For distributors, the warehouse is at the core of the business. How inventories are stored makes a substantial impact on workflows and productivity.
A fully optimized configuration means that every item is in its designated space so you’re not burning calories on search efforts. It also means that the process of picking and packing is completed with minimal product touches and travel distances.
To achieve ideal optimization, start by taking a step back. Whether you’re reimagining workflows or your warehouse space planning, consider function and process flows before form.
Studying how your operation picks, places and communicates about its inventory can help maximize warehouse utilization and improve productivity.
Optimize Picking Methods
Before you can dig into the best way to configure your warehouse, consider how inventories will be stored and moved.
Here are a few common picking methods:
- Single order: Pickers move throughout the warehouse to complete an entire order.
- Batch: Pickers retrieve units in bulk to fulfill multiple orders at a time and are staged for final consolidation.
- Multi-batch: Pickers make one pass through the facility, collecting items for multiple orders and sorting them into separate bins on carts.
- Cluster: Pickers complete the same process as the multi-batch method, but items are not sorted until after picking.
- Wave: Pickers are grouped into sets of waves, with multiple workers picking orders simultaneously, before forwarding items to sorting.
- Zone: Pickers are assigned to, and work in, dedicated zones throughout the warehouse. Orders are picked and passed to the next zone before being consolidated into a central location.
Smaller operations typically use single order, whereas larger operations will use the batch or multi-batch methods. However, for larger warehouses, wave and zone picking are usually more efficient.
Consider Product Placement
Once the ideal picking strategy is established, next is defining product placement. The right product placement helps optimize operations and inventory dollars. It can also make it easier to implement a warehousing addressing system and efficiently audit inventory.
As you look to optimize your warehouse configuration, take a city planning approach. The spaces in your warehouse have different values as real estate. How you use that floor space to house inventories can ultimately affect your productivity and inventory levels.
The following are four important considerations when designing the ideal warehouse configuration:
1. Expensive property prices
The area closest to the dock is similar in value to beachfront property: It’s the most expensive real estate in your warehouse. Because this area is so valuable, think carefully about what gets placed on your beachfront property and how it’s stored. For example, this space is ideal for housing high-turn or difficult-to-move products so that picking efforts and travel are minimized.
Alternatively, spaces deeper into the warehouse are more like open fields: They have a lot of room but aren’t prime development areas. This space can be used to store items with uncertain futures, like products that are discontinued or those that have significant, or seasonal, demand fluctuations.
2. Communities, neighborhoods and blocks
Warehouses usually have inventories already divided into communities of items that have specific storage regulations, such as frozen, cold or ambient, or organic versus conventional food items. From there, you can optimize by segmenting them even further.
Communities can be broken down into neighborhoods. These are items within a community that have the same picking requirements or storage conventions, like whole pallets, case or single items and heavy versus light items.
Neighborhoods can then be broken down into blocks. These items should be grouped together based on frequency of use or model types. For example, grouping all brands or electric motors together, while grouping switches and wires separate.
3. Housing solutions
You also need to consider how products will be stored where they’re placed.
Racks act like high-rises: Their height helps store more products without a large footprint.
But there are also items that act as traditional homes. These can only be stored at floor level, making them challenging to store efficiently.
As with any city, it’s effective to build up instead of building out. Optimize the cost of beachfront property near the docks by using high-rise storage where possible. Keep traditional homes near the open fields, where space is less valuable.
4. City infrastructure
Routes through the warehouse can be mapped out just like highways and roads through a city.
Start planning with highways or larger lanes that allow traffic to flow effectively from the docks throughout the warehouse. From there, build boulevards that bisect the highways and allow product movement parallel to the docks. You should also include streets that provide easy access to high-turn items and avoid dead ends and cul-de-sacs.
And within that layout, be sure that each product has a specific address or mailbox.
After establishing an ideal picking strategy and warehouse design plan, think about how you’ll communicate that information, along with important inventory data.
Many operations are still using pick tickets as their chosen method. But pick tickets leave room for error, and updates on inventory can be slow.
Instead, improve communication by leveraging technologies like:
- Warehouse management systems: Warehouse management systems help automate tasks around inventory management. Lots of options come integrated into modern ERP software, such as NetSuite or Microsoft.
- Mobile scanners: Mobile scanners are handheld devices that pickers can use to receive pick lists as well as inventory and layout information. By designating unique barcodes for each item, they help eliminate order errors and provide insights into picker performance.
- Voice pick: With voice pick, operators provide pickers with verbal instructions through headsets. Voice pick is often paired with a visual status board that refreshes regularly to provide real-time updates on inventory.
- Pick to light: This technology uses LEDs and barcode scanners on racks and shelves to provide instructions. Operators scan an order, and LED lights will guide the picker to each product location.
- Collaborative mobile robots: Robots are an effective option for manual repeating tasks and moving products. For example, they can bring groupings of items to an operator for final picking, and then return remaining inventory to its designated location. You can also use automated guide vehicles that travel autonomously through the warehouse to help deliver products.
- Carousel system: Carousel systems are high-density storage towers that come equipped with inventory management software to help automate retrieval and picking tasks. Pickers can scan a barcode and the carousel will rotate to provide access to the items they need. They’re an effective option for picking and storing smaller items.
Mark Stevens is a principal at Wipfli LLP, a top business consulting firm specializing in the manufacturing, distribution and retail industries. For over 25 years, Mark has guided local, national and international companies through all facets of operational excellence and technology integration. He can be reached at email@example.com.