BRINGING YOUR WAREHOUSE TO LIFE !

Establishing Warehouse Performance Metrics A Simulation Based Approach

ISCI 2013 22nd Feb 2013

What is a Warehouse?

A large building where materials are stored. Warehouses are used for storing Raw Materials, Finished Goods, Packing Materials, Project Materials, Maintenance Materials, Records etc

Warehousing in India
I N D I A E U R O P E

Warehouses in India are mostly stock-piles with very little focus on modernisation. However there is certain amount of seriousness coming up in areas like volume utilization etc However in the developed world, huge advents of Automation is evident in the last few years

Intralogistics

Intralogistics is defined as every dimension of logistics within the four walls related to implementing, managing, monitoring and optimizing materials handling and information flows.

Key Performance Indicators of a warehouse

Key Performance Indicators are quantifiable measurements agreed to beforehand, that reflect the critical success factors of an organization. The key performance indicators vary across the various segments of a warehouse. KPIs of a warehouse can be broadly classified into the following three points

What does Godrej Do?

Godrej Storage Solutions is part of the 3.3 Bn Godrej Group which got started in 1897. Godrej Storage Solutions is the market leader in warehousing with more than 10000 installation world wide

Objective of the Paper

This paper tries to find out the right storage system optimizing the KPIs of the customer Discrete event simulation using I used for the analysis We are trying to analyze the operations of a logistics warehouse

The Case
This is a logistics warehouse catering to multiple regional warehouse Selective Pallet Racking is the storage system used It stores around 10500 pallets Reach trucks and Hand Pallet Trucks are used for handling of material The expected Performance Parameters On a peak day the customer has to despatch 100 trucks in 8 hours. On an average one truck carries 24 pallets The put-away requirement is to unload trucks in 24 hours Safety is another prime concern of the customer. Hence minimising the number of equipments used will help him to reduce accidents

Problems faced by customer:

Currently the customer is able to store 10567 pallets in the warehouse using a selective pallet racking system with G+3 levels and with 10 reach trucks. Capacity of the warehouse was insufficient and hence the warehouse was dumped with material. As a result of the above, the retrieval time was more. The expected order fulfilment rates were in the range of 95-99%. However the actuals were in the range of 60-65% in the 8 hour shift with additional material handling equipments on hire. In order to achieve the fulfilment rates he had to engage more people and work in overtime thus making the warehousing operations costlier

Simulation of Current Scenario

In an eight hour shift he is able to load 59 trucks only It takes approximately 13 hours to complete 100 trucks At times he hires extra material handling equipments.

Our observations on the current Scenario

This is a national distribution centre and it caters to the regional distribution centres. This warehouse gets its material from the factory. This meant that both in bound and out bound logistics is in bulk The system that was in use was a pallet racking system which offered 100% selectivity The size of the warehouse is 148m x 97m x 8m. The customer uses a pallet of 1200x1000x1600mm. The volumetric utilization of the warehouse was 18%. The warehouse was planned with a forecasted inventory of 5 years. However there were new additions to the product line of the company and hence in the 4th year itself they were facing shortage in capacities

Our Approach Towards the Solution

After the process mapping and a detailed study of the warehouse it was very clear that the product solution chosen by the customer was wrong. For a bulk in/out scenario, a 100% selective system was a wrong choice. This resulted in sub-optimal cubic space utilization of the warehouse and higher travel distances both in put-away and picking cycle. So we decided to check the possibility of a dense storage solution which (1) helps with a better volumetric utilization of the system (2) facilitates bulk/batch out scenario. Simulation was carried out using 3 types of system namely drive in, radio shuttle racking and pallet flow racking.

Alternate products chosen

The following products were chosen as the alternate options possible Drive In Storage System Pallet Flow Storage System Radio Shuttle Storage System

Option 1 : Drive In

Option 1 : Drive In

Current SPR Pal Capacity Trucks dispatched 10567 59

Option 1 Drive in 15744 47

Option 2 PFR

Option 3 Shuttle

Option 2 : PFR

Option 2 : PFR

Current SPR Pal Capacity Trucks dispatched 10567 59

Option 1 Drive in 15744 47

Option 2 PFR 14193 86

Option 3 : Radio Shuttle

Option 3 : Radio Shuttle

Current SPR Pal Capacity Trucks dispatched 10567 59

Option 1 Drive in 15744 47

Option 2 PFR 14193 86

Option 3 Shuttle 21248 84

Comparison of Options
Current Option 1 Option 2 PFR Drive in -SPR Pallet Capacity(Nos) Trucks dispatched(Nos) Warehouse volume used(%) Rack + Equipment Cost(Lacs Rs) Cost per stored CBM(Rs) 10567 59 18 390 1922 15744 47 26 720 2380 14193 86 24 3040 11150 Option 3 Shuttle 21248 84 36 1184 2901

Comparison of Options
Current Option 1 Option 2 PFR Drive in -SPR Pallet Capacity(Nos) Trucks dispatched(Nos) Warehouse volume used(%) Rack + Equipment Cost(Lacs Rs) Cost per stored CBM(Rs) 10567 59 18 390 1922 15744 47 26 720 2380 14193 86 24 3040 11150 Option 3 Shuttle 21248 84 36 1184 2901

Comparison of Options
Current -SPR Pallet Capacity(Nos) Trucks dispatched(Nos) Warehouse volume used(%) Rack + Equipment Cost(Lacs Rs) Cost per stored CBM(Rs) 10567 59 18 390 1922 Option 1 Drive in 15744 47 26 720 2380 Option 2 - Option 3 Shuttle PFR 14193 86 24 3040 11150 21248 84 36 1184 2901

Based on the above factors System with Radio Shuttle was suggested to the customer

Conclusion
Using this model of discrete-event simulation a correct and optimal intralogistics solution was provided to the customer where Achieved throughput is closer to what they are looking at Cost per Stored CBM is optimal Safety is better

THANK YOU
Unnikrishnan N N unni@godrej.com +91 99400 66458