Developing a Design Science Based Decision Support Framework for Detailed Design of a Warehouse

Abstract: Problem description: Warehouses and warehousing operations are often considered as some of the most crucial elements in a company's supply chain, and often stand for more than 20 percent of a company’s total logistics costs. The actual size of these costs are, together with most of the costs related to warehouse operations, mainly consequences of the decisions made when designing the warehouse. The design of warehouses should therefore be considered as a critical component for any company striving towards increased competitiveness and a more efficient supply chain. When designing a warehouse several aspects have to be considered, including location and size of aisles, P/D location, picking zones, storage assignment and many more. These aspects are often interdependent, thereby making it almost impossible to find an optimal solution to the layout design problem. A structured approach towards decision making is therefore needed. Purpose: The purpose of this thesis is to develop a decision support framework by combining warehousing theory with the methodology of design science. By using design science, the focus of the research shifts from theoretical knowledge creation towards a more problem solving oriented approach, enabling the user to consider several interdependent aspects by the use of iterative processes. Research questions: How can a decision support framework for the detailed design of a warehouse be conceived by utilizing established warehouse theory in combination with design science? And, can the proposed framework enhance the ability to pursue the warehousing strategy at the case company by improving the physical layout and related processes? Methodology: By studying research within the fields of both warehousing and design science, frameworks related to both of the topics were established. The design science research framework combines the viewpoints of current research and puts it in a warehouse design context. This framework was then combined with modules, consisting of key topics from the warehousing literature study, in order to create the decision support framework. The framework was then applied to the situation at BorgWarner Sweden AB using a single case study research strategy. Conclusion: The module based approach used in the decision support framework provides several benefits when merging the concepts of warehousing and design science. The iterative design science methodology needs clearly structured definitions and limitations, which is given by the different modules of the framework. It can also be concluded that, as seen by the case study, the use of the decision support framework resulted in an improved detailed layout that are in line with the strategy of the case company.