SECTION 1What Is a Warehouse Optimization Assessment or Study

.docx

School

Wichita State University *

*We aren’t endorsed by this school

Course

346

Subject

Industrial Engineering

Date

Feb 20, 2024

Type

docx

Pages

Uploaded by BaronElement9835

SECTION 1What Is a Warehouse Optimization Assessment or Study? A warehouse optimization study is a disciplined and comprehensive approach to analyzing all facets of the operations. While uniqueness exist across companies, an assessment is typically going to cover all functional areas from receiving through shipping. Additionally, optimization studies cover the warehouse layout and design as well as all inventory management functions. The goals are straightforward, you must be identifying those areas which are inefficient and drive up labor costs. Consider those processes and bottlenecks that do not allow you to meet your management’s expectations or customer’s needs. The outputs of the assessment should be the basis for developing a roadmap for improving the operations over time. How to Optimize Warehouse Operations A methodical optimization assessment should take the following aspects into account:  The product and order flow through the operations and supply chains.  The overall utilization of the facility and storage locations.  Material handling equipment, automation, and storage are utilized in the facility.  The product slotting, location profiles, and management of bin locations.  Value Added Services (VAS) such as kitting, labeling, repackaging, etc.  Vendor compliance programs for inbound goods.  The warehouse management software utilized in the operations.  The inbound and outbound docks, and the staging space required.  The organizational structure for the operations.  Benchmarking and metrics are utilized to manage the operations.

SECTION 2When To Consider a Warehouse Optimization Assessment Successful operations have a mindset of continual operational improvements. This keeps problems from slowly building to the point where the operations can no longer be efficient or service the customer. There are circumstances where businesses should look at operations holistically on a larger scale. These circumstances generally include the following:  Decline in inventory accuracy – changes in the four-wall inventory accuracy, or bin level accuracy, are strong indicators of a breakdown in processes.  Failure to meet customer expectations – these failures tend to stem from order accuracy issues, poor packaging, order turnaround time, etc.  Acquiring a new business – a new acquisition generally means increased inbound shipments, more picking volumes, and additional SKUs.  Within the final year of a lease – towards the end of a lease is when you want to analyze the operations and determine if the existing facility will continue to support your business.  Addition of new product lines – with new product lines and SKUs comes potentially new warehouse layout optimization and system needs.  At the end of a season – the end of a season is the perfect time to step back and look at how the operations performed overall.  Escalating fulfillment costs – this is another indicator that points to a breakdown in processes, or inefficient labor, that should be evaluated. SECTION 3Reasons To Perform a Warehouse Optimization Study

With businesses being more competitive, the need to continually improve the operations becomes more critical. A warehouse optimization assessment is a supply chain management tool that will help to identify areas that should be improved. Faster order turnaround and accuracy - Many consumer businesses are driving towards the latest order cutoff times available with parcel carriers. For business-to- business channels, the demand is equally as stringent. For many companies, the window for receiving and fulfilling customer orders has decreased to roughly 30 to 90 minutes. An optimization assessment will identify areas where companies can become more nimble in processing orders by identifying excessive touchpoints and bottlenecks. Orders must be fulfilled on time and accurately. The cost of picking errors and the impact on customers must be factored into the process. Assessments also identify warehouse optimization techniques, material handling equipment or automation to support the order fulfillment process. ERP and WMS utilization and capabilities - An optimization study will help identify gaps within the current ERP or WMS software. These gaps generally prevent a company from efficiently processing customer orders. Once the gaps are identified, decisions can be made on where and how to improve these systems. Improve inventory accuracy – inventory accuracy tends to be one of the major challenges within supply chains. At times this can be the four wall inventory that is posing challenges. For others, the bin level accuracy becomes the problem even though the four-wall inventory is correct. Warehouse optimization assessment will identify areas for improved cycle counting programs. However, cycle counts only clean up and correct problems once they occur. A thorough assessment will identify the root causes for how and why inventory accuracy problems arise, and effects of human error.  Handle new SKUs or lines of business – operations are continually evolving, this includes new SKUs and product lines that are added over time, to

acquisitions that are made and consolidated into the existing distribution supply chain. Warehouse slotting optimization is critical for an expanding SKU base. These situations require operations to be flexible and scalable to support the changes over time. A warehouse optimization assessment will allow companies to determine better ways to support the existing and future SKUs. For many companies, this will include ways to reprofile existing material handling equipment or even a redesign of the existing fulfillment operations. This can also identify opportunities for different conventional pallet racks and storage, or implementation of various levels of automation whether it be for high-density storage options or goods-to-person technologies.  Improve processes – internally, the operations need to support efficient processes such as light assembly or kitting, to repackaging and labeling requirements. These processes are critical to supporting the needs of other departments, as well as meeting customer expectations. These processes, if not done appropriately, will become costly from a labor perspective, as well as consume more space than needed – not to mention creating bottlenecks and potentially driving up the number of touch points. An assessment will identify opportunities for warehouse process optimization improvements and efficiencies. SECTION 4Ways Companies Save Money Through Warehouse Optimization Warehouse optimization assessments are all about controlling or driving down costs as well as gaining efficiencies to handle more throughput and better service the customer – critical aspects to supply chain management. At times, this could also be about heading off future costs – such as being able to push off moving to bigger space. These warehouse optimization solutions should be the driving factors in the continual improvement of the processes, systems, and flow in your distribution

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help