Culemborg, September 2006
©
A.F.M. van DitzhuijzenThe author is responsible for the content of the thesis: all rights regarding this thesis are reserved for the author.
Warehouse of the people
A technical and a social analysis
Author Student reference Email Faculty Study University supervisors Company Company supervisor
A.F.M. van Ditzhuijzen 1280358
anna@ditz.nl
Management & Organization
Industrial Engineering & Management Science Prof. Dr. J. Wijngaard
Dr. G.C. Ruël
TNT Benelux & Multi Country Logistics Costerweg 14
4100 AA Culemborg R. van Kuilenburg
Acknowledgements
I would like to thank all people who helped me making this thesis to what it is now. In January 2006 Richard van Kuilenburg and I came to an interesting research subject for the Solution Design department of TNT Logistics. The Solution Designers wanted more objective insights in the approach of decision making between various types of warehouse equipment. Although this is more focused on the technical aspect I personally felt the need to add also the social aspect of this research subject. So my first experience with warehousing became a fact during the following six months.
Thanks to all the employees situated at the TNT Logistics’ head office who gave me advise despite their busy activities. And to the employees in the various warehouses for their time and interest towards me making acquainted with the warehousing process and providing me the data needed. I realize this opportunity is really unique and has given me insights which will be of use to me and the rest of my career.
Especially I would like to thank my supervisors: from TNT Logistics, Richard van Kuilenburg who was always in for a discussion. My first supervisor from the university, Prof. Dr J. Wijngaard, who gave me advise and feedback any time. And finally Dr G.C. Ruël, my second supervisor from the university, who also was involved from the beginning until in the end. Their meetings gave me various new insights and a clear view of the situation.
Last, but certainly not least, I would like to thank all friends and family for their great support. I learned a lot during this last phase of my studies: on scientific level, operational level, organizational level and personal level.
Anna F.M. van Ditzhuijzen September, 2006
Management Summary
The main goal of logistics is to create the most efficient and cost effective solution to handle material. What does this mean for TNT Logistics? And why do processes handling almost the same articles and order profiles use different types of warehouse equipment? Can a handbook be established which guides TNT Logistics’ Solution Design department systematically by distinguishing various types of warehouse equipment?
This research aims to produce a matrix in order to help TNT Logistics in designing a lay-out in a more systematic way with regard to the various types of warehouse equipment. TNT Logistics tends to compare potential customers with current customers and as a result becomes somewhat partial to the warehouse equipment that is already being used. However, the process of selecting warehouse equipment should be carried out more objectively. TNT Logistics has already begun constructing a Warehouse Design Standard where ‘concept characteristics’ and its ‘order profile characteristics’ are indicated with the qualitative values ‘high’, ‘medium’ and ‘low’. This research is a continuation to the Warehouse Design Standard. A matrix illustrating the position of various types of warehouse equipment with regard to each other has been generated. This matrix will lead to a well founded method for the selection of the warehouse equipment in terms of their productivity rates. A final solution regarding specific warehouse equipment needed for specific productivity rates is not possible, as too many external influences would have to be considered.
This technical analysis is structured in three phases; the orientation, the analyses and the results. In the orientation phase it is important to become acquainted with the warehouse process and the Solution Design process. The Solution Design department creates solutions with regard to the choice in using specific warehouse equipment. With this knowledge the object of this research is formulated:
In order to obtain this objective, a decision tree is established from a range of various types of warehouse equipment currently used by TNT Logistics and alternative types of warehouse equipment. This decision tree consists of various types of warehouse equipment whose productivity rates will be explored in this research. The sub-questions indicate the various sources that will be consulted. Every alternative will be discussed in terms of these sources. The last sub-question regards the social part of this research which discusses the influence of the employees working with the different types of warehouse equipment.
The analyses start by collecting information per type of warehouse equipment and its alternative as illustrated in the decision tree. Field studies will be carried out, literature will be consulted, and various suppliers will be interviewed. The processes of two sectors within TNT Logistics, Print & Media and Electronics & Telecom, are observed and analyzed in terms of their productivity
rates. Time studies are also employed to distinguish between the detailed handling activities of the two processes within the Electronics & Telecom sector
A final matrix will summarize the analyzed information creating more insights for TNT Logistics between the various types of warehouse equipment as discussed. This matrix reveals the position of various types of warehouse equipment and compares the productivity rates with each other as illustrated below.
Figure 1 Insights between various types of warehouse equipment and its productivity.
In addition to the technical analysis this research also contains a social part. Besides all the ideas in creating a more efficient and cost effective solution to handle material, the employees working in these environments should also be considered.
A negative relationship is expected between mechanization and the quality of labour which can influence the productivity rates of the process or even the entire organization. As the ‘quality of labour’ can be interpreted in many different ways, this research specifically discusses the smaller tasks created by a mechanized environment. Smaller tasks can be enriched by enhancing appreciation and self esteem of the employees. The literature confirms that social needs of the employees must be tended to, hence isolated tasks should be avoided. To improve the social needs and therefore the internal motivation of employees working on smaller tasks, the job characteristics model of Hackman and Oldham (1980) will be discussed.
In conclusion, more attention towards the quality of labour should be considered by TNT Logistics if a mechanized solution is implemented. A recommendation is to add this principle as a fifth principle to the four principles of TNT Logistics: ‘space utilization’, ‘handling efficiency‘, ‘cost effectiveness‘ and ‘requirements‘. The quality of labour can be improved by creating higher internal motivation. In accordance with the fifth principle, it is expected that employees will experience a task as less limited. For example task rotation could be an opportunity to avoid repetitive tasks.
Recommendations for TNT Logistics regarding this research is to consult the already available information more often. Suppliers can also be approached more often and analyses should be done more frequently. A new application is Class, which is a warehouse modelling and simulation tool. This tool could provide new possibilities when calculating alternatives for a specific customer. For TNT Logistics to stay dynamic and able to design efficient and cost effective solutions for their customers, mechanization should be considered more often.
A final recommendation for TNT Logistics with regard to mechanization is to consider a new approach towards their customers. The short termed contracts and unstable order profiles push TNT Logistics to design conventional layouts. An opportunity for TNT Logistics is to offer a second proposal where the contract period is longer and as a result investments can be realized to achieve higher productivity rates. Besides that, TNT Logistics could take a risk by implementing a more flexible total concept where processes of various customers together could be processed in.
Table of content
Acknowledgements……….... 2 Management Summary………. 3 Table of content……… 6 Table of figures……… 8 Table of tables……….. 9 1 Introduction………...10 2 Research background……….. 13 3 Research design……… 15 3.1 Research boundaries……… 15 3.2 Research focus………16 3.3 Research objective……… 17 3.4 Sub-questions……… 18 4 Primary processes……… 20 4.1 Warehousing………. 204.1.1 Order picking activities………. 21
4.1.2 Order packing activities……… 24
4.2 Solution Design process………... 24
5 Conceptual model……… 27
6 Field studies………. 30
6.1 Sector Electronics & Telecom………. 30
6.1.1 Processes Company A and B……… 31
6.1.2 Time studies……… 32
6.2 Print & Media sector………. 33
6.2.1 First impressions Print & Media sector………34
7 Pairs of warehouse equipment………. 36
7.1 Flow racks versus static racking………. 37
7.1.1 Literature……… 37
7.1.2 Suppliers……….. 38
7.1.3 Field studies……… 39
7.1.4 Other sources……….. 40
7.1.5 Analyses……….. 41
7.2 Walking versus EPT………. 43
7.2.1 Literature………. 43
7.2.2 Field studies……… 44
7.3 Walking versus conveyor……… 47
7.3.1 Literature……… 47
7.3.2 Suppliers………. 47
7.3.3 Field studies (Electronics & Telecom)………. 48
7.4 Paper lists versus scanning………. 49
7.4.1 Literature………. 49
7.4.2 Field studies……… 49
7.4.3 Other sources……….. 50
7.5 Pick-by-Voice versus Pick-to-Light……… 51
7.5.1 Literature………. 51
7.5.2 Suppliers………. 51
7.6 Man-to-Goods versus Goods-to-Man……… 53 7.6.1 Literature………. 53 7.6.2 Suppliers……….. 54 7.6.3 Other sources………... 55 7.6.3 Analyses……….. 56 7.6.4 Calculations VanderLande B.V……… 57
8 Result technical analysis……… 59
9 Social part……….. 62
9.1 Literature……… 62
9.1.1 Mechanization……… 63
9.1.2 The content of the task………... 64
9.1.3 Internal motivation……… 65
9.1.4 Quality of labour……… 66
9.2 Field studies………67
10 The fifth principle……….. 71
11 Result social part……… 73
12 Recommendations……... 74
12.1 Recommendations technical part………. 74
12.2 Recommendations social part……… 75
References……… 77 Glossary……… 79 Appendices……...82 Appendix I...82 Appendix II...85 Appendix III... 87 Appendix IV……….88 Appendix V... 89 Appendix VI……… 92 Appendix VII………... 93 Appendix VIII……….. 99
Table of figures
Figure 1 Insights between various types of warehouse equipment and its productivity………4
Figure 2 TNT Logistics company profile……… 11
Figure 3 TNT Logistics’ warehouses Benelux……… 12
Figure 4 Cost drivers warehouses……… 16
Figure 5 A tree from SLAs towards operational rates……….. 17
Figure 6 Warehouse activities………... 20
Figure 7 A general picking process………. 21
Figure 8 Decision tree TNT Logistics……….. 23
Figure 9 Design principles……… 25
Figure 10 Process Solution Design………... 26
Figure 11 Conceptual model………. 27
Figure 12 Flow-chart packing process company A……… 31
Figure 13 Flow-chart packing process company B……… 31
Figure 14 Time studies company A (right) and company B……… 32
Figure 15 Layout static shelving (frontal view and view form above)……….. 41
Figure 16 Layout flow racks (frontal view and view form above)……….. 41
Figure 17 Graph walking versus EPT……….. 43
Figure 18 An automated matrix of VanderLande B.V……….. 54
Figure 19 Clients TNT Logistics combined with the VanderLande-matrix………... 56
Figure 20 Insights between various types of warehouse equipment and its productivity………. 59
Figure 21 The relationship between small tasks and internal motivation……… 63
Figure 22 Job characteristics model (Hackman and Oldham, 1980)……… 66
Figure 23 The fifth principle ‘quality of labour’………. 73
Figure 24 Activities timed of Company A………... 84
Figure 25 Activities timed of Company B……….. 86
Figure 26 Lay-out companies C, D and E in one warehouse……… 88
Figure 27 Input Class “order profile”………. 89
Figure 28 Input Class “number of orders processed per day”………. 89
Figure 29 Input Class “velocity EPT”……….. 90
Figure 30 Input Class “velocity walking”……….. 90
Figure 31 Output Class “labour utilization EPT”………... 91
Figure 32 Output Class “labour utilization walking”………... 91
Figure 33 Conventional order picking………. 92
Figure 34 Compact Pick System VanderLande B.V……….. 92
Figure 35 Zone Picking System VanderLande B.V……… 92
Table of tables
Table 1 Data over the year 2005 of the sector Electronics & Telecom……… 30
Table 2 Comparison timed activities company A and B……….. 33
Table 3 Data over the year 2005 of the Print & Media sector………... 34
Table 4 Characteristics static racking versus flow racking………... 38
Table 5 Data shelving company C, D and E……… 39
Table 6 Solution Designers’ opinions……….. 40
Table 7 Simulation data companies C/D, E and F………. 45
Table 8 Characteristics total concepts……….. 53
Table 9 Order profiles of customers of TNT Logistics……….. 56
Table 10 Examples of the Maslow theory within an organization……….. 65
Table 11 The fifth principle ‘Quality of labour’……….. 71
Table 12 Time studies executed by company A………. 82
Table 13 Time studies company B……… 85
Table 14 Average seconds of activities of company B………87
Table 15 Average seconds of activities of company A………...87
Table 16 Profile Company I………93
Table 17 FTE 2006 of company I………95
1 Introduction
TNT N.V.
Thomas Nationwide Transport (TNT) was founded by Ken Thomas in Australia in 1946. By 1961 TNT Limited was listed on the Sydney Stock Exchange. Within nine years TNT expanded into Europe and in 1985 TNT logistics was launched as a separate division in the UK. A year later TNT also launched the TNT Newsfast division to provide nation-wide delivery services for the publishing industry in the UK. In 1994, TNT Italy began operating the world’s largest third-party logistics contract on behalf of FIAT.
TNT was acquired in 1996 by a Dutch telecom company KPN. Two years later, TNT Post Group NV (now TPG – express, logistics and mail services) was separated from KPN and was listed independently on the Stock Exchanges of Amsterdam, New York, London and Frankfurt. Another two years later, in 2000, TNT Logistics became a separate division within TPG. Finally, in 2005, TPG, parent company of TNT Logistics, changed its name to TNT N.V.
With two brands, TNT and Royal TPG Post, TNT N.V. is a global leader in Express, Logistics and Mail. With its headquarters based in the Netherlands, TNT N.V. employs over 161,000 people in 63 countries and serves over 200 countries. The company reported sales of €12.6 billion in 2004. The TNT group web site is: www.tnt.com/group
In December 2005 TNT N.V. decided to sell the majority of its contract logistics activities. Whether the logistic activities are sold or not however, will not influence the outcome of this research.
TNT Logistics
TNT Logistics is part of TNT N.V. (see figure 2) and is a leading global logistics company. It designs, implements and operates complex supply chain solutions on a national, regional or global scale for medium and large enterprises. TNT Logistics employs approximately 40,000 people, who operate in 40 countries divided over 13 business units and who manage over 8.3 million square meters of warehouse space. In 2005, TNT Logistics reported sales of € 4.2 billion.
The TNT Logistics web site address is: www.tntlogistics.com. TNT Logistics represents approximately one third of TNT's revenue and has become the fastest-growing division of the three TNT businesses (Logistics, Express and Mail) through a combination of organic growth and acquisitions.
Figure 2 TNT Logistics company profile
TNT Logistics exploits technology to achieve optimization, integration and visibility throughout the supply chain. The company focuses on a diverse range of market sectors including:
1. Consumer Packaged Goods & Retail (CPG&R) 2. Electronics & Telecom
3. Industrial 4. Healthcare 5. Print & Media 6. Automotive
TNT Logistics aim as stated in their mission statement is to exceed customers' expectations in the transfer of their goods and documents around the world. With their slogan ‘Everything is Logistics’ TNT delivers value to its customers by providing the most reliable and efficient solutions in distribution and logistics. TNT Logistics strives to lead the industry by:
1. creating value for their shareholders 2. instilling pride in their people 3. sharing responsibility for their world
TNT Benelux & Multi Country Logistics
This research focuses on the business unit TNT Benelux & Multi Country Logistics operating in 15 warehouses throughout the Benelux encompassing 250.000 square meters. At the moment most warehouses are organized in a conventional way. By building on its strong sector expertise, TNT Logistics is able to provide innovative, customized solutions to its customers, whether they organize their logistics regionally or globally. TNT Logistics makes a difference between multi-user and dedicated warehouses. Through its Show freight management it provides air and sea freight services within an international network. This, however, is not considered relevant for this research. The map, shown below, indicates where the warehouses of TNT Logistics in the Benelux in 2005 are situated.
Figure 3 TNT Logistics’ warehouses Benelux.
Within the business unit TNT Benelux & Multi Country Logistics the warehouse process generates a number of questions with regard to its efficiency. The Solution Design (SD) department would like to create more structure in the process of deciding which warehouse equipment to use for a specific customer. The SD department creates solutions for various customers who want to outsource their warehousing process (see §4.2).
From a discussion within the SD department it was concluded that every person has his or her own experiences and insights with regard to various types of warehouse equipment. For this reason a more fact based model for the Solution Designers, supporting them in their decision making regarding quantitative distinctions between various types of warehouse equipment are possible to make, should be created.
Within the orientation phase the research background, research design and the primary processes of TNT Logistics will be discussed. The research itself will start with field studies which are used for analyses. Suppliers will be conducted and literature written will be gathered. The information of these sources will bring more insights of the various types of warehouse equipment considering their productivity rates which results in a concept interesting to use for TNT Logistics in the future.
The social part of this research will result in a concept as well concerning the employees and the possibility to create a positive influence on the productivity rates of the entire process.
2 Research background
TNT Benelux & Multi Country Logistics, which from now on will be referred to as TNT Logistics, is one of the larger logistics service providers. Important to them is the services they can provide their customers. TNT Logistics would like to exceed customer’s expectations by optimizing the warehouse process. This research will discuss this vision from an internal approach.
The internal core processes of TNT Logistics can be divided into a production process, called warehousing, and the Solution Design process, which designs lay-outs of warehouses consisting of various types of warehouse equipment to handle the specific goods of the customer. The main goal of every logistic process is to generate a most efficient and cost effective solution regarding material handling.
Experiencing the processes of warehousing during the first weeks it was observed that processes with almost the same order profile and almost the same type of articles use different types of warehouse equipment to handle the material in these processes. The question arose how these different decision were made. What are the aspects influencing these decisions? And could these aspects been quantified?
The SD department, responsible for the decision making of various types of warehouse equipment, has already designed a handbook for their department called the Warehouse Design Standard which describes the steps to arrive at a final optimal warehouse design. This standard reviews the equipment that can be used according to its ‘concept characteristics’ and its ‘order profile characteristics’. These characteristics are indicated with qualitative values as ‘high’, ‘medium’ and ‘low’. Qualitative values are still subjective, hence the meaning can be broadly interpreted by every Solution Designer. A discussion with the Solution Designers trying to quantify a range of warehouse equipment made it clear that every person has his or her own experiences with various types of warehouse equipment. Therefore their first aim was “to quantify in an objective manner these aspects for the warehouse equipment, mentioned in their handbook, in order to finalize their handbook made”.
Soon it was discovered that quantifying the warehouse equipment was too optimistic, hardly any quantities were found in literature and too many types of warehouse equipment exist. Besides that, the calculations made in this research did not lead to a general solution. As every customer is different and every external influence cannot be taken into account, it is not possible to give an exact outcome to each specific situation. Expertise and insights are still needed to come to a final, integral solution.
After various discussions with the Solution Designers it was concluded that this research should focus upon a range of warehouse equipment. Could specific warehouse equipment currently in use be distinguished from others by their productivity rates?
TNT Logistics is already aware of the fact that more structure can be given in their process to design a more efficient production process. Therefore this research will examine the efficiency of the production process by their productivity rates taking into consideration various types of warehouse equipment in order to give recommendations to the Solution Design department with regard to their decision making. The results cannot be formulated in a general form to complete their handbook. But TNT Logistics could still use these results as input for their process to design an optimal solution. This research will still be conducted for the Solution Design (SD) department.
3 Research design
In order to create a handbook, a large variety of topics need to be included and then consolidated into a general solution. Specific expertise is needed in this process. As this is a very complicated process and almost impossible to accomplish, the initial objective of this research will be formulated into a more feasible objective. The new objective, discussed with the Solution Designers, will be formulated on an operational level. The various types of warehouse equipment will be distinguished by their productivity rates and alternatives will be analyzed as well. The research boundaries and the research focus are discussed first, after which the research objective is formulated. Chapter four discusses the primary processes of TNT Logistics concentrating on the scope of this research designed in this chapter.
An extra dimension will be given to this research discussing the employees’ point of view with regard to the warehouse equipment discussed in the technical part of this research. This dimension is considered because TNT Logistics wants to know how they can have a positive influence on the employees working in the warehouses. This part of the research will focus upon the quality of labour and how this concept could positively influence the productivity rates of the entire process.
3.1 Research boundaries
As mentioned earlier this research is limited to an analysis of certain types of warehouse equipment. Warehouse equipment can be categorized in terms of specific material handling activities. These activities are illustrated in figure 4 in terms of cost drivers for the warehouse process.
From the figure below it can be concluded that the activity picking proportionally seen is a large cost driver in all three warehouse cost categories (van den Berg, 1996). This means that a more efficient picking process could result in lower labour costs, capital costs and support costs. Labour costs will be considered in every type of warehouse equipment discussed in this research. Capital costs are taken into consideration as well relating to the investment needed for certain types of warehouse equipment. Support costs are not included in the scope of this research and therefore not considered while discussing the various types of warehouse equipment.
Figure 4 Cost drivers warehouses
According to Drury (1988) the activity “picking” is the most labour-intensive process of a warehousing process. In general 60% of all processes can be allocated to the category “picking”.
Knowing that more efficiency and effectiveness can reduce the costs in a process, and what is proven by Drury and van den Berg, it can be concluded that picking is an important part of the warehousing process.
In most processes of TNT Logistics the packing process is a part of the picking process. Therefore the warehouse equipment used for the picking and packing activities will be explored in this research. A range of equipment will be looked at in this research based on the assumption that the reliability of the picking and packing performance is guaranteed. This means the time needed to solve unexpected situations will not be taken into account which could differ per process and will not contribute to plausible analyses.
3.2 Research focus
Warehouse equipment can be distinguished by various entities. This research is concentrated on the productivity rates of the various types of warehouse equipment as mentioned earlier. Within the Solution Design process the customer plays an important role to finalize an optimal solution for the use of various types of warehouse equipment. TNT Logistics would like to process the customer’s demands in the most efficient way.
To accomplish this goal it will be important for TNT Logistics to obtain the service levels agreed upon (SLA) with the customer. These SLAs should be transformed into performance indicators (PI) to judge the performances of the operational processes. A performance indicator (PI) is a variable that expresses quantitatively the effectiveness or efficiency or both, of a part of or a whole process, or system, against a given norm or target (Fortuin, 1988). Performance measurement (PM) is the activity of measuring performance using PIs. It is used to quantify the efficiency and effectiveness of operations (Neely et.al., 1995). Examples of PIs relevant for this research are illustrated in figure 5.
Figure 5 A tree from SLAs towards operational rates.
The tree makes it possible to judge the rates internally, within the scope of this research. Mainly the productivity rates will be discussed by e.g. the number of orders picked per day. In some cases the accuracy is discussed in stead of the productivity rate because these types of warehouse equipment will be chosen regarding the accuracy a customer wants in his or her process.
3.3 Research objective
The problem-owner of this research is the SD department: they should make optimal use of the available warehouse equipment to create an efficient production process for the customer and the company. As this problem contains a managing aspect, de Leeuw (2000) describes it as a reality problem which results in an evaluation of the reality. A model is created which compares the warehouse equipment with each other regarding their productivity rates. The output of this research can be used as an input for the decision making process of the SD department.
To realize this matrix, relevant warehouse equipment for TNT Logistics will be explored and discussed by productivity rates from various angles. This model should help TNT Logistics using a more systematic approach to come to a well founded choice of specific warehouse equipment. Therefore the objective of this research is formulated more discretely into:
The SD department of TNT Logistics is not structured in such a way that solutions for various types of warehouse equipment can be found. A handbook has already been established by the SD department to structure their process to design a warehouse. This handbook can be made more concrete by studying the productivity rates of currently used warehouse equipment and their alternatives. But a general solution cannot be given.
The technical part of this research discusses various types of warehouse equipment and their characteristics especially, their productivity rates. A matrix is designed to help the Solution Design department with a more structured approach towards their decision making. This matrix is designed with regard to the productivity rates of various types of warehouse equipment.
The social part of this research considers the employees. They have to work in the environment of a warehouse and with the warehouse equipment installed. Important is the impact on the employees using more mechanized warehouse equipment and what the consequences could be for the productivity rates. Recommendations will be given to TNT Logistics as an employer.
The research question results in:
The Solution Design department in TNT Logistics needs more quantitative and fact-based decision support and decision evaluations. The Solution Designer would like to know in what situation certain decisions can be made considering productivity rates to improve the efficiency of the supply chain. This will be done from different points of view which will be high-lighted by the sub-questions discussed in the next paragraph.
3.4 Sub-questions
The following sub-questions can be formulated:
I. What can be said about the various types of warehouse equipment from the literature?
II. What do suppliers say about the characteristics of various types of warehouse equipment regarding the productivity rates and the applications?
III. What relationships can be found with regard to the productivity rates of various types of warehouse equipment currently in use within customers’ processes of TNT Logistics?
IV. How do other sources experience the characteristics of the warehouse equipment used?
V. What are the findings of the employees using the warehouse equipment discussed and how could they influence the productivity rates of the equipment?
Consolidating the information found by these sub-questions answer the research question and therefore help the Solution Design department reconsidering various types of warehouse equipment. These sub-questions correspond with the methods used by Baarda et.al. (2001) to gather information:
− gather given data − take interviews − make observations
Data and descriptions will be gathered from the literature written. This can lead to qualitative and quantitative information (I). To explore the information of various types of warehouse equipment and the recommendations suppliers give their customers concerning productivity rates, interviews with the main suppliers of TNT Logistics will take place (II). Production data of customers’ processes will be explored by field studies. The data will be compared with customers having the same order profile characteristics. Distinctions between the concept characteristics will be evaluated by productivity rates (III). Other sources which are consulted during the six months of research will be discussed in this paragraph. This means sources relevant for specific warehouse equipment which cannot be categorized.
In the end employees are observed to give an impression of the experiences of the employees working with the various types of warehouse equipment discussed in the technical part of this research. These experiences could have an influence on the productivity rates of the warehouse equipment used. Recommendations are given to TNT Logistics so that a positive environment for the employees to work in could be created and therefore could have positive influences on the productivity rates (V).
Case studies of peer companies in the same sector were not possible to use as an extra point of view because this information is not likely to be shared. This research will provide an input created by literature, suppliers, field studies, other sources and employees concerning the various types of warehouse equipment. A final handbook with general data of the various types of warehouse equipment could not be established. As specific expertise is always needed in this process, a matrix could be established containing relevant information for a more systematic approach of decision making within the Solution Design department. In the last phase expertise is still needed to make a final decision. The specific range of warehouse equipment relevant for this research will be discussed in the next chapter (see § 4.1.1.).
4 Primary processes
The core processes of TNT logistics consists of an operational process called warehousing and a management process executed by the Solution Design department which designs the lay-out of a warehouse consisting of various types of warehouse equipment. The following two paragraphs will describe these two processes.
4.1 Warehousing
A warehouse is an element of the supply chain with the purpose to bridge the time between the supply and demand of goods and to control the supply chain. This is carried out through the handling of material: incoming goods are sorted by article and outgoing goods are sorted by customer.
Material handling is defined as the movement of materials (raw materials, semi-finished goods and finished goods) to, through and from production processes, warehouses and storages, and receiving and shipping areas (Frazelle, 1992). Material handling incorporates warehousing and material flow. Warehousing refers to material handling activities that take place in warehouses, and receiving and shipping areas.
The throughput in a warehouse is divided by inbound and outbound, which are again divided into different activities.
Figure 6 Warehouse activities
Inbound:
1. Control: unload incoming goods, check freight documents, check packaging, check the amount and control the quality of the goods. The WMS assigns a location in the storage.
2. Storage is defined as from the physical storage up to the incoming demand. 3. Replenishment is the internal transport from the storage to the picking area.
Outbound:
1. Order-picking: the amount of articles ordered will be picked out of stock, after which they will be consolidated into one order.
2. Packing and shipment are divided by the following sub-processes: − checking picked orders
− packing of the order
− shipping documentation will be added − trucks will be loaded
Next to these warehouse activities support is needed. The information is managed by the Warehousing Management System (WMS) with the following main activities:
− To keep up with stock mutations, to recognise articles and to allocate the various articles in the warehouse.
− To check the quantity that is ordered by the customers. − To produce order picking lists to process incoming orders.
As this research only focuses upon the picking activities, this handling activity will be explained in more detail in the following paragraph. Some packing activities are integrated within the picking activities of TNT Logistics. The packing activity will be explained in paragraph 4.1.2. .
4.1.1
Order picking activities
The picking process is shown in figure 7. An employee receives an order to pick specific articles. He or she searches for the right location and picks the article requested. The article picked needs to be confirmed then the next article has to be found or the order is completed and will be handed over to the packing area.
Figure 7 A general picking process.
Picking can be done from pallets stored in pallet racking or boxes stored on shelves. A specific picking method used by TNT Logistics is ‘square-picking’, which is done when one specific article is ordered through individual orders. A pallet containing that specific article will be located on a central location, a square, and the articles will be picked per order. The walking distance increases, which decreases the efficiency of the process.
The picking activities shown in figure 7 need various types of warehouse equipment to make it possible to process the articles ordered in an efficient way. Warehouse equipment used for picking
activities can be distinguished in dynamic and static order picking (Esmeijer, 1993). Dynamic order picking refers to the man-to-goods-principle: the employees are static and the articles are dynamic. Static order picking means the employees are traversing the picking area to pick their needed articles. Static warehouse equipment is mostly used in conventional warehousing processes and dynamic warehouse equipment within mechanical solutions.
Within the static and dynamic warehouse equipment a distinction will be made between the warehouse equipment currently in use and the warehouse equipment interesting for TNT Logistics to consider more often in the future. A range of warehouse equipment is chosen together with TNT Logistics to explore within this research. An analysis of mechanized warehouse equipment will be discussed as well if it is worthwhile considering, as TNT Logistics makes in most of its current processes still use of static warehouse equipment only.
Static warehouse equipment can be analyzed by handling equipment and storage equipment.
Handling equipment can be a picking list or a scanning device. A picking list consists of a paper list collected by a centrally located computer. The article number is combined with the amount of items needed to be picked per order. The picked article will be confirmed on paper by pencil. Bar-code scanning can be done by a hand held scanner or a finger scanner. With the latter both hands are free to pick. Many conventionally designed warehouses nowadays use paperless order picking systems with scanning equipment rather than a picking list. Pick-to-light and Pick-by-voice are also examples of picking equipment but can be used both conventionally and dynamically. The items needed to be picked are indicated by a light or by a voice indicating what location the article can be found. Both types of equipment can be combined with conveyors creating a kind of dynamic system. The orders are transported through the warehouse passing pick locations automatically.
Other handling equipment is walking with e.g. a trolley or using equipment such as an electronic pallet truck (EPT) or a conveyor. Walking is mostly combined with a trolley where the articles picked can be allocated to the right order. A trolley is a cart needed to be pushed by the picker. An EPT is a vehicle electrically driven which can take pallets with it to collect items from one or more orders. The employee sits or stands on the vehicle. A conveyor is mostly used to transport collected orders to the packing or shipment area.
Storage can be done by pallet racking, static shelving or flow racks. The latter is a warehouse equipment that incorporates sections of a conveyor to allow the cartons or pallets to flow to the face of the rack. Stocking is performed from the rear of the rack. Pallet racking and static shelving are shelves for pallets or items.
Dynamic warehouse equipment is rarely used by TNT Logistics. But this equipment will be discussed as well to show TNT Logistics what the possibilities are in this area. TNT’s vision at this moment about mechanization is that it leads to longer pay-back times than most contracts allow and the flexibility is too low for a logistic service provider to afford it.
Dynamic warehouse equipment discussed in this research are integrated picking concepts. An example is a mini-load which contains different levels of bins presenting the articles needed to be picked at the work station. The articles are picked and replenished automatically in full case quantities. This means full cases come to the employee and the employee will pick the number of articles needed and consolidates the items into one order. Batch Picking Systems, Zone Picking Systems, Compact Picking Systems and Order Distribution Systems are applications of a mini load. These systems are practiced by VanderLande B.V. and will be explained in paragraph 7.1.1. discussing the total concepts.
In practice it is seen that once a specific type of warehouse equipment has been chosen, the option of using other types of warehouse equipment could be excluded. For this reason the structure of the model will be a decision tree (see figure 8). It shows a range of different types of warehouse equipment which will be discussed and explored by this research.
Figure 8 Decision tree TNT Logistics
The dashed lines show the division between the three aspects of static order picking. All pairs of warehouse equipment circled red will be explored and discussed in this research. The relevant pairs of warehouse equipment are also listed below:
I. Static shelving vs. flow racks II. Walking vs. EPT
III. Walking vs. conveyor IV. Paper list vs. scanning
V. Pick-by-Voice vs. Pick-to-Light VI. Man-to-Goods vs. Goods-to-Man
4.1.2
Order packing activities
Order packing will be discussed in this research as a part of the picking process. Packing is done at a packing table where the articles picked are brought to. These articles are put in a sending box. A shipping label will be attached to the box and the box will be stored on a pallet labelled for the right destination. At the packing table a terminal scanner can be attached to check the orders immediately with the system according e.g. carrier details and customer details. The same types of warehouse equipment are used for these activities as for the picking activities discussed in the previous paragraph, except for the dynamic equipment which are particularly designed for picking activities.
4.2 Solution Design process
This paragraph describes the solution design process of TNT Logistics nowadays. The Solution Design process consists of 4 steps named:
I. Kick off II. Analyses III. Solution IV. Costing
Every step is defined in the following paragraphs.
I. Kick off
The whole process starts with a request for quotation (RFQ) of a potential customer. TNT Logistics will receive data and requirements. The requirements of the customer are related to reliability, flexibility, procedures and other factors. Reliability reflects the service levels described in percentages. Flexibility like future volumes and seasonality are of importance as well. Next to these requirements, the country, building specifications and procedures like ISO, HACCP can be of importance for the customer. A pre-data-analysis is done before the kick off meeting with all the people of TNT Logistics who are involved in this project. The pre-data-analysis consists of an outbound profile of the customer concerning their market, customers and number of shipments, number of customer locations and their annual weight/volume. Outbound within the Solution Design process represents the number of orders, lines and items as well as the number of parcels, pallets and rush orders. Inbound in stead represents the number of trucks/receipts, orders, lines, items and returns. Storage gives the number of SKUs, locations (pallet and bins), product groups and surface. SKU stands for Stock Keeping Unit which refers to a specific article number.
Principles are designed and scenarios are defined by the Solution Design (SD) manager. These principles emphasise the customers’ profile. After designing these principles, different scenarios are calculated and described. The four principles used within TNT Logistics are illustrated in figure 9.
Figure 9 Design principles
II. Analyses
With the RFQ, the data of the customer and the output of the kick off meeting, the analyses are done by the logistic analyst. With a volume overview of the customer, conclusions are made with regard to information that has not been provided by the customer. An order profile is provided by the customer. Missing data will be assumed by TNT Logistics. The optimal solution at this stage is generated by the principles ‘space utilization’ and ‘handling efficiency’.
III. Solution
The input for this stage is the output of the data analysis and the output of the kick off meeting. With this information a solution is finalized and a warehouse solution is designed for the customers’ products. What to store and how to store it, is determined by the principle “space utilization”. The principle “handling efficiency” lists all relevant measures used for the lay-out design and how to pick-pack and move. Finally, schemes of volumes per day, process description, resources needed, an organization scheme and a lay out design are presented to the customer.
IV. Costing
Costing is finalized by the solution output. TNT Logistics uses the internally produced Benelux Cost Model calculated in the resource model. The analysis made by TNT Logistics is the part where decisions are made for certain equipment to handle the goods. These decisions translate volumes into hours in a resource model. This transmission is done with the support of a productivity database. Finally hours are translated into a cost model. When the cost of the solution is too high, the analyst analyses a second solution (see figure 10).
The figure below illustrates the process and indicates where the focus of this research lies in this process to create a decision tree.
Space utilization: to maximize the utilization
of space.
Handling efficiency: avoid unnecessary
movements and waiting time by bottlenecks.
Cost effectiveness: the lowest cost level and a
short pay-back time for investment.
5 Conceptual Model
A conceptual model used for problem formulation is a written description and visual representation of predicted relationships between various concepts (Baarda et.al., 2001). In this research a conceptual model is created to gain an overview of the objective of this research and the concepts related to this objective.
This research discusses the decision making between various types of warehouse equipment regarding the productivity rates. As mentioned in the design of this research other concepts could influence the decisions as well. The relationships of these concepts will be mentioned in this research but not studied. The conceptual model, illustrated below, does not show all relationships between all concepts to keep the overview. All relationships relevant for this research will be explained in the text below.
Figure 11 Conceptual model
Deciding what warehouse equipment could be interesting for which customer depends on the order profile of the customer, the required productivity rates and the required investment. The ‘decision making’ field distinguishes conventional warehouse equipment and mechanized warehouse equipment. The predicted causal relationships between the concepts are illustrated with a plus or a minus.
If the customer would like to invest, the investment will have a positive relationship with mechanized warehouse equipment when the order profile of the customer is stable and when the contract period is long. A stable order profile makes it possible to deal with the inflexibility of a mechanized system. And a long contract period makes it possible to pay the investment back in time. A negative causal relationship towards conventional solutions is considered, but this depends on the order profile and the productivity rates a customer would like to achieve.
An order profile consisting of a small number of SKUs has a positive relationship with conventional warehouse equipment. A large variety in dimensions of SKUs results in a conventional solution as well. Both have a negative causal relationship with mechanized warehouse equipment. A
large number of SKUs will be processed by a mechanized solution if the order profile consists of a small variety of dimensions. In the other cases the order profile will be too complicated for a mechanized system to handle or the system becomes too specific for one customer which is not efficient for a service provider.
If a customer asks for a high productivity rate a mechanized solution should be considered. A high productivity rate needed has a negative relationship with conventional warehouse equipment. With this latter the process will not be efficient and cost effective enough.
In this research an extra point of view is included to gain TNT Logistics’ awareness with regard to a possible negative influence from implementing mechanized equipment on the quality of labour. This could influence the productivity rates of the entire process negatively. First the literature is explored to recommend TNT Logistics in a general way how to influence the quality of labour positively working with mechanized warehouse equipment. To see how employees experience working with various types of warehouse equipment in practice, observations were done. As a result of the literature explored and the observations made a fifth principle is added to the current design principles of TNT Logistics.
The earlier chapters described the orientation phase of the technical analysis. The relationship between the ‘productivity rates’ and the ‘decision making between various types of warehouse equipment’ is made operational which means the analyses can start. The other concepts in this model are related to the objective of this research as well but are not made operational. Still these concepts will be discussed to make TNT Logistics aware of these concepts.
Field studies, literature, suppliers and other sources will be consulted and analyzed per pair of warehouse equipment. The productivity rates within current processes of TNT Logistics and their used warehouse equipment are gathered and if needed measured. To be able to look from different points of view other sources will be approached too by interviews. Various experiences of certain warehouse equipment will be gathered.
TNT Logistics provides services to various market sectors. Sectors chosen for this research are the Print & Media sector and the sector Electronics & Telecom in order to find out more about warehouse equipment currently in use by TNT Logistics. These specific sectors are chosen because both lay-outs are subject of discussion within TNT Logistics at the moment. The picking processes of the first sector can be compared according their productivity data. The main process within the Electronics & Telecom sector consists of packing standing at a packing table. These packing processes will be analyzed by time studies to create more insights in every activity on its own. First the field studies conducted within these sectors and their resulting productivity rates will be analyzed. Later on, these productivity rates will be analyzed per relevant pair of warehouse equipment.
After having analyzed the sources, every pair of warehouse equipment can be discussed by the data found during the field studies and interviews, classified in the sub-questions earlier. As a result of the analyses, a matrix is created illustrating the relationship between the two concepts ‘productivity rates’ and ‘decision making between various types of warehouse equipment’. Finally, recommendations are given towards TNT Logistics to gain more insights regarding the various types of warehouse equipment.
6 Field studies
This research started with the finding that customers processing the same articles and the same order profile use different warehouse equipment to handle these articles. Within the two sectors Print& Media and Electronics & Telecom observations are done and productivity rates are gathered to find relationships between the various types of warehouse equipment being used and their productivity rates. The customers will not be mentioned by their names as the information used for various analyses is confidential.
6.1 Sector Electronics & Telecom
This chapter discusses the market sector Electronics & Telecom. Two processes are determined which handle the same product in different ways. The companies A and B are two customers of TNT Logistics located in two different warehouses. Their core process is packing in stead of picking. The following table shows the data noticed within the different processes. These entities are chosen to show the comparison of the warehouse equipment used and the order profile characteristics.
Table 1 Data over the year 2005 of the sector Electronics & Telecom. Entities Company A Company B
Lines / order 1 1.5
Items / order 1 1.5
Orders/man-hour 60 50
Layout Square picking Square picking
Warehouse equipment
packing Pallet picking. The product is packed and placed on a roll conveyor.
Flow rack picking. The product is packed and placed on a pallet to be shipped.
Details Packing slip required. No shipping box.
No packing slip needed. Shipping box required.
Packing tables 7 4
Orders per day 3500 2800
A coordinator is responsible for the replenishment of the work stations and the transport of the finished goods to the shipping area. All the value-added activities are done by other employees.
The order profile is almost the same for both customers. This makes it possible to compare these processes. As there are only two processes to compare it will be more interesting comparing these processes on a lower level per activity. The next paragraph will illustrate the activities of the two processes and will explain these processes.
6.1.1
Processes Company A and B
First the general packing process of both companies will be explained and illustrated by flow charts. These are the activities done by one employee. The coloured boxes are corresponding activities of company A and B which will be compared later on.
Company A
Figure 12 Flow-chart packing process company A
An employee picks the product from a pallet and scans 4 barcodes. Afterwards he/she confirms the article number with a pencil on the list and sticks a destination label on the box. The shipping label needs to be printed and can be put in the box. The box will
be closed with a sticker to make the activity ‘tape box’ easier. Finally the box is put on the conveyor belt.
The employees are divided by 7 packing tables. The 8th table is occupied by an employee who processes the spare parts. There is a coordinator keeping the packing employees busy by refilling their tables and keeping orders in control. Another employee is responsible for packing the pallet from the conveyor and putting it on stock. The pallets stay mainly 10 days on stock. This last employee is also responsible for replenishing the packing tables with products needed to be packed.
Company B
In this process the employees are divided by 5 packing tables. The 6th table is used for the packaging of spare
parts. A coordinator is also part of the process. The product needs to be picked from a flow rack. Shipping boxes need to be fold first to put in the product. After having folded the box, the bottom will be taped. The product will be scanned and put in the box with the shipping label. The shipping labels are printed on forehand and will be scanned with the product. The box will be closed and taped, a label will be sticked and finally the box will be put on the pallet with the right destination. Not always all packing tables are used, it depends on the demands of the customers’ customer. If more than 4 packing tables are in progress a second coordinator is needed.
6.1.2
Time studies
The processes of companies A and B are divided into specific handling activities. Time studies of these activities will be made to compare the corresponding activities with one another. Four packers of each process will be video taped. By means of these videos their activities will be timed. Every activity is observed around 80 times. Data and detailed graphs are included in appendix I and II. Appendix III includes the average time per activity and the first impressions of these data. Below both graphs are illustrated to compare the time needed per activity in company A (on the right) and company B (on the left). Every colour reflects one activity: corresponding activities have the same colour. Activities not corresponding are coloured grey.
Figure 14 Time studies company A (right) and company B.
Remarkable is that every packer has its own sequence of doing his activities. The major differences within the processes are that company A includes a packing slip in the package and company B puts the order in an extra shipping box.
The coloured activities in figure 12 and 13 are compared in the table below. The data that is given is measured in average seconds per activity. The pairs I (flow racks versus static shelving), III (walking versus conveyor) and IV (paper list versus scanning) of warehouse equipments will be discussed by means of these data:
Table 2 Comparison timed activities company A and B
6.2 Print & Media sector
This market sector represents customers who have outsourced the logistic process of their internal paperwork as envelopes and notepaper as well as brochures and promotion material. The customers discussed are companies C, D, E and F. The first three are located in the same warehouse, company F is situated in another warehouse.
Every warehouse has its own administrative department. The warehouse with the companies C, D and E has three picking processes but the administration department distinguishes only two customers. This is caused by the fact that two companies have merged which is already adjusted within the administration department. But the operations are still processed separately. This causes some trouble for an optimal benchmark. Another difficulty is company F which uses other production data. This is caused by the fact that TNT Logistics discusses various SLAs with a customer. PIs are established out of these SLAs and these PIs will distinguish the entities of the performances delivered specific per customer. There is no general report where all warehouses have to file a period.
To compare the different customers, general productivity information will be used. Important is their objectivity. The following table shows for the year 2005 which can be used for comparisons1. The
pairs I - IV of warehouse equipment can be discussed according to these processes (see figure 8). The layout of the picking area of companies C, D and E are enclosed in appendix IV.
1
A year consists of 250 days and 1450 productive hours.
Company A Company B Difference A – B Tape box 5.59 5.21 0.38
Scanning 4.02 5.74 -1.72
Pick article 3.56 3.58 -0.02
Stick label 2.83 3.40 -0.57
Table 3 Data over the year 2005 of the Print & Media sector
Company C Company D Company E Company F Lines / order 3.30 6.64 1.02
Items / order 8.04 4.86 53.97
SKUs 1694 1041 2676 1422
# locations 558 369 810 297
Orders / man hour 8.11 8.23 18.46
Lines/man hour 26.76 54.67 18.83
Items/man hour 215.26 265.64 1000.66
Layout Pallets and shelving in pallet racking.
Warehouse
equipment Walk Walk Walk EPT
Terminal scanning Terminal Scanning No scanning Terminal Scanning picking front 305.91 m 267.30 m 264 m Lines/day 200.67 410.05 629.75
6.2.1
First impressions Print & Media sector
Company F, compared to the other companies, produces many items per order. The cause here is the different administration methods of both warehouses where these processes are located. This variable is not discussed because a comparison can not be made. The other impressions are listed below:
− Company E has the most locations compared to the other customers. This can have an influence on the picking performance. Finding the right location will be more difficult. But company E picks almost twice as many articles per man hour than company C or D and 6 times more than company F.
− Another note is that company F is the only company using an EPT to pick its orders. But company E picks faster than company F despite walking. The picking front is equal.
− Company E has almost 7 lines per order and company C and D have a little more than 3 lines per order. But company E picks as many total orders per hour as company C and D.
− The largest number of orders picked per man hour is within the process of company F. Most orders of company F consist of 1 line. Expressing the productivity in lines per man hour, in stead of orders, means a large decrease with regard to the other company processes. Company E processes the most lines per man hour and company F has the lowest productivity rate on this level.
Within the Electronics & Telecom sector the comparable activities of the time studies done will be discussed per relevant pair of warehouse equipment. All four companies of the sector Print & Media have organized their process in the same way but differ in the order profile characteristics.
The order profile characteristics and the concept characteristics will be analyzed per relevant type of warehouse equipment. The productivity rates play a major role in these analyzes. The labour costs, the capital costs and in some cases the support costs (see figure 4)will be taken into account in cases if the information is known.
7 Pairs of warehouse equipment
The following chapter concerns the various types of warehouse equipment evaluated for TNT Logistics (see figure 8). The four sub-questions, each consisting of a different point of view to discuss the pairs of warehouse equipment, are listed below:
I. What can be said about the various types of warehouse equipment from the literature?
II. What do suppliers say about the characteristics of various types of warehouse equipment regarding the productivity rates and the applications?
III. What relationships can be found with regard to the productivity rates of various types of warehouse equipment currently in use within customers’ processes of TNT Logistics?
IV. How do other sources experience the characteristics of the warehouse equipment used?
V. What are the findings of the employees using the warehouse equipment discussed and how could they influence the productivity rates of the equipment?
Not every sub-question can be discussed within a paragraph analyzing a pair of warehouse equipment. From what is written in literature the concept characteristics and the order profile characteristics will be discussed. Suppliers will be approached to discuss their opinion of the equipment not in use by TNT Logistics. Customer’s processes will be compared using the same equipment or alternatives. Also here not all equipment are used in one process. In some cases extra sources were possible to consult which could not be categorized by one of the sub-questions mentioned before. Some general analyses can be made with the data gathered by these sub-questions.
The alternatives discussed in the following paragraph are listed below: I. Static shelving vs. flow racks
II. Walking vs. EPT III. Walking vs. conveyor IV. Paper list vs. scanning
V. Pick-by-Voice vs. Pick-to-Light VI. Man-to-Goods vs. Goods-to-Man
7.1 Flow racks versus static racking
Flow racks and static shelving are storage equipment. They could influence the picking performance by their storage density which could decrease the walking distance and therefore increase the productivity rates, for example the number of articles picked per hour.
7.1.1
Literature
Concept characteristics: because of the separation of loading and picking aisles flow racks result in more safety and less congestion. Besides that, the staff productivity will increase. A basic advantage of flow racks is a higher storage capacity, they offer higher density and store according to the FIFO-principle which leads to an efficient and accurate process. Another advantage is the time saved in order picking as a result of a decreased picking area. Straight aisles allow a better overview and lead to an improved organization of work. A disadvantage is that an investment is needed and flow racks are not maintenance free. Flow racks are less flexible as to which articles can be stored within this equipment Flow racks are an interesting option if mechanization is not cost efficient (Caron et.al, 1998).
Static shelving is relatively inexpensive and basically maintenance free. Static shelving only reaches 2 meters high. The space above these two meters contains wasted space.
Order profile characteristics: flow racks need a high turnover rate and a large amount of items per article are needed to result in an efficient process. Static shelving is interesting for slow and fast movers depending on the size of the total assortment. With slow movers an employee does not have to walk to the bulk storage to collect that one article. The application for fast movers could be interesting regarding a small assortment because it decreases the picking front. Very fast movers can be inefficient again because of much replenishment which takes place in the same aisle. Flow racks are more interesting in this case.
Table 4 summarizes the concept characteristics and the order profile characteristics of these warehouse equipment. When a warehouse evaluates flow racks or static shelving it should mostly replace their pallet racking. Therefore this table discusses the characteristics of pallet racking as well.
Table 4 Characteristics static racking versus flow racking
Warehouse equipment Concept characteristics Order profile characteristics Pallet racking - Pallets are clearly structured and
immediately reachable.
- Low investment but an unfavorable ratio between storage and aisle-area. -Long travel distances.
- Palletizable goods.
- Storage per article restrictions.
- Large amounts of articles need to be picked frequently
Shelving - High load factor and work load. - Shorter pick run.
- Flexible storage.
- Heights of 180-200cm with a depth of 50cm and a width of 100cm.
- In combination with pallet racking possible.
- Mostly manual replenishment from bulk storage.
- Small articles in small amounts or limited stock.
Carton flow racking - High storage capacity or small surface needed.
- Increases staff productivity and time saving by short routing.
- High starting costs. - High exploitation costs.
- Large number of items picked per article.
- High turnover frequency.
7.1.2
Suppliers
Flow racks and static shelving both reduce the time walking of an employee. Flow racks could even gain a higher density but need a higher investment as well. This paragraph will discuss the two subjects, savings on walking distance and the investment needed, according to the experience of different suppliers.
SSI Schäfer is one of the suppliers of flow racks. Their experience about flow racks versus static shelving besides costs, are aspects as safety. Safety in the sense of avoiding accidents by replenishing in another aisle than picking. And safety on the long term is known as ergonomics. Employees do not need to reach for the last item at the back of a canal.
Studies within SSI Schäfer came to efficient lanes, from the replenishment aisle towards the picking front,with a number of 5 cartons long. If canals are longer than these 5 cartons there will be more empty locations in a canal and this will not be efficient.
According to Cisco-Eagle, a supplier of flow racks and shelving, employees spend approximately 15% of their time doing productive work with static shelving and approximately 85% with flow racks. Flow racks cost more than conventional shelving but it cuts labour costs dramatically by decreasing the walking distance between items being picked and the time spent looking for them. The hidden cost factor here is labour as the racks itself are, relatively seen, inexpensive. Flow racks make more efficient use of floor space. Fewer aisles are required.
