Existing Warehouse Optimization Demo
Project Description
When warehouse operations struggle to achieve desirable results based on KPIs, Arrow Logistics can help. Our solution automatically identifies operational challenges and problems based on existing warehouse parameters and layout, analyzes business requirements (e.g. increasing Perfect Order Index to over 98% or having an Order Picking Accuracy of 99%), and presents recommendations for equipment and layout changes that will help the warehouse achieve stated business goals.
Stage 1 Challenges
In the first stage, the warehouse challenges are identified based on the data uploaded into our system, which includes warehouse attributes, parameters, current KPIs and operational metrics.
For example, one warehouse we analyzed had the following operational details:
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Total employees: 15 (3 in delivery zone, 5 in storage area, 5 in sorting area, 2 in shipping zone)
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Forklifts: 8 (2 in delivery zone, 4 storage area, 2 in sorting area/shipping zone)
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KPIs and operational metrics:
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On-time shipments: 63% (primarily due to delays in getting products to the sorting area and then to the shipping zone)
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Internal order cycle time: 4 hours (once again, linked to delays that were caused by traffic congestion due to the large number of forklifts)
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Dock to stock cycle time: 3 hours (in the current setup it is impossible to get below the industry standard of 2 hours)
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The operational details presented above negatively impact the financials of the warehouse operations and lead to a significantly higher than normal cost as a % of sales.
Stage 2:
Quantitative Technical Business Requirements
Upon identifying the operational challenges, business requirements are defined in a technical, measurable manner:
1. On-time Shipments: Improve from 63% to 98%. Implement real-time tracking and optimized dispatch systems.
2. Internal Order Cycle Time: Reduce from 4 hours to a target of 2 hours. Implement predictive analytics for staff scheduling, real-time tracking of equipment, and intelligent traffic management systems.
3. Dock to Stock Cycle Time: Reduce from 3 hours to industry standard of 2 hours. Implement automated sorting systems, barcode or RFID systems for rapid item recognition, and automated guided vehicles (AGVs) for efficient material handling.
4. Perfect Order Index (POI): Increase to over 98%. Implement advanced inventory management systems, pick-to-light systems, automated packing lines, and quality checks at every step.
5. Order Picking Accuracy: Achieve 99% accuracy. Implement advanced Warehouse Management System (WMS), automated picking solutions, and RFID/barcode scanning.
6. Space Utilization: Optimize using dynamic slotting algorithms, vertical storage solutions, and mobile racking systems.
7. Inventory Turnover: Increase rate for faster stock movement and reduced holding costs. Implement improved demand forecasting, efficient order management, and robust supplier relationship management.
8. Return Rate: Decrease through stringent quality checks, accurate picking and packing processes, and AI-based image recognition systems for order verification.
These quantifiable, technical requirements guide Arrow Logistics in recommending precise,
data-driven warehouse optimization solutions.
Stage 3 Outcome
Arrow Logistics automatically ran simulations of warehouse operations to identify the exact warehouse optimization options that will successfully achieve stated business requirements without adversely impacting other metrics.The system proposed two options:
Automation
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Total employees: 10 (2 in delivery zone, 2 in storage area, 4 in sorting area, 2 in shipping zone)
Forklifts: 2 (2 in sorting area/shipping zone)
The addition of two conveyor belts to link the delivery zone to the storage area to reduce the number of forklifts and operators required to move products from the delivery zone to the storage area.
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Components used
Option 1
2x Global Industrial Variable Speed 1 Horsepower Omni Metalcraft Belt Conveyor with turn areas Approximate cost: 15,500.00 CAD
Optimization of goods movement between storage and sorting areas through the addition of two conveyor belts.
Installation of three robotic manipulators on linear belt drives to automate goods movement in the storage area and in the sorting area:
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2x in storage area
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1x in sorting area
3x Macron Dynamics linear belt drive with robotic manipulator and 4x Global Industrial Variable Speed 1 Horsepower Omni Metalcraft Belt Conveyor with turn areas Approximate cost: 210,000.00 CAD
Option 2
Automation & Robotization
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Total employees: 4 (2 in delivery zone, 1 in sorting area, 1 in shipping zone)
Forklifts: 2 (2 in sorting area/shipping zone)
Recommendations
Layout changes
The addition of two conveyor belts to link the delivery zone to the storage area to reduce the number of forklifts and operators required to move products from the delivery zone to the storage area.
