IENG 471 Lecture 17 Introduction to Order Profiling

IENG 471 - Lecture 17 Introduction to Order Profiling Major portion courtesy of Dale T. Masel, Ohio University and the 2009 Material Handling Teacher’s Institute 11/26/2020 IENG 471 Facilities Planning 1

Order Profile l Definition: Order Profiling l A summary of the important characteristics of the orders that a warehouse needs to fill l Examples of important characteristics l Demand for items What’s popular? l Quantities ordered What’s the workload? l Unit loads What equipment is needed?

Importance of Order Profiling l Provides information about our population, which is what we usually need when we design anything l We don’t design cars for individual drivers l We don’t design clothes for individual wearers l We don’t design warehouses for individual orders l Profile gives us insight on the characteristics of the individuals that comprise the population

Order Profiling as Art & Science l Art l Determining which characteristics are relevant for a particular situation l Turning the characteristics of the order population into an order fulfillment system l Requires expertise in warehouse design l Science l Converting available data into data required for a profile l Summarizing the order population from the available data l Focus of this presentation

Where to Start: Data Requirements l SKUs l What’s being stored, and possibly how it is being contained l Inventory l How much is being stored l Orders l What’s being processed, and l How much is being processed

Why bother profiling? l Trying to sort through data can be overwhelming l Profiles are ways to organize the data l Don’t want to just rely on averages l Demand would exceed capacity 50% of the time l Value of profiling is that it provides a quantitative description of what a distribution center needs to be designed to handle

Example of a Typical Order#8 # of Lines SKU # Qty 6 1481 15 1979 12 2777 6 3927 9 3979 7 2840 9

A month’s worth of orders. . . Order#1 # of Lines SKU # Order#2 Order#3 Order#4 Qty # of Lines SKU # Qty Order#28 Order#6 3 2 3 1481 6 2 1481 11 2 1481 18 # of Lines SKU # Qty Order#5 Order#8 # of Lines SKU # Qty 1979 24 3979 6 2840 4 2777 15 Order#7 1481 16 # of Lines SKU # Qty 3 # of Lines SKU # Qty 1 Order#30 2840 3 1524 18 Order#27 # of Lines SKU # Qty 1979 18 6 1481 12 Order#9 6 1481 15 # of Lines SKU # Qty 3 # of Lines SKU # Qty 2777 6 # of Lines SKU # Qty 1956 12 1979 12 Order#26 1979 12 Order#10 5 1901 13 3 4060 12 2705 27 1 2705 9 1955 2777 6 # of Lines SKU # Qty 1481 14 5422 24 Order#13 2840 6 1972 3927 9 3 3927 18 12 Order#12 1 1524 2839 7 9# of Lines SKU # Qty 6079 12 1901 Order#11 5422 12 6 3979 7 # of Lines SKU # Qty 1972 2 2840 24 7 Order#17 Order#25 1524 # of Lines SKU # 24 6 Qty 6717 2840 9 5 1524 13 1955 1481 6 15 # of Lines SKU # Qty 5 1481 8 2840 34 # of Lines SKU # Order#31 2840 18 4 1979 11 3 3122 15 3927 12 Order#16 Order#19 # of Lines SKU # Qty 3906 18 3906 13 5422 6 1481 3 # of Lines SKU # Qty 2 2839 3 3079 15 1481 15 6079 12 6079 18 Order#15 6 1 1979 12 4 1901 12 1481 5422 18 Order#20 2840 14 4817 24 # of Lines SKU # Qty 1481 6 # of Lines SKU # Qty 6717 12 Order#29 13 Order#2324 4 1972 4800 Order#21 2 2705 18 Order#18 # of Lines 18 SKU # Qty # of Lines 6 SKU # Qty Order#22 1524 5100 # of Lines SKU # Qty 2840 12 # of Lines 4 SKU # 1981 Qty 24 3 1901 24 Qty 1481 9 4 1972 6# of Lines SKU # Order#24 4 1979 1955 9 12 5340 12 Order#32 1 1481 12 1956 36 1524 10 # of Lines SKU # Qty 6079 18 1481 12 # of Lines SKU #1481 Qty 18 1481 9 2 3122 18 1481 17 1524 6 2 3906 17 1979 18 2811 18 5100 13 1481 9 Profiling gives us a way to make sense out of all this data

Examples of Order Profiles l Item Family Profile l Order quantity l Unit Load l Lines per order l Cube per order

Item Family Profile l Want to find families of SKUs l Family = group of SKUs that can completely fill a large number of orders l Items in a family are stored together and not spread over facility l Reduces travel for pickers to get all items for the order

Orders by Item Family Order#15 Order#21 Order#29 Order#1 Order#28 Order#5 Order#30 Order#22 Order#7 Order#20 Order#24 Order#6 Order#9 # of Lines SKU # Qty Qty # of Lines SKU # # of Lines Qty SKU # # of Lines SKU # Qty # of Lines SKU # Qty 131481 61901 24 12 16 13 3 6 4 4 4 1481 3 1972 61981 121481 1 1481 5 1972 1979 1524 101481 12 18 14 1979 241955 12 181979 1955 1481 91524 12 12 7 1524 181481 6 91956 1979 1524 6 1972 12 36 181972 7 1901 6 1955 15 1524 6 1 3 4001 -7000 5 Family-B & C 5 14811524 8 2840 18 39063927 18 30791481 15 54226079 18 13 34 12 3 18 Family-A & B & C 1 3 3 Order#18 Order#19 Order#23 Order#14 # of Lines SKU # Qty 5 4 4 4060 5422 6079 2501 -4000 # of Lines SKU #Qty Family – C 3122 39279 15 18 2839 5422 6 12 6079 6717 12 24 Order#11 Order#12 3 Family – B # of Lines SKU # Qty 0000 -2500 # of Lines SKU # 6 9 18 18 2 27772705 3122 1 2 2840 32705 2840 2811 12 18 2840 6 Order#25 Order#26 Order#10 Family – A Order#27 1979 1901 3 1901 1972 18 9 12 24 1481 6079 5340 12 18 6 12 6079 4800 1481 12 17 24 18 4817 510024 13 6 6717 12 Family-A & C Qty 12 24 12 Order#17 Order#2 Order#3 Order#4 Order#13 Order#16 Order#31 Order#8 Order#32 # of Lines SKU # # of Lines SKU # Qty # of Lines Qty. SKU # # of Lines SKU # Qty Qty 2 2 2 43 21481 1979 11 3 17 21481 1122840 181979 2839 24 12 3906 61481 15 1 1481 4 1481 3906 13 6 9 3979 2840 6 1979 15 12 1481 6 1481 2777 1481 15 2777 6 2840 14 3927 9 3979 7 2840 9 Family-A & B

Plotting Item Family Percentages 30 Percent of Orders 25 20 15 10 5 0 A B C AB SKU Families AC BC ABC

Information from the Profile l We get a lot of orders for only family A items and only family B items l Items from family C are usually ordered with items from family A or family B—rarely alone l Use this information to group items by family in separate areas l Maximize number of orders that can be filled from a single area l Minimize the size of each area (to keep travel distance small) If room for three aisles, where would you put aisles for A, B, C?

Order Quantity Profile l Look at what unit loads are needed to fill an order l l Pallets Cases Eaches A mix of these (progressive dimension system) l Store in quantities to make appropriate unit loads available for picking l Easier for picker to handle l Efficient to pick l Improve picking accuracy

Plotting Order Quantity Percentages 45 40 Percent of Orders 35 30 25 20 15 10 5 0 Full Broken Case Quantity Mixed

Information from the Profile l Most orders are filled with full cases, so most of the inventory will be stored as cases stacked on a pallet l Storage equipment will be some kind of pallet rack l For less than pallet quantities, different storage equipment is possible, depending on conditions l Pick from an open carton stacked on pallet with rest of full cartons l Store individual cartons on separate shelving or bins

Unit Load Profiling l Look at what unit loads (full or partial) customers order l The unit loads that SKUs are shipped in should be the unit loads you store l Avoids wasted time repacking the SKUs

For SKU 1481 the most-ordered SKU in this example Unit Load Order#2 Order#12 Order#32 Order#15 Order#21 Order#17 Order#8 # of Lines SKU #Qty. Qty # of Lines SKU # Qty Qty # of Lines SKU #Qty # of Lines SKU # 5 2 4 6 1481 1524 3979 2840 3927 1481 6079 13 3 34 6 12 3 18 3 units ordered (½ case) Order#19 Order#13 Order#31 2 4 2 19723906 13 6 17 15241481 18 10 9 1481 9 9 19561979 36 18 9 units ordered (1½case) # of Lines SKU # Qty. SKU # # of Lines SKU # Qty Qty 3 4 6 2839 2148128401901 24 12 3 1481 1979 24 1481 6 6 6 4800 24 1524 18 5100 6 6 units ordered (1 case) Order#29 Order#5 Order#22 Order#14 1 4 14811979 15 19793906 12 27771481 6 39272840 9 3979 7 2840 9 11 13 15 14 15 units ordered (2½ case) # of Lines SKU # Qty. SKU # # of Lines SKU # Qty Qty 6 4 12 1972 514811981 12 24 1955 1979 12 1481 1955 6 6079 12 1524 1972 12 4817 6 1901 6 6717 1524 6 12 units ordered (2 case) 18 12 12 24 12 Order#23 Order#4 # of Lines SKU #Qty # of Lines SKU # 2 3 14811901 18 24 27775340 15 12 1481 18 18 units ordered (3 case)

Plotting Unit Load Percentages For a single SKU 20 15 10 5 Portion of Case Ordered 3 2 5/6 2 2/3 2 1/2 2 1/3 2 1/6 2 1 5/6 1 2/3 1 1/2 1 1/3 1 1/6 1 5/6 2/3 0 1/2 Percent of Orders 25

Information from the Profile l 50% of orders for this SKU require only fullcarton quantities l 6, 12, 18 items l More than 75% of orders require a mix of only full-carton and half-carton quantities l 3, 6, 9, 12, 15, 18 items l Packaging the items in bundles of 3 within the main carton would reduce picking time for orders needing 3, 9 , or 15 items l 1 move to get 3 items

Lines per Order Profile l Each SKU on an order represents a “line” l No. Lines = No. Locations a picker must visit l May need to pick multiple units of each line item l No. Lines ≠ No. Units ordered by a customer

Lines per Order#16 Order#22 Order#9 Order#6 Order#10 Order#13 Order#20 Order#24 Order#32 Order#31 Order#2 Order#4 1 1 11979 114812705 12 2840 12 2839 9 3 9 Order#1 Order#23 Order#26 Order#27 Order#25 Order#28 2 2 2 Order#19 Order#29 Order#17 Order#15 Order#18 Order#21 # of Lines SKU # # of Lines Qty. SKU # Qty Qty 3 4 3 31901 33927 6 4060 24 2777 18 3122 12 6 15 31481 3 1481 16 1979 5340 5422 24 5422 12 2705 12 5422 24 27 6 1979 18 1524 1481 6717 18 6079 18 2840 24 6079 12 6 12 Order#14 Order#30 Order#11 Order#12 1956 5 5 197219011481 181524 13 14812840 122840 14 6079 15243906 123927 7 4817 19723079 241481 7 6717 19555422 126079 15 12 8 13 18 34 18 12 15 3 18 18 4 4 41901 41981 41979 12 1972 24 1979 11 1972 13 9 1481 1955 3906 6 1524 12 6079 13 1524 18 18 4800 1481 24 1481 12 1481 15 1481 9 17 5100 1524 2840 6 1956 6 5100 14 1979 36 13 Order#5 Order#8 # of Lines SKU # Qty Qty 22840 22705 23122 2423906 1821481 18 2839 17 1481 11 1481 3 3 18 1481 28402811 6 1481 12 2840 18 1481 9 3979 4 2777 6 6 15 # of Lines SKU # # of Lines Qty. SKU # Qty Qty # of Lines SKU # 3 # of Lines SKU # # of Lines Qty. SKU # Qty Qty # of Lines SKU # # of Lines SKU # Qty Qty 1 # of Lines SKU #Qty 6 6 1481 12 1979 12 19552777 6 19723927 12 19013979 6 15242840 6 15 12 6 9 7 9 6 10 9 18

Plotting Lines per Order Percentages 30 Percent of Orders 25 20 15 10 5 0 1 2 3 4 Lines per Order 5 6

Information from the Profile l Provides insight on amount of travel involved collecting all of the items for an order l Provides insight on equipment / method for carrying items picked by pickers l Profile also indicates percentage of items that consist of just 1 line l These orders could be packed as they are picked, since items from other zones aren’t needed l May have a dedicated area for packing these orders since they don’t need sortation l (most appropriate when 1 unit of a line is ordered)

Cube per Order Profiling l Cube is used to describe the space in a warehouse l All three dimensions are used for storage, so we’re concerned about volume, not area l Can be… l Amount of space occupied by a unit load l Amount of space available for storage in the racks/shelves

assuming 0. 1 ft 3/unit for all SKUs Cube per Order#16 Order#22 Order#9 Order#6 Order#10 Order#2 Order#31 # of Lines Qty Qty # of Lines SKU # # of Lines SKU # Qty. SKU # 1 1 22705 3 11979 11481 1222840 1222839 9 1481 3 1481 9 2839 3979 28401481 6 4 6 1 Order#7 Order#19 Order#21 Order#4 Order#13 Order#20 Order#24 Order#32 Order#1 Order#27 Order#28 Order#25 0. 1 to 2. 5 ft 3 # of Lines # of Lines SKU # # of Lines Qty. SKU # Qty Qty # of Lines SKU # # of Lines SKU # Qty Qty. SKU # 2 3 2705 324 31481 6 43122 12 2777 16 1901 15 1972 6 12 2 1481 2 2840 3122 3906 18 1834060 1741481 318 24 2705 18 1481 6 121979 18 5422 9 1979 24 5422 6 1524 27 6 2777 1481 2840 15 2811 12 2840 12 4800 1524 6079 1956 18 6079 12 1481 6 24 51001979 6 6 10 9 18 2. 6 to 5. 0 ft 3 Order#29 Order#17 Order#18 Order#23 Order#26 Order#30 Order#5 Order#8 # of Lines SKU # Qty. SKU # # of Lines SKU # Qty Qty Qty # of Lines SKU # Qty 3 3 4 4 1901 111481 9 1481 24 181901 6 1979 61979 5 13 4 3927 1981 24 12 5422 18 1979 5340 126079 121481 131979 3906 14 1955 12 12 6717 17 2777 1481 181481 241524 151955 1481 7 6 1481 12 2840 5100 13 3927 1972 141972 7 1524 6 12 19013979 1955 15 6 15242840 6 5. 1 to 7. 5 ft 3 15 12 6 9 7 9 Order#15 Order#11 Order#12 Order#14 # of Lines SKU # Qty. SKU # # of Lines SKU # Qty Qty 4 5 5 13 1972 5197214811524 8 13 1524 18 1481 2840 18 34 1481 9 6079 3906 3927 18 12 1956 36 4817 3079 1481 15 3 5422 60796717 18 18 ≥ 7. 6 ft 3 18 12 12 24 12

Plotting Cube per Order Percentages 40 Percent of Orders 35 30 25 20 15 10 5 0 0 -2. 5 2. 6 -5 5. 1 -7. 5 Cube per Order >7. 5

Information from the Profile l Cube of an order represents size of shipment to the customer l Can affect method used to pack the order l Pallet vs. Carton l Size of carton l May also affect shipping method l Parcel delivery vs. Less-than-Truck Load (LTL)

Item Activity Profile l Item Activity reflects how frequently it’s ordered and picked l Each order for an item represents additional work for warehouse l Travel to storage l Retrieval from storage l Considering Item Activity when assigning a storage location can reduce the amount of work when the item is ordered l Especially for travel

Typical Item Activity SKU #1481 Units 21, 330/week Pallets 150 units Cube 0. 6 ft 3/carton

Activity of many SKUs… SKU #3927 SKU #1524 SKU #6079 SKU #3906 SKU #1481 Units 1, 2400/week Units 48/week SKU #1979 SKU #3122 Units 48/week Units 1, 2400/week Units SKU #5422 Pallets 150 units Pallets 90 units Units 1, 2400/week SKU #1956 Pallets 90 units Pallets 150 units Pallets Units 1, 2400/week 3/carton Cube 0. 6 ft 3/carton. Cube 1 ft Pallets 150 units 3/carton SKU #2777 3/carton Units 48/week Cube 1. 2 ft Cube 0. 6 ft Cube Pallets 150 units SKU #3079 SKU #6717 3/carton Cube 0. 6 ft 3/carton Pallets 90 units Units 1, 2400/week 3 Cube 0. 6 ft /carton Units 1, 2400/week SKU #2705 Units 1, 2400/week 3/carton Cube 1 ft Pallets 150 units SKU #2840 SKU #1972 Pallets 150 units Units 1, 2400/week 3/carton Cube 0. 6 ft Units 1, 2400/week 3 3 Units 1, 2400/week Cube 1. 2 ft /carton. Pallets 150 units Cube 0. 6 ft SKU #3979 /carton Pallets 150 units Pallets 90 units 3/carton SKU #4817 Cube 0. 6 ft Units 1, 2400/week SKU #5100 3 Cube 0. 6 ft /carton Cube 1 ft 3/carton Units 1, 2400/week Pallets 150 units Units 19/week SKU #1981 SKU #5340 SKU #2839 Pallets 150 units Cube 1 ft 3/carton Pallets 45 units Units 1, 2400/week 3/carton Units 12/week Cube 0. 6 ft 3 Cube 1. 2 ft SKU #1901 /carton SKU #2811 Pallets 150 units Pallets 45 units Pallets 150 units Units 1, 2400/week SKU #4800 SKU #1955 Cube 0. 6 ft 3/carton Units 18/week SKU #4060 Cube 1. 2 ft Cube 1. 2 ft 3/carton Units 1, 2400/week Pallets 150 units Units 1, 2400/week Pallets 45 units Pallets 150 units Pallets 90 units 3/carton Cube 0. 6 ft Pallets 45 units Cube 0. 6 ft 3/carton Cube 1 ft 3/carton Cube 1. 2 ft 3/carton

Creating the Item Profile l Rank SKUs from most units/week to least l Usually divided into three classes (A, B, C) l A – Fastest movers l Probably 5% – 10% of SKUs l Consider keeping these in a special “Forward Pick Area” l B – Average l Probably 10% - 15% of SKUs l Consider keeping these near front end of aisles l C – Slowest movers l Probably 80% or more of SKUs l Store these in longer travel locations

Demand Profile SKU #1481 SKU #1901 SKU #2705 SKU #3906 SKU #6079 SKU #1524 SKU #5422 SKU #1956 Units SKU #1979 Units Units 48/week Pallets Units SKU #2840 Pallets Pallets 90 units Cube Pallets Units 1, 2400/week Cube Cube 1 ft 3/carton Cube Pallets 150 units Cube 0. 6 ft 3/carton SKU #1972 SKU #3122 SKU #4817 SKU #3979 Units SKU #3927 SKU #2777 SKU #5100 SKU #2839 Pallets Units SKU #6717 SKU #1981 SKU #2811 SKU #4060 Cube Pallets Units SKU #1955 SKU #4800 SKU #3079 SKU #5340 Cube Pallets Units Cube Units 12/week Cube Pallets 45 units Cube 1. 2 ft 3/carton

Plotting the Demand Profile A

Information from the Profile l Most popular SKUs represent most of demand, but a small portion of total SKUs l Pareto’s Law: 20% of the SKUs account for 80% of the items ordered l We need to do a good job storing and picking these SKUs because they represent most of the work l A large percentage of SKUs (maybe even more than half) represent the smallest category of demand

Applications of the Item Profile l Grouping SKUs into classes for storage l Identifying assignments in Forward and Reserve storage areas l Storage and material handling strategies

Getting Started l Profiling requires data l Need several months, to provide a picture of the long-term situation (seasonality) l Data will probably require preparation l Identify which data fields in the Work Management System (WMS) contain the needed data l May have data values that need to be fixed l Design shouldn’t start until you have a profile that describes your warehouse situation

Data Preparation l Data may not be complete l Empty fields where data wasn’t available or recorded l Data may not be accurate l Invalid SKUs l Negative inventory levels l Need to clean up this information l Fix values where possible l Delete entries if fix isn’t possible l Probably will need to be done manually

What comes next… l Completed profiles give data that is needed for an effective facility design l Amount of space (cube) for storage l Types of storage equipment l Profiles are also used to design operations l Methods for order picking l Equipment for order picking

In Summary Order profiling… l … needs to be done before a warehouse is designed (or redesigned) l … is never complete because the order characteristics change and the warehouse design and management need to be updated to reflect these changes l … if done accurately, yields excellent results and useful information l … if done incorrectly, can produce inaccurate conclusions and lead to bad decisions

Sources for further reading l Warehouse and Distribution Science, John Bartholdi and Steven Hackman (2008). Available on-line at http: //www 2. isye. gatech. edu/~jjb/wh/ l Facilities Planning, James Tompkins, John White, Yavuz Bozer, and Jose Tanchoco, 3 rd Edition (2002) Wiley. l World-Class Warehousing and Material Handling, Edward Frazelle (2001) Mc. Graw-Hill.

Questions & Issues? 11/26/2020 IENG 471 Facilities Planning 42