Reduce Overtime of Distribution Centre by Re-Layout and Employee Shift Scheduling Use Class Based Storage and Integer Linear Programming

Abstract

A distribution center, which operates franchised minimarket networks, faces high overtime in warehouse operations. In the DC, the distribution center process is related to warehouses as part of a logistics system for receiving, storing, and distributing groceries. This research was conducted on DC at Cilacap city, Center of Java, with the highest amount of overtime, 11.3%. Through the analysis of FMEA, failure mode and effect analysis and Fishbone Diagram, find out that repack problems during the pick-pack process and the difficulty of finding the location of SKU, system keeping unit by the picker. After implementing the Class-Based Storage method with the ABC classification technique, it is used to classify based on the throughput percentage rating, which is from the highest cumulative value to the lowest cumulative value. With the proposed layout that has been made, it has resulted in a decrease in total travel distance by 17% and overtime by 17%. Furthermore, to determine the appropriate shift combination of optimal labor needs, we use linear programming with LINGO Software. By implementing work scheduling with LINGO Software, companies could minimize DC costs by up to 48.4%.