Warehouse costs order picking

The function of a distribution warehouse is to store products and to fulfill external customer orders typically composed of a large number of order lines (where each order line specifies a quantity of one particular product). The number of different products in a distribution warehouse may be large, while the quantities per order line may be small, which often results in a complex and relatively costly order picking process. Therefore, distribution warehouse are often optimized for cost-efficient order picking. The prominent design criterion is the maximum throughput to be reached at minimum investment and operational costs. 

From this base, the planning team considered altemahves that ranged from simple procedural changes that could be implemented immediately to extensive automated sortation designs that required time and capital. With many considerations, the team recognized that the order-selection process was the most labor-intensive activity performed in the customer s warehouse. As a result, it offered the greatest opportunity for improvement. The team identified and implemented several ideas to reduce the order-picking costs ... 

This chapter presents the main concepts of warehouse management. First, there is a functional description of a typical warehouse operation, with emphasis on order picking because that is where most of the labor costs in a warehouse are incurred. This is followed by a discussion of strategic and tactical factors for warehouse operation, and then a discussion of database considerations for WMS. The last part of the chapter describes how users interact with a WMS and what functions they should expect it to perform. The purpose here is not to describe how the WMS is structured, since that varies with the software vendors, but rather to present a user s viewpoint of the major aspects of the system. 

This chapter focused on managing the warehouse and associated flows in a supply chain as well as on the number of different ways flows from suppliers to users can be organized. It established that effective use of the warehouse to decrease supply chain costs often requires careful design and use of crossdocking as an operational tool. Finally, managing order picking can have a big impact on warehouse turn-around time. This chapter thus discussed how the chain structure, the capacity of transportation, and the coordination of material movement and inventory as well as workers in a warehouse improve the competitiveness of the supply chain. 

Central Distribution Center (CDC) The CDC receives orders for products from stores, picks orders, and delivers cases of products to stores. The CDCs goal is to minimize delivery costs and CDC inventories. The CDC times purchases from manufacturers in large quantities (truckloads or railcar loads) to manage inventory costs at the warehouse. 

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