A State-of-the-Art Warehouse

A Forklift Driver Brings Down the Warehouse

2 Optimized Warehouse Design 3 Operations Based on Best Practices Outline 1 Introduction 2 Optimized Warehouse Design 3 Operations Based on Best Practices 4 Best-of-Breed Applications – Warehouse Management System 5 New Technologies in Warehousing 6 Personnel Skills and Knowledge 7 Continuous Improvement Program

26 4 37 100 Supply Chain Who we are % The 1 thing we do Supply Chain Consultants Offices Projects Completed Last Year Success Rate The 1 thing we do Supply Chain

Our customers

Introduction From store management to full blown warehousing logistics The warehouse is at the heart of any supply chain The warehouse constitutes one of the largest capital expenditures of any company Warehouse Operations constitute one of the largest operating expenses of any company Warehousing is now a science and even taught as majors in universities

Introduction Elements of warehousing: Facility (land, building, flooring, racking systems) Material Handling Equipment (riders, reach trucks, dock levelers…) Systems (Warehouse Management System) Technology (Voice Picking, Pick-to-light, AS/RS) People and operations Having a State-of-the-Art warehouse implies optimizing all elements together to achieve the best results

How to optimize your warehouse design?

Optimized Warehouse Design Having the right warehouse design is critical to: Optimizing storage capacity Streamlining Throughput and Operational Flow Minimizing Shrinkage Maximizing Stock Safety Ensuring Overall Facility Security Ensuring Compliancy with Warehousing Best Practices i.e. FEFO/FIFO, ABC Slotting, Replenishment, etc…

Optimized Warehouse Design Some of the common mistakes in design: Not benefiting from full building height Maximized storage capacity that slows down the whole operations (full VNA design in an FMCG warehouse) Large storage areas that increase travel distance Reduced marshalling and staging areas that generate congestion in loading/unloading activities Non-energy efficient designs (lack of skylights, non-colored roofs…) Non safety compliant system

Optimized Warehouse Design + Required Storage Systems Different racking systems to suit operations Aisle Spaces Data Analysis Total Pallet Storage required Total non-pallet storage required SKU classification Average movement of goods Required Docks Required Warehouse Size

Optimized Warehouse Design Sample Racking Systems: Standard Selective: Aisle Width = 3.3 m Good Order Picking: (100% selectivity; average pick rate) Poor floor Area Utilization: 31% net pallet area VNA: Aisle Width = 2.2 – 2.4 m Good Order Picking: (100% selectivity; average pick rate) Average floor Area Utilization: 50% net pallet area

Optimized Warehouse Design Sample Racking Systems: Drive-In/Drive-Through: Drive-through: Stock Rotation FIFO Drive-In: Stock Rotation LIFO Selectivity limited Good Floor Area Utilization: 60% net pallet area Pallet Flow Racks: Stock Rotation FIFO Selectivity Limited Good Floor Area Utilization: 60%+ Expensive (cost per pallet position)

Link between Storage Systems

Optimized Warehouse Design Security – Column Guards: Ensure the security of racking material

Optimized Warehouse Design

How to optimize your warehouse operations?

Operations Based on Best Practices Receiving Put-away Inventory Management Picking Loading and Shipping

Operations Based on Best Practices What Not to Do Excessive Labeling Double Safety Stock Pick from Permanent Storage Areas

Operations Based on Best Practices What Not to Do Pick from bottom of the stack Cycle Counting Using Labels

Operations Based on Best Practices Receiving Putaway Cycle Counts Picking

Operations Based on Best Practices Receiving : Use Real-time or Online systems Use barcodes Standardize palletization Capture data at receiving docks Segregate damages Respect products validations QC received goods

Operations Based on Best Practices Putaway: System driven strategies Optimize storage space Respect products specs Classify items based on A B C analysis

Operations Based on Best Practices Cycle Counts: Daily, weekly counts Partial stock counts Maintain high accuracy throughout the year Investigate problems progressively Reach the 99+% mark on location level

Operations Based on Best Practices Picking: Reserve stocks based on FIFO, FEFO Pick based on unit of measure Slot items in locations Use real-time or online picking Use Paperless picking Label pallets or cases on picking Pick to assigned door

What are the Best-of-Breed applications for warehouses?

Best-of-Breed Applications – WMS A Warehouse Management System (WMS) is an advanced solution that will Control and Monitor all the activities performed within the 4 Walls of your Warehouse. A WMS will organize work and align resources and labor to satisfy your customer requirements. A WMS is not an inventory system

Best-of-Breed Applications –WMS Differentiating Functionalities: Storer specific, inventory separation based on account, division and SKU Multi-warehousing, enterprise control SKU references, alternative and substitute capabilities Flexible, user defined lotting capabilities Ability to capture Expiry Dates, Manufacturing Dates and other SKU attributes Ability to capture Weight and Serial Numbers Full tracking and visibility of different data/lot attributes Shelf Life Validations on Inbound and Outbound Bill of Materials

Best-of-Breed Applications –WMS Differentiating Functionalities: Traceability Full Traceability of a product from Receiving to Shipping Ability to easily recall products from the market Cycle Counts Highly developed modules for daily counts Ability to generate counts by Class, SKU, Location… User defined rules for automatic stock update based on counts Access on full counts history RF Directed Functionalities

Best-of-Breed Applications – WMS WMS Cost Savings For All Warehouses 1 Month 1 Year 2 Years 3 Years 4 Years 5 Years Paper & Printing Savings $2,500.00 $30,000.00 $60,000.00 $90,000.00 $120,000.00 $150,000.00 Labor Overtime Savings $3,000.00 $36,000.00 $72,000.00 $108,000.00 $144,000.00 $180,000.00 Sales Increase $5,000.00 $240,000.00 $300,000.00 Reduction in Sales Returns $500.00 $6,000.00 $12,000.00 $18,000.00 $24,000.00 Inventory Accuracy $250.00 $9,000.00 $15,000.00 Reduction in Inventory Better Warehouse Space Utilization Energy Savings Savings on the Planning Side (Olayan Staff on Excel payroll) Increase Customer Satisfaction Level $300.00 $3,600.00 $7,200.00 $10,800.00 $14,400.00 Reduce Labor Turnover (Increase Morale/Motivation) $150.00 $1,800.00 $5,400.00 Reduce Theft/Shrinkage Optimize Transportation/ Maximize Loading Capacity Help in Winning ONLY 1 More 3PL Account $0.00 $200,000.00 Reduce Port Demurrage and Penalty Fees Reduce Damages $100.00 $1,200.00 $2,400.00 $4,800.00 Reduce Obsolete Stock Reduce Labor (10%) - Optional Total $18,700.00 $224,400.00 $648,800.00 $873,200.00 $1,097,600.00 $1,322,000.00

What are some of the new technologies that can be used in warehousing?

New Technologies in Warehousing Pick to Light

New Technologies in Warehousing Pick to Light 3 -5 errors per 1,000 or 99.50% Order picking productivity can range between 100 –350+ lines / hour depending on the industrial application Most suitable for high hit-frequency “split case” products as measured in order line activity or “reaches”

New Technologies in Warehousing Voice Picking

New Technologies in Warehousing Voice Picking 0.2 -2 errors per 1,000 or 99.8 –99.98% Order picking productivity can range between 100 –300 order lines / hour depending on the industrial application Suitable for both low-hit and high-hit frequency environments Suitable for “full case” and “split case” products

How to improve of the personnel skills and knowledge?

Personnel Skills and Knowledge Think Tank Training Curriculum Pay for Performance Employee of the month Affix Billboards Suggestion box in warehouse Annual events Rotate people in warehouse Clean environment

How to continuously improve your warehouse performance?

Continuous Improvement Program Define list of KPIs to evaluate warehouse Calculate KPIs and identify lowest score Design and implement solutions to increase KPIs Re-measure KPIs and select new ones

Thank you