GRA , a specialist provider of supply chain and logistics management solutions was tasked by a national logistics and services provider to undertake an assessment of their warehouse network processes.
The assessment exercise aimed to determine the difference in effort required to operate the client’s extensive warehouse network brought about by planned changes in its warehouse processes and the warehouse management system supporting those services.
The focus of the assessment was to deliver a credible result that provided a relative measure between each of the scenarios to enable the development of a business case for funding to improve certain aspects of its national warehousing operations.
A project was commissioned to determine the following:
- Relative cost of the current warehousing operation
- Impact of changes in processes and systems on those costs
- Effect of optimising the product location within the warehouse on operational effectiveness and costs
The first step involved defining the current and future warehouse processes as well as the time required to perform each element of the processes.
The next step involved developing the simulation model and assessment tools for the following:
- Reference warehouse for the network including its layout, task times, inbound/ outbound movements and stock control
- Different operational states of maturity from As-Is to Existing WMS Fully Implemented , WMS Enhanced without and with RF for each process
- Determining optimised product location within the reference warehouse using ORion-Pi
The final step involved determining as well as reporting total costs and the relative cost benefits between scenarios.
Recommendations were made for improvements to the existing operation from observations made during the assessment exercise.
The assessment results indicated that the potential savings available through process and system change over the As-Is scenario to the Existing WMS Fully Implemented, WMS Enhanced without and with RF were 18%, 27% and 55% respectively, supporting a business case for the capital needed.
Additionally, the most significant opportunities for improvement (up to 71%) came from policy and process improvement to outbound material movements and inventory management.
Finally, the assessment exercise also projected further opportunities that existed to:
- Correctly size the warehouse bin locations to minimise the number of replenishment tasks and optimise the warehouse space utilisation
- Match the bin replenishment quantity for each item to the Optimal Replenishment Quantity or part thereof (carton, layer or pallet)
- Determine the right order release and picking strategy for each facility in the network in order to optimise the order picking costs, transport costs and customer service outcomes