In progress How and When to Pick an Order

Reference:
ERIM PhD 2014 RSM LIS 01 FW_LK_RZ_RdK_JD

Abstract

Achieving high-volume production and delivering within the shortest time, while maintain-
ing low inventory are some of the key principles in supply chain management. In a further
attempt to decrease the total inventory, lots of companies decided to replace multiple rela-
tively small distribution centers (DCs) by a few large ones. In some cases, even an entire
continent is served by a few DCs at strategic locations (Van Den Berg and Zijm 1999). In
this regard, order picking - the process of retrieving products from storage to ful l a speci c
customer request - has been identi ed as the most costly operation (De Koster et al. 2007,
Drury et al. 1988, Goetschalckx and Ashayeri 1989). It is estimated that around 55% of the
total warehouse operation cost is related to the order picking (Tompkins et al. 2010). This
implies that improving the order picking process is the rst priority for achieving an ecient
warehouse. Advances in technologies have enabled companies to automate various parts of
the order picking process. Implementing these technologies has a potential to save on labour
costs, increase the reliability of the order picking process, reduce error rates, and shorten
the response times (Zaerpour 2013). Furthermore, large consolidated DCs not only help to
reduce safety stocks but also help to justify the automation of the order picking process. In
this document we propose four research projects that are aimed to improve the eciency of
the order picking process in warehouses.

Keywords

Material handling, Queueing networks, Supply chain management, Warehousing, Vehicle- based order pick systems, AVS/R systems, Sequencing, Scheduling, Order release

Time frame

2014 - 2018

Topic

Supply Chain Management
This theme addresses design, management, optimization, coordination, and planning issues in supply chains and networks. Attention is not only given to flows of products, but also to flows of people.

Subtheme: Sustainability and Supply Chain Optimization
The research on Sustainability and Supply Chain Optimization focuses on developing analytic approaches to improve economic and environmental performance of supply chains. According to Cradle to Cradle principles, closing material and product loops is essential for reaching true sustainability, and this calls for radical innovations in the supply chain. This in particular requires the integration of the forward chain with the service and reverse chain. Smarter use of existing resources and processes in the forward chain and avoiding material and energy need altogether leads to important gains in terms of economic and ecological footprints. This subtheme also includes the mathematical analysis of methods for supply chain optimization. An example project is the following:

  • Coordinated supply chain internalization of external costs of transportation logistics. For various reasons, companies are progressively involved in voluntary or regulated programs that aim to reduce the negative externalities of their logistics activities. The example of carbon footprint reduction has received particular attention. While some programs are regulated, such as the Emission Trading Scheme for large direct emitters in Europe, other programs are voluntary, such as the supply chain wide emission reduction programs initiated by some OEMs (Mattel, SCA) and retailers (Walmart, Tesco). In supply chains, the reduction of negative externalities needs to be coordinated, as the associated investments and returns are not distributed evenly. The proposed research will consider quantitative modelling of supply chain coordination problems between multiple organizations associated with voluntary and regulated programs. For further information: prof.dr. Rob Zuidwijk: rzuidwijk@rsm.nl.


Subtheme: Terminal Optimization
The research on Terminal Optimization focuses on developing theories, and quantitative optimization models and tools to improve the design, operations, and planning and control of terminal processes. Such terminals include warehouses, port and railway terminals, and trans-shipment centres with the related material handling systems. Our research resulted into insight into the relations between layout, storage strategies, order batching, and picker routing methods. The developed design principles (layout, system selection) are currently used by several warehouse design companies. An example project is the following:

  • Stochastic models for the design of automated warehousing systems. Complex automated warehousing systems require sophisticated stochastic models to adequately describe and predict the consequences of variability in processes like picking, transporting, sorting, and buffering. These models have proved their value in supporting practical operations and decision making in, for example, warehouse layout, order scheduling, and product storage. In this project we aim to make a big leap forward in the development of stochastic models, and in particular queuing models, for the design of automated warehousing systems and their interfaces with manual processes. The proposal focusses on the study of stand-alone components, such as storage and retrieval systems, as well as complete warehousing concepts, such as dynamic picking systems, or combinations of picking and sorting systems in interaction with manual processes. Ultimately we envision a hierarchical modelling approach: the results of the stochastic models will provide input to the optimization of the warehouse design. For further information: prof.dr. René de Koster: rkoster@rsm.nl.


Subtheme: Transportation Management
The aim of the research on Transportation Management is to improve the performance of passenger and cargo transportation systems, usually based on the application of simulation and mathematical optimization methods. Within the Smart Port program, research is carried out focusing on improving the transport connections between the Port of Rotterdam and the Hinterland via rail and barge, and on security and compliance in international transportation. Furthermore, due to our close cooperation with Netherlands Railways (NS), much research focuses on optimization of railway systems. Specific topics of this subtheme include robustness and reliability of transportation systems, fleet composition, city distribution, the effective use of information, and revenue management.
Examples projects within this subtheme are the following:

  • Last-mile delivery services in online retailing: Despite the potential of the Internet as a sales channel, online retailers face many logistic challenges in the fulfilment of online demand. Internet order fulfilment is considered the most challenging and critical operation of companies engaging into selling physical goods online. Handling small individual orders and shipping them to the customer's home in a timely and cost-efficient manner is difficult. This is particularly the case for the "last-mile" delivery, i.e. the last leg of the e-fulfilment supply chain. This last-mile often covers small distances, but corresponds to disproportional high costs. The primary goal of this project is to identify the strengths and weaknesses of different service models in different settings, and to develop decision support tools to facilitate the optimal design of different delivery service models in online retailing. For further information: dr.ir. Niels Agatz: nagatz@rsm.nl.
  • Passenger oriented disruption management in public transport: This project focuses on disruption management in public transport, where the aim is to uphold as much as possible service for the passengers in disrupted situations. The project aims at understanding how passenger behaviour can be used as input and possibly be influenced in such situations, so that the remaining system capacity can be utilized most effectively. Real-time disruption management strategies are developed based on mathematical optimization models. Passenger behaviour is studied based on big data sources like smart card data and social media. For further information: prof.dr Leo Kroon: lkroon@rsm.nl
  • Big data in traffic and transportation: Traffic and transportation processes generate massive amounts of operational data. The potential of these data often goes beyond straightforward monitoring, considering their use to actively manage capacity, influence behavior, analyze patterns, describe present states, or forecast future developments. The realization of these potential benefits is less straightforward, as it requires investments in a proper data infrastructure, advanced skills in business analytics, and a clear view of business strategy, which can be prohibitive, even for larger companies. The aim of this project is to develop big data applications in traffic and transportation. Prominent examples are the smart cards in railway transport and the use of automatic detection devices and electronic trade documentation to infer the utilization of the traffic infrastructure. For further information: dr. Jan van Dalen: jdalen@rsm.nl


Subtheme: Purchasing and Supply Management
Our research on Purchasing and Supply Management focuses mainly on relational and contractual governance in buyer-supplier relations, and on purchasing strategy. The domains where we study these processes have been extended from manufacturing sectors to the public and service sectors, where for instance research is currently conducted on the use of performance-based contracts in health-care and public infrastructure, and its impact on product and process innovation.

Subtheme: Behavioural Operations
Our research in Behavioral Operations Management focuses on the impact of human factors on company performance, next to planning and control systems. We study the role of humans (managers, workers) in operational processes, in particular the effects of systems design, organizational climate and leadership on worker behaviour, well-being and performance, including innovation. We study leader behaviour, decision making, and implied worker behaviour in interaction with systems, in contexts relevant to society. Example projects in this subtheme are the following:

  • Work environments for human performance. The goal of this research is to develop (production) systems and procedures in manufacturing and service industries to improve human performance in terms of productivity, quality, creativity, and health and safety in the work environment. The goal is to maximise business performance as well as human well-being. The research focuses on the discovering relationships between on the one hand different characteristics of the social-organisational and physical work environment, and on the other hand individual performance, team performance, and firm performance. This research aims to combine academic rigor with practical relevance, is performed in close collaboration with industry stakeholders, and results in setting guidelines for managerial practice and system design practice. For further information: prof.dr. Jan Dul: jdul@rsm.nl.
  • Behaviour and logistic performance. In recent research it has been demonstrated that behavioural aspects play a major role in achieving company performance, e.g. in the areas of worker productivity, safety, and job satisfaction. We want to study this further and include the effects of worker behaviour on environmental performance. Car-driver behaviour can impact the use of fossil fuels with up to 15% in road traffic. In warehouses, electricity consumption is for a large part determined by the use of forklifts and other equipment. In conjunction with a number of companies we want to conduct experiments and carry out in-company research to find out the impact of incentives and forklift driver personality on driver behaviour and warehouse operational performance, including environmental performance. For further information: prof.dr. René de Koster: rkoster@rsm.nl.
  • Team decision making and performance: The Operations Management (OM) field witnesses a rapidly growing interest in behavioral research, but virtually all studies focus on individual decision-making. How teams make decisions is largely ignored - which is remarkable because operations and supply chain management decisions (sales & operations planning processes) are typically made in teams. Our research focuses on identification and analysis of cognitive and motivational biases that play out in sales & operations planning, including regulatory focus (a yet uncharted area in behavioral OM) and investigates the power of team reflexivity - the extent to which teams reflect on and modify their functioning - to mitigate such biases. For further information: dr. M. Schippers: mschippers@rsm.nl.
  • Study success: Enhancing Student Retention and Academic Performance: The Effects of Guided Reflection on Goals and Teamwork
    Prior research has shown that an online goal-setting intervention can be been very successful in raising academic performance and retention rate of students. Especially clearly defined and articulated goals give students purpose and meaning. In the current project, we aim to advance our understanding of these effects by investigating (a) specific changes in student behavior as a result of participating in this program and (b) the extent to which the program enhances academic performance of students in a problem-based learning context.
    On the other hand, students have to work in teams a lot, which often is accompanied by conflict and social loafing (free-riding). In the current project, we will also assess the effect of an online intervention regarding goal-setting on a team level (i.e. team charter) on the quality of team work of students.For further information: dr. M. Schippers, mschippers@rsm.nl.

Supervisory Team

René de Koster
Professor of Logistics and Operations Management
  • Promotor
Debjit Roy
Associate Professor of Logistics and Operations Management
  • Daily Supervisor