OPMA+4302

= Material Handling in the Warehouse = OPMA4302 PROJECTMEMBERS:Danilo AvalosMandy BudenbenderEnrique IguaranOctober 12, 2010

INDEX

 * 1) MATERIAL HANDLING OVERVIEW
 * 2) MATERIAL HANDLING TECHNIQUES
 * 3) NON AUTOMATED WAREHOUSE ORGANIZATION
 * INBOUND AND OUTBOUND LOGISTICS
 * 80/20 RANKING TO PRODUCT
 * SPACE ORGANIZATION LAYOUT
 * PRODUCT PROFILING
 * DOCUMENTING PROCESSES AND IMPLEMENTING STRATEGIES

4. WHAT AUTOMATION CAN DO TO A SUPPLY CHAIN AND ITS WAREHOUSING SYSTEM?
 * MIGRATING FROM SPREADSHEETS TO INVENTORY MANAGEMENT SYSTEMS
 * IMPROVING BAR CODE SYSTEMS AND SCANNER SYSTEMS
 * WHEN TO IMPLEMENT RADIO FREQUENCY IDENTIFICATION SYSTEMS

5. GETTING TO KNOW WHAT YOU HAVE AND HOW TO ACCOMMODATE FOR MORE
 * DO I HAVE ENOUGH SPACE?
 * FROM REPORTING NIGHTMARE TO ENLIGHTENMENT

6. WAREHOUSING COMPLEX SYSTEMS
 * A WAREHOUSE WITHIN A WAREHOUSE
 * A SERVICE CENTER WITHIN A WAREHOUSE
 * EXPLORING OTHER OPTIONS: CUSTOMIZED STRUCTURES

WORKS CITED

1. MATERIAL HANDLING OVERVIEW

Since the creation of warehousing, managers have shifted from stocking high amounts of inventories to leaner and leaner loads. The industrial revolution and the availability of new technology has played an important role in the way inventory is handled. The necessary coordination to eliminate warehousing is not foreseen in the nearest future because there is always going to be gaps between the processes. Handling material in the warehouses follows the nature of the product itself; from raw material to finished product. It is here that modern management techniques play a critical roll; the roll of finding the equilibrium between having to much or too many inventory. Either way, a manager stands between two possibilities. First, carrying too much safety stock can trigger excessive handling and storage costs that will trim revenues, or Second; carrying too little inventory that will definitely will materialize into loss sales, opportunities, and incurring extra costs to acquire or producing and delivering goods or services to customers. The problem seems more complicated when large corporations start realizing the extremes that these issues could create. For example, Alcon Labs, a pharmaceutical company with headquarters in Fort Worth, Texas had to swallow the bitter flavor of finding how its current processes allowed vendors to maintain excessive inventory at customer ends. The result were a return of inventory worth of one year production of merchandise close to expire. On the other end, managers obsessed how cutting inventory all the time and having too little could get them into the other extreme. Having a lack of inventory at store's levels is worse. A company not having enough product to satisfy demand could mean lose of sales to competitors. In the united states alone, there are quite of bit of companies without any automation processes in place that will move towards automation to improve logistic processes. However, automation is not an automatic solution for anyone's problems if first we have not prepared and trained the employees of the organization to utilize such machines and methods. Material handling at a warehouse focus on optimizing and improving the way product is stored, moved, and organized within a warehouse. As move towards the next topics, we will realize that such activities are important to increase warehouse efficiency.

2. MATERIAL HANDLING TECHNIQUES

Handling product at a warehouse can be summarized into 3 categories:

A. Manual activities B. Activities utilizing mechanical equipment C. Activities utilizing automated equipment

A. Manual activities

Within a warehouse from small to large there is always going to be activities that require manual activities Right, you can argue saying: What about fully automated warehouses? I would say: True, but there is always going to be techs repairing, configuring and calibrating such machines. The day may change when we have robots fixing other robots,but in our days manual activities are more intensified in smaller warehouses. In small and medium warehouses there are needs for warehouse manpower to load, unload, move, distribute within stations, and rework product. These manual activities can be pure manual such as re-labeling or packaging product to part mechanic. The use of the pallet jack allows a person to move heavy loads in a way we would of tough impossible years ago when material handling at a warehouse were purely manual.

B. Activities utilizing mechanical equipment

The next step into managing a middle sized warehouse is to implement some sort of mechanical equipment to help move, distribute, and organize product. This can include the use of fork lifts. The types of forklifts are described bellow:


 * Standard Trucks:** These are the large, sturdy forklift trucks, that are used in warehouses. Standard trucks can lift weights that range between 3,000 to 4,000 pounds. The blades can lift cargo up to a height of 20 feet. This type of forklifts can be used inside and outside a warehouse.




 * Reach Truck:** These are narrow-aisled forklifts. They are designed for pallet storage, and can lift loads up to a height of 40 feet.




 * Order Selector:** These are very narrow-aisled trucks that are useful for moving racked loads which are smaller than the pallet size. They can lift both the load as well as the truck operator to a height of 40 feet.




 * Motorized Pallet Trucks:** In this type of vehicle the operator does not have to sit inside the vehicle to operate it. Also, it allows the operator to walk along the side of the truck as it moves the load.




 * Swing Mast Trucks:** These are vehicles with a narrow aisle. They are similar in appearance to standard trucks. However, their masts can swing up to 90 degrees in one direction only.




 * Turret Trucks:** Turret trucks also have very a narrow aisle. Like the order selector, they can lift both the load as well as the operator and swing the forks 90 degrees on either side.



Other types of machines include complex palletizing machines that require an operator and advanced shrink-wrapping machines that use sensors technology. When I was a forklift operator I remember I had to pull product from the palletizing machine that was shrink-wrapped to the storage area.Bellow is an example of some shrink-wrapping machines:



C. Activities utilizing automated equipment

There are several reasons why companies utilize automated equipment. Some of the reasons are:
 * Labor is expensive.
 * Space constrain in the warehouse
 * Expensive storage space
 * Competition on the industry is high

whatever other reason is to implement automation at some level or purely automated warehousing. The costs are very high and must be weighed against the benefits to be obtained by this implementation. One example of automation will be New Balance, New Balance faces fierce competition by the giants Nike and other global shoe industry competitors. Most of this competitors found outsourcing a solution for reducing labor costs, but outsourcing encounters several problems. For example:

The models of shoes can turn products into the innovating side. Innovating product require a responsive supply chain and therefore outsourcing to china can present certain challenges such as delays in response to the demand spike, reliability on suppliers, information leakage, and many other challenges.

Perhaps there is another solution for companies to remain competitive without having to outsource its operations overseas. New Balance Inc. is one of the exceptions. The company realized they can remain competitive by automating its warehouse operations and processes and quickly responding to demand patterns within their market. I will quote at length from an article on the internet: There’s perhaps no better example in action than at New Balance Athletic Shoe Inc.—the global sporting goods industry leader which produces and ships 40 million shoes annually. Its fully-automated, state-of-the-art warehouse facility in Lawrence, Massachusetts boasts 250,000 square feet and houses 130 employees. Built in 1997, the warehouse has enabled New Balance to consolidate and streamline distribution of both domestically produced and imported products to retailers throughout the country. But more efficient material handling was attainable in large part due to “Lean Manufacturing”, and in no small part due to Pflow Industries. Aside from a series of logistical adjustments that were made, a significant improvement to the overall process was the installation of a Vertical Reciprocating Conveyor (VRC) from Pflow, a company recognized as being instrumental in actually creating the Vertical Conveyor industry. All in all, the efforts and updates have helped New Balance reduce the time needed to prepare and ship a full order from 17 weeks to just two. Headquartered in Milwaukee, Wisconsin, Pflow has been the industry leader in the design and manufacturing of safe, vertical material handling equipment since 1977. VRCs from Pflow provide a fast, convenient and safe way to move goods to/from mezzanines, balconies, basements and between levels in multi-story buildings. The New Balance warehouse, which contains a three-level mezzanine, has over three miles of conveyor belts running at any given time, and the shoes are processed in waves from a Tilt Tray sorter. One of the warehouse re-design’s major initiatives was to catch costly mistakes made in processing, such as incomplete boxes of shoes that were incorrectly selected for shipment, before they reached the end of the line. Pflow’s “lean” machine perfectly suited to serve the 1.5 million dollar tilt-tray platform was a Series M Vertical Lift that is designed in particular to alleviate problems that might occur in unit processing. If and when a wave is run without the correct shoe, the Pflow M1 is loaded with the correct shoe necessary to make the order whole, and then, with the touch of an elevator-like button, brought to the proper level for insertion. The Series M Lift offers high performance and durability with a two-post mechanical design that is ideal for transporting large, heavy loads between two or more levels. Bob Knapp of Baron Industries in Burlington, Massachusetts, who sold and distributed the lift, knew that Pflow’s Series M is also excellent for high-cycle, automated systems or frequent-use applications, such as the New Balance warehouse. Pflow engineered the machine for New Balance to meet the exact application and height requirements needed, and the carriage is lifted and lowered by a heavy roller chain attached to a motorized mechanical lifting mechanism. While “lean manufacturing” didn’t turn out to be a way to speed up the metabolism, for New Balance it did speed up its run to the top of the athletic shoe industry. By applying the techniques presented by James P. Womack and Daniel T. Jones, and seeking a higher level of performance with a little help from Pflow Industries, the Boston-based sneaker giant has dashed from No. 8 in 1995 to its current ranking of No. 4. There is so much to talk about about automated machines that obey the commands from a operator or warehouse management system. The improvement on robotics is changing the way big warehousing operates. Thus, according to the warehouse needs automation must be implemented carefully to avoid wasting millions with no improvement as an outcome.

There are hundreds of books that talk about warehouse organization, but this books concentrate in the middle to big warehouses. For small warehouses there is not other remedy but creativity. what can a small warehouse do to improve and organize its organization? The following topics explain certain suggestions to help this folks get more efficient. **
 * 3. NON AUTOMATED WAREHOUSE ORGANIZATION

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 * INBOUND AND OUTBOUND LOGISTICS, There is no doubt any size warehousing has to deal with its inbound and outbound problems. But I have witnesses how hard it is to manage a warehouse without any system or mechanical machine but a pallet jack. However, it is hard but not impossible. the first thing we need to do is to design processes and manuals to define operations within the warehouse and hold everyone accountable for the achievement of the goals to be attained. The creation of spreadsheets can help software automate some processes such as managing inventory and maintain records, archives and product trial of inventory. Current and accessible technology can helps us share information and communicate this need to the operations department. If the product is stored with a bard code system. It is possible to create an access database with scanning capabilities to maintain record of the in and out of product. First, we need to deal with inbound logistics problems. In order to receive the product a receiving dock station can help us receive the product into the database and then after receiving the product we can then stage it into its corresponding place on the rack system or storage space. The storage space and rack system should be designed according to the nature of the product we keep in the warehouse and its moving ratio. The following diagram illustrate the concept.
 * The image above is basic in its concept, but we can grow from there and imagine how this workstation and diagram flow can change if applied to a cross-docking layout and if there is outbound logistics going on in the other side of the warehouse instead of two docks in one place. Depending of the infrastructure of the warehouse its layout can change and be redesigned to match most optimal operation's procedures. Second, we can look at the way organize and storage the product. A creative way to avoid losing sight of product within the warehouse is to perform inventory counts weekly. This will reduce shrinkage and promote solutions to storage problems since walking over inventory can foster creativity to better organize the warehouse and to develop new processes. Anyways, the DC manager play a big role in looking at the big picture and implementing solutions for inventory problems. To maintain inventory control a labeling system can be put in place. how does it work? Each rack must be identified and label, and within each area there should be a folder with all the stock labels belonging to the product placed in such area. There is always going to be human error as a factor, but it is a good start to maintain control and speed the process at the moment we scan all the product in the warehouse. If product is taken from a place, the person taking the product must scratch or peel the label from the folder. This will allow to maintain a controlled record of what we keep in the warehouse. Reports should be created and informed to upper level management for its analysis and review.
 * 80/20 RANKING TO PRODUCT, The 80/20 models comes from the concept that few products gives us most of the business. In this case it is pictured as a 20% of products gave us 80% of business. There is not always going to be such a case, since there is not always a close statistical result to demonstrate an exact 20% indeed give us 80% of the business. The real challenge here is to determine which products are required the most so we can organize the staging layout and facilitate a fast inbound and outbound logistics. The idea is to place the product with higher demand closer enough to allow the material handlers to quickly load trucks and stage products in its corresponding places. Expensive items should be placed in a controlled and secure room and items that are demanded less can be storage at the back of the warehouse.
 * SPACE ORGANIZATION LAYOUT, Several organizational layouts vary depending of the warehousing model and type of product. For example in a warehouse with space constrain and limited by two docks in the same area we could refer to the diagram above and maintain product in hold while in transit to make sure it is entered into the database. The lack of radio frequency product handling systems doesn't necessarily means we are not going to be able to control and maintain inventory. It just means we need to be creating towards implementing more effective processes to work with inventory. In a service station within a warehouse, maintaining inventory on hold is a must because the product is then transferred to the service station until product is fixed and then transferred back to the warehouse for its proper distribution.
 * PRODUCT PROFILING, Product profiling refers to the activities involved into evaluating product by its statistical characteristics. Products with high inventory turnover isolated can be misleading. Evaluating product in a context and assessing existing processes can help the organization match specific products with specific locations, improve at product retrieval and replenishment management.
 * DOCUMENTING PROCESSES AND IMPLEMENTING STRATEGIES, Processes must be documented and be accessible to warehouse employees if we want to create guidelines and uniformize operations within the organization. Periodical reviews of current processes can reveal important information about warehouse logistic performance. Benchmarking operation ratios with other warehouse performance can be useful to lead the whole organization towards achieving corporate goals. knowing this information can help us developing models like a radar diagram to see how close are we getting towards accomplishment current goals.

4. WHAT AUTOMATION CAN DO TO A SUPPLY CHAIN AND ITS WAREHOUSING SYSTEM?

Trying to keep up with all the movement at a warehouse can be painful if there are not processes, neither some sort of automation. From my experience trying to measure product activity is really hard. There are too many things going at once and spreadsheets only can do so much. Doing inventory can take a whole day and sometimes operations need to be shut down to accomplish it. The problem just started, because if product is missing; a reconciliation process can really slow down inventory process, and a lot of the time is wasted trying to locate the items missing. If you cannot find the items, then, tracing its location is a different issue. At the end of the year a complete physical inventory count can take several days to months depending on the size of the warehouse and its product activity. Does this story sound familiar? It is true automation cannot solve problems if the crew isn’t ready for it. Neither will be effective if there is not a plan in place. Thus, creating a warehouse operation manual is a must. Organization must be implemented and the crew involved in the system implementation. But, what kind of automation has to be implemented, and how this will affect the supply chain and warehouse system? First, there are several systems that will help the warehousing system to be more efficient and effective. However, just like any other implementation the investments must be evaluated and weighted against the benefits. However, if upper level management has decided to automate, then a warehouse management system (WMS) must be implemented first. What is WMS? A warehouse management system is computer software designed to help smoothing the product movement and storage of product **. Wikipedia defines this concept better,
 * MIGRATING FROM SPREADSHEETS TO INVENTORY MANAGEMENT SYSTEMS
 * A ****
 * IMPROVING BAR CODE SYSTEMS AND SCANNER SYSTEMS

WORKS CITED

Debopriya Bose. 2000-2009,2010 buzzle.com 

Pflow industries help New balance run lean.2010 Pflow Industries Inc. []

Warehouse management system. Wikipedia. 5 October 2010 at 8:00 < []>