Multiproduct slot allocation heuristic to minimize storage space

Abstract

Purpose – Since developing efficient product-location strategies represents a critical issue in operations management, due to its impact on warehouses performance in terms of both service level and operation costs, this paper aims to focus on possible improvements in the allocation of SKUs, numerically evaluating how these can lead to a reduction of both overall required warehouse space and material handling times. Design/methodology/approach – The undertaken approach focused on translating the warehouse management problem into a vertex colouring problem, modelling it as a multi-criteria problem and solving it through a properly modified algorithm. Findings – The heuristic validation on a real industrial case demonstrated its high optimization potential, and its benchmarking simulations showed performances significantly close to the best conceivable case. Indeed, though using a dedicated storage policy, the gained optimization value turned to be definitively close to the lower bound calculated through a randomized storage policy, which, differently from the proposed solution, must be inevitably supported by a warehouse management system software. Originality/value – This work presents an original multiproduct slot allocation heuristic developed by taking cue from vertex colouring problems and its pragmatic evaluation on a real industrial case; a benchmark with the randomized storage policy is also presented in order to underline the heuristic effectiveness and to point out possible future research opportunities.