National Warehouse Process & System Change Assessment

Client: National Logistics and Services Provider

Background

Our client tasked GRA with an assessment exercise to determine the difference in effort required to operate its extensive warehouse network brought about by planned and/or potential 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.

Challenge

A project was commissioned to determine the following:

• the relative cost of the current warehousing operation
• the impact  of changes in processes and systems on those costs and
• the effect of optimising the product location within the warehouse on operational effectiveness and costs.

Approach

Define:

• the current and to-be warehouse processes
• the time required to perform each element of the processes.

Develop simulation model and assessment tools for:

• the reference warehouse for the network including its layout, task times, inbound, outbound movements and stock control
• the different operational states of maturity from As-Is to Existing WMS Fully Implemented , WMS Enhanced without and with RF for each process and
• Using ORion-Pi, determine the optimised product location within the reference warehouse

Determine and report:

• total costs and the relative cost benefits between scenarios

Recommend:

• improvements to the existing operation from observations made during the assessment exercise.

Outcome

Assessment Results:

• the assessment 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
• the most significant  opportunities for improvement (up to 71%) were identified as coming from policy and process improvement to outbound material movements and inventory management.

Further Opportunities exist 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, the transport costs and the customer service outcomes.