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IENG 471 - Lecture 17

IENG 471 - Lecture 17. Introduction to Order Profiling Major portion courtesy of Dale T. Masel, Ohio University and the 2009 Material Handling Teacher’s Institute. Order Profile. Definition: Order Profiling

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IENG 471 - Lecture 17

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  1. IENG 471 - Lecture 17 Introduction to Order Profiling Major portion courtesy of Dale T. Masel, Ohio University and the 2009 Material Handling Teacher’s Institute IENG 471 Facilities Planning

  2. Order Profile • Definition: Order Profiling • A summary of the important characteristics of the orders that a warehouse needs to fill • Examples of important characteristics • Demand for items  What’s popular? • Quantities ordered  What’s the workload? • Unit loads  What equipment is needed?

  3. Importance of Order Profiling • Provides information about our population, which is what we usually need when we design anything • We don’t design cars for individual drivers • We don’t design clothes for individual wearers • We don’t design warehouses for individual orders • Profile gives us insight on the characteristics of the individuals that comprise the population

  4. Art Determining which characteristics are relevant for a particular situation Turning the characteristics of the order population into an order fulfillment system Requires expertise in warehouse design Science Converting available data into data required for a profile Summarizing the order population from the available data Focus of this presentation Order Profiling as Art & Science

  5. Where to Start: Data Requirements • SKUs • What’s being stored, and possibly how it is being contained • Inventory • How much is being stored • Orders • What’s being processed, and • How much is being processed

  6. Why bother profiling? • Trying to sort through data can be overwhelming • Profiles are ways to organize the data • Don’t want to just rely on averages • Demand would exceed capacity 50% of the time • Value of profiling is that it provides a quantitative description of what a distribution center needs to be designed to handle

  7. Example of a Typical Order

  8. A month’s worth of orders... Profiling gives us a way to make sense out of all this data

  9. Examples of Order Profiles • Item Family Profile • Order quantity • Unit Load • Lines per order • Cube per order

  10. Item Family Profile • Want to find families of SKUs • Family = group of SKUs that can completely fill a large number of orders • Items in a family are stored together and not spread over facility • Reduces travel for pickers to get all items for the order

  11. Orders by Item Family Family – B 2501-4000 Family – C 4001-7000 Family – A 0000-2500

  12. Plotting Item Family Percentages

  13. Information from the Profile • We get a lot of orders for only family A items and only family B items • Items from family C are usually ordered with items from family A or family B—rarely alone • Use this information to group items by family in separate areas • Maximize number of orders that can be filled from a single area • Minimize the size of each area (to keep travel distance small) If room for three aisles, where would you put aisles for A, B, C?

  14. Order Quantity Profile • Look at what unit loads are needed to fill an order • Pallets • Cases • Eaches • A mix of these (progressive dimension system) • Store in quantities to make appropriate unit loads available for picking • Easier for picker to handle • Efficient to pick • Improve picking accuracy

  15. Plotting Order Quantity Percentages

  16. Information from the Profile • Most orders are filled with full cases, so most of the inventory will be stored as cases stacked on a pallet • Storage equipment will be some kind of pallet rack • For less than pallet quantities, different storage equipment is possible, depending on conditions • Pick from an open carton stacked on pallet with rest of full cartons • Store individual cartons on separate shelving or bins

  17. Unit Load Profiling • Look at what unit loads (full or partial) customers order • The unit loads that SKUs are shipped in should be the unit loads you store • Avoids wasted time repacking the SKUs

  18. For SKU 1481 the most-ordered SKU in this example Unit Load 3 units ordered (½ case) 9 units ordered (1½case) 15 units ordered (2½ case) 18 units ordered (3 case) 6 units ordered (1 case) 12 units ordered (2 case)

  19. Plotting Unit Load PercentagesFor a single SKU

  20. Information from the Profile • 50% of orders for this SKU require only full-carton quantities • 6, 12, 18 items • More than 75% of orders require a mix of only full-carton and half-carton quantities • 3, 6, 9, 12, 15, 18 items • Packaging the items in bundles of 3 within the main carton would reduce picking time for orders needing 3, 9 , or 15 items • 1 move to get 3 items

  21. Lines per Order Profile • Each SKU on an order represents a “line” • No. Lines = No. Locations a picker must visit • May need to pick multiple units of each line item • No. Lines ≠ No. Units ordered by a customer

  22. Lines per Order

  23. Plotting Lines per Order Percentages

  24. Information from the Profile • Provides insight on amount of travel involved collecting all of the items for an order • Provides insight on equipment / method for carrying items picked by pickers • Profile also indicates percentage of items that consist of just 1 line • These orders could be packed as they are picked, since items from other zones aren’t needed • May have a dedicated area for packing these orders since they don’t need sortation • (most appropriate when 1 unit of a line is ordered)

  25. Cube per Order Profiling • Cube is used to describe the space in a warehouse • All three dimensions are used for storage, so we’re concerned about volume, not area • Can be… • Amount of space occupied by a unit load • Amount of space available for storage in the racks/shelves

  26. assuming 0.1 ft3/unit for all SKUs Cube per Order 0.1 to 2.5 ft3 2.6 to 5.0 ft3 ≥ 7.6 ft3 5.1 to 7.5 ft3

  27. Plotting Cube per Order Percentages

  28. Information from the Profile • Cube of an order represents size of shipment to the customer • Can affect method used to pack the order • Pallet vs. Carton • Size of carton • May also affect shipping method • Parcel delivery vs. Less-than-Truck Load (LTL)

  29. Item Activity Profile • Item Activity reflects how frequently it’s ordered and picked • Each order for an item represents additional work for warehouse • Travel to storage • Retrieval from storage • Considering Item Activity when assigning a storage location can reduce the amount of work when the item is ordered • Especially for travel

  30. Typical Item Activity

  31. Activity of many SKUs…

  32. Creating the Item Profile • Rank SKUs from most units/week to least • Usually divided into three classes (A, B, C) • A – Fastest movers • Probably 5% – 10% of SKUs • Consider keeping these in a special “Forward Pick Area” • B – Average • Probably 10% - 15% of SKUs • Consider keeping these near front end of aisles • C – Slowest movers • Probably 80% or more of SKUs • Store these in longer travel locations

  33. Demand Profile

  34. Plotting the Demand Profile A

  35. Information from the Profile • Most popular SKUs represent most of demand, but a small portion of total SKUs • Pareto’s Law: 20% of the SKUs account for 80% of the items ordered • We need to do a good job storing and picking these SKUs because they represent most of the work • A large percentage of SKUs (maybe even more than half) represent the smallest category of demand

  36. Applications of the Item Profile • Grouping SKUs into classes for storage • Identifying assignments in Forward and Reserve storage areas • Storage and material handling strategies

  37. Getting Started • Profiling requires data • Need several months, to provide a picture of the long-term situation (seasonality) • Data will probably require preparation • Identify which data fields in the Work Management System (WMS) contain the needed data • May have data values that need to be fixed • Design shouldn’t start until you have a profile that describes your warehouse situation

  38. Data Preparation • Data may not be complete • Empty fields where data wasn’t available or recorded • Data may not be accurate • Invalid SKUs • Negative inventory levels • Need to clean up this information • Fix values where possible • Delete entries if fix isn’t possible • Probably will need to be done manually

  39. What comes next… • Completed profiles give data that is needed for an effective facility design • Amount of space (cube) for storage • Types of storage equipment • Profiles are also used to design operations • Methods for order picking • Equipment for order picking

  40. In Summary Order profiling… • … needs to be done before a warehouse is designed (or redesigned) • … is never complete because the order characteristics change and the warehouse design and management need to be updated to reflect these changes • … if done accurately, yields excellent results and useful information • … if done incorrectly, can produce inaccurate conclusions and lead to bad decisions

  41. Sources for further reading • Warehouse and Distribution Science, John Bartholdi and Steven Hackman (2008). Available on-line at http://www2.isye.gatech.edu/~jjb/wh/ • Facilities Planning, James Tompkins, John White, Yavuz Bozer, and Jose Tanchoco, 3rd Edition (2002) Wiley. • World-Class Warehousing and Material Handling, Edward Frazelle (2001) McGraw-Hill.

  42. Questions & Issues? IENG 471 Facilities Planning

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