Warehouse performance improvement for a FMCG company

Chen Huihui

Abstract

There had been an increasing need for more efficient and effective supply chain strategies in meeting warehouse optimization. The warehouse is the interface area for supplies, production lines, customers and the business environment in general. Goods Receipt (GR), RM put away, Goods Issue (GI) parts of warehouse activities, with a broader view of the warehouse activities, the actual problems may become clear and understandable and hence easy to solve. The aim of this project is to increase the performance of warehousing operations day in and day out. During the project, I investigated the relationship between production volume and warehouse capacity requirement. The linear relationship obtained was used to forecast the capacity requirement. Subsequently, I found an increasingly widening gap between capacity and demand of warehouse capacity. From there, I proposed new inventory management strategies as well as warehouse capacity expansion strategies to close the gap, so as to bring the Capacity to Demand (CD) ratio to 1.2, a desired level optimize warehouse capacity. Along the way, I also found operational efficiency improvement opportunities through relocation of materials according to consumption frequency, as well as cost saving opportunities by increasing minimum ordering quantity. To implement the optimal warehouse model, various approaches were reviewed and evaluated and using Analytic Hierarchy Process (AHP) to obtain the suitable alternative that can help achieve the E2E supply chain optimization.