Part three:

Facility Design for various facilities functions

Chapter 7 - Warehouse Operations

Luu Van Thanh

 Lecture outline
1. Introduction
2. Functions in the warehouse
3. Receiving and shipping operations
4. Dock locations
5. Storage operations
6. Order picking operations
 1. Introduction
• Importance of warehouse operations
– Just-In-Time, more frequent shipments
– Quick response, same day or next day delivery
– Quest for quality, increased shipping accuracy
– Customer service, value added activities including
kitting, special packaging, label application, etc…
– SKU proliferation, wider variety of products
available to customers.
• Mission of a warehouse is to effectively ship
products in any configuration to the next step
in the supply chain.
 2. Functions in the warehouse

Fig 07_01: Warehousing opportunities within Fig 07_02: Typical warehouse functions and flows
a logistics network

• Receiving, prepackaging, put-away, storage,

order picking, packaging, sortation &
accumulation, packing & shipping, cross-docking,
replenishment.
 3. Receiving and shipping operations
Fig 07_03: Possible arrangements of
shipping and receiving areas. (a)
Transportation facilities on one side of
building. (b) Transportation facilities on
two adjacent sides of building. (c)
Transportation facilities on two opposite
sides of building.

- Combine shipping and

receiving: Promotion &
Detraction.
 Receiving and shipping space planning

Fig 07_04:
Receiving and
shipping analysis
chart

-The steps required to determine the total space requirements for

receiving and shipping areas are:
1. Determine what is to be received and shipped (figure 7.4)
2. Determine the number and type of docks
3. Determine the space requirements for the receiving and
shipping area within the facility.
 ❖ Determine the number and type of docks

Fig 07_06: Recessed and “Y” approaches to

faciilitate truck access to property. (a) Recessed
truck entrance. (b) “Y” truck entrance.

Fig 07_07: Apron depth definition of 900 docks. (a)

Unobstructed dock. (b) Post-supported canopy. ©
Alongside other trucks. (d) Driveways and stalls.

Fig 07_08: 900 dock and finger dock bay

width and apron depth trade-offs. (a) 900
dock. (b) 450 finger dock.
Table 07_01: Space requirements for 900 docks

Table 07_02: Finger dock space requirements for a 65 foot trailer

 ❖ Determine internal receiving and shipping area requirements

Table 07_03: Minimum Maneuvering allowances for receiving and shipping areas
Example 1: Space estimation and breakdown at receiving and shipping

A total staging area of:

Figure 7-9: (a) Site and (b) dock area for example 1

The total space requirement within the facility is:

(6+12)*(48 0r 50)
[3(10)+2(7)]*52
26*6
26*6
Type of docks

Fig 07_11a Pemanent Fig 07_11b

adjustable clock levelers

Fig 07_10: Yard ramps

Fig 07_12: Truck leveler

 4. Dock locations

Fig 07_15: Modular designs of storage/warehouse facilities with expansion alternatives shown.
 5. Storage operations
❖ Storage analysis chart
5.1 Storage space planning

Example 1:
At the ABC manufacturing firm, the average daily
withdrawal rate for product A is 20 cartons per day,
safety stock is 5 days, order lead-time is 10 days, and
the order quantity is 45 days.

What are the maximum and average quantities of unit

loads to be stored?
Example 1 (solution)
• Reorder points
= safety stock + lead time demand = 300 cartons

• Maximum quantity to be stored

= safety stock + order quantity = 1000 cartons

• Average quantity to be stored

= 1/2 order quantity + safety stock = 550 cartons
• The planned number of unit loads for each material to be stored may be determined by
considering the receiving schedule and the method of assigning materials to storage locations!
Example 2:
A plant produces 100 cartons a day to be stored in the
warehouse. The company would like to keep a three-day
supply of stock as a safety cushion to fall back if production
is temporarily interrupted. The maximum time between
orders is 30 days.
Determine the maximum and average amount of stock to be
stored.
If each unit is 3*4*2 ft and if they may be stacked 6 units
high, determine the floor space required for storage. For
these small loads, aisle space of 8 % of the total storage
area should be allowed.
Example 2 (solution):
• Maximum units in stock
= safety stock + units in a single order
= 3 days * 100 units/day + 30 days * 100 units/day = 3300 units

• Average units in stock

=safety stock + ½ of units in a single order = 300 + ½ * 3000 = 1800

• Maximum storage space required

a. 3300 units/(6 units/stack) = 550 stacks
b. 550 stacks * (3 ft * 4 ft*) = 6600 square feet
c. 6600 square feet * 0.08 = 528 square feet for aisles
d. (6600 + 528) square feet = 7128 square feet of total floor space
required
 ❖ Space standard
– “volume required per unit stored, including “losses”
• loss in cube utilization due to aisles
Clear stack height: 18’ (feet)
total cube =18*(10+36)*(4+10+9+10+4)
= 30636
10 ‘ 10 ‘ 36 ‘
aisle cube = 18*(10*36*2+10*37) = 19620
4‘ 9’
“loss” due to aisles = 19620/30636 = 64%
10 ‘

• loss in cube due to honeycombing

Ceiling Aisle

A A
A A A
A A A A
Floor elevator view Outside wall plan view
❖ Storage assignment method
• Randomized storage (floating slot)
• Dedicated storage (fixed slot)
• Hybrid types
– class-based dedicated storage
– “supermarket” storage

Figure 7-17: Warehouse layout example

Inventory levels for six products in a warehouse, expressed in pallet loads of product
Example 3:
A single input/output (I/O) point serves following storage area. (see
figure 7-17)
All movement is in full pallet-load quantities. The storage area is
subdivided into 10x10 ft storage bays. Three classes of products (A, B
and C) are to be stored. Class A items represent 80% of the input/output
activity and have a dedicated storage requirement of 40 storage bays, or
20% of the total storage; class B items
generate 15% of the I/O activity and have a dedicated storage
requirement of 30% of the total, or 60 storage bays; and class C items
account for 5% of the throughput for the system, but represent 50% of the
storage requirement.
Assume that lift truck travel between the I/O point and individual storage
bays can be approximated by rectilinear distances between the dock and
the centroid of each bay.
Assign product classes A, B and C to the storage area in order to
minimize the total distance travelled, if a dedicated storage policy is used
Example 3 (solution)
• Compute distances-to-travel (average distance traveled in following table)

• Determine activity and space requirement

Space required
Products
I/O activity bays Space ratio
Nhoùm A 80% 40 20%
Nhoùm B 15% 60 30%
Nhoùm C 5% 100 50%
Example 3 (solution) – con’t
• Assign “FMI” to “closest” locations, and compare the expected average
distance traveled (EDT) …

“Optimum” dedicated storage layout; EDT = 53.15 ft

Rectangular-shaped randomized storage layout,;

Randomized storage layout,; EDT = 52.9 ft EDT = 50 ft
5.2 Storage layout planning
• Pareto and ABC analyses are very popular and useful
in storage analysis. What Pareto or ABC analyses would
you suggest ?
Examples:
– annual sales/item
– storage space/item
– replenishment size/item
– order size/item
– orders/unit of time
– time in storage/item (turnover)
– # trucks arrivals/unit of time
– activity-to-space ratio
❖ Popularity principle

Fig 07_24: The impact of storage depth on travel distances

Fig 7_25: Popularity and centralization issues demonstrated in combination for a distribution warehouse
Fig 07_26: Material storage by popularity
Example 4: Determining optimum storage location based on item popularity
The products given in the below table are most popular in the warehouse shown in
figure 7.27(a). How should these items be aligned along the main aisle?

Example 4(solution)
The receiving/shipping ratios may be calculated and are given in below table.
The receiving/shipping ratios may be calculated and are given in below table.

One of the assignments of products to locations that will result in minimal travel is
given in below figure.
❖ Other principles: similarity, size, characteristics,
space utilization.

Fig 07_28: Illustration of storage area accessibility considerations

 6. Order Picking Operations
Order picking:
• is most critical function in distribution operations.
• is the most costly activity in a typical warehouse.
(see the following figure)
❖ Order picking principles:
• apply Pareto’s law;
• use a clear, easy-to-read picking document;
• use a pre-routed, pre-posted picking document;
• maintain an effective stock location system;
• eliminate and combine order picking tasks when possible:
➢ travelling
➢ extracting
➢ documenting
➢ sorting
➢ packing
➢ searching
• Order picking work elements and means for elimination
Fig 07_31: Lines per order distribution

Fig 07_32: Methods of order picking

Fig 07_33: ABC analysis: items and picks

Fig 07_34: ABC analysis: items and completed orders

 ❖ Storage layout model

• Model: Find the optimum dedicated storage Assignment

• Notations:
q, number of storage locations
n, number of products
m, number of input/output (I/O) points (docks)
Sj , number of storage locations required for product j
Tj, number of trips in/out of storage for product j, i.e thruput of j
pi , percentage of travel in/out of strorage to/from I/O point i
dik, distance required to travel from I/O point i to storage location k
Xjk: 1 if product j is assigned to storage location k; otherwise, 0
f(x), average distance travelled.
• Procedure to minimize EDT (expected distance traveled)

+ number products according to their activity-to-space

ratio, such that
T1/S1  T2/S2  …  Tn/Sn

+ compute expected distance traveled fk for all storage

locations, m
f k =  pi d ik
i =1

+ assign product 1 to the S1storage locations having the

lowest fk values, next assign product 2 to the S2 storage
locations having the second lowest fk, etc.
• Example

Consider the warehouse of which the layout is given below. Storage bays are of size
20x20 ft. Docks P1 and P2 are for truck delivery; docks P3 and P4 are for rail
delivery. Dedicated storage is used.
Sixty percent of all item movement in and out of storage is from/to either P1 or P2
with each dock equally likely to be used. Forty percent of all item movement in and
out of storage is equally divided between docks P3 and P4. Three products, A, B and
C, are to be stored in the warehouse with only one-type product stored in a given
storage bay. Product A requires 3600 ft² of storage space and enters and leaves
storage at a rate of 750 loads per month; product B requires 6400 ft² of storage
space and enters and leaves storage at a rate of 900 loads per month ; product C
requires 4000 ft² of storage space and enters and leaves storage at a rate of 800
loads per month. Rectilinear travel is used and is measured between the centroids of
storage bays.

p1 p3
p2 p4
Solution
-Compute distance dik and the the fk ,
e.g: f29 = 0.3*100+0.3*120+0.2*80+0.2*100 = 102
106 110 104 118 122 126 130 134

86 90 94 98 102 106 110 114

P1 P3
76 80 84 88 92 96 100 104
P2 P4
86 90 94 98 102 106 110 114

105 110 114 118 122 126 130 134

-Compute the activity-to-space ratio

activity, Number Activity-to-space ratio,

product, volume
Tj of bay, Tj/Sj order
j (ft2)
(loads/month) Sj

A 3600 750 9 83.33 (1)

B 6400 900 16 56.25 (3)
C 4000 800 10 80.00 (2)
- assignment step C B B B B B
A A C C C B B B
P1 P3
A A A A A C C C
P2 P4
A A C C C B B B
B B B B B
• Unit load storage alternatives
➢ block stacking
➢ deep lane storage
➢ single-deep selective pallet rack
➢ double-deep selective pallet rack

Storage method S (ft2)

a. Block stacking 111.80

b. Deep lane 80.48
c. Single-deep 117.33
d. Double-deep 87.03