There are different types of locator systems which leads us to the subject of how and where we place items with in our warehouse. We need to decide where an item will live within your facility.
There are three main theories for item placement: 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 in 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, this theory can be used to apply to warehousing and item placement.
Let’s assume that “A” represents the “vital few” or the fastest moving items within 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 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. Let’s 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 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.
It is vital that your inventory management system has the ability to right the rules into the system that you define. Zenventory has the capabilities to address these types of ideas on how to organize your warehouse.