How do I optimize my material flow in the warehouse? Am I making the best possible use of existing capacities and resources, or are there performance reserves lying idle here and there? What sounds like a crucial question(s) is a challenge for logistics managers on an almost daily basis - especially against the backdrop of increasingly complex processes as a result of constantly rising market and customer requirements. But cost pressure is also a decisive factor, because a deficient material flow design can lead to more means of transport being used than are actually needed. These put a strain on the balance sheet in terms of acquisition and operating costs. Often, throughput times also increase because longer transport routes are incurred in the warehouse, excess inventories are built up and the space requirement increases. That's why the topic of today's blog post is how you can reliably detect optimization potential within the material flow and set up your internal logistics more efficiently by means of material flow optimization or material flow planning.
Material Flow Definition:
Intra-company material flow refers to the physical management of goods movements in the warehouse, logistics and/or distribution center. A good orientation is also provided by the guideline VDI 2689, which defines material flow as the "concatenation of all operations in the obtaining, processing and distribution of goods within defined areas". At the process level, steps such as processing and inspection, handling, conveying, and storage itself must be distinguished.
Material flow is often equated with the value stream provided in intralogistics. It refers to the physical processing of material movements in the warehouse with the aid of manual and/or automated resources in the form of means of transport including transport equipment.
Material flow optimization helps to make a company's own intralogistics processes more efficient and stable by reducing transport effort and avoiding waste. Appropriate measures also improve delivery quality and increase customer satisfaction.
Holistic material flow optimization is not only aimed at selective improvements, but at the entire warehouse logistics as a core element of the supply chain. Such an approach ensures interlinked processes so that one process meshes smoothly with the other.
Data acquisition of material flow
The material flow starts with the delivery of raw materials, components or finished products at goods receipt and ends with the delivery of goods. Consequently, all intermediate movements must also be analyzed in the course of material flow optimization . Regardless of which methods and tools are used here, the overriding goal should be to reduce internal transportation effort and routes, and to minimize the time windows at each point of goods or material transfer.
A fairly simple way to capture material flow data is directly in the ERP system as well as in the WMS (Warehouse Management System). As a rule, article master data, storage location requirements, ABC indicators, processes and resources are stored there and can thus be retrieved and combined. Manual surveys and the storage of physical coordinates can also be helpful. Required are details
- on the respective sources and sinks
- on the number of transports per time unit
- the means of transport
- the transport aids per trip, and
- the number of parts that a pallet or container can hold.
It is useful to create a so-called material flow diagram or a material flow matrix or transport matrix, which shows the quantitative relationship between sources and sinks. The results can be used to determine whether the individual case involves a unidirectional or multidirectional transport organization. Finally, a clear differentiation also facilitates the selection of a suitable transport system in each case. These can include automated guided vehicles (AGVs), tugger trains, conveyor systems, shuttles and stacker cranes. With the help of the material flow matrix, selective optimizations are already possible in the actual layout.
Flow diagrams and a Sankey diagram offer additional opportunities to illustrate the correlations more clearly: The latter shows the relationships both qualitatively and quantitatively. Where the transport effort is particularly high, it is advisable to depict the material flow using meaningful distance-path diagrams.
Optimization options: Measures for material flow optimization
In summary, a systematic material flow analysis can identify deficits in the process organization so that suitable measures can be introduced to eliminate them, make structural changes and increase efficiency. "Systematic" also means acting in a planned manner. For example, it is also advisable to define concrete goals such as reducing throughput times by a factor of X or isolated analyses of critical functional areas. In this way, transport routes can be shortened, the number of transports in the warehouse reduced and transport or operating costs saved.
At the same time, a systematic material flow analysis can be used to determine which transport technology or which type of warehouse is best suited to an individual case - both from a performance and an economic perspective. In this context, however, you should also bear in mind that the scope for design within existing structures is limited and that a sufficient balance must therefore be struck between desire and reality or available space.
As already mentioned, the transport effort results from the quantity of goods to be conveyed and the distance to be covered. The optimal solution would therefore be to pass the parts from one workstation to the next. The more complex the processes in the material flow or the so-called value stream, the more utopian this idea seems. In such a case, you should choose a holistic material flow optimization approach involving representatives of all departments that are affected by intralogistics.
Check material flow optimization at regular intervals
The coordination can take place, for example, in regular or specially scheduled workshops. Software also plays a decisive role in this context: Both material flow planning and the optimization of existing material flows can be carried out with the aid of simulation. For this purpose, the entire internal value-added process is mapped, from goods receipt to warehousing, production and order picking, right through to shipping.
The benefits that can be achieved thanks to simulation speak for themselves:
- Optimization of material flows under performance aspects
- Evaluation of lead times and process costs
- Stabilization of the process design
- Ensuring adequate inventory levels
- Best possible space utilization as well as resource and capacity utilization
- Transparent material flows and increased profitability
Speaking of software: Intelligent software such as SAP EWM (SAP Extended Warehouse Management) including the SAP MFS (SAP Material Flow System) module helps to constantly optimize the material flow. The standard software synchronizes all movements based on the daily order volume and continuously balances capacities and resources. One can therefore certainly speak of a tool for material flow optimization that shows its advantages in everyday logistics operations on a daily basis. Since the system elements only interact when required at full capacity, companies can also save electricity. This aspect is immensely important in view of the energy and climate crisis.
Whether by matrix, diagrams or simulation: The topic of material flow optimization or material flow planning is extremely complex, the design is often underestimated and plug & play is out of the question. IGZ's team of experts will be happy to help you with questions about material flow optimization and support you in improving your resource and capacity utilization, especially in uncertain times, while maintaining profitability and, in the best case, significantly increasing it.
Material flow optimization is not just an end in itself. Stable processes and shortened throughput times also increase customer satisfaction, strengthen customer loyalty and thus ultimately consolidate the competitiveness of your company.
For more information on the topic of material flow control, click here.