storage systems carousels and other storage options

8/12/2019 Storage Systems Carousels and Other Storage Options

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Materia l andl ing C lassicsP a p e r s i n t h e c l a s s i c s s e r i e s h a v e a p p e a r e d i n p r e v i o u s p u b l i c a t i o n s o f t h eM a t e r i a l H a n d l i n g I n s t i t u t e a n d a r e a t l e a s t t e n y e a r s o l d . N o n e t h e l e s s t h e i r v a l u ei n c o n t r i b u t i n g t o t h e e v o l u t i o n o f t h e i n d u s t r y a n d t o c u r r e n t p r a c t i c e i s v i e w e dt o b e t i m e l e s s e v e n t h o u g h i n m a n y c a s e s t h e a u t h o r s a n d c o m p a n i e s c r e d i t e d a r en o l o n g e r i n t h e i n d u s t r y .

STORAGE SYSTEMS

CAROUSELS AND OTHER STORAGE OPTIONS

1984 NAVSUP

CHARLES V. (CHUCK) JAMIESON

WHITE STORAGE AND RETRIEVAL SYSTEMS INC.NOVEMBER 5-9, 1984

Looking at the subject title of this presentation, "Carousels and other Storage Options", along

with the other titles in the NAVSUP program which cover many additional storage and retrievalsystems, we could ask why? Why is there a need for so many storage and retrieval options? One

might think it only makes it more difficult to choose the proper equipment and causes confusion.

Unit-Loads, Mini-Loads, Man Aboard, Vertical Carousels, Horizontal Carousels, Moving Aisles,Flow Racks, Conventional Racks and Bins, etc. The list goes on and on.

Having spent more than 20 years visiting hundreds, perhaps thousands, of warehouses,

stockrooms, stores 'areas for distribution or manufacturing, one picture becomes veryclear...rarely, if ever, do we find a stock keeping operation where the characteristics, description

and throughput of the materials are the same throughout. For this reason, we have long held the

view that there is no one storage and retrieval concept that is best for all the varied materials tobe handled. The astute designer should never view an area and say "How can I get all materials

in a single machine?" The proper approach is "How can I identify those materials that are bestsuited and applicable to various storage and retrieval concepts?"

All of the storage and retrieval concepts mentioned work well; they all have histories ofsuccessful operation and proven benefit. Yet, we can find systems of every type that did not

succeed. When we look at these failures, we find it was not that the product did not work.

Machine failure is rarely the problem. Misapplication is the primary cause of most systemfailures.


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If we want to be smart and design the best system, we need to analyze and categorize all the

various materials to be handled. We should determine:

PALLET LOADS, CASE LOADS, LOOSE OR SPLIT CASE LOADS SIZE ANDWEIGHT

FREQUENCY OF REPLENISHMENT FREQUENCY OF CALL: It is worth noting that this differs from usage. Frequency of call or

hits is concerned with how often we pick a given part; not how many.

An historic record, in descending order, listing items by how often they are called, is highly

valuable. There is probably no other single piece of information that can be used in so manyways when designing an efficient storage and retrieval system.

MIN-MAX INVENTORY LEVEL AVERAGE LINE ITEMS/ORDER AVERAGE QUANTITY/LINE ITEM TOTAL AVERAGE THROUGHPUT SURGE

REQUIREMENTS

When all the above information is collected, it must be weighed and considered within the

framework of:

A. AVAILABLE METHODS AND PROCEDURES:

Can we random stock; is a dynamic location file available? Is alphanumerical or predetermined

stock location dictated? Can picks be sequenced; can we batch pick, etc.?

B. PHYSICAL ENVIRONMENT:

Available building space, column locations, ceiling height, potential obstructions and powerservices.

C. INFORMATION SUPPORT SYSTEM:

Paper and clip boards, batch computer or real time capability.

When all these factors are put together and we consider how they impact on one another, the

result can be a very complex equation. When we accumulate, analyze and categorize all the

information, it becomes very clear why we need a variety of storage and retrieval products to

select. The important point is that we should not try to apply a simple, single brush solution to acomplex materials mix. If all the variables are stuffed into a single product, the end result will be

less than optimum. Improvement and benefits will probably be gained. However, was it the bestsolution, yielding the maximum benefit? A multi-product system, utilizing different storage and

retrieval devices, each applied to a specific category of materials, will almost always provide a

better cost/benefit ratio than the single product solution.


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The following scenario is a composite of real situations we have encountered. It is presented as a

single case to illustrate, as an example, how the process of questions, answers and analysis canlead to equipment selection. We emphasize the application of our own products because we have

the greatest exposure and experience with them. The basic process, however, could be similar for

any storage and retrieval equipment evaluation.

Their business was the manufacturing of valves. Parts ranged from small sub-components, "0"

rings and seals, to large industrial valves weighing 50 lbs. and occupying a 2' x 2' x 1.5' carton.An established and profitable company, their facilities were clean and modern. Manufacturing

equipment was old, but extremely well maintained and by no means obsolete. They

manufactured approximately 6,000 finished goods S.K.U.'s. Manufacturing was for stock basedon history and forecast. Customer orders were filled from stock.

Since machine set up time was extensive, their runs or lots were large, usually sized to produce 6

months of inventory. Their manufacturing environment was one of queuing raw materials,building product, and then queuing finished product in wire caged pallets, all at the work station.

Movement of finished product was in large slugs. While their equipment was conducive to large

lot production, a more important reason was that they had always operated this way. Therefore,

their layout was arranged accordingly. Managers, supervisors and workers were all familiar andcomfortable with an established method of production that served them well.

The stock room consisted of three primary types of storage:

1. Plastic totes, stored in steel bins, arranged back to back with aisles. This area storedapproximately 3,000 small sub-components. About 2/3 of the quantities pulled from thisarea supported in-house manufacturing. The remaining 1/3 was for customer orders.

2. Wire caged pallets, stacked three high on racks. This area stored 1,500 small-to-mediumsized (all hand manage- able) valves, fittings and connectors. All quantities picked were

for customer orders.

3. Cartons stored in steel back to back bins with aisles. Each carton contained a single unit

finished goods S.K.U. Cartons ranged in weight from 5 to 50 lbs. and in size from 2 cu. ft.to 6 cu. ft.

With the preceding as background, the first question was, "What is (are) the problem(s)"? Theanswer was, "Our customer orders are backing up and we're not maintaining our shipping

schedule". At this point, we could have assumed, especially after observing their stockroom, that

a storage and retrieval system was needed. This would have been premature and, in fact, could

possibly have led us down the wrong path. So far, all we had to go on was the stated problem by

one person in a large company. Even if others concurred, as they later did, we still didn't know:

How long had the problem existed? Why did it become one? The important point is we just didnot have enough information yet. We may have known where the problem was manifesting

itself, but we did not know the cause. If we assume a storage and retrieval system is the correct

fix for meeting shipping schedules, without knowing the roots of the problem, we may end up


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with an expensive symptomatic cure. If this is true, a new problem will only resurface

somewhere else.

The next series of questions provided us with a better view of the problem.

We learned:

A. Awareness of the problem started two years ago and was increasing steadily.B. Units shipped and dollar volume during this period had grown, but not enough to account

for the current problem.

C. Inventory levels had grown steadily over two years, yet few S.K.U.'s had been added tothe product line. Space was not a problem since they had vertical and I horizontal

expansion available. There hadnot beena need to create more storage locations.

However, the amount of material within existing totes and pallets

had increased.D. Cash flow and profits had been declining.

E. Stockroom staff was increased by two people.

These answers still did not uncover the root cause. They did, however, give us a strong cluetoward where to look next. We then worked with the data processing group, reviewing computer

printouts from the past two years. Something had to have changed. It wasn't growth in volume,S.K.U. expansion or reduced personnel. What was it? The computer records gave us an answer.

Not the answer, but an answer. Two factors almost jumped off the printouts at us.

1. The number of customer orders had increased over 4 times.2. The average units shipped per order had declined by a factor of four.

Over the past few years, they were filling four times as many (smaller) orders, yet shipping the

same volume. Their customers were ordering more often, in smaller amounts, demanding shorter

lead times. We now clearly understood why the problem had developed. We also knew enoughto say a storage and retrieval system could be a viable solution. However, what other solutions

should be considered, and which are the best? Like peeling away the layers of an onion, we had

to go further. We now knew that order sizes and frequency had changed. We needed tounderstand why. This answer required a knowledge of the outside world. What was the mood

and attitude of American industry? Why had their customer demands changed?

Was it a change that was unique to their customers or part of a shift in industry attitude? Having

one's fingers on the pulse of the marketplace was essential to understanding the true depth of the

problem. American industry was moving persistently in new directions. The old tripod of growth

-more space, more people and more inventory -was being rapidly abandoned. New concepts

were gaining momentum: flexible work cells, just-in-time arrival, work-in-process systems,reducing the material pipeline, zero inventory, etc. The pursuit of these philosophies and

methodologies all had a common target: reduction of inventory overhead. The enormous impactof the computer, especially as it shifted from batch to real time, was making it more and more

possible for companies to achieve these objectives. Those companies who today implement and

achieve just-in-time arrival do so in an American marketplace that, as a whole, is not geared forjust-in-time. Therefore, the problems of inventory and storage are shifting to the vendor,


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supplier and distributors. The root cause we were searching for was that their customers, in an

effort to reduce their own inventory overhead, had laid the burden directly on them.

Now, for the first time we felt we had enough information to intelligently consider and selectoptions. Following are the principle choices this company considered:

1. VOLUME DISCOUNT STRUCTURE

This involved penalizing the small purchases and rewarding the large purchases. This

option was rejected as self-serving and counter-productive. Given the realities ofcompetition, their customers would simply go elsewhere.

2. CHANGE IN MANUFACTURING PHILOSOPHY

This option considered changing from a manufacture- for-stock to a manufacture-for-

order philosophy. A manufacture-for-order production system would require small lots,

frequent set up changes and quick response. While feasible and even desirable, the costwas prohibitive. Totally new, modern production equipment and anew layout would be

required. An extensive work-in-process material handling system with elaboratecomputer control and tracking would be needed. In addition, every person in the

company would have to be totally retrained. One important element of this option was

salvaged, however. As old equipment is replaced, new equipment would be selected with

this objective in mind. They could, therefore, evolve to a partial, if not total,manufacture-for-order system.

3. REDUCE LOT SIZES WITH EXISTING MANUFACTURING SYSTEM

It was determined that lot sizes could be reduced by 20-25% using existing productionequipment and methods. Implementing this option would have a direct effect on

reducing inventory levels.

4. IMPLEMENT AN IMPROVED STORAGE AND RETRIEVAL SYSTEM

True, we could have done this back at the beginning. Now, however, we are on moresolid ground. Our in- depth understanding of the problem has allowed us to consider

many options and apply several coordinated steps.

Following is a summary of the action to be taken:

1. As new production equipment is acquired and methods adapted, it would be done with a

view toward small lots, quick response and moving to a "manufacture-for order" system.

2. Existing lot sizes would be reduced by 20-25% in order to keep inventory levels lower.


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3. Implement a storage and retrieval system that would fill orders faster, and shorten lead-

time.

THE STORAGE & RETRIEVAL SYSTEM

First, let us define a storage and retrieval system. The primary elements in proper order are:

1. Methods and procedures2. The storage and retrieval device(s)

In this case, had we specified and sized the device(s) without first looking at their methods, we

would have perpetuated much inefficiency. AS/RS products will not improve a poor procedure.To automate without first streamlining procedures would only result in automated inefficiencies.

So, the first thing we did was look at each of their three types of storage for improvement in

methods and procedures.

All three areas were stocked in part number sequence. Utilization of available cubic space was

poor. Many empty slots existed because the material dedicated to these locations was not, andwould not be there for long periods of time. All totes, pallets, bins and racks were fixed and rigid

in their spacing, resulting in a lot of "air" being stored. Part locations had no relationship to

activity. Often the fastest moving parts were at the far end of the stockroom, and the slowest

moving parts at the nearest point.

In the tote storage area, there was a tote for each S.K.U. Utilization within the totes was less than

40% on the average. In the pallet area, we observed pickers pulling one to twelve units from each

pallet. The pickers had to travel 450 linear feet to obtain access to the 1,500 S.K.U.'s in pallets.

We recommended the following changes in procedures:

1. RANDOM STORAGEThis would yield two principle benefits. The first was to maximize the utilization of availablecubic storage space. The second was to allow materials to be located by activity; the most

frequently called materials in the most accessible locations and the less frequently called

materials in the least accessible locations. To implement this, we had first determined that

existing computer capability could provide:

a. Updated listing of S.K.U.s by activity.b. Dynamic location file.c. Picking list by locations on order to maintain physical sequence of picks.


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2. COMPARTMENTIZE TOTESThe 3,000 totes were reduced to under 2,000 by combining S.K.U.'s (maximum of 4 pertote) where appropriate.

Create a forward pick area for the 1,500 S.K.U.'s in pallets. A two-week supply of eachS.K.U., in the pallets, was moved into the tote area. All picks would be made from the

totes. The balance of material was maintained in the pallets, which now provided

replenishment for the forward tote area. This move now exposed the picker to all 1,500S.K.U's within 125 linear feet, as compared to 450 linear feet of travel.

The carton storage area was relatively small with low throughput. We recommended itremain this way.

Now, we were ready to look at the storage and retrieval device(s). We then asked: "Do we need

it"? Originally, the stockroom was a manual (bin and rack) system using inefficient methods.Having reached agreement on new procedures, we now had to evaluate a manual system using

efficient methods. It was known that they had been averaging under 20-line items/man hour. The

procedural changes could be expected to improve pick rates to 35-40-line items/man hour. The

application of storage and retrieval equipment could improve the rates to the 100-line items/manhour level. (The reader should understand that pick rates are highly variable. The numbers used

herein were based on established performance in similar environments with similar materials).Several types of storage and retrieval equipment were considered. No one had a clear advantage

over the others. On balance, however, our proposal to use horizontal carousels was accepted. In

this case, the principle reasons were:

Flexibility

As it later developed, the carousel system was comprised of six independently operating

machines. This provided high overall throughput and flexible operating modes. Other storage

and retrieval equipment escalated the cost dramatically when providing six independentmachines.

Modularity

The relative ease and low cost to expand, reconfigure or relocate carousels was a distinct

advantage.

Upgrade

Standard control packages providing material tracking and management, in real time, were

available and could easily be added in the future.Cost

In-general, and especially in this case, the cost/ benefit ratio was highly favorable to horizontal

carousels. The carousels would be the primary forward pick area for all active S.K.U.'s in totes.

We had to accommodate the original tote area, now condensed from 3,000 to 2,000 totes, plus1,500 totes from the pallet area. Of these 3,500 totes, 1,000 were determined to be very slow


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movers. We retained one back to back row of bins for the slowest movers. The remaining 2,500

totes, with utilization factored in, would fit into 300 carousel bins 2' wide x 18" deep x 10' high.The 300 bins were then divided into six 50-bin carousels. This determination was based on

throughput requirements. We knew that total throughput demand increased steadily towards the

end of each month to a required level of 250 line items/system hour.

We chose to establish three picking stations, each consisting of two 50-bin carousels. Two

carousels per operator will produce optimum throughput. In this case, a realistic and obtainablethroughput was three pickers at 100-line items/man hour, providing 300-line items/ system hour.

We also knew that during surge periods, we could operate with six pickers (one per carousel) at

85-line items/man hour, providing 510-line items/ system hour. We call that FLEXIBILITY.

The 2,500 S.K.U.'s, having been designated for the carousels, were then broken into three

categories by activity (frequency of call): most active, moderately active and least active. Theleast active were assigned to the top 3 feet of the carousel's 10-foot bins and distributed evenly in

the six carousels. Historic records showed the pickers would need to access the upper levels via a

fixed ladder, only one in every twenty picks. Medium movers were assigned to the lower levels

of the bins and most active to the prime center of the bins. All were evenly distributed in the sixcarousels; thus assuring balanced activity for all carousels.

The end system consisted of the following:

1. Standard bins for small, low activity carton storage area.2. Standard bins for slow moving S.K.U.s in totes.3. Wire caged pallets, deactivated as a result of the creation of a forward pick zone, now

providing replenishment only.

4. Six 50 bin carousels for forward parts pocking, with equal distribution of S.K.U.s byactivity.

SUMMARY

1. Identify the cause of a problem(s). Attack the core, not the symptom.2. Collect, analyze and categorize all available information. Do not treat all materials and

processes the same.

3. Consider all possible solutions and then select the best ones.4. Improve methods and procedures first. Do not automate inefficiencies. Remember that

equipment will not solve a poor procedure problem, but good procedures will enhance

equipment performance.

5. After applying all possible non-equipment improvements, then evaluate equipmentneeds.

6. Select the best equipment by category; don't apply a single brush to a complex mix.

7. Size the equipment first to satisfy overall static storage capacity, then define and specifythe system required for overall and balanced operation and throughput.


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In this scenario, were the solutions implemented the best? That depends on definition. The

unqualified "best" solution probably was a total change to a "manufacture-for-order" system. Thesolutions that were adapted, however, were practical, affordable, justifiable and realistic. In this

context, the solutions selected were the best . . . "THE BEST" it's referred to and often forgotten

the point of diminishing return.

storage systems carousels and other storage options

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