The 12 Principles of High Performance Warehousing #5. Optimise layout for minimum travel path

Optimise your warehouse layout for travel path and processing flow inbound and outbound

Part 5 of a series on the 12 Principles of High Performance Warehousing.  The eBook can be downloaded for free by joining the High Performance Warehouse Network on the Logistics Help website.  Note each new blog post also adds new content with a rewrite of each section so the eBook continually evolves.  If you have an old version it might be worth updating it to get the latest version.

The principles of process design dictate that the design of systems and infrastructure must support the business process.  So in order to get the layout correct you must first design the process that you want it to support - with full knowledge of what is possible and what is affordable.  This is the approach we take to all our warehouse designs – first the process then the layout and systems to support it appropriate to the size and growth path of the business.

An optimised layout is a combination of the right racking for your products in the right place with the right products slotted in the right locations but you can only make these decisions once you have developed the right process for your business

Many people make the mistake of starting with the current system and the existing infrastructure and then designing a process around that.  Unfortunately when you do it this way, you are accepting your current limitations without question and missing the opportunity to unleash greater overall productivity in your business.  What often starts as a need for some new racking, or an observation that you are running out of space in your warehouse can be an opportunity for a major reform and productivity gain if you open your eyes to what is possible.

Do not make the mistake of thinking “I have no budget so I will stick with what I have”.  Far better to develop the ideal process and then work out how to fit it to your budget, than compromise the process design by taking your current infrastructure and systems limitations as an unchangeable given.
If your current warehouse layout is poor then you have locked in poor productivity into your operations.  What’s worse is that this lower productivity is invisible to you because it is not in your front of mind when considering how to improve your operation.

Businesses change over time, a once perfectly suitable layout and racking arrangement can become a drain on productivity.  Perhaps the layout was never planned in the first place but racking was simply put wherever it fitted at the time the installer showed up.

The basic principles of efficient warehouse layout are as follows:

1. There are two ways of arranging racking & shelving (transverse or longitudinal to the main axis of your warehouse).  Unless the floor area allocated to the racking is square, one way will yield more storage locations than the other.  This is easily determined by laying out the racking both ways on building plan. This can be easily done with CAD software or a manual drawing.  If there is a choice then the longitudinal arrangement will be the more efficient and flexible arrangement due to the greater number of travel aisles leading to the despatch dock.
2. Where racking types are mixed (say block stack, pallet racking and shelving) then assess the average pick frequency for each storage block and layout with the most frequently accessed storage nearest the front of the warehouse.  Physical building constraints may still override the optimum positions.  The aim is to get the best position possible.
3. Staging areas must be large enough to stage the expected inbound and outbound delivery requirements and preferably next to separate receiving and shipping doors.  If operational timing permits, (i.e. receive in the morning and despatch in the afternoon) then the staging space can be shared between receiving and shipping.
4. Build travel shortcut aisles into long runs of racking or shelving so pickers can cut across aisles to reduce travel path.
1. Pallet racking should be continuous with beams removed in one rack bay to a sufficient height to let your forklifts travel underneath the higher levels.
5. Maximise the use of the building volume with high level pallet racking, multi-level shelving modules and mezzanine levels.
1. Generally you can stack stock to up to 45cm below the level of your sprinkler heads but check with your fire system provider for the clearance required for your particular installation.
6. Eliminate air – your stock does not need to breathe!
1. When I walk into a warehouse, one of the first things I look for is storage density as indicated by the amount of free space (air) around products in the storage racking.  Lots of air means lots of wasted space which means higher storage cost per unit, longer travel path for put-away and picking and lower productivity.
2. Once you realise that an investment in the most appropriate racking and storage systems for your products is an offset of both rent and operating expense you will not quibble over the cost anymore.  Good racking and storage systems make you money, last indefinitely and are never superseded.  Is any other investment this good? Buy good quality second hand if your budget is tight.  Do not buy cheap damaged racking or inferior quality imports that fit together poorly and that you will not be able to buy more of if you need to add beams or extend your racking in future.  This is a false economy and you will regret the decision.  Old but quality racking is fine.  Old racking was built with a lot more steel in it than modern racking and provided it is not damaged, will last forever.
7. Build optimised workstations for receiving, packing and despatching orders near the inbound and outbound docks.
1. Too much focus just on the pick process and neglecting the whole of the warehouse operations will see you missing out on valuable productivity gains.  Slow receiving will starve the picking operations and make them less efficient.  However your stock comes in or goes out, you need space and efficient process to get it into or out of the warehouse.
2. This means a well laid out operations bench which is kept clear of junk and has everything you need to hand such as labels, packing materials, paperwork, computer workstation (if required) & printers.
8. Allow sufficient staging space for inbound and outbound order staging and processing.
1. Around the workstations and at each dock you need clearance for staging of product in and out.  Nothing kills productivity and throughput rates faster than the double handling caused by inadequate staging space.  I have seen warehouses with insufficient staging areas fill up their racking aisles with outbound or inbound stock.  When they had to pick or put-away to these aisles they had to double, triple, quadruple handle this stock just to keep functioning.
9. Keep fast moving product in the fastest to access areas.  The corollary also applies, put slow moving items in the slowest to access storage areas.
1. If you have a bad building with pillars and walls in all the wrong places then this idea is what will bring back the productivity into your operations.  Many businesses simply do not apply this principle to their warehouses or do not apply it rigorously enough to get the full benefit.
10. Use fixed pick locations near to the despatch dock with a periodic replenishment cycle.  This keeps fast moving products close together to reduce travel path.
1. This requirement must be balanced by the need to allow sufficient access to the pick face so that all of the orders for fast moving product may be picked.  Too close together and you can create congestion as too many pickers need to access the same product at the same time.
11. Store the balance of fast moving stock in randomly located bulk storage racks.
1. As per point 1: in bulk storage racks, keep the faster moving products in the fastest to access locations, which, in pallet racking, will be low and nearest to the despatch dock.  These subsets of bulk storage racking are also referred to as zones.  Zoning at this level requires a warehouse management system to control the put-away process.
2. Points 9-11 are related to the idea that is commonly called product slotting.  They are important to layout because they will impact what type of racking you put in your fast zone.  We will talk more about slotting in principle 7 below.
12. These principles of good warehouse layout must be applied as part of the overall operational process design. This includes the warehouse management system, data collection technology (mobile terminals with barcode scanners, voice directed task technology), racking systems and materials handling equipment.

If you need help to work out the right layout for your warehouse you can contact us here

A Warehouse Management System for every warehouse

Every warehouse should have a WMS - here's why

A WMS for every warehouse

In my job I walk into a lot of warehouses.  The thing that has frequently surprised me is the lack of penetration of warehouse management systems into the ever increasing number of warehouses and distribution operations that seem to spring up every day.  At the top end of business, of course, they are everywhere.  You really would not want to run a 20,000m² or more warehouse, with 30 or 40 staff, on paper or relying on Bob's* memory. But when you step down to the next tier you will find many businesses with quite large operations running on a basic paper based order and inventory system from their ERP.

At the lower end of the scale, WMS is essentially absent. Internal logistics operations supporting service businesses such as hotels and hospitals or engineering operations such as mining and building mostly don't even know what a Warehouse Management System is.

Given that a good Warehouse Management System can result in 25% productivity gains, improved inventory accuracy, reduced stock losses, faster order turnaround and greater order shipping accuracy, the benefits are simply extraordinary for the amount invested.

If I compare this to accounting software, which was really the first business productivity killer app. for the the modern computing age, then there would not be a small business that did not at least have PC and a copy of MYOB or Quicken.  There is a full spectrum of accounting software to help everyone from the sole trader to the biggest of financial institutions but no parallel capability for WMS.

Small warehouse operations can get significant
benefits from a WMS

So as a dedicated logistics professional (who likes a bit of a challenge) I decided I would fix this.  I started out this year by creating The Rapid WMS Project.  This was my personal side project to try and find if anyone out there was open to the idea of developing a low cost WMS that would be affordable for any organisation with even a small warehouse.  But the tricky thing was that I needed to be able to take the system under my wing so that I could develop a low cost implementation and support model that was not saddled with the overheads of a business oriented to tier one customers.

I found an ally who was almost uncannily, thinking the same thing, in Scott Symons of Paperless Warehousing.  It did take us a while to work out the detail but Rapid-WMS is now in pre-launch mode. That is to say we are looking for customers who would like to be part of something big.  Something that will revolutionise their warehouse operations and change the level of logistics productivity and competitiveness for Australia.

Rapid-WMS is a proven system based on the years of WMS expertise of the Paperless Warehousing premium system but stripped back to the core functions that you need to run a warehouse.  When combined with our years of experience in optimising warehouse and logistics operations and a fast and affordable implementation service, the results will transform the performance of your warehouse.

To find out more call us on 02 8078 6903 of fill in and enquiry form on the website.

*Bob is your best storeperson with an memory like an elephant.

You can follow more about The Rapid WMS project on the blog

If warehousing and logistics are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of our business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

21 Mistakes adding cost and killing productivity in your warehouse #21: Failing to maintain and develop your operations as your business grows and changes

The seventh habit in Stephen Covey’s Seven Habits of Highly Effective People is Sharpen the Saw.  This is the recognition that even the best “saws” become blunt over time.  If the saw wasn’t that sharp to begin with, then a few years down the track the work of cutting through becomes really hard!  Does your warehouse feel like that?  Just plain hard work to get through every day?

The mistake of not changing your warehouse operations as your business evolves can cost you dearly.  Even traditional businesses are constantly changing now and the pace of change seems to keep increasing.  New, products, new customers, new services, maybe even completely new business models can get dumped onto the warehouse and the common response is a hasty rehash of existing systems and processes to “get by for now”.  This pattern accumulates inefficiencies over time and can end up with a very inefficient warehouse, staffed by a lot of frustrated people, with the whole operation in need of a major overhaul.

The antidote to “getting by for now” is a program of continuous improvement.  I see two distinct areas to focus on to drive an effective continuous improvement program to keep your warehouse operations up to date and running smoothly.

1. A periodic audit and redesign based on the application of Lean principles will introduce a step change in technology or infrastructure to allow your business to operate at a higher level of efficiency and output.
2. A Lean principle based continuous improvement program will help you to optimise your current processes and work methods.

These ideas are really two sides of the Lean coin: 

• firstly the strategic business side which must be driven by the management team based on how the business is supplying value to customers and 
• secondly the operational continuous improvement that hones the day to day execution of the strategy and it supporting infrastructure.

The need for a change in strategy or infrastructure is often driven by a crisis or repetitive failures by the business to deliver the value required by its customers at a sustainable cost.  Service failures, customer complaints, out of stocks, overstocks, high operational costs, overflow storage are all examples of the sort of pain that will prompt a change in strategy or highlight the need for new infrastructure in a business.

If the resources to answer these challenges are not available within the business then help from professional business advisors will be required to help formulate an appropriate response to the business challenges.  This is exactly where Logistics Help can advise a business that is facing issues such as:

• the relocation of a warehouse or
• the need to keep the current warehouse viable for a few more years,
• warehouse management systems implementations
• materials handling systems
• freight management issues
• or any other warehouse related issue.

A review of the business operations followed by a guided implementation program aimed at delivering business results and a solid return on investment is what we specialise in at Logistics Help.

Whilst major change programs are essential to long term business health, they are not by themselves sufficient.  The ongoing operation of the facilities and systems are critical to success.  This is where any systematic application of Lean principles must flow throughout the company to the operators that deliver the daily work.  Training and coaching your operational staff including managers, supervisors and warehouse operators in the attitudes and tool kit of Lean, will ensure that you get the best out of your investments in the technology and infrastructure of your business.

This is a bottom up approach that engages the hearts and minds of everyone in your business to ensure its success.  Our aim at Logistics Help is to provide resources and training for your staff in applying Lean principles and up to date knowledge and tools for warehousing and distribution so that your warehouse is vibrant and productive.

To this end we have launched the Warehouse Performance Initiative to foster a community of warehouse professionals to raise the standard of knowledge, expertise and effectiveness of people working in warehouses around the world.  You can get involved straight away by signing up here and receive the compete eBook of these posts of the 21 mistakes as a thank-you.  We will also keep you informed of new features and resources as we build them.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 Mistakes adding cost and killing productivity in your warehouse #20: Failing to invest in staff development

The best systems and technology in the world are of no use if you do not develop your staff to get the best out of them.  I do not want to dive in to human resource management and labour relations techniques here; but I do think that if you have got the culture right in your organisation, then one of the best things you can do is invest in training and developing your staff in ways that are relevant to your business.

Many businesses (particularly small – medium sized businesses) make the mistake of thinking that people will just pick up what they need to know along the way.  This is true to a certain extent, but would you neglect other areas of your business the same way?  Would you not bother to do any marketing and just hope that your customers figured out what you did and offered all by themselves?

So what training or development activities should you do for your warehouse staff?  Where do you start if you have literally nothing?  The place to start is with the activities that most directly impact on your customer service.  This is usually the picking, packing and despatch processes.  I suggest that you write a step by step work instruction based on the what your most experienced and best operators do.  This includes the physical process and any system interactions that they need in the performance of their work.  The written instruction will be a guide to the operator on what to do, and for the instructor on what to teach.  Starting with picking work your way through all your core activities until you have a complete set of training documentation.

You can also make this fun by making a video instruction.  Sitting all new hires through half an hour or so of video showing them the basics is a great way for many people to learn.  This should not be a substitute for detailed instruction and coaching by a supervisor, but it can help lighten the load somewhat, particularly if you use casual labour to manage peak workloads.

There are three stages required to cement any learning and all should be documented in a training register to record where people are at in their training program.  The three steps are:

1. I have been shown what to do and received the work instruction to refer to.
2. I have done the task for the prescribed period and feel like I know what to do.
3. I have been tested or assessed to be competent by an experienced person

If you adopt this approach you put the responsibility on both the operator and the trainer to confirm their competence in performing a task.  Your staff will become more productive due to reduced errors and a common set of procedures for all warehouse activities.  You should see your KPIs improve as you roll out your training program.  

Not only do you need a good training program in place for your warehouse operators but your supervisors and managers must also be developed to improve their management skill and understanding of warehousing and performance improvement so that they can apply these skills to improve the processes and operations within the warehouse.

Many supervisors and managers in businesses are drawn from talented and motivated storespeople but have had no formal training or broader exposure to the range of ideas and technologies available to improve the performance of their warehouse.

Recognising this need, Logistics Help are developing the Warehouse Performance Initiative (WPI) to help develop the skills of all those responsible for managing warehouses.  The sign up for those who are interested in joining is available now

The aim of the WPI is to create a resource to develop superior performance in warehousing regardless of business size, resources or location.  Starting with an online (and eventually offline) space providing ideas and resources drawn from wide experience of what works in improving warehouse performance.  Members of the WPI will be able to join in a forum to discuss ideas and get answers to questions from other members and expert moderators.

WPI members will also get all of the Logistics Help templates and self-help resources developed over many years of consulting experience, for half the normal list price.  Membership is free and .
The WPI will also encourage offline Warehouse Performance Groups where members can organize meet ups and regular meetings to help each other improve their skills and share experiences about what they are finding out how to improve their warehouse performance.

Ultimately we hope to develop some core modules for a training program for warehouse supervisors and managers which can be delivered both in workshop seminar format and online.   The aim being to dramatically improve the quality of warehouse performance for small-medium businesses around the world.

The sign up page is here.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 Mistakes adding cost and killing productivity in your warehouse #19: Failing to invest in equipment, systems and technology

Equipment, warehouse systems and technology can be expensive and is an optional expense in the sense that it is not required to operate your business.  For these reasons some businesses shy away from making capital purchases.  The same businesses that do this will also have no problem meeting a non-optional but high wages bill every week and pay overtime when required to meet customer demand.  In our experience, provided the correct equipment is bought for your requirements, the investment in warehouse technology, systems and materials handling equipment is always rapidly paid for in reduced labour costs, let alone increases in accuracy and quality, responsiveness and improved safety.

Once you have adjusted your attitude to technology from scary cost to business investment, you will never look back.  Look at every purchase as an investment in productivity and calculate the return and payback period.  If you lack the capital to invest then leasing or borrowing is usually a viable option if your business is strong.  The payback even for large investments will typically be less than one year, so if capital is tight, a loan or lease agreement can be structured to be cash flow positive to your business almost immediately.

Delaying an investment in productivity will usually only cost you money in lost cost reduction.  Although you don’t feel this the same way as a sudden jump in costs, the impact is the same.  Should you treat it as any less urgent?  It is for this reason that I think failing to invest in technology when the option is available to you is wasting money.
Let’s look at how you can do a basic return on investment calculation for an area of business need.  My number one technology investment recommendation for a warehouse is to implement a Warehouse Management System (WMS).

Let’s look at a return on investment calculation for the Rapid WMS that we will be making available soon for the small-medium business market.  For a modestly sized warehouse running a simple paper based ordering system and employing 12 people an investment of a little over $90k pays for itself in less than seven months and makes you $1.5M richer over ten years, that is an average interest rate of 170% p.a. (flat) over 10 years.  You can’t get that from a bank!

Item	Unit Cost	Units	Cost
Project cost			$            91,750
Current FTE (Labour cost)	$            55,000	12	$          660,000
Estimated Productivity Gain	25%
FTE reduction saving	$            55,000	3.00	$          165,000
Revised Labour Cost	$            55,000	9.00	$          495,000
Payback in Months			6.67
Net profit gain year	1		$        73,250
Net profit gain by year	2		$      238,250
Net profit gain by year	5		$      733,250
Net profit gain by year	10		$   1,558,250

Unfortunately not all investments in technology will have as high a payback as the first implementation of a WMS but you get the idea.  Find an area of need where labour can be saved and service quality increased, find a solution that you like, calculate the return,  implement it well and reap the rewards.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 Mistakes adding cost & killing productivity in your warehouse #16: Use of multiple freight systems

Most if not all carriers today will want you to give them your freight despatch information electronically.  Whilst there are still plenty of circumstances where a hand written consignment note is unavoidable, the processing of manual con-notes is more expensive.  To make this easier for you and for them they have developed computerised freight management systems.  Unfortunately these systems are designed to work with one carrier (i.e. the carrier providing the system).  This means that when you inevitably need to use the services of a different carrier that is either cheaper or provides services that you cannot get from your other carrier you end up with another freight system.  This can end in multiple carrier specific freight systems.  This is a mistake, it is better to have a single (paid for) freight system.  Why should I pay for something that I can get for free, you ask?  Well I’ll tell you.

Carriers don’t want you to use anyone else for your freight, a single carrier system tends to lock you into that carrier.  Once you break this barrier and have multiple systems you now have a training load to learn an additional system.  It may also take different sized labels and so you have an additional critical supply to manage.  You have just added more points of potential failure.

You have now also split your data into multiple systems.  The 21^st century more than any other is the age of data and you should regard your data as a gold mine to be guarded and protected from loss and fragmentation.  What use is my old freight data apart from looking up old consignment notes for Proof of Delivery requests, you ask?

Freight will be one of your company’s largest costs and not being able to measure and report on its performance and costs as a whole package, is a significant deficiency in your reporting.  Freight cost reporting is significantly easier if you have all the data in one multi-carrier system.  A multi-carrier system lets you extract data from all of your services so that you can get it costed by alternative carriers when you perform a freight review; which you should do annually.  Call me if you have never done a carrier review, we do this quickly and cheaply for you, even if your data is fragmented.

In addition to managing your freight costs, if you tie back your freight data to your order management system you will now be able to do better Cost To Serve analysis of your customer base to determine relative profitability of different customer groups.  This is very useful to assess the underperforming areas of your business.

If you have a large number of shipments per day there is a significant productivity gain to be made from having your freight system integrated to your WMS or order management system to eliminate data entry.  Creating freight labels at order confirmation or before each order pick (see no.15 on speeding the packing process) is a huge productivity booster.  You only want to integrate one system not four or five so this means you need a multi-carrier system.  One of our clients integrated their freight system and saved one full FTE*.  At around $55,000 p.a. for a storeperson for a development cost of only $5000 this had a payback of less than a month!
*FTE=Full Time Equivalent, or the labour equivalent of one person working full time.

There are three major multi-carrier freight systems currently available:

1.    IFS Smart Freight

2.    Supply Master

3.    Moveitnet

All are good and capable of being integrated with a host system.  Their cost structures and functionality vary so look at all three and choose the best one for your circumstance.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #14

14.   Incorrect picking methodology

Picking is the highest labour activity in the warehouse and consequently gets a lot of focus on optimising it by both the Warehouse system developers and the materials handling equipment manufacturers.  Failing to select the best picking methodologies for your particular business needs will see you missing out on what can be relatively easily won productivity gains.

There are three basic picking methodologies and a nearly endless variety of variations depending on the technology, equipment and layout employed in your warehouse.  The three basic picking methods are:

1.    Discrete picking

a.    Picking one order in its entirety before moving onto the next order.  This is the standard picking method employed by all order processing systems.

b.    Most suited to intermediate to large sized orders comprising multiple pallets or cartons of stock (including large re-pack orders).

2.    Multi-order picking

a.    Picking several orders at once in one pass through the warehouse.  If you have ever grabbed pick slips for a dozen single line orders and sorted them into correct travel sequence then you have performed a multi-order pick.

b.    The key to multi-order picking is to create a batch of orders that can be picked by one person onto one trolley.  Each order is assigned a carton number.  The picks are sorted into travel path sequence regardless of the order number.  Each pick is taken from the shelf and placed into the carton number associated with each order.

c.    Multi-order picking functionality is normally only provided by a WMS, but provided you have a modern system with some flexibility in data access, it is quite possible to create a paper based multi-order pick. (Contact us for more details)

d.    Suited to small order sizes where the entire order will fit into one or two boxes.

3.    Batch pick and assembly (also called consolidated picking)

a.    Performing a single pick for the sum of the quantities required for each item in a batch of orders.  This allows a single pass through the warehouse to pick an entire wave of orders.  The stock is staged in an assembly area and needs a subsequent pick process to assemble the individual orders.

b.    Most suited to picking from slow to access areas where discrete picking would be very slow.  This can be used as an entire picking strategy but be wary of the fact that the assembly process is effectively double handling and the selection of items from a large batch pick can be slow.

c.    The slow assembly process can be facilitated by locating the items in the assembly area so that they can be found quickly.  This functionality is not common, but not difficult to code if required, and manual workarounds can also be devised to speed the selection process.

Some common variations and combinations are:

·        Discrete pick the fast zone batch pick the slow zone or bulk areas

o   In this method the majority of the order picks are done for a single order from the fast pick area and a second batch pick for the order wave collects the stock from the slow zone and stages it in an area of the fast pick zone. The order picker then collects what he needs from this staging area to complete the order and thus avoids the travel time through the slow zone.

·        Multi-order pick the fast zone and batch pick the slow zone

o   Similar to the above but more suited to small order picking.  As above but the picker completes multiple orders in one pass through the fast zone.

·        Zone picking (discrete or multi-order or batch)

o   For very large orders or where stock requires different storage conditions grouped into location zones (such as temperature control, security, dangerous goods, special racking).  The order is broken up into zones and picked separately in each zone (often by different operators).  The picks from each zone are usually then brought together on the dock for consolidation for shipping purposes.

Further adding to the options available are various technology and materials handling equipment assisted methods.  Here is a quick summary.

·        Goods to the man systems

o   These are a means to eliminate picker travel and speed up picking.  They can be used for discrete or multi-order picking depending on their level of sophistication.

o   Vertical or horizontal carousels keep the operator in position and move the shelves to present the goods required for picking.  These systems require their own control systems that interact with the WMS to manage the picking and put-away processes.

o   Kiva systems use mini AGVs that move shelves of product to present the goods to the picker.

·        Conveyor based zone picking

o   This methodology is the province of the large distribution centre.  A conveyor moves totes for orders through each zone of the warehouse so that a picker can be restricted to picking from a limited range of items into the tote.  The tote is directed to each zone where a pick is required and ends up at a despatch station for freight labelling and staging.

o   This method also works for carton picks but in this case the picker picks and labels cartons on to the conveyor which directs the cartons from each zone to sortation lanes where the cartons are palletised for each order.

o   Some of the picking may be automated picking systems such as the A Frame high speed picker or AS/RS systems picking pallets and delivering them directly to the dock with AGVs.

·        Wireless terminal assisted picking

o   Warehouse management systems provide the opportunity to manage the information normally presented on a paper pick slip with in any way you could possibly imagine.  An RF terminal can drive discrete, multi-order or batch picking and present the information to the picker via a screen or via voice and even vision based systems

o   Screen and barcode scanning is the most common.  All products and warehouse locations are barcoded to build accuracy into the pick process.  The RF terminal could be fixed to a trolley or forklift, or hand held.  There are also wearable units that allow the user constant use of both hands and eliminate the need to pick up and put down a scanner.

o   Voice directed picking has been implemented widely and is highly efficient because the picker does not have to stop to read a screen or scan a barcode.  Accuracy is built into the process with verbal confirmations of check digits and quantities picked.

·        Pick To Light systems (PTL)

o   Pick to light is a static racking based system usually built into carton live storage (roller racks) that uses a small electronic display at each pick face to indicate how many items to pick.  The operator presses a button to confirm the pick.  This is suited to high volume discrete picking (several hundred units per hour) of small items into repack cartons or totes.  PTL is often one of the zones in a large distribution centre but can also a be stand-alone installation.

What picking method should you use?  This is a very good question and it will depend on your business profile - what sort of inventory you carry and what your order size, quantity and frequency are.  Once this is known then it is a matter of costing the various options to find a suitable return on investment.  The important point to realise is that you may be missing out on increasing both your productivity, service level and accuracy by not taking advantage of what the best picking methods have to offer your business.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #13

13.    Products not slotted according to pick frequency

Traditionally, before computerised stock systems people stored products in warehouses in logical groups so that they were easy to find.  For example if you were a hardware wholesaler you would keep all the hand tools together with hammers, chisels, screwdrivers etc. all grouped together.  Lots of small warehouses still do this, even if they have a location system.  This strategy soon starts to fall apart when the business grows and becomes more dynamic.  

Changes in product stocking levels and turnover of products will require constant rearranging of stock to maintain the logical stock arrangements in the warehouse.  Because this is too much work, the system breaks down and stock gets stored wherever it fits and stock gets randomised and increasingly hard to find.  Does this describe your warehouse?

The simple antidote to this problem is to store products according to pick frequency.  Picking is the highest labour activity in the warehouse and as such is the process to be optimised beyond all others, which is why so much attention is focussed on it.

Product slotting is the calculation of the best place to store a product to minimise subsequent travel associated with moving of that product through the warehouse during put-away, replenishment and picking operations.

At its most basic this is the casual observation by the warehouse staff that it makes sense to keep a particular product down low because they pick it all the time.  The next level of sophistication is perform a Pareto* analysis of your order history to determine the fastest moving products in your business and apply this information to where you store your products and what goes in the fast zone or the slow zone of your warehouse.  Over time your business and product profile change so this must be periodically revised to keep your slotting current.

*Pareto analysis is the application of the 80/20 rule where 80% of the picking is from only 20% of the items in the warehouse.  Keep this 20% in the fast zone and you make a huge gain in productivity.

A basic Pareto analysis can be done on a spreadsheet with minimal effort.  We will be publishing a how to guide and spreadsheet template for members of the Warehouse Performance Initiative in the future.

Awareness of promotions and new products with a rapidly growing demand, and items that are dying or obsolete is also helpful to maintain the warehouse efficiency.  A product slotting review should be done at least twice per year if your business changes only slowly and monthly to quarterly if changes are more rapid and you want to keep your warehouse movements optimised.

The ultimate sophistication is to use product slotting software.  Optislot is the only standalone product in this market at the moment and is now available in Australia through Synermatic.  With typical improvements in replenishment and picking productivity of 10-15% this is a must have investment for large DCs running on thin margins.

According to the website: 

“OptiSlot DC addresses the complexities of slotting by utilizing advanced mathematical algorithms which consider a product's dimensions like weight and velocity, physical characteristics of your environment including slot configurations, pick path and material handling equipment, and operational goals like pallet building, seasonality requirements and retail groupings.”

It's probably worth noting that this is only possible when you have the data.  If you don't have a modern WMS with an accurate data set of your warehouse and product dimensions then this tool will not be any use to you.

Synermatic are also developing a subscription service for organisations that need more than a basic Pareto analysis, but do not wish to invest in purchasing the software, contact them for more details.

Some Warehouse Management Systems also have a product slotting package available.  Most notably Manhattan which was designed by the same person who developed Optislot.

The big hurdle with slotting your warehouse is not getting the information; it is acting on it.  What do you do when you find out that 75% of your stock is in the wrong place?  This is a huge and seemingly wasteful task if all you do is move it from bin to bin.  The answer is to:

• Understand that the effort required to move the product to the right place will pay you back in productivity gains (reduced labour)
• Let natural turnover drive the process over time.
• Change the home bin or pick location or put-away zone etc. (depending on what systems you have available) so that as new products come in, they are put-away where they should be and the wrongly located items are picked out.
• After a month or two bite the bullet and move out anything left behind.
• If natural turnover hasn’t moved it then it is a slow item that may take too long or never pick out.  You do not want slow moving items in fast moving areas!!!!!  I cannot emphasize this enough.
• Perform a more regular slotting review so that you do not get yourself in such a mess in future.

Finally, some personal experience of what having a jumbled warehouse is like.  When I was Logistics Manager at Clifford Hallam I had to re-layout my warehouse to install a lot of new racking (more than doubling the storage by using the height of the building).  I did this whilst continuing to operate the business.  

This process took several months and the entire stock got jumbled due to all of the relocations required during the installation.  My overtime costs for normal operations went through the roof!  I finally sorted it out by re-slotting and working even more overtime (that went down well with my boss, as you can imagine!) to move product around to where it needed to be.  My excess labour fell back to even better than before the re-design and everyone was happy in the end.  So if your warehouse has never been slotted properly then imagine what productivity treasures are waiting to be revealed!

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.