Management criteria of automated order picking systems in high‐rotation high‐volume distribution centers

Abstract

Purpose

To develop a decision support system (DSS) and improved management criteria for operating dispenser‐based single‐piece automatic order picking systems (AOPS) in distribution centers, able to reduce the need for manual decision making based on personal experience or subjective judgement.

Design/methodology/approach

Simulation was utilized to analyze the relationships between stochastic demand, setup parameters and performances of an AOPS. A set of rules was then defined to cost‐effectively select the values of setup parameters. A DSS was built incorporating the heuristic rules to dynamically update the equipment setup.

Findings

Manual management of an AOPS can be poorly efficient even if largely practiced. Significant economic benefits may result from rule‐based equipment setup instead of the traditional manual decision approach. This was verified resorting to a case study referring to the distribution center of a leading pharmaceuticals distributor in Italy. Major performances improvements resulted regarding manual operation by an experienced logistic manager, including a 40 per cent reduction of the cost per picked order line.

Practical implications

The proposed DSS is able to monitor the system behaviour over a specified time window and automatically set the values of the state variables for the next period. It is able to automatically define the set of items to be allocated on to the machine, to select the number of storage locations allocated to each item and set reorder levels and maximum picking quantities for each item, thus greatly simplifying the task of the logistic manager. Utilization of this DSS enables one to maintain a high level of picking automation efficiency while drastically cutting the required support personnel, thus significantly improving profit margins of high‐volume high‐rotation distribution centers.

Originality/value

The paper addresses, with original methodology, a practically relevant issue which is neglected in the literature. The paper is aimed at distribution centers managers seeking to improve the performances of AOPS and reduce their operating costs.

Citation

Caputo, A.C. and Pelagagge, P.M. (2006), "Management criteria of automated order picking systems in high‐rotation high‐volume distribution centers", Industrial Management & Data Systems, Vol. 106 No. 9, pp. 1359-1383. https://doi.org/10.1108/02635570610712627