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Better the devil you know

12 December 2012

Software modelling can help a company assess the risks of warehouse redesign says Carol Chapman of supplier Cirrus Logistics We all know the next couple of years are going to be tough and that it will be those companie

Software modelling can help a company assess the risks of warehouse redesign says Carol Chapman of supplier Cirrus Logistics

We all know the next couple of years are going to be tough and that it will be those companies prepared to innovate and embrace change that are most likely to end up on top. The trouble is innovation and change can be expensive and are almost always risky, while the assumptions - even of the most experienced managers - may no longer be enough to convince the bank to lend the money needed to support development.

For warehouse management, this leads to specific dilemmas.

Clearly, the challenge is to optimise operations, and this means the best layout design and racking arrangements.

But, how do managers test these layouts in warehouses that have not yet been built, or in fully functioning depots without risking disruption to service levels? Furthermore, an apparently optimal layout that seems to unlock every square inch of useable space does not necessarily translate into an optimised operation. This needs to be assessed separately and in its entirety to fully understand the inter-dependencies in complex operational flows that achieve, or hinder, strong warehouse performance.

Increasingly, companies are turning to modelling and simulation technologies to provide them with the answers. At their best, these tools are relatively easy-to-use, require no more than a laptop and offer a visual clarity that makes the design or operational planning issues readily understood.

Class, created by Cirrus Logistics some years ago and now in its 12th generation, has been developed specifically to enable rapid and risk-free decisionmaking by warehouse managers.

When ASDA, for example, used Class to find out if it could increase the capacity of its UK warehouses, it managed to typically improve capacity by about 10% and, in one case, by as much as 40 per cent.

The warehouse layout design module within Class allows managers to design, test and re-design the layout in the virtual world of the computer. According to Peter Deyell of 3PL, Linfox: "We have used Class for at least eight projects and have yet to find a layout design we cannot simulate.We are confident that the software will pay for itself within 12 months." The technology can show nine types of pre-specified racking, from block racking to mobile and live racking. Each type of racking has an associated cost per pallet, enabling users to immediately see not only the volume of SKUs that can be housed in different arrangements, but the related costs of each one.

Belron, one of the world's leading vehicle glass repair and replacement companies, has been impressed by how close to the real thing the Class models have proved to be. Its storage operation was about to move from a warehouse spread across six floors to a potentially much more efficient, single storey building, but the concern was capacity. The company wanted to find out if it needed to spend money on a new mezzanine floor, if the marshalling yard was big enough and whether there was space for a fitting area. Having run Class to establish the answers, Belron had the new warehouse built to replicate the chosen computer model and found that not only did the virtual bear a very close resemblance to reality, the efficiency levels predicted by the model were remarkably accurate.

The global brands conglomerate, PZ Cussons, had operational challenges at the top of its agenda when it used Class to analyse a new warehouse in the planning stages. The operation was complex, involving different sorting activities to handle imported products and then customise them for reexport.

The diversity of goods - from cosmetics to detergents, as well as OTC products requiring specific storage conditions - was considerable, and there were both very fast moving and slow lines. Simulation of the trunking and put away operations showed where the pick face and put-away should be located.

The necessity of an additional shrink-wrap machine was identified to overcome a bottleneck, and shift patterns and MHE resources were tested against the significant weekly variance in throughput in order to minimise inefficient working.

Whatever the specific concern, it is clear that managers must optimise their warehouse space more effectively than ever before, both in terms of the layout and the operations.

Modelling and simulation give insights into the issues in a way that cannot be found in the real world and the evidence is powerful in securing buy-in from everyone involved.