Variability: The warehousing challenge

It is possible to create processes that manage the peaks as comfortably as slower times.

By Jim Apple -- Modern Materials Handling, 11/1/2004

As six sigma and lean manufacturing principles become widely accepted as standard practice, there has been increasing pressure to apply them in the warehouse, too.

It would be wonderful if warehousing operations were as stable and scheduled as their manufacturing counterparts. And, in some instances, they are. I have mentioned before the big benefit of being able to plan tomorrow's work today. Then we have the opportunity to plan the staffing to match a steady workload spread evenly over the day.

A primary tenet of "lean" is eliminating variation. However, many warehousing operations are faced with responding to orders that arrive continuously during the day, and are expected to be out the door before people go home.

Not only are we subjected to the ebbs and flows of incoming orders, but we are also subjected to a changing mix of work content for those orders. Some may be dominated by full cases or pallets, while others have a high piece-picking content. Many may be single line, or single-piece orders. Still others may require value-added services such as gift wrapping, price ticketing and serial number capture. These variations challenge us to plan processes that are efficient for each, and yet can be turned on and off as the activity shifts.

Normally, we use historical data to establish capacity requirements for each separate process and then design the processes and warehouse flows accordingly. If our data is very granular, we can spot extreme peaks in demand. But, planning each process for its most extreme peak leaves us with considerable excess capacity most of the time.

Here are some principles to try to outsmart the problem. Just be careful not to outsmart yourself in the process.

Be cautious of highly automated processes whose efficiency depends on running at full speed. They may not be so efficient when volumes are low, and still have the high capital investment to amortize.

Choose the simplest process for the majority of the orders and absorb the inefficiency for the others.

Create a mini-warehouse, or independent line of flow, for orders that have common characteristics. These might include a small sub-set of the product line, single lines or single units, the same shipping package or the same carrier mode. This may feature a workstation for picking and packing as a single-step process. Or, a separate conveyor line may keep high-volume flow of small cartons off the primary system.

In a conveyorized system, provide a loop, or highway that permits flow from any process to another, and that makes the changes in order process requirements or sequence easier to handle.

Design workstations that have the capability to perform a variety of tasks and locate them so that they are easily accessed from different points in the primary line of flow. These might be configured to support several activities. Cross-train employees so that as the mix of requirements changes, a workstation may be re-assigned to a new mission.

Variability is our challenge. But, we don't have to be its victims. Careful data analysis and a little bit of clever process planning can turn us into heroes.