Evaluating and Improving a Spare Parts Warehouse in the Mining Industry - A Case Study at Sandvik AB

Abstract: Title: Evaluating and improving a spare parts warehouse in the mining industry – a case study at Sandvik AB. Authors: Filip Linse, Jacob Sandefeldt Supervisor: Joakim Kembro, Department of Industrial Management and Logistics, Faculty of Engineering, Lund University Problem description: The importance of having efficient warehouse operations is increasing as customer demand changes quickly in combination with an overall expectancy of shorter and shorter lead times. Warehouses are a major part of any large company when it comes to costs and supply chain performance which justifies making them subject to optimization. To enable items to move smoothly through the warehouse the different activities that are performed within must be aligned with each other as well as with the parts of the supply chain that extend beyond the warehouse walls. As opposed to many other warehouse optimization projects, this thesis does not focus on the picking operation. Instead, the focus is based on the hypothesis that improving the receiving operation can unlock the overall warehouse potential through synergies with the other operations. Purpose: The purpose of this thesis is to identify improvement suggestions in the receiving operation of a warehouse in order explore how these can enhance the efficiency of the entire warehouse. Research objectives: Characterize the warehouse based on operational and design aspects and identify the problems that can be found within. Suggest improvements focused on the receiving operation and determine how these suggestions impact the entire warehouse. Methodology: The literature study was compiled into a support tool for characterizing a warehouse that lists the most important alternatives for each major operation that can be used when deciding on how a particular warehouse should be configured. Through a single case study, the tool is applied to a spare parts warehouse at Sandvik and used to identify problems and deliver improvement suggestions. Conclusion: The hypothesis that the receiving operation can be the key to overall warehouse performance is justified. By changing different aspects of the receiving operation such as the placement of packing stations, number of warehouse operators, and how items are packed the ultimate measure of a warehouse, which is the ability to meet customer demand, is enhanced. Keywords: Warehouse operations, warehouse design, warehousing, receiving operation, synergies, supplier collaboration.