Challenges for warehouse efficiency : A case study at a stock point warehouse

Abstract: Introduction: Improving efficiency through the supply chain has long been strived for by management. Traditional approaches focus on improving efficiency in the supply chain through optimization of a company’s internal activities, where warehouses play an important role. Companies are therefore dealing with the dilemma of how to increase efficiency in their warehouse, yet at the same time reduce operational costs. Current research focuses on strategies to increase efficiency in conventional warehouses by studying design, operations, and planning. Digitalization and lean warehousing are also emerging as important tools for warehouse efficiency. However, alternative warehouse types exist that are less researched. The research aimed therefore to investigate the challenges warehouses with stock point design face.   Methods: A qualitative and deductive case study approach was chosen. A literature review was first conducted to find the variables defining warehouse efficiency. Interviews and observations were then performed at the case company to investigate how the variables affect efficiency at the case company. Lastly, the theoretical framework was compared to the findings to find strategies to overcome the challenges.  Findings: Efficiency problems can be found in many aspects of the case company´s warehouse. Over time the warehouse has lost its structure, where a lot of reliability for warehouse procedures are placed on the employees and their knowledge about the company and all parts. Because of missing routines for reviewing parts data, changes in generations and parts being revised, are hard to keep track of which causes an effect on efficiency. It also increases the risk of deadstock.  Conclusions: In previous research, few studies could be found where researchers tackle the problems that multiple storage building causes on efficiency. By concluding that seven key variables define warehouse efficiency from previous research and applying them to a warehouse with stock point design, the challenges that an alternative warehouse face through the important variables in warehouse efficiency research could be explained.  All the variables affect efficiency, yet warehouse design has the biggest impact. Because of limited abilities with hand scanners and missing routines for reviewing parts data, operations, movement, and planning can also be concluded to have a high influence on efficiency.  To overcome the challenges, strategies for class-based storage assignment should be applied from the perspective of the storage building limitations. Right conditions for batching and good routines for warehouse procedures and reviewing parts data are also suggested as strategies.