Abstract: The forest industry is one of the most important businesses in Sweden, accounting for 9-12 percent of the Swedish industry's total occupation, export, turnover, and added value. Although the investments made by the Swedish forest sector reached a new record during 2017, the industry stills struggle with low profitability. Development of the value chain can be decisive for sawmills to raise their solvency, such as improving productivity and achieve cost-saving through adopting operations management initiatives. By identifying non-value adding activities, organisations can achieve flow efficiency and thereby improve the flow of material.
Material handling is considered as one of the most potentially profitable areas for cutting down costs, which involves several processes. Order picking is seen as the most important and most challenging process to optimise among the many operations that occur within warehouses. Professionals acknowledge order picking as the highest priority for productivity improvements since its operations have a significant impact on the overall performance as part of the logistics chain. The emphasis on quality improvement and customer service has increased, forcing managers to focus more on minimising product damage, lead time, and picking accuracy.
With this background, it became important to analyse the process of order picking within the forest industry and see if there are certain aspects to be considered to increase productivity and efficiency. The study aimed to identify non-value adding activities within the existing inventory management and material handling at a wood company, focusing on the order picking process. The intent was to explore opportunities for improvement with the support of operations management theory.
The approach was a single case study to gain a deeper understanding of the topic being studied. Both quantitative and qualitative methods were adopted, through focus group interviews, time studies, observations, and inventory statistics. The collection of data was analysed to conduct a value stream map and calculate the lead time for ten orders, corresponding to 81 order lines. The performance was measured for each order line, including productivity, cycle time, and financial measures. Further, an ABC analysis was carried out to divide the product range according to their importance and reasoning about inventory layout and material management. By identifying the non-value-added activities and causes of these wastes, improvements were further discussed.
The results showed that unnecessary inventory and transportation occurred most often followed by defects, waiting, inappropriate processing, and unused employee creativity. The number of unnecessary movements of packages occurred to a great extent. The main factors causing it were incorrect positions, unstructured storage areas, and non-standard packages. The recommendation is to allocate products according to demand and order frequency periodically, pick orders in direct connection to production, and to perform stocktaking regularly to make sure that the package's accessibility is consistent with reality. Further, the existing compartments should be utilised better to avoid temporary storage and mixed compartments which will decrease transportation and unnecessary movements of packages.
Publication Year: 2020
Publication Date: 2020-05-31
Language: en
Type: article
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