Ramping up a heuristic procedure for storage location assignment problem with precedence constraints

The retail industry is becoming increasingly competitive; as a result, companies are seeking to reduce inefficiencies in their supply chains. One way of increasing the efficiency of operations inside a warehouse is by better allocating products in the available spaces. In this paper, we propose a new heuristic approach to solving the storage location assignment problem (SLAP) considering precedence constraints, in multi-aisle, multi-product picking warehouses. A two-phase heuristic procedure is developed: the products are clustered and assigned to the available spaces. We tested the procedure in the non-perishables warehouse of a real-world Portuguese retail chain, which supplies 191 stores per day. The results show that the new assignment of products allows for an improvement of up to 15% on the distance travelled by the pickers, which implies savings of approximately 477 km per month. This problem is a special case of SLAP since we are dealing with large percentages of non-uniform products. This procedure incorporates four relevant criteria for the allocation decision: the products' similarity, demand and weight, and the distance travelled by the picker. By using a two-phase heuristic method, this study offers companies and academics an alternative and more effective solution for SLAP than the usual methods based on the creation of density zones.