A study of changes in Air Materiel Command warehouse procedures made possible by the use of electronic data processing equipment

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Content STUDY OF CHANGES IN AIR MATERIEL COMMAND WAREHOUSE PROCEDURES MADE POSSIBLE BY THE USE OF ELECTRONIC DATA PROCESSING EQUIPMENT A Thesis Presented to the Faculty of the School of Commerce The University of Southern California In Partial Fulfillment of the Requirements for the Degree Master of Business Administration by Richard L. Horton June 1956 UMI Number: EP43432 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI' Dissertation Publishing UMI EP43432 Published by ProQuest LLC (2014). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 C.om M B A 'Si H823 This thesis, written by Richard L. Horton H S aM> 1 1 under the guidance of his Faculty Committee, and approved by all its members, has been presented to and accepted by the Faculty of ^a, t the School of Commerce in partial fulfill ment ©f the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION Date /-^ 1.9 S 6 Approved PREFACE \ This thesis is a formalized report of a study con ducted by the author while serving as Deputy Chief, Logis tical Data Processing Development Office, Maywood Air Force Depot. The author owes much to the personnel of the depot who provided the fullest possible cooperation during the study. He is particularly grateful for the concentrated efforts of Armon Christopherson and Abraham Dworkin who assisted in the development of the data presented in this study. The Commander, Colonel Walter S. Lee, has been of invaluable service in providing full support to the study even miien the subject pursued was in opposition to en trenched methods of operation. This freedom of action has allowed a questioning attitude during all phases of the study. This document does not contain information affecting the national defense of the United States within the mean ing of the Espionage Act, £0 U. S. G., 31 and 32 as amended, TABLE OP CONTENTS j CHAPTER ' I. THE PROBLEM AND DEFINITIONS OP TERMS USED . . i i The problem . . ............................ I Statement of the problem ........ Importance of the study ............... Definitions of terms used . . . ........ I Classes ................................ ] | Computer .............................. . I j Electronic Data Processing System . . . . j Organization of remainder of the thesis . . i 1 II. AIR MATERIEL COMMAND AND MAYWOOD AIR FORCE 1 DEPOT PLAN FOR USE OF COMPUTERS ...... Mission of the air materiel command . . . Air materiel command plan for use of electronic data processing equipment . . Maywood Air Force Depot responsibility under this plan ......................... III. THE APPROACH TAKEN TO ITS SPECIFIC ASSIGNMENT BY MAYWOOD AIR FORCE DEPOT . ........... Processing requests selected as the major problem . . . . ............... t . Individual studies necessary to solve the problem ............................ CHAPTER PAGE , I The stock control function lif ' The warehouse function 15 , The packaging function l6 j ■ 1 The transportation function.............. 17 I ! Overall integration of the functions . . 19; 1 IV. THE WAREHOUSE S T U D Y 21 j Selection of the classes.................... 21! 1 1 Present warehouse methods of storing . . . 23 J J Present warehouse methods of picking . . . 26 J I | V. ANALYSIS OP THE PRESENT OPERATION ..... 33 | Frequency of issue........................... 33 1 Location of active stock . ................ i j . 7 Configuration of active stock ...... £0 VI. SYSTEM POSSIBLE USING ELECTRONIC DATA PROCESSING EQUIPMENT . .................... $k Segregation of active stocks on a controlled basis ..................... Selection of stock on a controlled basis . 63 / VII. EVALUATION OF ELECTRONIC DATA PROCESSING EQUIPMENT IN RELATION TO THE PROPOSED SYSTEM . . . .......................... 70 A general description of electronic data j processing systems ................... 70 iv CHAPTER PAGE Computer.............................. 71 Input and output devices............. 72 Auxiliary components ............... 72 t Integration of the equipment........ 73 Computer processing necessary in the warehouse problem .......... 7I 4 . Capability of electronic data process ing systems to perform the required operations ..... ................. 81 VIII. SUMMARY AND CONCLUSIONS .............. 83 Summary ................... 83 Conclusions..................... 86 BIBLIOGRAPHY, ..................... 88 LIST OP TABLES TABLE PAGE : I. Frequency of Requests on Stock Items in Class A (Excluding Indorsements) ..... 3$ II. Frequency of Requests on Stock Items in Class B (Excluding Indorsements) ..... 38 III. Combined Frequency of Requests on Stock J Items in Class A and B (Excluding | Indorsements).................... l±2 IV, Comparison of Frequency of Requisition at ' Two Time Intervals for a Sample of 25 Active Stock I t e m s ............ If6 V. Approximate Weight and Cube of the Most Active Items in Class A and B ... 52 LIST OP FIGURES FIGURE. PAGE 1. Warehouse Requisition Processing at Maywood Air Force Depot ................... 28 2. Frequency of Warehouse Location Selection for l j .96 Class A and B Active Items - October 1? - November 17, 1955 .......... J 4 . 9 3. Logical Chart for Control of Segregated Warehouse Area at Maywood Air Force Depot . 6l i j . . Computer Runs Required to Perform Processing of a Requisition at Maywood Air Force Depot 76 CHAPTER I j j THE PROBLEM AHD DEFINITIONS OF TERMS USED j i The major logistical mission of the Air Force is i the responsibility of the Air Materiel Command. Tie accom plishment of this mission has become so complex that the present methods of performing the function are not adequate to properly ' ’ back-up” the fighting arms of the Air Force. j - \ The Air Materiel Command has committed itself to providing i the necessary service with the use of electronic data processing equipment.^ j I. THE PROBLEM The use of electronic data processing equipment for business purposes is such a recent development that no adequate ground rules or methods of approach are available in establishing such a system in the Air Materiel Command. Statement of the problem. It Is the purpose of this study to (1) review the Air Materiel Command need for and planned use of, electronic data processing equipment: (2) 1General E. W. Rawlings, "The Jet Age Electronifies Logistics" (unpublished paper read before the meeting of Armed Forces - Management Association, Washington, D. C., June 17, 1955). 2 | to outline the responsibility of Maywood Air Force Depot in the development of the system; (3) to develop fully the warehouse portion of Maywood Air Force Depot's assignment; and, (iu) to evaluate electronic data processing equipment I i in relation to the proposed system. Importance of the study, The Air Materiel Command | is purchasing a number of large scale general purpose com puters whose use should not be limited to the mere process ing of the present paperwork in a more rapid and accurate method. The greatest gains to be expected from computers ! is in the development of new controls and techniques of i ' management not possible under a manual or punched card system. This belief is expressed by many experts in the computer field; Dr. Bradshaw and Maurice Newman, business consultants, have stated: . . most important, the kinds of reports and the rapid ity with which these reports can be prepared are vastly different. This last can mean, in our opinion, the ^ eventual development of new techniques of management. This study is expected to have a direct value to the Air Force since those methods, which are developed, will be ^Thornton Bradshaw and Maurice Newman, ”Changing Concepts of Organization and Responsibility” Electronic Data Processing in Industry, Special Report-No. 3, 1955 (New York: The American Management Association, 1955)* P. 1*9 • implemented, where they are accepted, by the management\ of the Air Materiel Command. Accepted changes will be implemented, not only at Maywood Air Force Depot, but throughout the Air Materiel Command. In addition, the applicable portions will be used in changing the supply procedures of other major commands of the Air Force. The study is also expected to be of value to all organizations of sufficient size to warrant the use of electronic data processing equipment in their warehousing and shipping activity. Mo study of the application of computers to the storage problem has been published In any articles obtainable by the author. The findings in this study will offer a blueprint of steps taken to ascertain if a similar application is possible. The subject studied has been almost completely ignored by systems and procedures people who are concerned with a manual or punched card system. It is felt that smaller organizations could possibly find much to improve in their manual system by attention to those portions of the study which deal primarily with the physical filling of requests for merchandise. II. DEFINITIONS OF TERMS USED , - - I Classes. A grouping of stoek items having common characteristics. In this study a class is a group of such items recognizable primarily by a common group of digits i i i in the stock number. j Computer. A stored-program digital computer capable; of performing sequences of internally stored instructions. Electronic Data Processing System. The combination of equipment, personnel, and an operating program necessary to make a procedure operative. Electronic Data Processing Equipment. The combina tion of the computer, input and output devices, and auxilary equipment necessary to fully utilize the computers capabilities. III. ORGANIZATION OF REMAINDER OF THE THESIS In Chapter II the organizational structure of the offices responsible for development of new systems using electronic data processing equipment is defined. The mission of the Air Materiel Command is described briefly to allow a proper perspective as to the scope of the problem. The field organization, with particular reference to the Maywood Air Force Depot, is described in sufficient detail to allow the reader to understand the setting for the study! which is the subject of the thesis. i In Chapter III the specific assignment, which May- j wood Air Force depot has in the systems development, is ! more fully stated. The selection of areas directly con- ; cerned with the processing of a requisition, as the first j major project to be undertaken, is justified. Major j studies, to be made within this project, are outlined and j the interrelationships between them described in sufficient' detail to make clear the dependence of some aspects of the j j warehouse study on facts outside the parameter of this thesis. Chapter IV starts the development of the detailed analysis of the present warehouse system. The criteria for selection of certain classes, as representative of the entire warehouse operation, are stated. Present warehouse methods, in those areas within the parameter of this thesis, are described in sufficient detail to make proposed changes meaningful. In Chapter V factual data obtained, which is per tinent to show where the inability to provide such data for management control has resulted in an ineffective system, is given in tabular form. Analysis of this data, in the 6 i light of a system where such data could he obtained, is : made in sufficient detail to prove the practicability of a j better system. j In Chapter VI a system made possible with the use ofj ! t electronic data processing equipment is outlined. This i i system is not reduced to a step by step procedure since j other studies and the assignment of a specific computer to i the Maywood Air Force Depot makes this undesirable at this 1 i t time. A detailed explanation of the system, which allows i a clear picture of the advantages to be obtained, is given. In Chapter VII present electronic data processing equipment is evaluated for its ability to perform the desired processing with efficiency and speed. Character istics of computers, not yet available but defined by the manufacturers are given to prove the feasibility of the proposed system. Chapter VIII is the final chapter of the thesis. It summarizes the findings made in the thesis and points out related studies which will be effected by the findings in this study. CHAPTER II AIR MATERIEL COMMAND AND MAYWOOD AIR FORCE DEPOT PLAN FOR USE OF COMPUTERS Some knowledge of the mission of the Air Materiel Command and the organization of the offices responsible for developing new systems, based upon the use of electronic data processing equipment, is necessary to provide the background for the major subject of this thesis. This chapter will provide sufficient information in ‘ these areas to give the study its proper setting. I. MISSION OF THE AIR MATERIEL COMMAND The mission of the Air Materiel Command is defined by Air Force Regulation. That portion of the regulation necessary for an understanding of the study is as follows: Provide overall logistical support for all activities and agencies of the Air Force as well as those additional activities and agencies designated by the Department of Defense which are dependent on the Depart ment of Air Force for logistical support, including the Mutual Defense Assistance Program. Provide, establish, and control adequate, efficient, and up-to-date systems of procurement, identification, production, quality control, maintenance, transporta tion and traffic management, and supply and disposal for all aspects of logistics support for complete air- craft weapon systems in, or programmed for, the Air Force inventory.! The Air Materiel Command, then, has the primary responsibility for the procurement, distribution, and maintenance functions in the Air Force. It acts as the chief business agency of the Air Force and its primary problems are problems of a business nature, /tt is impor tant to remember that, unlike business, the primary goal of the Air Materiel Command is service to the fighting commands rather than performance of the services in an economical manner, j This difference in concept makes the consideration of time a major criteria, with economy of operation a very important but secondary goal. The scope and size of this mission is better under stood by consideration of a portion of the business done during 1951+- as shown in Aviation Week: Spent #11.1 4 - billion . . . overhauled 27,500 aircraft engines . . . shipped million tons of supplies to 300 USAF bases and 1800 other military installations around the world. . . . Stocked over 800,000 types of Items in depots containing 50 million sq.ft. of storage space. . . . Processed 39 million supply items through its domestic and foreign depots.2 The immensity of the paper workload to process and ^United States Air Force Regulation 23-2, July 28, ^Robert Hotz, f l AMC Streamlines Management Pattern” Aviation Week, 6l:73, August l6, 195J-4-. 9 control an operation of this nature has required a large portion of the resources available to the Air Force. Con stant improvements in procedures and increased use of punched card accounting has done little to reduce the work load since the complexity of the system is constantly in creasing. The military departments developed the large scale electronic computers during World War II to solve their scientific problems. Therefore, it was only natural that the Air Materiel Command should turn to these com puters to assist in processing their business data. j II. AIR MATERIEL COMMAND PLAN FOR USE OF V . ELECTRONIC DATA PROCESSING EQUIPMENT General Rawlings, the Commander of the Air Materiel Command since 1952, had first started the Air Force in its study of using electronic computers for business problems. In 19^4-7» when he was USAF Comptroller, the General assigned the USAF Planning and Research Division the responsibility of studying the possibility of using computers to reduce war plans to budgets and funding allocations. He brought to the Air Materiel Command his belief that the logistic system of the Air Force must be placed upon high speed electronic equipment if it was to satisfactorily perform 10 its mission of logistic support.^ j r | ; The General established the Logistical Systems ! Research and Planning Group within the Comptroller organi zation in early 1954* A partial list of its objectives is j : as follows: j Sponsor or conduct research for improved raathemat- ' ical factors, tables, data, and techniques to provide j better requirements determinations, budgets, procure- j ment control, provisioning, accounting, distribution control, and disposal determinations through the use ' ; of electronic computers and data processing equipment. Sponsor or conduct research into the logic and necessity of data recording, collection, and reporting throughout all AMC functions with the objective of reducing current operating expenses and permitting minimum,cost for the design and production of elec tronic computers and data processing equipment.4 Sinee that time the planned use of electronic com puters has progressed rapidly at the Air Materiel Command. A Univac was actually installed in 1954 and is being utilized in performing many of the complicated business computations of the headquarters. The programs planned were so complex and so great in number that it was decided to establish Logistical Data Processing Development Offices at each of the fifteen field installations under the con trol of the Air Materiel Command. These offices were to O J"Electronics to Streamline A F Logistics,*' Aviation Week, 6l:l54» August l6, 1954* ^Ibid, p. 1^8. 11 carry out the actual studies necessary prior to placing j i t the programs on the computers. The headquarters office j was to make specific assignment of projects and to co- 1 ordinate efforts, but the field installations were to have , great latitude in their approach to the assigned projects, j j III. MAYWOOD AIR FORCE DEPOT RESPONSIBILITY 1 r UNDER THIS PLAN I [ ! i The Maywood Air Force Depot is one of the fifteen | field installations of the Air Materiel Command which do j the actual physical handling of the vast amounts of materiel issued, received, and repaired throughout the Air Force. The Logistical Data Processing Development Office at Maywood was officially established in December 195^}- with the assignment of a military chief directly under the Depot Commander. Civilian assignments were first made in March 1955* The necessity for training the personnel of the office prevented actual progress upon the project assigned until July 1955• The assignment which Maywood received from the Air 5”Research Studies Regarding Electronic Data Processing Systems,” AMC Letter 150-500 (Dayton Ohio: Air Materiel Command, December 27, 195^). n.p. 12 iMateriel Command was the study of internal depot operations with all practical computer applications to be fully dev eloped, integrated into a unified computer application, and programmed and service Rested on a computer of suitable ! characteristic. j t L An Outline Plan for Modernizing USAF Logistics Utilizing Electronic Data Processing, (unpublished paper of the Logistical Systems Research and Planning Office, Comptroller, Air Materiel Command, February, 1955). n*p. CHAPTER III THE APPROACH TAKEN TO ITS SPEOIFIC ASSIGNMENT BY i i t MAYWOOD AIR FORCE DEPOT ; I The assignment of internal depot operations was not j specific enough to allow a planned schedule of progression ; i i to the eventual computer application. A review of depot operations to select a complete computer program which could be broken into separate functional studies was the first action taken at Maywood Air Force Depot. 1 I. PROCESSING REQUESTS SELECTED AS THE MAJOR PROBLEM i Receipt, storage, issue, and shipment of stock items for which the Depot has Air Force responsibility is the principal mission of the depot. Maintaining proper account ing records and reporting them is a secondary task. Property accounting, or stock item inventory con trol, is necessary for both of these purposes. It was immediately recognized that this function would have to be included in any study but that it would not, by itself, accomplish the integrated system which was desired. Processing a request for merchandise is the depot t operation which generates the majority of the paperwork. The necessary actions, both clerical and physical, to ship an Item requested also requires the greatest single ex penditure of marihours. The realization of this fact led quickly to the decision that the processing of a request would be the first major problem to be undertaken. II. INDIVIDUAL STUDIES NECESSARY TO SOLVE THE PROBLEM The dividing of this project into appropriate sub- projects was easily accomplished by following functional assignments to the organizational components involved. The stock control function. The Materiel Control Division of the Directorate of Supply performs the stock control functions at Maywood Air Force Depot. The function of the division is stated in the functions directory as follows: Performs all functions relating to maintaining control over all materiel stored on the Depot for . . . A F support. Includes property accounting functions accomplished for maintaining control of zonal classes assigned the Depot, as related to main taining stock record accounts, determining need for and initiating local purchase, directing redistri bution or disposition of materiel, and other allied stock control responsibilities*! The first processing action taken on requisitions is done in this division. Here the determination is made ^Maywood A F Depot. Organization and Functions Directory, (Maywood, California: Maywood Air Force Depot, n.d.) p. (revised December 29, 1955)* that the requestor is authorized the materiel, based upon j the designated use, and that the stock is available in sufficient quantities to allow ’ shipment. Current balances ; ! are maintained and adjusted. Sufficient copies of the I j I j voucher are prepared to allow proper processing at the : warehouse and packaging echelons. Priorities are tagged to ! receive special handling both here and at succeeding > | processing stations. j j Steps in processing in this division which have an i t : impact on processing in the warehouse operation are: i 1. Vouchers are released to the proper warehouse | in the order of completion without sorting by date received i I | or in any other way. 2. Vouchers tend to bunch as the fluctuating input reflects itself at the output station. 3. Vouchers are limited to seven line items on a single voucher. i j . . Only one class of Air Force property can be , ordered on a voucher. The warehouse function. The Storage Branch of the Materiel Facilities Division, Directorate of Supply, per forms the warehouse function at Maywood Air Force Depot. The function is defined as follows: Plans, organizes, and directs all activities relating to the operation of storage warehouses and storage areas for the receipt, storage, and issue of all property stored on the Depot except. . . .2 This function has been selected for detailed ana lysis and the procedures for processing a requisition will be covered fully in Chapter IV. The packaging function. The Packing Branch of the Materiel Facilities Division performs a portion of the packaging function as used in this thesis. This function is defined as follows: ’ ’ Plans, organizes, controls and directs the operations necessary to provide packing services for the Depot.”^ This branch is responsible for all packaging of materiel to be shipped off the depot. There are three major methods of packihg in effect; (1) Parcel post packing, packing personnel are authorized to consolidate shipments where possible if materiel is shipped by parcel post; (2) Special packing section packs only those items which require special packing because of some unusual charac teristic; and (3) standard packing section packs all other items to be shipped from the depot. This includes both ^Ibid, p. 70 (revised December 15* 1955)* ^Ibid, p. 7I 4 . (revised January 26, 195&). i7 | zone of interior and overseas packing. ; The Pre Pack Unit of the Materiel Processing Branch i performs the remainder of the packing function as used in ! this paper. Its function isi "Accomplishes unit pack of ; „k all materiel as required." The unit paek is determined, according to existing regulations, at a higher organizational level than the I Maywood Air Force Depot. In reality, it is in most cases determined at depot level, due to present inability of the authorized organizations to provide the necessary informa tion. ! The areas where the packing function has an affect upon the warehouse operation are: (1) Unit pack determinations increase or decrease picker’s efficiency, as they are, or are not, in accord ance with actual requisitioning practices. (2) Packing personnel are not able to consolidate freight shipments, since they do not know freight classi fication of materiel. The transportation function. The Transportation Division of the Directorate of Supply at Maywood Air ^Tbid, p. 70 (revised December 1$, 1955). I Force Depot Is given the following responsibilities: | i Perform all functions related to the planning, I administration, and coordination incident to the ! movement of materiel and personnel by commercial j and military means.% \ This division Is required to prepare bills of lading ! on shipments, as well as accomplish all necessary paper- j work, representing transactions between the Depot and the i | carrier. To accomplish this, they must identify outbound | \ i material in terms of standard freight classification nomen- ! elature. j They are also required to determine the most effect- ! ive means of moving materiel outbound from the Depot by i ' ! researching rates, schedules and routes, and considering cost, priority, deadline date, and volume of other materiel moving to the same destination. The elements of this function which must be con sidered in making the warehouse study are: (1) Destinations are standard and recurring in nature. Consolidation in transportation requires holding materiel and physically sorting it into groups by destina tions. (2) The major consideration in shipping is the desired date of delivery given by the requestor. ^Ibid., p. 85. (3) Freight classification of each item must be determined after the selecting and packaging has been done.; (Ij.) Scheduled commercial runs cannot be established, since advance notification of materiel which will be for- j warded to transportation is not provided. i Overall integration of the functions. The most ! important consideration in the development of a complete I system for processing a requisition is the integration of 1 ; the component functions. A clearcut definition of respon sibilities is imperative when processing passes from one organization to another. Procedures which are most effi- i i j cient within one organizational element must be altered if 1 they are not compatible with the most effective system from the depot standpoint. The individual studies listed above will be care fully analyzed when all have been completed. Changes in functional responsibility necessary to provide the system, which offers a satisfactory timeliness at a minimum cost, will be defined. When functional changes have been approved, or disapproved, by higher headquarters, the system John Diebold, editor, Automatic Data Processing Orientation (Chicago: Cudahy Publishing Company, n.d.T p. 3. 20' most compatible with, command decisions and having a minimum cost will be programmed for the computer which can | i best perform the work and is acceptable to the Air Materielj ! Command. i l CHAPTER IV THE WAREHOUSE STUDY An understanding of the existing warehouse system, for processing a request, is imperative to the development of a computer application* The effort necessary to obtain this understanding, by a complete review of all warehouse operations, was considered to be too costly in terms of time and money. Since the basic procedure must remain un changed, it was felt that a thorough study of some care fully selected classes would provide a firm basis for the necessary analysis and decisions. I. SELECTION OF THE CLASSES The Maywood Air Force Depot has zonal responsibility for a number of classes with a wide variation as to size, fragility, and end use."*" Criteria were established for the selection of classes, which, it was felt, would provide the necessary elements for insuring a representative group of items. These criteria are: lttUSAF Supply Manual,1 1 A. F. Manual 67-I, Vol. XV, (Dayton,-Ohio: Air Materiel Command, n.d.) sec. 3> p. 15 (dated, July 15, 1955). ; 22 1 i | (1) Volume of transactions. It was felt that a I ; ! reasonable percentage of the depot*s activity should be ; i : | covered. Also, the activity of the classes in relation to j I ! the number of items stocked in the classes had to be at a j relatively high level in order to allow statistics gathered; ! over a fairly short time period to give some meaningful ; ! results. I ! ■ (2) Number of items. The number of items, in the | classes to be selected, had to represent a statistically | acceptable portion of the total number of items stocked at ; the depot. i i | (3) Common supervision. A necessary criteria was ; i , considered a clear cut system, which could be studied with out consideration of variations resulting from individual interpretations of the basic procedures. This was only obtainable with the selection of classes which were under one supervisor. (I|_) Representative methods of storage. Two widely divergent methods of storage are in common use at Maywood , Air Force Depot, These methods are classified as bin ' storage and bulk storage, The differences inherent in these two methods of storage are explained later in this Chapter. At this time, it is sufficient to state that both ! types of storage were required in the group of items selected. The classes stored at Maywood Air Force Depot were compared to these criteria. It was found that the selec tive process used had eliminated all but two classes which were stored in one warehouse under one supervisor. These classes will be called class A and class B throughout the remainder of this thesis, since any further definition would not increase the validity of the study and would provide a more detailed knowledge of Air Force activity than is necessary to obtain an insight into the methods used in ascertaining where a computer would assist the operation. Those factors and characteristics pertinent to the study are developed in the remainder of the Chapter and in Chapter V. The selection of the classes to be examined made possible the actual detailed study of the warehouse oper ation. The first step necessary was an examination of the methods and systems now in effect in the warehouse which had been selected. II. PRESENT WAREHOUSE METHODS OF STORING The method of storing stock determines the location of items in the warehouse, which, in turn, affects the efficiency with which stocks can be picked. For this [reason, an understanding of storage methods is necessary to; t t j - ■ a complete analysis of the processing of a requisition. I The most ba-sic need of any large warehouse operation! : ' i (is a stock-locater system, which will allow any location in a warehouse to be defined in a method easily understandable p to all people working in the warehouse operation. The Air Force has such a system, which is in essence a combined ! I j alphabetic and numerical grid, which defines any specific ! ' I lwarehouse area in relation to the main aisle in the ware- 1 3 ' house. The locater file for the warehouse studied is in ; ; 1 !the warehouse and is the only such file in existence. It , ! i |is in punched card form and additional cards and change i ! ;cards are obtained by standardized requests to the Statis tical Services Division. There are two major methods of storing stock at the Maywood Air Force Depot. They are bulk stock and bin stock ,storage. Bulk stock storage is used where the size or quan tities of items stored will allow the use of warehouse techniques such as palletizing to conserve on space re quirements. An active location is established for all items ^Warehouse Operations Handbook, (n.p.: General Serv ices Administration, Federal Supply Service, 1953), p. 25. 1 3MXJSAF Supply Manual,” op. cit., Vol. I, sec. 6, P-£* 25 stored in this manner and stock selection is normally made from this location, additional receipts of this materiel are stored in the same location if sufficient space is ; available, if not, a reserve location may be established, j The actual placement of stock, upon receipt, is the respon sibility of the warehouse supervisor. It is recommended f that the following criteria serve as the basis for his i judgment decision: (1) Nature of materiel; (2) size, j weight, and shape; (3) activity, and (Ij.) quantity.^- The I ability of the supervisor to adequately consider these factors with the statistical data now available will be analyzed in the next Chapter. Class B is stored in this manner. Bin stock storage is used for small items which are normally issued in small quantities, according to Air Force q practice. Maywood Air Force Depot was authorized to make a service test of a different utilization of bin stock storage which is recommended by the General Services Administration.^ This system involves the storage of all items in a class as bin stock and the elimination of the ^Ibld., pp. 6-8. ^Ibid., p. Warehouse Operation Handbook, op. cit., p. I j . 8 . 26 i need for the locator file by storing in stock number sequence. This service test proved to be acceptable for ! some of the classes stocked at the depot and was authorized i ! to be used as desired at Maywood Air Force Depot. Class A I ' t j is stored in this manner. Because of large quantities of ! j materiel which a depot is required to store it is necessary^ ’ 1 ; to have a reserve location backing up the great majority j i i ! of items stocked in the bins. I i ‘ | Two problems in relation to bin stock storage as I ’ i ; here defined exist. (1) Sufficient space must be left for the addition of items whose stock number is between ; i I currently used stock numbers. (2) Bin replenishment is necessary at fairly frequent intervals. III. PRESENT WAREHOUSE METHODS OF PICKING The system in use for processing a requisition at Maywood Air Force Depot was determined by a detailed systems analysis. This was necessary since Air Force manuals, at present, do not prescribe a standard procedure. To insure that full cooperation would be obtained and that operating personnel would not become alarmed, the following procedure was followed. The writer discussed the desired results with the Director of Supply and his key staff personnel. Complete agreement was reached as to ! the necessity of the study; and a procedures analyst from ' the Materiels Control Division was assigned to assist as I directed. A meeting with the eighteen people working in i i j the warehouse was arranged. The Chief of the Warehouse | Division opened the meeting and introduced the author who ' explained the purpose of the study, which was to be made, i t j and the great potential advantage to the Air Force. The I 1 fact that the possible computer application was some time in the future was stressed, as operating personnel, with a meager understanding of computers, are becoming increas ingly aware of the labor saving potential of programs of this nature. The cooperation received with this approach was excellent. The operations performed were observed for some time and then flow charted on a detailed basis. From these detailed flow charts it was possible to develop a schematic flow diagram of warehouse requisition processing which is ' shown in Figure 1. Analysis of the actual process as shown in this Figure reveals a number of items of significance when con- :sidering a computer application. One of the most important of these is the frequent reference to the locater file. This is a manual look-up reference to a sizeable file of i IBM cards, which requires a considerable amount of time Re q ue a t s Re c e i v e d "by me s senger High Priority? Line Items received are counted ? . n . d recorded by date and t ime Voucher s sorted by action dates and single and mult iple line item requisitions ....... VA ..... Extra, copies of ' multiple line | item vouchers marked to provide a picking ticket per line item / V. V/ FIGURE 1 WAREHOUSE REQUISITION' PROCESSING AT MAYWOOD AIR FORCE DEPOT Voucher Number ^ and time of receipt entered in log book Bin stock Sort by class or by bin or bulk stock Bulk Stock Picker checks Re p 1 e n i sh me n t location for No tag completed availability Stock y and attacked of stock to bin Stock No stock Voucher to locater file for reserve location Picker checks for stock a.vai lability Selected stock placed in container \y M — Any stock Available? Voucher Number and contents written on container JcL Picker signs voucher Yes No Location of stock posted on voucher from locater file Picker checks location for availability of stock Stock Picks stock available and coordinates voucher change with stock control clerk \/ AF Form 227 completed to delete reserve location FIGURE 1 (continued) V WAREHOUSE REQUISITION PROCESSING AT MAYWOOD AIR FufvCE DEPOT N/ Single or Multiple line item voucher? Single Line Item Multiple Line Item _\k. Consolidated, with other items and. packers worksheet signed Placed in container which is marked with voucher number and nurnbe r of items * Servicable tag (50C) completed and packers worksheet signed *L. Servi ceable tag and vouchers fastened to container Log signed off on priority items * AkL To shipping area Hauled to Packing Branch L - AF Form 221 completed t alert inventory control of need for adjustment _______\V Action held pending inventory checks and adjustment FIGURE 1 (continued) WAREHOUSE REQUISITION PROCESSING AT MAYWOOD AIR FORCE DEPOT i 31 ! under ideal conditions. When the actual work of several i i people can be held up until an answer is obtained this time-consuming operation is magnified in its importance. , i i I The capability of a computer to provide this information | j i jprinted upon the request would, in itself, simplify the' i | j operation to a great extent. j j The second item of significance is the number of j I manual sorts and handling of the voucher required under the ! jpresent processing system. These sorts are made necessary I ’in large measure by the disorderly manner in which they are i | received. I : j The chart also shows the present necessity for logs J ‘and records to provide management data on production. This itype of information is considered to be an ideal use for those computers now available. The management data now available is a bare minimum and leaves much to be desired as will be shown more fully in Chapter VI. Analysis of Figure 1 reveals that certain possible steps are not shown. The most important omission is a sorting of requisitions to provide pickers with batches of vouchers requesting stock which is concentrated in one area of the warehouse. The fact that this is not charted does ;not mean that no established procedure, which is chartable, has been developed. Scrutiny of the actual operation reveals that the efforts to perform this sorting are so rudimentary and so variable in nature that little of the potential benefit of such a sorting is achieved. Class A is sorted out separately. Since this is in stock number sequence, a further sorting, sometimes done by the picker, is of benefit. An overall analysis of requisition processing in the selected classes discloses that the operation is loosely controlled and a great deal of reliance for an efficient operation rests with the individual workers within the warehouse. The very fact that this costwise important area of warehousing has been ignored, in the development of pro cedures, would indicate that sizeable savings throughout the Air Materiel Command could be achieved by a closer con trol of methods used in the selection process. CHAPTER ¥ ANALYSIS OP THE PRESENT OPERATION The volume of information flow and its relation to the items stocked was a necessary development for an adequate understanding of the selected classes. The need for information was felt particularly in the areas of frequency of issue, the actual warehouse location of stock issued, and special characteristics of the active stock in the selected classes. I. FREQUENCY OF ISSUE The most obvious item on which full Information was necessary to understand the importance of processing a request was the volume of business done. This information was readily available from monthly records maintained at the depot in terms of the number of line items actually selected by the pickers by month and by property class* This data is the principal basis for management control of the warehouse, but appeared to be entirely inadequate for the detailed study planned* It was felt that the pattern of this picking and the potential workload by item was necessary as a starting point. Examination of records and reports revealed that the Monthly Transaction Register could provide this information with sufficient clerical ! ! manipulation. This register records the individual list- i | ings of each transaction by stock number for each class.^ ! ' J I While it was possible to obtain shipments by stock j number, it was felt that this would distort the desired I i I picture since backorders and shipping orders on items in • ! ! j short supply would not allow a proper reflection of the < I ! ■ potential activity for these items. Indorsements, which ^ arise from improperly prepared requests, were the only customer request where omission appeared desirable. This j is true since a new request is prepared by the customer 1 2 i when the original one is returned. I i The data collection process was then started on the basis of requests for each item in Glass A and Class B. The results of this process are shown in Table I for Class A and Table II for Class B. Analysis of these Tables immediately made it appar- ! ent that the bulk of the picking operations involved only a small percentage of the items in the class. The fact that a large portion of the items stored are not requested once in a months period also appeared more important than the ■^“USAF Supply Manual,” op. cit., Vol. Ill, sec. 7» P. 5. I 2 Ibid., sec. 17, p. 3. TABLE I FREQUENCY OF REQUESTS, ON STOCK ITEMS IN CIASS A (Excluding Indorsements 1 % 3 4 5 6 7 Nr. of Accumulated Accumulated Frequency Total Nr. Accumulated Aooumulated Stock Nr.of Stook % of Total of Req.per of Requests Nr. of % of Total Items Items Stook Items Stook Item Col. 1 x 4 Requests Requests 1 1 _ ■ 157 157 157 2.2S 1 2 mm 130 130 287 4.16 1 3 - 117 117 404 5.86 I 4 • ' 111 111 515 7.47 1 5 - 100 100 615 8.92 1 6 - 98 98 713 10.34 1 7 - 81 81 794 11.51 1 8 • 80 80 874 12.67 1 9 - 76 76 950 13.77 1 10 • 70 70 1020 14.79 12 .98 68 136 1156 16.76 1 13 - 65 65 1221 17.70 1 14 - 62 62 1283 18.60 1 15 - 61 61 1344 19.49 1 16 mm 58 58 1402 20.33 1 17 • 57 57 1459 21.15 3 20 mm 55 165 1624 23.55 2 22 mm 49 98 1722 24.97 1 23 _ 47 47 1769 25.65 2 25 2.05 44 88 1857 26.92 2 27 - 43 86 1943 28.17 2 29 42 84 2027 29.39 2 31 - 41 82 2109 30.58 2 33 • 40 80 2189 31.74 3 36 2.95 39 117 2306 33.43 2 38 mm 38 76 2382 34.54 4 42 - 37 148 2530 36.68 & TABLE I (continued) FREQUENCY OF REQUESTS ON STOCK ITEMS IN CIASS A (Excluding Indorsements) 1 2 3 4 5 6 7 o A Accumulated Accumulated Frequency Total Nr. Accumulated Accumulated Stock Nr* of Stock % of Total of Req.per of Requests Nr* of % of Total Items Items Stock Items Stock Item Col. 1 x 4 Requests Requests 3 45 36 108 2638 38.25 2 45 mm 35 70 2708 39.26 4 51 4*18 34 136 2844 41.24 4 55 - 33 132 2976 43.15 1 56 - 32 32 3008 43.61 5 61 5,00 31 155 3163 45.86 2 63 - 30 60 3223 46.73 3 66 - 29 87 3310 47.99 1 67 - 28 28 3338 48.40 4 71 5.82 27 108 3446 49.96 6 77 m • 26 156 3602 52.23 4 81 25 100 3702 53.68 4 85 6.97 24 96 3798 55.07 3 88 - 23 69 3867 56.07 9 97 7.95 22 198 4065 58.94 5 102 m 21 105 4170 60.46 2 104 - 20 40 4210 61.04 5 109 8.93 19 95 4305 62.42 5 114 — 18 90 4395 63.72 5 119 9.75 17 85 4480 64.96 11 130 • 16 176 4656 67.51 8 138 - 15 120 4776 69.25 14 152 • 14 196 4972 72.09 7 159 13.03 13 91 5063 73.41 11 170 13.93 12 132 5195 75.32 14 184 15.08 11 154 5349 77.56 c c TABLE I (continued) j FREQUENCY OF REQUESTS ON STOCK ITEMS IN CIASS A (Excluding Indorsements) 1 2 5 4 5 6 7 i Nr. of Accumulated Accumulated Frequency Total Nr. Accumulated Accumulated Stook Nr. of Stock % of Total of Req.per of Requests Nr. of % of Total ! Items Items Stock Items Stock Item Col. 1 x 4 Requests Requests | 14 198 16.23 10 140 5489 79.59 13 211 17.30 9 117 5606 81.28 21 232 19.02 8 168 5774 83.72 29 261 21.39 7 203 5977 86.66 21 282 23.11 6 126 6103 88.49 24 306 25.08 5 120 6223 90.23 43 349 28.61 4 172 6395 92.72 60 409 33.52 3 180 6575 95.33 83 492 40.33 2 166 6741 97.74 156 648 53.11 1 156 6897 100.00 572 1220 100.00 0 1220 6897 I i t! SOURCE DOCUMENT* Monthly Historical Register Oct 1955 - 17 Nov 1955 TABLE II FREQUENCY OF REQUESTS ON STOCK ITEMS IN CLASS B (Excluding Indorsements) 1 2 3- 4 5 6 7 Nr. of Accumulated Accumulated Frequency Total Nr. Accumulated Accumulated Stock Nr. of Stook % of Total of Req.per of Requests Nr. of % of Total Items Items Stock Items Stock Item Col. 1 x 4 Requests Requests 1 1 m 139 139 139 3.47 1 2 Ml 118 118 257 6.41 1 3 - 116 116 373 9.30 1 4 - 114 114 487 12.15 1 5 • 101 101 588 14.67 1 6 - 58 58 646 16.11 I 7 - 57 57 703 17.54 1 8 - 56 56 759 18.93 1 9 •» 47 47 806 20.10 3 12 .50 46 138 944 23.55 .1 13 • 42 42 986 24.59 1 14 m 39 39 1025 25.57 1 15 - 38 38 1063 26.52 1 16 • • 36 36 1099 27.41 2 18 34 68 1167 29.11 2 20 • 33 66 1233 30.76 1 21 - 32 32 1265 31.55 3 24 1.00 31 93 1358 33.87 5 29 m 30 150 1508 37.62 1 30 29 29 1537 38.34 1 31 • 28 28 1565 39.04 2 33 «*• 27 54 1619 40.38 2 35) - 26 52 1671 41.68 1 36 - 25 25 1696 42.30 2 38 - 24 48 1744 43.50 1 39 - 23 23 1767 44.08 4 43 - 22 88 1855 46.27 TABLE II (continued) FREQUENCY OF REQUESTS ON STOCK ITEMS IN CLASS B (Excluding Indorsements) 1 2 3 4 5 6 7 Nr. of Accumulated Accumulated Frequency Total Nr. Accumulated Accumulated Stock Nr. of Stock % of Total of Req.per of Requests Nr. of % of Total Items Items Stock Items Stock Item Col. 1 x 4 Requests Requests ■ 4 47 1.95 21 84 1939 48.37 5 52 • 20 100 2039 50.86 6 58 m 19 114 2153 53.70 5 61 - 18 54 2207 55.05 2 63 • 17 34 2241 55.90 2 65 - 16 32 2273 56.70 5 70 2.90 15 75 2348 58.57 6 76 • 14 84 2432 60.66 6 82 - 13 78 2510 62,61 5 85 - 12 36 2546 63.51 4 89 ~ 11 44 2590 64.60 7 96 ' - ' 10 70 2660 66,35 9 105 4.35 9 81 2741 68.37 9 114 4.72 8 72 2813 70.17 21 135 5.59 7 147 2960 73.83 18 153 6.34 6 108 3068 76.53 37 190 7.87 5 185 3253 81.14 50 240 9.94 4 200 3453 86.13 63 303 12.55 3 189 3642 90.85 . 83 386 15.99 2 166 3808 94.99 201 587 24.32 1 201 4009 100.00 2414 4009 SOURCE DOCUMENT* Monthly Historica1 Register 17 Oot 1955 - 17 Nov 1955 v> I fact that these Inactive items were only I 4 . 7 per cent in ! i / ' |Glass A as compared to fo per cent in Class B. ! | The one overriding point, which could not be denied, j jwas that a comparatively few items, which composed the bulk i . • 1 jof the business, should receive special care in assignment ;of locations to minimize walking time and in locating the 1 > i jactual stock number appearing on the requisition. The ! [great variance in activity even indicated that a physical 1 segregation of a portion of the items into a small area, !with the assignment of a limited number of pickers, who ! ,could easily memorize the actual location, was the most | |desirable solution. Further examination of the Tables, with this thought in mind, raised the question as to the proper point at whieh segregation would be advisable. It appeared that the maj ority of requests should be filled from the segregated area. However, the number of items increased much faster than did the per cent of requisitions handled. The inclusion of all ;items requested was not considered feasible since the items not requisitioned at all during the month must be con sidered by Maywood Air Force Depot to be active items. Therefore, the items requested only a limited number of times in the month were suspect of being a group of items 'which had randomness of demand. Further consideration made i k-1 I it apparent that the elements to be considered were only | partially available from the Tables. The size of the ! ! ! segregated area and the manhours to pick within the area were additional elements of consideration before a final t ! selection of items to be segregated could be made. ' I i | The continuation of the study with meaningful | | i l results at a minimum cost made it necessary for an ar- ! I l i I j bitrary decision as to the cutoff point to be made. This 1 i I selection of items which would be considered to be the i I most active ones would allow a much more careful examina- | tion of these items. To assist in making this decision I ‘ j Table I and II were combined as shown in Table III. To | ! 1 establish the arbitrary level for assumed segregation three factors were considered: (1) number of stock items * involved, (2) frequency of requisition per stock Item, and (3) accumulated percentage of total requests. The frequency of requests, at the level of five per month, indicated an activity in excess of one requisition ; per week. At this level, 87 per cent of the month's business would be considered, and the ^ 6 line items did not appear too great a number to allow careful control. The items which had been requested five or more times in , the month were selected as the group on which it would be | assumed segregation would be made. Further studies were, TA.BLE III COMBINED FREQUENCY OF REQUESTS ON STOCK ITEMS IN CUSS A and B (Excluding Indorsements) 1 2 3 4 5 6 7 Nr* of Accumulated Accumulated Frequency Total Nr* Accumulated Accumulated Stook Nr. of Stock % of Total of Req.per of Requests Nr . of % of Total Items Items Stock Items Stook Item Col. 1 x 4 Requests Requests i 1 m 157 157 157 1.44 2 m 139 139 296 2.71 3 m- ISO 130 426 3.91 4 m 118 118 544 4.99 5 m 117 117 661 6.06 6 m 116 116 777 7.12 7 m 114 114 891 8.17 8 m 111 111 1002 9.19 9 - 101 101 1103 10.11 10 _ 100 100 1203 11.03 11 • 98 98 1301 11.93 12 81 81 1382 12.67 13 m 80 80 1462 13.41 14 m 76 76 1538 14.10 15 70 70 1608 14.74 17 68 136 1744 15.99 18 65 65 1809 16.59 19 «■ 62 62 1871 17.16 20 61 61 1932 17.72 2 22 mm 58 116 2048 18.78 2 24 m 57 114 2162 19.82 1 25 • 56 56 2218 20.34 3 28 55 165 2383 21.86 2 30 - 49 98 2481 22.75 TABLE III (continued) CO®DIED FREQUENCY OF REQUESTS ON STOCK ITEMS IN CLASS A and B (Excluding Indorsements) j - - —■ ■ - ■ ... . - • — . • - — • — | 1 Nr. of Stock Items 2 Aooumulated Nr.of Stock Items 3 Accumulated % of Total Stockltems 4 Frequency of Req.per Stock Item 5 Total Nr. of Requests Col. 1 x 4 6 Accumulated Nr. of Requests 7 Aooumulated % of Total Requests 2 32 - 47 94 2575 23.61 3 35 - 46 138 2713 24.88 2 37 1*02 44 88 2801 25.68 2 39 - 43 86 2887 26.47 3 42 m 42 126 3013 27.63 2 44 m 41 82 3095 28.38 2 46 m 40 80 3175 29.11 4 50 - 39 156 3331 30.54 3 53 - 38 114 3445 31.59 4 57 - 37 148 3593 32.95 4 61 - 36 144 3737 34.27 2 63 - 35 70 3807 34.91 6 69 mm 34 204 4011 36.78 6 75 2.06 33 198 4209 38.59 2 77 - 32 64 4273 39.18 8 85 ■■ 31 240 4521 41.45 7 92 - 30 210 4731 43.38 4 96 mm 29 116 4847 44.44 2 90 m 28 56 4903 44.96 6 104 - 27 162 5065 46.44 8 112 3.08 26 208 5273 48.35 5 117: • 25 125 5398 49.50 6 123 - 24 144 5542 50.82 4 127 mm 23 92 5634 51.66 13 140 mm 22 286 5920 54.28 TA.BI35 III (continued) COMBINED FREQUENCY OF REQUESTS ON STOCK ITEMS IN CUSS A and B (Excluding Indorsements) 1 Nr. of Stock Items 2 Accumulated Nr. of Stock Items ' 3 Accumulated % of Total Stock Items 4 Frequency of Req.per Stock Item 5 Total Nr. of Requests Col. 1 x 4 6 Aooumulated Nr. of Requests 7 Accumulated % of Total Requests 9 149 4.10 21 189 6109 56.02 7 156 - 20 140 6249 57.30 11 167 - 19 209 6458 59.22 8 175 18 144 6602 60.54 7 182 5.01 17 119 6721 61.63 13 195 - 16 208 6929 63.53 13 208 5.72 15 195 7124 65.32 20 228 - ' 14 280 7404 67.89 13 241 6.63 13 169 7573 69.44 14 255 - 12 168 7741 70.98 18 273 7.51 11 198 7931 72.72 21 294 <m 10 210 8149 74.72 22 316 8.70 9 198 8347 76.54 30 346 9,52 8 240 8587 78.74 50 396 10.90 7 350 8937 81.95 39 435 11.97 6 234 9171 84.09 61 496 13.65 5 305 9476 86^89 93 589 16.21 4 372 9848 90<30 123 712 19.59 3 369 10217 93.68 166 878 24.16 2 332 10549 96.73 357 2399 3634 1235 3634 33.98 100.00 1 357 10906 10906 100.00 SOURCE DOCUMENT: Montlly Historical Register 17 Oct 1955 - 17 Nov 1955 [ .......... " ' ' " ks i : ! in the main, devoted to considering these items or a 1 portion of them. | i The possibility that a one months study was not a ! i ; valid basis for decisions had been counteracted by the costj | of assembling data covering a longer period of time. The j f ” • ! segregation of a smaller number of items made further j validation of the original data possible. Another possible' I i | question arose due to the dynamic nature of the Air Force i I j I business. Did active items remain active for a long enough period to justify the cost of segregating stock? It was ■ determined that a sample study would allow both of these : problems to be solved simultaneously. j Twenty-five (25) stock items were selected from the active group of items. The items were selected in a method which insured the largest relative weight for the items having the highest frequency rate. The activity of the twenty-five (25) selected items was obtained from the Monthly Transaction Register covering the period four months previous to the original study. This comparatively short time period was necessary as records prior to that time were not available at the depot. The comparison be- c tween these periods is shown in Table IV. Analysis of this comparison shows that no items ' from the sample had dropped below the level of five TABLE IV COMPARISON OF FREQUENCY OF REQUISITION AT TWO TIME INTERVALS FOR A SAMPLE OF 25 ACTIVE STOCK ITEMS Class October 17 to November 17, 1955 Rank Frequency of Request June 17 to July 17, 1956 Frequency Rank of Request Difference in Rank D D2 A 1 157 132 1 0 0 B 2 139 99 2 0 0 A 3 117 55 8 5 25 B 4 116 47 10 6 36 B 5 101 72 3 2 4 A 6 100 56 7 1 1 A 7 80 67 6 1 1 A 8 68 40 11 3 9 B 9 56 68 5 4 16 ! A 10 55 35 13 3 9 ! B 11 46 51 9 2 4 : A 12 37 36 12 0 0 A 13 34 69 4 9 81 B 14.5 27 19 14.0 .5 .25 A 14.5 27 17 15.5 1 1 A 16.5 22 17 15.5 1 1 ‘ B 16.5 22 16 17 .5 •25 ' A 18.5 17 10 20 1.5 2.25 B 18.5 17 5 25 6.5 42.25 A 20.5 14 9 22.5 2 4 B 20.5 14 11 18 2.5 6.25 A 22,5 11 10 20 2.5 6.25 B 22.5 11 10 20 2.5 6.25 A 24.5 7 9 22.5 2. 4 B 24.5 7 6 24 .5 Total • 25 260.00 . e - rank correlation equals 1 — — --- equals .900 N(N2— 1) ' r - Coefficient of correlation - 2sin(“g“'times .900) | r equals .908 1*7 established as a criteria for segregation. This result was accepted, for the original study, as proving that active items tended to remain active for an acceptable time in terval and that the items selected in the original group were worthy of further investigation. The coefficient of correlation was also computed by rank correlation techni ques used in standard statistical books. The high correla tion of .908 seemed to further establish the hypothesis that a stable pattern of frequency of issue did exist. For the purposes of the study, it was considered that a great variation in activity of different stock items did, in fact, exist and that an adequate means of estab lishing which items were frequently issued would justify segregation of sufficient of these items to meet normal requirements from customers. II. LOCATION OF ACTIVE STOCK The actual warehouse location of the most active items indicated the extent of the possible gain to be achieved. The results of this determination were such that a segregation of stocks appeared to offer a very high potential savings in time and money. The two methods of storing stock represented com pletely separate problems so far as determining the , Itf; j location of the active items. The bin stock storage i | method used for Class A specifying storage by stock numberj j j sequence appeared to represent no possibilities for ; ! i generalization from the actual locations determined in a j specific class. Therefore, the premise was accepted that j . . . . i a selection of a limited number of stock numbers, from j the population of all stoek numbers in the class, would | i create a random spacing of active items throughout the ; ; I entire area. The stock number sequence system for storage j ; precludes any method of making the most frequently issued * i ] « | items any more available than the slow moving items. j ; t j To determine the general warehouse location of items in Glass B it was necessary to physically obtain the location from the locater deck, check to see if materiel , was available, and locate it within a specific warehouse area. The important data necessary was the actual req uisitions selected during the month from the warehouse areas. Therefore, the location by stock number was not I recorded but the total line items for the active items ^ selected in separate warehouse areas was developed. The actual warehouse layout for Class A and B and the number of line items requested for the month by warehouse area . is shown in Figure 2. < Analysis of this figure indicated that the main 69 20 259 730 1197 73 33l 51 llli 61 6223 BIN STOCK AREA CLASS A 33 69 MIN PICKING STATION 2h SHIPPING AREA 200' ' t - 9 } - > On X FIGURE 2 FREQUENCY OF WAREHOUSE LOCATION SELECTION FOR b96 CLASS A & B ACTIVE ITEMS OCT 17 - NOV 17, 1 9 % 501 picking station, from which all requests started their i processing action was located in an area which minimized ) carry distance for Glass A as much as possible with a stock| number sequence storage system. The location of the items j in Glass B appeared to place the focus of all selections j half the length of the warehouse from the picking station. ; The judgment of the warehouseman appeared a completely un- ' i I satisfactory method of assuring that frequently issued ! i items were close to the picking station. There was evidenoe s that an area of higher than normal activity did exist but it was located at a rather extreme distance from the pick- i ing station, and was spread out over a rather large portion of the total warehouse floor space available. In summary, present stock locations of the stock items determined to.be the most active and to account for the great bulk of the business were such that none of the potential savings in picking possible by storage by fre quency of issue are now obtained. The segregation of these items into a separate area would provide a considerable savings without the introduction of any other improvements. III. CONFIGURATION OF ACTIVE STOCK The weight and cube of the stock items in Class A and B provide a suitable pattern for the general config 51 uration of the classes chosen. The development of this data offered additional information which will be necess ary to physically plan the segregated area. The Air Force has established packaging codes on both weight and cube of stock items. Unfortunately, the designation of packaging code symbols has not been accom- 3 plished for the items in either Class A or B. It was therefore necessary to physically examine and handle the stock to classify it. The estimates made were not defin able in increments as small as the Air Force codes so lacks the exactness, which will be available at a later date. The estimates for the I 4.96 active stock items in Class A and B are shown in Table V. Examination of this table gives an excellent overall picture of the configuration of the active stock items. They are predominantly small and relatively light in weight. The items do, however, vary considerably in size and the requirements for considerable space, for a" few of the larger items, is apparent. This disparity in sizes appearedto be a desirable characteristic in allowing a generalization to be made from the specific study of Class A and B. This is true since the wider the span of problems encountered, the wider the area of coverage this study will have. TABIE V APPROXIMATE WEIGHT A HD CUBE OF THE MOST ACTIVE ITEMS IH CUSS A and B Cube in Inches i i Weight in Pounds o> 01 © c r > • . O O Ol o -p oi to 01 O ov •■ . O O 01 O-P 01 to to «-1 CM CD O 01 • • O o Ol 0 4)01 CM 01 O O Ol CM -PCD H H O O 01 O -P Ol CM to O O 01 lO -P ft rH O Ol + > 01 IP O O Ol 0+101 rH to O 01 rH -P Total to 469 581 1.99 2.0 3.99 5.99 7.99 6,0 9.99 8.0 10.0 - 11.99 12.0 - 13.99 14.0 - 23.99 24.0 - 26.99 496 381 Total ; 53' , The cube information shown allowed positive determin- | ation that a great quantity of the rapidly moving items ! ' I | could easily be stored in a small portion of the total j ;warehouse space available. The number of units of each j i stock item requisitioned in a month was not considered as ■ i j valid enough to include in the parameter of this study. i ! j This data, when available, will allow a precise determina- i |tion of the space required in the segregated area. I j The weight data is not particularly significant in ,this warehouse operation since there is no question of ;floor strength with the classes chosen. It is an item that! i j could be used for particularly heavy items to determine safe stacking heights. The analysis in this chapter has developed quite conclusively for the classes under consideration the fact that great benefits can be derived from storing sufficient stocks of active items in a segregated area. The develop ment of sufficient data to adequately control such an operation, under existing accounting methods, is a matter of doubtful economy. The use of some method to quickly and cheaply accumulate the necessary data for actual control ;would be beneficial to the Air Force. Modern electronic .computers appear to offer a tool capable of achieving this desired goal. CHAPTER VI SYSTEM POSSIBLE USING ELECTRONIC DATA PROCESSING EQUIPMENT ! Electronic data processing equipment provides the ! , | ability to rapidly collect, sort, and merge vast quantities; \ ' of data and to add, subtract, multiply, divide, and com- ' i pare any designated portions of this data to perform ■ necessary operations. It also provides necessary manage- I ment control reports. This ability of all general purpose ; computers allows the development of a logical system with- ; I 1 j out consideration of the specific manufacturer. A system , I ! for improving the operation of the warehouse operation at Maywood Air Force Depot has been developed using these capabilities of general purpose computers. I. SEGREGATION OF ACTIVE STOCKS ON A CONTROLLED BASIS The data collected on Class A and B stock items at the Maywood Air Force Depot makes a segregation of stock ’ appear extremely beneficial if management can develop a i : control to insure that the items so segregated are the most Jay Forrester, "Computer Applications to Management Problems," Strengthening Management for the New Technology, General Management Series, No. 17& (New York: American ' Management Association, 1955)* p. 31. .. active and that reasonable quantities of the stock are maintained in the segregated area. The computer is nee- \ j \ • essary to provide this control when the total number of ^ stock items, stored at the depot, are considered. The necessary elements envisioned to provide this system will first be considered. A method of determining j the most active items with an assurance of validity is the j i first requisite. The method followed in this study is not ! the best method for collection of all the data needed. The punched cards used to prepare the Monthly Transaction Register can be made available for a sufficient period of time to give reasonable assurance of selection of the most active items. A period of six months should be sufficient for this purpose since the system will continue to correct itself on a monthly basis. The punched cards can be converted to magnetic tape by processing through a card-to-tape converter available 2 on any major computer systems now manufactured. A fre quency study of any given class can be prepared in a matter of minutes once the machine program has been written and the data is available on magnetic tape. The same computer "Current Status of Magnetic Tape as a Recording and Data Processing Medium," Report of the Committee on Hew Recording Means and Computing Devices (n.p.: Society of Actuaries, 195$)* P* 9. j programs can be designed to determine the number of units i I requested during a six months period. I It has been assumed, for the purposes of this study i i that a reappraisal of the proper point to segregate stock j | will justify an average of five requisitions per month.. |It is important to remember that this is a judgment deci- i | sion based upon a variety of tangible factors. The use of j a mathematical model to properly establish it should be I ' I | made when enough data has been assembled using the computer |during the initial stage of operations under the new sys- i i tern. ! j The amount of stock which is stored in the segrega- j ted area must again be a judgment decision at the beginning stages. Certain obvious factors help to make this a dec- 1ision which can be obtained by proper consideration of them. Space requirements will be increased, or decreased, in a direct ratio to the time period expressed by the stock level. The larger the space requirements the more picking time will be necessary as the picker*s area of activity enlarges. Opposed to these factors, which make a minimum level desirable, is the fact that bin replenishment creates an additional picking action in the bulk warehouse. A ■period of a month's stock has been chosen as a starting I level by a reasoned judgment by supply representatives. j This original factor must be modified by additional | elements evident in the problem. The first is the require- 1 I ment for a minimum level to cause an automatic reorder to J | . | replenish the stock in the segregated area. The establish- I ! ment of this reorder point automatically reduces the amount | of stock below the expected requirements for a month. A ; fairly simple calculation enables a logical basis for I establishing this reorder point. The lowest number of ’ requests expected for an item, on the average, is five. | The establishment of sufficient additional units, to equal , one average request, would provide a theoretical replenish- i jment at the end of a month. This one-fifth of a month1s I stock is equivalent to a twenty per cent factor as a re- ! order point. The stockage objective must then be increased ,by an equal amount to provide a full month's supply. This same reasoning would be applicable at any number of re quests which was established as the cut-off point for segregation of stock. The actual establishment of the segregated area is i believed possible with the above data. The capabilities 'of modern electronic data processing equipment is the ,element needed to insure a proper control of the items in the segregated area and the balance which should be main- ,tained on each item. I 5 8 ' i i j The basic assumption in making the study, of the ! 1 I-possible use of electronic data processing equipment in i { i | the warehouse function, was that this computer would be available at the depot. It would be used to perform opera-j tions capable of being placed on a Computer in the stock , ; control function, the packaging function, and the trans- : j • . I j portation function. It was further assumed that the com- i ! puter would perform the stock control functions of insuring! ; that stock is available at the depot, that the requesting agency is entitled to the stock ordered in the amount > ' ! stated, and that the depot balances of stock are properly > I recorded and maintained in the computer. \ j Elements necessary on the master tape of the com puter to control the segregation area once it is established I ’ are: 1. A balance of the stock on hand in the segregated area for each stock item in the area. 2. A monthly and a six month’s (judgment decision) accumulation of the number of requests for each stock item stored at the depot. 3. A monthly and a six month’s (judgment decision) t accumulation of the number of units requisitioned, for each stock item stored at the depot, j i | . . The stockage objective for each stock item 59 stored in the segregation area. 5. The reorder point for each stock item stored in the segregated area. The following logical and arithmetic steps will be necessary as each requisition for an item in the segregated area is processed through the electronic data processing equipment: 1. Is the balance in the segregated area sufficient to fill the order? If not, a routine to provide for selection from the bulk warehouse is necessary. If the balance is sufficient the computer goes to the next step. 2. The balance must be decreased by the amount of the quantity requested. 3* The quantity ordered is added in successive steps to the previous total for the month and the six month accumulation of units requested. L } . . The number one is added in turn to the monthly total and the six month accumulation of the number of requests. 5. Has the reorder point been reached? If it has the computer must be programmed to print out a requisition to the bulk warehouse area for replenishment to the stock- age objective level. If not, the computer must put on tape for printing out the necessary data for complete depot j processing of the requisition, and then process the next I ' requisition. i | A machine flow chart depicting these steps is shown i | | | in Figure 3* ! | The accumulated data for each stock item remains ! i I available on the master tape. At the end of each month, ! ! ] or at other intervals, this master tape can be processed ! I ! ! to develop the following data and cause it to be printed j i ; ! out for use by management personnel: ! ! ! 1* A list of all items in the segregated area whose j j six month's total of number of requests and the last monthsl t j requests are both below a level of five a month. ^ 2. A list of all items in the segregated area whose six month's total of requests only is below an ■ average level of five a month. 3. A list of all items in segregated area in which the activity of the last month is below five requests. I } . . A list of all items in bulk warehouse area whose six month's total of requests and the last month's average | are both above five. £. A list of all items in the bulk warehouse area whose six month's total of requests averages above five. 6. A list of all items in which the requests for 1 the last month only is above five. wo YES NO YES YES NO ACTIVE ITEM? PREPARE REPLENISHMENT TICKET CALCULATE NEW BALANCE BELOW MINIMUM LEVEL? BALANCE SUFFICIENT? ACCUMULATE Cumulative No. of Units Issued Monthly No. of Units Issued Cumulative No. of Requests Monthly No*, of Requests ACCUMULATE s 1. Cumulative No. of Units Issued 2. Monthly No. of Units Issued 3. Cumulative No. of Requests U. Monthly No. of Requests FIGURE 3 LOGICAL CHART FOR CONTROL OF SEGRAGATED WAREHOUSE AREA AT MAYWOOD AIR FORCE DEPOT Management can decide from this limited list which items should be added to, and removed from, the segregated ! i area. It Is possible to establish criteria which would | t enable the computer to direct these moves without any human! I decisions. This approach m&y well be advisable as a ! refinement of the systems when the basis for management’s decisions becomes known. The stockage objective for each stock item, during ; i the next month, is computed very simply by the computer. It is programmed to divide the number of units requested inj the previous six months by the number of months (six in this case) and adding the twenty per cent factor. This monthly recomputation will keep the stockage objective in the segregated area in line with the originally established objectives. The above outline has shown the control of the segregated warehouse made possible by the capability of an electronic data processing system to rapidly and accurately provide effective management control. The capability of a computer is severely limited if it is used for limited processing. Therefore, the assistance which the computer can provide, in the selection of stock while the requisi tion is being processed, must be considered. II. SELECTION OP STOCK ON A CONTROLLED BASIS The proposed establishment of a warehouse area con- ' taining only active items, and the fact that the previous selection operation had been proven to be only loosely j i controlled on a survey basis, led to a consideration of I ways in which the computer could be used in the selection of stock. | A reference to Figure 1, page 28 of this thesis, will indicate the importance of the locater file in the selection operation. This function can easily be performed j ! by a computer by printing out on each selection ticket the j primary location for selection of items that are stored in either the segregated area, or In the bulk warehouse area. The fact, that balances by location in the bulk warehouse area would create a need for a considerable increase In magnetic tape requirements, has led to the plan to print the reserve location on requisitions which would normally be selected In the bulk warehouse area. This precaution, to enable proper selection of stock, will not be necessary in the segregated area since balances are to be known at all times. Failure to select from the segregated area means an error has occurred, which should be called to the attention of control or management personnel. A monthly print out of a locater list is planned to provide the J warehouse supervisor the ability to evaluate his storage | methods in the bulk warehouse area. ! It is assumed, for the purposes of this study, that ' a desirable goal is the packaging of all items selected I for a common freight classification group and destination I at the same time. This desirable goal requires the pro- i vision for a simple and feasible method of collection of I this materiel at a common plaee, at a common time. The number of destinations is limited in size, with ; those having a large volume of business falling con- j I siderably below one hundred. This limited number would still require a large amount of space if an accumulation bay had to be established for each destination. This loss of space appears unnecessary if materiel can be scheduled to arrive at a bay during a limited time period, on only those days when a shipment is required. This time sched uling appeared as a beneficial possibility in the planned system for the control of the selection of stock items. The customer is, within specified limits, allowed to state the date he needs the merchandise requested.^ , Requisitions having a high priority must be shipped by the 3”USAF Supply Manual,” op. clt., Vol. II, sec. 2, p. 6. 6$ ' fastest method of transport possible and expedited through : all phases of the depot operation. This priority handling,' of a small percent of the depot's business, is at odds i with the idea of a time-scheduled control of depot opera- I I t tions. Therefore, those priority items, not susceptible to economical batching and handling, were eliminated from the control portion of the problem. Priority tickets will ! i be processed during the night shift operation, on an I expedited basis, to allow a tighter control of daily operations. The statement of a desired date by the customer is an accepted practice in the M r Force. This offers a con siderable advantage, in scheduling workload, when the due date is sufficiently far enough in the future to provide a flexibility in the shipment date. It was felt that delivery before the requested date would not cause the customer any inconvenience, if he were aware of the actual date of delivery. A careful control of date requested, coupled with a knowledge of normal time in transit, would allow a deadline for the departure time on shipments leaving the depot. An earlier processing, to allow greater batching possibilities, and a further limitation on con trolled orders to be handled on a given day, seemed to offer a great potential benefit to the depot and further 66' allowed the selection process to he simplified. ! The above considerations led to the conclusion that j picking tickets must have a completion time stated. They ; s will also require sorting by destination and by freight i I classification. A further sort, by location, would serve J i i to decrease selection time by the elimination of un- I : ! necessary steps in selecting. An additional item of in- j i ] ; formation, which appears to be required under the plan I i 1 'developed, is the packaging area to be assigned during the , i * 1 i ! i scheduled time period, i j i For planning purposes, a two hour time period was 1 I established as the picking and collection time prior to I I jdelivery to packaging. This time period, once programmed for the computer, could easily be changed without a major !reprogramming effort, so the use of a judgment decision as I to the length of time of a scheduled period was felt to be justified. The number of sortings required and the order in i jwhich they would occur were, however, elements which had to receive careful consideration, as a computer program could not be developed until a decision, which would be hard to change, had been reached. ' The establishment of time, as one of the major con- ! |trol procedures, required the knowledge of the capabilities of the work force to perform the scheduled duties. This, in turn, required a knowledge of standard time for a pick ing operation on a predetermined method of selection. The development of these standard times is a function of the Industrial Engineering Branch of the Procedures and Oper- k ations Division, of the Directorate of Supply. The co ordination necessary, to insure that these standards would be made available, was achieved, although the standard times must await an actual timing of the operations of a pilot model. The actual method planned, with these considerations acting as limiting parameters, was: 1. All regular customers were to be scheduled to have requisitions shipped every second day. The basis for selection of the actual requisitions to be shipped was to be based upon the date requested. 2. The receiving installations, scheduled for a certain day, will be divided into four groups to provide a two hour schedule for selection of the items to be shipped. The actual selection, when made, will require as even a workload in each group as is possible. In addition, geo- ^-Maywood Air Force Depot. Organizational and Functions Directory, (Maywood, California: Maywood Air Force Depot, n.d.) p. 39 (revised March 22, 1956). graphic location and transportation schedules will be i additional criteria for the grouping. 3. Each group so selected will be further sub- | divided into the actual receiving installation in the prep-, aration of the picking tickets. j if. These destinations will again be subdivided to I allow separate action based upon the freight classificationj of the items involved. j i 5. The above breakout will provide the picking j order data necessary. This order will then be sorted in j accordance with the location in the segregated area, or j i the bulk warehouse. It is planned that bulk warehouse orders will be sorted manually by the pickers. The con centration of orders in the segregated area makes a com puter sort practical. The actual costing of the two methods of sorting is planned, after the actual system is in operation, to determine if a computer sort is, in fact, the most economical. 6. The actual print-out of the picking orders is the final computer step. The order must include for ware house use; (1) location, (2) stock number, (3) descriptive noun, (if) quantity ordered, (5) time scheduled, (6) ship ment number, and (7) packaging delivery location. The steps outlined above appear to provide the 69 i necessary ingredients for controlling the actual selection operation in a warehouse. The number of sorts and pro cessing steps involved make the operation compatible to the principles of electronic data processing. CHAPTER VII EVALUATION OF ELECTRONIC DATA PROCESSING EQUIPMENT IN RELATION TO THE PROPOSED SYSTEM The capabilities of existing data processing equip- j ment had to be evaluated to accomplish the desired data > i handling in the warehouse problem. A basic understanding ; of present-day computers is necessary to make this eval- j uation. I. A GENERAL DESCRIPTION OF ELECTRONIC DATA PROCESSING SYSTEMS1 An understanding of the present electronic data pro cessing systems is possible without a detailed knowledge of ^he description of data processing systems in this paragraph is not taken from any specific source as it has resulted from a detailed study of several systems combined with a review of the majority of the literature in the field. Specific credit should be given to the following sources. IBM 705 Preliminary Manual of Information (n.p.: International Business Machines, Inc., 1955). Programming for the Uniyac Fac-tronic System (New York: Remington Rand, Inc., 1953)* Electronic Data Processing in Industry, Special Report No. 3 (New York: American Management Association, 1955). Philip Morse and George Kimball, Methods of Opera tion Research (New York: John Wiley and Sons, Inc., 1951). the electronic processes involved and the actual pro gramming procedures required. This understanding is, how ever, dependent upon a grasp of the function of each of the major components. Computer. The heart of the processing system is the computer, which is best understood by a separate considera tion of the composition of its units. (1) The storage unit is often called the computer*s memory. This unit allows the storage of thousands of digits of information in electrical form capable of micro second access. (2) The arithmetic unit has the ability to perform the simple arithmetic operations of addition, subtraction, multiplication, and division. It has an additional capa bility of comparing two items of data and determining whether they are equal, or if digital, which is the larger. This is of extreme importance in the processing function. (3) The control unit determines the operations which the computer will perform. This is done by a res ponse to a series of instructions stored in the computer which the control unit is able to interpret. This unit causes movements of data to and from the storage device and controls the arithmetic functions performed in the arith metic unit. Input and output devices. The input and output components are not a direct part of the computer but are necessary to allow data to be entered into the computer, and to be received from the computer. These equipments arej I connected electrically to the computer, which is then able ' to control their operation. The primary types of input | and output equipment are magnetic tapes and punched cards, i t The punched cards, which require an element of mechanical J action for a few digits of information, are extremely slow I in relation to magnetic tape units, which have the ability to store great amounts of information in the form of ; i magnetic bits on the tape. The speed of these magnetic j tapes have made them the major input and output method in the larger and faster systems. An important element in their use is the ability to connect a number of these units to the computer at one time for use as directed by the com puter. Auxiliary components. There are additional items of equipment which are not normally connected to the central computer, which provide the necessary interpretive action from data in business form to the magnetic symbols used in the computer system. Components have been developed for the conversion of cards to tape and tape to cards to make ! the computer system compatible with present punched card i j accounting systems. Typewriters, which translate business I j information into computer language, and the reverse, are in I use in some computer systems. A printer, which prints I [ business data in readable form when activited by informa- } . tion on magnetic tape, is a component found in the majority J ; of the larger systems. t ' Integration of the equipment. An integrated data • processing system is dependent upon the proper use of the r ; above components to allow the flow of information, from the t |business operation into the processing system and back to 'the business system, in its desired form. The effective ness of the system is increased by arranging for input into the electronic system at its earliest possible stage and the processing of all possible applications prior to the development of the output. The use of the data processing equipment for the majority of the processing actions requires a detailed plan of operation. The handling of the data to get it to the computer in machine language at the least cost is an impor tant element of this planning. The planning, for the use of the computer and the input and output devices, is called programming. This requires a step by step development of j the things the computer must do developed in the precise terms required by the specific computer used* In an in- j ; 1 tegrated system, a number of programs and runs of the j i tapes through the computer may be necessary to obtain the I | ■ | desired output in its proper form. j t * i The integration of a business problem using elee- I tronic equipment requires an overall plan for rapidly con- j ! verting business data to a form suitable for computer use, i ' a series of machine programs to perform all possible opera- i j tions and to convert the data into that form desired by i I management, and a translation back to a form most usable for I |further business operations. The benefit from such a sys- i tern is measured by the economy of operation and by the savings in the span of processing time. II. COMPUTER PROCESSING NECESSARY IN THE s ! WAREHOUSE PROBLEM The warehouse problem, as outlined in this study, requires a number of runs through a computer to accomplish the necessary actions and controls for a complete process ing. These runs, and the purpose of each, are outlined below. Run #1 - The ‘ processing of daily transactions and the updating of the master file. The need for a master tape I containing data on all stock numbers, as a permanent and jup-to-date record, is mandatory with a computer. This 1 !master file will be maintained on magnetic tape. The (accumulation of all daily transactions on tapes arranged in the same sequential order as the master file will allow a I I single run of the master file each day. The ability of the i i computer to provide numerous outputs from the same run allows the development of an updated master file, priority i |transactions, normal processing tapes, and any other tapes |necessary for developing statistical and accounting data !for reporting and control purposes. The schematic diagram < j of this run as planned at the Maywood Air Force Depot is shown in Figure I 4 . . The priority tape, and the processing tapes dividing installations into two groups for every other day process ing, will contain sufficient information for the prepara tion of a picking ticket, a packing slip, and a bill of lading. Items of particular interest are (1) stock number, (2) descriptive noun, (3) destination, (ij.) quantity to be shipped, (5) warehouse location, (6) freight classification, (7) packing code, (8) date requested, and (9) original requisition number. The priority tape will receive those requests which cannot be processed in a normal manner and be delivered by the date specified by the customer. The I COMPUTER: UPDATING OF MASTER FILE RUN / / 1 STATISTICAL AND ACCOUNTING TAPE DAILY PROCESSING FILE TAPE A PRIORITY TRANSACTIONS TAPE DAILY PROCESSING FILE TAPE B UPDATED MASTER TAPE FILE REQUISITION PRINT OUT RUN # 2 SORTED DAILY PROCESSING FILE TAPE B SORTED DAILY PROCESSING FILE TAPE A COMPUTER: SORTS BY DATE FOR PROCESSING ACTION DESTINATION FREIGHT CLASSIFICATION FIGURE U COMPUTER RUNS REQUIRED TO PERFORM PROCESSING OF A REQUISITION AT MAYWOOD AIR FORCE DEPOT 77 ACCUMULATED PROCESSING FILE TAPE A GR B ITEMS REQUIRING PROCESSING TAPE ACCUMULATED PROCESSING FILE TAPE A OR B / ITEMS \ TO BE PROCESSED IN ADVANCE OF DUE DATE j SORTED \ DAILY PROCESSING FILE TAPE A OR B ^ SORTED \ AC CUH1ILATEIJ PROCESSING FILE TAPE A OR B MERGES TAPES COMPUTER COMPUTER: SELECTS REQUISITIONS FOR A DAYS PROCESSING' FIGURE h (Continued) COMPUTER RUNS REQUIRED TO PERFORM PROCESSING OF A REQUISITION AT MAYWOOD AIR FORCE DEPOT ITEMS REQUIRING PROCESSING RUN # $ ORDERED REQUISITION TAPE RUN / / 6 PROCESSED REQUISITION TAPE PACKING SLIP OR SHIPPING ORDER ' ITEMS \ TO BE PROCESSED IN ADVANCE OF DUE DATE j PICKING TICKET COMPUTER: MERGES TAPES PRINTER COMPUTER: ARRANGE BY LOCATION AND PREPARE FOR PRINTING FIGURE U (Continued) COMPUTER RUNS REQUIRED TO PERFORM PROCESSING OF A REQUISITION AT MAYWOOD AIR FORCE DEPOT ; destination, will serve to separate the processing tapes i into two separate groups required for every other day j j processing action. Run #2 - A sort of the daily request tapes* It is planned to sort the daily tapes to have all items re- 1 ( I quiring action on a given day to be in order by the date j * i i of action; within this major grouping a further sort by J j I i destinations is to be developed; maintaining the above 1 i i sequences a further sorting by freight classification is I planned. By proper storage of information and a properly I j ] written program, this sorting can be done in one sorting | i ' process. Figure i j . shows a diagram of this computer run. Run #3 - The merge of the daily request tapes with accumulated request tapes. All requests requiring process- ' ing on a given day must be available in one location on the tapes. This will be accomplished by merging the requests, which have been processed and accumulated on one tape from previous days, with the daily tape developed from Run #2. Separate merges will be necessary for the two groups viiich are processed on an every other day basis. See Figure ! { . . Run #Li - Selection of items to be processed for ; shipment. This run will actually select the line item ! requests which will be processed the following day. This will toe accomplished by summing the standard times per line; item for the tickets which must be processed the next day. I If sufficient time is not available, an overtime request by, | work-station will be printed out. If a full days work has , i I not been developed, enough additional items from future ' I i days work will be selected to provide the desired workload. | i These additional items will have to be run out on a separ- ■ i I I j ate tape as the proper sequence will be lost. See Figure ijj 1 Run #5 - Resprt operation. This sorting operation , will reposition all line items selected for the following ! days work by destination and freight classification. See ' Figure I 4 . . Run #6 - Sort by warehouse location. A sort by warehouse location, at this time, will achieve three pur poses; (1) the segregation of active warehouse and bulk warehouse area requests, (2) a reassembling of all like stock number items going to the same destination, and (3) a sequenced order of line items requested for easier selection in the warehouse. This sort will not be pro grammed to disturb the sequence which already exists for destination and freight classification. Run #7 - Print out of picking tickets and packing slips. A final run through the computer will be necessary ' 8 1 to order the information for printing individual picking tickets and consolidated packing slips. The actual print ing operation will not require computer time but will involve the use of the printer. III. CAPABILITY OF ELECTRONIC DATA PROCESSING SYSTEMS TO PERFORM THE REQUIRED OPERATIONS The evaluation of the runs necessary to perform the computer processing to allow the proper day to day opera tion of the warehouse reveals that Run #1 is the only run involving all of the items stocked. This run will require the most time, but it is also the one which is required even if the warehouse problem were not considered. The remainder of the runs are primarily for the purpose of making the internal depot operation more effec tive with primary emphasis on the warehouse processing. The major use of the computer, in these operations, is sorting into proper sequences for proper handling. The sorting operation is at present one of the computer*s least efficient operations. It still has, however, the ability to sort at speeds impossible by any other system* Manufacturers are in some cases developing ^First Annual Progress Report on Application of Electronic Data Processing Techniques to Supply Management sorters independent of the computers to shorten processing time. Sorting with the computer, or with an independent sorter, are both acceptable methods of performing the data handling necessary in the computer runs required at May wood Air Force Depot. The volume of printing outlined is in sufficient volume to make a high speed printer the most satisfactory solution. The present general purpose computers, with magnetic tape units and high speed printers, can easily handle the warehouse control system envisioned in this study. The Air Materiel Command has to date exerted the major control in the assignment of the computer which will be authorized at the field installations. This fact makes an evaluation of the computer best suited to the individual problem un necessary. The assumption, that the system developed can be used at all field installations, required that any of the large computers now manufactured be capable of handling the problem satisfactorily. Problems, WBS Report 3786. (Washington, D. C.: Hational Bureau of Standards, 1954)• P* ^9 seq. CHAPTER VIII SUMMARY AND CONCLUSIONS ; The warehouse study at the Maywood Air Force Depot I developed some previously undisclosed facts about the ware-; house operation at the depot. The study also served to ' make it apparent that further study is necessary before an j electronic data processing system can be properly utilized ; at the depot. j i SUMMARY The Air Materiel Command is the business agent for i ! the Air Force. It handles the procurement, inspection, storage, and distribution of the multitude of items needed by the other commands. This business has grown so complex that normal methods of handling the paperwork are proving unsatisfactory. The Logistical Research and Planning Division was formed at the Air Materiel Command Headquarters to study the possibility of using electronic data processing systems to handle the flow of data and to provide increased management control. It soon became apparent to this group that these systems were a perfect tool for the purpose, when the system in existence had been studied in detail and computer applications developed. The decentralizationj of many functions to the fifteen field offices required ; that the majority of the studies be made in these field offices. The need for computers at the field offices, as well as at the headquarters, appeared to be probable, , because of the Immensity of the data handling job. There-j fore, a Logistical Data Processing Development Office was ! i t established at each field office. The Logistical Data Processing Development Office of the Maywood Air Force Depot was assigned the project of studying computer applications for internal depot opera tions. The processing of a requisition through the depot I was selected as the first major project. This project involved the stock control function, warehouse function, packaging function, and the transportation function. The possible use of electronic data processing equipment for improving the performance of the warehouse function has been the subject of this study. An analysis of the frequency of issue of the stock items in the two classes selected for detailed study revealed that a small percentage of the items accounted for the bulk of the business. Analysis of the selection process showed a loose operation with insufficient control, of the workload of the pickers, to provide an economical 85 use of manpower* The meaning of these facts was carefully analyzed and the decision made that segregation of stock on fast i moving items and a tight control over the order of i selection by the pickers would allow a more economical warehouse operation, would insure prompt delivery of eus- t tomer^ orders, and would allow a greater consolidation of . shipments. A better method of collecting data and scheduling the selection operation was believed necessary to make the j t desired system work. It was felt that the electronic data processing system would provide the tool for this rapid ! i handling of information. The equipment now available in large scale elec tronic data processing systems allows computation, sorting, and printing to be performed at exceptionally high speeds. An outline of the warehouse problem showed a primary need for sorting and printing with electronic data processing equipment. Its known capabilities to perform these oper ations made the use of such equipment possible in Imple mentation of a new method of operating the warehouses at Maywood Air Force Depot and assumedly at the other field installations of the Air Materiel Command. CONCLUSIONS The desirability of an integrated data processing system makes further study necessary before a firm decision to adopt the suggested system can be made. A detailed study should be performed in the stock control function, which is primarily a record keeping function. It appears that the determination, that stock is available and that a shipment should be made, is an excellent procedure to place on a computer. The problems, inherent in handling the exceptions and in having all data on a stock item available, must be translated to a machine process to insure that the system will provide the in formation which management desires. A packaging function study is necessary to co ordinate the physical movement of goods through packaging and is desirable to provide reports which will Improve packaging practices. The consolidation of shipments in the warehouse as planned in this study will decrease the pack aging workload considerably if a procedure to take full advantage of the consolidation is developed in packaging. A great potential benefit could be realized if original packaging conformed to the needs of the final users. This would require the collection of considerable data for an extended period of time. It appears that the computer has the ability to obtain this data as a byproduct of normal j processing actions. It is realized that packaging is ! largely an engineering matter, but such statistical data } i | as could be gathered would certainly have a decided bearing1 on the optimum sizes of standard packs. Mr. Floyd, a con sultant to the Air Materiel Command, stated that the pack aging study should prove the above statement to be true.*1 - 1 One of the most important studies necessary is in | * ' ; i the transportation area. It seems logical that much of the! | clerical work could be performed electronically with in- ' creased efficiency and decreased costs. Another cost ■ savings of considerable magnitude appears possible by proper scheduling of shipments. The complexity of the rate structures in existence when combined with the varied time requirements fqr shipment and the attitude of Congress on ; an equitable distribution of the business of the Air Force, make an electronified system extremely difficult to develop. ; The acceptability of the other systems which may be developed will, however, be in a large measure dependent on 2 :such a successful accomplishment. Other studies are needed before an integrated system can be developed. The major studies are the handling of i _ . _ ^Floyd, loe.&it. receipts and the internal adjustments necessary to keep the system in balance. The completion of these studies will allow the development of an integrated system, which ' modifies the results of the individual studies, to allow I a unified processing system. ; I The development of this integrated system, incorpor ating major changes in physical handling of stock and the replacement of present information handling methods with an electronified system, will allow an evaluation as to the ability of electronic systems to handle the problem. If this is possible, as is expected, a cost study to deter-; mine the potential savings of the new system should be made. This cost study will not of necessity be the deter mining factor in any decision relating to the installation of an electronic data processing system, but should be made to provide a factual answer to one of the important factors involved in the installation of such a system. The Air Materiel Gommand plan for performance of its mission using electronic data processing equipment requires detailed consideration of all elements of its mission. The detailed study of the warehouse problem, when combined in its proper relationship to the other studies necessary, will allow a proper evaluation as to the capabilities of electronic data processing equipment to i assist in the control of internal depot operations through-! out the command. This knowledge, combined with the results of studies on requirements, procurement actions, and I weapons systems management, will eventually determine the | ! i number and kind of electronic data processing systems which: S will be used in the performance of the Air Materiel Com- 1 ! I mand mission. | 1 ; ! t i i i BIBLIOGRAPHY BIBLIOGRAPHY A. BOOKS AND PUBLICATIONS OP LEARNED ORGANIZATIONS Bradshaw, Thornton, and Maurice Newman. ’ ’Changing Concepts ! of Organization and Responsibility,” Electronic Data Processing in Industry, Special Report No. 3» New York:, American Management Association, 1955. PP* 39-51. ”Current Status of Magnetic Tape as a Recording and Data i Processing Medium, Report of the Committee on New ! Recording Means and Computing Devices. Society of ! Actuaries,”195^. 112 pp. Diebold, John, editor. Automatic Data Processing Orienta- , tion. Chicago: Cudahy Publishing Company, no date. 9 PP. Electronic Data Processing in Industry, Special Report No. 3* New York: American Management Association, 1955. 257 PP. Fisher, Albert B. Warehouse Operations of Service Whole sale Druggists, Bureau of Business Research, College of Commerce and Administration. Columbus, Ohio: The Ohio State University, 19^* 289 pp. Forrester, Jay. ’ ’Computer Applications to Management Problems,” Strengthening Management for the New Technology, General Management Series, No. 17 8. New York: American Management Association, 1955* 123 pp. Frederick, John H. Public Warehousing. New York: The Ronald Press Company, 19lp37 217 PP. Morse, Philip, and George Kimball. Methods of Operation Research. New York: John Wiley and Sons, Inc71 195l. M>7 PP. Proceedings of the 1955 Western Joint Computer Conference. New York: Institute of Radio Engineers, IncTl 1955* 132 pp. Stocker, Harry E. Materials Handling. New York: Prentice Hall, Inc., 1951. 330 pp. 92 B. PERIODICAL ARTICLES "Electronics to Streamline A P Logistics," Aviation Week, 6l: 1^2-159» August 16, 1951^. Higgins, John, and Joseph Glickauf. "Electronics Down to Earth," reprinted by Remington Rand, Inc., from Harvard Business Review, March-April, 1954* Hotz, Robert. "AMC Streamlines Management Pattern," Aviation Week, 6l: 71-75, August 16, 1954* C. COMPANY PUBLICATIONS IBM 705 Preliminary Manual of Information. International Business Machines, Inc., 1955. Programming for the Uni vac Fac-tronic System. New York: Remington Rand, Inc., 1953. D. GOVERNMENT PUBLICATIONS First Annual Progress Report on Applications of Electronic Data Processing Techniques to Supply Management Problems, NBS Report No. 3785* Washington, D. C.: National Bureau of Standards, 1954* "Packaging Control Procedures," AMC Manual 71-1. Dayton, Ohio: Air Materiel Command, 1955. "Research Studies Regarding Electronic Data Processing Systems," AMC Letter 150-500. Dayton, Ohio: Air Materiel Command, December 27, 1954* "Storage and Materials Handling," Air Force Manual 67-3. Washington, D. C.: Department of Defense^ 1955* United States Air Force Regulation 23-2. Washington, D, C.: United States Air Force, July 28, 1951}-. Warehouse Operations Handbook. Washington, D., C.: General Services Administration, Federal Supply Service, 1953* E. UNPUBLISHED MATERIALS An Outline Plan for Modernizing USAF Logistics Utilizing Electronic Data Processing. Unpublished manuscript of Logistical Research and Planning Office, Comptroller, Air Materiel Command, February, 1955. Ployd, William, Maywood Air Force Depot. Unpublished memorandum to the Air Materiel Command, February Ip, 1956. Maywood Air Force Depot, Organizational and Functions Directory. Unpublished manual of Maywood Air Force Depot. Rawlings, E. W., General. ! , The Jet Age Electronifies, Logistics,” Unpublished paper read before the meeting of Armed Forces Management Association, Washington, D. C., June 17, 1955. University of Southern California

Asset Metadata

Creator Horton, Richard L. (author)

Core Title A study of changes in Air Materiel Command warehouse procedures made possible by the use of electronic data processing equipment

Contributor Digitized by ProQuest (provenance)

Degree Master of Business Administration

Degree Program Business Administration

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag information technology,military studies,OAI-PMH Harvest,operations research

Language English

Advisor Goodwin, John L. (committee chair), Guild, Lawrence R. (committee member), Libby, Phillip A. (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c20-135992

Unique identifier UC11264030

Identifier EP43432.pdf (filename),usctheses-c20-135992 (legacy record id)

Legacy Identifier EP43432.pdf

Dmrecord 135992

Document Type Thesis

Rights Horton, Richard L.

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA