Designing a New Warehouse to Improve Space Utilization and Handling Efficiency: A Case Study of a Production Warehouse

Abstract

Title: Designing a new warehouse to improve space utilization and handling efficiency: A case study of a production warehouse
Authors: Emil Niklasson, Erik Ramström
Supervisor: Joakim Kembro, Department of Industrial Management and Logistics, Faculty of Engineering, Lund University
Problem description: The focus on warehousing has grown in the industry during the 21st century to increase the competitive advantage of companies. Despite this, the development of the coil warehouse at Alfa Laval has received little focus during the last decades. This is in contrast to Alfa Laval's goal of following global industrial development.
Purpose: To close this gap, the purpose of the thesis is to provide two recommendations of how the production warehouse of coils can be designed to increase space utilization and make the handling process more efficient.
Objectives: The recommendations to Alfa Laval are provided through fulfilling the objectives of the thesis. The first objective is to describe the current situation to get an understanding of the processes needed and which changes that are suitable. The second objective is to identify the challenges with storage of coils to know what the new solution should be able to solve. The third objective is to identify the contextual factors to take the unchangeable parameters into account. The fourth and final objective is to identify suitable configurational elements which the final recommendations will be based on.
Methodology: The method used in this thesis is the case study which consists of analyzing the problem in the context of a case company, Alfa Laval. The case study began with a literature review to understand what previously had been written about warehousing. Following this, the current situation at Alfa Laval was mapped through observations and interviews of employees as well as data extraction from information systems. Finally, the collected data was analyzed to identify the suitable configurational elements which were combined into two recommendations.
Conclusion: The result of the thesis is two recommendations which both decrease the majority of the identified challenges. Both of the recommendations have the same changes in the operations with a movement of the quality inspection and unpackaging from the picking phase to the receiving phase, to make it possible to pick directly to the production, and with an introduction of more structured picking and storage policies. The storage of the first recommendation is to use cantilever racks and to store the coils without pallets. The second recommendation is to automate the picking and put-away process through installation of an overhead crane with the coils stacked on the ground without aisles.

Popular Abstract

Catching up with warehouse development: The designing of a new coil warehouse
The storage of goods is not something fancy which easily draws the attention of management. At a first glance it might look simple and insignificant, but behind every well-designed warehouse hides great complexity. To understand what makes it complex and how to handle it is essential when designing a new warehouse.
Since the competition between companies has become tougher and the difference between products is smaller the service and reliability has become more important. To increase the performance of this new area, a well-designed warehouse is a necessity. The journey many companies take from having the warehouse as a burden to an asset will be followed through Alfa Laval. Alfa Laval has developed their products to be world leading but is lagging behind in the warehouse development. The purpose of the report was to help them start with the transformation of their coil warehouse.
Through interviews with stakeholders, observation of the warehouse, and collection of raw data, the current situation was mapped. This made it possible to identify the challenges associated with the current setup. These were largely related to double-handling, unnecessary touchpoints, and an inadequate layout. Through the mapping it was also possible to identify the contextual factors, which could not be changed and had to be adapted to. These were mainly related to the product characteristics of the coils as well as the volume and demand flows.
The analysis of the challenges and contextual factors resulted in changes to the operations, where processes were moved, and unnecessary touch points removed. This reduced the double- handling and made the handling processes more efficient. The analysis also resulted in two recommendations for the new design and resources which increased the space utilization of the warehouse. The recommendations consisted of one manual and one automated solution, with both including the implementation of a WMS.
For Alfa Laval, the report has provided an opportunity to align the warehouse development with the overall progress of the company. In an academic sense, the report can be used as a guide on how to design a new warehouse. This includes which factors that are important to consider in the specific context, how the layout should be depending on the situation, and the need of complexity. The report is also confirming the importance of the contextual factors which have been brought up in other articles.
Emil Niklasson and Erik Ramström
Master Thesis for M.Sc. in Mechanical Engineering, Division of Engineering Logistics Faculty of Engineering, Department of Industrial Management and Logistics
May 2021

• author: Ramström, Erik and Niklasson, Emil
• supervisor: Joakim Kembro
• organization: Engineering Logistics
• course: MTTM05 20211
• year: 2021
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Warehousing, warehouse design, production warehouse, contextual factors, space utilization
• report number: 5958
• language: English
• id: 9061851
• date added to LUP: 2021-07-26 10:49:28
• date last changed: 2021-07-26 10:49:28