Variability; the warehousing challenge

As six sigma and lean manufacturing principles become widely accepted as standard practice, there has been increasing pressure to apply them in the warehouse, too.

It would be wonderful if warehousing operations were as stable and scheduled as their manufacturing counterparts. And, in some instances, they are. I have mentioned before the big benefit of being able to plan tomorrow’s work today. Then we have the opportunity to plan the staffing to match a steady workload spread evenly over the day.

A primary tenent of “lean” is eliminating variation. However, many warehousing operations are faced with responding to orders that are dropped continuously during the day, and that are still expected to be out the door before we go home at night.

Not only are we subjected to the ebbs and flows of incoming orders, but we are also subjected to a changing mix of work content for the orders that drop. Some may be dominated by full cases or pallets, while others have a high piece picking content. Many may be single line, or single piece orders. Still others may require value added services such as gift wrapping, price ticketing and serial number capture. These variations challenge us to plan processes that are efficient for each, and yet can be turned on and off as the activity shifts.

Normally, we use historical data to establish capacity requirements for each separate process and then design the processes and warehouse flows accordingly. If our data is very granular, we can spot extreme peaks in demand. But, planning each process for it’s most extreme peak leaves us with considerable excess capacity most of the time.

Here are some principles to try to outsmart the problem. Just be careful not to outsmart yourself in the process.

Be cautious of highly automated processes whose efficiency depends on running at full speed. They may not be so efficient when volumes are low. But, we will still have the high capital investment to amortize.

Choose the simplest process for the majority of the orders and absorb the inefficiency for the others. In a case picking environment, if most of the time the number of cases per line is high, then manual picking will be as efficient as batch picking and sortation.

Create a “mini-warehouse”, or independent line of flow for orders that have common characteristics, such as a small sub-set of the product line, single lines or single units, the same shipping package or the same carrier mode. This may feature a workstation for picking and packing as a single-step process. Outbound cartons may be unitized for transport to the dock. Or, a separate conveyor line may be used to keep high volume flow of small cartons off of the primary system.

In a conveyorized system, provide a loop, or highway that permits flow from any process to another and that makes the changes in order process requirements or sequence easier to handle.

Design workstations that have the capability to perform a variety of tasks and locate them so that they are easily accessed from different points in the primary line of flow. These might be configured to support inspection, pre-packaging, price ticketing, gift wrapping, packing and/or returns processing. Cross train employees so that as the mix of requirements change, a work station may be re-assigned to a new mission.

Variability is our challenge. But, we don’t have to be its victims. Careful data analysis and a little bit of clever process planning can turn us into heros.

ABOUT THE AUTHOR

James M. Apple, Jr. is a Director in The Progress Group. Prior to co-founding The Progress Group in 1991, he was a Partner with Coopers & Lybrand's SysteCon division. During 1992-1995 he served as a Senior Systems Advisor with Vanderlande Industries, a major conveyor and systems provider in Europe.

Jim is an internationally recognized thought leader in the area of facility design and integrated distribution systems. His contributions to the improvement of distribution practices have been recognized by his receipt of the prestigious Reed-Apple Award, which is given for lifetime contributions to the advancement of the material handling profession. Jim has also received the Institute of Industrial Engineers' Facilities Planning and Design Award. He has written numerous articles and handbook chapters on warehousing and logistics operations and is a popular speaker on logistics seminar and conference programs.

Prior to SysteCon, Jim worked as an Industrial Engineer with IBM, was Supervisor of Facilities Planning for the Oldsmobile Division of General Motors and was Executive Vice President for an automotive aftermarket parts supplier. He holds B.S. and M.S. degrees in Industrial and Systems Engineering from the Georgia Institute of Technology.