Warehouse Layout Optimization : A Commissioned Thesis for Fiskars Garden Tools Oy
Bentz, Kyle (2017)
Bentz, Kyle
Yrkeshögskolan Arcada
2017
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2017052610537
https://urn.fi/URN:NBN:fi:amk-2017052610537
Tiivistelmä
The purpose of this thesis was to find ways on how to optimize the layout of Fiskars’s Garden Tools Distribution Center (D.C.) located in Billnäs, Finland. This was done by
answering three questions: 1) Which products generate the most sales revenue? 2) Which products have a high picking frequency? 3) Which products are commonly sold together?
4) Where should these High Revenue/Frequently picked products be placed within the warehouse? To find the answer to these questions, an ABC Analysis was used. The ABC Analysis is based on Pareto’s 80/20 rule, which states that 20% of your products generate 80% of your profits. An ABC analysis works by dividing all the products into three
classifications: A, B, and C products, ranked from most important to least important. Since there were two criteria: 1) Sales Revenue, and 2) Picking Frequency, it was then necessary to do an ABC Analysis on each and then combine them which created a Double ABC Analysis. This meant that instead of having three classifications from one ABC Analysis, there is now nine categories from a Double ABC Analysis. Products were then classified as “AA, AB, and AC” products. Finally, another ABC analysis was done based on the results from the Double ABC analysis. This revealed where these: “AA, AB, etc..” products should be placed in the warehouse for optimum ease of picking. This report is based on primary research on data concerning products, quantities, cost of goods sold, and delivery orders, which all aided in finding of the results for this thesis. Based on the sales revenue and picking frequency, out of the 514 products that were in the database, the analysis identified 51 products that have been identified as “AA” products. This means that these products are of high sales revenue and, picked frequently. It was recommended in this
thesis that the management of the Billnäs D.C. should devote more of their resources towards these “AA” products as they are the most important products for the company and
place these high revenue and frequently picked products be placed in areas that are closest to the packing station making these products easily accessible to the warehouse workers.
answering three questions: 1) Which products generate the most sales revenue? 2) Which products have a high picking frequency? 3) Which products are commonly sold together?
4) Where should these High Revenue/Frequently picked products be placed within the warehouse? To find the answer to these questions, an ABC Analysis was used. The ABC Analysis is based on Pareto’s 80/20 rule, which states that 20% of your products generate 80% of your profits. An ABC analysis works by dividing all the products into three
classifications: A, B, and C products, ranked from most important to least important. Since there were two criteria: 1) Sales Revenue, and 2) Picking Frequency, it was then necessary to do an ABC Analysis on each and then combine them which created a Double ABC Analysis. This meant that instead of having three classifications from one ABC Analysis, there is now nine categories from a Double ABC Analysis. Products were then classified as “AA, AB, and AC” products. Finally, another ABC analysis was done based on the results from the Double ABC analysis. This revealed where these: “AA, AB, etc..” products should be placed in the warehouse for optimum ease of picking. This report is based on primary research on data concerning products, quantities, cost of goods sold, and delivery orders, which all aided in finding of the results for this thesis. Based on the sales revenue and picking frequency, out of the 514 products that were in the database, the analysis identified 51 products that have been identified as “AA” products. This means that these products are of high sales revenue and, picked frequently. It was recommended in this
thesis that the management of the Billnäs D.C. should devote more of their resources towards these “AA” products as they are the most important products for the company and
place these high revenue and frequently picked products be placed in areas that are closest to the packing station making these products easily accessible to the warehouse workers.