Improving Warehouse Management System at The Largest Heavy Equipment Distributor Company in Indonesia with Simulation-Based Optimization Approach

Abstract

Warehouses play a significant role in supply chains, so it is needed to be excellent in customer service, and organizations have to create more productive warehouses to fulfill customer needs. Warehouse productivity is not optimal, as seen from the SLA achievement and manpower utilization, leading to inefficiencies in the warehouse management system. This research aims to find out and analyze the cause of the problem and design an improved warehouse management system for better productivity in terms of SLA, manpower utilization and cost-efficiency. In doing this research, a simulation was carried out because of the complexity. After processing the data and simulating existing conditions, the results obtained are the manpower utilization is quite low on average, caused by some critical positions that have very low utilization. There are 9.46% of processed items during overtime hours, and the average achievement value of incoming SLA is deficient. If the company considers manpower utilization and employee cost efficiency as priorities, adjusting number of manpower and merging some roles can be considered as the best scenario. Suppose the company prioritizes the number of overtime items and SLA achievement as an indicator of success. In that case, the flow process simplification scenario and defining new time standard could be carried out.