FACILITY DESIGN AND OPERATIONS MANAGEMENT
FAIR TRADER FACILITY DESIGN
(adapted from 2014-15 CICMHE Student Design Competition Case developed by St. Onge)
1. Problem Description
Fair Trader is an exceptional source for unique handmade gifts, jewelry, home decor, art and sculpture, textiles, serve ware, and personal accessories representing the diverse cultures of artisans in Asia, Africa, Latin America and the Middle East. As one of the world’s largest fair trade organizations, Fair Trader is a founding member of the World Fair Trade Organization (WFTO). They strive to improve the livelihood of thousands of disadvantaged artisans in 38 countries. Fair Trader accomplishes this by establishing a sustainable market for handmade products in North America and building long term buying relationships in places where skilled artisan partners lack opportunities for stable income. Product sales help pay for food, education, healthcare and housing for artisans who would otherwise be unemployed or underemployed. The company encourages artisan partners to use environmentally friendly processes, sustainable natural resources, and recycled materials to ensure each product offered has been crafted responsibly. Fair Trader is a nonprofit organization, and has been named one of the World’s Most Ethical Companies on multiple occasions.
Fair Trader distributes products from their distribution center in New City, USA. The distribution center services their 390 retail outlets throughout the United States, a consignment sales events business, and their emerging direct-to-customer business. The direct-to-customer business volume is growing rapidly and is expected to continue its rapid growth over the next few years. They have a seasonal peak in demand, from mid-November through the end of December, which is significantly higher than the annual average daily order count. During the most recent holiday season, management recognized several challenges in handling the seasonal demand volume in their direct-to-customer operation and initiated actions that have led to improvements. For example, they have already dramatically reduced an up to 30 minute delay in closing out a pick line with changes to their Warehouse Management System (WMS). They have also recognized that their layout, discrete workstation set ups, and current processes – receiving, stocking, picking, quality control, packing and shipping – may represent further opportunity for increasing productivity and throughput capacity.
Although this facility services all of the Fair Trader channels of distribution (i.e., retail stores, consignment, and direct-to-customer), the focus of this study is strictly on the direct-to-customer (DTC) channels. At this particular facility, the direct-to-customer channels include
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wholesale, festival, and e-commerce. Fair Trader is seeking assistance to identify the opportunities for improving their processes, particularly in light of an expected 25% volume growth in the upcoming year and 35% in the subsequent year.
With this in mind they have requested assistance in identifying improvements to increase their productivity and throughput. As with most nonprofits, approaches that require low capital expenditure but provide the needed flexibility to adequately handle volume increases associated with seasonal peak demands within a direct-to-customer operation are desirable. At the same time, Fair Trader will consider making a significant capital investment if justified by significant benefits.
2. Project Objectives
The project will require teams to complete at least the following tasks (more may be needed):
? Understand the processes currently performed at the Fair Trader distribution center, and determine future process capacity needs for the remodel of the facility based on available data.
? Redesign the facility configuration (i.e., develop layout alternatives) to support direct-to-customer (wholesale, festival, and e-commerce) fulfillment requirements in the portion of the facility available for these three channels including the ability to accommodate the anticipated increase in sales volume.
? Describe the flow of processes through the facility.
? Specify all resources required, including personnel, technologies, and equipment.
? Ensure that throughput capability supports the peak day of the year for each of the channels as well as the total peak for the operations, while being efficient all year round.
3. Deliverables and Grading
Progress Report (50 pts). The first deliverable of this project is a typewritten status report due on Tuesday, February 16, 2016 at the beginning of class. You will be graded based on the following criteria:
? Content of status report (30 points). The report should contain the following information:
o Your understanding of the project objectives and requirements.
o Description of completed tasks (no progress means no credit).
o Description of challenges found and proposed solution plan.
o Description of future tasks.
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? Organization of the report (15 points). The written report must be typewritten, single-spaced, use 1-inch margins, and use 12-point Times New Roman font. The report must be approximately 2 pages in length, not including references or appendices. Papers exceeding the 2-page limit will not be accepted.
? Accuracy of material (5 points). The written report must include a list of references and these references must be properly cited in the report.
Final Written Report (150 pts). The main deliverable of this project is a typewritten report due on Friday, March 11, 2016 by 5pm. Both, a hard copy and an electronic copy of the report (and appendices) must be submitted by this due date. You will be graded based on the following criteria:
? Your understanding of the project objectives and requirements (15 points). The alternative layouts for the remodel of the functional areas of the Fair Trader distribution center are based on the requirements. Any assumptions made are clearly stated and validated with data (where applicable).
? Organization of the report (15 points). The report must be typewritten, single-spaced, use 1-inch margins, and use 12-point Times New Roman font. The report must be approximately 5 pages in length, not including references or appendices. Papers exceeding the 5-page limit will not be accepted. The report must include a table of contents, page numbers, and the contents must be organized in sections.
? Originality of treatment (90 points). The material in the report is clearly a contribution of the students. A logical thought process was followed to analyze the information provided and transform it into a plausible solution that can be used for future decision support. The solutions proposed clearly reflect the level of effort invested by the team.
? Accuracy of material (10 points). The written report must include a list of references and these references must be properly cited in the report.
? 2D models of proposed layouts for future remodel (20 points). Computer-generated graphical representations in two dimensions of the proposed layouts. Dimensions (with specified units) and labels should be clearly visible.
The final report should be organized as follows:
1. An executive summary (no more than 1 page in length) that summarizes your objectives, high-level assumptions, and the recommendations based on the results from the analyses you conducted. The 1-page executive summary does not count toward the 5-page maximum.
2. The remainder of the report should summarize your efforts and provide enough details so that another industrial engineer can understand the process and logic used to generate your layout alternatives.
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a. Introduction – Problem statement, objectives of the study, brief description of existing facilities, and constraints and assumptions.
b. Methodology – Brief description of the methods used to analyze and synthesize the data and generate alternatives. Quantitative approaches will get the most credit.
c. Results and Recommendations – Recommendations to management based on the results of the analysis. Includes:
i. Product Flow: Description of how the proposed design provides for the desired product flow.
ii. Equipment Selection: Description of the appropriate equipment for the facility and how the proposed equipment meets the objectives specified for the facility.
iii. Space Utilization: Evaluation of the utilization of the cubic capacity based on the layout and equipment recommended for the facility and how the proposed design meets the objectives specified for the facility.
iv. Operational Plan: Description of the appropriate operational plan for the facility. Includes job requirements, use of all equipment, integration of any information technology, and guidelines for running this operation efficiently and safely for employees.
v. Implementation Plan: Description of an implementation plan that allows the project objectives to be reached without impacting existing activities.
vi. Economic Justification: Economic analysis that justifies the cost of the proposed design (including capital and ongoing costs) based on the benefits that the proposed design provides.
d. Appendices – Details of specific analyses, proposed layouts, equipment pictures, Gantt chart for implementation, etc. Do not include every possible layout that you generated. Make sure all appendices are titled so that they are self-explanatory. That is, do not have an appendix with “Appendix A” as a title and then a bunch of numbers listed in a table. Each appendix should be referenced in the report; otherwise there is no reason for including it.
Please ensure that the following items are addressed in your final report:
? Assumptions and calculations behind the proposed layout;
? Drawing illustrating the proposed general layout of the building and equipment;
? Description of operations that shows the basic material handling equipment and processes required to support the direct-to-customer channels;
? Estimated investment costs to implement the proposed facility design;
? Estimated direct labor staffing required to support the distribution functions, from the point of receipt through outbound trailer loading; and
? Elevation drawings, sketches, or photos of the proposed equipment needed to support the planned operations.
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Peer Evaluation (30 points). A peer evaluation form will be provided to each student at the end of the term. The results of this evaluation will be applied to each individual student to determine his/her final grade for the term project.
Notes:
? Rubrics for the Progress Report and Final Report will be available on Canvas at least 2 weeks in advance to the due dates for these deliverables.
? Dr. Vergara is available to meet with individual teams to answer any questions related to the term project. Please visit during office hours or send an e-mail to set up an appointment.

IE 368: FACILITY DESIGN AND OPERATIONS MANAGEMENT
Term Project
Winter 2016

FAIR TRADER FACILITY DESIGN
(adapted from 2014-15 CICMHE Student Design Competition Case developed by St. Onge)

1. Description of Current Processes
The main level of the facility has space dedicated to products for the retail stores and consignment along with space for direct-to-customer (DTC) products. Currently, this space is used for larger items (e.g., baskets) that are generally stored in pallet positions for the direct-to-customer channels. In addition, space on the mezzanine is available for direct-to-customer products. Currently, the mezzanine space is used for the smaller items (e.g. jewelry and scarves) that are generally stored in bins. Occasionally, direct-to-customer items are intermingled with the retail and consignment items. However, all design changes must be made within the footprint of the areas currently dedicated to direct-to-customer. Drawings with details are provided in separate files.
Inbound processes: Given the unique and varying characteristics of the items that flow through the facility, they arrive in a variety of configurations. Items arrive by parcel post, on pallets with a single SKU, and on mixed pallets with multiple SKUs. These items are generally transferred to the shelves on the main floor or to the bins on the mezzanine. Items may be placed in picking locations or they may be placed in overstock locations.
Flow through the facility: Inside the facility, larger items are stored in the space on the main level dedicated to direct-to-customer operations (with some overflow to other areas of the facility). Smaller items are stored in bin shelves on the mezzanine level, which is located above the offices.
Currently, order fulfillment for the direct-to-customer business occurs on the mezzanine level.The smaller items that are stored in the bins are manually picked into totes using carts. Largeritems in an order are picked from the direct-to-customer storage on the main level and brought tothe mezzanine on the elevator. These larger items are either transported to the mezzanine onpallets using pallet jacks or on carts if the product will fit. The elevator is known to be abottleneck during periods of high demand. The small item picks from the mezzanine bins andthe large item picks from the main floor, if any, are merged at the packing stations that are on themezzanine level.
On the mezzanine, employees batch pick items to totes. Pieces are then manually sorted by order to pass-through shelves at the pack tables. The existing Warehouse Management System (WMS) limits the batch size to 14 orders. When all items for an order are available, a packing employee packs the order. The orders are then transferred to the lower level (either by a spiral package chute or the elevator) for distribution.
Outbound processes: Most of the items are distributed using parcel post.
Dock doors: Both inbound and outbound trucks utilize the same 11 dock doors available at the facility.
Resources: For the direct-to-customer processes, the facility currently has the followingmaterial handling equipment:
1 Narrow Aisle Reach Truck (similar to Crown Model RR5225-35)
3 manual pallet jacks
13 pick carts with 2 shelves (similar to Economy Service Cart ESC1630-2)
2 platform carts (similar to Fairbanks E95-Q-2448-RTE-408)
1 spiral chute from the mezzanine to the main level (similar to a Hytrol TransnormSafeglide Chute (TS-Chute))
1 gravity conveyor on the mezzanine
The following sites contain extensive information on material handling equipment:
http://www.mhi.org/learning/cicmhe/resources/taxonomy
http://www.mhi.org/mediabank/
The facility has 7 employees for receiving, stocking, picking, packing, and shipping for direct-to-customerchannels. In addition, the facility also has a maintenance worker who services theentire facility.
The normal warehouse schedule is 8:00 a.m. to 4:30 p.m. Monday through Friday, with a 30minute lunch break, resulting in a 40 hour week. From mid-November until the end ofDecember, warehouse hours are extended. During this time, direct-to-customer operates 7:00a.m. to 7:00 p.m. from Monday through Friday and 8:00 a.m. to 4:30 p.m. on Saturday.Individual employee schedules are staggered to achieve this schedule, and employees often work45 hours per week or more during this time. Fair Trader often uses temporary labor during peakperiods.
Storage in the facility: The main level of the facility is often referred to as Zone 1. Themezzanine level is also referred to as Zone 3.
For the main level (Zone 1), items are either stored on the lower shelf level for picking or on the upper shelf levels for overstock. In the data files, a designator of 1PICK indicates that an item is stored in Zone 1 in a pick area. A designator of 1OVER1 indicates that an item is stored in Zone 1, in the first level of overstock items. A designator of 1OVER2 indicates that an item is stored in Zone 1, in the second level of overstock items.
For Zone 1, in several places in the data, the shelf levels are also referred to as levels A, B, C, D, E, and F, with A representing the lowest shelf level and F representing the highest shelf level. Thus, a designator of 1PICK is an A level shelf in Zone 1. A designator of 1OVER1 is a B level shelf, and a designator of 1OVER2 is a C level shelf, in Zone 1.
For the mezzanine level (Zone 3), items are stored in bin locations. The bin locations generally hold boxes of 22”x15”x12”. This zone is primarily used for storing smaller items. The lower four levels are used for picking, and the top 3 levels are used for overstock. In the data files, a designator of 3PICK indicates that an item is stored in Zone 3 (the mezzanine) in one of the lower four levels for picking. These lower four levels are referred to as A, B, C, and D. A designator of 3OVER indicates that an item is stored in Zone 3 in one of the upper three levels used for overstock, referred to as E, F, and G.

Figure 1.Illustration of Storage Terminology
Bins within the shelves also have identifiers, with a naming scheme of ZRBBLP, where
Z: Zone (1-4)
R: single letter designating a row
BB: 2-digit number designating the Rack (sometimes referred to as a ‘Bay’)
L: a letter designating the level
P: a number designating the position on the Bay/Level
Throughout the data files, there are references to bin sizes and also box sizes. Bin sizes refer to the storage capacity for the shelf bins, as summarized in Table 1. Box sizes refer to the storage capacity of the containers that store the items, as summarized in Table 2.

Table 1. Bin Sizes
Pallet For full pallet (such as skid or Gaylord) locations: 48”x40”x54” = 103680 in3 = 60 ft3.
Half Pallet For half height pallet locations: 48”x40”x24” = 46080 in3 = 26.67 ft3.
Tall Pallet For taller pallet locations: 48”x40”x74” = 142080 in3 = 82.22 ft3.
Chicken Box For cardboard “chicken box” locations: 22”x15”x12” = 3960 in3 = 2.29 ft3.
Basket For 3 large plywood bins for storing baskets: 68”x60”x88” = 359040 in3 = 207 ft3.
Oddsize3A There is some space along the wall for putting miscellaneous items: 125”x18”x60” = 135000 in3 = 78.125 ft3.

Table 2. Box Sizes
Chicken Box 22x15x10 in3.
Half-Chicken Box A half-height chicken box (22x15x6), used for heavier items where filling up a full chicken box would be too heavy.
Skid Items are placed directly on a wooded skid.
Gaylord Items are placed in a pallet-sized cardboard box.
Producer Box Items are stored in boxes provided by the producer.
2. Scope Assumptions and Design Criteria
• Direct-to-customer business for this organization includes wholesale shipments, festival(event sales), and conventional e-commerce shipments.
• The project is to be located in the existing facility within the confines of the area allottedfor direct-to-customer (see provided drawings).
• In the current configuration, direct-to-customer items are occasionally intermingled withthe retail and consignment items. Although these items may remain in the non-DTCareas, no additional rack storage space can be utilized in the non-DTC areas. Thus, allchanges are limited to the areas allotted for DTC (see provided drawings).
• The distribution center must have capacity to handle volumes for the next two years forwholesale, festival and e-commerce growth.
• Historical data from the existing DC will be utilized for the project and factoredaccordingly to reflect demand for the following year volumes. Growth factors shouldreflect a 25% increase for order volume next year and a 35% increase compounded forthe following year across all channels.
• The current Warehouse Management System (WMS) is assumed to be sufficient for usein the new designs or processes because it can be programmed to add functionality. Inthe systems phase, clearly identify any needed functionality in the new design so thesoftware engineer would be able to make the changes.
• All systems hardware, software, integration and programming are the scope of FairTrader IT department and not the scope of the design team. The design team, however,must clearly and fully define the functionality required to support the final design ofoperations.
• Shipping carton erection for direct-to-customer is a concern.
• The WMS will not hold a pick location for an item once the location is empty.
• Fair Trader uses temporary labor during peak periods. It is desirable to minimize the needfor temporary labor as these resources are not as effective or as accurate as regularassociates and require training to be prepared for the four week peak period. Trainingtypically requires 20 hours.
• It is desirable, although not absolutely required, to avoid single points of failure. A singlepoint of failure example would be a single automated case packer without redundancy ora section of conveyor that if it fails an operation must be shut down.
• Audits of orders filled for e-commerce must be conducted after fulfillment is complete.

3. Data Provided
The information provided includes the following:
• 2 AutoCAD drawing files and information files (view the information .pdf files before the drawings)
o Main Level
o Mezzanine Level
• 1 PowerPoint file that provides a summary of the inbound and outbound data files.
o FairTraderFacilityDataReview.pptx
• 4 Spreadsheet files
o All of the spreadsheet files include an Information Sheet that providesdescriptions of the data.
Bins.xls provides information on the storage bins available at the facilityincluding:
BinCode a unique bin identifier
ZoneCode the zone designation
BinTypeCode the bin type: “PICK” for a pick bin and “PUT AWAY”for an overstock bin
BinSize a description of the bin size (pallet, chickenbox, etc.)
BinVol the volume of the bin in ft3
LastDateCounted the date the bin was last counted.
BinContent.xls provides information on the contents of the bins over the time horizon including:
Date the date of the snapshot
BinCode the bin identifier
BinSize the description of the bin size (pallet, chickenbox, etc.)
BinVol the volume of the bin in ft3
ItemNo the item number in the bin. If blank, the bin is empty. A given bin may have multiple items(and therefore multiple records in this file).
Quantity the quantity of the item in the bin
ItemBoxType the standard way this item is stored in the warehouse
MerchVol the volume (in ft3) that the merchandise takes up
PercentFull the ratio of MerchVol to BinVol.
The organization has some data issues with BinContent.xls as described on the information sheet in the file.

Receipts.xls provides the following information for items received in the facility over the horizon.
Date the date the item was received
SourceType “Purchase Order” if it was received against a PO or “Supplier Order” if it was a return.
SourceNo the PO Number if the source type was “Purchase Order”, the return order number if the source type was “Supplier Order”
ItemNo the item received
Quantity the quantity of the item received
MerchVol the volume (in ft3) that the merchandise that was received
CustGroup the business unit associated with the order(WHOLESALE, FESTIVAL, or ECOMMERCE)

Outbound.xls provides information on the items shipped from the facility over the horizon including:
Date the date the item was shipped
SourceType always “Sales Order”
CustNo the customer number for the items shipped
CustGroup the business unit the customer is associated with (WHOLESALE, FESTIVAL, or ECOMMERCE)
SourceNo the sales order number
ItemNo the item number
Quantity the quantity shipped
MerchVol the volume (in ft3) of the merchandise that was shipped

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FACILITY DESIGN AND OPERATIONS MANAGEMENT
FAIR TRADER FACILITY DESIGN
(adapted from 2014-15 CICMHE Student Design Competition Case developed by St. Onge)
1. Problem Description
Fair Trader is an exceptional source for unique handmade gifts, jewelry, home decor, art and sculpture, textiles, serve ware, and personal accessories representing the diverse cultures of artisans in Asia, Africa, Latin America and the Middle East. As one of the world’s largest fair trade organizations, Fair Trader is a founding member of the World Fair Trade Organization (WFTO). They strive to improve the livelihood of thousands of disadvantaged artisans in 38 countries. Fair Trader accomplishes this by establishing a sustainable market for handmade products in North America and building long term buying relationships in places where skilled artisan partners lack opportunities for stable income. Product sales help pay for food, education, healthcare and housing for artisans who would otherwise be unemployed or underemployed. The company encourages artisan partners to use environmentally friendly processes, sustainable natural resources, and recycled materials to ensure each product offered has been crafted responsibly. Fair Trader is a nonprofit organization, and has been named one of the World’s Most Ethical Companies on multiple occasions.
Fair Trader distributes products from their distribution center in New City, USA. The distribution center services their 390 retail outlets throughout the United States, a consignment sales events business, and their emerging direct-to-customer business. The direct-to-customer business volume is growing rapidly and is expected to continue its rapid growth over the next few years. They have a seasonal peak in demand, from mid-November through the end of December, which is significantly higher than the annual average daily order count. During the most recent holiday season, management recognized several challenges in handling the seasonal demand volume in their direct-to-customer operation and initiated actions that have led to improvements. For example, they have already dramatically reduced an up to 30 minute delay in closing out a pick line with changes to their Warehouse Management System (WMS). They have also recognized that their layout, discrete workstation set ups, and current processes – receiving, stocking, picking, quality control, packing and shipping – may represent further opportunity for increasing productivity and throughput capacity.
Although this facility services all of the Fair Trader channels of distribution (i.e., retail stores, consignment, and direct-to-customer), the focus of this study is strictly on the direct-to-customer (DTC) channels. At this particular facility, the direct-to-customer channels include
Page 2 of 5
wholesale, festival, and e-commerce. Fair Trader is seeking assistance to identify the opportunities for improving their processes, particularly in light of an expected 25% volume growth in the upcoming year and 35% in the subsequent year.
With this in mind they have requested assistance in identifying improvements to increase their productivity and throughput. As with most nonprofits, approaches that require low capital expenditure but provide the needed flexibility to adequately handle volume increases associated with seasonal peak demands within a direct-to-customer operation are desirable. At the same time, Fair Trader will consider making a significant capital investment if justified by significant benefits.
2. Project Objectives
The project will require teams to complete at least the following tasks (more may be needed):
? Understand the processes currently performed at the Fair Trader distribution center, and determine future process capacity needs for the remodel of the facility based on available data.
? Redesign the facility configuration (i.e., develop layout alternatives) to support direct-to-customer (wholesale, festival, and e-commerce) fulfillment requirements in the portion of the facility available for these three channels including the ability to accommodate the anticipated increase in sales volume.
? Describe the flow of processes through the facility.
? Specify all resources required, including personnel, technologies, and equipment.
? Ensure that throughput capability supports the peak day of the year for each of the channels as well as the total peak for the operations, while being efficient all year round.
3. Deliverables and Grading
Progress Report (50 pts). The first deliverable of this project is a typewritten status report due on Tuesday, February 16, 2016 at the beginning of class. You will be graded based on the following criteria:
? Content of status report (30 points). The report should contain the following information:
o Your understanding of the project objectives and requirements.
o Description of completed tasks (no progress means no credit).
o Description of challenges found and proposed solution plan.
o Description of future tasks.
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? Organization of the report (15 points). The written report must be typewritten, single-spaced, use 1-inch margins, and use 12-point Times New Roman font. The report must be approximately 2 pages in length, not including references or appendices. Papers exceeding the 2-page limit will not be accepted.
? Accuracy of material (5 points). The written report must include a list of references and these references must be properly cited in the report.
Final Written Report (150 pts). The main deliverable of this project is a typewritten report due on Friday, March 11, 2016 by 5pm. Both, a hard copy and an electronic copy of the report (and appendices) must be submitted by this due date. You will be graded based on the following criteria:
? Your understanding of the project objectives and requirements (15 points). The alternative layouts for the remodel of the functional areas of the Fair Trader distribution center are based on the requirements. Any assumptions made are clearly stated and validated with data (where applicable).
? Organization of the report (15 points). The report must be typewritten, single-spaced, use 1-inch margins, and use 12-point Times New Roman font. The report must be approximately 5 pages in length, not including references or appendices. Papers exceeding the 5-page limit will not be accepted. The report must include a table of contents, page numbers, and the contents must be organized in sections.
? Originality of treatment (90 points). The material in the report is clearly a contribution of the students. A logical thought process was followed to analyze the information provided and transform it into a plausible solution that can be used for future decision support. The solutions proposed clearly reflect the level of effort invested by the team.
? Accuracy of material (10 points). The written report must include a list of references and these references must be properly cited in the report.
? 2D models of proposed layouts for future remodel (20 points). Computer-generated graphical representations in two dimensions of the proposed layouts. Dimensions (with specified units) and labels should be clearly visible.
The final report should be organized as follows:
1. An executive summary (no more than 1 page in length) that summarizes your objectives, high-level assumptions, and the recommendations based on the results from the analyses you conducted. The 1-page executive summary does not count toward the 5-page maximum.
2. The remainder of the report should summarize your efforts and provide enough details so that another industrial engineer can understand the process and logic used to generate your layout alternatives.
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a. Introduction – Problem statement, objectives of the study, brief description of existing facilities, and constraints and assumptions.
b. Methodology – Brief description of the methods used to analyze and synthesize the data and generate alternatives. Quantitative approaches will get the most credit.
c. Results and Recommendations – Recommendations to management based on the results of the analysis. Includes:
i. Product Flow: Description of how the proposed design provides for the desired product flow.
ii. Equipment Selection: Description of the appropriate equipment for the facility and how the proposed equipment meets the objectives specified for the facility.
iii. Space Utilization: Evaluation of the utilization of the cubic capacity based on the layout and equipment recommended for the facility and how the proposed design meets the objectives specified for the facility.
iv. Operational Plan: Description of the appropriate operational plan for the facility. Includes job requirements, use of all equipment, integration of any information technology, and guidelines for running this operation efficiently and safely for employees.
v. Implementation Plan: Description of an implementation plan that allows the project objectives to be reached without impacting existing activities.
vi. Economic Justification: Economic analysis that justifies the cost of the proposed design (including capital and ongoing costs) based on the benefits that the proposed design provides.
d. Appendices – Details of specific analyses, proposed layouts, equipment pictures, Gantt chart for implementation, etc. Do not include every possible layout that you generated. Make sure all appendices are titled so that they are self-explanatory. That is, do not have an appendix with “Appendix A” as a title and then a bunch of numbers listed in a table. Each appendix should be referenced in the report; otherwise there is no reason for including it.
Please ensure that the following items are addressed in your final report:
? Assumptions and calculations behind the proposed layout;
? Drawing illustrating the proposed general layout of the building and equipment;
? Description of operations that shows the basic material handling equipment and processes required to support the direct-to-customer channels;
? Estimated investment costs to implement the proposed facility design;
? Estimated direct labor staffing required to support the distribution functions, from the point of receipt through outbound trailer loading; and
? Elevation drawings, sketches, or photos of the proposed equipment needed to support the planned operations.
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Peer Evaluation (30 points). A peer evaluation form will be provided to each student at the end of the term. The results of this evaluation will be applied to each individual student to determine his/her final grade for the term project.
Notes:
? Rubrics for the Progress Report and Final Report will be available on Canvas at least 2 weeks in advance to the due dates for these deliverables.
? Dr. Vergara is available to meet with individual teams to answer any questions related to the term project. Please visit during office hours or send an e-mail to set up an appointment.

IE 368: FACILITY DESIGN AND OPERATIONS MANAGEMENT
Term Project
Winter 2016

FAIR TRADER FACILITY DESIGN
(adapted from 2014-15 CICMHE Student Design Competition Case developed by St. Onge)

1. Description of Current Processes
The main level of the facility has space dedicated to products for the retail stores and consignment along with space for direct-to-customer (DTC) products. Currently, this space is used for larger items (e.g., baskets) that are generally stored in pallet positions for the direct-to-customer channels. In addition, space on the mezzanine is available for direct-to-customer products. Currently, the mezzanine space is used for the smaller items (e.g. jewelry and scarves) that are generally stored in bins. Occasionally, direct-to-customer items are intermingled with the retail and consignment items. However, all design changes must be made within the footprint of the areas currently dedicated to direct-to-customer. Drawings with details are provided in separate files.
Inbound processes: Given the unique and varying characteristics of the items that flow through the facility, they arrive in a variety of configurations. Items arrive by parcel post, on pallets with a single SKU, and on mixed pallets with multiple SKUs. These items are generally transferred to the shelves on the main floor or to the bins on the mezzanine. Items may be placed in picking locations or they may be placed in overstock locations.
Flow through the facility: Inside the facility, larger items are stored in the space on the main level dedicated to direct-to-customer operations (with some overflow to other areas of the facility). Smaller items are stored in bin shelves on the mezzanine level, which is located above the offices.
Currently, order fulfillment for the direct-to-customer business occurs on the mezzanine level.The smaller items that are stored in the bins are manually picked into totes using carts. Largeritems in an order are picked from the direct-to-customer storage on the main level and brought tothe mezzanine on the elevator. These larger items are either transported to the mezzanine onpallets using pallet jacks or on carts if the product will fit. The elevator is known to be abottleneck during periods of high demand. The small item picks from the mezzanine bins andthe large item picks from the main floor, if any, are merged at the packing stations that are on themezzanine level.
On the mezzanine, employees batch pick items to totes. Pieces are then manually sorted by order to pass-through shelves at the pack tables. The existing Warehouse Management System (WMS) limits the batch size to 14 orders. When all items for an order are available, a packing employee packs the order. The orders are then transferred to the lower level (either by a spiral package chute or the elevator) for distribution.
Outbound processes: Most of the items are distributed using parcel post.
Dock doors: Both inbound and outbound trucks utilize the same 11 dock doors available at the facility.
Resources: For the direct-to-customer processes, the facility currently has the followingmaterial handling equipment:
1 Narrow Aisle Reach Truck (similar to Crown Model RR5225-35)
3 manual pallet jacks
13 pick carts with 2 shelves (similar to Economy Service Cart ESC1630-2)
2 platform carts (similar to Fairbanks E95-Q-2448-RTE-408)
1 spiral chute from the mezzanine to the main level (similar to a Hytrol TransnormSafeglide Chute (TS-Chute))
1 gravity conveyor on the mezzanine
The following sites contain extensive information on material handling equipment:
http://www.mhi.org/learning/cicmhe/resources/taxonomy
http://www.mhi.org/mediabank/
The facility has 7 employees for receiving, stocking, picking, packing, and shipping for direct-to-customerchannels. In addition, the facility also has a maintenance worker who services theentire facility.
The normal warehouse schedule is 8:00 a.m. to 4:30 p.m. Monday through Friday, with a 30minute lunch break, resulting in a 40 hour week. From mid-November until the end ofDecember, warehouse hours are extended. During this time, direct-to-customer operates 7:00a.m. to 7:00 p.m. from Monday through Friday and 8:00 a.m. to 4:30 p.m. on Saturday.Individual employee schedules are staggered to achieve this schedule, and employees often work45 hours per week or more during this time. Fair Trader often uses temporary labor during peakperiods.
Storage in the facility: The main level of the facility is often referred to as Zone 1. Themezzanine level is also referred to as Zone 3.
For the main level (Zone 1), items are either stored on the lower shelf level for picking or on the upper shelf levels for overstock. In the data files, a designator of 1PICK indicates that an item is stored in Zone 1 in a pick area. A designator of 1OVER1 indicates that an item is stored in Zone 1, in the first level of overstock items. A designator of 1OVER2 indicates that an item is stored in Zone 1, in the second level of overstock items.
For Zone 1, in several places in the data, the shelf levels are also referred to as levels A, B, C, D, E, and F, with A representing the lowest shelf level and F representing the highest shelf level. Thus, a designator of 1PICK is an A level shelf in Zone 1. A designator of 1OVER1 is a B level shelf, and a designator of 1OVER2 is a C level shelf, in Zone 1.
For the mezzanine level (Zone 3), items are stored in bin locations. The bin locations generally hold boxes of 22”x15”x12”. This zone is primarily used for storing smaller items. The lower four levels are used for picking, and the top 3 levels are used for overstock. In the data files, a designator of 3PICK indicates that an item is stored in Zone 3 (the mezzanine) in one of the lower four levels for picking. These lower four levels are referred to as A, B, C, and D. A designator of 3OVER indicates that an item is stored in Zone 3 in one of the upper three levels used for overstock, referred to as E, F, and G.

Figure 1.Illustration of Storage Terminology
Bins within the shelves also have identifiers, with a naming scheme of ZRBBLP, where
Z: Zone (1-4)
R: single letter designating a row
BB: 2-digit number designating the Rack (sometimes referred to as a ‘Bay’)
L: a letter designating the level
P: a number designating the position on the Bay/Level
Throughout the data files, there are references to bin sizes and also box sizes. Bin sizes refer to the storage capacity for the shelf bins, as summarized in Table 1. Box sizes refer to the storage capacity of the containers that store the items, as summarized in Table 2.

Table 1. Bin Sizes
Pallet For full pallet (such as skid or Gaylord) locations: 48”x40”x54” = 103680 in3 = 60 ft3.
Half Pallet For half height pallet locations: 48”x40”x24” = 46080 in3 = 26.67 ft3.
Tall Pallet For taller pallet locations: 48”x40”x74” = 142080 in3 = 82.22 ft3.
Chicken Box For cardboard “chicken box” locations: 22”x15”x12” = 3960 in3 = 2.29 ft3.
Basket For 3 large plywood bins for storing baskets: 68”x60”x88” = 359040 in3 = 207 ft3.
Oddsize3A There is some space along the wall for putting miscellaneous items: 125”x18”x60” = 135000 in3 = 78.125 ft3.

Table 2. Box Sizes
Chicken Box 22x15x10 in3.
Half-Chicken Box A half-height chicken box (22x15x6), used for heavier items where filling up a full chicken box would be too heavy.
Skid Items are placed directly on a wooded skid.
Gaylord Items are placed in a pallet-sized cardboard box.
Producer Box Items are stored in boxes provided by the producer.
2. Scope Assumptions and Design Criteria
• Direct-to-customer business for this organization includes wholesale shipments, festival(event sales), and conventional e-commerce shipments.
• The project is to be located in the existing facility within the confines of the area allottedfor direct-to-customer (see provided drawings).
• In the current configuration, direct-to-customer items are occasionally intermingled withthe retail and consignment items. Although these items may remain in the non-DTCareas, no additional rack storage space can be utilized in the non-DTC areas. Thus, allchanges are limited to the areas allotted for DTC (see provided drawings).
• The distribution center must have capacity to handle volumes for the next two years forwholesale, festival and e-commerce growth.
• Historical data from the existing DC will be utilized for the project and factoredaccordingly to reflect demand for the following year volumes. Growth factors shouldreflect a 25% increase for order volume next year and a 35% increase compounded forthe following year across all channels.
• The current Warehouse Management System (WMS) is assumed to be sufficient for usein the new designs or processes because it can be programmed to add functionality. Inthe systems phase, clearly identify any needed functionality in the new design so thesoftware engineer would be able to make the changes.
• All systems hardware, software, integration and programming are the scope of FairTrader IT department and not the scope of the design team. The design team, however,must clearly and fully define the functionality required to support the final design ofoperations.
• Shipping carton erection for direct-to-customer is a concern.
• The WMS will not hold a pick location for an item once the location is empty.
• Fair Trader uses temporary labor during peak periods. It is desirable to minimize the needfor temporary labor as these resources are not as effective or as accurate as regularassociates and require training to be prepared for the four week peak period. Trainingtypically requires 20 hours.
• It is desirable, although not absolutely required, to avoid single points of failure. A singlepoint of failure example would be a single automated case packer without redundancy ora section of conveyor that if it fails an operation must be shut down.
• Audits of orders filled for e-commerce must be conducted after fulfillment is complete.

3. Data Provided
The information provided includes the following:
• 2 AutoCAD drawing files and information files (view the information .pdf files before the drawings)
o Main Level
o Mezzanine Level
• 1 PowerPoint file that provides a summary of the inbound and outbound data files.
o FairTraderFacilityDataReview.pptx
• 4 Spreadsheet files
o All of the spreadsheet files include an Information Sheet that providesdescriptions of the data.
Bins.xls provides information on the storage bins available at the facilityincluding:
BinCode a unique bin identifier
ZoneCode the zone designation
BinTypeCode the bin type: “PICK” for a pick bin and “PUT AWAY”for an overstock bin
BinSize a description of the bin size (pallet, chickenbox, etc.)
BinVol the volume of the bin in ft3
LastDateCounted the date the bin was last counted.
BinContent.xls provides information on the contents of the bins over the time horizon including:
Date the date of the snapshot
BinCode the bin identifier
BinSize the description of the bin size (pallet, chickenbox, etc.)
BinVol the volume of the bin in ft3
ItemNo the item number in the bin. If blank, the bin is empty. A given bin may have multiple items(and therefore multiple records in this file).
Quantity the quantity of the item in the bin
ItemBoxType the standard way this item is stored in the warehouse
MerchVol the volume (in ft3) that the merchandise takes up
PercentFull the ratio of MerchVol to BinVol.
The organization has some data issues with BinContent.xls as described on the information sheet in the file.

Receipts.xls provides the following information for items received in the facility over the horizon.
Date the date the item was received
SourceType “Purchase Order” if it was received against a PO or “Supplier Order” if it was a return.
SourceNo the PO Number if the source type was “Purchase Order”, the return order number if the source type was “Supplier Order”
ItemNo the item received
Quantity the quantity of the item received
MerchVol the volume (in ft3) that the merchandise that was received
CustGroup the business unit associated with the order(WHOLESALE, FESTIVAL, or ECOMMERCE)

Outbound.xls provides information on the items shipped from the facility over the horizon including:
Date the date the item was shipped
SourceType always “Sales Order”
CustNo the customer number for the items shipped
CustGroup the business unit the customer is associated with (WHOLESALE, FESTIVAL, or ECOMMERCE)
SourceNo the sales order number
ItemNo the item number
Quantity the quantity shipped
MerchVol the volume (in ft3) of the merchandise that was shipped

FACILITY DESIGN AND OPERATIONS MANAGEMENT
FAIR TRADER FACILITY DESIGN
(adapted from 2014-15 CICMHE Student Design Competition Case developed by St. Onge)
1. Problem Description
Fair Trader is an exceptional source for unique handmade gifts, jewelry, home decor, art and sculpture, textiles, serve ware, and personal accessories representing the diverse cultures of artisans in Asia, Africa, Latin America and the Middle East. As one of the world’s largest fair trade organizations, Fair Trader is a founding member of the World Fair Trade Organization (WFTO). They strive to improve the livelihood of thousands of disadvantaged artisans in 38 countries. Fair Trader accomplishes this by establishing a sustainable market for handmade products in North America and building long term buying relationships in places where skilled artisan partners lack opportunities for stable income. Product sales help pay for food, education, healthcare and housing for artisans who would otherwise be unemployed or underemployed. The company encourages artisan partners to use environmentally friendly processes, sustainable natural resources, and recycled materials to ensure each product offered has been crafted responsibly. Fair Trader is a nonprofit organization, and has been named one of the World’s Most Ethical Companies on multiple occasions.
Fair Trader distributes products from their distribution center in New City, USA. The distribution center services their 390 retail outlets throughout the United States, a consignment sales events business, and their emerging direct-to-customer business. The direct-to-customer business volume is growing rapidly and is expected to continue its rapid growth over the next few years. They have a seasonal peak in demand, from mid-November through the end of December, which is significantly higher than the annual average daily order count. During the most recent holiday season, management recognized several challenges in handling the seasonal demand volume in their direct-to-customer operation and initiated actions that have led to improvements. For example, they have already dramatically reduced an up to 30 minute delay in closing out a pick line with changes to their Warehouse Management System (WMS). They have also recognized that their layout, discrete workstation set ups, and current processes – receiving, stocking, picking, quality control, packing and shipping – may represent further opportunity for increasing productivity and throughput capacity.
Although this facility services all of the Fair Trader channels of distribution (i.e., retail stores, consignment, and direct-to-customer), the focus of this study is strictly on the direct-to-customer (DTC) channels. At this particular facility, the direct-to-customer channels include
Page 2 of 5
wholesale, festival, and e-commerce. Fair Trader is seeking assistance to identify the opportunities for improving their processes, particularly in light of an expected 25% volume growth in the upcoming year and 35% in the subsequent year.
With this in mind they have requested assistance in identifying improvements to increase their productivity and throughput. As with most nonprofits, approaches that require low capital expenditure but provide the needed flexibility to adequately handle volume increases associated with seasonal peak demands within a direct-to-customer operation are desirable. At the same time, Fair Trader will consider making a significant capital investment if justified by significant benefits.
2. Project Objectives
The project will require teams to complete at least the following tasks (more may be needed):
? Understand the processes currently performed at the Fair Trader distribution center, and determine future process capacity needs for the remodel of the facility based on available data.
? Redesign the facility configuration (i.e., develop layout alternatives) to support direct-to-customer (wholesale, festival, and e-commerce) fulfillment requirements in the portion of the facility available for these three channels including the ability to accommodate the anticipated increase in sales volume.
? Describe the flow of processes through the facility.
? Specify all resources required, including personnel, technologies, and equipment.
? Ensure that throughput capability supports the peak day of the year for each of the channels as well as the total peak for the operations, while being efficient all year round.
3. Deliverables and Grading
Progress Report (50 pts). The first deliverable of this project is a typewritten status report due on Tuesday, February 16, 2016 at the beginning of class. You will be graded based on the following criteria:
? Content of status report (30 points). The report should contain the following information:
o Your understanding of the project objectives and requirements.
o Description of completed tasks (no progress means no credit).
o Description of challenges found and proposed solution plan.
o Description of future tasks.
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? Organization of the report (15 points). The written report must be typewritten, single-spaced, use 1-inch margins, and use 12-point Times New Roman font. The report must be approximately 2 pages in length, not including references or appendices. Papers exceeding the 2-page limit will not be accepted.
? Accuracy of material (5 points). The written report must include a list of references and these references must be properly cited in the report.
Final Written Report (150 pts). The main deliverable of this project is a typewritten report due on Friday, March 11, 2016 by 5pm. Both, a hard copy and an electronic copy of the report (and appendices) must be submitted by this due date. You will be graded based on the following criteria:
? Your understanding of the project objectives and requirements (15 points). The alternative layouts for the remodel of the functional areas of the Fair Trader distribution center are based on the requirements. Any assumptions made are clearly stated and validated with data (where applicable).
? Organization of the report (15 points). The report must be typewritten, single-spaced, use 1-inch margins, and use 12-point Times New Roman font. The report must be approximately 5 pages in length, not including references or appendices. Papers exceeding the 5-page limit will not be accepted. The report must include a table of contents, page numbers, and the contents must be organized in sections.
? Originality of treatment (90 points). The material in the report is clearly a contribution of the students. A logical thought process was followed to analyze the information provided and transform it into a plausible solution that can be used for future decision support. The solutions proposed clearly reflect the level of effort invested by the team.
? Accuracy of material (10 points). The written report must include a list of references and these references must be properly cited in the report.
? 2D models of proposed layouts for future remodel (20 points). Computer-generated graphical representations in two dimensions of the proposed layouts. Dimensions (with specified units) and labels should be clearly visible.
The final report should be organized as follows:
1. An executive summary (no more than 1 page in length) that summarizes your objectives, high-level assumptions, and the recommendations based on the results from the analyses you conducted. The 1-page executive summary does not count toward the 5-page maximum.
2. The remainder of the report should summarize your efforts and provide enough details so that another industrial engineer can understand the process and logic used to generate your layout alternatives.
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a. Introduction – Problem statement, objectives of the study, brief description of existing facilities, and constraints and assumptions.
b. Methodology – Brief description of the methods used to analyze and synthesize the data and generate alternatives. Quantitative approaches will get the most credit.
c. Results and Recommendations – Recommendations to management based on the results of the analysis. Includes:
i. Product Flow: Description of how the proposed design provides for the desired product flow.
ii. Equipment Selection: Description of the appropriate equipment for the facility and how the proposed equipment meets the objectives specified for the facility.
iii. Space Utilization: Evaluation of the utilization of the cubic capacity based on the layout and equipment recommended for the facility and how the proposed design meets the objectives specified for the facility.
iv. Operational Plan: Description of the appropriate operational plan for the facility. Includes job requirements, use of all equipment, integration of any information technology, and guidelines for running this operation efficiently and safely for employees.
v. Implementation Plan: Description of an implementation plan that allows the project objectives to be reached without impacting existing activities.
vi. Economic Justification: Economic analysis that justifies the cost of the proposed design (including capital and ongoing costs) based on the benefits that the proposed design provides.
d. Appendices – Details of specific analyses, proposed layouts, equipment pictures, Gantt chart for implementation, etc. Do not include every possible layout that you generated. Make sure all appendices are titled so that they are self-explanatory. That is, do not have an appendix with “Appendix A” as a title and then a bunch of numbers listed in a table. Each appendix should be referenced in the report; otherwise there is no reason for including it.
Please ensure that the following items are addressed in your final report:
? Assumptions and calculations behind the proposed layout;
? Drawing illustrating the proposed general layout of the building and equipment;
? Description of operations that shows the basic material handling equipment and processes required to support the direct-to-customer channels;
? Estimated investment costs to implement the proposed facility design;
? Estimated direct labor staffing required to support the distribution functions, from the point of receipt through outbound trailer loading; and
? Elevation drawings, sketches, or photos of the proposed equipment needed to support the planned operations.
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Peer Evaluation (30 points). A peer evaluation form will be provided to each student at the end of the term. The results of this evaluation will be applied to each individual student to determine his/her final grade for the term project.
Notes:
? Rubrics for the Progress Report and Final Report will be available on Canvas at least 2 weeks in advance to the due dates for these deliverables.
? Dr. Vergara is available to meet with individual teams to answer any questions related to the term project. Please visit during office hours or send an e-mail to set up an appointment.

IE 368: FACILITY DESIGN AND OPERATIONS MANAGEMENT
Term Project
Winter 2016

FAIR TRADER FACILITY DESIGN
(adapted from 2014-15 CICMHE Student Design Competition Case developed by St. Onge)

1. Description of Current Processes
The main level of the facility has space dedicated to products for the retail stores and consignment along with space for direct-to-customer (DTC) products. Currently, this space is used for larger items (e.g., baskets) that are generally stored in pallet positions for the direct-to-customer channels. In addition, space on the mezzanine is available for direct-to-customer products. Currently, the mezzanine space is used for the smaller items (e.g. jewelry and scarves) that are generally stored in bins. Occasionally, direct-to-customer items are intermingled with the retail and consignment items. However, all design changes must be made within the footprint of the areas currently dedicated to direct-to-customer. Drawings with details are provided in separate files.
Inbound processes: Given the unique and varying characteristics of the items that flow through the facility, they arrive in a variety of configurations. Items arrive by parcel post, on pallets with a single SKU, and on mixed pallets with multiple SKUs. These items are generally transferred to the shelves on the main floor or to the bins on the mezzanine. Items may be placed in picking locations or they may be placed in overstock locations.
Flow through the facility: Inside the facility, larger items are stored in the space on the main level dedicated to direct-to-customer operations (with some overflow to other areas of the facility). Smaller items are stored in bin shelves on the mezzanine level, which is located above the offices.
Currently, order fulfillment for the direct-to-customer business occurs on the mezzanine level.The smaller items that are stored in the bins are manually picked into totes using carts. Largeritems in an order are picked from the direct-to-customer storage on the main level and brought tothe mezzanine on the elevator. These larger items are either transported to the mezzanine onpallets using pallet jacks or on carts if the product will fit. The elevator is known to be abottleneck during periods of high demand. The small item picks from the mezzanine bins andthe large item picks from the main floor, if any, are merged at the packing stations that are on themezzanine level.
On the mezzanine, employees batch pick items to totes. Pieces are then manually sorted by order to pass-through shelves at the pack tables. The existing Warehouse Management System (WMS) limits the batch size to 14 orders. When all items for an order are available, a packing employee packs the order. The orders are then transferred to the lower level (either by a spiral package chute or the elevator) for distribution.
Outbound processes: Most of the items are distributed using parcel post.
Dock doors: Both inbound and outbound trucks utilize the same 11 dock doors available at the facility.
Resources: For the direct-to-customer processes, the facility currently has the followingmaterial handling equipment:
1 Narrow Aisle Reach Truck (similar to Crown Model RR5225-35)
3 manual pallet jacks
13 pick carts with 2 shelves (similar to Economy Service Cart ESC1630-2)
2 platform carts (similar to Fairbanks E95-Q-2448-RTE-408)
1 spiral chute from the mezzanine to the main level (similar to a Hytrol TransnormSafeglide Chute (TS-Chute))
1 gravity conveyor on the mezzanine
The following sites contain extensive information on material handling equipment:
http://www.mhi.org/learning/cicmhe/resources/taxonomy
http://www.mhi.org/mediabank/
The facility has 7 employees for receiving, stocking, picking, packing, and shipping for direct-to-customerchannels. In addition, the facility also has a maintenance worker who services theentire facility.
The normal warehouse schedule is 8:00 a.m. to 4:30 p.m. Monday through Friday, with a 30minute lunch break, resulting in a 40 hour week. From mid-November until the end ofDecember, warehouse hours are extended. During this time, direct-to-customer operates 7:00a.m. to 7:00 p.m. from Monday through Friday and 8:00 a.m. to 4:30 p.m. on Saturday.Individual employee schedules are staggered to achieve this schedule, and employees often work45 hours per week or more during this time. Fair Trader often uses temporary labor during peakperiods.
Storage in the facility: The main level of the facility is often referred to as Zone 1. Themezzanine level is also referred to as Zone 3.
For the main level (Zone 1), items are either stored on the lower shelf level for picking or on the upper shelf levels for overstock. In the data files, a designator of 1PICK indicates that an item is stored in Zone 1 in a pick area. A designator of 1OVER1 indicates that an item is stored in Zone 1, in the first level of overstock items. A designator of 1OVER2 indicates that an item is stored in Zone 1, in the second level of overstock items.
For Zone 1, in several places in the data, the shelf levels are also referred to as levels A, B, C, D, E, and F, with A representing the lowest shelf level and F representing the highest shelf level. Thus, a designator of 1PICK is an A level shelf in Zone 1. A designator of 1OVER1 is a B level shelf, and a designator of 1OVER2 is a C level shelf, in Zone 1.
For the mezzanine level (Zone 3), items are stored in bin locations. The bin locations generally hold boxes of 22”x15”x12”. This zone is primarily used for storing smaller items. The lower four levels are used for picking, and the top 3 levels are used for overstock. In the data files, a designator of 3PICK indicates that an item is stored in Zone 3 (the mezzanine) in one of the lower four levels for picking. These lower four levels are referred to as A, B, C, and D. A designator of 3OVER indicates that an item is stored in Zone 3 in one of the upper three levels used for overstock, referred to as E, F, and G.

Figure 1.Illustration of Storage Terminology
Bins within the shelves also have identifiers, with a naming scheme of ZRBBLP, where
Z: Zone (1-4)
R: single letter designating a row
BB: 2-digit number designating the Rack (sometimes referred to as a ‘Bay’)
L: a letter designating the level
P: a number designating the position on the Bay/Level
Throughout the data files, there are references to bin sizes and also box sizes. Bin sizes refer to the storage capacity for the shelf bins, as summarized in Table 1. Box sizes refer to the storage capacity of the containers that store the items, as summarized in Table 2.

Table 1. Bin Sizes
Pallet For full pallet (such as skid or Gaylord) locations: 48”x40”x54” = 103680 in3 = 60 ft3.
Half Pallet For half height pallet locations: 48”x40”x24” = 46080 in3 = 26.67 ft3.
Tall Pallet For taller pallet locations: 48”x40”x74” = 142080 in3 = 82.22 ft3.
Chicken Box For cardboard “chicken box” locations: 22”x15”x12” = 3960 in3 = 2.29 ft3.
Basket For 3 large plywood bins for storing baskets: 68”x60”x88” = 359040 in3 = 207 ft3.
Oddsize3A There is some space along the wall for putting miscellaneous items: 125”x18”x60” = 135000 in3 = 78.125 ft3.

Table 2. Box Sizes
Chicken Box 22x15x10 in3.
Half-Chicken Box A half-height chicken box (22x15x6), used for heavier items where filling up a full chicken box would be too heavy.
Skid Items are placed directly on a wooded skid.
Gaylord Items are placed in a pallet-sized cardboard box.
Producer Box Items are stored in boxes provided by the producer.
2. Scope Assumptions and Design Criteria
• Direct-to-customer business for this organization includes wholesale shipments, festival(event sales), and conventional e-commerce shipments.
• The project is to be located in the existing facility within the confines of the area allottedfor direct-to-customer (see provided drawings).
• In the current configuration, direct-to-customer items are occasionally intermingled withthe retail and consignment items. Although these items may remain in the non-DTCareas, no additional rack storage space can be utilized in the non-DTC areas. Thus, allchanges are limited to the areas allotted for DTC (see provided drawings).
• The distribution center must have capacity to handle volumes for the next two years forwholesale, festival and e-commerce growth.
• Historical data from the existing DC will be utilized for the project and factoredaccordingly to reflect demand for the following year volumes. Growth factors shouldreflect a 25% increase for order volume next year and a 35% increase compounded forthe following year across all channels.
• The current Warehouse Management System (WMS) is assumed to be sufficient for usein the new designs or processes because it can be programmed to add functionality. Inthe systems phase, clearly identify any needed functionality in the new design so thesoftware engineer would be able to make the changes.
• All systems hardware, software, integration and programming are the scope of FairTrader IT department and not the scope of the design team. The design team, however,must clearly and fully define the functionality required to support the final design ofoperations.
• Shipping carton erection for direct-to-customer is a concern.
• The WMS will not hold a pick location for an item once the location is empty.
• Fair Trader uses temporary labor during peak periods. It is desirable to minimize the needfor temporary labor as these resources are not as effective or as accurate as regularassociates and require training to be prepared for the four week peak period. Trainingtypically requires 20 hours.
• It is desirable, although not absolutely required, to avoid single points of failure. A singlepoint of failure example would be a single automated case packer without redundancy ora section of conveyor that if it fails an operation must be shut down.
• Audits of orders filled for e-commerce must be conducted after fulfillment is complete.

3. Data Provided
The information provided includes the following:
• 2 AutoCAD drawing files and information files (view the information .pdf files before the drawings)
o Main Level
o Mezzanine Level
• 1 PowerPoint file that provides a summary of the inbound and outbound data files.
o FairTraderFacilityDataReview.pptx
• 4 Spreadsheet files
o All of the spreadsheet files include an Information Sheet that providesdescriptions of the data.
Bins.xls provides information on the storage bins available at the facilityincluding:
BinCode a unique bin identifier
ZoneCode the zone designation
BinTypeCode the bin type: “PICK” for a pick bin and “PUT AWAY”for an overstock bin
BinSize a description of the bin size (pallet, chickenbox, etc.)
BinVol the volume of the bin in ft3
LastDateCounted the date the bin was last counted.
BinContent.xls provides information on the contents of the bins over the time horizon including:
Date the date of the snapshot
BinCode the bin identifier
BinSize the description of the bin size (pallet, chickenbox, etc.)
BinVol the volume of the bin in ft3
ItemNo the item number in the bin. If blank, the bin is empty. A given bin may have multiple items(and therefore multiple records in this file).
Quantity the quantity of the item in the bin
ItemBoxType the standard way this item is stored in the warehouse
MerchVol the volume (in ft3) that the merchandise takes up
PercentFull the ratio of MerchVol to BinVol.
The organization has some data issues with BinContent.xls as described on the information sheet in the file.

Receipts.xls provides the following information for items received in the facility over the horizon.
Date the date the item was received
SourceType “Purchase Order” if it was received against a PO or “Supplier Order” if it was a return.
SourceNo the PO Number if the source type was “Purchase Order”, the return order number if the source type was “Supplier Order”
ItemNo the item received
Quantity the quantity of the item received
MerchVol the volume (in ft3) that the merchandise that was received
CustGroup the business unit associated with the order(WHOLESALE, FESTIVAL, or ECOMMERCE)

Outbound.xls provides information on the items shipped from the facility over the horizon including:
Date the date the item was shipped
SourceType always “Sales Order”
CustNo the customer number for the items shipped
CustGroup the business unit the customer is associated with (WHOLESALE, FESTIVAL, or ECOMMERCE)
SourceNo the sales order number
ItemNo the item number
Quantity the quantity shipped
MerchVol the volume (in ft3) of the merchandise that was shipped