1. Case Study
Siemens Logistics Centre, Vadpe
The report consists of the main Bottle neck problem of the
warehouse, its solution and the benefits after implementing the
solution. Photographs, charts and simulation diagrams are
used for illustration.
Spear Logistics Pvt. Ltd. , Pune
8/5/2013

2. PROPOSAL OVERVIEW
The warehouse facility at Vadpe, is of SIEMENS and is managed and run by Spear Contract Logistics.
Spear performs following activities at the Warehouse.
Spear is looking to improve productivity in this Siemens facility by mapping all the operations and doing a
comprehensive time study. Upon doing the time study, and analysis of the processes, the further solution will
be planned.
PRESENT SCENARIO
 Generally 80 % of Material inwarded is imported for which Sorting, Counting & MRP Label pasting
activity is carried out.
 20% Material inwarded is Local material for which no Sorting & MRP Label pasting activity is carried
out.
 Following table depicts the data for Binning activity :
BINNING September October November Average
Average Qty Binned per day 60591 61663 93187 71814
Average person present per day 30 29 24 28
Productivity per person per day without OT 2020 2126 3883 2676
Average Items Pending for Binning 616 1697 1220 1178
Average Items binned 548 683 667 633
 From the data analysis it can be seen that pending items for binning quantity is high and is a prime
bottleneck which occurs due to time taken for sorting and MRP labeling after material is inwarded.
 Note :
o This binning data includes binning of all material i.e. Import & Local for all areas of the
warehouse.
o Average Imported material binned per day from above data – 57451.
o Average local material binned per day from above data – 14362.
Receiving
Sorting
(MRP
Labeling if
imported)
Put Away Picking Packing Dispatch

3.  Activity mapping for Imported material :
Due to manual checking of item code on material against item code on invoice and then sorting it and thereby
pasting MRP Sticker on the same consumes major chunk of time which is the reason for Items pending for
Binning.
SPEAR OBSERVATION:
Currently, the material received from overseas shipments comes in big cartons. Upon receipt of these cartons,
they need to be opened. The different types of SKU’s present in the cartons need to be segregated manually
at first according to their item codes (or barcodes). After sorting is done, the MRP Labels are pasted on them.
Around 80% of the material that arrives in the warehouse is imported. So, Sorting and MRP Labeling is a
crucial and time consuming activity.
Also not all material requires sorting. 30% of material imported does not require sorting as they can be sorted
visually.
Only those boxes which contain multiple SKU’s and large number of hash quantity require sorting due to their
similar appearance and for these boxes a solution needs to be designed for quicker sorting.
Material
taken from
Just Unloaded
Area
Box open - if
multiple hash
quantity /
multiple SKU
in single box
Every hash
quantity
checked
against
invoice with
item code
Sorting
MRP Label
pasting
Binning

4. TIME STUDY:
 Generally 6-8 casual labors are assigned for sorting per shift.
 2 labors complete task of 1 box.
 Following time observations were made :
WHY SORTING & MRP LABELING OF IMPORT MATERIALS IS A BOTTELNECK?
• It was noted that it takes about 191 minutes for 542 quantity of material for 2 labors to be ready for
binning.
• 21 seconds are required for each quantity to be ready for MRP Labeling.
• Out of productive time of 420 minutes of a labor 191 minutes are spent on sorting of material of 1
box.
• At a time according to load, 3 cartons are opened and 2 labors work on each box. So a total of 6
labors do the sorting and labeling operation per shift. The number of different SKU’s on a single
invoice range from 2 to 70. On an average, 6-8 types of SKU’s are there on a single invoice. Besides,
the MRP List gets updated twice daily, so the labels have to be generated accordingly.
• Also according to the Items pending to be binned gives us a clear picture of bottleneck in the activity.
• Based on the time study done and the data analyzed it was found that sorting operation was the one
that was hampered the most and due to more time taken for sorting, there was a large amount of
inventory in the Just Unloaded Area (JUA).
• Hence, an improvement was required in this area.
SOLUTION:
The main bottle neck which affects at the moment is the sorting and MRP Labeling operation. The goods which
are received need to be addressed immediately. Such a system should be designed that the major amount of
time consumed (i.e. for sorting operation) must be minimized.
The following solution will not only reduce the time required for sorting operation but also improve the
accuracy of the sorting operation thus relieving the labor of meticulous checking of each and every part. The
simulation of the MRP Labeling operation is shown below.
Sr. Number Time for Opening of
Box in Minutes
Time for Checking Code against
Invoice in Minutes
Hash Quantity Per
Box
1st Box 6 180 650
2nd Box 7 242 520
3rd Box 6 178 450
4th Box 5 165 550
AVERAGE 191 542

5. To accelerate the sorting process the labor will be equipped with a handheld scanner linked to a user-friendly
interface. Each and every product that comes into the warehouse for MRP Labeling operation has a barcode
on it. The labor will scan the barcode and it will appear on the screen displayed at the scanning station. The
display screen will show the part number which is scanned and the bin number where the part will be put. The
number of bins/ compartments will be commensurate to the number of type of SKU’s present in the box.
Thus, material will be kept in several compartments for properly sorting all the different types of SKU’s.
There will be 3 such sorting stations provided, so that the sorting process will be quick and efficient. The
proposed time chart will be as shown below.
Time required to pick from
box
Time required to
scan
Time require to keep material on designated Bin
Number
2 sec 2 sec 5 sec
CONCLUSION
Following conclusions are drawn after the analysis:
Current time required for sorting of 1 quantity 21 seconds
Total time required for sorting of 1 quantity
after implementation
9 seconds
Time required for 542 #quantity
81 minutes
Reduction in time for sorting 58% reduction in time for sorting is proposed

6. INFRASTRUCTURE REQUIRED FOR IMPLEMENTING THE SOLUTION:
For the above solution to be fully functioning and implemented the following infrastructure will be needed:
(for 3 sorting lines)
 03 Barcode Scanners
 03 Display Screens/ Laptops
 03 Desks
TRIALS WERE CONDUCTED AND FOLLOWING IS THE REPORT:
TRIAL #1:
Sorting Type Time Taken (in minutes) Percentage Reduction
Sorting by Barcode Scanner 5
60 % Reduction in
time
Sorting Manually 12.5
Type of SKU's 14
Number of # Quantity 41
TRIAL #2:
Sorting Type Time Taken (in minutes) Percentage Reduction
Sorting by Barcode Scanner 13
71 % Reduction in
time
Sorting Manually 45
Type of SKU's 17
Number of # Quantity 120
Trials were conducted on the cartons which were opened for the first time. The total time taken was
considered right from the first box which was picked up and scanned up to the verification of all the boxes
which were sorted and kept on the pallet.

7. The bar code on the individual boxes was scanned. The box is as shown below.
SORTING LOGISTICS:
The next step is now to plan the sorting logistics and how exactly will the sorting take place once the
solution is implemented. The following are the three actions which will be carried in order to sort the
product.
Pick up Box Scan Bar code Keep in Trolley Estimated
Time (in sec)
1 box 1 Bar code Scan Keep 1 box on the
pallet
9
PROVIDING AN ERGONOMIC OPERATION:
At present, the sorting operation is carried out by bending down or crouching and sitting on the pallet, then
checking each and every MLFB number and sorting according to it. In addition to giving a bar code scanner,
further improvement can be done by minimizing the bending movement which is still present.
It will make the job of sorting – easier, faster, and foolproof. In order to sort and differentiate easily, the
necessary system should be provided which will be adjusted according to the quantity of the material received.
BAR CODE SCANNED

8. STANDARD OPERATING PROCEDURE (SOP) TO BE FOLLOWED:
The summary of the SOP for the sorting process to be followed is as given below:
Step 1: PALLET ARRIVAL
Step 2: OPENING THE MASTER FILE
Step 3: ACTUAL SORTING VIA BARCODE SCANNER
Step 4: CREATION OF A NEW EXCEL FILE
Step 5: CHECKING THE QUANTITY
Step 6: PALLET READY FOR MRP LABELING
SCOPE FOR FURTHER IMPROVEMENT:
The above solution will improve the accuracy and productivity of the labors in the sorting system. In order to
make additional use of the data scanned, the following modification will be required in the sorting system.
 A database of the “MLFB Number” and the corresponding “Barcode Number” with the number of
hash quantity in each box of ALL the SKU’s in the warehouse will be required. Once received the
further modification in the system can be done.
This data can be used in several areas and will reduce the manual input effort required by the Data Operating
Operators thus saving a lot of processing time.