Improving Warehouse Picking Performance by Using Contextual Factors and Lean Practices: A Design Science Study at Tetra Pak

Abstract: Problem Description: As warehouses play an important role in the supply chain and are vital for the success of a company, it is important that they operate efficiently. Thus, Tetra Pak wants to increase their picking efficiency for their production warehouse by identifying and solving bottlenecks and wastes that decreases the performance. Purpose: The purpose of this thesis is to develop a solution for how to increase warehouse picking efficiency by identifying and solving material-flow bottlenecks and wastes related to the picking process. Objectives: Two research objectives were formulated to fulfil the purpose of the thesis. The first one is to develop an artifact based on contextual factors and lean practices to improve warehouse picking performance. The second objective is to test and evaluate the artifact by applying it to the Tetra Pak production warehouse. Methodology: The study had a design science research strategy as it aimed to develop a solution. The first step was to do a literature review based on prior theories connected to warehousing, lean practices, and contextual factors, and create the artifact that can be used to increase picking performance. This artifact is then tested and evaluated by conducting a case study at the production warehouse at Tetra Pak. Data related to the picking performance was collected through observations, interviews, documents, and system data. The collected data was analysed with the help of pattern matching and the artifact. Lean practices helped locating bottlenecks and wastes, and the contextual factors helped designing suitable configurations. Findings: Three potential bottlenecks were identified, along with their wastes and contextual factors with the help of the artifact. The bottlenecks were space utilization, pallet picking process, and the lift put-away and picking process. The empirical findings, prior theory, wastes, and contextual factors were used to formulate 12 general propositions on how to improve picking efficiency in certain contexts. The practical implications for the case company were that that they should increase collaboration and maintenance to improve space utilization, use a new zone configuration to remove wastes at the lift and pallet processes, and use batch picking to increase the performance of the lift and pallet picking. Conclusion: This thesis involved the creation and validation of an artifact for increasing warehouse picking efficiency by identifying and solving material-flow bottlenecks and wastes related to the picking process. The artifact was found useful as it guided the data that was needed to be collected, as well as the analysis of it. The lean practices helped to locate the bottlenecks and waste, while the contextual factors helped to formulate better configurations that reduce wastes and increase the picking efficiency. The artifact was found useful and flexible as it had a systematic approach and was based on well-grounded and comprehensive theories. Since the artifact helped to formulate 12 propositions to improve the picking performance of the case company by targeting the bottlenecks and waste, it shows that it is an applicable framework. Thus, fulfilling the purpose of the thesis project.