Senior Design Stories: Increasing Warehouse Efficiencies
During the last 16 years, SD Wheel Corp. has experienced exponential growth within their market of matching car and truck enthusiasts with wheel and tire bundles. A staple of their business model is offering the largest product selection within the industry and being able to ship orders anywhere within the continental US within a week. Due to its growth, the company obtained a warehouse in Batavia. The three main activities in the warehouse are put-away, pulling, and production. Tires and wheels arrive in containers from all over the United States and need to be put away into an open location in the warehouse.
For every customer order, employees need to pull tires and wheels and take them to production. Pulling tires and wheels to satisfy customer orders make up 55% of the operational expenses. In production, employees perform quality assurance and prepare the products for shipping. Throughout this project, many different IE tools are being used such as process flow mapping, demand analysis, time studies, layout analysis, and designing optimization models.
In the last year, the company held more than 5,000 SKUs for tires and over 28,000 SKUs for wheels. The SKU variation also changes drastically throughout the year. Currently, wheels and tires are stored in any available location as they arrive and results in product scattered around the entire warehouse.
SD Wheel Corp. has tasked NIU’s Industrial and Systems Engineering Senior Design team with improving the pulling process in order to meet the TAKT time of 2.23 minutes and developing a strategy for storing their products to minimize the distance involved in the pulling and put-away process.
The students have identified hundreds of SKUs that can be managed more efficiently and will result in millions of dollars saved. Consolidating product with similar demand trends and storing them in storage locations with the lowest distance to and from production and receiving will maximize the efficiency and effectiveness of the pulling process and increase their ability to meet their growing customer demand.