Designing a Warehouse/Distribution Centre

1. Designing a Warehouse/Distribution Centre • The role of a warehouse & when does it become a distribution centre • Making the distribution operations work • Design procedure (movement & relationship analysis) • Materials handling

2. The role of distribution facility in the supply chain Wholesale Distributor Distribution Centre Retail Stores Suppliers Manufacturers Consumers Third-party Distributor

3. Warehouse or distribution centre • Warehouse a building for storing goods • Distribution centre - modern term with the following functions: • receiving • storing • order picking • dispatch

4. Conflicting Perspective to Inventory • The Financedirector minimise investment • The buyer or the manufacturing manager large quantities • The sales and marketing manager large variety

5. Possible Constraints • Existing land • Existing building • Available finance • Existing equipment that must be re-used • Return-on-investment requirements • Staff or union objection • Government regulations (H&S), parking, planning and environment etc.

6. Making the distribution operations work Strategy People Technology Business Processes

7. Making the distribution operations work - Strategy & Process • Strategy - Need to develop a vision & conceptual design including: • Business direction, customer service requirements, customer order demand profile, product line characteristics, inventory policy, supply chain structure, supply chain partners and cultural, organisational and people components • Process– distribution processes need to align with policies and procedures and direct interactions among people equipment and product flow. • These include receiving, put-away, storage and replenishment, picking, value-added services(such as labelling, price marking and order consolidation), shipping, inventory management and control.

8. Making the distribution operations work- Technology & People • Technology • information and communication technology (ICT) • Warehouse management • materials handling equipment technology (forklifts, conveyors, sophisticated sortation systems, barcode scanners, automated storage and retrieval systems, AGVs, robotics etc.) • People • employees are the greatest asset • entails recruitment, training and development, reward systems, empowerment, flexibility etc.

9. What makes a good layout? • Inherent safety- minimises danger to staff and customers • Length of flow- often distance travelled needs to kept minimal • Clarity of flow- such as clearly marked gangways and sign posted routes for customers and staff • Staff comfort- good ventilation & lighting, avoid noisy environment • Management co-ordination- design should assist appropriate supervision and communication • Accessibility- of stored items and equipment • Use of space- optimisation of available space • Long-term flexibility- Layout needs to be changed periodically to reflect changing customer requirements

10. Layout Procedure • Define the objectives • Specify the primary and support activities to be performed in accomplishing the objectives • Determine the interrelationships among all activities • Determine the space requirements for all activities • Generate alternative layouts • Evaluate the alternatives • Select the most appropriate one • Implement • Maintain

11. Activity Relationships • Need to evaluate various forms of activityrelationships • The main sets of relationship involve flow of: • Materials • Personnel • Information • Equipment • Money etc.

12. Product Movement Analysis • For smaller operations the information can be gathered manually • For complex situations data collection & analysis - requires computerised analysis • Divisions and family group • Split-case and full-case items • Simplified analysis for complex product ranges (Pareto analysis) • Summarising the data • Extra information • Establishing the design level

13. Types of FROM - TO relationship charts • Distance between departments • Number of moves or trips between departments per day or month • Cost Matrix • Relationship/Reason Chart

14. Types of relationships • Material flows are highly quantifiable. Several ways of quantifying such as: • Number of moves/hour • Quantity moved/hour • Inventory turnover rates • The number of paperwork transactions/month/week • Other types of relationships could be: • Organisational (i.e. who reports to whom) • Environmental (health & safety, noise, dust etc.) • production process relationships (i.e. provision of services, power, water etc.)

15. Distribution Centre design and layout • Selection of storage systems(which has implications for materials handling).(This may be organised into Block, drive-in, ‘U’ flow drive through/through flow) • Mechanical handling equipment has implications on distribution centre design • Degree of movement of goods inwards and outwards

16. Materials Handling • Manual • Forklift Trucks • Conveyors • Trolleys • Manual trolleys • Roll pallets • Tow trains • Driverless trolleys • Automatic guided vehicle systems (AGVs)

17. Conveyors Capability of conveyor Merging products Sorting goods Manual sortation Accumulation is the key to productivity The first step is the minimum line pressure conveyor The zero-pressure accumulation conveyor Forklift trucks - major types Straddle truck Reach truck Counterbalanced forklift truck Free-path narrow-aisle machines Free-path, ultra-narrow aisle machine Rising cabs Two-deep reach Stacker cranes Conveyors & Forklift trucks