Business Case

Making change to a warehouse requires a business case. Financial justification takes the form of either higher revenue or lower costs. Examples of change include the following:

  • Technology related to systems or automation
  • Material handling equipment
  • Storage strategy
  • Other changes

Material Flows

A business case involves measuring and improving the value of material flows:

First, map the material flows. Understand the midpoints for pick and put transactions to calculate the average travel distance for a flow.
Second, apply time to the flow. Pick and put tasks take time to perform physical work and to record transactions. Travel time is distance divided by speed.
The total time for material flows divided by the total time worked is a measure of productivity.
Link the recorded time to units handled during the period to generate the metric of time per unit. Improving this metric will justify the business case.
The business case for change involves improving space, labor and/or equipment.

Example Business Cases

Space: layout design, storage media, or slotting.

Labor: Task interleaving, cross-training, scheduling logic, user-interface technology

Equipment: Higher capacity, alignment-to-function, fixed automation, mobile automation