The productivity and throughput of a warehouse is influenced by several factors such as implementation of various policies and strategies, configuration of aisles, usage of different material handling equipment and assisting technologies. Table 1.1 presents the list of decisions involved with each of those factors for a pallet storage and case picking system. The decisions associated with each factor not only affect warehouse throughput and costs, but also affect one another. Warehouse managers often struggle to determine the right combination of all these factors that would result in optimal putaway or pick rates, thereby, helping them to effectively handle inflow and outflow of products. We call such a combination of decisions as technology. As the decisions in each factor are interdependent, it is essential that the resulting combination of all of these decisions is practically feasible to be implemented at an operational level. An example of a feasible technology would be a pallet storage system at a warehouse with wide aisle configuration using block stacking storage system with randomized storage policy, where pallets are putaway using a direct strategy to the storage area via a counter balanced lift truck and paper based technology. Similarly, a feasible technology in an order picking system would be batch picking cases from case flow racks with class-based storage policy using pallet jacks and pick-to-light technology.
These decisions have a significant bearing on warehouse throughput and costs, which, in reality, impact other supply chain decisions, such as inventory and transportation. For instance, narrow-aisles in the picking area of a warehouse reduce the required space (thus, space cost), but increase the probability of worker congestion. The resulting decrease in worker productivity reduces the warehouse’s throughput capacity, impacting the inbound and outbound transportation decisions. Similarly, the ability to
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cross-dock at the warehouse may require advanced material handling equipment and information technology infrastructure; both come at a cost. Notice that cross-docking is associated with no inventory in the warehouse — an inventory decision is impacted by a warehousing decision.