Chapter 7 Responsive Warehouse Management

Question 1

Define the Responsive Warehouse Management Stage.

Answer 1

In responsive warehouse management it is assumed the process are already defined and transparent can no longer be improved. The warehouse productivity however can still be increased. Productivity is optimized through better utilization of resources, i.e., people, machines, vehicles and warehouse space. Information technology is used to increase the warehouse performance by introducing new planning and control principles that respond to real-time events.

Question 2

What are the elements of a responsive warehouse?

Answer 2

1. Capacity planning - This is done at the tactical level and involves matching the workload with resources capacity- e.g., labor capacity, dock space capacity, storage capacity and inventories.
2. Progress monitoring - At the operational level and is the operational control during the day.
3. Task management - At the operational level and is the actual assignment of tasks to operators and automate material handling equipment.

Question 3

What should a manager consider before deciding to implement advanced systems?

Answer 3

1. Will the benefits repay the investment?
   - Advanced technology for resources planning, order management, task management and performance management primarily apply to DCs with high complexity. However, for medium and low complexity DCs the principles behind the control and planning framework should still be applied.
2. Is it preferable to outsourcing to a 3PL and avoid the need for major investments?
   - The planning and control instruments for a responsive warehouse require significant investment in software and hardware. It might be financially better to outsource the DC to a 3PL who specializes in designing and managing distribution centers.

Question 4

Advantages of outsourcing.

Answer 4

1. More focus on core business - Companies can focus on their core business because the 3PL relieves the company of many operational issues.
2. Reduced costs - The 3PL can achieve economies of scale by sharing resources among operations of multiple clients or different DCs and therefore be able to run the warehouse at a lower overall cost.
3. Lower capital investment - Companies do not have to spend the fixed capital cost such as on buildings, equipment, software and hardware and these become variable operational costs instead of fixed costs to the company.
4. More flexible capacities - 3PLs are better able to handle strong fluctuations in workload. They can combine clients with countercyclical assortments and accommodate peak demand efficiencies, e.g., ice cream in summer and frozen vegetables in winter.

Question 5

Disadvantage of outsourcing.

Answer 5

1. Rates are not necessarily cheaper - 3PLs do not necessarily provide higher productivity and where the client has a big operation, economies of scale is already optimized. 3PLs might be reluctant to invest in efficient automated material handling systems because they are not easily configured and would need a long-term commitment from the client.
2. Dependency on third party logistics provider - The client heavily relies on the 3PL and if their operations deliver poor service or required volumes can’t be processed, they won’t be able to quickly move to another 3PL. Moving operations is complex, labor intensive and risky.
3. Less control over the operation - An additional link is added to the supply chain when outsourcing. Collaborating with the service provider can be complicated and the clients who are a distance from the DC can’t see directly into the WMS.

Question 6

What are the two techniques for capacity planning?

Answer 6

1. Resource planning - calculates the necessary resources for all warehouse processes in a given time period, such as a day or a week.
2. Workload balancing - the balancing of fluctuations by shifting the workload between periods.

Question 7

Name the steps to calculate resource planning.

Answer 7

1. Estimate the expected order volume.
2. Convert orders into tasks.
3. Compute the required process time.
4. Compute the required resources.

Question 8

Name the constraints a WMS has to comply with when assigning task and tours to operators.

Answer 8

1. Must be physically possible for the operator to perform the task (e.g., can’t assign a task to an operator using a forklift truck with a maximum reach of 3m when the location height is 10m).
2. Small zones should have constraints on the maximum number of operators allowed to avoid congestion and increasing waiting times.

Question 9

Explain individual tasks and tours.

Answer 9

Individual tasks are pallet moves such as put aways, replenishments, pallet relocations or pallet picks.

Tours consist of multiple consecutive tasks, for example a pick tour.

Question 10

What are two objectives of task management.

Answer 10

1. Efficiency - when the WMS assigns a task to an operator that is close to his current position, it minimizes the empty travel distance between tasks.
2. Urgency - caused by deadlines to be met as well as bottlenecks. The WMS should consider how urgent a task is as well. Considering the urgency of tasks can prevent waiting times or late departures of trucks.