Business is booming, you’ve sourced some great new products, and they’re due to arrive at your warehouse soon. But do you have anywhere to put them, or is your warehouse already pretty full?
Before you start researching new premises, read on to make sure you really have got the best out of your existing space first!
One product per location?
How many different products or Stock Keeping Units (SKUs) do you store in each location?
It is common for new businesses, particularly those relying on manual processes, to keep just one SKU in each location. Makes sense right?
Well, yes and no. It might seem a good solution as you can keep track of exactly what you have where, and because each location contains a single line item you are less likely to get mixed up and pick the wrong thing. But there are many drawbacks.
Drawback 1: What happens when you have too much of a particular item to fit into it’s designated location?
- Do you try to squash it in? Not great as you could end up damaging the goods.
- Put it in a nearby location that has space? This may seem smart, but how will someone coming along to pick these items later on know where to find them? And, because this ‘other’ location is likely to have been allocated to a different SKU, you now have potential for picking errors.
- Leave it on the floor in front of the location? Possibly the worst option as you have the problems of the other two ‘solutions’ plus now you have untidy and potentially blocked aisles which could slow down travel time for everyone.
Drawback 2: If you sell out of a product, you end up with an empty location. And if the product is never re-ordered, unless you have processes to handle empty locations ( for example, some systems such as the Peoplevox Warehouse Management System (WMS) provide empty location reports) this location could sit empty indefinitely.
Drawback 3: Fast moving lines vs. slow moving lines - if you permanently allocate locations to SKUs you may well end up with older, slower moving lines in the prime locations because these would likely have been assigned first. The impact here is that pickers might end up walking past low selling items - possibly even empty locations - to pick many of their orders.
The solution is to use dynamic locations / chaotic storage.
Dynamic locations / chaotic storage
This means that the location in which a SKUs is stored is not fixed, and items can be be placed in any available location according to operator choice or pre-defined system rules. It is possible due to barcode scanning - as long as the SKU and the location are scanned each time the system knows exactly where everything is - and is offered by many systems including the Peoplevox WMS. The benefits of this approach are enormous. In addition to solving the problems mentioned above it saves operator travel time and allows warehouse space to be used in full.
It also means that multiple SKUs can be stored in a single location, and a single SKU can be stored in more than one location. The recommendation here is to limit the number of SKUs to around 3, and store dissimilar products together to reduce picking errors - it is easier to distinguish between a pair of pink knickers and a blue hat than different sizes of pink knickers!
Your warehouse may have different floors, mezzanines, secure areas, aisles, racks, shelves and totes. Some of these are physically fixed, but others can be moved or supplemented. Make sure you label your locations so that more can be added without having to start again. For example, begin numbering shelves from the bottom up - if you’re going to add more shelves it will most likely be at the top.
When staff move round the warehouse to put-away, move or pick stock, minimising the amount of ground covered is key to efficient operations. Sequencing (or ordering) your locations in such a way that the route through the warehouse flows and does not go back on itself can save time, avoid bottlenecks and make sure that every last corner of the warehouse is utilised. By using the chaotic storage method described above, you can place your fastest moving stock in locations near the start of the sequence so that pickers are sent to these first and only travel to the more remote parts of the warehouse for rarely ordered items.
If you are already doing all of the above and really do need more space, the obvious solutions are to move to larger premises or add extra warehouses to your business. The latter provides the option of location choice - having multiple warehouses in different physical locations may offer savings in transport costs and give you a wider area from which to source warehouse staff. However. if your expansion in product lines / volume is not expected to be permanent, choosing temporary warehouse space might be the answer as this piece in Warehouse & Logistics News explains.
Finally, whether you choose to go with additional warehouse space or move to a single larger warehouse, make sure your systems can handle it. Some, including the Peoplevox WMS, support multiple sites or warehouses allowing you to scale with ease.
If you are reaching capacity with your existing premises and are unsure of how to proceed, or wish to learn more about WMS in general, get in touch with us at Peoplevox and we’ll help you work out what your next steps could be.