The storage location assignment problem for improvement of put-away process to total time reduction in order picking process : a case study of the tire warehouses

Abstract

Order picking process is the most time operation in a warehouse and significantly influence efficiency. The objective of this research was to improve the put-away process’s total time reduction in picking process at tires warehouses. This research introduced the concept of sales volume and market group to assign storage location by applied the ABC classification and K-Means clustering algorithms. The data sets were collected from one of the tires warehouse containing shipping frequency, county of shipping and location or area storage. The research methods were, first, collecting and defining item family by ABC classification and K-Means step, second, collecting and defining location area for item family using a focus group discussion with 7 operational experts to determine the storage area of the product from various factors, third, developing Microsoft's Excel for assigning items to storage location. The simulated results showed the new location assignment by proposing a method that was able to improve the order picking time efficiency by 16.59 percent. The data showed that there were only 0.56 percent of all products with total sales of 18.92 percent, the warehouses able to consider the products to be selected for improvement with low effort but with high efficiency. In addition, a focus group discussion revealed that it can reduced direct cost to 19,000 baht/man/year. Implication of Thematic Paper: This research focused in ABC classification and K Means analyzed past sales data. Statisticians can apply focus group discussion and statistical data to analyze and compare efficiency between this method and the base method in order to find the most effective and suitable method.