The starting point: A sudden increase of orders and a broken pallet led to major delays in the warehouse. In the example of Ines and Max, there are a number of ways in which the system can take action. The starting point is to find a new route for transporting pallets in the warehouse that will avoid the blockage yet have the shortest travel time to keep costs down as low as possible. In further consequence, orders can be regrouped with a view to optimizing item coverage. This will ensure that orders can be processed as quickly and efficiently as possible.
Tours for outbound delivery to business customers and the departure sequence will then also be recalculated and adjusted by the system. Ines and Max tell the system to reassess the priority assigned to orders that have been released and orders that are yet to be started, and then put them in order based on their new availability details. The potential availability dates are calculated ahead at the same time. Ines and Max are then notified and coordinate this with the freight carrier, who then in turn coordinates it with the customers. The system transfers the new departure times to the warehouse management system via the transport management system interface. Ines and Max can now use the system to calculate the completion time of today’s workload for 11:30 p.m. In order to stick to this target finish time, the order start and batches for picking will need to be changed. Goods will also need to be rerouted and picked at different stations. On top of all of this, the shift supervisor has spoken to some of the workers, who have agreed to work some overtime today.
Learning for the Future
Ines and Max have managed to make the best of a challenging situation with the help of their colleagues and the system. The operators and the system responded perfectly. While it was not possible to stick completely to the original plan, the clever way in which the situation was dealt with meant that the changes could be limited.
Variations can be calculated and countered not only when situations arise at short notice but also when long-term plans are being made. This allows for the impact of different situations to be predicted and planned for so that discussions can be entered into with customers and staff.
Warehouses are found at the points of intersection with one, several, or, sometimes in the case of online retail, many customers along the supply chain. They strike a balance between the large volumes delivered cost-effectively over long distances and the often much smaller volumes forwarded on to customers. Warehousing ensures quick, responsive delivery to customers, even though inbound delivery by manufacturers follows a longer term schedule and is a slower process. The purpose of a warehouse is always to guarantee delivery of goods to a company’s customers.
Many small-scale warehouses are still managed on the basis of lists and run by workers who are experts in all of the areas within the warehouse. Once warehouses reach a certain size, however, it becomes more and more difficult to manage them based purely on experience. In these cases, it is sometimes necessary to wait for the relevant worker to come back before goods can be delivered, since they are not always stored in the field of vision of all employees. Warehouse management systems help to keep an overview, so that everyone can be efficient in their work. When the number of movements in a warehouse exceeds a certain point, conveying systems, automated storage systems, and fully or partially automated picking stations used to compile customer orders, can be relied upon to boost efficiency. If different categories of goods need to be handled or stored differently, warehouses are divided up into specific warehouse areas.
Warehouses become more chaotic and difficult to manage as stock is rotated more quickly. The number of items stored and, most significantly, the range of warehouse areas have an impact here too. This is all the more true when goods picked from different areas need to be compiled for a customer-specific inbound delivery. Anyone looking to overcome this level of complexity should ideally start by setting up a control room and hiring employees to man a control center.
Peter Totz works as Director Business Consultancy at SSI SCHAEFER.
His career began as a project engineer, data analyst and simulation specialist in Graz. With intermediate steps in production planning and as a logistics consultant, he worked as a senior consultant and project manager for many years. Later, he was responsible for business development in Latin America before taking over the lead of the globally active Business Consultancy Group.