In modern logistics facility planning, constructing a competitive distribution center makes the introduction of advanced material handling equipment—such as automated warehouses and sorters—unavoidable, rather than relying solely on standard equipment.
When considering advanced automated equipment and machinery not built into TCalc 2, it is necessary to perform operational aggregation by detailed work flow from the EIQ matrix table of TCalc 1 to calculate the figures required for a more precise layout design.
This chapter thoroughly explains the specific procedures for using the EIQ matrix table to configure optimal work flow categories for the site, perform appropriate equipment settings for each operation, and ultimately derive the return on investment (ROI).
In the design approach of logistics facility planning, TCalc 1 (Plan 1) and TCalc 2 (Plan 2) have clearly distinct roles. The major differences between the two plans are summarized in the following four points:
| Evaluation Item | Plan 1: TCalc 1 (Work Operations Oriented / For Detailed Design) | Plan 2: TCalc 2 (Storage & Overall Estimate Oriented) |
|---|---|---|
| 1. Approach to Introduced Equipment & Area Calculation | There are no restrictions on the introduced equipment to be configured. Based on the work flow aggregated values from the EIQ matrix, designers can freely arrange optimal equipment and meticulously calculate the area manually (using CAD, etc.). | Automatically calculates the area for standard equipment built into the system (such as fixed racks and medium-duty shelving). Area calculation for special equipment other than built-in equipment is not possible. |
| 2. Key Indicators for Rank Configuration | Uses "Case" for case shipping and "Line (number of picks / workload)" for piece shipping as keys. Focuses on operational optimization for how efficiently the work flow can move. | Uses "PL (Pallet) Conversion" as the key for both cases and pieces. Emphasizes early derivation of the approximate overall building scale. |
| 3. Selected Shipping Date (Target Data) | Adopts the "Peak Shipping Day" (e.g., 2022/05/09) when volume spikes highest throughout the year, calculating the peak processing capacity of automated equipment needed to overcome the maximum fluctuation. | Adopts the average of all shipping data. Assumes covering all item storage information and handling peak surges through operational measures such as consuming safety stock. |
| 4. Trend of Selected Introduced Equipment | Selection strongly focuses on advanced automation and mechanization, such as sorters, automated case warehouses, shuttle racks, and GTP (Goods to Person) systems. | Selection centers on manual labor and standard equipment (fixed PL racks, forklifts, hand carts, etc.) with a strong track record and low cost. |
When drafting a logistics facility plan, the first step is to clearly define the work flow regarding which introduced equipment to assign to which process according to product characteristics (cases or pieces) and velocity (fast-moving or slow-moving).
Fast-moving shipping destinations and fast-moving items with extremely high shipping frequency are processed all at once using conveyors and high-speed sorters (sliding shoe sorters, cross-belt sorters, etc.). On the other hand, slow-moving items with low shipping frequency are stored in multi-tier automated case warehouses (miniload AS/RS) and called up to join the shipping line only when needed.
Fast-moving items shipped every day are lined up in front of flow racks (inclined gravity racks) equipped with digital picking displays to minimize worker walking distance during processing. On the other hand, rarely shipped slow-moving piece items are stored at high density deep inside automated case warehouses.
For both case and piece shipments, slow-moving items that would maximize work burden if workers walked around a large warehouse are managed within the same automated case warehouse. Then, the equipment settings are configured so that instead of "people going to retrieve products," "products (containers) automatically come to the worker's hands" at outbound stations (GTP systems) to execute sorting and picking with zero walking.
The work flows defined above (A, B1, B2, B3, etc.) are accurately assigned to the corresponding cells of the 5x5 EIQ matrix table calculated in TCalc 1. Subsequently, for each unit of work flow, "Total Outbound Issues," "Piece Picking Quantity," "Case-Converted Boxes," "PL Conversion Required for Storage," and "Weight Conversion for Truck Loading" are cross-aggregated. Finally, a rigorous cross-check is performed to confirm that the sum of values aggregated across each operational flow matches the original shipping destination totals and item totals without a single error, preventing omissions in calculations.
Operational aggregation data derived from the EIQ matrix is interpreted as follows and applied to calculate the processing capacity of each piece of introduced equipment:
There is an overall picture of issuing 6,449 cases across all 918 items
from the storage area to 300 shipping destinations.
[Breakdown by Flow] Flow A (Direct to Sorter): 365 items / 4,893 cases
| Flow B1: 365 items / 780 cases | Flow B2: 452 items / 643 cases | Flow
B3 (Automated Warehouse GTP): 365 items / 133 cases.
There is an overall picture of issuing loose items equivalent to 3,174
cases across all 2,393 items from the storage area to 411 shipping destinations.
[Breakdown by Flow] Flow C (Flow Racks): 1,211 items / equivalent to 2,400
cases | Flow B1: 1,211 items / equivalent to 356 cases | Flow B2: 1,182
items / equivalent to 319 cases | Flow B3 (Automated Warehouse GTP): 1,182
items / equivalent to 99 cases.
* By performing this "detailed aggregation by work flow (operation)," it becomes possible to fully extract—as theoretical values rather than rough estimates—the exact number of storage locations, hourly inbound/outbound capacities (including replenishment cycles), and the required number of folding containers during shipping needed to introduce automated equipment.
The aggregated numbers are translated into requirements for actual physical equipment settings.
1,200 items / 2,400 cases (converted to 56 PL) are issued in bulk by pallet from the storage area and moved to the replenishment area (151 outbound transfers). Then, workers perform 3,843 picking operations following the display lamps on the front of the flow racks to accurately ship toward 411 destinations (yielding approximately 9.35 picks per shipment destination).
Despite comprising a wide variety of 2,393 items, the volume is only 774 cases (24 PL conversion). Line-stacking these individually on shelves would consume an immense floor area; thus, settings are configured to store them in standard outbound containers (~550 containers, mixing ~4.35 items per container) for high-density 3D storage in an automated case warehouse, retrieving them via automated equipment for processing.
After entering the calculated volumes into each process block (inbound, storage, picking, inspection/packing, outbound), the introduced equipment is arranged at actual scale (creating layout drawings) aligned with the overall operational flow lines of the logistics facility plan (ensuring material and human flows do not intersect) and the physical dimensions of the building (column pitch, effective ceiling height, etc.).
📌 Mandatory Comparative Evaluation Items for Return on Investment (ROI) to Present to Management
Because introducing automated equipment requires substantial capital, rigorous evaluation from both of the following perspectives is essential:
1. Cost Evaluation: Simulate how many years it will take for the total cost of automated warehouse and sorter equipment—including "initial investment costs (hundreds of millions to billions of yen)" and "annual maintenance and electricity running costs"—to be recovered by surpassing the "significant labor cost savings (including recruitment and management costs)" achieved through automation.
2. Operational & Risk Evaluation: Conduct a comparative evaluation of qualitative benefits, such as backup systems during equipment breakdowns (system operational complexity), overwhelming safety assurance through unmanned operations, and building footprint optimization (reducing required floor area to lower rent costs).
Ultimately, a multi-year comparison is made between the "low initial investment but labor-intensive manual layout" derived from TCalc 2 and the "high initial investment but ultra-lean automated layout (Plan 1)" derived from TCalc 1, building the optimal system with the highest strategic advantage (ROI) for corporate management.