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WAREHOUSE MANAGEMENT FOR IMPROVED ORDER PICKING PERFORMANCE: AN APPLICATION CASE STUDY FROM THE WOOD INDUSTRY G.P. Broulias, E.C. Marcoulaki, G.P. Chondrocoukis and L.G. Laios Department of Industrial Management & Technology, University of Piraeus Phone: +30-104142019, e-mail address: emarc@unipi.gr

Abstract: The study presented here considers arrangement and management policies to improve the order picking procedure in the existing company warehouse. The study was conducted in a timber goods production and trading company. The main objective was to reduce the overall picking time that is quite high due to the lack of proper management and the nature of the stored items. The first stage was to register the situation in the warehouse. The second stage involved the analysis of the obtained data, to identify promising modifications and quantify the benefits of adopting them. The proposed modifications were based on policies and methodologies suggested in the literature. After the company approved and implemented (some of) the proposed modifications, the final stage was to measure and analyse the achieved improvements. Keywords: warehousing, case study, facility layout, order picking time 1. INTRODUCTION Order picking (OP) appears as one of the most significant activities in a warehouse. The picking tasks may contribute by over 65% in the warehouse operating costs. In fact, the retrieval cost exceeds by far the storage cost of any given item (Coyle et al., 1996). The factors affecting the efficiency of OP typically include the product demand, the warehouse layout, the location of the items, the picking method in combination with the routing methods, the experience of the employees, and the extent of automation (Gattorna, 1997). Note that the high cost associated with the automation of the procedure forces the majority of companies to use manual operation, usually at the expense of efficiency and time. The case study is carried out in a timber goods production and trading company. We consider one of the existing warehouse facilities and we attempt to improve its performance. The performance measure is the total picking time, so our objective is to find ways to reduce it as much as it is practically possible and desirable. At the first stage involves the collection of time data, to target the improvement that may be accomplished from the transition from a totally disorderly situation to an organized and controlled warehouse environment. The second stage suggests, implements and studies alternative storage, picking and routing schemes, according to observations made during the first stage. During the third stage, a second series of time measurements is carried out to investigate the achieved benefits. 2. REVIEW OF WAREHOUSE POLICIES RELATED TO ORDER PICKING There is a variety of studies on methods, policies, principles and/or techniques developed to improve the overall OP procedure. The decisions usually concern policies for the picking of the product items, the routing of the pickers in the warehouse, and the storage schemes for the products in the warehouse. The research scope has been to investigate the effect of changes in these policies on the reduction of the overall OP costs and the increase of percent savings. Petersen and Gerald (2003) was the first to attempt a simultaneous evaluation of all the three policies, whereas the usual practice is to consider them separately.

2.1. Picking policies In terms of the picking policies, Ackerman (1990) divided OP into strict, batch and zone picking and proposed policies tailored to each case. In strict picking, a single order is assigned during a picking tour, leading to lower service times and higher customer satisfaction. The policy is ideal when the group of the picking products is quite small and easy to be found. Drawbacks of the policy include an increase in the overall transportation time and a cost penalty. Alternatively, the batch picking policy assigns to a picker...
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