Distribution Operations Outline

Distribution Operations Overview

Distribution Operations Outline
Facility Operating Models Operating Functions Inbound Functions Receiving Putaway / Takeaway Stocking & Picking Slotting & Pick Design Pick Slot Storage Types Order Picking Control Pick Replenishment Order Release Methodologies Flow Through Processing Check-In Order Allocation Value Added Services Order Pick / Pack Sortation / Consolidation Packing / Shipping Packing Functions Shipping Concepts Automated Sortation Quality Control Facility Maturity Model Facility Capacity Analysis Capacity Assessment Basics Flow Profiling & Data Queuing & Accumulation Impact of Capacity Facility Design and Layout Warehouse Control & Optimization Distribution Operation Tools

Facility Operating Models

The purpose of distribution facilities is to balance transportation efficiencies between a supplier and an end-user, as well as providing whatever inventory buffer is necessary to ensure required fill rates. Facilities help manage transportation costs by providing consolidation efficiencies for both inbound and outbound shipments The positioning of facilities within the network depends on the relative costs and frequencies of transportation and the importance of service times Different operating models are appropriate for different circumstances and product characteristics, for example: Stocking facilities – Slow moving inventory, long lead time items, high demand variability, requirements for frequent re-allocation Flow through facilities – High value inventory, seasonally variable items, fashion goods, Cross-dock facilities – High volume or fast moving items with predictable demand patterns, commodity items,

Benchmark is using their facility in this manner Summary Of Facility Functions And Suitability Considerations System Description Pros Cons Stocking The distribution facility serves as a repository for inventory, buffering demand and enabling the use of efficient order quantities as well as the building of efficient delivery loads to customers or end-users. Most suitable for slower moving inventory or items with long lead times. Higher fill rates for items with less predictability (pooling of inventory risk) Higher system-wide inventory levels. Additional layer of handling costs (putaway and selection). Flow Through The facility serves as an assembly point for outbound orders to customers or end-users. Inbound loads from suppliers are broken down and distributed among multiple destinations. No inventory is held beyond the time to build and dispatch the next outbound shipment. Enables a more efficient inventory model where inventory is allocated to and maintained at the point of demand, where volumes cannot support large end-user shipments. Streamlined processing costs. Requires sophisticated order management and allocation capabilities. Requires sufficient density of end-user demand volume to justify frequent outbound shipments. Cross-Dock The facility is a transfer point for inbound shipments which are already separated for delivery to individual customers or end-users. The function is to shorten the supply chain while maintaining transportation efficiencies. Minimal handling costs. Fastest speed to market. Requires order scale to justify supplier preparation of end-user shipments. Limited ability to react to last minute changes in demand patterns.

Stocking Facility

Flow Through Facility

Inbound Processing - Receiving and Putaway / Takeaway
This section may be of less interest

Physical Receiving Physical receiving processes are largely driven by the nature of the goods being received, as well as the ultimate mission of the facility. Receiving Process Unload, stage & check-in Immediate putaway to reserve Immediate putaway to primary Cross-docking or “hot receiving” Physical Receiving / Material Handling Pallet onto Floor / Rails Pallet to Carton Takeaway Direct Carton Unload and Takeaway

Receiving Processing Initial processing of goods on the receiving dock generally consists of check-in and receipt verification. The degree of processing depends on the design of upstream and downstream processes and is driven by the relative capacity and productivity of the various processes. Detail Receiving Detail Check In Receiving Detail Check In Processing (Flow Through Facilities) No Detail Check In – Carton Count or Assumed Receipt Receipt Verification / Check In Manual validate against PO upon receipt Scan validate against PO upon receipt Pre-receiving Assumed receipt

Receiving Methods Pallets unloaded onto floor conveyor or into floor positions, PO sortation and checking done by re-stacking pallets where necessary

Receiving Methods Pallets unloaded into floor positions, cartons unstacked and sorted onto conveyor by PO and taken away to storage or processing

Receiving Methods Cartons unloaded onto conveyors, sorted by PO and taken away to processing or storage

Putaway / Takeaway After initial receiving processing, products are taken from the dock to either storage or interior locations for further processing. There are various methodologies for executing these moves Process First Come First Serve Batched by Zone Batched and Sequenced Automated Putaway Location Selection Manual (Random) Manual (locate SKU by zones) System Confirmed Putaway System Suggested Putaway System Directed Putaway

Slotting and Picking This section presents some critical considerations as the new facility is designed

Slotting & Picking Design Methodology
Data Collection Analysis Business Case Layout Design Product profile data Cube Weight Unit of measures Facility Profile Sales history & variances by sku Order history (line item detail) Pick slot capacities Order Analysis Units-of-measure Pick Frequencies (hits per SKU) Slotting Analysis Slot size requirements Pick slot storage type Slot location Assign pick methods Storage types Handling systems Control methods Estimate pick rates Determine order release method Analyze congestion Determine automation requirements Develop layout drawing Estimate capital costs Estimate operating costs Estimate savings Quantify cash flows

Data Collection Analysis Layout Design Business Case Product profile data Cube Weight Unit of measures Facility Profile Sales history & variances by sku Order history (line item detail) Pick slot capacities Order Analysis Units-of-measure Pick Frequencies (hits per SKU) Slotting Analysis Slot size requirements Pick slot storage type Slot location Assign pick methods Storage types Handling systems Control methods Estimate pick rates Determine order release method Analyze congestion Determine automation requirements Develop layout drawing Estimate capital costs Estimate operating costs Estimate savings Quantify cash flows

Slotting Analysis – Locations
This is a key slide Slotting Analysis – Locations Generally, the warehouse can be divided into slotting zones based on pick frequencies Slow Movers C Pick Zone 80-90th Percentile B Pick Zone 80th Percentile of Pick Frequency A Pick Zone Dock

Slotting Analysis – Locations
This shows the analysis that is done to assess how well a facility is laid out Slotting Analysis – Locations Sample product slotting analysis Comparison of As-Is & To-Be Slotting Output From Slotting Analysis

Slotting Analysis – Travel Path
Sample picking travel path analysis The impact is that efficiency is dramatically improved Before Total Travel Distance = 1,110 ft. (68% Reduction) After Re-Slot Total Travel Distance = 3,480 ft.

Data Collection Analysis Layout Design Business Case Product profile data Cube Weight Unit of measures Facility Profile Sales history & variances by sku Order history (line item detail) Pick slot capacities Order Analysis Units-of-measure Pick Frequencies (hits per SKU) Slotting Analysis Slot size requirements Pick slot storage type Slot location Assign pick methods Storage types Handling systems Control methods Estimate pick rates Determine order release method Analyze congestion Determine automation requirements Develop layout drawing Estimate capital costs Estimate operating costs Estimate savings Quantify cash flows

Pick Slot Storage Types
System Description Pros Cons Static Storage Pallet Rack Shelving System in which the product does not move on its own. The most common storage equipment used is the selective pallet rack (single deep) and the steel shelving unit. Storage by size and popularity is critical. appropriate for the storage and picking of all but the most popular products, initial low investment excessive travel time, ineffective control system Dynamic Storage Carton Flow Pallet Flow System in which the product flows by gravity (gravity conveyor or air flotation rails) to present a unit of material to the picker at a specified location. There are two basic variations: Carton Flow, used for broken case picking and Pallet Flow Rack, used for case picking. relatively small picking face, reduced size of zone and travel distance substantial equipment costs, replenishment costs (labor) Example Pallet Rack Example Carton Flow Replenish Pick

Order Picking Handling Systems
Man-to-Part: Traditional material handling approach to order picking that requires the picker to travel to the storage location System Description Pros Cons Pick to pallet The picker operates an industrial truck with a pallet and commonly used for case picking and broken case picking. access to hi-rise shelving least productive order picking method Pick to cart The picker operates a push cart or powered cart. improved productivity with computer control and radio communication capabilities, able to handle large orders and long distances restricted access to storage levels that can be reached from the floor Pick to belt The picker is assigned a zone along a. conveyor where he places picked items. Commonly used with flow rack storage and requires sortation by customer order before shipping Man-aboard Storage / Retrieval The picker rides a captive aisle storage/retrieval machine that rides on a rail and is powered by an electric bus overhead. reduces travel time flexibility of being able to move between storage aisles Full Case Broken Case Example Carton Flow & Pick to Belt

Order Picking Handling Systems (continued)
Part-to-Man: Material handling system in which the part is delivered via carousels, conveyors, and storage/retrieval systems to the picker System Description Pros Cons Horizontal Carousels Storage bins that rotate horizontally on a track under electric motor power improved cube utilization, full utilization (no waiting, no traveling) substantial equipment costs; cannot pick & replenish simultaneously Vertical Carousels Storage shelves that rotate vertically, always presenting a shelf to the picker at waist level. excellent for space utilization and organization when storing small volume, small items Automatic Storage & Retrieval System Hybrid of the carousel and S/R modules that store and retrieve containers under computer or operator directed control substantial equipment costs Example Horizontal Carousel

Picking Control Methods
System Description Pros Cons Paper Picking A printed pick list that includes SKU’s and locations higher likelihood of picking errors; requires manual pick confirmation Label Picking A bar coded label is printed for each SKU or full case with correct location address, SKU identity, and customer order number. reduces likelihood of counting errors, improves productivity Pick-to-Light The use of a visual display to visually lead the picker through the process of picking each line in the assigned zone. paperless picking, order accuracy Radio Frequency (RF) Units The use of onboard and hand-held terminals displaying picking instructions via RF data communication links from the picker to the control computer in real-time. Also provides a means of confirming or correcting picking orders. reduced travel time and delays, high order accuracy

Pick Rate Analysis Applying pick rate benchmarks is a quick way to estimate the labor costs associated with various pick methods If general benchmarks are inappropriate, then more detailed work studies will be required

Order Release Methodologies
Description Pickers Per Order Line Items Per Pick Periods per Shift Pros Cons Discrete Picking One person picks one order, one product at a time. Orders are not scheduled and may be picked at any time on a particular day. Single simple, risk of picking errors of omission is reduced, provides fastest response in a service window environment, picking accuracy accountable to a single person, little coordination with other pickers required, no space required for order consolidation, and relatively low control system sophistication required least productive, excessive travel time, relatively low number of orders picked simultaneously, greater risk of picking area congestion Zone Picking The total pick area is organized into distinct zones managed by one person responsible for picking all lines for each order for that zone. Two variations of zone picking include: Sequential zone picking, when the order is passed from one zone to the next, one at a time. Simultaneous zone picking, when the order is consolidated in a designated location after zone picking is done from all applicable zones independently. Multiple flexible with different skills or equipment associated with a hybrid warehouse, reduced travel time/congestion/delays due to the ability to further subdivide zones, relatively high number of orders picked simultaneously, reduced picking area congestion Multiple pickers accountable for picking accuracy, high coordination with other pickers required, space and coordination required for order consolidation

Order Release Methodologies (continued)
Description Pickers Per Order Line Items Per Pick Periods per Shift Pros Cons Batch Picking One picker picks a group of orders at the same time, one line at a time. Single Multiple greater productivity, best for orders with few (1-4) lines and small cube, reduced travel time, drastically reduced picker travel time, very high number of orders picked simultaneously risk of picking and sorting errors, coordination required between bulk picking and individual order sortation , individual order processing time dependent upon total batch processing time, space required for individual order sortation, residual product handling can be relatively high, relatively high control system sophistication Wave Picking One picker picks one order one line at a time however a selected group of orders are scheduled to be picked during a specific planning period better coordination with shipping Risk of productivity loss if shipping schedule is unbalanced

Order Release Methodologies (continued)
Description Pickers Per Order Line Items Per Pick Periods per Shift Pros Cons Zone-Batch Picking Each picker is assigned a zone, and will pick a part of one or more orders, depending on which lines are stocked in the assigned zone. Multiple Single Potential for higher productivity requires more control due to complexity in nature Zone-Wave Picking Each picker is assigned a zone, and picks all lines for all orders stocked in the assigned zone. requires workload balancing between pick zones Zone-Batch-Wave Picking Each picker is assigned a zone, and picks all lines for orders stocked in the assigned zone.

Flow Through Processing

Flow Through Processing
Detail checking in flow through processing areas is similar to the process engaged in during receiving. Often this process is deferred to these processing areas to leverage the need to open and unpack each carton in these areas and avoid duplicate handling. A key function of a flow-through process is to delay allocation of incoming product shipments until receipt at the distribution center in order to make more effective decisions on the deployment of inventory. Flow through processing includes the physical distribution of goods to final destinations based on these allocations. This can happen in several ways: Manual distribution (re-packing) Manual pick / pack processes Automated sortation

Flow Through Processing – Value Added Services
Value added services are typically performed as a function of the flow through processing areas. These areas can be either in-line, or arranged in work-stations for more complex services. Note that these services can also be applied to products in a storage facility as well as a flow-through facility. Typical Services Kitting / Light assembly Pre-packs Custom packaging Labeling Pricing Floor-ready displays Tracking / Control Component pick lists Automated inventory adjustments & conversions Schedule and coordination

Flow-Through Processing
Multi-level processing modules are one way of combining flow-through processes in-line, maintaining flow rates and improving productivity.

Flow-Through Processing – Pick / Pack Concept
The Order Pick / Pack concept circulates each product past static locations for each customer or destination, where the allocated quantity for each location is consolidated and packed to containers.

Flow-Through Processing – Automated Sortation
Automated sortation is one option for consolidating individual items that have been picked, or are being allocated and distributed into a unitized delivery carton or container. Tilt-Tray Sorter - Tilt Trays sorters require either manual or automatic induction. Once the item is on a tray the item is scanned and transported to the proper lane/chute. At that point the tray is tilted so the product is diverted off. These trays can divert to both sides and receive product at multiple points. Crossbelt Sorter - Crossbelt sorters are similar to tilt trays, but a dual action belt with dc motor replaces the tray. Products are inducted onto the individual belts then powered off at the proper lane destination. * Note that this is a representative sample, not a comprehensive list of sorter types

Packing / Shipping

Packing / Shipping The shipping function creates unit loads (pallets or containers) for shipping, as well as preparing shipments for delivery to customers. The shipping area is typically responsible for closing out order activity and confirming distribution activities. Order verification Packing Master packs / consolidation Palletization Freight / postage determination Labeling Content labeling Compliance labeling Shipping labeling Packing slips Shipping Manual Pallet Build, Stage & Load Carton Sortation to Pallets, Stage & Load Direct Carton Load Automated Loading Pack & Hold

Packing / Shipping Pallets built in picking or processing areas are accumulated on the dock and staged for shipping

Packing / Shipping - Conveyors and Sortation
Several types of sorters exist for sorting cartons or containers to shipping lanes for palletization or direct loading: Right Angle Pusher - Diverts via a pneumatic powered pusher, when activated the pusher pushes the carton directly in front of it off the sort conveyor onto an outbound lane. While relatively simple and cost efficient, this type of sorter has limited throughput rates. Sliding Shoe Sorter - Suited for heavy duty applications, the cartons are tracked and diverted by pushers (shoes). The number of shoes that diverts are based on the specific carton being tracked. Both the tube and slat can sort left or right at the same time. Pop Up Wheel - Diverts via a pneumatic powered solenoid, when activated the wheels raises above the sorter plane, changing the case direction. Versions of this concept include pop up chains and roller sections in traditional conveyor sections. * Note that this is a representative sample, not a comprehensive list of sorter types

Packing / Shipping Pallets are built in shipping from individual cartons conveyed from picking / processing areas. Pallets are not staged, but are live loaded. A version of this concept would load cartons directly onto trailers without palletizing (floor loading trailers / containers)

Quality Control Quality control activities are typically either performed upon receipt as part of the detail check-in process, or post-storage as part of a location / SKU verification process (cycle counting) Quality Inspection upon Receipt 100% Inspection Random Inspection (Procedure directed) Random Inspection (System Directed) Statistical Inspection (System Directed) Cycle Counting Random Periodic / Scheduled Statistical (Experience Based) Exception Triggered

Facility Maturity Model

Facility Maturity Model
We Categorize practices based on a Capability Maturity Model Stage IV Excellent Top 5 % Companies Stage III Advanced Top 5 – 20 % of Companies Stage II Common Middle 20 – 80 % of Companies Stage I Outdated Bottom 80 – 100 % of Companies Usage Leading, edge practices based on new or emerging technology or very innovative processes Practices that are widely implemented at leading edge companies within an industry Practices that are widely used and adopted across an industry Practices which are used but may be considered out of date Time As a practice becomes more widely adopted, it transitions from excellent through to a standard practice; and then possibly to an outdated practice

10. Distribution Operations: Warehouse Planning & Design
Excellent Advanced Common Outdated Start-up and Close Downs of Warehouse Operations Start-up and close-down based on continually updated quantitative network model that determines optimal warehouse location based on trade-off between operational costs, facility costs, transportation costs, inventory investment and customer service. Start-up and close-down based on quantitative network model that determines optimal warehouse location based on trade-off between operational costs, facility costs, transportation costs, inventory investment and customer service. Start-up and close down based on perceived need. Use of a detailed project plan for start-up and close-down of operations to ensure seamless customer service. Start-up and close down based on perceived need. Use of a project plan for move and installation of warehouse resources, equipment and stock. Ad-hoc close-down. Parameters Used in Layout and Equipment Decisions Use of computer based layout and work-flow simulation modeling is used. The model is stand-alone or part of a “Tier-One” WMS solution. It considers slotting by SKU velocity and optimization of work flow and travel paths. Use of PC based spreadsheet models for layout and equipment needs and cost are used. Some velocity loading is considered for SKU placement. No models exist. Sizing is based on an estimate of bin, rack and floor space needed for current and future needs, derived from past examples. No models exist. Layout and equipment are based on past methods and product groupings. Velocity and travel optimization not considered. Methods and tools for Layout and Equipment Decisions Layout and Equipment design carried out by using a modeling tool to optimize space, SKU slotting, and travel optimization of the warehouse vs. cost, service and profit targets. SKU quantities and volumes are used to estimate storage types and space needs. Numerous storage and retrieval methods are evaluated to determine equipment needs. SKU quantities and volumes are used to estimate storage types and space needs. Past storage and retrieval methods are assumed while determining equipment needs. Sizing is done based on a comparison of material and quantities to be stored to past examples. Evaluation of Warehouse Configuration Dynamic SKU slotting is used to continually optimize warehouse space. Rearrangements are based on changing stock movement patterns. Frequent, periodic rearrangements of the warehouse (SKU static slotting) when movement patterns of stock changed significantly. Ad-hoc and infrequent rearrangements of the warehouse. No optimization of the warehouse. Material is moved only when space needs to be freed up for more material or when earlier such actions are reversed.

10. Distribution Operations: Operational Processes
Excellent Advanced Common Outdated Application of Lean Concepts Lean concepts are extended beyond the 4-walls to drive entire supply chain (“sell-one, buy one” and avoid promotions to reduce demand “lumpiness”). Lean concepts are used throughout warehousing operations (workplace organization, visual control and standardized work). Partial application of Lean concepts – particularly due to implementation difficulties in the area of standardized work. No application of Lean concepts. Operational Processes Determination Operational Processes are based on use of modeling tools and WMS outputs. Operational Processes are based on productivity considerations. Operational Processes are based on experience and past business requirements. Poor of non-existent structured determination of Operational Processes. Operational Improvement Methodology Operational processes are improved based on 6 Sigma process measures and workflow simulations. Operational processes are improved when inefficiencies become apparent. Operational processes are improved only when major inefficiencies are obvious. Operational processes are changed only when the services provided change. Process Automation Processes are managed via integrated WMS system, are RF-driven and include RFID technologies. Conveyor systems and automated sortation are integrated with WMS. Other automation (e.g. ASRS, carousels, etc.) may be utilized to satisfy specific requirements. Processes are managed via WMS system and are mostly RF driven. Conveyor systems and automated sortation are utilized. Other automation (e.g. ASRS, carousels, etc.) may be utilized to satisfy specific requirements. Paper or Radio Frequency (RF) driven processes. Some utilization of conveyors to transport orders to packing & shipping. Paper driven processes with some reporting. Order Picking Mixture of products cross-docked and pick from stock. Batch and wave picking with automated sortation are utilized to optimize productivity and shipping capacity. Conveyor system includes inline weighing and manifesting. Mixture of products cross-docked and pick from stock. Batch picking and automated sortation is utilized to optimize productivity. Mixture of single order and batch picking. Batch picked orders are manually sorted. Single orders are picked from storage racks.

10. Distribution Operations: Operational Processes
Excellent Advanced Common Outdated Receiving Statistical sampling of ASN’s is used to verify accuracy of receipts. No physical counting of receipts is required for consistently accurate vendors. Use of Cross docking with the use of ASN to allocate in-transit prior to actual receipt. Receipts are verified against ASN and entered into warehouse system via RF terminal. Use of Cross docking from receiving to shipping– allocate upon ASN. Receipts are verified via physical counts and entered into warehouse system via RF terminal or manually. Receipts are verified via physical counts compared to receiver document. Receipts are manually entered into warehouse system. Put-away WMS directs put away and interleaves putaway tasks with other warehouse tasks (e.g. replenishment, stock transfers, order picking, etc.) WMS directs put away to optimal storage location. Putaways are non-directed and updated into the warehouse system via RF terminal or manually. Paper-based put-away process where inventory moves are updated into the warehouse system by clerical, after the fact. Replenishment Replenishment tasks are interleaved with other warehouse tasks. Wave based replenishment to multiple pick zones based on material handling types. WMS system automatically increases priority of replenishment tasks when pick slot quantities fall below demand. Replenishment tasks are interleaved with other warehouse tasks. Wave based replenishment may be used. WMS system automatically increases priority of replenishment tasks when pick slot quantities fall below demand. Replenishment needs are generated from warehouse system report. Stockers use report to fulfill pick slot needs. Emergency pick slot needs are manually communicated. Replenishment needs are manually tracked and communicated to stockers. Productivity Tracking Productivity is captured and reported via WMS at the task and operator level and linked with labor incentives. Engineered standards may be used. Productivity is captured and reported via WMS at the task and operator level. Productivity is tracked at the process level (e.g. lines/pieces picked per labor $, etc.) Productivity is tracked at the operational level (e.g. orders shipped, labor cost, etc.)

Facility Capacity

Facility Capacity Analysis
Capacity should be looked at in two dimensions Throughput Storage Evaluate throughput in terms of several operating parameters Staging & queuing Conveyor and accumulation Productivity and staffing levels Address through material handling and process changes Evaluate storage at peak levels allowing for contingency Total cube and slot utilization Operating buffer (10-15%) Slotting and productivity considerations Volume fluctuations drive much of the discussion of capacity Peak versus average and duration of peaks Impact of balance of shipments and flow over time

Facility Capacity – Flow Profiling
The first step in evaluating capacity is to accurately chart activity by area and process through the facility, including accurately charting relative volume flows Sample Facility Flow

Data Detail for Capacity Analysis
Data requirements for a capacity analysis are typically more intensive than typical operations projects Sample Data Sheet

Throughput capacity – Staging and queuing- Each process in a distribution facility will require staging, either in the form of dedicated staging areas, or in the equivalent capacity to hold more product than is being currently processed Pick facings can be thought of as effective staging for order fuflillment Conveyor and accumulation Matching the capacity and flow rates of conveyors and sorters to periodic volume demand, and providing the appropriate amount of accumulation in these systems is a key to optimizing facility throughput Productivity and staffing A critical input to capacity analysis is the productivity of the staff involved in the process being analyzed Operating concepts and productivity Similarly to the storage concept or automation, the selection of operating concepts for key processes such as receiving, shipping, putaway and replenishment can drive the effective capacity of a distribution facility

Sample Capacity Calculations

Conveyor Flow Capacity & Queuing Impact
Accumulation capacity in a conveyor or sortation system has a dramatic effect in the overall throughput capacity of a system. Over capacity situations lead to extended operating hours or reduced throughput, resulting in higher costs or a need for extensive capital expenditures Sample Sorter Queuing Analysis In this case, additional accumulation and staging capacity must be added to accommodate wave sorting of processed merchandise

Impact of Facility Capacity Improvement
Why focus on capacity analysis and improvement? The combined impact of material handling concepts, balancing of flows, and improved productivity can minimize and localize disruptions over time, while accelerating product turn and minimizing capital requirements. Before concept modification After concept modification

Facility Design and Layout

Facility Design and Layout
Conceptual Design Concepts Analysis Space Requirements Conceptual Layout & Flow Detail Design CAD Layouts Material Handling Specifications Working Equipment Budgets

Concepts Analysis Sample Concepts Comparison
Pallets become less cost effective as utilization decreases. Pallets are only cost effective with >35% pallet utilization. Use case shelving for items with less than 35% pallet utilization lot size. Pallet Vs. Case Shelving - Break Even Point (Example) Pick / Pack Alternative Analysis (Example) Quantitative Comparison - Picking and Packing Methods (Example)

Space Requirements Sample Space Calculations

Conceptual Facility Flow
Sample Conceptual Flow

Conceptual Facility Design
Sample Conceptual Layout

Detail Material Handling Design
Sample Detail Layout

Warehouse Control and Optimization

Communication / Data Capture
Facility Control Communication / Data Capture Paper Batch Bar Code Scan RF Bar Code Scan Hands Free Devices / Voice Activated Controls RFID WMS Functionality Location Control / Inventory Integrity Directed Work Activity / Process Efficiency Quality Control Lot Tracking Returns Compliance / Labeling Transaction Auditing / Tracking The warehouse is moving in the right direction with respect to technology (i.e. the bar code scanners that are in use), but current and expected needs should be considered…

WMS Conceptual Framework
Materials Requirements Planning Distribution Requirements Planning/ Forecasting Inventory Management Order Entry Processing Purchasing/ Financials/ General Ledger Administrative Enterprise Resource Planning Systems Host Interface(s) - API’s Inventory Locations Resources Vendors Rates/Carriers Pallet ID’s Routes Customers Warehouse Management Systems Dock Management Receiving/ Putaway Shipment Planning / Wave Mgt. Replenish - ment Picking / Distribution Location Control Sortation / Shipping / Manifesting Operational Interfaces User Access Video Data Terminals Internet Browser Data Collection Terminals PC Workstations Automatic Identification Bar Code Labeling Bar Code Scanning OCR, RF, RFID UCC128 Compliance Radio Frequency Radio Data Terminals - Hand Held - Truck Mouted - Voice Recognition Warehouse Control Systems AS/RS, Carousels AGV’s, Pick-to-Light Conveyors, Sorters Palletizers Trading Partners

% of Engineered Standard Achievable
Labor Optimization Work Measurement No Standards Standards Used for Planning Standards Used for Evaluation Standards Used for Incentives Continuous Feedback No Reporting Non-Measured Area Reporting Historical Standards 55-65% 65-75% Individual Productivity Reporting Workload Forecasting/Manpower Planning 90+ 55% 40 50 60 70 80 90 100 110 Goal Setting with Performance Counseling Engineered Standards Computerized Productivity Management System 75-90% Individual Employee Incentive Compensation % of Engineered Standard Achievable

Engineered Labor Standards
ELEMENTAL DETAIL AREA: 9209 BUILDING: 2000 Function: Pick/Pack 60 CHECK SUMMARY PICK SHEET Check off on bulletin board summary pick sheet when pick is complete. 70 GO TO PACK AREA Go to the pack area when the pick is completed to pack merchandise. 80 GET AN EMPTY CARTON Get an empty carton located on a stack to the right of the packing area. 90 OPEN CARTON Open the carton. 100 TRANSFER PIECES FROM CART TO CARTON Take the pieces from the track and place them in a carton located on the conveyor. 110 WRITE UNITS ON CARTON Write the total units on the carton. 120 CLOSE CARTON AND TAPE Close carton and place 2 pieces of tape on the carton.

Distribution Operations Tools Internal Deloitte Tools For Evaluating Distribution Operations

The SPEED framework is typical of the types of tools we use during our analyses – it is more of a methodology or approach than a specific computer program SPEED SPEED (Supply Chain Enhancement and Effectiveness Diagnostic) is an analytical framework for identifying supply chain issues and performance improvement opportunities It embodies our diagnostic methodology, which covers the entire chain and its opportunities Analytical Template Sample

Warehouse Designer This software was developed in-house and is used to optimally design or reconfigure warehouse layouts by determining, on an individual basis for each item, the most effective size for its picking locations. It factors in product dimensions, shipping volume, stock replenishment and the overall productivity of the warehouse I don’t know how much “detailed” design we still do at Deloitte – my sense is that a higher level assessment is more typically what we bring to the table…

AutoCAD AutoCAD is the first choice of architects and engineers in professional computer-assisted design software and we use it in most of our warehouse design projects. AutoCAD can be used to design anything from simple block layouts for optimized material flow to a detailed 3-D analysis of complex automated storage equipment layouts I don’t know how much “detailed” design we still do at Deloitte – my sense is that a higher level assessment is more typically what we bring to the table…

AutoMod AutoMod is a software simulator we use to study the behavior of conveyors to optimize their design with respect to: Accumulation areas Effects of stoppages in different areas Bottlenecks during peak volume periods I don’t know how much “detailed” design we still do at Deloitte – my sense is that a higher level assessment is more typically what we bring to the table…

MOST The MOST measurement system calculates standard times to evaluate the productivity of future or existing processes. In a MOST study, each movement of a task is part of a sequence with a relative time and frequency. This system is used to analyze most warehouse processes: order filling, packaging, shipping, holding, etc.

Distribution Operations Outline

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