1. A State-of-the-Art Warehouse

2. A Forklift Driver Brings Down the Warehouse

3. 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

4. 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 thing we do
Supply Chain

5. Our customers

6. 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

7. 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

8. How to optimize your warehouse design?

9. 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…

10. 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

11. 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

12. 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

13. 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)

14. Link between Storage Systems

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

16. Optimized Warehouse Design

17. How to optimize your warehouse operations?

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

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

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

21. Operations Based on Best Practices
Receiving
Putaway
Cycle Counts
Picking

22. 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

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

24. 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

25. 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

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

27. 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

28. 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

29. 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

30. 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

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

32. New Technologies in Warehousing
Pick to Light

33. 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”

34. New Technologies in Warehousing
Voice Picking

35. New Technologies in Warehousing
Voice Picking
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

36. How to improve of the personnel skills and knowledge?

37. 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

38. How to continuously improve your warehouse performance?

39. 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

40. Thank you