IF you want to have a successful inventory management system there are certain factors that you need to take into consideration. Identification is the cornerstone of proper inventory management. You must be able to identify each SKU as ell as where that SKU lives whether it be in a slot, bin, rack, shelf, or an area. This is very similar to the address on your house or your business. It lets everyone know where you dwell. If you move then you will have to notify the post office of your change of address. Your inventory management system must also have this capability. The system must also be capable of assigning multiple locations for a particular SKU. There may be an instance where a SKU may have more than one home within the warehouse and the inventory management system must be able to account for this. Tracking movements needs to be a simple process that can be accomplished in a reasonable amount of time. By taking the above items into consideration your inventory management system will reduce labor associated with searching for individual products, and their locations within your facility. It will also reduce unnecessary purchases do to products that may have been misplaced or lost amongst the other items that you store in your warehouse. Improved accuracy, less wasted labor, and an overall more efficient work environments stem from implementing a finely tuned inventory management system.
Lets take a closer look at how we can develop an effective locator system. It begins with clearly marking the products with SKU identifiers. These identifiers should contain units of measure and where the item is located or its location address. Think of the location address like your home address. Street, city, state, and zip correspond to your to your specific geographic location on a map. An example of a warehouse address could consist of case, position, rack, and wing. Now that item been clearly marked with the SKU and its address the inventory management system has to tie the address to the SKU. When an item is moved from one location to another the system must be updated as soon as possible in order to maintain accuracy. This can be accomplished through the use of bar coding or by using RFID technology. Identification can be alpha, numeric, or a combination of the two. It has been found that workers typically make less mistakes when a numeric system is used vs. an alpha system. It seems to be easier to match up numbers than to read words. Bar coding scanners also help with the accuracy of identifying an item during the pick process.
The items that you store are are not the only things that need to have identification. Positions within the warehouse must also be identified and clearly marked so that your staff can quickly recognize where a particular item is located. Again, I refer to this like the address on your house. If is is clearly visible from the street then it will be easier for your guests to find your house. This position address must specify where the item is located within your warehouse. Just tying the sku to the position is not enough for an inventory system to be accurate. The system has to be able to account for adds, deletions, as well as product moves. Some organizations require real time updates this would require the use of mobile scanners/computers connected to some type of wireless or cellular network or through the use of RFID technology.
Zenventory is a web based inventory management software solution that will help you organize your warehouse so that your staff will be able to preform there jobs to their fullest extent. Call today to schedule a live demonstration of the software and see for yourself the POWER of ZENVENTORY inventory management system.
We have discussed the different types of locator systems which naturally leads us to the subject of how and where do we place items with in your warehouse. Basically we need to decide where items will live when they are at your facility. The three main theories for item placement are Inventory Stratification, Family Grouping, and Special Considerations.
Inventory stratification is divided into two subgroups. ABC categorization of the SKU’s and by using a ratio for loading and unloading. ABC categorization stems from the 80-20 rule. This was a theory developed by an Italian Sociologist by the name of Vilfredo Pareto i the mid to late nineteenth century. His theory essentially stated that 80% of all of Italy’s wealth was held by 20% of the people or what he referred to as the “vital few.” It translates to many of our experiences in everyday life. In any population 80% of the value is comped by 20% of the entire population. Also known as Pareto’s Law, I will explain how this theory applies to warehousing and item placement. Let’s assume that “A” represents the “vital few” or the fastest moving items withing your organization. “B” represents the next fastest mover and finally “C” will represent the slow movers. It is most important to place your fast mover or “A” to their point of use or where they are most easily accessed for storage and shipping. Conversely, the “C’s”or slow movers will take a lower priority to their particular placement with in the warehouse. This may mean storing unlike items side by side. In summary this system is designed to organize your warehouse based on usage and frequency. Inventory stratification can be dialed in to be more accurate by adding a SKU’s loading/unloading ratio to ABC categorization. ABC deals with frequency of use and the loading and unloading ratio deals with the handling of the product form the time it is brought to the storage location to the time it is sent to its point of use. Essentially, it is the ratio of trips it takes to get to the storage location vs. the number of trips it takes to get the item from storage to its point of use. The higher the the ratio the more critical it is for the item to be place to its point of use. Small amounts of time savings by properly planning your warehouse layout will result in an overall more efficient and productive work environment.
Family grouping is a simple concept. As the name state you will be placing like items with similar characteristics next to each other. It is like placing hammers with hammers, screw drivers with screw drivers, and so on. It can also mean placing items that are used in conjunction with each other together. For instance placing all necessary items to complete a kit. Lets say you are assembling a clock. You might want to place all of the second hands, minute hands and hour hands in close proximity to each other. This will lead to a more efficient process when it is time for those items to be picked. Items can be grouped by similar characteristics, whether they are used or they are sold together. This simplifies the storage and retrieval of the items. It also makes recognizing items easier as well as utilizing a zone locating system. There are some draw backs to this method of item placement. Items may accidentally be substituted for on another because they are so similar in nature. There may even be times when a particular item is used in multiple family groups. This may lead to several homes of the item within your warehouse.
The third theory that we are going to discuss today is the special considerations concept of item placement. They way an item is received, stored, picked, packed, and shipped may be dictated by the item itself. If the item is extremely heavy and special equipment is required to maneuver it, then special considerations may be needed when determining where to position the item within your warehouse. Other contributing factors could be and are not limited to, size, fragility, its hazardous nature, or even how perishable it is. This is more the exception than the rule as to how inventory is to be handled.
Zenventory web inventory management software has the capabilities to address these types of ideas on how to organize your warehouse. If you are inventory taking or inventory managing personnel, it is vital that your inventory management system has the ability to right the rules into the system that you define. We invite you to witness the Power of Zenventory web based inventory system. Call today to schedule your live demo.