Warehousing process performance improvement: a tailored framework for 3PL

Abstract

PurposeThird-party logistic providers (3PLs) continuously strive for controlling and improving their performances to gain a competitive advantage. The challenging environment where they operate is affected by high variety in type and number of clients, the inventory mix and the demand profiles they have to meet. Consequently, better understanding the dynamics of warehousing operations and the characteristics of the inventory mix is critical to handle such a complexity.Design/Methodology/approachThis paper proposes a decision-support framework, suited for 3PL warehouse practitioners, that aids to design and implement effective and affordable activities for measuring and improving the warehousing performances. Such goal is pursued by the framework by leading the managers through an initial mapping and diagnosis of the system, then by developing a tailored measurement system to track the performance, paving the way to the identification of the criticalities and the potential improvement scenarios.FindingsThis paper presents a case study on the implementation of the proposed framework at a warehouse of an Italian 3PL provider to introduce a new storage assignment policy and reduce the travelling time for order picking. Furthermore, the paper exemplifies how the framework contributes to enhance the awareness of managers on warehousing operations and the involvement of the personnel throughout the improvement process.Practical implicationThe proposed framework can be implemented by operations managers of 3PL warehouses who want to pursue general performance improvement projects. With respect to the case study, this framework contributes to identify the storage assignment policy that reduces the travelling for order picking in the observed warehouse of 8 percent in a month but is intended to address to even other areas of improvement in 3PL warehousing environments.Originality/valueInstead of focusing on the proper methods and models that optimize a specific task or performance indicator, it provides a general framework that leads the managers through the decisional process, from the preliminary diagnosis of the system, to its benchmarking, towards the implementation of corrective and improving solutions.