1. Applying Lean Concepts in a
Warehouse Operation
Frank Garcia
Partner
ADVENT DESIGN CORPORATION

2. What We’ll Cover
Basic Lean Concepts for Warehouse
Improvement
Using Value Stream Maps:
Current & Future State
Implementing Process Improvements
Case Study Using and Ongoing
Application (Pork Producer)

3. WHAT TO DO ABOUT THE
WAREHOUSE?
• Too many people
• Excessive material handling
• Inventory inaccuracies
• Don’t ship the pounds
• No space!!!! Need to Expand!

4. WAREHOUSE CHALLENGES
Focus on Manufacturing.
Warehouse is a box on the
VSM Office & Info Flow Customer Demands
Product pushed into
warehouse & pulled by
customers
Warehouse
Application of Lean
Principles to an area that
exists because of waste in
the value stream or customer
Production Suppliers
demand/lead time
Warehouse is the crossroads
of conflicting requirements

5. How Do We Use Lean Techniques
for Warehouse Improvement?
Assess the operation using a Value Stream
Map and/or PFDs (Product families & Warehouse data)
Involve the operators & supervisors
Identify lean improvements & kaizens
Question every activity!
Treat the warehouse like a large staging area
Develop justification
Implement lean improvements using VSM
plan
Start the cycle again!

6. Lean Manufacturing
Fundamental Principle of Lean Manufacturing
Any activity or action which does
not add value to the product is a
form of waste and must be
eliminated or minimized.
In the Warehouse Customer Pays for Shipping
Everything Else Must Be Minimized !

7. What Do We Need to Know?
Demand
Material Flow & Handling
Information Flow to the
Warehouse
How Material is Stored
Order Picking & Staging
How Shipped
VALUE STREAM MAPPING!

8. Why Use VSM?
Road map for lean improvements
Train team members in use of lean
concepts
Integrated lean implementation plan
Long term planning - Many Future States

9. product family Current State Map
Understanding how the warehouse
current state drawing currently operates.
Material and information flows
Future state Start with the “door to door” flow
drawing Walk the flow and get real data
* no standard times
* draw by hand
plan and Get operators & supervisors involved
implementation Basis for the Future State

10. Warehouse Current State
Value Stream Map
Blanket Orders with Daily
Releases; Supplemented with
Open Market Purchases
Blanket Orders Production
Spices and Packaging Randomly Placed Various
Hogs with Weekly or and Inventory Control
Smokehouse Materials Orders (Various Sizes) Customers
Bi-Weekly Releases (Computer System)
Materials
Demand:
Daily
131 to 242 orders per
Productio
day
n
Avg: 167/day
Schedule
Daily Weekly Weekly 1 to 2 pallets/order
or Bi- or Bi- Aging 15 to 17 orders per
(about Daily Shipping Orders
Weekly Weekly Report truck
400) & Freezer Release
(5PM) 12 to 13 trucks per
day
1 route per truck
Smokehouse
Operations
Smoke Wrap & Pack
Off-Site Freezer Storage Daily
Shipments
Smoked (12 to 13 routes)
Products
I I
Multiple Multiple
1, 578K lbs
Operators Operators Conveyor
Staging
Kill & Cut Wrap & Pack Metal Detection Strapping Palletizing Order Picking Order Shipping
& Storage Checking
1 to 2 & Scanning
1 to 2
1 to 2 pallets 1 to 2
Cut Products Cut Products pallets
per
I 1 to 2 1 to 2 I pallets I order
I pallets I per
Pallets Pallet order
Multiple Multiple 6 to 8
Operators Operators Conveyor Conveyor Rack Staging Staging
3 People 2 2
Staging Staging Storage Palletizing for Trucks
People People People
10 cases 10 to 15 775 & Dock 2 orders
C/T = 7 sec C/T = 10 - 35 C/T = 15 min C/T = 4 hours
C/T =2 sec C/T = 2 sec cases positions; 6 orders (4 pallets)
per case or 10 minutes C/O = 0 min C/O = 0 min
C/O =2 min C/O = 1 min 7 reefers; (12 pallets)
min per pallet C/O = 0 min Rel. = 85% Rel. = 85%
Rel. = 95% Rel. = 80%
Order Lead Time 3.7 to 6.1 Days C/O = 0 min 610K lbs Rel. = 85% Avail. = 16.5 hrs Avail. = 16.5 hrs
Rel. = 85% Avail. = 49.5 to
Order Processing Time: 6 Hrs Avail. = 24.8 66 hrs (2 shifts)
hrs (2 shifts)
Takt Time: 3 to 4 minutes
30 5 sec 6 minutes 2.9 to 5.3 days 20 15 minutes
seconds (Freezer minutes
storage:
35 10
minutes
40 seconds 40 20
6.7 to 14.5
minutes 4 hours
seconds minutes

11. Important Warehouse Data
60mm pounds per year
2002 Product Picks (All)
6.8 turns per month
700
Seasonal production.
609
Number of Product Items
600
500
400 Production exceeds
300
200 shipments by 20% Easter
& Xmas
100
31 16 8 5 1 1 0 0 0 0 1
0
1 to 1001 to 2001 to 3001 to 4001 to 5001 to 6001 to 7001 to 8001 to 9001 to 10000 11001
1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Number of Line Item Picks
to to
11000 12000 Average 1.2 pallets per
order. Average 167
orders/day
10% products = 66% of picks
20% products = 84% of picks 95% of picks are for less
than a pallet
Returns 1.9% of lbs
shipped

12. Opportunity: Material Flow & Layout
Many crossed flows !

13. Opportunity: Walking and Lifting in
Palletizing
Little case
accumulation
Case lifting and
walking
Pallet cycle time too
long
Cases missing straps
Area used for order
staging
No visual controls

14. Opportunity: Rack Storage and
Utilization
Daily Product Aging
Counts
Insufficient pallet storage
for peak months
No rack locator system
Reefers used for overflow
storage
Product gets lost
Rely on operator
memories or supervisor
expediting

15. Opportunity: Order Picking & Shipping
Order picking too slow
Must pick before final
order confirmation
Few operators
understand warehouse
Dock staging too small
Inventory updated at
scanning
Not enough dock doors

16. ORDER PICKING FLOW
FRESH SMOKED FROZEN
GET PICK GET LOAD
LIST PATTERN
LOCATE PALLET
IN WAREHOUSE LOCATE PALLET
IN DOCK RACKS
• MOVE PALLET
PICK
• CASES 95% OF TIME CASES OR PALLETS REPEAT
UNTIL
• MOVE PALLET ORDER
COMPLETE
STORE
PALLET
• PALLETIZING STAGE
AREA ORDER
• DOCK
• MOVE TO INSPECTION
CHECK
ORDER
SCAN
BAR CODES
• MOVE TO TRUCK
LOAD
TRAILER

17. Why is Order Picking Slow?
computer-looking
2% interference
2%
Walking
reorganizing product- 8%
dates
11%
computer-looking
Looking
interference
34%
Looking
outside interruption
Picking
reorganizing product-dates
Walking
Picking outside interruption
38% 5%

18. Opportunity: Case Flow Through Metal
Detection & Strapping
• No gap between cases
• Cases jam at metal detector
• Maintenance adjusts metal
detector
• Run out of strap
• No system status display

19. Opportunity: Production Scheduling Not in
Sync With Shipments or Warehouse Capacity
Pallet storage in aisles
Insufficient pallet
storage for peak
months
Outside Freezer
Warehouse Used used
for overflow storage

20. How Do We Fix It?
Look at Application of Lean
Concepts
Future State Using Value
Stream Maps With &
Without Expansion

21. Future State Questions
What is the takt time?
Will we build to shipping or to a supermarket?
Where can we use continuous flow? How do we level the
pacemaker process?
SUPPORTING IMPROVEMENTS
What process improvements will be necessary to eliminate
waste?

22. TAKT Time
Synchronizes pace of production
to match pace of sales
Rate for assembling an order
based on shipping schedule
TAKT = Effective Working Time per Shift
Customer Requirement per Shift

23. Look for No Flow &Wastes
They are in the warehouse too!
Inventory (too much)
Overproduction (more or sooner than needed)
Correction (inspection and rework)
Material Movement
Waiting
Extra Motion
Non-Value Added Processing

24. Lean Manufacturing
Concepts & Techniques in the Warehouse
Flow: Visual Workplace, Layout
Improvement, Lean Automation
Materials: Kanban Systems, Supply Chain
Management, Point of Use
Perfection: Quality Systems, Training
Information: Just in Time, Lean Office

25. Warehouse Assessment
Value Stream Map (Future State) Without Expansion
Blanket Orders with Daily
Releases; Supplemented with
Open Market Purchases
Blanket Orders Leidy’s Production
Spices and Packaging Randomly Placed Various
Hogs with Weekly or and Inventory Control
Smokehouse Materials Orders (Various Sizes) Customers
Bi-Weekly Releases (CSB System)
Materials • Aging Data
Demand:
Daily 131 to 242 orders per day
Productio Avg: 167/day
n 1 to 2 pallets/order
Schedule 15 to 17 orders per truck
Daily Weekly Weekly
Bar Code Scan Bar Code Scan 12 to 13 trucks per day
or Bi- or Bi- Daily Shipping Orders
(about Warehouse Input Inventory 1 route per truck
Weekly Weekly & Freezer Release
400) Updates
(5PM)
Smokehouse
Operations
Smoke Wrap & Pack
Off-Site Freezer Storage Daily
Shipments
Smoked (12 to 13 routes)
Products
I I
Multiple Multiple
1, 578K lbs
Operators Operators Conveyor
Staging
Kill & Cut Wrap & Pack Metal Detection Strapping Palletizing Order Picking Order Shipping
& Storage Verification
1 to 2
1 to 2
1 to 2 pallets 1 to 2
Cut Products Cut Products pallets
per
I 1 to 2 1 to 2 I pallets I order
I pallets
FIFO
per order
Pallets Pallet 3 2
Multiple Multiple 6 to 8
Conveyor People Rack People 2
Operators Operators Conveyor People Staging
Staging Storage People
Staging Dock
10 cases 883 positions;
30 to 50 C/T = 7 sec Locator system, C/T = 10 to 15 2 orders C/T = 10 min C/T = 2 hours
Gap cases C/T =2 sec C/T = 2 sec cases (4 pallets)
per case or 6.8 A items on first minutes C/O = 0 min C/O = 0 min
C/O =2 min C/O = 1 min 3 separate
min per pallet tier, additional C/O = 0 min Rel. = 85% Rel. = 85%
Rel. = 95% Rel. = 90% Zones C/O = 0 min rack above Rel. = 85% Avail. = 16.5 hrs Avail. = 16.5 hrs
Order Lead Time: 3 to 4.9 Days Bar code scan Rel. = 85% palletizing Avail. = 49.5 to
Avail. = 24.8 610K lbs 66 hrs (2 shifts)
Order Processing Time: 3 Hrs hrs (2 shifts) Scan bar codes
2.6 to 4.5 days
Takt Time: 3 to 4 minutes 30 seconds 5 sec 6 minutes (Freezer storage: 15 minutes
6.7 to 14.5 days) 20
40 seconds 40seconds 13 minutes minutes 8 minutes 2 hours

26. What Happened in the Future State
VSM Without Expansion?
Implemented rack locator system & organized
storage based on product turns
Revised order picking methods
Implemented WMS
Improved palletizing system
Reduced job classifications & cross trained
operators
Established operational metrics
Closer to Takt Time….but not there yet!

27. FUTURE STATE PALLETIZING FLOW
FRESH
Production Cases
WMS TEMP PRINT
WAREHOUSE LABELS SMOKED
SCAN
Transfer Count Cases
CASES
WMS
WAREHOUSE GET CASE FROM
Location MANAGEMENT CONVEYOR WALK TO
Pallet Number • MOVE CASE CONVEYOR
PLACE ON
PALLET
Yes SPACE TO FIT No • MOVE PALLET
Visual Display
ALL PALLETS
PRINT & APPLY PALLET
LABEL
Zone
Location
• FRESH Random
Pallet Number
STAGE
• MOVE PALLET
of System
• SMOKED
Status
PALLET
LOCATE EMPTY
STORAGE
POSITION STRETCH
WRAP • GET STRETCH WRAP
• MOVE PALLET
SCAN • MOVE PALLET
LOCATION STAGE •IN TUNNEL
PALLET FOR FORKLIFT
PICKUP
ADD PRODUCT TO RACK,
RETURN TO PALLETIZING
LINE SCAN
PALLET LABEL
PUT AWAY
• MOVE PALLET
• FRESH
• SMOKED
• MOVE
• MOVE
TO TRUCK
TO TRUCK
LOAD LOAD
FRESH FROZEN
TRAILER TRAILER

28. FUTURE STATE ORDER PICKING FLOW
FRESH SMOKED FROZEN
GET PICK LIST GET LOAD
WMS
PATTERN
Truck Route Wave Pick
LOCATE PALLET
IN WAREHOUSE
LOCATE PALLET
• MOVE PALLET REPEAT IN DOCK RACKS
SCAN UNTIL
WMS LOCATION
ORDER
COMPLETE
PICK CASES OR
• CASES 95% OF TIME PALLETS WMS
Next location
• MOVE PALLET
WMS SCAN CASES
STORE
PALLET
STAGE
• PALLETIZING ORDER
AREA
• MOVE TO INSPECTION
• DOCK CHECK
ORDER
VERIFICATION
WMS SCAN • TRUCK ROUTE
Truck Route
LOAD • MOVE TO TRUCK
TRAILER

29. PROPOSED PALLETIZING & STORAGE
IMPROVEMENTS

30. PROPOSED PALLETIZING IMPROVEMENTS

31. Future State Benefits
Step 1: Without Expansion
Improved order picking and material flow
Reduced cycle time 15% in 3 months. Going to
30%
Reduced material handling
Saved rack space (10% reduction in 2
weeks)
Reduced lead time 50%
Handle peak periods with less congestion
(108 positions)
Better trained and flexible workforce
Capital Payback of 1.8 years

32. How Do We Implement the Future State
VSM?
Don’t Wait Until It’s Perfect!
Use future state VSM to highlight changes
Break up the future state into sections
Develop a VSM implementation plan
Tie plan to business objectives & show
savings
Assign projects to team members to
implement

33. Organizing the Lean Solutions
Process Problem Solution
Metal M1. Cases not metered into machines causing jams and M1. Create space between cases with metering device increases
Detection backup of product reliability of strapper and metal detector
&
Strapping M2. Metal detector setting has to be changed manually M2. Scan product to set metal detection setting increases reliability of
metal detector
P1. Product is handled twice, once to palletize then once to P1. Rearrange high moving product to allow case stacking in flow
pick racks
Palletiz-
P2. Operator walking several feet to obtain correct case of P2. Shorten walking distance by separating product onto shorter
ing
product to palletize conveyors
P3. Product is moved to be shrink wrapped prior to put P3. *Automate the shrink wrapping process with conveyor and
away automatic wrapper
ST1. Searching for open position for putaway ST1. Implement W arehouse Management System for putaway
Storage ST2. Product must be rotated from top to bottom resulting in ST2. Rearrange racking for whole pallet flow racks on high moving
Racks and several pallet moves product
Staging ST3. Need forklift to put bottom row away. Need ladder to ST3. Remove lower rail on certain aisles to allow pallet jack putaway
pick from second tier. instead of forklift. Lower second tier to pick height without
ladder.
O1. Pickers searching for product due to no location system O1. Put pick locations on pick ticket after W arehouse Management
Order O2. W alking from aisle to aisle with no logical sequence of System is installed
Picking picks O2. Sort products by frequency of pick then by weight in warehouse
O3. Rotating stock to bring oldest date to front to minimize walking
O3. *Use pallet flow racks to automatically rotate stock
Shipping
SH1. Insufficient space to stage multiple pallets leads to SH1. *Increase floor space for dock staging. Long term plan would be
double moves of product to reorganize when building is expanded
SH2. Operator is dedicated to verifying picked pallet prior to SH2. Improve picking operation through training and scanning at pick
scan location with bar code scanners.
SH3. Occasionally additional product gets shipped to SH3. Confirmation check by scanning once prior to loading truck
customer

34. PROPOSED IMPROVEMENTS: Costs & Savings
C y c le T im e A nnual C o s t to
P rocess P r o b le m S o l u ti o n (R e d u c e d ) S a v in g s $ I m p le m e n t
M eta l M 1. C a s es n o t m et er e d in t o m a c h in es c a u s in g ja m s M 1. C r ea te s p a c e b etw e e n c a s es w it h m et er in g d e v ic e in c r ea s es 3 ,5 0 3 2 ,0 0 0
.3 3 m in /p a l
D et e c tio n a nd b a cku p o f product r elia b ility o f s tra p p er a n d m eta l d et e c to r
& 3 ,5 0 3 2 0 ,0 0 0
S tr a p p in g M 2. M eta l d e t e c t o r s ettin g h a s to b e c h a n g e d M 2. S c a n p r o d u c t to s et m eta l d et ec t io n s ettin g in c r ea s es .3 3 m in /p a l
m a n u a lly r elia b ility o f m eta l d et e c t o r
P1. P r o d u c t is h a n d le d tw ic e, o n c e to p a lle tiz e th e n P1. * R ea r r a n g e h ig h m o v in g p r o d u c t to a llo w c a s e s ta c k in g in 1 o p e r /y e a r *TBD *TBD
o n c e t o p ic k flo w r a c k s
P a lletiz - P2. O p e r a to r w a lk in g s ev er a l f e et to o b ta in c o r r ec t P2. S h o r t e n w a lk in g d is ta n c e b y s o r tin g p r o d u c t b y b a r c o d e 1 .3 3 m in /p a l 1 4 ,0 2 4 9 5 ,0 0 0
in g c a s e o f p r o d u c t to p a llet iz e in to c o n v e y o r z o n e s o r u s in g a v er tic a l r ec ir c u la tin g
con vey or
( v e r t ic a l
P3. P r o d u c t is m o v e d to b e s tr e tc h w r a p p ed p r io r to c o nve yo rs)
put away P3. * A u to m a te th e s tr e tc h w r a p p in g p r o c e s s w ith c o n v e y o r 2 m in /p a l * 2 1 ,0 4 2 * 6 2 5 ,0 0 0
a n d a u to m a tic p a lle tizin g
S T 1 . S ea r c h in g f o r o p e n p o s itio n fo r p u ta w a y S T 1 . I m p le m e n t W a r eh o u s e M a n a g e m e n t S y s t e m f o r p u ta w a y .7 5 m in /p a l 7 ,8 9 1 ^ S e e b e lo w
S T 2 . P r o d u c t m u s t b e r o ta te d fr o m to p to b o tt o m S T 2 . R ea r ra n g e r a c k i n g f o r w h o le p a llet flo w r a c k s o n h ig h 5 m in /p a l
S to r a g e r es u lt in g in s e v er a l p a lle t m o v es m o v in g p r o d u c t
R a cks a nd 2 6 ,3 0 3 4 0 ,0 0 0
S T 3 . N e e d f o r k lift to p u t b o tto m r o w a w a y . N e e d S T 3 . L o w er s e c o n d tier to p ic k h e ig h t w ith o u t la d d er .
S ta g in g 0 .3 3 m in /p a l
la d d er to p ic k fr o m s ec o n d tier . R e o r g a n iz e s h e lv in g h e ig h t to a llo w s e v er a l S K U ’s to fit in
S T 4 . N e e d a d d it io n a l r a c k s p a c e f o r p r o d u c t o n e p a llet lo c a tio n .
3 ,4 7 9 3 ,0 0 0
S T 4 . A d d r a c k in g o v e r h e a d o n p a lletiz in g lin e 0 m in /p a l
0 3 0 ,0 0 0
O 1. P ic k er s s ea r c h in g f o r p r o d u c t d u e to n o lo c a tio n O 1. P u t p ic k lo c a tio n s o n p ic k tic k et a fter W a r eh o u s e 1 0 m in /p a l 1 0 5 ,2 1 0 ^ S e e b e lo w
O r d er system M a n a g e m e n t S y s t e m is in s ta lle d
P ic k in g O 2. W a lk in g fr o m a is le t o a is le w ith n o lo g ic a l O 2. S o r t p r o d u c ts b y fr e q u e n c y o f p ic k th e n b y w e ig h t in 5 m in /p a l 5 2 ,6 0 5 ^ S e e b e lo w
s e q u e n c e o f p ic k s w a r e h o u s e to m in im iz e w a lk in g
O 3. R o ta tin g s to c k to b r in g o ld e s t d a te to fr o n t O 3. * U s e c a s e flo w r a c k s to a u to m a tic a l ly r o ta te s to c k
1 m in /p a l * 1 0 ,5 2 1 TBD
S H 1 . In s u ff ic ie n t s p a c e t o s ta g e m u ltip le p a llets lea d s S H 1 . * I n c r e a s e flo o r s p a c e fo r d o c k s ta g in g . L o n g te r m p la n 3 m in /p a l * 3 4 ,7 2 0 TBD
to d o u b le m o v e s o f p r o d u c t w o u ld b e to r e o r g a n iz e w h e n b u ild in g is e x p a n d e d
S h ip p in g S H 2 . O p e r a to r is d ed ic a te d to v er if y in g p ic k e d p a llet S H 2 . I m p r o v e p ic k in g o p er a tio n th r o u g h tra in in g a n d s c a n n in g a t 2 m in /p a l 2 1 ,0 4 2 ^ S e e b e lo w
p r io r to s c a n p ic k lo c a tio n w it h b a r c o d e s c a n n er s .
S H 3 . O c c a s io n a lly a d d itio n a l p r o d u c t g ets s h ip p e d to S H 3 . C o n fir m a tio n c h ec k b y s c a n n in g o n c e p r io r to lo a d in g tr u c k
c u s to m er
Increase
U t iliz e s p r o b le m S T 1 + O 1 + O 2 + S H 2 s a v in g s d a ta D es ig n s o ft w a r e, p u r c h a s e h a r d w a r e , in t e g r a te s y s t e m s a n d 1 7 .8 m in /p a l 1 8 6 ,7 4 8 2 4 0 ,0 0 0
in s ta ll o n w a r e h o u s e flo o r .
WMS
O r g a n iz a tio n a l h ier a r c h y to o s p e c ia liz e d . C a n ’t tra c k C r o s s tra in o p er a to r s to fill m u ltip le r o le s d u r in g o n e s h ift. P o o l TBD TBD
h o u r s c o r r ec tly d u e t o c la s s if ic a tio n o f w o r k er s . a ll la b o r a n d r e d u c e a s n e e d e d . T ra c k la b o r b y g r o u p p r o d u c tiv ity
v e r s es in d iv id u a l p r o d u c tiv ity .
T o t a l o f a ll p r o je c ts w i t o u t e x p a n s i o n $ 2 3 4 ,0 8 1 $ 4 3 0 ,0 0 0
( U s in g p r o b le m M 1 , M 2 , P 2 , S T 3 , S T 4 , a n d W M S
d ata)

35. PROPOSED IMPLEMENTATION PLAN
Without Expansion
Phase 1. Simple modifications
1. Remove bottom rail to allow pallet jack access. (Target date
May 2003)
2. Lower second tier to remove the need for ladder access. (May
2003)
3. Match shelf size with average pallet height to increase the
number of
pick locations. (May 2003)
4. Change speed of conveyor in metal detection room to space
product cases properly or implement as part of palletizing
relocation. (May 2003)
5. Balance flow of orders transferring from the order pickers to
verifiers during the entire shift. This can be accomplished by
training more utility operators as outlined in the
organizational restructuring matrix shown in Section 4. (May
2003)
6. Label all pallet rack storage locations to begin transition to
warehouse management system(May 2003)
7. Place 135 high moving SKU’s on first or second tier of the
pallet rack. (May 2003)

36. PROPOSED IMPLEMENTATION PLAN
Without Expansion
Phase 2. Moderate improvements to computer system and
operations
1. Implement warehouse wide standards on order accuracy, line
items shipped on time, orders shipped complete. Post the
results weekly to begin continuous improvement philosophy in
warehouse activity.(June 2003)
2. Install static racking above the existing palletizing area, leaving
sufficient head room for the palletizing operation. (September
2003)
3. Install new vertical recirculation conveyor palletizing station
and lift tables. (September 2003)
4. Consider implementation of CSB locator screen using move
tickets if automated scanning will be delayed. (September
2003)
5. Install flow through pallet rack on bottom tiers of existing racks
to eliminate top-down pallet rotation on high movers. (October
2003)
6. Change configuration of metal detection conveyor to scan
labels prior to entering metal detection equipment. Use barcode
scan to change settings on the metal detector. (2004)
Phase 3. Major improvements to computer system and operations
1. Upgrade CSB system to include Warehouse Management
System for locating product and install equipment to bar code
scan case labels. (1 st quarter 2004)

37. Warehouse Assessment
Value Stream Map (Future State) With Expansion
Blanket Orders with Daily
Releases; Supplemented with
Open Market Purchases
Blanket Orders Leidy’s Production
Spices and Packaging Randomly Placed Various
Hogs with Weekly or and Inventory Control
Smokehouse Materials Orders (Various Sizes) Customers
Bi-Weekly Releases (CSB System)
Materials • Aging Data
Demand:
Daily 131 to 242 orders per day
Productio Avg: 167/day
n 1 to 2 pallets/order
Schedule 15 to 17 orders per truck
Daily Weekly Weekly
Bar Code Scan Bar Code Scan 12 to 13 trucks per day
or Bi- or Bi- Daily Shipping Orders
(about Warehouse Input Inventory 1 route per truck
Weekly Weekly & Freezer Release
400) Updates
(5PM)
Smokehouse
Operations
Smoke Wrap & Pack
Off-Site Freezer Storage Daily
Shipments
Smoked (12 to 13 routes)
Products
I I
Multiple Multiple
1, 578K lbs
Operators Operators Conveyor
Staging
Kill & Cut Wrap & Pack Metal Detection Strapping Palletizing Order Picking Order Shipping
& Storage Verification
1 to 2
1 to 2
1 to 2 pallets 1 to 2
Cut Products Cut Products pallets
per
I 1 to 2 1 to 2 I pallets I order
I pallets
FIFO
per
Pallets Pallet order
Multiple Multiple 6 to 8
Conveyor Rack
Operators Operators Conveyor 3 People Staging 2 2
Staging Storage
Staging People Dock People People
10 cases 1100 positions;
30 to 50 C/T = 7 sec Locator system, C/T = 10 to 15 5 orders C/T = 5 min C/T = 1. 5 hours
Gap cases C/T =2 sec C/T = 2 sec cases per case or 6.8 A items on first minutes (10 pallets) C/O = 0 min C/O = 0 min
C/O =2 min C/O = 1 min 3 separate
min per pallet tier, additional C/O = 0 min Rel. = 95% Rel. = 95%
Rel. = 95% Rel. = 90% Zones
Order Lead Time: 2.5 to 4.4 Days Bar code scan
C/O = 0 min
Rel. = 85%
rack above Rel. = 85%
Avail. = 49.5 to
Avail. = 16.5 hrs Avail. = 16.5 hrs
palletizing
Order Processing Time: 2.5 Hrs Avail. = 24.8 610K lbs 66 hrs (2 shifts)
hrs (2 shifts) Scan bar codes
Takt Time: 3 to 4 minutes
30 seconds 5 sec 6 minutes 2.6 to 3.5 days 8 minutes
(Freezer
storage:
40 seconds 40 13 minutes 10 minutes 8 minutes 1.5 hours
seconds 6.7 to 14.5

38. What Happens in the Future State VSM
With Expansion?
Expand warehouse to provide staging areas
Most pallets are staged on floor not in racks
Revised order picking methods…Pick from
pallets not racks
Robotic palletizing system based on previously
upgraded system
Improved production scheduling & planning
New markets for frozen products to increase
turns

39. PROPOSED PALLETIZING & STORAGE IMPROVEMENTS
expansion1.wmf

40. PROPOSED PALLETIZING & STAGING
IMPROVEMENTS

41. The Warehouse Improvement Cycle
Assessment Recommended Methods
(VSM) Solutions Layout
Material Handling
Visual Controls
Continuous
Improvement
Automation
Implementation Information
DO IT!
Plan Systems