Square Root Law – inventory in multiple locations

Got asked what would happen to inventory when the number of stocking locations change.  I thought for a minute and remembered a quick rule of thumb … The Inventory Square Root Law states that … Average inventory increases proportionally  to the square root of the number of locations in which inventory is held. X2 =… [Read More]

Table top simulation – dock operations

Simulation is the act of imitating or mimicking the behavior of some situation or some process by means of something suitably analogous.  The imitation of a process can be used for debugging, and validating process design changes or use to communicate or train associates. Simulations can be used for: process design testing new ideas debugging… [Read More]

Tips for warehouse sizing

Tips for warehouse sizing: Don’t get fooled by “averages” Consider using statistical tools, such as standard deviation, and P.90 probability to analyze operational data – both in and out bound Understand which system components can expand capacity by adding labor, and which can’t Design expansion capability in from the start; SKU count almost always goes… [Read More]

Safety Stock Optimization

Many of you are looking for a correct, comprehensive safety-stock calculation. My company’s approach is based on more than 15 years of development and testing. As we have learned through extensive experience, optimized safety stock requires more than a formula. We use complex demand–data modeling and calculations. We provide a service, not a spreadsheet. You… [Read More]

Supply Chain Design

Things to do to improve warehouse productivity

Business may be slow now but before you know it you’ll be jammed again. Want to get more done with the folks you have?  Things to consider: Keep the lifts in good repair Batteries getting old? Stagger shift starts – replenish forward picking before the first wave Reslot often – move the A items closer… [Read More]

Walmart Sustainable Product Index

Why do you think Walmart is asking these questions of their 100,000 suppliers? Can you answer these questions by October 1, 2009? How much staff time will it take to gather this data? If you aren’t a Walmart supplier don’t think for a second you are off the hook; when will your key customers start… [Read More]

Simplified Systematic Network Planning – step 6

STEP 6: DETAIL AND DO Step 6 details and implements the network plan selected in Step 5. If the purpose of the network planning project is simply to conduct and analysis and make a presentation, no actual changes will be planned. When actual changes will be made, the planner first prepares a Gantt chart of… [Read More]

Simplified Systematic Network Planning – step 5

STEP 5: EVALUATE ALTERNATIVES In Step 5, the planner evaluates the network plans developed in Step 4 by running several alternative scenarios. Evaluation takes two forms: • Cost analysis – comparing relevant costs among scenarios and their network plans. • Intangible analysis – for factors or considerations that cannot be easily modeled or measured in… [Read More]

Simplified Systematic Network Planning – step 4

STEP 4: CREATE SCENARIOS In Step 4, the planner develops scenarios to model various elements of the problem. Each scenario is generated by making one or more of the following changes to the baseline model set-up: • Adding or deleting products, locations, resources or lanes • Changing demand allocations • Adding or relaxing constraints. The… [Read More]