Toward a relevant agenda for warehousing research: literature review and practitioners’ input

3.1 Operation strategy

By operation strategy, we mean both strategic planning and general operational policies. Detailed operational planning would fit to the scope of research related to each operation, namely receiving, storage, picking and shipping. Examples of operation strategies and policies are decision making on managerial philosophies [12], outsourcing [13], material flow pattern and FIFO versus LIFO [14].

In addition to the strategic decisions, appropriate operation policies should be devised. Different researchers have worked on the proper utilization of technologies to support the overall strategy: for example, employment of a WMS in cooperation with RFID technology [15] and decision support systems [16].

The distribution of the papers between the two categories of strategic planning and operational policy making is similar. Most of the studies focus on unit-load warehouse, while research on less than unit load is scarce and adds more complications to the analysis. Most of the published works are under deterministic conditions, although the business environment contains a lot of uncertainties and risks.

3.2 Infrastructure design

Many papers cover different aspects of infrastructure design including estimations of required space [17], layout design and determination of departments’ location relative to each other [18], department design [19] and equipment configuration [20]. Most of the papers reviewed in this category follow a mathematical modeling research method, and more specifically the majority of the solution techniques are meta-heuristic algorithms.

The other group of papers in this field is focusing on determining location and size of warehouse departments. Most of the published papers in this field try to capture other aspects in their models as well, such as designing the operation [21] and product allocation to different departments [22]. Multiple-level layout design is one of the most complicated problems in the literature [23]. The more detailed studies are those concentrating on design of the warehouse area, e.g., configuration of lanes in picking/storage areas [24]. Apart from the layout of the departments, configuration of warehouse equipment is another area of the literature [20]. Finally, very few papers investigate warehouse construction and design from energy efficiency perspective [25, 26, 27].

Infrastructure design is one of the richest categories in the literature. Several aspects including sizing, dimensioning, department design and configuration of equipment are covered. Research on warehouses with special needs, such as temperature-controlled departments and high seasonality, is relatively scarce. The majority of the literature approach warehouse design problem from economic efficiency perspective, while research with special consideration to environmental performance is scarce. Most of the design papers focus on the storage departments, while research on the layout of receiving and shipping is rare; these departments are more important for a cross-dock warehouse, another field of research which seems to be overlooked in the literature.

3.3 Human resource management

Human resource management can be investigated from different angles. Scheduling of the staff [28], psychological considerations [29], and ergonomics issues and safety [30] are the main areas explored in the literature. Chakravorty [31] posits that academic research in warehousing and material handling is mainly focused on technical factors to improve performance, but usually neglects human factors.

Ergonomics of warehousing jobs is the most investigated topic in human resource management. Such research can be useful when designing material handling equipment. Even the way that male and female operators [32] and expert and non-expert workers [33] are performing can be different. Awareness regarding such differences would be helpful not only in design of the equipment but also in job assignment in the warehouses.

The reviewed literature shows that human resource management has been considered mainly from an ergonomics point of view, i.e., how handling of different items can have negative impact on the body. Apart from that, researchers have also explored impact of exposure to carbon monoxide from equipment, job rotation and psychological aspects of warehousing work, even though their proportions have been significantly less. Scheduling and rotation of tasks in warehouses are among the everyday work in most of the warehouses and distribution centers, but have not attracted much research.

3.4 Technology and equipment

Within this category, two groups of soft and hard technology/equipment are considered. Selection of automation level [34], appropriate equipment [35], suitable warehousing management system [36], decision support systems [37], planning and application of those technologies and equipment [38] are included in this group of research. Among the technologies introduced in warehousing is tracking equipment such as RFID-based devices or barcodes. Some researchers have shown cost and time efficiency of employing such technologies [39], although some skepticism exists on the potential cost-saving capabilities and positive ROI in the near future for RFID [40]. Designing a proper WMS for a warehouse is also an important aspect to consider. Even though such works are not very common in academic research, Shiau and Lee [36] design a WMS to integrate picking and packing operations. Employment of automatic guided vehicles (AGV) in warehousing has become very popular during last decade. This trend can also be witnessed in the literature [41, 42, 43], but most of the relevant papers can be found in robotic and mechatronic literature with more emphasis on engineering aspects.

3.5 Performance evaluation

This category was the most researched field after 2000, and it also had a quite high number of published papers in previous decades (Table 5). Most of the publications focus on the performance evaluation of a particular operation and equipment, and especially for automated warehouses. Studies with consideration to performance management and benchmarking of the successful cases can make significant contributions in future.

3.6 Receiving and shipping

The warehouse operations initiate in goods receiving and finish in the shipping area. Products are received into the warehouse, assigned to different locations, and after picking, they are packed and shipped out to the customers. The planning of receiving and shipping operations is among the least investigated topics in the literature. Some examples of potential problems to investigate are preparation of goods to be stored [53] and resource allocations, e.g., truck-dock assignment for receiving and delivery and order-truck assignment if orders of different customers are aggregated into one truck [54]. Receiving and shipping are the least investigated categories in the warehousing literature, with preparation operation and resource assignment as the main aspects explored.

3.7 Storage

Apart from inventory management, different decisions should be made to form the warehousing function, e.g., where SKUs should be stored in the warehouse [7]; how much space is required for each product [55]; what storage policy should be followed [56]; how products should be classified [57]; and how the scheduling and sequencing of operations should be planned [58]. Warehouse managers usually try to design storage processes in association with picking activities, because what is done in the storage stage directly influences the picking performance.

The operation of storage needs to be done based on a plan, and sometimes in combination with the picking process when the warehouse is working under double command operation. The estimation of average traveling time for multi-aisle AS/RS [59], sequencing the storage and picking in AS/RS system [60], scheduling the equipment in AS/RS system [61] and sequencing of storage and re-storage process [58] is among the published works in this field.

Unit-load and single-deep rack are the main setups for the publications in the storage category. Most papers belong to the subcategory of operational aspects, which includes more common problems of warehousing. Planning for the storage operation is one of the well-researched areas, but most publications neglect the dynamism of warehouse requirements and information. Employing robust planning can significantly contribute to this field.

3.8 Picking

Different picking methods are suggested in previous research, but we find that the literature lacks comprehensive analysis and comparison of these methods for different warehouse designs and operational requirements. Most of the papers consider travel/picking time as the main indicator to optimize when evaluating the picking operation. Finally, similar to the papers in the storage category, static information is the main mode of input for the problems addressed, while uncertainty of the business environment is usually neglected.

3.9 Connection to other departments and companies

Warehouses are connected to other departments and companies through both incoming and outgoing goods, and as a potentially outsourced function. This interface can be captured in different ways: e.g., by integration of planning and processes with purchasing, production, transportation and contracting with external companies.

Poon et al. [70] focus on the interface between production and raw material warehouse. Chou et al. [71] address a warehousing problem when products can be ordered from a production site and then after use are returned to the warehouses for future reuse. The connection of transportation and cross-dock warehouse operations is considered by Hill and Galbreth [72]. Contracting 3PL warehouses is becoming very common. As an example of analytical modeling of 3PL contracts, Chen et al. [73] formulate three different settings of warehousing contract with capacity commitment from buyer perspective and show which types can be cost-efficient to choose.

The relation of the warehouse to other departments and companies is among the least explored fields in the literature. Most of the papers in this category focus on the connection of warehouse and production to have a smooth flow of material between these two functions, especially when the material flow is from both sides. Two other investigated areas are contracting aspects and the connection with transportation, although not very extensively. As a summary of the literature discussed in this section, Appendix C of ESM exhibits the classification of each primary and supporting component and lists the related papers.

The status of warehousing research published before 2000 was extracted from [2, 3]. They have a similar classification and definition for each category of research as in this paper, but the categories of human resource management and the connection to other companies/departments were not included. Comparing recent studies with those before 2000, most of older literature was devoted to operational aspects (storage and picking). Also performance evaluation attracted many publications as well as infrastructure design, in almost one-fifth of the total papers (Table 5). The three categories of technology and equipment, receiving/shipping and operations strategy are far behind with just 14 papers in total. Publications after 2000 are more evenly divided between different categories, although operations strategy, connection to other departments/companies and receiving/shipping are still significantly fewer. When comparing the number of papers in each category before and after 2000, one observation is the increase of publications in the technology and equipment category. The trend of automation, rapid change and emergence of new soft/hard technologies, together with the e-commerce evolution during the last decade, can be some of the motivations for this increase. Another observation is the lower share of papers focusing on operational aspects. Even though the proportion of publications in these categories is still relatively high, it has decreased and become more similar to the supportive aspects.

4.1 Infrastructure design

One common warehousing problem is related to space. This arises because of the growth in both volume and number of SKUs which, however, is not only a recent problem: “Our main issue is, and has been for a long time, the space problem. …. This issue has been here for so long, even as we have been using new techniques and new machinery to cope with it” (interviewee 1). “Space is the most common warehouse problem that can be fixed by right type of shelving and storage equipment. It will help you reduce the overhead expense, and increase the productivity” (interviewee 11). Interviewees 10, 11 and 15 highlight how improper storage systems, zoning and layout design increase the amount of space required. Another practitioner concern is risk management. Planning the expansion either through renting or buying the space requires proper risk management; interviewee 4 states “if you do not want to own a building then you want a company to rent it from, and I do not think there is a company to build and rent a warehouse if you want to put less than 7 years in the contract because financial risk is too great. But again from the company’s perspective, it is a big risk to write a contract for 7 years, they do not know what may happen in 7 years in most industries.”

4.2 Operation strategy

Global competition is continuously increasing for most companies. Having cheap labor gives them an important competitive advantage. “If we cannot keep our overhead down, we cannot compete with them. Doing less with more is what we should do” (interviewee 9). Having customers who expect more (interviewees 5, 9) calls for customized services that require proper planning and strategy development. The business trend toward more customized demands, order consolidation and big fluctuation in demand are examples of factors influencing operations planning approaches. Several interviewees (4, 8, 9, 12, 15) raise the concern of slow movers, calling them one of the main cost drivers. Having said that, warehouse managers need an up-dated assortment of goods; “It is probably the easiest one to say but one of the most difficult ones to handle” (interviewee 4). As another aspect of modern business, e-commerce has been growing significantly during the past decade, and this trend will continue in the future. It is important to explore how this change can influence warehouses and their operations. In the words of interviewee 2, “instead of having major flows going to the bigger distributers, you actually need to start sending smaller parcels to customers. So, more and more, warehouses find that this is a different way of doing work; … and there will still be a flow to normal stores.” He continues, “Many warehouse managers may have thought about it but only a few have really adapted to this new way of distributing things”; the nature of material flow has changed and warehouses need to take the responsibility of sending goods to end customers in addition to shops and distribution centers.

4.3 Human resource management

The practitioners find it important to explore how the repetitive work of picking during a whole day influences workers and their performance. Occurrence of discrepancies may be one of the impacts. Research in this area is missing in the literature, but is in practitioners’ interest, as interviewee 1 mentions: “That is probably a minor problem we have, which has been always spoken about as being a major problem”; “it would be very interesting to see how you can oil the mind of the picker, make work smoother and more correct; and not only correct but also faster, just by providing the right tools.” In line with the goal of reducing discrepancies, interviewee 11 pinpoints the required training and motivation; interviewee 5 clarifies “there is a lot to do since in a warehouse you can see quite a lot of unmotivated personnel. I think a cultural change is needed here to lift the organization and individuals to be more productive by being happier and more content with work and their position.” Employees’ health is another important concern which is mentioned by interviewee 8 regarding cold storage area: “One problem is the sickness level of the labor which we think is high (6–7 %) and it costs both time and money to handle a high number like this”; he also continues from a staffing point of view: “we have an aim for a certain percentage of female employees but it is difficult due to the problem of having heavy work. It is not easy to handle all the weight. So what we do is that we try to rotate and we also use external labor on the heaviest parts.”

4.4 Technology and equipment

The mentioned concerns can be divided into two groups of soft and hard technologies. Improper shelving and inflexible equipment can greatly hinder operations efficiency (interviewees 11, 13, 15). According to the interviewees, automation has been the trend for a long time. The more automated a warehouse becomes, the less flexible it can be. Combining partial flexibility and automation can be possible at huge cost, which stresses the importance of appropriate automation level. This balance point is sensitive to different parameters that need to be explored. As stated by interviewee 7, “one of the main challenges with equipment and technology is to find the balance between implementation cost and flexibility,” along with interviewee 6’s perspective “with flexibility comes complexity.” Automation has usually been suggested as the first solution for most warehouse problems, as interviewee 1 says: “I think that’s why we are automated today, because someone told us that automation is the only way that speeds up picking; the latest technology was suggested instead of an analysis of what our real needs are.” Furthermore, the automation process should be implemented, while the warehouse is working at full operation. This is consistent with ideas of interviewees 1, 2, 6 and 7, reporting that best practices during this transition time are valuable for warehouses. As a soft technology, properly designed WMS is required to provide accurate information on inventory and storage location, which can potentially reduce discrepancies (interviewees 9, 10, 13, 15). Finally, the evolution of e-commerce calls for critical changes in warehouse operations, strategies and requisite IT systems (interviewees 2, 7, 9) to support operations.

4.5 Performance evaluation

The necessity of having well-defined KPIs is the most commonly expressed concern. It is important to establish correct understanding of the performance and measure it in the right way. Warehouse performance is usually measured based on the number of order lines, which most of the practitioners doubted to be the best measurement, as stated by interviewee 3: “It is important to measure the right thing. I mean it is not just the number of order-lines you pick per hour, it is also the matter of how much money is spent to pick an order-line.” In addition, performance evaluation is critical when planning for improvement. KPIs should be able to show whether the changes have been made in the right direction based on the company goal for improvement. According to the numbers provided by interviewees 1, 6, 7, 12, 13 and 14, one of the areas that may be very small in number, but very huge in impact, is picking discrepancies. None of the interviewees mention it to be a severe problem for the warehouses, but they pointed out its huge potential impact because end customers directly feel it. Measuring these errors is important, but it is essential to find out why they happen, which in turn can lead to their reduction.

4.6 Storage

Warehouse operations are not so frequently mentioned in the interviews, although several practitioners voice their concern about operations strategy and planning. Two interviewees (3, 12) considered storage allocation and re-allocation as their concern in the warehouse. Interviewee 12 mentions the warehouse problem during the recession: “almost all the warehouse slots were occupied and picking productivity was lower than before. Taking a walk around the warehouse, I realized we had products that I was not even aware of.” In connection to this problem, he finds the solution in reviewing the inventory to recognize the dead items (obsolete SKUs), fast movers and re-allocation of storage places. According to interviewees 3 and 12, appropriate classification of the goods and storage location assignment play critical roles in warehouse operation cost.

4.7 Picking

According to the interviewed consultants, companies usually do not come to consultants with specific questions. Instead, the selling point is to secure a particular service level, capacity or cost, and “the most common thing that we look into is the picking process,” said interviewee 4. Picking is the most cost-driving activity in warehouses and needs to be explored. It is important to optimize the process to be smooth and cost-efficient throughout the whole year as well as during peak times.

4.8 Connection to other departments and companies

Interviewee 1 states, “Looking at the space issue, the link between the purchasing department and the warehouse is not very good. There has never been any real cooperation; just buying and then shipping to the warehouse; and then of course you have the other end which is the sales department.” Similar to purchasing and sales department, production and transportation must be planned in cooperation with the warehouse; interviewee 4: “there is a trend about shipping, on how warehouse is depending on transport. You see that many companies are starting with transport management system (TMS) or logistics management system (LMS), and they are also looking at planning. So, they are starting to look at them as one question. But the companies that are really doing that, they are not many.” Information sharing plays a significant role in planning for cooperation of different departments. Companies should determine when and what information should be shared. Regarding this issue interviewee 2 states, “we started some sort of internal service level agreement; and when we got there, it was easier to work and understand when we had an issue.” Interviewees 8 and 11 point out that in order to set up such cooperation, members of the chain and different departments of a company should share common values; they need to have some knowledge about how the business works and how they can improve it by better collaboration.

5.1 Comparing practitioners’ concerns and literature

Reviewing the practitioners’ concerns and the literature, our findings are as follows:

5.2 An agenda for future research

There is a huge gap between the number of papers with an assumption-restricted modeling approach and those based on the complex reality of warehouses. The lack of empirical research in this area can be considered as a warning to academia. More case and action research studies must be done, which can help the research community to better understand the reality. In addition, research results with a validity check on real-case settings will have direct benefits for practice.

Suggested research directions are divided into two areas; first, studies aiming to understand, explain and predict a concept or phenomenon that is currently practiced and exists (positive approach), and second, research attempting to provide guidelines to managers regarding what should be done (normative approach) [74]. The positive studies suggested can be done through survey, case and interview studies; normative studies include but are not limited to modeling studies. Our analysis shows that more empirical investigations should be conducted to understand and capture complexities of the real environment, and proposed normative studies need to be accompanied by practical applications to benefit both academia and practice.