How does Amazon design warehouse layout to keep a global network of 1,200+ facilities neatly humming along?
The company understands something that smaller businesses often miss: introducing chaotic storage actually helps calm the chaos in your warehouse.
Organizing your warehouse like a store harms your customer experience.
Get organized, they say. Have your ducks in a row. When it comes to warehouse arrangement, perhaps not.
Traditional thinking might suggest that having your shelves and stock neatly arranged, with all the grey T-shirts in one place, all the yoga mats in another, and a third place especially for avocado de-stoners, would be the sensible solution.
Wouldn’t it help workers remember where things are and therefore work faster? No. A recent innovation and a bit of lateral thinking have totally debunked the “shop front mentality” layout.
Two common complaints of growing ecommerce businesses:
- We are running out of space in the warehouse and need to move to a larger facility.
- Pickers keep picking the wrong items.
The solution? Embrace chaotic storage.
Use a Dynamic Location System in your Warehouse, or “Chaotic Storage” as our friends at Amazon call it. This warehouse methodology says that, so long as it’s recorded in the system and so long as all the items and locations are scanned every time, you can put out and move any SKU to any place, anywhere in the warehouse. This includes having multiple SKUs in the same location and having the same SKU in as many different areas as you like.
Madness? Carnage? It just doesn’t look right…? No, this is seriously sensible. Here’s why.
1: Stop running out of space
We visit a lot of warehouses (surprisingly enough), and to our well-trained eyes, despite how full it may look, a warehouse is rarely actually at full capacity.
Indeed, warehouses can waste space by fixing items to specific locations or assigning areas for particular items because stock levels fluctuate. A gap on a shelf, especially in a prime piece of real estate right next to a packing bench, is a serious gap in efficiency.
Implementing dynamic locations, made possible by the Peoplevox WMS, could go as far as doubling your warehouse’s storage capabilities. Amazon reckons using chaotic storage allows them to store twice as many goods as they did in the early 2010s. Empty spaces get filled up immediately, and you can keep fast sellers and popular items nearer the pack benches.
2: Avoid mispicks
Mispicks in the warehouse will lead to unhappy customers, who open their box to find a size large grey T-shirt when they ordered a medium. They’ll probably go and shop somewhere else to buy that T-shirt, and if you’re really unlucky, they’ll leave you a terrible review.
If you’ve got all your grey T-shirts of every size in one place on the same shelf, it’s not a surprise that the wrong size can slip into the trolley when all the items look the same. It’s especially likely on a busy Monday morning when each picker has 1000 items to grab before lunch.
It’s so much easier to identify and pick the correct item from dynamic locations with mixed SKUs. Medium grey T-shirt, not wedged between larges and smalls of the same item in the same colour, but instead sitting between aforementioned yoga mats and avocado de-stoners. Much clearer.
And even more than this, there is no need to visually identify an item at all. If your system knows the precise location of the required item, you just have to pick the item from that location and scan it. Our system won’t let you pick it if it’s not right.
Other benefits of using dynamic storage locations:
- Put Away: At goods in, you receive 1000 pairs of the same shoe and assign ten staff to putaway. With a fixed location, you’ll have ten staff, each with 100 shoeboxes, all charging up and down the same aisle, all trying to stack their boxes in the same place. Or, you embrace dynamic locations and let the ten staff take their 100 shoeboxes to ten different locations or more! Quicker, safer, easier.
- Language / Memory / New Workers: Dynamic locations do away with naming areas of the warehouse after certain item types, and because the system knows where everything is, no one needs to attempt to memorise that “specific corner where all the toys are”. Instead, you’ll find that one toy you need to pick as it comes to you in your smart route around the warehouse. As soon as they’re up to speed with the mobile system (which itself takes minutes, not days), new staff have everything they need to find any SKU, anywhere.
Substance over style: A smarter warehouse layout
Chaotic storage works.
If the thought of chaotic storage makes your stomach hurt, consider that if it didn’t work, Amazon wouldn’t still be doing it. But come on, it’s Amazon. Aren’t they really in a different class? Well, we work with many businesses that are much smaller than Amazon, and they see similar success with this strategy.
You can turn your internal compulsion for optimal feng-shui into an obsession with great use of space, more accurate picking, and happier customers who keep coming back to you. Set up dynamic locations with a warehouse management system and witness how it transforms your business. You can even start using an optimized warehouse to grow sales!
Ready to see a WMS in action? Descartes Peoplevox offers dynamic locations alongside many other features bespoke to the incredibly high demands of ecommerce fulfillment.