A project for International Truck & Engine Corporation

These materials are provided by the Supply Chain & Logistics Institute at the Georgia Institute of Technology. You are welcome to use them so long as the copyrights remain intact, credit for authorship is acknowledged, and nothing is resold at profit.

Service parts distribution at International Truck & Engine Corp.

The predecessor to ITE was the International Harvester Company, which built and sold agricultural equipment, which was seasonal. Now, as the International Truck & Engine Corporation, they make and sell trucks,Ê school buses, and engineÊparts. With a more diverse suite of products, seasonalities have been minimized. The parts business have experienced 14 consecutive years of growth but corporate (manufacturing) growth is heavily dependent on economic conditions.

The ITE warehouse is a service parts facility: It ships spare parts on demand. Customer demand is not under their direct control but can only be forecast statistically. It is typical of such warehouses that they carry very many sku's and that most of them move slowly. Of the approximately 22,000 skus held by this DC, 1,500 account for about one-half of the annual volume.

Another feature of service parts distribution is that delivery is urgent, and especially so in this context: Some large industrial truck may be idle (not generating revenue) while waiting for repair parts.

The DC serves mostly truck dealers and a typical order is for about 70 lines, though this may vary considerably. "Stock orders" are picked in the morning and go to replenish dealer's stock. "Emergency orders" are those for parts that are urgently needed, such as for repair, but not typically carried at the dealer, because they are slow-moving or expensive or both. Emergency orders are accepted until 3PM and will be sent out the same day.

The Atlanta DC employs about 35 order-pickers and they are assigned to zones (areas of the warehouse). Picking is coordinated through RF. We will focus on the following three zones (or perhaps on only one or two of these):

About 20 workers pick small parts from Zone 5. Two or three workers pick heavier parts from Zone 2; and about five workers pick the heaviest parts from Zone 3.

Pickers travel by electric truck except those picking the heavy items; they use a lift-truck.

Orders are batched by the warehouse management system. The logic behind the batching is not clear.

Here is a photo tour of the distribution center.

The project

The main concern of the client is convenience of retrieval.


The company data is copyrighted and proprietary. You may use it for the purposes of this course only. (If you would like to use it for something else, please contact me to discuss.)

Here is the data we have to work with:

Warehouse layout and addresses

The three main areas of the warehouse are

There are other, smaller, special purpose areas that we will not consider, such as the area for aerosols and flammables and the area for hoods and body panels.

Click to enlarge.

Bin-shelving for small parts: Aisle 381 Bin 1

Aisles and bins are numbered on the floor as shown in the photo. Level A is the lowest, then B, C, etc. For example, address 381-01-B2 refers to the storage location at aisle 381, bin (section) 1, level B, the second position in the one-way direction of travel. Notice that the next bin on the left is 03, then 05, etc. The bins on the right are numbered 02, 04, etc.

Level T stands for "top" and will be a reserve location. Reserve locations are to be found only in the pallet rack area


Click to enlarge.

Rack for bigger, heavier parts: Aisle 361 Section 1

First steps

Here are some suggestions to help you get started: First note that there are two parts to the slotting decision, in what type of storage mode to place a sku and exactly where to place it.

Here are some questions you may want to explore: