A Simulation Model to Determine Staffing Strategy and Warehouse Capacity for a Local Distribution Center

Abstract

Capacity and workforce management in a distribution center can have significant impacts on the overall supply chain. This paper examines the effects of workforce staffing strategies employed in the warehouse operations of a beverage distribution center located in the Bio-Bio Region, Chile. The workforce is responsible for unloading and storing inbound product shipments from distant production plants, as well as retrieving and preparing outbound product shipments for local delivery. A simulation model was used to guide how to improve warehouse operations as measured by load preparation time, workforce staffing costs, and maximum storage capacity utilization. The results recommend increasing warehouse pallet storage capacity to improve efficiency. Additionally, scenarios were evaluated concerning the firm’s willingness-to-pay for improvements related to workforce staffing and training. The results indicate that investing in the workforce will reduce the firm’s load preparation time by as much as 15%.