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Automated techniques move into the warehouse
Automated techniques move into the warehouse by JOHN R. KELLY How a warehouse is run and the goods it contains are distributed will become of increasing concern to the DP manager for the high costs of these operations is forcing companies to consider applying some measure of computer control and automation. . °
hat exactly is the function of a arehouse? It is, perhaps, pruent to obtain a clear answer to this question before considering how the control of this function can best be mana g e d - with or without the full panoply of electronic aids. Without having a clear idea of what the role of a warehouse is and how it is changing as a result of a variety of exogenous pressures, it is clearly fruitless to discuss how warehouse systems can be controlled and, indeed, oprimised. John R. Kelly is a director of Freight Software Systems and managing director of Davies and Robson (Southern) distribution consultants.
20
A warehouse is basically a buffer stock which stands between production and the market place. In general, production favours long runs, whilst the demand from sales is erratic and in smaller quantities than the runs at which it is economic to produce the goods. Thus the warehouse function can be divided into the following roles: 1) To permit economic production runs. 2) To have readily available all items on the current stock list. 3) To provide a predetermined level of buffer stock in the event of an interruption in production or an unexpected surge in demand. 4) T o conform with fmmacial objectives to minimise stockholding costs. The existence of regional warehouses or depots is normally only relevant to item 2, that is, to provide a more rapid service for orders than could be achieved by a single central warehouse, or perhaps to balance trunkingflwarehouse costs.
It is not difficult to appreciate that the pressures and demands from produc-
tion, sales and finance conflict. Production want long, uninterrupted runs, which means that the finite space in a warehouse is not occupied with a balmaced stock corresponding with sales patterns, mad that certain products may be out of stock. Sales are generally not too worried about actual stock levels provided all products are available and can be rapidly despatched in response to orders. Finance on the other hand is extremely concerned with the total value of stock and the speed with which it is turned over.
Pressures intensified Some of the pressures outlined above have intensified in the current economic climate: I) The high rates of interest being experienced have intensified demands to keep stock levels to a minimum. 2) The manufacturers' customers are experiencing similar pressures and, in reducing their own stocks, they demand an even better service from their suppliers. DATA PROCESSING
APPLICATIONS Warehouse control and distribution 3) The pressures outlined above have created a demand for professionalism in warehousing which is not often to be found in individual companies. This has created an opportunity for the most competent third party warehousing companies to expand. 4) The increase in the cost of labour, the continuing decline in the cost of computer hardware and the availability of sophisticated software, have combined to create a situation in which the longsince theoretical possibility of computer control of warehouses is now becoming a financially attractive proposition without the need for massive storage/ throughput levels previously needed for cost justification. 5) Finally, as a by-product of computer developments in data capture at point of sale and in production control, we are beginning to see a flow of information from the retailer to the supplier in the form of automatic replenishment orders, which can in turn reverse the production schedules. The potential certainly exists for the flow of goods in response to actual demand to be streamlined and thus in fact to reduce the demand on warehouses in terms of space and stockholding, but to increase them in terms of operational efficiency. It is perhaps worth remarking that a major supplier of warehouse equipment is so worried by these trends that it is seeking ways of diversification into other areas of physical distribution.
Warehouse control operation The flow of products through a warehouse encompasses the following operations. a) goods receipt, checking and possibly repalletisation. b) allocation of and movement to storage position. c) replenishment of picking positions from bulk store. d) sorting of orders into most efficient picking sequence. e) picking. f) packing and labelling. g) despatch, marshalling and vehicle loading. h) housekeeping operations, such as rearrangement of stock locations. i) provision of management information to other areas of the company. T h e function of stock control, although intimately connected with the warehouse operation, has been deliberately omitted from this list. This is because it is frequently and most logically considered part of the sales order DECEMBER 1981/JANUARY 1982
processing system. Thus orders are usually only passed to the warehouse for products which are available. Order for out of stock items can be held back until new supplies are received in the warehouse.
Goods inwards After goods received have been checked in, they have to be allocated a storage position. Normally this will be in the bulk store, but occasionally there will be a need to replenish the picking stock directly. The location of stock can either be pre-allocated, zoned or completely random. Traditionally some kind of logical arrangement predominated. The arrangement could be by product number or range, or indeed by ranking in terms of volume throughput. Nowadays it is becoming increasingly common to use a totally random allocation system for bulk storage. This can be simply operated by computer and usually results in a much more efficient utilisation of the available storage cube in the warehouse. A special and nuisance-provoking aspect of goods inwards is the handling of returns. When this is a feature of the operation, returns have to be inspected for credit approval and condition. If suitable for return to stock, locations have to be determined and stock records incremented.
Replenishment of picking positions In order to facilitate the picking of orders of less than unit load, most warehouses have a separate picking face. The most common type of unit load is a pallet. Picking may involve most simply the selection of packages from a pallet, but it may involve opening the outer container and picking individual items from the package. The arrangement of products in picking positions is of crucial importance to the efficiency of the operation. Computers can be used to assist in this arrangement. They are widely used to ~nsure that replenishment takes place before the bins have been emptied of stock.
Picking Strategies of picking vary widely. They can include the following: 1) One person with a trolley fulfils a complete order. 2) One person with a trolley or handtruck fulfils a batch of orders at one trip. 3) Order-pickers specialise in one section of the picking face and the orders
proceed from section to section until complete. 4) Orders may be batched and consolidated by the computer with a fmal pick being carried out in the order assembly area. Computer control of this area is well established with orders being sequenced to minimise travel distance, record priorities, effect consolidation and give break downs into picking instructions from the bulk store, with balances from the picking face. Packing is often a very significant item of expenditure in the warehouse and careful scrutiny of work flows, and methods and materials used, can generate significant savings. Computer control in this area is not deeply established. Obviously label production is a simple by-product of order processing, although it becomes more complex if one has to estimate the number of outer containers to be labelled from the dimensions of the items to be packed. The arranging of despatch moves into the area of load planning and routeing and these are the subject of a separate article. Suffice it to mention that the demands of optimal vehicle utilisation can influence the priority of picking orders so that the orders are ready for loading in good time.
The automated warehouse We have now described the basic functions which a warehouse has to perform and drawn attention to certain fairly routine and well-established computer applications. Let us now look at the possibilities of a fully automated warehouse and highlight the problem areas. Pallets arrive from production and are fed on to a conveyor system, moved through some kind of dimension check, allocated a random storage location, moved on to wire-guided driverless trucks and forwarded to the end of the a p p r o p r i a t e aisle. A t this stage computer-controlled stacker cranes pick up the pallets and deliver each pallet to its predetermined location. Retrieval of pallets follows the reverse procedure, but in many instances the pallet may require to be delivered to the picking area. At this stage the pallet often needs to be broken down into its individual packs for insertion into the picking faces. Indeed in many instances, for slow moving items, replenishment may be in less than pallet quantities. Although documentation, instructions continued on page 22
21
~I I1 I11 [1~:II / [ I ] ~ ~.'] continued from page 21
and routeing for this operation are frequently computerised the actual transfer into the picking face tends to be manual. The automation of the picking operation is more complex, but there are a number of successful installations which have overcome the problems. The difficulties are basically two-fold: the first to devise a machine which will release the correct number of items from a partitular bin or l a n e - each item probably being of different dimensions; the second to introduce a sorting function, since it is clearly of great assistance if products can be delivered to a conveyor belt in order sequence for subsequent transfer to the packing area. This transfer is now frequently effected by computer-controlled conveyor systems, which should ensure that the work is spread evenly amongst available packing stations and that individual multi-package consignments are not broken up. We have now followed the normal flow of goods through the warehouse and seen that at practically every stage computerised control has a role to play. The major problems in full automation occur at transfer points and the interaction between computer controlled trucks and cranes and the central warehouse computer. There is also a very important interface between the warehouse computer and the mainframe responsible for order processing and stock control. These problems are now being overcome, but at some considerable cost in software development which tends to be bespoke for an individual application. Indeed a recent project fell 12 to 18 months behind as a result of software development problems. It will also have become apparent that the more a warehouse deals in unit loads, the greater the scope for total automation. Conversely, in those situations where there is an emphasis on individual part picking, full automation is not so well developed. This is more due to financial considerations rather than to the lack of technology. W h a t are c o m p a n i e s doing?
Whitbreads has installed a totally automatic brewery in Warrington which only handles pallets. The impression is gained that, although the warehouse operates effectively, the innovative aspects of the implementation made it a time-consuming and costly project which is not likely to be repeated in the near future. BL Cars has installed an automated 22
A traditional, mechanically-controlled warehouse ripe for automation. warehouse at Longbridge for housing painted Metro and Mini bodyshells. The overall control system is based on dual PDP 11/34 minicomputers (one is standby) and the stacker cranes are each controlled by a Data General Nova 3/4 micro. Software development was by SPL. Stelrad has recently commissioned an automated warehouse in Hull for the storage of foundry moulds and cores. Dexion supplied the total system including conveyors, racking and computercontrolled stacker cranes. The cent#al warehouse computer is a Data General Nova 4X which also interfaces with the MP200 crane controller. Elida Gibbs, part of Unilever, has gone one stage further in its new warehouse at Whitwood in Yorkshire. There it has installed twin "Ordermatic" machines made by SI Handling Systems of the USA for picking individual packs in order sequence. The project team comprising Elida Gibbs and SM Consultants planned the whole system which included driverless trucks for bulk store feeding, special replenishment trucks for the Ordermatic machines, conveyor systems and computer programs. The warehouse control computer is a PDP 11/70, linked in turn to a large IBM 4341, which carries out the order processing and certain advance simulation of the warehouse's tasks the following day. The driverless trucks each have their own EMI minicomputer. It is a cause of self-criticism in the distribution industry that there are over 2,000 automated high bay warehouses in operation in Japan, over 1,000 in the USA and less than 100 in the UK. Besides the well-known reluctance of the British to apply new technology, it must also be remembered that the ratio between the cost of capital and labour in the UK tends to be lower, so that the economic break-even point for adopting
automated techniques is at a higher level. There is also a marked reluctance by property funding institutions to encourage the building of high bay or specialist split elevation warehouses which more efficiently match the new materials handling/storage techniques. The standard "shed" principle predominates, and it reamins for the manufacturers of warehouse equipment to scale down their systems to suit. Free path 180 degree stackers with elevating cabs can now perform a semi-automated role in that the logistical control of truck activity can be achieved by microcomputers, whereas the actual physical movement functions remain in the firm control of the machine operator. There are, however, clear indications of a quickening level of interest in automated warehousing and one can expect the cost of the hardware and associated software to reduce as the packages become more standardised. There is also a great deal of interest being shown in the application of laser scanners and bar coding for product recognition in warehouses, and in addition the introduction of carousels which bring the product to the picker is seen to have considerable potential. The author's own company, Freight Software Systems, believes that the most dramatic growth will occur in the application of microcomputers to reduce the clerical burden of warehouse control activities in such areas as stock location control, inventory control, consolidation of picking lists and so on. There are a very large number of warehouses which could benefit greatly from such a system which would probably cost well under £10,000 for software and hardware. For further information circle 070 on enquiry card.
DATA PROCESSING
hat exactly is the function of a arehouse? It is, perhaps, pruent to obtain a clear answer to this question before considering how the control of this function can best be mana g e d - with or without the full panoply of electronic aids. Without having a clear idea of what the role of a warehouse is and how it is changing as a result of a variety of exogenous pressures, it is clearly fruitless to discuss how warehouse systems can be controlled and, indeed, oprimised. John R. Kelly is a director of Freight Software Systems and managing director of Davies and Robson (Southern) distribution consultants.
20
A warehouse is basically a buffer stock which stands between production and the market place. In general, production favours long runs, whilst the demand from sales is erratic and in smaller quantities than the runs at which it is economic to produce the goods. Thus the warehouse function can be divided into the following roles: 1) To permit economic production runs. 2) To have readily available all items on the current stock list. 3) To provide a predetermined level of buffer stock in the event of an interruption in production or an unexpected surge in demand. 4) T o conform with fmmacial objectives to minimise stockholding costs. The existence of regional warehouses or depots is normally only relevant to item 2, that is, to provide a more rapid service for orders than could be achieved by a single central warehouse, or perhaps to balance trunkingflwarehouse costs.
It is not difficult to appreciate that the pressures and demands from produc-
tion, sales and finance conflict. Production want long, uninterrupted runs, which means that the finite space in a warehouse is not occupied with a balmaced stock corresponding with sales patterns, mad that certain products may be out of stock. Sales are generally not too worried about actual stock levels provided all products are available and can be rapidly despatched in response to orders. Finance on the other hand is extremely concerned with the total value of stock and the speed with which it is turned over.
Pressures intensified Some of the pressures outlined above have intensified in the current economic climate: I) The high rates of interest being experienced have intensified demands to keep stock levels to a minimum. 2) The manufacturers' customers are experiencing similar pressures and, in reducing their own stocks, they demand an even better service from their suppliers. DATA PROCESSING
APPLICATIONS Warehouse control and distribution 3) The pressures outlined above have created a demand for professionalism in warehousing which is not often to be found in individual companies. This has created an opportunity for the most competent third party warehousing companies to expand. 4) The increase in the cost of labour, the continuing decline in the cost of computer hardware and the availability of sophisticated software, have combined to create a situation in which the longsince theoretical possibility of computer control of warehouses is now becoming a financially attractive proposition without the need for massive storage/ throughput levels previously needed for cost justification. 5) Finally, as a by-product of computer developments in data capture at point of sale and in production control, we are beginning to see a flow of information from the retailer to the supplier in the form of automatic replenishment orders, which can in turn reverse the production schedules. The potential certainly exists for the flow of goods in response to actual demand to be streamlined and thus in fact to reduce the demand on warehouses in terms of space and stockholding, but to increase them in terms of operational efficiency. It is perhaps worth remarking that a major supplier of warehouse equipment is so worried by these trends that it is seeking ways of diversification into other areas of physical distribution.
Warehouse control operation The flow of products through a warehouse encompasses the following operations. a) goods receipt, checking and possibly repalletisation. b) allocation of and movement to storage position. c) replenishment of picking positions from bulk store. d) sorting of orders into most efficient picking sequence. e) picking. f) packing and labelling. g) despatch, marshalling and vehicle loading. h) housekeeping operations, such as rearrangement of stock locations. i) provision of management information to other areas of the company. T h e function of stock control, although intimately connected with the warehouse operation, has been deliberately omitted from this list. This is because it is frequently and most logically considered part of the sales order DECEMBER 1981/JANUARY 1982
processing system. Thus orders are usually only passed to the warehouse for products which are available. Order for out of stock items can be held back until new supplies are received in the warehouse.
Goods inwards After goods received have been checked in, they have to be allocated a storage position. Normally this will be in the bulk store, but occasionally there will be a need to replenish the picking stock directly. The location of stock can either be pre-allocated, zoned or completely random. Traditionally some kind of logical arrangement predominated. The arrangement could be by product number or range, or indeed by ranking in terms of volume throughput. Nowadays it is becoming increasingly common to use a totally random allocation system for bulk storage. This can be simply operated by computer and usually results in a much more efficient utilisation of the available storage cube in the warehouse. A special and nuisance-provoking aspect of goods inwards is the handling of returns. When this is a feature of the operation, returns have to be inspected for credit approval and condition. If suitable for return to stock, locations have to be determined and stock records incremented.
Replenishment of picking positions In order to facilitate the picking of orders of less than unit load, most warehouses have a separate picking face. The most common type of unit load is a pallet. Picking may involve most simply the selection of packages from a pallet, but it may involve opening the outer container and picking individual items from the package. The arrangement of products in picking positions is of crucial importance to the efficiency of the operation. Computers can be used to assist in this arrangement. They are widely used to ~nsure that replenishment takes place before the bins have been emptied of stock.
Picking Strategies of picking vary widely. They can include the following: 1) One person with a trolley fulfils a complete order. 2) One person with a trolley or handtruck fulfils a batch of orders at one trip. 3) Order-pickers specialise in one section of the picking face and the orders
proceed from section to section until complete. 4) Orders may be batched and consolidated by the computer with a fmal pick being carried out in the order assembly area. Computer control of this area is well established with orders being sequenced to minimise travel distance, record priorities, effect consolidation and give break downs into picking instructions from the bulk store, with balances from the picking face. Packing is often a very significant item of expenditure in the warehouse and careful scrutiny of work flows, and methods and materials used, can generate significant savings. Computer control in this area is not deeply established. Obviously label production is a simple by-product of order processing, although it becomes more complex if one has to estimate the number of outer containers to be labelled from the dimensions of the items to be packed. The arranging of despatch moves into the area of load planning and routeing and these are the subject of a separate article. Suffice it to mention that the demands of optimal vehicle utilisation can influence the priority of picking orders so that the orders are ready for loading in good time.
The automated warehouse We have now described the basic functions which a warehouse has to perform and drawn attention to certain fairly routine and well-established computer applications. Let us now look at the possibilities of a fully automated warehouse and highlight the problem areas. Pallets arrive from production and are fed on to a conveyor system, moved through some kind of dimension check, allocated a random storage location, moved on to wire-guided driverless trucks and forwarded to the end of the a p p r o p r i a t e aisle. A t this stage computer-controlled stacker cranes pick up the pallets and deliver each pallet to its predetermined location. Retrieval of pallets follows the reverse procedure, but in many instances the pallet may require to be delivered to the picking area. At this stage the pallet often needs to be broken down into its individual packs for insertion into the picking faces. Indeed in many instances, for slow moving items, replenishment may be in less than pallet quantities. Although documentation, instructions continued on page 22
21
~I I1 I11 [1~:II / [ I ] ~ ~.'] continued from page 21
and routeing for this operation are frequently computerised the actual transfer into the picking face tends to be manual. The automation of the picking operation is more complex, but there are a number of successful installations which have overcome the problems. The difficulties are basically two-fold: the first to devise a machine which will release the correct number of items from a partitular bin or l a n e - each item probably being of different dimensions; the second to introduce a sorting function, since it is clearly of great assistance if products can be delivered to a conveyor belt in order sequence for subsequent transfer to the packing area. This transfer is now frequently effected by computer-controlled conveyor systems, which should ensure that the work is spread evenly amongst available packing stations and that individual multi-package consignments are not broken up. We have now followed the normal flow of goods through the warehouse and seen that at practically every stage computerised control has a role to play. The major problems in full automation occur at transfer points and the interaction between computer controlled trucks and cranes and the central warehouse computer. There is also a very important interface between the warehouse computer and the mainframe responsible for order processing and stock control. These problems are now being overcome, but at some considerable cost in software development which tends to be bespoke for an individual application. Indeed a recent project fell 12 to 18 months behind as a result of software development problems. It will also have become apparent that the more a warehouse deals in unit loads, the greater the scope for total automation. Conversely, in those situations where there is an emphasis on individual part picking, full automation is not so well developed. This is more due to financial considerations rather than to the lack of technology. W h a t are c o m p a n i e s doing?
Whitbreads has installed a totally automatic brewery in Warrington which only handles pallets. The impression is gained that, although the warehouse operates effectively, the innovative aspects of the implementation made it a time-consuming and costly project which is not likely to be repeated in the near future. BL Cars has installed an automated 22
A traditional, mechanically-controlled warehouse ripe for automation. warehouse at Longbridge for housing painted Metro and Mini bodyshells. The overall control system is based on dual PDP 11/34 minicomputers (one is standby) and the stacker cranes are each controlled by a Data General Nova 3/4 micro. Software development was by SPL. Stelrad has recently commissioned an automated warehouse in Hull for the storage of foundry moulds and cores. Dexion supplied the total system including conveyors, racking and computercontrolled stacker cranes. The cent#al warehouse computer is a Data General Nova 4X which also interfaces with the MP200 crane controller. Elida Gibbs, part of Unilever, has gone one stage further in its new warehouse at Whitwood in Yorkshire. There it has installed twin "Ordermatic" machines made by SI Handling Systems of the USA for picking individual packs in order sequence. The project team comprising Elida Gibbs and SM Consultants planned the whole system which included driverless trucks for bulk store feeding, special replenishment trucks for the Ordermatic machines, conveyor systems and computer programs. The warehouse control computer is a PDP 11/70, linked in turn to a large IBM 4341, which carries out the order processing and certain advance simulation of the warehouse's tasks the following day. The driverless trucks each have their own EMI minicomputer. It is a cause of self-criticism in the distribution industry that there are over 2,000 automated high bay warehouses in operation in Japan, over 1,000 in the USA and less than 100 in the UK. Besides the well-known reluctance of the British to apply new technology, it must also be remembered that the ratio between the cost of capital and labour in the UK tends to be lower, so that the economic break-even point for adopting
automated techniques is at a higher level. There is also a marked reluctance by property funding institutions to encourage the building of high bay or specialist split elevation warehouses which more efficiently match the new materials handling/storage techniques. The standard "shed" principle predominates, and it reamins for the manufacturers of warehouse equipment to scale down their systems to suit. Free path 180 degree stackers with elevating cabs can now perform a semi-automated role in that the logistical control of truck activity can be achieved by microcomputers, whereas the actual physical movement functions remain in the firm control of the machine operator. There are, however, clear indications of a quickening level of interest in automated warehousing and one can expect the cost of the hardware and associated software to reduce as the packages become more standardised. There is also a great deal of interest being shown in the application of laser scanners and bar coding for product recognition in warehouses, and in addition the introduction of carousels which bring the product to the picker is seen to have considerable potential. The author's own company, Freight Software Systems, believes that the most dramatic growth will occur in the application of microcomputers to reduce the clerical burden of warehouse control activities in such areas as stock location control, inventory control, consolidation of picking lists and so on. There are a very large number of warehouses which could benefit greatly from such a system which would probably cost well under £10,000 for software and hardware. For further information circle 070 on enquiry card.
DATA PROCESSING