Simultaneous determination of warehouse layout and control policies

In a supply chain’s order fulfilment process, it is often the warehouse that plays a central role in making the right product available to the right customer at the right time. This paper aims to improve warehouse performance by deriving an effective design method for the simultaneous determination of warehouse layout and the warehouse’s control policies. The authors consider layout variables for the warehouse such as the number of primary aisles utilised, the number of cross-aisles and the aisle length under several different design philosophies. Concurrently, control policies such as storage policies and routing are considered. Simulation is utilised to determine the performance of the various resulting scenarios. A screening and selection procedure is employed to reduce the required number of replications while achieving a predetermined precision in identifying the best configuration. The approach is applied for an industrial partner in this research and the results of experimentation are compared to a baseline scenario which describes a proposed new facility in the Netherlands. The results reveal a large potential for performance improvement.