What should be lean buffer threshold for the forward-reserve warehouse?

Abstract

Purpose

The assorted piece-wise retail orders in a cosmetics warehouse are fulfilled through a separate fast-picking area called Forward Buffer (FB). This study determines “just-right” size of FB to ensure desired Customer Service Level (CSL) at least storage wastages. It also investigates the impact of FB capacity and demand variations on FB leanness.

Design/methodology/approach

A Value Stream Mapping (VSM) tool is applied to analyse the warehouse activities and mathematical model is implemented in MATLAB to quantify the leanness at desired CSL. A comprehensive framework is developed to determine lean FB buffer size for a Retail Distribution Centre (RDC) of a cosmetics industry.

Findings

The CSL increases monotonically; however, the results concerning spent efforts towards CSL improvement gets diminished with raised demand variances. The desired CSL can be achieved at least FB capacity and fewer Storage Waste (SW) as it shifts towards more lean system regime. It is not possible to improve Value Added (VA) time beyond certain constraints and therefore, it is recommended to reduce Non-Value Added (NVA) order processing activities to improve leanness.

Research limitations/implications

This study determines “just-right” capacity and investigates the impact of buffer and demand variations on leanness. It helps managers to analyse warehouse processes and design customized distribution policies in food, beverage and retail grocery warehouse.

Practical implications

Proposed buffering model offers customized strategies beyond pre-set CSL by varying it dynamically to reduce wastages. The mathematical model deriving lean sizing and mitigation guidelines are constructive development for managers.

Originality/value

This research provides an inventive approach of VSM model and Mathematical algorithm endorsing lean thinking to design effective buffering policies in a forward warehouse.

Citation

Shah, B. (2023), "What should be lean buffer threshold for the forward-reserve warehouse?", International Journal of Productivity and Performance Management, Vol. 72 No. 2, pp. 361-387. https://doi.org/10.1108/IJPPM-02-2021-0075