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Business Management Question
Write a case study on Warehousing.
Business Management Solution
Creating a warehouse layout design demands a lot of planning. Efficient utilisation of space, order preparation, order picking and packing all are a part of the warehouse management system, which determine the lead time of the delivery of goods to the customer. In this report, we create a design for the distribution centre which will fulfil the business objective of delivering the goods to the customer on time and at the minimum possible cost to the organization, and also critically appreciate the design. We also make a comparison of the layout used in our design to a different layout.
The key requirement for a distribution centre, in general, is to understand and evaluate the requirements since there are a lot of levers which needs to be aligned together. The 4-step procedure below helps in listing the key requirements for a distribution centre (Ghiani, Laporte, & Musmanno, 2004):
- Synergies across channels: If we are looking for synergies we need to look for the order profiles, inventory sharing, cycle time, product packaging, outbound packaging, receiving of goods, put away & storage.
- Order profiles- If one profile catered has a different rate of a requirement than other we might need two very different fulfilment methodologies. With similar fulfilment methodology, different goods might suffer in the rate of receipt sorting as well as picking and despatch. For e.g. in e-commerce, the average is one or at max two lines per order, whereas in wholesale, it is about 20-40 lines per order.
- We need to balance the opportunity for inventory sharing with product packaging. Usually, manufacturing itself is the place where channel-specific packaging is the least expensive. This though limits our ability to redeploy an item to a different channel whenever and wherever needed.
Operating methods: Once we are aware of what kind of synergies operate the next step is to choose the operating method- such as a static module or dynamic pick locations for picking. For fast-moving SKU’s we can opt for a static module for high pick productivity and for slower-moving we can use dynamic pick area with advance slotting logic. These items are dynamically brought forward by the WMS system as and when needed so as to balance pick productivity and space utilization. (Chan & Chan, 2011).