A project for S. P. Richards Company

This is a project to accompany the course and the book Warehouse & Distribution Science, at the Georgia Institute of Technology, by John J. BARTHOLDI, III and Steven T. HACKMAN. Everyone is welcome to use the book and materials for educational purposes, as long as all copyrights remain intact.

The company and its DC operations

Click to enlarge.

Small parts stored in 18-inch deep shelves.

We are pleased to welcome back S. P. Richards Co., for whom previous classes have done projects. Rick Weeks and Amy Severance of SPR visited on 27 January and described the company and some engineering goals at the Philadelphia distribution center. (Their presentation is available here in ppt (3MB) or pdf (32 MB) formats.)

Here are highlights from the talk. SPR distributes wholesale office products. Each DC accepts orders until around 5PM (depending on the DC and the customer) and ships overnight for next day delivery. The customers are known and stable but their orders are not known until shortly before they must be loaded onto a scheduled truck for delivery.

SPR serves three main types of customers: "Mega-dealers", independent resellers, and internet resellers (the last of which is growing quickly). About 75 percent of orders received by SPR are "wrap-and-label", which means they are packaged as if they came from SPR's customer.

We will be looking and the distribution center in Morristown, NJ, which serves the Philadelphia area and so is informally called the "Philadelphia DC" or, even more informally, the "Philly DC". The Philadelphia DC has long been one of the most efficient of the SPR DCs. But recently their productivity has dropped slightly after they installed a warehouse management system. They are now searching for how to regain the lost productivity.

We will be focusing on the area of the warehouse shown in the figure below. (You can find a larger version of this layout here.)

Layout of B, C, F zones

Layout of zones B, C, and F

Most of the activity in Philadelphia is in zones B and C. Zone B is the blue shelving in the figure above and this is the primary picking area. The cluster on the left is 30-inches deep and 42-inches wide. The cluster on the right is 18-inches deep and 42-inches wide. Zone B was intended to hold the fastest moving of the small products. Zone C is the red shelving, some 18-inches deep, others 30-inches deep, and all 42-inches wide. Zone C was intended to hold slower moving small products. Currently zones B and C are picked independently of each other and the two corresponding parts of any order are shipped separately. However, as this has not produced the hoped-for efficiencies, the order-picking for these two zones will be combined, so that each picker will travel through both zones if necessary. SPR has been puzzled that the lines picked per person hour have been approximately the same in zones B and C. Is this because of wrong choice of product to store in B? Or because of congestion? Or is there some other reason?

Zone F is pallet rack that has been configured to hold both full pallets and, in some locations, cartons. Zone F is the gray racking on the bottom left of the figure and also the purple racking that encircles zone B in a sort of horseshoe shape. The gray area of zone F is for active pick locations of products that are stored and picked as eaches, such as brooms or garbage cans. The purple region is intended to hold overstock for zones F and B but it also holds some other items that are both stored and picked as eaches.

Here is a legend for the map above:

Other features of interest in the layout:

Each order-picker pushes a cart and travels a complete circuit through the main aisles of the zone, picking a batch of orders. Workers pick directly into final packaging, which is cardboard boxes. Any full-case quantities are pulled from reserve. Thus if a customer requests 13 pens and the pens are packed 12 to a carton, there will be one pick from reserve (of 1 carton) plus one pick from the active pick area (of 1 pen).

You can take a tour of the key operating areas of the SPR Philadelphia distribution center here.

The project

Click to enlarge.

Light bulk stored in 30-inch deep shelves.

The Philadelphia DC is reported to be among the best in the SPR system. However they continue to look for ways to improve. They have generated the following list of issues.

As in any real operation, the warehouse may be changing in some ways even as we try to improve it. For example, here are two changes under current study. In the circled region on the left of the figure below, you can see that one line of shelving has been removed (formerly blue, now clear) and the pick-path has been changed to be unidirectional, in hopes of reducing congestion. Similarly, the circled region on the right might be changed so that product to the far right of Zone C is moved to the left-most green area. Then Zone C would be more compact and could be visited by a unidirectional path, again to reduce congestion. Teams should feel free to evaluate these suggestions, or come up with your own.

Suggested changes to layout of Zones B, C

Some possible changes to layout of zones B and C


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.)

Data will be posted as soon as we receive it. Here is what we requested:

  1. Item master, with the following fields: This will be used to support computation of re-slotting Zones B, C, and F
  2. Order history over, say, 3 months, with the following fields:

    This will be used to address some of the other questions you raised, such as about how to batch pick-lines, whether to pick into a tote or a box, etc. Note that it was important to avoid December and January in this order history because during those months, and only then, calendars are the fastest moving items. You must always be careful of seasonalities!

  3. Additional warehouse description
  4. Labor economics

Here is what we have received so far. Note that in each instance we have tried to err on the side of requesting too much data rather than too little.

Suggestions for getting started