Warehouse Layout Optimization

with FlexSim Simulation

BIG Planning & Logistics HQ

Agenda

BIG Warehouse Strategic Framework

BIG Warehouse Layout Principles

Simulation Concepts

Practical Results in BIG Countries (Brazil and Germany)

Summary of Improvement Results

FlexSim Warehouse Layout Simulation Tool

Toolkit Available for Implementation

BIG Warehouse Strategic Framework

Strategic Objectives:

• Improve Warehouse Safety

• Increase Warehouse Density /

throughput

• Increase Warehouse Productivity

Warehouse

Density

Warehouse Layout

& Labor Planning

Performance

Management Execution

(PME)

Warehouse

Building local

Capabilities

Increase number of

cases per layer and

layers per pallet

Have right warehouse layout,

equipments, capacity & right

number of people per

function

PME: clear roles and

responsibilities for each

warehouse function

Str

ate

gic

Blo

cks

Fo

cu

s

To

ols

TOPS FlexSim Warehouse

Layout Simulation Tool

BIG Labor Planning &

Smart Scheduling Tool

BIG Warehouse

Training Workshop

Be

ne

fits

Increase warehouse

density & reduce

handling, distribution

and transportation

costs

Guarantee warehouse

capacity to cope with

growth , increase

productivity, throughput

and reduce cost per case

PME: change management

process for measuring and

managing employee

engagement in all

warehouse functions.

Improve local warehouse

capability and

knowledge about IDS,

Warehouse Operations

and Mixed Pallet

Makeup Area

PME: actionable metrics,

managed at the floor level,

visual boards & 10 minute

standup meetings

PME: labor planning and

scheduling tools, goal

setting, and CIP

• Reduce Warehouse Cost per Case

• Improve Service (Fill Rate)

• IT Tools Aligned with Program Scale

COE: Leveraging

successful practices and

integrated tools and

processes

Warehouse

Automation/WMS

High density rapid deep

lane storage: 2X

racking

High speed pallet

staging & mixed pallet

building

Business case based

on key factors: density,

Speed,

labor costs, and

Inventory Deployment

Strategies

Vertique, Swisslog,

Westvalia, Activ, NKF

BIG Warehouse Layout Principles Setting the right warehouse layout is one of the most important enablers to achieve safety, high

labor and material handling equipment productivity and efficiency.

--- Principles for an Efficient Warehouse Layout ---

Safety should be consider in the warehouse layout design

Storage plan should be based on ABC curve. High turnover

Items should be located near the loading area. Slow movers

items should be stored vertically high and fast movers low

Items often received, ordered or manufactured together

should be located near each other

Adequate storage height to maximize capacity and in

compliance with local regulations.

Respect stacking height of each package. Floor stacking is

recommended for high turn products and case flow rack for

“C” items in the picking area

Adequate aisle spacing (9 FT for pallet jacks, replenishment

aisles 12.5 for single and 15 for double) and should be

visually identified in the floor to minimize congestion

Compact picking area to minimize distances traveled by

picking personnel. Pick aisles should be perpendicular to the

loading area

Simulation Concepts

“…Simulation is the modeling of a process or a system in such a way that the model mimics the

response of the actual system to operational events that take place over time..”

Warehouse Simulation Process Flow

Accounts for variability in warehouse

operation

Is versatile enough to model different

kinds of layouts and warehouse

functions

Provides information on multiple

performance measures

Forces attention to detail in the design

phase (data consistency)

Captures system interdependencies

(e.g. production lines throughput)

Shows operational behavior over time

Runs in compressed, real or even

delayed time

Data

Gathering

Data

Validation

Initial

Modeling

Scenarios

Simulation

Results

Evaluation

Benefits of Simulation Analysis

Practical Results in BIG: Brazil Norsa Layout Analysis Previous Baseline Layout for Salvador Plant

Warehouse Capacity (pallets)

REQUIRED 2010

7.541

CURRENT AVAILABLE

4.842

LOADING POSITIONS

REQUIRED

6

AVAILABLE

6

PICKING

Picking area

255

Practical Results in BIG: Brazil Norsa Layout Analysis Proposed New Layout for Salvador plant

Practical Results in BIG: Brazil Norsa Layout Analysis

WAREHOUSE CAPACITY (pallets)

REQUIRED (DEC 2014)

11.107

AVAILABLE

11.350

LOADING POSITIONS

Distributors/ Transfer

8

Delivery

16

PICKING POSITIONS

Picking

183

Push-back + Dynamic

372

Flow Rack

86

Main corridor with 5 m and secondary corridor with 4 m

Loading area outside the warehouse. (Expand roof to cover the loading area)

Drive in/blocked for A items, Drive in/blocked for B items, push-back/rack pallets for C

Picking Area in “U” divided in Returnable and Non returnable using a push-back to speed up

replenishment process

Case flow rack for slow mover items

Proposed New Layout: Improvement from 4.842 to 11.350 pallets – 134%

Practical Results in BIG: Germany FFB Layout Analysis Previous Baseline Layout

WAREHOUSE CAPACITY (EURO-PALLETS)

AVAILABLE

21,250

LOAD POSITIONS

PICKING AREA

AVAILABLE

976

AVAILABLE

8

Zone Current aspects

Loading Two loading areas

Storage pallets in Loading areas Horizontal loading area

Storage Mobile single pallet racking for B and C

Floor Stacking for A Items More than 20 pallet position length per row

Picking Picking in Line inside Live Pallet Racking (B and C Items)

Single/Mobile Pallet Racking for C Items

Picking on floor positions

Single live pallets positions

Practical Results in BIG: Germany FFB Layout Analysis Improvement Opportunities Identified

Major objective : Increase warehouse capacity and throughput

Areas of opportunity :

- Storage area:

• Review the best combination of storage structures and equipment

• Evaluate current row length

- Loading area:

• Evaluate breakdown walls

• Consolidate current truck load tunnels

• Change load direction (backload versus sideload)

• Evaluate staging area location and sizing

- Picking area:

• Review picking area flow and configuration

• Evaluate best storage structures to minimize footprint

• Evaluate best deep storage level

Practical Results in BIG: Germany FFB Layout Analysis New Warehouse Layout: Improvement from 21.250 to 27.932 – 31%

WAREHOUSE CAPACITY – 2.012 (EURO-PALLETS)

REQUIRED

27,718

AVAILABLE

27,932

LOAD POSITIONS

FUTURE LAYOUT

10

PICKING POSITIONS

FUTURE LAYOUT

806

STAGE POSITIONS

FUTURE LAYOUT

327

Item Changes

A

Include 2 load positions and staging areas focused on

full pallets loads (NR-delivery to CW customers) -

Needed to break down the walls to have outsides lane

(outside of the storage area)

B Maximum 12 pallet position length per row (A items)

C Include case flow racks for slow movers C items

D 1st floor – Live Pallet Rack and 2nd and 3rd floor -

Pushback racks for C items (4 deep rack)

Ite

m Changes

E Pushback racks for C items (2 deep rack)

F One new gate to access the loading area

G Include 4 load positions and stages areas focused on

Forwarders

Practical Results in BIG: Germany FFB Layout Analysis Pictures of New Warehouse Layout

Backloading Area Old loading Area

New loading area New gate to loading area

Case flow rack Case flow rack

Live pallet rack Tunnel

Case flow rack

Practical Results in BIG: Germany FFB Layout Analysis Pictures of New Warehouse Layout

Practical Results in BIG: Germany Cologne Identified Improvement in both Density and Productivity

Summary of Improvement Results

Support our strategy for lean and flexible network design by maximizing asset utilization

of our production warehouse locations allowing increased storage and throughput

velocity

Increase warehouse density (cases per m2) on average by more than 30%. It is a key

enabler to implement different IDS strategies (cross docking, fast flow, etc.)

Develop warehouse people capability on how to design warehouse layouts inside BIG

Reduce operational bottlenecks and inefficiencies inside the warehouse, increasing

total warehouse productivity by 8 – 13%

Guarantee storage and operational capacity to cope with sales demand growth for

next 3 years. Reduce outside storage expenses (temporary warehouses due to lack of

space)

Improve safety – Reduce accident risks

Reduce truck turnaround time for transportation operation due to right number and

position of loading docks at production warehouse and distribution centers

FlexSim Warehouse Layout Simulation Tool Develop BIG Warehouse Layout Simulation Tool that will allow each country to perform warehouse

optimization analysis for all their warehouses to increase warehouse density and throughput.

Customized and standard approach to perform warehouse analysis inside BIG that

significantly reduces complexity and length of time it takes to complete the initiative

Develop local SME capabilities in analyzing and executing a warehouse layout optimization

Significantly reduce cost and provide low cost replication capability that allows unlimited

use to perform analysis in multiple locations

Pre-defined successful practices already embedded inside the tool

Benefits of BIG Simulation Tool:

Upload your current CAD drawing

3D view of simulation execution

Simulate 3 years forecast growth

Design all warehouse operational processes

like receiving, putaway, truck loading,

picking, staging, etc.

Different types of rackings (e.g. Single rack,

dual putaway and retrieval, push back, case

flow rack, etc.)

Automatic or user-defined SKU slotting

Auto-populate inventory capability

FlexSim Warehouse Layout Simulation Tool Key Functionalities:

Labor group definition and different break

patterns

Simulate Layer picking operation

Different types of material handling

equipments (e.g double, triple and quads

forklifts)

Simulate different inventory policies

Multiple scenario analysis

Comprehensive and flexible KPI dashboard

FlexSim Warehouse Layout Simulation Tool

VIDEO with FlexSim Overview

FlexSim Warehouse Layout Simulation Tool Robust Toolkit Materials Available for Implementation in BIG Countries

One Page Summary BIG Whse Layout Guideline Data Gathering Template

Reading Materials Face to Face Workshop Detailed On line Help