Track: Facilities Planning and Plant Layout

Abstract

A well-managed warehouse system with effective facility layout design is the key concept of modern supply chain system and has an important role in the success of a company (Baker and Canessa, 2009). According to Glock & Grosse (2012) several components must be considered when developing an efficient warehouse facility layout and design, one of which is the material placement and location, and one of the critical activities in material placement is order picking. Picking process have become an important part of the supply chain process and is seen as the most labor-intensive and costly activity for almost every warehouse, where the cost is estimated to be 55% of the total warehouse operating expense. That is why, the researchers aim to design facility layout focusing on material placement and location for warehouse system. The study covers two largest sugar milling warehouses in the Philippines that experience delay in material placement due to slow response time and long cycle time in its picking process. Techniques such as time study, ABC inventory analysis, quality function deployment (QFD) tool, systematic layout planning (SLP) and systems simulation were used in order to design and improve the current material placement layout of the companies. It is concluded that using ABC inventory analysis based on the order picking frequency of materials and implementation of “U” flow material warehouse layout design significantly reduces time and distance spent in searching and picking activities and improves the overall warehouse operation of the companies.