In the complex environment of warehousing, simulation is a good option to test new to build warehouses or changes in the processes of an already existing warehouse. Before spending time and money on new implementations it makes sense to test drive the warehouse with a simulation model. Simulation enables companies to analyze the design of warehouse lay-outs, to predict throughputs and to identify possible bottlenecks in the warehouse process. It supports warehouse managers in their decision if changes are necessary in processes or warehouse layout.

Questions that can be answered with a simulation model are for example:

• Will the current warehouse layout be sufficient to handle a particular growth of goods flow in the future?
• How many trucks do we need to achieve a certain productivity level?
• Do processes like parceling or controlling areas have enough capacity?
• Should congestion of trucks be expected in any section of the warehouse?
• How will a different working schedule work out on warehouse performance?
• What picking strategy will result in the highest productivity?

Philips Lighting
Philips Lighting has built a new distribution centre at their site in Acht (Eindhoven). Although calculations on processes had already been made, the management decided to simulate the new warehouse in order to validate the already performed calculations and identify possible bottlenecks in the process. ED Logistics contains standard building blocks, which enable the user to build a warehouse in 2D and 3D environment. This suite is used to build a simulation model of the new warehouse. The model has been built in close cooperation between Philips Lighting Distribution and Incontrol Enterprise Dynamics.

Objective
The goal of this simulation project was in the first place to validate the already performed calculations on the required number of reach trucks and order pick trucks. In the second place what-if scenarios where defined to identify possible bottlenecks situations. Further more Philips Lighting wanted to have a 3D representation of the warehouse to use as reference material and educational purposes.

Scope
The model includes the warehouse processes from receiving to put away and from order picking until shipping. Input for the model was defined based on an analysis of historical order patterns. Truck specifications came from the supplier of warehouse equipment and lead times where used for warehouse processes.

One of the questions to answer was to define the required number of reach trucks and order pick trucks in order to handle the flow of inbound and outbound goods. Other questions concerned the capacity of the drop zones, the buffer conveyors between sealing area and shipping lanes and the capacity of shipping and receiving lanes.

Benefits for Philips Lighting
The project’s result was a validated simulation model which includes all the described processes. The results of this model gave Philips Lighting more insight in the expected performance of the new warehouse. In short the benefits for Philips Lighting from this simulation project are:

• A validated range of the number of trucks required to handle the inbound and outbound goods flow.
• Indication of congestion in some parts of the warehouse. One of the advices was to spread the concerned product type over more aisles.
• The model showed a bottleneck at the confirmation and sealing area. The advice was to rearrange this area and balance the division in terminals for full pallets and cluster pallets.
• A useful 3D representation of the warehouse.
• Indication that the number of shipping and receiving lanes is stressed, good planning of inbound and outbound flow is required.
• Reduction of ‘waiting for replenishment’ would improve the performance.
• The simulation model of the warehouse in Acht gives a good starting point to simulate a similar warehouse in Pila (Poland).