAMS, and other “modeling languages” incorporate a reference model for the domain of optimization models, and are used to create instances of optimization models.

Can reference models be developed for the domain of

discrete event logistics systems, or for subsets of the domain, e.g.,

warehouses, factories, and supply chains?