Efficiency Improvement of Raw-Materials Warehouse by Designing of Optimal Layout and Storage Location Assignment in a Diaper Manufacturing

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Napattra Na Chiangmai
Akkaranan Pongsathornwiwat


The objective of this research is to design of optimal layout and storage location assignment for warehouse efficiency improvements in a diaper manufacturing. The current problems of this case study are that there are two warehouses where were faced with inefficient operations in term of lower space utilizations. The space utilization of a first warehouse is over the minimum standards about 151%, while facing lower space utilization (17% out of overall available spaces) in the second warehouse. This is caused by the ineffective storage policy that keep only few types of raw materials in the first warehouse. Furthermore, there is unnecessary travel distances of pickers because of inappropriate warehouse layouts, resulting in the excessive costs of production. To overcome these issues, this research was collected the data on SKUs’ picking frequency for reconsidering the warehouse layout and storage relocation. Two models are proposed in this study, namely ABC class-based layout and Storage Location Assignment. Both are analyzed and make a performance comparison for finding the best model that can help improve the better warehouse efficiency. In the class-based model, we applied ABC analysis for finding the classes of SKUs regarding the high, medium and low-frequency and assign the items into the appropriate zones. For another model, we formulated the problem as Storage Location Assignment Problem (SLAC).  The idea is that the fast-moving SKUs should be located close to the I/O stations and the optimal solution, obtained by Open Solver. Our analysis shows that the optimal based-layout has better efficiency than the class-based one. With the new layout, the case can gain benefit of better warehouse efficiency in terms of the traveling distance reduction from 77,592 to 35,760 meters (54%) and the transportation cost reduces by 39%. For the space utilization performance is also significantly improve. The first warehouses can reduce the over utilization problem from 151% to 96%, while increasing the space utilization of the second warehouse up to 99%.

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Na Chiangmai, N., & Pongsathornwiwat, A. . (2022). Efficiency Improvement of Raw-Materials Warehouse by Designing of Optimal Layout and Storage Location Assignment in a Diaper Manufacturing. Thai Industrial Engineering Network Journal, 8(1), 28–38. Retrieved from https://ph02.tci-thaijo.org/index.php/ienj/article/view/245999
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