Hallmark Cards, Inc.
James S. Noble, Alec Chang, Phichet Wutthisirisart
University of Missouri
Order picking is the most costly activity in a typical distribution center. Warehouse slotting is the task of determining where to locate product in order to achieve the most efficient picking operation. This project focused on the development of a slotting approach that is based on order sequences. A mathematical model of the problem is formulated and solutions are compared to several heuristics in order to illustrate the value of an order-based slotting approach. The analysis indicated that the math model generates significantly better results than existing approaches. Based on this analysis a sequence-based layout generation heuristic was developed and implemented within a user-friendly warehouse floor layout tool. Preliminary results on a large scale data set show a picking cost savings between 15-30% over a manual approach.
The Hallmark Liberty Distribution Center currently spends over $70 million to process and ship orders. A key factor that determines the efficiency of the order processing / shipping operation is the layout of SKUs on the warehouse floor. The current warehouse floor layout is generated and modified manually with respect to monthly SKU additions/deletions.
Based on the literature there have been two primary strategies to the warehouse layout problem:
– Random layout
– Dedicated layout
However, none of the previous approaches explicitly incorporate filling/restock labor, transportation cost, SKU velocity, picking sequence, congestion, and ergonomics as is desired for this project.
Therefore, the objective of this project is to determine key factors involved in positioning product on filling floor (with respect to SKU velocity, restock labor, picking labor, shipping labor, carton shipping cost), then develop floor layout decision support tool. The focus of the analysis will be the “Everyday” SKUs.