Warehouse Analysis and Improvement for Färggrossen : A Multiple Case Study

Abstract: Färggrossen is a warehousing company that was established in 1976. The company has over 400 customers ranging across mid and south Sweden; it stores 5,000 different types of products such as paints, wallpapers, chemicals and tools which are used for painting. Since its establishment, the company has not changed how it manages its warehouse. Decisions are based on the warehouse manager’s personal memory and decisions, and this method worked sufficiently well until the company was bought by Mikael Lindgren in September 2008. Lindgren, the CEO, believed that the company had more potential, which is why the company has eagerly started to make changes in order to improve the warehouse operations as well as to reach its full potential. This thesis is to guide the company to reach this goal. At our first meeting with Färggrossen, improvements regarding different processes as well as the warehouse layout were identified. As a first step, a literature study was conducted in order to gain deeper insight and understanding about warehouse layouts; also we benefited from studying literature regarding different warehouse aspects from a system perspective: inputs, processes and outputs. Subsequent to the literature study, we identified those thesis research questions which needed to be answered in order to improve the warehouse management at Färggrossen. The next step was to decide which methods should be used in order to answer these questions. After researching different methodology options, a meeting with Färggrossen and our supervisor Bengt Ekdahl took place where we, together, decided to use the multiple case study method. Färggrossen suggested that we study two other companies, BSAB and ECO; according to them, these companies had similar warehouses. To be able to benchmark three companies, we needed to understand the warehousing management systems of all three companies, which is why we conducted our interviews. Once we finished gathering the required data, we defined the three companies’ activities in a manner to correspond with the terminology which is used in the literature.  In the analysis chapter we compared the three companies, and also used the information from the literature in order to provide Färggrossen with recommendations on how to improve the warehouse processes and layout. These are categorised as main, secondary and future recommendations; the main recommendations are the most important and inexpensive to implement, which is why we strongly suggest that they are prioritized. The two most important recommendations to improve the outputs of the warehouse system are implementing a serialized locater addressing system and defining a bulk area to support the replenishment process. These particular modifications will improve the overall efficiency of the warehouse system as well as the product availability and the customer satisfaction. The overall efficiency of the warehouse system will be further improved by eliminating manual labour as much as possible and combining the inspections whih are done in the receiving process with the putaway process. The product condition will be improved if the following recommendations are implemented; a small shelf solution which is used in ECO, a fixed slot system in the wallpaper area and the implementation of safety precautions in the company. The purpose of this thesis was to map and analyze Färggrossen in order to improve the inventory, warehouse layout and the methods being used in the warehouse management. With our recommendations, the company will have an improved and new warehouse layout, the processes will be improved and the efficiency will be increased.