Suggested actions to improve the warehouse layout at Nordic E-commerce group

University essay from Linnéuniversitetet/Institutionen för ekonomistyrning och logistik (ELO); Linnéuniversitetet/Institutionen för ekonomistyrning och logistik (ELO)

Abstract: Background: Nordic E-commerce group (NECG) consists of affiliated companies NordicInk, NordicFeel and PetsOnline. Three different types of companies in one warehouse area contribute to a wide range of products held in inventory. NECG’s problem derives in the fact that the company’s warehouse layout needs to handle a larger volume of sales, but is not capable of doing this in a structured way today. This matter of fact has led to new thoughts concerning improvements of the layout. The warehouse layout referred to in this thesis includes input and output doors, receiving and outgoing areas, material handling equipment and the placement of articles in inventory. Although article placement is per definition a part of warehouse layout, it will be given extra emphasis in this thesis as it is one of NECG’s most critical issues.   Purpose: The purpose of this thesis is to identify NECG’s current warehouse layout and article placement and the problems associated with it, as well as to provide suggested actions for improvements. This is to be done so NECG can better utilize the warehouse space, and thus prepare the warehouse to handle a larger volume of sales.   Methodology: Qualitative and quantitative data was collected through semi-structured interviews and observations at NECG, as well as through excel files containing transactional data for NordicInk’s products. Through a non-probability, snowball selection the respondents were chosen. There have not been any requirements from NECG regarding confidentiality in terms of the warehouse layout.   Findings: There are a number of suggested actions that NECG may apply to improve the warehouse layout; two separate doors for incoming and outgoing deliveries, one designated receiving and one outgoing area, and a flow shop layout combined with a U-form layout would be the most beneficial for NECG’s warehouse. Furthermore, NECG needs a more consistent article placement and it is recommended for the company to apply a floating location system to its high-picked products and a fixed location system for its low-picked products. This will make NECG take better use of the available space and a more structured warehouse will be achieved.

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