Ankor is a wholesaler in Leidschendam and its warehouse is facing pressure on improving order picking efficiency. Routing and storage assignment is two of the major parameters for order picking, as it is one of the most time-consuming activities and a large contributor to the operational costs in a warehouse. Besides, customers always order late, however, expect prompt delivery. Therefore, a good combination of policies for storage assignment and routing is necessary for Ankor.
There are several factors affecting order-picking efficiency. They include operating procedures, changing product demand, equipments and the racking and layout of the warehouse. Specifically, altering the operating procedures can improve efficiency without the large capital investments in racks or equipment. Besides, travel time and order picking time depend largely on operational procedures, which routing policies and storage-assignment policies are two of those.
Originally, Ankor implemented no specific routing policy due to the restriction of customers' order.
In order to improve the efficiency, they decided to switch to a new routing policy, which is Heuristics. It cannot guarantee the best order picking route but it can quickly create a picking sequence. Also, it is flexible, easy to work with and adjust with changes, like layout and specified picking priorities.
For the storage policy, Ankor used ABC classification for each of the three groups, fast moving, longest edge over 80cm and regular products, into 3 classes by frequency.
In response to the request of customers, Ankor changed to store the products based on product type and frequency instead of divide them into the 3 groups. Specified storing areas are set for each product type while picking areas near the end of the routes for breakable and unbreakable products.
i) Routing Policies
Routing heuristics is introduced in the case. This methodology generates...