Strategies for effective storage – the foundation for successful warehouse management

Konrad Wolfenstein

5 years ago

The efficient design of the receiving area is just as crucial to a warehouse's performance as equipping it with effective racking systems. If the receiving area is poorly designed or not optimally organized, this almost inevitably leads to serious disruptions in the entire subsequent warehousing process.

Strategies for effective storage – Image: Drazen Zigic|Shutterstock.com

Goods receipt concept

In goods receiving, the goods are identified, inspected, and prepared for storage in a multi-stage process. Due to the close collaboration between warehouse logistics and suppliers, preliminary information about the incoming goods is usually already available, allowing identification to be carried out by comparing barcodes or similar identifiers. A prerequisite for simplified scanning is the implementation of a numbering or barcode system that is unambiguously interpretable by both parties. Without this, the inspection must be carried out manually.

After the incoming goods have been checked for accuracy and quantity, quality control is carried out. This process varies considerably depending on the type of item delivered and can range from a superficial check to a detailed analysis of individual or even all goods.

After successful initial inspection, the goods are passed from goods receiving to storage.

The goal of an effective goods receiving system, in addition to the control function described above, is to prepare the items for subsequent storage. Errors during goods receipt can have extremely costly consequences during storage and later handling or retrieval. Consider, for example, the virtually impossible task of locating individual items that have been incorrectly assigned to specific locations within a warehouse. Furthermore, poor space utilization due to faulty initial planning can lead to a shortage or even waste of storage space.

Mistakes made during storage affect the entire subsequent storage process. Therefore, a targeted strategy for the effective storage of goods is essential for warehouse logistics professionals.

But how do you organize and structure this?

Depending on the type of item or storage, different strategies can be employed. Basically, a distinction can be made between two types – occupancy strategies and movement strategies.

The warehouse layout strategy determines the arrangement of individual functional areas within the warehouse. Which goods are located in which storage location and in which storage zone depends on the objective of the respective layout strategy.

Alongside these are the movement strategies, which determine the use of storage equipment for storing, relocating, or retrieving goods. Their goal is to achieve maximum efficiency in storage, relocation, and retrieval through the skillful use of resources, given existing storage conditions.

In order to operate a warehouse efficiently, the movement and occupancy strategies of the warehouse management must be precisely coordinated, because not every movement strategy is suitable for every occupancy strategy.

Storage strategies: Occupancy strategies

Fast-running concentration

The goal of this strategy is to optimize order pickers' routes. By storing fast-moving items in a central location, employee walking distances are reduced, and faster access to these items is achieved. A distinction is made between dynamic and static item storage.

Fast-track concentration during dynamic deployment

The principle of goods-to-person order picking applies here. Items are moved directly to the employee's workstation using transport equipment (conveyor belts, carousel storage, etc.). Fast-moving items are stored in such a way that the transport equipment can access them as easily and quickly as possible and send them to the warehouse worker.

High-speed concentration in static provisioning

This alternative uses man-to-goods picking. The picker retrieves the required goods from the respective storage location. Therefore, in this variant, fast-moving items are placed in a central, easily accessible location within the staging area. The disadvantage is that the pickers' paths can cross when retrieving closely spaced goods, thus obstructing each other.

Fixed and free storage area arrangements

In a fixed storage location system, storage spaces are reserved and kept clear for a specific item. In contrast, with a free storage location system, items are placed in any available space as soon as it becomes free. It is completely irrelevant which item was previously stored in that space or whether similar goods are located elsewhere in the warehouse.

A disadvantage of fixed storage location arrangements is that reserving space for an item requires keeping rooms free that cannot be used for other goods. This solution therefore requires more space. An advantage, however, is that the storage locations of goods can be easily determined at any time without the need for software.

The technological effort is higher with open storage arrangements, as their implementation requires a warehouse management system to control the flow of goods. Advantages of this solution include optimal utilization of storage capacity, since there is no need to block off free storage space for items that may not yet be available. Furthermore, the routes during storage are shorter, as the first available space can always be used.

Equal distribution strategy

There, the goods are distributed within the warehouse in such a way that roughly the same number of goods are stored in each location or aisle. Their goal is to ensure a balanced distribution of goods within the warehouse and thus an even utilization of capacity.

Storage space adjustment

Here, storage spaces are allocated goods according to their capacity. Small spaces are filled with low-volume storage units and small stock levels, while larger spaces are stocked with correspondingly larger goods or units with high stock levels

Single-item and mixed-item space allocation

Single-item storage means that adjacent storage locations can only be stocked with identical items (i.e., products with very similar appearance, size, etc.). In the warehouse management software, these items are identified with a unique identification number. Mixed-item storage, on the other hand, involves stocking storage locations with units of various items. Structurally, it is comparable to free-space storage. Here, too, there is a greater need for supporting software.

Minimizing the need for storage areas with broken pieces

In any type of warehousing, it can happen that the space at a single storage location is insufficient to accommodate all the items in a batch. In this case, the goods must be distributed across multiple storage locations – creating partially filled storage spaces that waste space, as the unused areas at that location cannot easily be filled with other goods. Therefore, goods from partially filled storage units are always removed first. This is intended to increase the fill level and avoid using more than one storage space per item.

Storage strategies: Movement strategies

Single-game strategy

In this strategy, the storage and retrieval machine picks up a storage unit at the base location and transports it to the designated storage location. The machine then returns to the base to pick up the next storage unit. In these so-called single-cycle operations, the transport vehicles therefore only ever process either storage or retrieval orders. Mixing orders is not possible.

The advantage of single-player mode is increased performance during storage and retrieval.

However, the longer empty journeys of the storage equipment (=return journeys to the collection or from the delivery station) have a disadvantageous effect.

Double game strategy

Unlike single-player games, this game combines inbound and outbound transactions.

Thus, the storage of one item on the outbound journey is combined with the removal of another item, stored nearby, on the return journey.

The advantage of dual-track operation is the optimization of transport routes, which reduces empty runs and downtime, thus increasing the efficiency of warehouse processes. A disadvantage is that individual movements take longer. More precise process planning is also required, which is often only possible through the use of sophisticated warehouse management software.

Route strategy

The route strategy determines which routes the storage and retrieval machines should take to the picking locations in order to store the goods. The goal is to visit the storage locations sequentially via the shortest possible routes to minimize travel distances. Depending on the strategy, it may also be a goal to operate the machines with maximum capacity utilization to transport as many goods as possible at once.

Relocation strategy

The more frequently goods are moved within a warehouse, the greater the need for relocating individual items. Storage locations that were previously ideal for a product can become less attractive due to newly available space elsewhere. This is the case, for example, with fast-moving items when space near picking stations suddenly becomes available. Similarly, newly delivered goods may require a specific storage location that is currently occupied. In this case, the items located there would need to be relocated.

The transfers are differentiated into:

Relocation near outsourcing
Combined relocation and storage
Random relocation

Relocation near storage is a method frequently used, especially for fast-moving items, where the goods to be relocated are stored as close as possible to the picking or loading station.

For combined storage and retrieval, particularly high-capacity storage equipment is required. This equipment picks up the items to be moved and transports them to the location of the item being retrieved. While the retrieved item is also being picked up by the transporter, the goods to be moved are simultaneously placed in the now vacant storage space.

In random relocation, the location to which the goods are to be relocated is chosen randomly, as in free storage location arrangement.

Gear shift strategy

This is a method in which inbound and outbound orders are collected and only processed after a certain period of time.

To process a picking order, items usually need to be retrieved from different storage locations. This would typically require visiting multiple aisles for a single order. With the aisle-switching strategy, orders are collected (formed into batches) and then processed together. This involves processing all items from the various orders that pertain to a specific aisle. The aisle switch occurs once all items from all picking orders in that aisle have been accessed. The warehouse equipment or operator then moves to the next aisle to retrieve the required items. This type of warehouse management primarily aims to optimize picking routes and times.

Alternative: Storage in dynamic storage systems

Many of the strategies described aim to optimize travel routes and space requirements in the warehouse. These strategies typically assume a static shelving system. However, storage capacity can also be optimized in other ways; simply by warehouse logistics professionals opting for modern, sometimes fully automated, systems. Due to their high-density design, these systems require minimal space and, with the use of sophisticated warehouse management software, meet the highest demands in terms of efficiency during storage and retrieval, picking accuracy, and cost considerations. These storage systems include: