Intralogistics & warehouse optimization: Calculate average storage duration
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Published on: July 2, 2021 / update from: September 14, 2021 - Author: Konrad Wolfenstein
Calculate average storage time – Image: Xpert.Digital – Halfpoint|Shutterstock.com
With the turnover time we can check how long the goods stay in the warehouse on average. The average storage period is a key figure that is intended to help us identify fast-moving items and thus better position them in the warehouse. The prioritization of fast-moving items (best sellers) and slow-moving items helps us to optimize the goods in the warehouse.
Why optimize the warehouse?
Thanks to innovative control software and automated, networked systems, today's digitalized working world offers sufficient potential for constantly optimizing the situation in the warehouse. After all, what use is the best and most modern warehouse if the processes behind it don't work?
Suitable for:
- If SEO is the choice, warehouse optimization is the must
- Warehouse optimization with order picking: 5 steps to more productivity with optimized order picking
Another option for warehouse optimization is to build and expand a buffer warehouse. Buffer warehouses are there to secure supplies when there may be bottlenecks, such as: B. during the corona pandemic.
The advantages of efficient warehouse management, especially in e-commerce, are as follows:
- More productivity in the warehouse leads to better competitiveness
- Lower costs due to reduced personnel requirements, higher utilization of available space and resource-saving operation of the systems
- High customer satisfaction through fast and precise delivery and shipping
- Optimum utilization of space due to highly compressed storage
- Overview & safety thanks to modern software control
- Scalability & flexibility through modularly expandable storage systems
By calculating the average storage period, we can continually check our storage policy to see whether there is still room for improvement.
The well-known formulas
Ø storage period = 360 days * Ø inventory / annual consumption
or
Ø Storage period = 360 days / inventory turnover frequency
should help us to continually improve (Kaizen).
KAIZEN for warehouse optimization
Kaizen comes from Japanese and means “change, change for the better, change for the better”.
Kaizen – Image: Xpert.Digital
Kaizen has its origins in the automotive industry. More specifically, it comes from Toyota. Japan was in economic decline after World War II. The overall economic problems also weighed on Toyota. The aim was to use a recurring method to work on the continuous improvement not only of the products, but also of the processes, structures and people. You invest in machines, they are written off and ultimately scrapped. Something new is coming. Processes and structures remain. Employees also stay. It therefore makes sense to continually improve the skills of workers and employees and to use their knowledge, experience and work performance.
Kaizen is also becoming increasingly popular in companies and organizations from other industries. For example, Kaizen is used in logistics, especially in intralogistics.
Kaizen pursues several goals. The main goal is higher customer satisfaction, since customer acquisition is more expensive than customer retention. To ensure customer satisfaction, four factors are in the foreground:
- Cost reduction
- quality assurance
- Speed (time efficiency)
- flexibility
The proponents of the Kaizen method assume that the current situation can be improved and that one must continue to work on it in order to improve it.
Furthermore, changes (“change”) in the area of employees are desired. Their commitment should be guaranteed through ongoing training, and internal hierarchies should be adjusted so that every employee can participate.
The Kaizen philosophy advocates a strong involvement of all areas of a company in a constant effort to create a better working environment for everyone involved through process improvements, which in turn should guarantee the best quality of the products. It is therefore important to carry continuous improvement into all areas.
Calculation of the average storage period
By calculating the average storage period we can:
- increase economic efficiency
- shorten storage times
- keep capital commitment low
Use our Xpert.Plus service for your intralogistics & warehouse optimization
Xpert.Plus is a project from Xpert.Digital. We have many years of experience in supporting and advising on storage solutions and in logistics optimization, which we bundle in a large network Xpert.Plus
Konrad Wolfenstein
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Xpert.Digital – Konrad Wolfenstein
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