Reconfiguring a Unit-Load Finished-Goods Warehouse

Abstract

Title:
Reconfiguring a Unit-Load Finished-Goods Warehouse

Authors:
Jakob Bjarke & Oliver Elftonsson

Supervisor:
Joakim Kembro, Department of Industrial Management and Logistics, Faculty of Engineering, Lund University

Problem formulation:
Since moving, Alfdex has experienced increased demand while the Finished Goods Warehouse (FGW) has remained unchanged. This has caused challenges such as insufficient capacity, double handling, operational inefficiency, and inefficiency in maintaining First-In-First-Out (FIFO).

Purpose:
The purpose of the thesis is to propose a complete reconfiguration for
the FGW at Alfdex.

Research objectives:
RO1: Understand how warehouse configuration affects performance.
RO2: Investigate the current state of the FGW to identify wastes, contextual factors and requirements for the new configuration.
RO3: Design a new configuration for the FGW and evaluate the expected performance.

Methodology:
The study uses a design science approach. The methodological framework outlines the thesis process, including key elements such as literature review, external company visits and data analysis. The analytical framework summarizes the theoretical background, covering the contingency approach, the warehouse configuration framework,
and analytical tools. These frameworks are combined in the thesis framework, highlighting important methodological elements.

Findings:
The current state was thoroughly investigated. Divided into five categories, 16 design propositions were formed. The propositions and their implications for configuration elements were detailed. Combining the design propositions generated a new configuration.

Conclusion:
The new configuration fulfills the requirements and improves key performance indicators. Capacity increases, time for daily operations is nearly halved and system support that ensures FIFO is introduced. The proposed configuration received positive feedback from Alfdex employees at a validation workshop. Thus, the purpose to propose a complete reconfiguration for the FGW at Alfdex is fulfilled.

Popular Abstract

Reconfiguring an FGW to Improve Operational Efficiency

In the face of growing demand Alfdex’s Finished Goods Warehouse (FGW) has
struggled with both the absence of space and utilizing the space it has. This thesis
introduces an original design that creates room for a new production area, cutting
operation times, improving the working environment, and increasing digitalization.

To achieve these improvements, the purpose of the thesis was to design a new configuration. A warehouse configuration is the combination of operations, design, and resources. The configuration elements have to be selected under consideration of specific contextual factors, to ensure efficient operations. That is why the design science methodology was applied, to develop an artifact, in this case, a new configuration.

The current situation was investigated to map the contextual factors and find areas of improvement. Retrieved data consisted of (i) observations of Alfdex’s FGW and operations, (ii) data from Alfdex’s business system, (iii) interviews with operators, and (iv) three external company visits. The FGW at Alfdex, a company located in Landskrona and specializing in crankcase gas separators for diesel engines, experienced a set of issues. These include limited capacity, inefficient picking, a poor working environment, and sparse digitalization. Many of these issues arise from using a First-In-First-Out (FIFO) policy without information system support to identify the oldest pallets, causing unnecessary labor.

Several tools were used to reach the new configuration. The activity profiling tools - including ABC-analysis and Heatmap - were used to investigate the contextual factors. On the other hand, the lean tools - consisting of Value Stream Map, Spaghetti Diagram, and Muda Matrix - were used to identify current problems and respective waste.

The analysis led to the presentation of a new configuration that optimizes the use of available space by implementing single-deep racks throughout the warehouse. By using the ERP system to create specific pallet positions ”Pallet flag picking”, an operation consisting of manually checking the dates of pallets to follow FIFO, is no longer required. These changes had a substantial impact on performance. The new design nearly halved the time spent each day on daily operations and increased the warehouse’s capacity while at the same time improving
availability drastically.

Alfdex reacted positively to the reconfiguration. During a validation workshop towards the end of the study, overwhelmingly positive feedback on the validity of data, analysis, and solution was received. This emphasized the practical benefits of the recommended reconfiguration. It can also be generalized for other warehouses operating under similar circumstances. However, the specific contextual factors should never be neglected. This project advanced the field of efficient warehouse design and showcased the significant potential of optimized logistics.

This popular scientific summary is derived from the master thesis: Reconfiguring a Unit-Load Finished - Goods Warehouse, written by Jakob Bjarke and Oliver Elftonsson (2024).

• author: Bjarke, Jakob and Elftonsson, Oliver
• supervisor: Joakim Kembro
• organization: Engineering Logistics; Production Management
• course: MTTM05 20241
• year: 2024
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Warehousing, Warehouse Configuration, Contingency Approach, Contextual Factors, Design Science, CAMO.
• other publication id: 6024
• language: English
• id: 9164033
• date added to LUP: 2024-09-04 13:51:00
• date last changed: 2024-09-04 13:51:00