Hardware warehouse optimization

Abstract

Wispeco is a growing company and has reached the point where their GS (Gauteng Stockist) storage
\nwarehouse does not possess enough storage space to keep up with the growing demand for Wispeco
\nproducts. They have now acquired an additional storage warehouse, where all their hardware products will
\nbe stored.
\nThe processes in the hardware warehouse (or GC warehouse) is currently relatively unstructured, with no
\nstandard operating procedures, information management systems or warehouse management systems in
\nplace.
\nIn order to improve the operations of this warehouse, an analysis of the current operations have been done,
\nalong with an investigation of the current available best practices for similar warehouses. In the investigation
\nof available best practices the following warehousing techniques were investigated: Setting up stock levels,
\nABC analysis, flow within a warehouse, order picking techniques, layout design, and storage assignment.
\nFrom the investigation of best-practices the techniques that will best fit the goals of the GC warehouse are a
\npicker-to-part system, with a forward-reserve storage allocation approach. The GC warehouse already
\noperates with a forward-reserve storage allocation approach and picker-to-part system, but the current
\nlocation of the main areas in the warehouse, namely the small store, bulk store, receiving and dispatch areas,
\nare increasing the average travel distance of pickers. These areas need to be located according to the amount
\nof movement between the areas.
\nThe best storage policy for the GC warehouse is a combination of dedicated storage and full-turnover storage,
\nitems with a high turnover rate are located in dedicated location close to the dispatch area.
\nWhen conducting an ABC analysis it was found that locating items according to their relative impact on sales
\nvalue, will be the best strategy for reducing the average picking distance. The relative impact of an item is
\ndetermined by multiplying the value of an item with the annual number of sales. When drawing a Paretograph
\nfor the relative impact of sales it was discovered that roughly 16.07 % of the items are responsible for
\n80% of GC warehouse’s value of sales. The following 15% of the sales value is comprised from the next
\n20.54% of items. The final 5% of sales value is from the final 63.39% of items. These three groups will be
\nknown as groups “A”, “B” and “C”.
\nThe proposed receiving process, along with the use of an inspection sheet will ensure that incorrect products
\nor in accurate quantities are not accepted into the warehouse. The proposed dispatch process, along with a
\npicking slip, which indicates the product code, quantities and location of the item that needs to be picked, the
\namount of incorrect picks will decrease, along with inaccurate shipments to customers.
\nIt was determined that proposed layout 3 is the best layout for the GC warehouse, because It fulfils the most
\nimportant criteria of the warehouse.
\nWhen comparing the available storage space in the GC warehouse with the required storage space, it was
\ndetermined that the warehouse does consist of sufficient space for all the Hardware products.

Cite this paper

@article{krause2016hardware,
  title = {{Hardware warehouse optimization}},
  author = {Krause, N.},
  journal = {UpSpace Institutional Repository (University of Pretoria)},
  year = {2016}
}

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