Delft University of Technology
FACULTY MECHANICAL, MARITIME AND MATERIALS ENGINEERING
Department Marine and Transport Technology Mekelweg 2 2628 CD Delft the Netherlands Phone +31 (0)15-2782889 Fax +31 (0)15-2781397 www.mtt.tudelft.nl
This report consists of 83 pages and 12 appendices. It may only be reproduced literally and as a whole. For commercial purposes only with written authorization of Delft University of Technology. Requests for consult are only taken into consideration under the condition that the applicant denies all legal rights on liabilities concerning the contents of the advice.
Specialization: Production Engineering and Logistics
Report number: 2013.TEL.7749
Title:
The redesign of system control at
Hollander: Balancing carrier
throughput
Author:
F.A. Plaizier
Title (in Dutch) Herontwerp van de beheersingsstructuur bij Hollander: Een balans tussen de verwerking van pallets en rolcontainers
Delft University of Technology
FACULTY MECHANICAL, MARITIME AND MATERIALS ENGINEERING
Department Marine and Transport Technology Mekelweg 2 2628 CD Delft the Netherlands Phone +31 (0)15-2782889 Fax +31 (0)15-2781397 www.mtt.tudelft.nl
This report consists of 83 pages and 12 appendices. It may only be reproduced literally and as a whole. For commercial purposes only with written authorization of Delft University of Technology. Requests for consult are only taken into consideration under the condition that the applicant denies all legal rights on liabilities concerning the contents of the advice.
Assignment: Masters Thesis Confidential: Yes
until: February 28, 2015 Initiator (university): prof.dr.ir. G. Lodewijks Supervisor: dr.ir. H.P.M Veeke Initiator/Supervisor
(company): J. Cornelissen (Hollander, Barendrecht)
Delft University of Technology
FACULTY OF MECHANICAL, MARITIME AND MATERIALS ENGINEERING
Department of Marine and Transport Technology Mekelweg 2 2628 CD Delft the Netherlands Phone +31 (0)15-2782889 Fax +31 (0)15-2781397 www.mtt.tudelft.nl
Student: F.A. Plaizier Assignment type: Master thesis
Supervisor (TUD): dr.ir. H.P.M. Veeke Creditpoints (EC): 35 Professor (TUD): prof.dr.ir. G. Lodewijks Specialization: PEL
Report number: 2013.TEL.7749 Confidential: Yes
until: February 28, 2015
Subject: The redesign of system control at Hollander: Balancing carrier throughput Introduction
Since the year 2008 Hollander is housed in a brand new (perishables) distribution centre (DC). The DC is built by The Greenery as a result of a 10-year contract with Plus Retail. Formerly Hollander was a privately owned company with the distribution of potatoes, vegetables and fruit as their core-business. Nowadays the DC acts as an independent business-unit owned by The Greenery and handles around 900.000 items per week, divided over 6 days of operation per week. On average 600.000 out of 900.000 handled items per week are due to the demand for items which are kept in stock in the DC of Hollander. The remaining 300.000 items are handled via the cross-docking operation at the DC. From 2008 until present time a lot has changed for Hollander. The organization, which once was a transport organization serving a large number of different independent customers, transformed into a logistics service provider with only one customer, Plus Retail, serving approximately 270 affiliated entrepreneurs.
Nowadays the dust, as a result of this radical process of change, has settled and Hollander aims for operational excellence. The operation responsible for handling items which are kept in stock at the DC is chosen, by the management team, as a starting point to structurally increase efficiency within the operation.
Problem statement
At Hollander Barendrecht they experience difficulties with the replenishment of carriers, loaded with goods. Shortages occur within the order picking operation while safety stock at both a bulk storage location and the actual pick location should prevent this from happening.
Shortages within the order picking operation are very expensive. Distance covered by employees which are executing an order picking route through the DC almost doubles in case of shortages. This is due to the fact that the warehouse management system (WMS) redirects employees at the end of their route to the location at which a shortage occurred.
With the expected growth of the demand for items kept in stock, with 400.000 items per week, to 1.000.000 items per week finding the root cause of this disturbance becomes more and more important.
Delft University of Technology
FACULTY OF MECHANICAL, MARITIME AND MATERIALS ENGINEERING
Department of Marine and Transport Technology Mekelweg 2 2628 CD Delft the Netherlands Phone +31 (0)15-2782889 Fax +31 (0)15-2781397 www.mtt.tudelft.nl Research question
Based on the problem statement stated above it is suspected that the cause of the disturbance (shortages within the orderpicking operation) can be found in the current structure of control functions. It is decided to check if requirements from the environment are sufficiently translated into useful standards. Thereafter, it is important to see if; the defined standards (if present) are evaluated, tasks are scheduled accordingly and rules for the assignment of resources are formulated.
To be able to balance the throughput of carriers through the DC while preventing shortages to occur the following research question must be answered:
What is an effective control system for the throughput of carriers within the distribution centre of Hollander Barendrecht?
The answer to this question will be twofold. First it should be investigated how to translate
requirements from the environment into useful intended results per existing functional area. Secondly it should be investigated if the current operational structure is capable of meeting these intended results in an efficient manner.
Research execution
- Analyze the logistic process, currently defined standards and assignment of resources according the Delft Systems Approach
- Analyze the lay-out of the DC and working principles of the WMS
- Determine how the requirements from the environment should be translated into functional requirements
- Determine the availability requirements of resources
- Determine which information signals are needed (measurement points) and how to intervene with the system’s behavior
- Compose rules for resource assignment - Study relevant literature
The professor, TU Coach,
VII
Preface
This report is the result of my graduation research project at Hollander (Barendrecht) for my Master program “Production Engineering and Logistics”, affiliated to the faculty of mechanical engineering at Delft University of Technology, the Netherlands. The research is conducted during the period between June 2012 and January 2013.
A core business comprising distribution and logistics, for me personally, turned out to be a true leap into the unknown. After several experiences with different production systems in The Netherlands as well as abroad it was a pleasant surprise to discover the complexity of purely logistic processes. The Delft systems approach, once again, turned out to be a great way of structuring my thoughts. I would like to thank Jeroen Cornelissen for this opportunity and the weekly meetings at Hollander in which he helped me unravel several problems. I also would like to thank Hans Veeke for his
supervision at the University. Hans Veeke helped me a lot with the structure of my research and report. My appreciation goes to those who were willing to help me with this research by taking time for an interview, discussion or providing data: Paul Berendsen, Peter van de Voorde, Nienke de Jong, Ron Laurens and Maurice Lutgens at Hollander. And last but not least, I would like to thank my family for their faith in me. Dear Jet, we did it!
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Summary
This report describes a case study performed at Hollander Barendrecht. From 2008 until present time a lot has changed for Hollander. The organization, which once was a transport organization serving a large number of different independent customers, transformed into a logistics service provider with only one customer, Plus Retail, serving approximately 270 affiliated entrepreneurs. Nowadays the dust, as a result of this radical process of change, has settled and Hollander aims for operational excellence. On average 600.000 out of 900.000 handled items per week are due to the demand for items which are kept in stock in the DC of Hollander. The remaining 300.000 items are handled via the cross-docking operation at the DC. The operation responsible for handling items which are kept in stock at the DC is chosen, by the management team, as a starting point to structurally increase efficiency within the operation.
Using a systems approach the operation at the DC is analyzed. It is found that for the different functional areas, visualized in Figure 1, standards are set insufficiently. The intended results for especially the receive/store and replenish functions are not yet formulated. As a consequence there is a lack of control, since there are no standards to be met, causing an unbalance in the throughput of carriers which results in late replenishments and unnecessary shortages while fulfilling the retrieve function.
An answer to the following research question is found:
What is an effective control system for the throughput of carriers within the distribution centre of Hollander Barendrecht?
X
Functional requirements & information signals
As part of the answer to the main research question requirements from the environment are translated into standards for the different functional areas, so called functional requirements. These requirements are initiated based on requirements from the environment (Plus Retail and individual entrepreneurs). Evaluation of the functional requirements is done based on performance of the different subsystem responsible for the fulfillment of the different functions and information regarding the flowing elements within the product flow.
• For the receive/store function the requirements are formulated in terms of number of carriers per product-group per shift.
• For the replenish function the requirements are also formulated in terms of number of carriers per product-group per shift
• For the retrieve function the requirements are formulated in terms of number of retrieved stock keeping units (SKUs) per product-group per shift.
• For the ship function these requirements are formulated in terms of number of multi carriers (roll containers) per shift.
The functional requirements for the receive/store function are deduced from the arrival schedule and supply forecast. Together with the storage policy (where is a certain product-group stored) it is then possible to initiate operational standards for all the subsystems working together to fulfill the
receive/store function. The storage policy is subjected to change and should be monitored. To evaluate the arrival schedule and supply forecast, the actual number of incoming carries per product-group per shift must be monitored.
The functional requirements for the replenish function are deduced from the departure schedule, demand forecast and number of SKUs per carrier. The number of SKUs per carrier should be measured since this figure is of importance for the evaluation of the functional requirements and eventually the initiating of the operational standards regarding the process fulfilling the replenish function. To be able to evaluate the demand forecast the number of outgoing SKUs per product-group per shift must be measured.
The functional requirements for the retrieve function are deduced from the demand forecast and departure schedule. Within the departure schedule agreements with different entrepreneurs about when which type of product (product-group) may be ordered is incorporated.
The functional requirements for the ship function are deduced from the demand forecast together with the number of retrieved SKUs per multi-carrier (roll container). The number of retrieved SKUs per multi-carrier is a result of the performance of the subsystems responsible for fulfilling the retrieve function.
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Operational structure and standards
The initiated functional requirements must be translated into operational standards for the control of the operations responsible for fulfilling the different functions. For the receive/store and replenish function it is investigated if the current operational structure is indeed the most desired structure. For this purpose several performance indicators are defined and four different operational structures are defined and modeled. Eventually, production runs are simulated using discrete event simulation. After simulation it turned out that a structure consisting of one transport stage for the replenishment of carriers and one transport stage for the storage of carriers at both the ground and first floor gives the best performance. Reach trucks assigned to a ‘replenishment’ stage are allowed to execute storage tasks to prevent idle time when no replenishment tasks are available.
Currently four stages are defined at both the ground- and first floor for the replenishment of carriers. This means that 6 out of 8 existing stages to which means of transportation may be assigned
disappear. This drastically reduces the amount of different operational standards to be defined. Besides this, it reduces the complexity of resource assignment. With the new structure in place operational standards should be defined for:
Carriers with their final destination at the first floor:
• Carriers per hour from the receive area to the lifts. (1) • Carriers per hour by the lift to the first floor. (2)
• Carriers per hour from the outlet of the lift to their final storage destination at the first floor. (3)
• Carriers to be replenished per hour at the first floor. (4) Carriers with their final destination at the ground floor:
• Carriers per hour from the receive area to their final storage destination at the ground floor. (5)
• Carriers to be replenished per hour at the ground floor. (6)
Resource assignment and rules for control
The behavior of resources assigned to the subsystems responsible for the fulfillment of the store and replenish function is also investigated using simulation. In case of shift 1 (when only replenishment tasks are generated) achieved results in terms of number of processed carriers per hour can simply be compared to the initiated standard (standards 4 and 6). The same holds at all times, thus for all shifts, for the transport to lift and transport by lift subsystems (standards 1 and 2) and for the transport to storage location subsystem, when only storage tasks are generated, in shift 4 and 5 (standards 3 and 5). Shift 2 and shift 3 require a more ‘integral’ type of control, since reach trucks assigned to the transport to pick location subsystem (which fulfills the replenish function) may execute both replenish and storage tasks. Accordingly, rules for resource assignment are formulated.
XIII
Summary (in Dutch)
Dit rapport beschrijft een onderzoek dat is uitgevoerd bij Hollander te Barendrecht. Vanaf 2008 tot nu is er een hoop veranderd voor Hollander. De organisatie, ooit een transporteur van aardappelen, groente en fruit met veel verschillende klanten, is getransformeerd in een logistiek dienstverlener met één klant, Plus Retail, waarbij ongeveer 270 individuele supermarktondernemers aangesloten zijn. Momenteel bevindt de organisatie zich in een stabiele situatie en is zij er klaar voor om kritisch te kijken naar de operationele processen met als doel efficiëntie verhoging. Gemiddeld verwerkt Hollander wekelijks 900.000 artikelen waarvan er 600.000 in tussentijdse opslag zijn geweest. De overige 300.000 artikelen worden verwerkt doormiddel van cross-dock werkzaamheden. Het management team heeft besloten om te beginnen met het onder de loep nemen van het proces verantwoordelijk voor de verwerking van de op voorraad gehouden producten.
Doormiddel van een systeemkundige benadering is het proces geanalyseerd. Na analyse is geconcludeerd dat voor de verschillende functionele gebieden (zie Figuur 1) een gestructureerde normstelling ontbreekt. De verwachte resultaten voor, in het bijzonder, de functies;
ontvangen/opslaan en aanvullen blijken onvoldoende gedefinieerd. Een gevolg hiervan is dat de verwerking van pallets onbeheerst verloopt waarbij een onbalans in de doorloop van pallets op kan treden. Een onbalans in de doorloop van pallets resulteert in de praktijk in aanvullingen welke te laat zijn en dus onnodige tekorten op picklocaties.
Er is een antwoord gevonden op de volgende hoofdonderzoeksvraag:
Wat is een effectieve beheersingsstructuur voor de verwerking van voorraadhoudende producten bij Hollander?
XIV
Functionele eisen & informatie signalen
Als onderdeel van het antwoord op de hoofdonderzoeksvraag zijn eisen vanuit de omgeving vertaald in normen voor de verschillende functionele gebieden. Deze normen hebben de naam ‘functionele eisen’ meegekregen. Deze eisen worden geïnitieerd op basis van eisen vanuit de omgeving (Plus Retail en individuele ondernemers). Evaluatie van deze eisen gebeurt op basis van prestaties van de verschillende subsystemen, welke verantwoordelijk zijn voor het vervullen van alle aanwezige functies, en informatie met betrekking tot de stromende elementen (pallets en rolcontainers) binnen de
productstroom.
• De eisen voor de ontvangen/opslaan functie zijn geformuleerd als aantal te verwerken pallets per productgroep per shift.
• De eisen voor de aanvullen functie zijn ook geformuleerd als aantal te verwerken pallets per productgroep per shift.
• De eisen voor de verzamelen functie zijn geformuleerd als aantal te verzamelen ‘stock keeping units’ (SKUs) per productgroep per shift.
• De eisen voor de laden functie zijn geformuleerd als aantal te laden rolcontainers per shift.
De functionele eisen voor de functie ontvangen/opslaan zijn afgeleid van het bestel-aflever-schema en de aanlevervoorspelling. Samen met het opslagbeleid (waar ligt welke productgroep opgeslagen) is het dan mogelijk om normen te definiëren voor alle subsystemen die samenwerken om de
ontvangen/opslaan functie te vervullen. Het opslagbeleid is aan verandering onderhevig en dient continu gemeten en geëvalueerd te worden. Om ook het bestel-aflever-schema en de
aanlevervoorspelling te evalueren is het noodzakelijk om het daadwerkelijke aantal binnengekomen pallets per productgroep per shift te meten.
De functionele eisen voor de functie aanvullen zijn afgeleid van het routeschema, de vraagvoorspelling en het aantal SKUs per pallet. Het aantal SKUs per pallet moet gemeten worden omdat dit erg
belangrijk is voor de evaluatie van de functionele eisen maar ook voor het initiëren van de normen voor de subsystemen die verantwoordelijk zijn voor het vervullen van de functie aanvullen. Om ook de vraagvoorspelling te kunnen evalueren is het noodzakelijk het aantal uitgaande SKUs per
productgroep per shift te meten.
De functionele eisen voor de functie verzamelen zijn afgeleid van de vraagvoorspelling en het routeschema. In het routeschema zijn afspraken met betrekking tot welke productgroepen wanneer besteld mogen worden, per ondernemer, opgenomen.
De functionele eisen voor de functie laden zijn afgeleid van de vraagvoorspelling en het aantal verzamelde SKUs per rolcontainer. Het aantal verzamelde SKUs per rolcontainer is het resultaat van de prestaties van de verschillende subsystemen die samenwerken om de functie verzamelen te vervullen.
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Operationele structuur and normen
De geïnitieerde functionele eisen moeten vertaald worden in normen welke geschikt zijn voor beheersing van de processen welke verantwoordelijk zijn voor het vervullen van de verschillende functies. Voor de functie ontvangen/opslaan en de functie aanvullen is onderzocht of de huidige processtructuur de meest wenselijke is. Om dit te kunnen onderzoeken zijn verschillende prestatie-indicatoren gedefinieerd, daarnaast zijn er vier processtructuren gedefinieerd en gemodelleerd. Uiteindelijk zijn voor iedere structuur verschillende productieomstandigheden gesimuleerd met behulp van ‘discrete event simulation’.
Na simulatie bleek dat een structuur bestaande uit één transportgroep voor het aanvullen van pallets en één transportgroep voor het opslaan van pallets op zowel de begane grond als eerste etage het best presteert. Transportmiddelen die zijn toegewezen aan een transportgroep verantwoordelijk voor aanvul taken mogen opslag taken uitvoeren indien er geen aanvul taken zijn, dit om stilstand te voorkomen.
Momenteel zijn er vier transportgroepen gedefinieerd op zowel de begane grond als op de eerste etage. Met de in dit rapport voorgestelde structuur verdwijnen dus zes van de acht transportgroepen. Dit vermindert het aantal verschillende normen die gedefinieerd moeten worden drastisch. Daarnaast wordt het toewijzen van transportmiddelen aan transportgroepen eenvoudiger. Als de voorgestelde structuur geïmplementeerd is dienen de volgende normen (voor de subsystemen verantwoordelijk voor het vervullen van de functie opslaan en de functie aanvullen) aanwezig te zijn:
Voor pallets met hun uiteindelijke opslaglocatie op de eerste etage: • Pallets per uur van het ontvangstgebied naar de lift. (1) • Pallets per uur met de lift naar de eerste etage. (2)
• Pallets per uur van de uitgang van de lift naar hun opslaglocatie op de eerste etage. (3) • Aan te vullen pallets per uur op de eerste etage. (4)
Voor pallets met hun uiteindelijke opslaglocatie op de begane grond:
• Pallets per uur van het ontvangstgebied naar hun opslaglocatie op de begane grond. (5) • Aan te vullen pallets per uur op de begane grond. (6)
Toewijzing transportmiddelen en regels voor procesbeheersing
Het gedrag van transportmiddelen die zijn toegewezen aan subsystemen, verantwoordelijk voor het vervullen van de functie opslaan en functie aanvullen, is ook onderzocht met behulp van simulatie. In het geval van shift 1 (in deze shift worden enkel aanvul taken gegenereerd) kunnen de behaalde resultaten in de vorm van het aantal aangevulde pallets per uur eenvoudig vergeleken worden met de geïnitieerde normen (normen 4 & 6). Ditzelfde geldt te allen tijde voor de subsystemen die
verantwoordelijk zijn voor het transport van pallets van inslag naar de lift en van de begane grond naar de eerste etage (normen 1 & 2). In het geval van shift 4 en 5, wanneer enkel opslag taken
XVI
worden gegenereerd, kunnen ook de behaalde resultaten direct vergelijken worden met gestelde normen (normen 3 & 5). Het karakter van shift 2 en 3 vraagt om een meer integrale manier van procesbeheersing aangezien transportmiddelen die zijn toegewezen aan het subsysteem
verantwoordelijk voor het aanvullen van de picklocaties zowel aanvulverplaatsingen als
opslagverplaatsingen mogen uitvoeren. Voor deze situatie zijn, op basis van resultaten verkregen door simulatie, regels opgesteld.
XVII
Contents
1 Introduction ... 19
1.1 Company profile... 19
1.2 Goal of the research ... 21
1.3 Outline of the report ... 21
2 Description of the operations at Hollander ... 22
2.1 Lay-out of the DC ... 22
2.2 Docking and registering of incoming trucks ... 24
2.3 Receiving pallets ... 25
2.4 Storage of stock ... 26
2.5 Order-picking ... 29
2.6 Bundling and sorting at expedition ... 34
2.7 Cross docking ... 35
3 Systems approach ... 36
3.1 Black-box approach ... 36
3.2 The PROPER Model ... 37
3.3 Conclusions ... 41
4 Problem definition ... 42
5 Defining functional requirements ... 44
5.1 Functional requirements for the functions within the order flow ... 44
5.2 Functional requirements for the functions within the product flow ... 45
6 Translation of requirements into operational standards ... 50
6.1 Storage policy and pick locations ... 50
6.2 Order picking sections ... 52
6.3 Transport stages ... 53
7 Operational structure & assignment of resources ... 54
7.1 Future supply and demand ... 54
7.2 Task duration per movement type... 54
7.3 Available buffer locations at the input and output of the lift ... 55
7.4 Minimum inventory at pick-locations... 55
7.5 Rules for resource assignment ... 56
7.6 Performance indicators ... 57
7.7 Modeling ... 58
8 Verification, simulation and results ... 65
8.1 Verification of the computer model ... 65
8.2 Desired operational structure ... 67
8.3 Intervene with the system’s behavior ... 72
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9.1 The structure of control functions ... 76
9.2 Recommendations & future work ... 78
References ... 83
Appendix A - Scientific paper ... 84
Appendix 2A - Lay-out of the DC ... 91
Appendix 2B - Arrival pattern of carriers per weekday ... 93
Appendix 2C - Location-types, storage policy and storage zones ... 95
Appendix 2D - Pick storage policy flow diagram ... 98
Appendix 2E - Demand patterns per section ... 99
Appendix 3A - An in-depth systems approach ...109
Appendix 5A - Departure schedule outgoing trucks ...116
Appendix 6A - Transport stages in relation to transport tasks ...117
Appendix 7A - Operational standards per weekday per shift per transport stage ...119
Appendix 7B - Parts of the computer model in TOMAS/Delphi ...121
19
Figure 1.1 - A part of the DC of Hollander
1 Introduction
This report will be focused on a case study performed at Hollander Barendrecht. Hollander operates a distribution center for fresh produce (potatoes, vegetables and fruit) and all other cooled products (semi-perishable food) which are part of Plus Retail’s assortment. Hollander is Plus Retail’s only logistic service provider for fresh and cooled products. Currently, Plus Retail is Hollander’s only customer. Plus Retail represents 270 adjoined entrepreneurs which run their retail grocery store according the Plus Retail concept.
A general introduction to Hollander Barendrecht, and the environment it operates in, will be given. Then the main research question will be presented and the outline of this report will be dwelled upon.
1.1 Company profile
Organization
Hollander is founded in the year 1929. Its founder, Siem den Hollander, started with peddling fruit and vegetables through the whole city of Rotterdam, The Netherlands. In 1975 the place of
establishment became Barendrecht, a small city south of Rotterdam. Since the year 2008 Hollander is housed in a brand new (perishables) distribution centre (DC). The DC is built by The Greenery as a result of a 10-year contract with Plus Retail. Formerly Hollander was a privately owned company with the distribution of potatoes, vegetables and fruit as their core-business. Nowadays the DC acts as an independent business-unit owned by The Greenery and handles around 900.000 items per week, divided over 6 days of operation per week.
The Distribution Centre
Distribution centre’s play a major role in modern logistic systems. A distribution centre is able to improve the performance of the overall logistic system by working together with different actors in the chain in such a way that the end-customer receives products at the right time, in the right quantity and according the right quality.
The DC of Hollander consists of two storeys. The DC is divided in several ‘storage and retrieval’ sections based on product
characteristics. Within these sections products with related product characteristics are stored and retrieved. All products enter the system at one point on the ground floor and are then stored within the different sections based on
20
Figure 1.2 - Representation of the different ‘storage and retrieval’ sections
different sections. All the products leave the DC at the same time at one location on the ground floor, within the DC. The ground floor consists of a general receive area (inbound logistics), an expedition area and several sections for ‘storage and retrieval’. The first floor consists only of ‘storage and retrieval’ sections.
Within the DC currently two main flows can be distinguished: Cross dock items and stock keeping items. Functional areas concerning stock keeping items are:
Receive Pallets (carriers) with products are delivered at the DC by several suppliers. Once the products arrive at the DC a quantity/quality check is performed. After a successful check the carriers including products are booked into the warehouse management system (WMS).
Store Carriers are physically stored at so called bulk storage locations. When products are needed for order picking they need to be transported to the pick location where the need did arise. Retrieve Once the DC receives an order from one of their customers the order is split over the different ‘storage and retrieval’ sections. These section-orders are picked simultaneously. Roll
containers (multi-carrier) are used to store products on during and after order picking. Within a section, roll containers are transported by a human operator or orderpick truck. Once a section order is completed, the operator puts the roll container back on the chain conveyor. This chain conveyer will transport the full roll container (through the ramp when roll containers are filled at the first floor) to the expedition area on the ground floor. The chain conveyer forms a closed loop throughout the whole DC. The conveyor is accessible from every section within the DC.
Expedite (ship) When all section-orders are fulfilled and all the roll containers, belonging to one overall order, arrived at the expedition area on the ground floor, the roll containers for one customer are loaded together onto a truck. A truck will transport all roll containers (including products) to the customer.
Figure 1.2 consists of a representation of the different sections, based on product characteristics, which are present in the DC. Most of the section names speak for themselves except for the sections AGF and AP1. AGF stands for potatoes, vegetables and fruit (in Dutch:
Aardappelen, Groenten en Fruit).
AP1 (in Dutch: ActiePlein 1) is a section dedicated to AGF products which are on offer within all PLUS retail stores during a fixed period. In chapter 2 an extensive description of all functional areas, stated above, is given.
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1.2 Goal of the research
At Hollander Barendrecht they experience difficulties with the replenishment of carriers, loaded with goods. Shortages occur within the order picking operation while safety stock at both a bulk storage location and the actual pick location should prevent this from happening. This research focuses on the design of a new control mechanism for the system consisting of a hierarchy of echelons.
The main research question of this research is:
What is an effective control system for the throughput of carriers within the distribution centre of Hollander Barendrecht?
In order to answer this question several sub questions need to be answered first, namely: 1. How should the requirements from the environment be translated into functional
requirements (standards for the different functional areas)? 2. What are the availability requirements of resources?
3. What to measure and how to intervene with the system’s behavior? 4. How should the available resource capacity be assigned?
1.3 Outline of the report
A description of the operations at Hollander can be found in chapter 2. In chapter 3 the DC as a system is investigated and conclusions to the current situation are drawn. From the conclusions in chapter 3 a problem statement is derived in chapter 4. Chapter 5 answers sub question 1, here a foundation for the structure of control functions is laid. The way in which functional requirements are translated into operational standards is dwelled upon in chapter 6 as a starting point for answering sub question 2. Several possible operational structures are defined and modeled in chapter 7. For the different defined operational structures production runs are simulated using ‘discrete event simulation’ in chapter 8. In the same chapter the results are evaluated, the most desired structure is decided upon and answers to sub questions 1, 2 and 3 are found. Chapter 9 consists of a conclusion regarding the main research question and recommendations for future work.
22
2 Description of the operations at Hollander
This chapter will give insight in the lay-out of the DC as well as most of the operations within the DC. All functional areas are described in the order in which they occur when one would follow an item on its way through the DC; from the moment a truck, delivering the product, arrives at the DC up to the moment of bundling and sorting of customer specific roll containers, with the product on it, at the expedition area. The flow of cross-dock items will be covered separately at the end of this chapter since not all functional areas described contribute to the processing of cross-dock items.
2.1 Lay-out of the DC
As already stated in the general introduction, the DC consists of two storeys. Both the ground floor and first floor cover around 12.500 square meters.The ground floor is connected to the first floor in two ways. There are two lifts (with limited capacity) available for transport of pallets, loaded with incoming goods, from the ground floor to the first floor. The transportation of empty roll containers, used for order picking on the ground floor and first floor, is done by a chain conveyor. This conveyor forms a closed loop throughout the whole DC. All ‘storage and retrieval’ sections described below have access to the conveyor. All sections are provided with empty roll containers through the conveyor and all full roll containers after order picking are put on the conveyor and transported by the conveyor to the expedition area.
Ground floor
The ground floor houses different kinds of functional areas. It houses in total 42 docks where 10 docks are being used for the incoming stock items, 2 docks for the arrival of cross-dock items and 30 docks for the loading of outgoing trucks to customers.
In front of the docks that are used for the arrival of stock, the arrival area is positioned. Within the arrival area the products that are finally stored at the first floor are positioned closest to the lifts. Products that need to be stored on the ground floor are positioned on the other side of the arrival area. In the middle of the arrival area the products which are retrieved/picked according the pick to zero policy are positioned. The pick to zero section is housed on the first floor so also these items need to be transported by elevator to the first floor. Pick to zero will be elaborated on later in this report.
Almost half of the ground floor is covered by the expedition area. The expedition area is positioned right in front of the docks that are used to load trucks. These trucks will distribute the goods to the different stores. The expedition area is divided into four zones. Each zone is provided with loaded roll containers through the chain conveyor. Therefore each zone has a diverter. A diverter is an exit for loaded containers where they leave the chain conveyor. All loaded containers are assigned to exactly one of the diverters. Within the expedition area, roll containers are bundled and sorted to be able to load a truck fast and accurate. In the middle of the expedition area some space is reserved for the
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arrival of cross-dock items. Since these items do not go into storage but are immediately sorted for distribution to the customer they are received close to the four zones described above.
Besides the receive- and expedition-area the ground floor also houses three ‘storage and retrieval’ sections. The three sections are, bulk-dairy, AGF (consisting of AGF 2-3 °C and AGF 9-11 °C) and AP1. Within the AGF 9-11 °C area a small compartment of AGF 14 °C exists for storage of (mainly)
bananas. All these different temperature zones for potatoes, vegetables and fruit belong to the same AGF section. For a complete overview of the ground floor see: Appendix 2A.
First floor
The first floor houses only ‘storage and retrieval’ sections. The three sections are cheese, meals and semi-perishables. The semi-perishables section is the largest ‘storage and retrieval’ section within the whole DC. For a complete overview of the lay-out of the first floor see: Appendix 2A.
Chain conveyor
As mentioned earlier the chain conveyor forms a closed loop through the whole DC. In appendix 2A can be seen that the track passes all different sections described above. Also the diverters at the expedition area are clearly visible. The total track has a length of approximately two kilometers. After the last diverter within the expedition area all empty spots on the conveyor are filled up again with new empty roll containers. In this way there are sufficient empty roll containers available for use at ‘storage and retrieval’ sections at all times. As a consequence only few empty spots are left for the placement of full roll containers by order pickers. Therefore, most of the times, an order picker needs to take away an empty roll container from the conveyor to be able to put the just processed roll container back on the conveyor. The process of acquiring empty roll containers and the passing on of full roll containers will be described as part of the description of the order picking process.
Lifts
Two lifts connect the ground floor with the first floor. These lifts are used to transport pallets filled with incoming goods up to the first floor. The lifts are also used to transports empty pallets from the first floor back to the ground floor. Pallets that need to be transported with the lift are loaded onto the feeding system of the lift with a reach truck. After a pallet is transported by the lift a reach truck needs to pick up the pallet and remove it from the outlet. There is limited space for pallets on the feeding system as well as on the outlet. Once the outlet of the lift is full, the lift is not operational until a pallet is removed from the lift’s outlet.
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2.2 Docking and registering of incoming trucks
For each truck that arrives at the DC a purchase order exists within RPO. RPO is an ERP system used by (among others) purchasers within Hollander. A purchase order generally consists of products ordered at one supplier for one delivery date and for one moment during that day. This means that if, during a day, two trucks from one supplier will arrive at the DC at two separate moments, two
purchase orders will exist within the ERP system. The ERP system and the WMS of Hollander are coupled. For the docking of incoming trucks this means that the purchase orders exist within the WMS but are not yet suited for further processing by the WMS.
Docking and registering
Suppliers (truck-drivers) are assigned to an arrival dock upon arrival at the DC. Before they are allowed to start unloading their truck they need to hand in their bill of lading. This bill will be
compared with the purchase order available within the WMS (which is available through coupling with the ERP system). Within the WMS an arrival document will be composed consisting of all products which are on the truck. This document is printed and distributed (digitally as well as hardcopy) to employees processing the pallets with products at the dock the driver is assigned to.
Dock assignment policy
Each supplier delivers goods on a fixed time during weekdays. For the arrival of goods 10 docks are available. Each dock is able to supply two lanes within the arrival area. Per delivery a combination of dock and lane is scheduled. Since every delivery has got its own fixed time during weekdays it is possible to plan the assignment of docks ahead in time. It is possible to plan the dock assignment with an interval of 15 minutes. In practice a truck-driver is assigned to a dock-lane combination based
Figure 2.2 - Feeding system of a lift at the ground floor
Figure 2.1 - Outlet of a lift at the first floor
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Figure 2.4 - The arrival area at Hollander
on available capacity at the arrival area. Once a driver arrives at the DC an employee, working at the arrival area, is consulted. The employee decides to which dock-lane combination the driver will be assigned.
Arrival pattern of trucks
Trucks arrive at Hollander 18 hours a day for 6 days a week. Trucks arrive at the DC on Sundays only sporadically. In appendix 2B an overview of the arrival patterns of incoming pallets for all weekdays can be found. Figure 2.3 represents the arrival pattern during a day averaged over Monday to Saturday within the period week 11 - week 23, 2012.
2.3 Receiving pallets
The driver of an incoming truck unloads all pallets and positions them at the stock arrival area. Different lanes exist in the stock arrival area. Lanes for products that must be transported by one of the two lifts to the upper floor are positioned on the far left of the area (closest to the lifts). Products which will be stored on the ground floor are positioned at lanes on the far right of the arrival area.
Checking-in pallets
After all pallets are unloaded by the driver, employees of Hollander need to check in all products into the WMS. In order to check in a pallet with products the employees use the document number of the earlier composed arrival document. Via hand computers they look up the document number which is stated on the arrival document.
26 Figure 2.5 – Attached barcode label
After the product under consideration is identified, a quantity-, temperature-, ‘best before date’- and ‘correctness of product’-check needs to be performed. When all checks are performed and registered within the WMS the system gives the pallet a pallet number based on a barcode label the employees attached to the incoming pallet. Employees scan the barcode label they attached to the pallet, in this way the products are linked to a pallet within the WMS. This last step is necessary because the WMS will generate carrier (pallet)
displacement tasks to store and transport products.
The steps described above are performed for each pallet on the arrival document.
2.4 Storage of stock
Once all stock is well received, it is ready for storage. To the EAN (European Article Number) of the product, which is ready for storage, the product-group is coupled. Based on this product-group the WMS decides in which zone the pallet including products needs to be stored.
Bulk locations
Within the WMS 2957 bulk locations are defined. The bulk locations are built up out of 29 different types of locations (see Appendix 2C). Only the height of a location type is of importance for the storage of pallets with goods. The WMS will only store a pallet with goods at a certain location when the height of the pallet including products is suited for a certain location type. The width and depth of a location are not considered by the WMS.
Bulk storage policy
For the storage of goods the DC is divided in zones. These zones differ from the sections defined for order picking, the so called ‘storage and retrieval’ sections. In other words; one ‘storage and retrieval’ section may consist of several storage zones. An overview of the zones defined for storage of goods on bulk locations is provided in appendix 2C.
In appendix 2C also an overview of all existing groups within the DC is given. One product-group can be positioned in different zones. Based on prioritization, articles in one product-product-group are first placed in the zone with highest priority based on a closest open position policy1 with the target
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position as the initial position. Once this zone is completely occupied the WMS tries to store the articles in the next zone available for the product-group under consideration.
However, the storage of goods is not only controlled on group level. Almost every product going through the DC has its own storage policy. Based on the static pick location of the article, production leaders adjust the storage policy for that product. They try to manually minimize the distance between the static pick location and the target position of the specific article. This minimizing of distance is done by adjusting the target position defined for each section within the storage policy.
The storage policy at Hollander can be defined as class-based2 combined with a closest open position
policy (within a class zone). Based on class, an article may be stored in several zones (with different priorities). The closest open position policy is implemented based on the static pick-location of the specific product. Defining article specific storage policies for 2000 (constantly changing) active articles is experienced as very time consuming.
Transport and confirming carrier displacements
Displacements of pallets with products are executed by operators on a reach truck. The WMS assigns displacements to the right means of transportation and group of operators. Pallets which are ready for storage at the arrival area are assigned to an employee operating a reach truck. The operator is notified that there is work available via a mobile computer terminal. The operator drives to the pallet which needs to be transported. Once the driver scans the barcode attached to the pallet he confirms he is at the current location of the pallet and he is about to execute the scheduled displacement. In his screen appears the location where the pallet should be transported to. When he arrives at the intended location he scans the location itself to confirm he arrived. At this point the location of the pallet itself changes to the new, just confirmed, location.
In the case that goods must be stored at the first floor and are still at the arrival area the intended location after displacement will be the location of one of the lifts. The displacement from lift ground floor to lift first floor is performed automatically once the pallet arrives at the first floor. The
displacement from the lift at the first floor to the final storage location is again assigned to the right means of transportation and group of operators at the first floor. For goods that are at the arrival area and are stored on the ground floor the intended location will directly be the final storage location.
Assignment of displacements to resources
The WMS decides, based on the target location, to what type of transportation and which group of operators the displacement may be assigned. Means of transportation are grouped in stages. So bulk locations are grouped in zones, order-pick operations are grouped in sections and displacements are
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grouped in stages. Within the WMS environment some stages are linked in order to make sure a displacement between these stages is executed by a specific resource.
Table 2.1 provides an overview of the different stages which are present in the DC.
In most cases the target location determines to which group of operators a displacement is assigned. However in some cases stages are coupled, and a specific stage to which the displacement must be assigned is defined. Table 2.2 shows to which stage a certain displacement is assigned (empty cells indicate that this type of displacement is impossible in practice).
From/To
OGV OGV2 AP1 BZ AGF130 AGF680 LFT KAAS MLT VW ZVL
OGV
OPP OPP OPP
OPP
LFT
OGV2
OPP OPP OPP
OPP
LFT
AP1
OGV OGV2 AP1 BZ AGF130 AGF680 LFT
BZ
OGV OGV2 AP1 BZ AGF130 AGF680 LFT
AGF130
OGV OGV2 AP1 BZ AGF130 AGF680 LFT
AGF680
OGV OGV2 AP1 BZ AGF130 AGF680 LFT
LFT
OGV OGV2 AP1 BZ AGF130 AGF680
OPV OPV OPV OPV
KAAS
LFT KAAS MLT VW ZVL
MLT
LFT KAAS MLT VW ZVL
VW
LFT KAAS MLT VW ZVL
ZVL
LFT KAAS MLT VW ZVL
Table 2.2 - Assignment of displacements from/to a stage Stage Storage
zones Description
OGV - Arrival area (first half) OGV2 - Arrival area (second half)
AP1 AP1 Area for AGF (potatoes, grocery and fruit) products on offer (this area is geographically the same as section AP1 for orderpicking). BZ A3S, RIC Bulk-Dairy area (this area is geographically the same as section BZ
for orderpicking).
AGF130 A3 Area for AGF products stored at 1 to 3 degrees Celsius AGF680 AC, A8, A8S,
A15, AP2 Area for AGF products stored at 6 to 8 degrees Celsius
LFT Pallet lift
KAAS KAO, KAU Area where product group Cheese is stored/retrieved (this stage differs geographically from the section KAAS)
MLT MAO, AP3 Area where product group Meals is stored/retrieved (this area is geographically the same as section Meals for orderpicking).
VW VWO, WIO,
FLW Area where product group Meats is stored/retrieved. ZVL ZUO, AP4,
AP6, FLZ Area where product group Semi-perishables is stored/retrieved (this area is geographically the same as section SV for orderpicking). OPP - Virtual area used to assign means of transportation for
displacements with the initial location within the arrival area. OPV - Virtual area used to assign means of transportation for
displacements with the initial location at the outlet of the lift on the first floor.
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Once a displacement is assigned to a stage, the operators responsible for transportation are, in some stages within the DC, forced to execute the provided displacement. In other stages all displacements the operator owns transport rights for are provided in one overview. The operator himself decides here which displacement to execute by scanning a carrier (that needs to be moved) at its initial location.
Four types of trucks are available for the storage of stock and the replenishment of pick locations: - HTP, a forklift used at the ground floor to transport carriers from the arrival area to their
storage- or pick location. These trucks are also used for the replenishment of pick locations. Within the WMS 6 HTP’s are defined, in practice only one is used.
- LVT, a reach truck used at the ground floor to transport carriers from the arrival area to the lift. Within the WMS 6 LVT’s are defined, in practice only one is used.
- RTP, a reach truck used at the ground floor to transport carriers from the arrival area to their storage- or pick location. These trucks are also used for the replenishment of pick locations. Within the WMS 12 of these trucks are defined, in practice 2, 3 or 4 are operational.
- RTV, a reach truck used at the first floor to transport carriers from the outlet of the lift to their storage- or pick location. These trucks are also used for the replenishment of pick locations. Within the WMS 24 of these trucks are defined, in practice only 8 are operational.
2.5 Order-picking
In this chapter the procedures for order-picking within the different ‘storage and retrieval’ sections is elaborated on. Order-picking is an important step within a DC, on the one hand because its
performance influences customer satisfaction greatly and on the other hand because it contributes to as much as 55 to 60 percent3 of the labor costs.
At Hollander they make a distinction between pick locations and bulk storage locations. Order-pickers are following a route through a ‘storage and retrieval’ section within the DC. On this route several pick locations are visited in order to retrieve the right products in the right quantity. All retrieved products are put on a roll container. Once the amount of products on a pallet stored on a pick-location is below some minimum value a new full pallet is transported from a bulk storage location to the pick location. The DC is divided into zones for bulk storage (see Appendix 2C). At the same time the DC is divided into ‘storage and retrieval’ sections for order picking (see: Table 2.3). In practice this means that a section may be build up out of several storage zones and these zones contain both bulk storage and pick locations. There also exist zones such as FLZ which contain only pick-locations. These types of zones are not incorporated within bulk storage policies and also not important for the storage of
3 De Koster R. & Van der Poort E. (1998). Routing orderpickers in a warehouse: a comparison between optimal and heuristic solutions. IIE Transactions 30:5. 469-480.
30 ‘Storage and
retrieval’ section Pick-locations in zone Transport stages serving section
Bulk-Dairy (BZ) A3S, RIC BZ
Meals (MLT) MAO, AP3 MLT
Cheese (KAAS) FLW, VWO, KAO, KAU
WIO VW, KAAS
Semi-Perishables (SV) ZUO, FLZ, AP4, AP6 ZVL AGF (AGF) A3, A8, A8S, AC, AP2,
A15 AGF130, AGF680
AP1 (AP1) AP1 AP1
Table 2.3 - Sections and zones
goods at pick locations since Hollander has a policy comprising fixed (static) pick locations. So no distinction is made between
pick and bulk locations within the defined zones. Some zones contain both bulk storage and pick locations whilst other zones contain just bulk storage locations or pick locations. Table 2.3 gives an overview
of the pick locations per zone per section. The order-picking operations are described with reference to the different ‘storage and retrieval’ sections, and the pick locations in this section, regardless the actual storage zone the pick location belongs to.
The existence of sections is a result of family grouping at the PLUS retail stores. All stores grouped their products according PLUS retail’s family grouping policy. By dividing the DC into the same sections as the different family groups, roll containers are easily processed upon arrival at the PLUS retail stores.
Pick locations
Within the WMS 13.352 pick locations are defined. In reality there are 3505locations used for actual order picking within the DC. These locations are built up out of 23 types of locations (see: Appendix 2C). For this figure the pick locations in zone A15 within the AGF section are neglected. Within zone A15 of the AGF section the banana’s are stored and for this purpose 2098 pick locations are defined within the WMS, not all of these locations are present in reality. For now zone A15 is neglected since it only represents a very small area within the total AGF section and the precise number of pick locations is unclear.
Pick storage policy
Every article with its own article number is assigned to a fixed pick location within the DC of Hollander. The different articles are assigned to pick locations by the production leaders. The
production leaders use product characteristics such as product-group, weight and size to decide where to pick a certain article from. By order of the logistics manager a flow diagram is constructed which defines what pick location should be assigned to what type of article. This flow diagram can be found in appendix 2D.
The policy for pick location allocation (in the form of a flow diagram) turns out to be outdated. It is constructed in the year 2010. Since then the sections for Meals, Cheese and Semi-perishables at the first floor are re-defined. Nowadays the production leaders use their experience to allocate pick locations. The flow diagram in appendix 2D is nowadays used as a reference.
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PLUS Retail couples an A, B or C classification to the products in their assortment. The A classification indicates that a product is fast-moving (high demand) and the C classification indicates that a product is a slow-mover. This classification is communicated with Hollander. In practice the A, B or C
classification is not used for the storage policy of products at pick locations and/or bulk storage locations. The stackability of a certain product is considered (by the production leaders) to be the most important factor for the storage of goods at a static pick location. SKUs which are heavy and/or solid are positioned at the beginning of a picking route. Along the pre-defined routes trough a section products become more and more fragile.
Waves and generating section-orders
The customers of Hollander (around 270 PLUS retail stores) receive their products in the early morning and/or afternoon. Every store is supplied on a fixed time during the morning and/or afternoon. Some stores receive goods in the morning as well as in the afternoon. Others receive products only in the morning or only in the afternoon.
To be able to supply customers with products in the morning the order picking at the DC is done during the evening and night shift. The evening and night shift in total are divided in six waves4 and
consists of eight (Monday, Tuesday, Wednesday and Thursday) or nine (Friday and Saturday)
operational hours. The deliveries which are scheduled in the afternoon are picked during the morning shift. The morning shift is divided in four waves and consists of six operational hours. Within this report the evening shift is regarded as being part of the next day. In this way wave 0, which starts at 18:00 hours, on Tuesday is part of the operations on Wednesday. Orders are assigned to a wave within one of the three shifts based on the time of departure of the route in which the store is normally included. Therefore it may happen that two orders, belonging to stores that will be supplied by the same truck, are picked in different waves when the routes are rearranged. This happens often. Table 2.4 shows all waves per shift including the time they are released for production.
A customer submits its orders on average 12 hours before the truck with goods needs to leave at the DC. This means that within 12 hours the products which belong to the order must be received (this holds for most of the products), picked, sorted and loaded onto a truck. Hollander has the policy that it should be possible that products are available at the expedition area and ready for loading on a truck within 6 hours after an order line is received at the DC.
4 R. de Koster et al. (2007). European Journal of Operational Research 182. pp. 481–501.
Evening and night shift Wave 0 Wave 1 Wave 2 Wave 3 Wave 4 Wave 5
Release time 18:00 18:00 18:00 23:00 23:00 23:00
Morning shift Wave 6 Wave 7 Wave 8 Wave 9
Release time 4:30 4:30 4:30 4:30
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The overall order placed by one customer is divided over the different sections within the DC. The different section-orders are picked parallel. This means that all section-orders for one customer are released within the same wave during a morning- or evening shift.
A section order is restricted in weight and size. Depending on the amount of products that must be acquired from one section, and thus need to be picked from a section, several section-orders per section may be created. All articles available in the WMS possess dimensions and weight. The roll containers are restricted to a payload of 384 kg and a volume of 0,816 (0.8 x 0.6 x 1.7) cubic meters. The WMS automatically generates section-orders that meet the constraints of the roll container. Therefore, when 500 kg of goods need to be picked from one section two section-orders will be created for this section. The same holds for excess in volume.
It is important to realize that when a customer places a very small order with products from each section, at least six (the number of sections) section-orders will be generated. As a result six roll containers which are not at all fully loaded will flow through the system.
Order picking procedure
Order pickers are assigned to one section (Bulk-Dairy, Meals, Cheese, Semi-Perishables, AGF or AP1). Within this section they pick all products on their route. The order pickers are guided along their route through the section using voicepicking5. Besides the actual order-picking several other task need to be
performed.
The structure of the order picking process within the AGF section somewhat differs from the procedure in other sections. First the procedure which holds for all sections excluding AGF will be described. After this the differences between AGF and the other sections are explained.
Order picking procedure in sections: Bulk-Dairy, Meals, Cheese, Semi-Perishables and AP1 All order pickers wear a headset through which they are able to communicate by voice with the WMS. An operator requests an order. The WMS tells the operator to get a roll container from the chain conveyor. Roll containers are attached to the conveyor by a pin. The operator removes the pin from the container and checks if the roll container is operational (no damage etc.). All operators are equipped with a scanner. After acquiring a roll container from the conveyor a barcode on the container is scanned by the operator.At this point the section-order is coupled to a container and operator. Through his/her headset the operator gets the first location where items should be retrieved from. The operator travels by foot to this location. On arrival the operator needs to confirm his/her current location by communicating a unique ID which is present at the location. Location ID’s are interchanged regularly to make sure operators are not able to memorize the ID’s. After the location is confirmed by the operator the WMS indicates how many items need to be picked. The operator needs
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to confirm this number by voice. Once the operator collected the items and put them on the roll container a new location is communicated.
The steps of travelling to new locations and picking of items is repeated until the end of the section- order. When an operator arrives at a location which turns out to be empty he/she reports a shortage. In case of a shortage the location is skipped and the operator is directed to the next location on route. At the end of the pick order the operator is directed again to the locations for which a shortage was reported. The operator is also directed to such a location when it is not yet complemented from a bulk storage location by an operator on a reach truck. When a pick location is still empty at the end of a pick route a backorder is generated and this order will be picked separately when stock is moved from bulk storage to the pick location.
When a section-order is completed, the operator transports the roll container to the chain conveyor. The operator tightens the tension belt and seals the whole container. After sealing the container is ready for transport (by the chain conveyor) to the expedition area. Once the operator indicates by voice that he completed its route the WMS automatically generates a displacement for the roll cage. The WMS now assumes the roll cage is on the chain conveyor regardless if it is physically there. Order picking procedure in section: AGF
The interaction with the WMS by the operators is the same as described above. However, in this section (AGF) orders are picked using an order-pick truck. On this truck two roll containers are placed (see Figure 2.6). So, two section-orders are picked simultaneously by one operator.
Five so called order-pick trucks are available for order picking in the AGF section. Figure 2.6 Order-picking with two roll containers using an order-pick truck
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Pick to zero
Some products within the DC are retrieved according a pick to zero (PTZ) policy. On arrival PTZ products are stored directly at their designated pick location (within the Cheese and Meals section). Suppliers of PTZ products deliver the exact amount of products needed for the fulfillment of all customer orders during that day. For these products Hollander is not managing inventory levels. The management of the inventory levels is shifted towards the supplier. The PTZ pick locations are part of the Cheese and Meals section and incorporated within the routes through these sections. Therefore no distinction is made in terms of the order picking procedure.
Routing policy
Order pickers are directed by the WMS through their section. The WMS constructs a route based on the articles that are part of the section-order. For the routing of order pickers through a section the s-shape heuristic6 (also called transversal heuristic) is used. Any aisle containing one item is traversed
through the entire length. Aisles with no picks are not entered. The sections at Hollander not only contain parallel aisles, therefore no pure s-shape route can be constructed. In all sections the order pickers are walking their route approximately according the s-shape heuristic.
Standards and performance of order picking
On average 23.000 section-orders per week divided over 6 days of operation need to be picked in the DC. These orders represent on average 675.000 goods which are picked in one week within the DC. The standards used within the different sections and the actual performances of the different sections are analyzed and the results are presented in appendix 2E. All figures presented are based on a period of 13 weeks, namely week 11 up till week 23 in the year 2012, and are visualized in appendix 2E. Within this period, the DC was operational six days a week. 3 days during this period the DC was closed due to public holidays (April 9th, May 17th and May 28th). The data represents 75 days of
operation. One day of order picking consists of ten waves and a total of 14 operational hours on Saturday, Monday, Tuesday and Wednesday. On Thursday and Friday order picking is operational for 15 hours per day.
2.6 Bundling and sorting at expedition
After a section-order is completed the roll container is put on the chain conveyor. The chain conveyor will transport the container to the expedition area. Since the operators, responsible for order picking, coupled a section-order to a roll container (by scanning the roll container before starting their order picking tour), the roll container is diverted automatically, using radio frequency identification (RFID), to the right lane within the expedition area. An operator at the expedition area takes the full roll container off the diverter and puts a SSCC label comprising container number, assortment group (e.g. Cheese, Semi-perishables etc.) and customer (including address) on the roll container.
6 De Koster R. & Van der Poort E. (1998). Routing orderpickers in a warehouse: a comparison between optimal and heuristic solutions. IIE Transactions 30:5. 469-480
35
Figure 2.7 - Expedition area When roll containers have a very low
load factor due to, for example, backorders, two containers may be bundled. The operator then first scans the container where the products will be taken off. After that he/she scans the container the products are put on again. In this way it is known on which container the products left the DC and a new SSCC label is printed.
If all containers have a sufficient load factor the operator positions all containers which will be transported by the same truck in one lane. In this lane are positioned the roll containers from all sections together with the cross-dock items.
The expedition area serves in total 30 docks suited for trucks on which the roll containers will be loaded for transportation to the retail stores. Each dock is served by 4 lanes. 2 of these lanes are used for the first transport leaving the DC. The two other lanes are used to store roll containers belonging to orders which are still being picked/retrieved. Figure 2.7 gives an idea how a close to fully occupied expedition area looks like.
2.7 Cross docking
Besides the products which are kept in stock, the DC houses a cross-docking operation. Cross-dock products are received in the middle of the expedition area. The processing of cross-dock products happens outside the WMS; therefore a lot of paperwork is involved. Suppliers of cross-dock products bundled the products based on a customer order. In other words PLUS Retail places all orders of the individual stores directly at the supplier in the case of cross-docking.
When Hollander receives cross-dock products, the products are checked on the same characteristics which are checked in case of products that are kept in stock. If the check is successful the bundled batch of products is split. Splitting is necessary since the supplier bundles all orders for the different retail stores into one shipment. However, the supplier identifies the different orders within the shipment.
After splitting, the employees position the products at the right lane within the expedition area. Within this lane also the products that are retrieved from stock for the same customer are positioned.
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Figure 3.1 - A black-box approach of the system under consideration
3 Systems approach
In this chapter the DC as a system is explored. An important remark here is that the complete cross-docking operations, shortly elaborated on in Chapter 2, is excluded from this analysis.
First a black-box approach is applied to the system under consideration. Using this approach the requirements of the environment and the way in which the performance of the system as a whole should be formulated is dwelled upon. Subsequently, to incorporate different aspects of the system in one qualitative model, the description of the DC (See chapter 2) is expressed in terms of the PROPER-model7.
3.1 Black-box approach
Full (or less than full) pallet loads with products of one type together with empty roll containers enter the system under consideration. Roll containers with different type of products ordered by the customer leave the system together with empty pallets. Pallets with SKUs are supplied by
trucks and the roll containers loaded with different type of SKUs are eventually loaded on trucks again. Therefore the arrival pattern of incoming trucks and the departure pattern of leaving trucks are of importance for the main flow through the system. The system border is placed just outside the walls of the DC so that the batch sizes and arrival pattern of incoming pallets and the batch sizes and arrival pattern of leaving roll containers are incorporated in the analysis.
Function of the system
The function of the system under consideration is best formulated as follows: The system must order, receive and temporarily store full pallet loads of SKUs. The system must then retrieve SKUs from storage, based on customer orders.
Requirements of the environment
The environment of the system mainly consists of one customer: PLUS Retail. However, the system interacts with around 270 individual entrepreneurs (affiliated with PLUS Retail) each with their own, slightly different, requirements. PLUS Retail as a whole roughly defined a couple of (mainly) functional requirements:
- Minimization of the residence time of SKUs within the system. Maximum of 2 days for AGF products, products belonging to other product-groups may be kept in stock for a maximum of one third of the total best before period.
