ORDER PICKING OPTIMIZATION

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World-Class Warehousing and Material Handling

Based on the initial slotting, reslotting rules should be defined to suggest when and if a particular item should be reslotted. The rules can be developed with the help of a simple from-to chart that computes the potential cost savings of moving an item from its current mode and zone to every other mode and zone. This savings is compared with the cost to move the item. If the savings-to-cost ratio exceeds a predetermined threshold, the item is recommended for reslotting. Note that a more convenient opportunity for reslotting an item occurs when its pick-location inventory drops to zero. In this case, the slotting system should suggest the most appropriate slotting for the item and direct the restocking operator to the new location for the item. An example reslotting from a recent client engagement is provided in Figure 8.18. The tool prioritizes reslotting based on the number of activity zones by which an item is mis-slotted.

Figure 8.18 RightSlot re-slotting analysis for a single SKU. In this case, the recommendation is to relocate the SKU from storage drawers to horizontal carousels, yielding an annual savings of $28.35 and a move cost of $1.86 for a four-week payback period.

Item Number/Item Description/Category/Current Mode/Optimal Mode 11098 Downy Sheets April Fresh Stationery Storage Drawers Horizontal Carousels

Annual popularity

972.00 984.00 $532 $505 0.42 414.56

Annual turnover Current Annual Operating Cost Optimal Annual Operating Cost Unit Cube (unit cube CF) Cube Movement Demand Increment (Eaches per Pick) Cube Increment (CF per Pick)

1.01 0.43 2,307.16

Pick Density (Picks per CF) RightSlot TM Savings ($/year) Current Cost (% of Sales) Optimal Cost (% of Sales) Move Cost Payback Period (Years)

$27.35 8.98% 8.52% $1.86 0.07

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