Storage Location Optimization for a real-world stock warehouse: the non-food sector

The retail industry sector is becoming increasingly competitive. As a result, companies are seeking to squeeze inefficiencies out of their supply chains. This is the result of periods of pressures for reducing costs, improving quality and responsiveness created by the global competition. This project emerges to give an improvement to the internal layout of the non-food stock zone of the warehouse of a Portuguese Food Retailer company. At a first stage, we collected information about the non-food stock processes throughout informal interviews, non-participant directobservation and data about products in stock, their order’s frequency and their locations. At a second stage, we plan to use a two-phase model to optimize the products' location in the warehouse. The model starts by segregating the products based in their affinity. This information is, subsequently, used to allocate the products to the available spaces. It is expected that the reassignment of products improves the pickers’ productivity by reducing the distance travelled while building the pallets for the stores. This research has a higher practical value since a two-phase model is implemented in a totally new context, to solve a real world problem. Moreover, no optimal algorithm has been presented in literature for storage location problems in multi-aisle multi-product picking’ warehouses and heuristic procedures for this kind of warehouse are also scarce.