Quantitative Evaluation of Operations for Omni-Channel Warehousing: FMCG Warehouse Simulation Study

This study evaluates the impact of operational philosophy on the efficiency of omni-channel warehouses. Suppliers want to integrate an online order channel in existing infrastructure, while efficient integration of omni-channel operations is challenging due to the difference in nature of e-commerce orders and store orders. Integration of operations is necessary for cost efficient omni-channel implementation, however little scholarly works exist exploring operational implications in the omni-channel context. The impact of operational philosophy is analysed through a discrete events simulation of the alternative operation designs. Through a sensitivity analysis on order arrival pattern and order type skewness, the performance of the design alternatives are compared. The considered operation designs have been found in literature. For realistic input values a case is considered of a distribution warehouse from a Fast Moving Consumer Goods (FMCG) supplier. From the results it is apparent that in an omni-channel warehouse, a dedicated zone is required to handle expected web order throughput efficiently, although such an operations design requires lots of space, which is often constrained. Space is constraint due to supplier seeking to integrate the online channel into existing operations, which turns out not to be durable. Therefore, it is concluded that for future throughput non of the considered operational philosophies is adequate.Mechanical Engineering | Multi-Machine Engineerin