An extensive review on warehouse operation planning problems is presented. The problems are classified according to the basic warehouse functions, i.e., receiving, storage, order picking, and shipping. The literature in each category is summarized with an emphasis on the characteristics of various decision support models and solution algorithms. The purpose is to provide a bridge between academic researchers and warehouse practitioners, explaining what planning models and methods are currently available for warehouse operations, and what are the future research opportunities.
Warehouses are an essential component of any supply chain. Their major roles include: buffering the material flow along the supply chain to accommodate variability caused by factors such as product seasonality and/or batching in production and transportation; consolidation of products from various suppliers for combined delivery to customers; and value-added-processing such as kitting, pricing, labeling, and product customization.
Market competition requires continuous improvement in the design and operation of production-distribution networks, which in turn requires higher performance from warehouses. The adoption of new management philosophies such as Just-In-Time (JIT) or lean production also brings new challenges for warehouse systems, including tighter inventory control, shorter response time, and a greater product variety. On the other hand, the widespread implementation of new information technologies (IT), such as bar coding, radio frequency communications (RF), and warehouse management systems (WMS), provides new opportunities to improve warehouse operations. These opportunities include, but are not limited to: real-time control of warehouse operation, easy communication with the other parts of the supply chain, and high levels of automation.
A number of warehouse operation decision support models have been proposed in the literature, but there remains considerable difficulty in applying these models to guide warehouse operations. The objective of this paper is to classify and summarize the prior research results, and to identify research opportunities for the future. The intended outcome is both a guide to practitioners on the analytical methodologies and tools available to support better warehouse operation planning, and a roadmap for academic researchers to future research opportunities.
This paper presents a comprehensive review of the state-of-the-art in research on warehouse operation planning. We first present a unifying framework to classify the research on different but related warehouse problems. Within this framework, historical progress and major results are summarized with an emphasis on how the research on these problems evolved and the relationships between various problems. Future research directions are identified and discussed. The scope of this paper is restricted to warehouse operation-planning methods. There are a lot of related results on performance evaluation, which we believe deserve a separate discussion since it is a key issue in warehouse design and operation that provides the basis for intelligent decision-making. The companion paper (Gu et al., 2005) provides a detailed discussion on this topic together with warehouse design, computational systems, and case studies. Readers may also refer to Rowenhorst et al. (2000) for a recent survey on the overall warehouse design and operation problems.
The distribution of the research results among the various warehouse operational problems is shown in Fig. 1, where the numbers in parentheses represent the number of papers addressing the corresponding problem. It is clear that the past research has focused strongly on storage and order picking. This is not surprising since these are the two warehouse functions that have the largest impact on the overall warehouse operational performance including storage capacity, space utilization, and order picking efficiency.
On the other hand, the development of research is not well balanced. Some problems received far more attention from the research community than others. For example, the SLAP and routing problems account, respectively, for 32% and 38% of the total surveyed literature, while zoning accounts for less than 6%. Furthermore, there is little direct evidence of collaboration of the academic research community with industry. Many of the research results are not sufficiently communicated to industry to make a significant impact on the practice of warehouse operations. More communication from both sides might help to better identify the real challenges faced in warehouse operations, to appreciate the opportunities for better operation, and to realize these opportunities by close cooperation between researchers and practitioners.
The problems discussed in this paper are at the operational level, which means that decisions need to be made quite frequently and the influence of these decisions is typically of a short duration and localized. Such decisions typically need to be made quickly without extensive computational resources. This tends to encourage the use of heuristic procedures that can find a good solution reliably in a reasonable amount of time. In addition, from the management point of view, an ideal solution method should be simple, intuitive, and reliable in order to minimize the training costs in the warehouse.
Another consequence of the operational nature of the problems discussed in this paper is that the problems should be considered dynamically by constantly incorporating new information about the operating environments. Some research on the dynamic planning of warehouse operations exists, but the dynamic problems are much less studied than the equivalent static problems. Furthermore, research in the literature usually concentrates on certain standard performance measures, such as the total order picking cost. In many practical situations, different objectives such as the tardiness, or the order cycle time, are as important as the traditional aggregate performance measure.
In summary, there continues to be a need for research focusing on the operational management of warehousing systems, where the different processes in the warehouse are considered jointly, the problems are placed in their dynamic nature, and multiple objectives are considered simultaneously. Clearly, the research domain of warehouse operations is very rich and challenging. Given the prevalence of warehouses in the supply chains, such research results can have a significant economic impact.
