01 Tri Siwi.pmd Puspandam Katias & Denis Fidita Karya, Warehouse Modeling in Strategic Planning Model 7373 Warehouse Modeling in Strategic Planning Model Puspandam Katias & Denis Fidita Karya Unusa University, Surabaya e-mail: puspandam@unusa.ac.id & denisfk@unusa.ac.id Abstract: As a critical point in the supply chain, warehouse facility must be managed in good way, started from planning and design becomes important, this research using modeling tool to make and ensure the warehouse to be more effective and efficient. This paper to analyze the concepts of modeling for managing warehouse facility, from strategic level to operational level, for future re- search to provide a conceptual references also contribute to project management. The Problem in this analysis formulated as: 1). how modeling in designing and planning warehouse in action, and 2) how modeling in designing and planning warehouse as classified. The findings of this research with a modeling project: a model of classification for managing efficient warehouse, especially in strate- gic planning model. Keywords: modeling, warehouse management, supply chain A. BACKGROUND In the highly competition, and to response the business situation recently, the business or- ganization can compete and success with the most important sources, namely; dynamic capa- bility, flexibility, agility, speed and adaptation. In carrying out business activities, operational ac- tivities are described as a basic unit of competi- tive advantage by Porter (1996), so that the operational effectiveness of a business directly contributes to competitiveness and market lead- ership. According to La Londe et al. (1997) that organizations must be fast, agile, and flexible to compete efficiently which cannot be obtained without the coordination and collaboration of companies in the supply chain (Vokurka et al., 1998). La Londe et al., (1997) argues that companies can compete if they develop and manage partnership collaboration. According to Mentzer et al., (2004) that competitive advan- tage can be obtained not only through products sold, but also through the way in which we manage, stream and supply chains. An impor- tant role of operations management and operat- ing strategies for Supply Chain Competitiveness has been conducted by Fuller et al. 1993; Hayes et al. 1984; Fisher et al. 1997 and Levi, DS et al., (2005). Supply chain management, the focus has shifted from the “market share” paradigm to the “part of the customer” paradigm, where the aim is to create “customer value” that leads to increased sustainable corporate profits, share- holder value and long-term competitive advan- tage (Evans and Danks, 1998). Warehousing and distribution According to Coyle, et al., (2008) is one of the critical facili- ties in the supply chain, some 3PL research proves the dominant role of carrying out logis- tic distribution activities (warehousing, packag- ing and labeling, transportation), so that man- agement practices supply chain is mostly done by 3PL companies (Watson and Pitt, 1989; Sheffi, 1990; Foster and Muller, 1990; Bardi and Tracey, 1991). Planning and warehouse design are impor- tant, because of the potential risks from high investment to build warehouse facilities. Tho- Business and Finance Journal, Volume 4, No. 1, March 2019 74 mas W. Speh (2009) reminds that warehousing is nothing more than the management of space and time. The space management portion, stor- age, ha a cost per month, because there is a monthly cost for warehouse space. How man- age the time also has important component, includes labor involved in handling materials as they move in and out. To ensure better planning in warehouse planning and design, where one tool is, is; modeling is an option, such as a simulation model consisting of several alterna- tive designs Levi, et al. (2008) to ensure the management of warehouses and supply chains in a broader sense to be more effective and efficient. 1. Problem Formulation The problem formulation in this analysis is (1) how is the action plan from warehouse planning and design modeling and (2) how to classify warehouse planning and design. 2. Research Purposes This study aims to define the modeling concept in warehouse management applications, both at a comprehensive strategy level, so that it can provide conceptual references for future research and contribute to project planning in the warehouse management field. It is expected that the findings from this study with the mod- eling project, determine the classification of models for warehouse management, especially in planning and design aspects are; strategy planning model. B. CONCEPT & THEORY The concept of a warehouse according to Coyle, et al. (2003) acts as a point in the logistics system, where a company has raw materials, semi-finished goods, or finished goods for various periods of time. Meanwhile, accord- ing to Mulcahy (1994), the warehouse is de- fined as a function of storing various types of product items or stock keeping units (SKUs) in small or large quantities from the time after production to the time the product is needed by consumers. Warehouse with more complex func- tions in the supply chain paradigm is called a distribution center (DC), according to Waller (2003) DC as a facility in the supply chain that receives, stores, and sends final goods to con- sumers, the stages of activity that occur in the distribution center (Waller, 2003) among oth- ers: Reception, Stocking, Picking and Dispatch- ing. In business practice, the warehouse facility is managed by Third Party Logistics (3PL) as an external supplier that carries out all parts of the company’s logistics function. Coyle, et al. (2003) explained that the existence of 3PL provides solutions to logistical or supply chain problems, which are classified into 5 categories as core businesses, namely: (1) Transportation, (2) Ware- house or distribution center, (3) Forwarding, (4) Finance and (5) Information. 1. Modeling The modeling application in warehousing management analysis in the early stages re- quires a clear conceptual explanation, although it is a strong analytical technique, few compa- nies have used warehouse planning modeling because modeling is thought to contain long mathematical equations and very large com- puter codes. Whereas on the contrary, modeling can be made as simple as groups of circles and arrows that represent the sequence of process- ing steps or choose commands. Napolitano Puspandam Katias & Denis Fidita Karya, Warehouse Modeling in Strategic Planning Model 75 sive understanding of how the system works, and can reveal other problems that exist. 3. Modeling provides an opportunity to ex- periment. By modeling, the effect of design changes can be tested, theories will be vali- dated, and potential disasters can be pre- vented. 4. Some modeling tools have the graphic abil- ity to represent the proposed system before the system is created. 2. Modeling The Project Warehousing modeling activities are part of a systematic, documented, and well-orga- nized plan so that planning can be assured of success. Bowersox et al. (1986) predicting ware- house performance that is efficient and effec- tive is the result of careful and thorough plan- ning. Systematically, the stages of the Napolitano (1998) modeling process in the project format are as follows: 1. Building a good foundation; the company needs a clear vision of the expected delivery, as in Figure 1, commitment from top man- agement. 2. Manage resources • The project’s objectives and scope must be clearly defined in order to focus on relevant issues. • Assign tasks to achieve these goals. • Choose a project team. • Choose the right tools and/or software to carry out the tasks that have been set and provide solutions. • Develop a schedule, to keep the project on track and inform specific targets to be achieved. 3. Establish an action plan • Gather relevant information. • Translating data and creating basic models (1998) describes modeling as a powerful ana- lytical technique and uses close representation, duplicating existing systems or designs, as pow- erful analytical techniques, using representa- tions that duplicate an existing system or design proposals on computer or computerized. So that modeling can also be made in a spread- sheet consisting of rows and columns that only require addition and subtraction, or are made in the form of warehouse layouts or network diagrams. C. ANALYSIS The potential utilization of warehouse modeling is to test the effect of a warehouse’s dynamic behavior, supported by the amount of information about warehousing with an unlim- ited number of input data. Problems that can be incorporated into warehouse modeling include: changes in demand items, addition of lines or new product SKUs, as well as new equipment. 1. Benefits of Modeling The practice of warehousing management can benefit from modeling applications, Napoli- tano (1998), namely: 1. Modeling is a systematic thing and uses a logical approach, so it can reduce the level of risk. An example of a plan to add a new distribution center is one of the large invest- ments that contain quite high risk. Model- ing can reduce this risk by assessing the current situation and considering all feasible options before making a decision. 2. Modeling allows one to gain deeper insight and knowledge about the existing system. Modeling carries out supervision that is closer to operations, provides a comprehen- Business and Finance Journal, Volume 4, No. 1, March 2019 76 are like design or redesign, including how to accommodate a change in business conditions and also how to increase productivity. Table 1 Classification of Modeling Strategies • Analyze the model. • Validate the model whenever possible. • Evaluate data and alternatives produced. • Document the system recommended by the project team and inform manage- ment. Exhibit 1 The Modeling Project Source: Gross & Associates (1998) 3. Modeling Classification At the level of tactical planning, the appli- cation of the warehouse design model involves identifying the optimal configuration of a facil- ity, equipment, personnel and other resources. In some cases, warehousing designs at this level Source: Napolitano (1998) Application Model for Discussion Central Themes Scope Level of Detail Panning Horizon Strategic Planning Facility location, site selection, warehousing cost models Supply chain planning & design, overall financial performance Broad Highly aggregate d data One or more years Ware- house Design Warehouse block layouts, models for storage analysis, ergonomic models, flow charts, system simulation Layout desing of physical warehouse, design of warehousing operations Narrow to broad Less aggregate d more detailed Less than a year Opera- tion Planning Product location optimization, labor equipment planning & scheduling, load planning, activity routing Resource routing & scheduling Narrow Highly detailed Daily or weekly Examples of models used for facility lay- out, storage analysis, tracking of flow of re- sources, capacity planning and equipment de- sign, where planning design evaluations are car- ried out periodically in a shorter planning hori- zon than strategic planning. The operation plan- ning model application listed in table 1 enters a planning situation that requires continuous monitoring to ensure efficient operations, such as resource scheduling, optimizing storage, pick- ing position and maximizing pallet setup. 4. Strategic Planning Models In the context of the strategic plan, ware- houses are part of the Napolitano (1998) supply chain or logistics network, which is a collection of functions and activities involving acquisition, transportation, storage, distribution, handling, and management of products or services from source of creation to the point of demand. Puspandam Katias & Denis Fidita Karya, Warehouse Modeling in Strategic Planning Model 77 5. Warehouse Design Models Applications for the design process in table 3 begin with the warehouse block layout model, which results in warehouse block layouts using both manual and computer-aided approaches. Napolitano (1998) then describes modeling stor- age requirements, with a spreadsheet approach, which focuses on calculating storage require- ments, which are based on historical profiles of activity data and estimates of business changes. Ergonomic model, which is defined as the study of how humans fit the workplace, places the design process of a work environment created to suit the workers. Application Modeling Tools Key Questions Scope Level of Detail Length of Study Distribution Network Mathematical, programming, simulation, heuristics How many warehouse should there be in your network? Where should these warehouse be? What storage & throughput capacity should these warehouse have? Broad, extending throughout the supply chain Highly aggregated Six month s to a year Site Selection Decision matrix with weighting & grading system Which specific community should the warehouse be located in? Which specific site or building should be selected? Broad, with more emphasis on non- quantifiable factors Depends on company requirements 60-90 days Cost Analysis Financial analysis using spreadsheets How much does it cost to operate you warehouse? Specific to the physical facility & the operations within the facility Highly detailed in terms of costs & performance measures 30-60 days Table 2 Classification Strategy Planning Models Source: Gross & Associates (1998) Table 3 Classification of Warehouse Design Models Application Modeling Tools Key Questions Scope Level of Detail Length of Study Warehouse block layout Relationship diagramming, simulation, network analysis, mathematical programming, heuristics How operating functions should be arranged within a warehouse? How should resources flow through the facility? Specific to the operations within the facility, does not consider all aspects of the physical facility Moderately aggregated 15–30 days Storage analysis: spreadsheet approach Data & cost analysis using spreadsheets What is the cost per pallet for a storage module? What is the appropriate mix of storage modules? Specific to storage requirements, does not consider all aspects of physical facility Highly detailed in term of costs 15–30 days Business and Finance Journal, Volume 4, No. 1, March 2019 78 the entire system design and analyze specific methods and equipment in bottleneck condi- tions, congestion, loss of utilization, insufficient capacity, and others. D. SUMMARY & RECOMENDATION The concept of modeling in warehouse management applications, both at a strategic level comprehensively, refers to a strong ana- lytical technique and uses close representation, duplicating existing systems or designs, as pow- erful analytical techniques, using representa- tions that duplicate an existing system or design proposal above paper or computerized. The The model for tracking flow from resources in a warehouse (product, equipment, labor or information) is a flow chart. Different types of flow charts are used for different uses, such as process design and development, capacity plan- ning, development in information flows or prod- uct flows. The simulation model in warehouse design that refers to many aspects, aims to create a more efficient system, which is tested before it is installed. As for distribution-oriented facili- ties, this simulation model is the main design process stage (Napolitan, 1998), because this model generates a process from the activities of a warehouse facility and designers can validate Source: Gross & Associates (1998) p y y Storage analysis: graphic approach Data & cost analysis using spreadsheets & computer- aided design of storage area What is the best arrangement of storage modules within the facility? What is the cost per pallet for a storage module? What is the appropriate mix of storage modules Specific to storage requirements, considers most, if not all, aspects of physical facility Highly detailed in term of costs & layout details 30–60 days Ergonomic analysis Ergonomic mathematical tools, simulation What level of stress is exerted by a specific motion? How should work stations be ergonomically designed? What is the recommended weigh limit for a lifting task? Human & work site interface Highly detailed in term of human & work site properties 15–30 days per process Tracking the flow of products, people, resources, & information Flow charting or process mapping What is the most efficient way of handling warehouse resources? What non- value added steps can be eliminated in the handling of products? Flow of all resources within the physical limits of the warehouse Highly detailed 15–30 days per operating function Overall system design Simulation Will the design satisfy projected throughput requirements? What are the limitations of the design? What aspects of the equipment, operation & software need to be corrected in the design? Specific to all the events within the physical limits of the warehouse Highly detailed 90–180 days Puspandam Katias & Denis Fidita Karya, Warehouse Modeling in Strategic Planning Model 79 contribution in project planning in the ware- house management field is to build a good foundation; the company must arrange and en- sure the right environment before the project starts. Then manage resources, which continue to set action plans, such as: • Translating data and creating basic models • Analyze the model. • Validate the model whenever possible. • Evaluate data and alternatives produced. • Document the system recommended by the project team and inform management. The warehouse strategy planning model is; Distribution Network, Site Selection and Cost Analysis. 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