#7. Storing products in family groups, product code or description order or Bob* knows where
Before computerised systems warehouses were
run entirely by manual paper based systems and human memory. When there was a product to pick for and
order there had to be some sort of system and logic to how stock was put-away
so that individual items could be found.
Often stock was stored in family groups like in a supermarket where the
same category of items are stored in the same area. So long as the item you needed was there
somewhere you would be able to find it if you looked hard enough.
A variant of this is to store items
alphabetically or numerically in code order.
This is a how your local video
store keeps its weekly video rentals (if you’re lucky), they will have family
groups (drama, comedy, horror) and then put the videos in order by title. If the warehouse and product range is very
large and storing in logical product sequence becomes impossible then some
variant of a stock locator card would be used to check product in and out of a
numbered storage bay or location within the warehouse.
The problem with manual systems like this
is that they continually break down due to the dynamic nature of modern
business. New products and product
ranges come and go constantly. A new
product range takes off and needs a lot more space. This means constant rearranging of stock to
maintain order, which is very time consuming (i.e. expensive). So what happens in practise is the
rearranging either never happens or only when they system is very broken. Stock will be put-away wherever it fits. This is like the Drama section in your video
store becoming full and the overflow going into the foreign language film
section. Maybe someone will stick on a
post it note to tell you or you stumble upon this by accident or when you ask
the staff they wave in the general direction and say “oh, that one’s in the
foreign film section”.
The other problem with a manual logic based
storage system are that too much time is lost searching for products even when
everything is in order (which is almost never the case). Once products are put where they fit instead
of where they should be that search time can go up exponentially. New hires have a long learning curve to become
productive because the system becomes more based on memory and they have to ask
an experienced colleague where things might be.
Bringing in a bunch of casual labour to help manage a peak in work or a
stocktake can be an expensive and futile exercise.
Unfortunately too many businesses still run
manual warehouse systems like this. This
is of course the fault of the modern business system. All the effort has been
put into making the accounting and sales process efficient and little thought
is given to the warehouse operations.
For example, SAP Business One does not even have an inventory location
system (something I believe they are belatedly correcting). Many business systems have basic location
control of one location per product.
This is usually a text field added to the inventory file and not a
separate location file allowing multiple items per location. Whilst this is a major step up from nothing
it does not give you the tools you need to run your warehouse efficiently.
The best solution to the problem is to
invest in a Warehouse Management System (WMS) that will allow you to optimise
the storage and physical product flows in your warehouse an eliminate the time
lost in searching for products during picking or empty space during
put-away. These systems pay for themselves
in around 3-6 months for medium and larger warehouses and 9-12 months for
smaller warehouses with less than 10 staff.
If you are not ready to invest in a WMS
then it may be possible to enhance your existing system with some new fields
and revised reports to provide some basic functionality to improve what you
have as an interim measure. We have done
this to great effect with SAP Business One but the same principles can be
applied to most systems. Bear in mind
that if you go this route you are investing in a short term solution that you
will throw away later and you should only do this if the WMS option is simply
not viable for your business but you have to do something. I strongly suggest that if you think you need
to do something that you call us to discuss what your best options are.
* Bob is your
longest serving warehouse operator.
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