No question – logistics challenges have increased since the rise of e-commerce and the number of products on the market started to multiply. For this reason, supply chain solutions have become an integral part of business strategies to cope with these ever-increasing complexities.
However, there is the difficult question of which technology to implement to make better use of your warehouse. So, how can you tackle this task?
Simulation technology is broadening possibilities for how warehouses evaluate their:
- Physical space
- Use of technology
Compared to traditional forecasting models on spreadsheets, the benefits from simulation software come in the form of a holistic overview of both current and potential operations through a user-friendly interface. Plus, it eliminates costly errors by enabling the trialing and benchmarking of different solutions in a virtual warehouse
What exactly is warehouse simulation?
Through warehouse simulation, you can accurately visualize all the attributes of the warehouse in a 2D or 3D computer model. By doing this, you can run a day or a week in the life of your operation and get back data on its performance capability.
Areas can include:
- In- and outbound workflows
- Staffing requirements
- Material handling
- Vehicle movements
- Aisle widths
- Storage capacity
- Entrance gate, loading/offloading bays and other external areas
Simulation can compare different “what-if” scenarios. This is possible for greenfield as well as brownfield sites. So, for the former, this might be different layout and storage configurations, and for the latter, solutions for current process bottlenecks. Evaluating obvious and hidden “breaking points” allows to create accurate longer-term projection for future expansion.
Examples of use
If you are using warehouse simulation as an improvement tool to current operations, the first step is to create an exact computer model of your present end-to-end processes. This is typically over a seven-day period, reflecting a weekly distribution cycle. Then you can run different scenarios over a similar seven-day period, against the data you have collected, to create an accurate “compare and contrast” picture.
For example, you can compare fixed automation with the use of autonomous mobile robots.
Making the best use of space
Using preconfigured industry standards, such as aisle widths and pallet sizes, allows quick and easy simulated use of space: You can optimize your storage by evaluating different storage methods and racking types and the software will automatically show the number of pallet positions created. Running the simulation will further identify if sufficient storage has been provided. Changing the size of the allocated space results in the number of locations automatically adjusting. Further customization in the simulation software, for example, allows adjustment of the height or width of a rack and the number of storage locations. Plus, if your storage system is automated, you can compare the speed of putting away or retrieving items against different automation technologies.
Dealing with seasonal peaks
Preparing for seasonal peaks can be achieved by identifying areas which will need more attention, a change in process, or extra resources. This is particularly prevalent when you consider that during peak periods, warehouses can expect to double staff levels. You may need to consider the area you will need to allocate for a 10% rise in demand for a particular product, how many more AMRs you may need to lease, or – if you deploy voice technology – how many additional headsets you will need.
Calibrating the model
It is important to note that the more accurate the data, the more effective the simulation. For this reason, it is crucial that the simulation partner runs the model based on the information they have assimilated. If the numbers do not reflect the reality, work with your partner to fine tune until you have achieved 95 to 98% accuracy.
Tying it all together
Warehouse simulation technology is continuously evolving. It allows you to
- clearly visualize your operations from A to Z in 2D and 3D
- evaluate your current and potential technology performance
- create “what-if” scenarios for peak seasonal demand
- generate models to assess your breaking points
- prepare for long-term growth
- reduce time and cost and risk for the decision-making process
Plus, the Internet of Things (IoT) in particular – the connectivity of devices and software – is exploring possibilities we could previously not even imagine. As time goes on, the sensors and information within a warehouse will be able to provide far more accurate information, which simulation software can then use as a basis for optimizing the operations. Predictive maintenance – where you can evaluate the health and lifetime of a piece of equipment in advance of any failure – is another example of how warehouses will improve their performance into the future. By feeding these predictive insights into a simulation model, you will be able to better maintain performance levels and direct capital expenditure. Looking through a future lens, the possibilities of warehouse simulation are endless.
Simon Shore is Managing Director for Supply Chain Modelling and Maritime solutions globally at Korber Supply Chain. Simon and his team are focused on using technology to help their customers identify the optimum supply chain strategy for their business. Simon has over 20 years’ experience in the supply chain software industry and has held Director positions in sales and services driving business benefits for his customers in the areas of warehouse management, customs and excise, freight forwarding and ERP. He studied engineering, is a Chartered Engineer, a member of the Institute of Engineering Technology and a member of the Chartered Institute of Logistics and Transport.