NOVOSOFT Warehouse Management and SOLVOYO Order Decision Support Systems Integration in A-101

System Analysis

A101 is a growing company and the senior management has to make correct strategic decisions in order to manage this growth successfully. Therefore, they need the information of the capacity and the utilization of their current system to plan their further growth moves. In other words, the company would like to estimate how much of the existing capacity is required to serve current number of stores and how many more stores existing capacity can serve.

The layout of the warehouse is designed considering the FIFO policy and the products are located in decreasing order of their weight. In this system, it is observed that the items under a particular product group that can be only ordered by a store in a particular day are not necessarily located close to each other.

Warehouse layout

Orders of stores are received from an ERP system. Orders are printed out and distributed to warehouse workers for picking operation. Without support of any system, workers pick up products only following print out of order lists. Then they randomly put them to shipping area for truck loading operation.

In stores’ ordering process, a hand terminal is used which shows historical sale data of each type of products individually. By the help of this data, employee decides sufficient number of order quantities until next order day for that product and enters them in hand terminal to give order to the warehouse. Then, order quantities are transferred into ERP system. When the products are received by the stores, employees control the quantities and qualities of the products. Eventually, the employees place the products in related shelf places to be sold.

Each store can make orders at only three pre-determined days in a week. Moreover, in each order day they can order only from pre-determined product groups and 30 additional products independent from product groups. For example, Store A gives orders to the warehouse at Monday, Wednesday, and Friday. On Monday it can be ordered only product groups of milk and milk products, beverages, legumes and flour products. Additionally at the order days, the store can give extra orders up to 30 products which the store is in a critical situation in terms of stocks.

Observed symptoms and complaints of the system are as follows:

  • Layout of the warehouse is inefficient that walk distances of the workers inside the warehouse increase. It causes huge time loss
  • Storage area is used ineffectively.
  • Picking operation is performed manually by order print outs so that employees may pick wrong products or wrong amounts to their picking pallets.
  • Managing stock counting process is difficult. Monitoring exact live stock levels is impossible.
  • The current product groups that company use is not smooth according to their sizes. It is important to have equally-sized product groups for the company because their current order policy is implemented through product groups. In the current situation, because the sizes of product groups are not equal, warehouse faces some difficulties when preparing the orders of the stores: workforce cannot be balanced at the warehouse.
  • Measuring the performance of the warehouse employees returns a big challenge.
  • Preparing pallets can be difficult since their weights and volumes varying because of the non-smoothness of product group sizes and unbalanced weight and volume distribution among the product groups.
  • Truck loading is done in a random order so that unloading operation takes too much time.
  • Stores face stock out situations because of wrong order decisions of the store staff.

Proposed Solutions

  • The layout of the warehouse is changed with the help of an optimization model. Therefore, products are located in a manner which minimizes order picking time and walking distances.
  • New layout
  • New physical storage system with racks is integrated to warehouse in order to save from the space and ease implementation of FIFO policy.
  • Layout with racks
  • NOVOSOFT Warehouse Management System is integrated to the system. As a result of WMS integration, A-101 optimizes its warehouse processes, enhances transparency, avoids employee mistakes, maximizes labor resource, correctly measures employee performance and improves their morale, effectively manage warehouse stocks, and provides infrastructure for the continuous improvement.
  • Warehouse Management System
  • In the current system, stores order 3 days in a week. However, there is not any mathematical model or proof that shows this number is the optimum number for order days of the stores. Therefore, by the help of some optimization techniques, it is tried to find optimum number of order days in a cyclic period like a week. By determining the optimal order days, product groups attached that days are also considered.
  • SOLVOYO Order Decision Support System is integrated to the system in order to minimize the dependency of the system to the store staff.