13 - Warehousing

Chapter 10 Warehousing
• Introduction
• Warehouse Design
• Stacking Patterns
• Location in Warehouses
• Order Picking
Industrial Engineering
IEE 561Production Systems

© Ronald G. Askin 2010
Warehouse Types and Uses
• Retail Distribution Center – trucks deliver large loads that are then
repackaged with many products for distribution to stores/regional
warehouses, typically on fixed schedule (Walmart, Safeway,
Dillards)
• Raw Materials – Storage of input materials received in economic
quantities awaiting release to shop floor.
• Spare Parts – storage of small quantities (usually) of spare parts to
ensure machine/product availability. High variability in item
demand.
• Order Fulfillment – Stocks of many items which are picked to fill
orders. Often with high frequency, low volume orders. Typical of
catalog retailers, e.g. LL Bean, Amazon
• 3PL – Third party logistics service provider with core competency in
warehouse management. May service multiple customers from
same site to utilize space/equipment efficiently.
2 IEE 561Production Systems

Storage Policies
Space Allocation
• Dedicated Storage – each product type has its own dedicated
storage area
• Class-based – A B C item classes with space allocated for each
class. Products assigned to classes based on turnover rate
• Random Storage – storage system determines best available
location for each load based on turnover rate
• Affiliation based – product groups assigned space based on

correlation of customer usage (facilitate order picking) or size (slot
design)
Industrial or other common factor. This can be integrated with the
Engineering
other approaches.
3 IEE 561Production Systems

Warehousing

Warehouse components
• Building shell
• Storage medium
• Storage/Retrieval transport mechanism
• Controls/policies
Facility Activity
Storage racks/slots Storage
Quality control Receiving inspection
Receiving docks Unloading, depackaging, identifying, sorting
Store/retrieve Location selection, transport, S/R request sequencing
Manufacturing
Industrial Engineering Parts preparation (for shop floor release)
Shipping docks Order assembly, packing, labeling, loading

Warehousing functions
Receiving Function
Unload Inspect Put Away
Cross Storage
Dock Function
Shipping Function
Load Pack Order Pick

Warehouse Design
• 85 percent rule
• The designer should plan on a maximum of 85 percent occupation of
slots and 85 percent fill of the storage cube in the occupied slots.
I/O (0,0) βb
αa
Standard Warehouse Design
• Travel distance
D | x1  x2 |  | y1  y2 |
βb
• Objective: minimize average
storage or retrieval time.
a b
min 
2 4
s.t.:
αa K
a b 
n
 ,  : relative adjustment factors to incorporate aisle space. a, b integer
n : the warehouse is n levels high.
K : a total of K locations is needed.
Distance measured in square storage units

a spaces long, b spaces wide

And the Solution is …
a b  K b
min  min 
2 4 K 2bn 4
a
s.t.: bn
d K 
K   0
a b  db 2nb 2 4
n
a, b integer b* 
2 K
n
K 2 K
Industrial Engineering a  b 
2 n n

Are Other Designs Possible?
Traditional WHSE Design

without/with a Cross Aisle
Meller and Gue, 2009

Thinking Creatively
The Flying V Fishbone Design

~10% Less Travel
15-20% Less Travel
Meller and Gue, 2009

Location in Warehouses
• Random (Open) Storage
• In computer controlled warehouses, unit loads can be stored
independently.
• The computer keeps track of the contents of each location.
• Need fewer storage locations than dedicated warehouse.

• Class-based storage
• Provide increased throughput capacity with respect to random storage.
• Storage locations are split into classes based on their distance from the
I/O port.
• Three classes, reflecting the standard A,B,C inventory breakdown, are
often used: A items receive the best locations, then B locations are
picked, the reminder form class C.
• Storing complementary items

• Items that often appear on the same order should be located near each
other.
• Instead of assigning individual items to storage locations, we can assign
groups to storage area.

• Dedicated storage
• A contiguous region of the warehouse is set aside for each product.
• Simplify warehouse control and inventory status checking.
• Much of the space will have low occupation levels since maximum
inventories may be twice the average level.
Item
Inventory
A B C
Industrial Engineering D E
time

Where to Place Each Product
Assume handling volumes and I/O locations for products are known.
1 P
4x6 = 24
cij 
Ai
w ip d pj
p 1 grid squares
Product i, i  1,..., N requires a maximum of Ai grid squares for storage.

N
The total number of grids is M and  A  M.
i 1
i
There are P shipping and receiving ports.

wip : proportional to the cost per period for product i 's activity
through port p per unit distance traveled.
cij : the corresponding travel cost per period due to storage of i in j.
d ij : distance from the center of grid j to port p.

• Dedicated storage
N M
min  cij xij
i 1 j 1
s.t.
M
x
j 1
ij  Ai i
N
24 grids
x
j 1
ij 1 j
xij  {0,1}
xij is 1 if product i is assigned to grid j and 0 otherwise.


Solution under Factoring Assumption
• Factoring Assumptions:
• All products use all ports in the same proportion.
• Let ci be the total volume of product i moving in and out of storage per
time, possibly weighted by a cost per unit distance moved for product i.
1 P
ci P P
cij 
Ai

p 1
wip d pj =   wp d pj Let f j   w p d pj
Ai p 1 p 1
• Solution:
Step 1: Order grids: f[1]  f[2]  ...  f[ M ]
Step 2: Order products: c[1] c[2] c[ N ]
  ... 
A[1] A[2] A[ N ]
Step 3: Assign products: assign product [i] to the first A[ i ] grid squares still
available.

Example 10.4 (Page 341)
Consider a five-row, five-column warehouse with a major aisle and I/O locations
along the south wall.
Loads are received at (0,0) and product is shipped from (5,0).
Three products are stored and all make four times as many trips to the shipping
point as from the receiving point.
Storage and throughput requirement are given.
Please assign product to storage locations.
Product No. of grids required Total loads moved per day

1 10 100
2 5 150
3
Industrial Engineering 8 160

Solution:
1 4
The factoring assumption holds true since: w1  , w2  for all three products.
5 5
8.2 7.6 7.0 6.4 5.8

Step1: f j  0.2d1 j  0.8d2 j 7.2 6.6 6.0 5.4 4.8
6.2 5.6 5.0 4.4 3.8
5.2 4.6 4.0 3.4 2.8
4.2 3.6 3.0 2.4 1.8
(0,0)Input (5,0)Output
Step2: product 2 is most important, followed by product 3 and finally 1.
Step3: 1 1 1
1 1 1 1 3
1 1 3 3 3
1 3 3 2 2
3 3 2 2 2
(0,0)Input (5,0)Output
Optimal assignments

Throughput Analysis
Z
Tchebyshev Travel -max time in either direction
X
Z X x z
E (one way travel time) =( XZ ) 1   max{ , }dxdz
0 0 vx v z
X , Z : the horizontal and vertical lengths of the storage racks.
vx , vz : the horizontal and vertical speeds of the S/R vehicle.
vx Z 2 X
E (one way travel time)  2 
6vz X 2vx
vx Z 2 X
Tsc  2   2t pd
3vz X vx
Tsc = single command travel time; tpd = pickup/dropoff time

Z X x z
 
1
E (one way travel time) =( XZ ) max{ , }dxdz
0 0 v x vz
vx
Assume X Z i.e., max horizontal time exceeds max vertical time
vz
Z X x z
 
1
E (1 way travel time) =( XZ ) max{ , }dxdz
0 0 vx v z
 Z zvx / vz
z
Z X
x 
 ( XZ )   
1
dxdz    dxdz 
 0 0 vz v
0 zvx / vz x 
 Z z 2 vx Z
 X 2 z 2 vx  
 ( XZ )   2 dz   
1
 2  dz 
 0 vz 0
2vx 2vz  
vx Z 2 X
 2 
6vz X 2vx
Note: we could insert density function for likelihood of each (x,z) location
For Dual Command with FCFS pick ups
X  15v x2 Z 2 v x3Z 3 
E (dual command time)    40  2 2  3 3   4t pd
30v x  vz X vz X 

Order Picking
The often labor intensive process of fulfilling customer orders by extracting
appropriate items from storage and organizing those items for shipping.
Typical Material Organization
F
o
R r S
w h
e a
c r i
e d p
Reserve Area P p
i
i
v c
i
Industrial Engineering i k n
n i g
n
g g
Periodic (Nightly) Restocking
Order Picking
• Basic problem
• Combine customer order into pick lists followed by the ordering of
storage location visits on each list.
• Pick Routing Door(s)
• Traversal strategy
• Use a serpentine walk through all aisles with one or more picks
• Midpoint strategy (two-sided access)
• Go only up to half depth of an aisle to pick; enter from both ends if needed
• Return
• Go
Industrial Engineering into aisle as far as needed to pick and then return to start
• Largest Gap (two-sided access)
• Traverse into aisle as far as biggest gap between picks
• Largest Gap most efficient
Order Picking
• Basic problem
• Combine customer order into pick lists followed by the ordering of
storage location visits on each list.
• Forming pick lists

Cluster algorithm (Hwang and Lee [1988])
• Chebyshev travel along the storage row with travel time measure
| x  x j | | zi  z j |
tij  max{ i , }
vx vz
between location i and j.

• Engineering
Industrial Similarity coefficient
A for order i and j:
ij
sij 
Ai  Aj  Aij

• Chebyshev travel region along a row
Travel Time
| x  x j | | zi  z j |
tij  max{ i , }
vx vz
z2  z1 x2  x1
a1  
2s 2s
z  z1 s ( x2  x1 )
b1  2 
2s 2
z  z3 x2  x3
a1  2 
2s 2s
z  z3 s ( x2  x3 )
b1  2 
• Areas for pick orders 2s 2
Industrial Engineering v
s z
vx
2 b22
Ai  [a s  ] / 2  a1 (b1  b2 )  a2 (b2  a1s)
2
s

Order Picking
• List formation
Step 0: Initialize. Set S={1,…,K}. T=0.
Step 1: Start new list. If S is empty, stop. Otherwise, t = t+1, find

k t  arg max{I k : k  S} and letLt  k , Q  Qk , S  S  k and go to 2.
t t t
t
Step 2: Add to list, let k   arg max{sk k : k  S , Q t  Qk  C}.

t
If no such k, go to 1.
S  S  k  , Lt  Lt  k  , Q t  Qt  Q Go to 2.
k
I k : the number of items in order k .

Industrial Engineering C : capacity of the list.
S : the set of unassigned orders.
sij : the similarity between order i and j.
Lt : the set of orders assigned to list t.
Qt : the volume (capacity) currently assigned to list t.


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Chapter 10 Warehousing

IEE 561Production Systems

2 IEE 561Production Systems

• Affiliation based – product groups assigned space based on

3 IEE 561Production Systems

IEE 561Production Systems

IEE 561Production Systems

Unload Inspect Put Away

Load Pack Order Pick

IEE 561Production Systems

Distance measured in square storage units

IEE 561Production Systems

IEE 561Production Systems

Traditional WHSE Design

Meller and Gue, 2009

The Flying V Fishbone Design

Meller and Gue, 2009

IEE 561Production Systems

• Storing complementary items

IEE 561Production Systems

IEE 561Production Systems

Product i, i  1,..., N requires a maximum of Ai grid squares for storage.

There are P shipping and receiving ports.

IEE 561Production Systems

xij is 1 if product i is assigned to grid j and 0 otherwise.

IEE 561Production Systems

IEE 561Production Systems

Product No. of grids required Total loads moved per day

IEE 561Production Systems

8.2 7.6 7.0 6.4 5.8

IEE 561Production Systems

Tsc = single command travel time; tpd = pickup/dropoff time

For Dual Command with FCFS pick ups

IEE 561Production Systems

Typical Material Organization

• Pick Routing Door(s)

• Forming pick lists

between location i and j.

IEE 561Production Systems

IEE 561Production Systems

Step 1: Start new list. If S is empty, stop. Otherwise, t = t+1, find

Step 2: Add to list, let k   arg max{sk k : k  S , Q t  Qk  C}.

I k : the number of items in order k .

IEE 561Production Systems

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