Light bulk stored in 30-inch deep shelves.
S. P. Richards (SPR) is a distributor of wholesale office products. Their customers are the retail companies that deal directly with the final user, such as OfficeMax. SPR is the oldest continuously operating company in Atlanta; and has grown so that they now distribute nationally through 36 distribution centers across the continental US.
This project is to generate alternative designs for the new DC in Dallas, Texas. (Here is a copy of the SPR presentation during their visit to class.)
SPR serves three main types of customers: “Mega-dealers”, independent resellers, and internet resellers (the last of which is growing quickly). About 90 percent of orders received by SPR are so-called “wrap-and-label”, which means that SPR packages them as if they came from SPR's customer.
Most customers order electronically in mid to late afternoon. The DC receives product in the morning and puts it away, until early afternoon. Then picking begins in earnest to meet departure schedules of the trucks. The product is delivered overnight.
SPR does not know the customer orders until it is time to pick them. There is huge variance in the demand even for the most popular products.
Typically an SPR warehouse has three main areas: Pallet rack for large, heavy items such as furniture; static shelving that is 30-inches deep for light bulk, such as boxes of file folders, waste baskets, or briefcases; and a separate area of static shelving that is 24-inches deep for small and light items, such as pens, erasers, paper clips, and so on. All static shelving is 48 inches wide.
Up to now, most SPR warehouses have located light bulk on the ground floor, above which sits a mezzanine where small parts are stored. This arrangement has created some challenges because an order may need items from each area. Currently orders are started in the small parts zone and then carried by conveyor down to the light bulk area and finally to shipping, where the order is packaged and joined up with any large, heavy items and with other orders going on the same truck.
All order-picking is managed by a pick-to-voice system. Each worker pushes a cart from storage location to storage location under the direction of the voice control.
Light bulk stored in 30-inch deep shelves.
SPR is moving to a new facility in Dallas, Texas, and are using the occasion to reconsider the design that they have used for most other DCs.
The main question is how should the warehouse be slotted? That is, where should each sku be stored and in what quantity? Note that the warehouse layout suggests a plan for organizing the locations of skus; can you do better? In slotting, note that the maximum shelf weight is about 300 pounds. If a shelf is loaded with more weight than that, it should be the first level, on the ground. Each shelf is 24 inches deep and 18 inches high. You may remove a shelf to leave a taller opening that will hold more or larger items.
Another task is recommend a location naming scheme in which each name has seven characters (letters and/or numbers) to specify zone (1), aisle (2), bay (2), level (1), and position (1).
A secondary challenge is to consider a design alternative that runs conveyor through the warehouse, with diverts into zones, where an assigned worker would make all picks in that zone. Should SPR pursue pick-to-conveyor as a picking strategy instead of pick-to-cart? What are the potential benefits of such an investment?
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