In 6 steps to efficient warehousing - How companies can better manage their inventories

Published on: May 20, 2016 / Update from: November 24, 2018 - Author: Konrad Wolfenstein

As trade continues to grow, companies' demand for modern capacity to store their products is increasing. At the same time, the demands on storage systems are growing, as the efficient processing of incoming orders has become a crucial competitive factor for providers.

This is also an area in which there is still enormous potential when it comes to increasing productivity. According to studies, the order picking process alone is responsible for up to 55% of the total storage costs. The main reason for this is the time that employees spend locating the stored items and bringing them to the picking station. It is these transport routes alone that eat up almost two thirds of the warehouse workers' total working time.

It's no wonder that companies are trying to minimize this effort.

This 6-step guide is intended to help companies question their internal processes in the warehouse with regard to untapped potential:

1. Classification of inventory
2. Assign inventory to the appropriate shelf storage solutions
3. Automation of processes
4. Identification of the optimal storage location for the goods
5. Optimization of picking processes
6. Implementation of a comprehensive software solution

1. Classification of inventory

How exactly inventory should be divided depends on a number of factors. The main characteristics are the size and weight of the stored goods as well as their retrieval frequency. It proves to be particularly efficient ALL stored goods and not just concentrate fast-moving items The 80/20 rule that is often used as a criterion by companies, according to which 20% of the goods are responsible for 80% of sales, falls short here. This would mean that the company would, conversely, not take 80% of the goods – and thus a large part of the total storage space – into account in the optimization process. It is particularly the goods that are less or rarely called up that cause the warehouse workers to travel particularly long distances and therefore costs due to their storage locations being far away from the picking stations. It is therefore advisable for the company to find a complete storage solution for all existing goods.

2. Assign inventory to the appropriate rack storage solutions

However, the desired overall solution does not mean that a single strategy must be found for all products; The stored goods usually differ in terms of their size, weight, retrieval frequency or special requirements for their storage conditions (e.g. cool or dry environment, etc.).

The manufacturers of material storage facilities offer a variety of solutions, some of which differ considerably from one another in terms of their options but also the investment costs; They range from simple, manually operated pallet and shelf racks to technically sophisticated, completely automated horizontal carousels and vertical storage lifts.

The individual company is now faced with the task of identifying the right shelving system for each product group.

In general, it can be said that many companies (especially in the e-commerce sector) have established the use of pallet racks for their particularly frequently accessed goods. However, it should be emphasized that this type of storage requires a lot of space. If you want quick access to a large number of products and the storage space is limited, carousel or high-bay warehouses are ideal. Thanks to their highly dense design, they can accommodate a lot of goods in a small space and deliver them directly to the person Can transport picking.

3. Automation of processes

With the help of automated processes, larger quantities can be stored and retrieved quickly and with greater accuracy. The productivity of the processes therefore increases considerably. Other benefits include:

• Less space required through the use of high-rise warehouses that make optimal use of the existing ceiling heights
• Higher picking accuracy of up to 99.9%
• Better control and control options through software control
• Better inventory management – ​​shortages and shortages are identified more quickly
• Increased workplace ergonomics as goods are transported directly to the warehouse workers. The lifting and bending movements that often occur are eliminated.

4. Identification of the optimal storage location for the goods

The better the various goods are stored, the more efficiently they can be removed. In addition, the required storage space and walking distances can be minimized by cleverly dividing the goods. In addition, improvements will be made regarding

• Call times
• Pick accuracy
• Workflows
• Search times

achieved. However, in order to find the optimal position of each individual product in the warehouse, in addition to the specific characteristics of the goods (size, weight, etc.), a number of additional data are required:

• polling frequency
• Number of units retrieved each time
• Number of units to be stored
• product-specific storage requirements
• Turnover rate

Based on the data obtained, warehouse management software then assigns the goods to their optimal location.

5. Optimization of picking processes

Now that the goods have been classified and assigned to the appropriate storage systems, it's time to optimize the picking process. This is particularly of great interest for the e-commerce sector, as products are picked thousands of times a day and even small improvements can have a noticeable impact.

There are three main picking strategies that can be used here:

Creating collective orders ( batch picking ) is a good way to make processes more efficient. Especially for goods that are called up less frequently, collecting them in one go is an excellent way to save time, as the warehouse worker can process several orders in a single route.

In addition, so-called zone picking it possible to divide the storage area into different sections (zones) and assign individual employees to them. There they process the individual orders only for those products that are stored in the zone assigned to them. The order is then passed on to the next section, from which the appropriate goods are removed. This principle of passing on orders through the various sections is particularly suitable for companies that have goods that have different retrieval rates (high and low picking numbers) and that have different requirements for the storage systems due to their design or size. In this way, the various systems can be set up efficiently in individual zones.

The combination of the top two strategies is parallel picking . Here, the individual orders are processed in all zones in parallel and forwarded to a central station, where they are grouped together and made ready for dispatch. Due to its complex structure, this approach is primarily suitable for companies that operate daily with large volumes of orders to be processed and a comprehensive inventory that requires various storage systems and zones.

6. Implementation of a comprehensive software solution

Ultimately, the aim is to bring the multitude of existing software solutions under one roof in the newly designed warehouse. The operational ERP systems must be combined with the programs for controlling the rack storage and fine-tuning the picking processes. Many manufacturers in the intralogistics industry already offer warehouse management software that can be adapted relatively easily to the needs of individual companies and integrated into their existing programs.

Only if all the systems are connected to one another in such a way that they communicate smoothly with one another and can be accessed centrally can the processes in the warehouse be transparently mapped and effectively controlled.

Nothing stands in the way of successful and productive warehouse management.