The productivity of order pickers depends largely on the location of goods, which can be determined entirely by a Warehouse Management Solution (WMS). According to Manhattan Associates, using software to specify the optimum warehouse slot can improve productivity, ergonomics, security and quality.
How do you determine the best location in a warehouse for your products? Most companies begin by looking at their order pattern. Fast-moving products are placed in the front of the warehouse while slow-moving ones are placed in the back.
This strategy works as long as fast-moving products do not all end up in the same aisle. If this happens, a new problem can arise: congestion. It is very easy for activity levels in one place to become so high that order pickers find themselves in each other's way.
Determining the best location for each product is a complex job, as productivity, ergonomics and security all need to be taken into account. It is impossible to apply a simple rule of thumb or a formula to all warehouses or distribution centres as product characteristics, movement of goods and warehouse layout are different for each company.
Daily slotting
All warehouses and distribution centres need to set up a slotting plan at least once, to determine the best location for products. In reality, most warehouses have to optimise slotting layouts more than once. As new products are introduced and demand for existing products increases, fast-moving goods are added and slow-moving goods disappear. Many companies therefore carry out a yearly, monthly and even weekly slotting review. In a few cases this may even take place on a daily basis.
Some warehouses operate a fully automated system, whereby goods are arranged automatically at night by machines, ready to be picked the next day. A similar procedure takes place in warehouses where large volumes of orders have to be picked within a short period of time. In order to free up the maximum level of manpower for order picking, incoming goods are set aside initially, and positioned later. Some systems can also support automated slotting of new items as the WMS becomes aware of them. This helps avoid costly delays in receiving and put-away of new items.
Location, location, location
One benefit of optimised slotting is higher productivity gained by a reduction in walking distances. This can be achieved not only by putting fast-moving goods to the front but also by grouping together those products that are regularly sold together. It is also more efficient to put bulk stock close together for replenishment. Fast-moving goods are best located at waist-height in warehouses with 'roll-on' racks. This serves not only to improve pick rate and productivity but also provides the best ergonomic solution. For the same reasons heavy products are best placed at hip or shoulder level.
In addition to productivity and ergonomics, efficient slotting brings security benefits. For instance, in warehouses containing volatile substances, products may not be placed close to each other because of possible chemical reactions. A good slotting plan can also help to limit damage and mistakes. Heavy products should be loaded at the bottom of a pallet and not on top of breakable products, for example. Furthermore, picking errors can be reduced by avoiding the placement of similar-looking products together.
The job of calculating an optimised slotting plan, that takes into account all of these factors, is vast and nearly impossible with a paper-based system, which is where a WMS with a slotting optimisation function comes in. Data is entered into the WMS, including the measurements, location, number of products in a box, number of boxes on a pallet and storage conditions of each article. Information about the pick location is also needed; this includes its measurements, carrying capacity, walking distance, and the type of products that may be put on it. Finally, the system requires data about the movement of goods, such as the number of picks per product and its demand forecast.
To make its calculation, the system distinguishes between constraints and goals. Constraints, such as weight restrictions or storage conditions for harmful substances, have to be met by the location layout. Goals are elements that have to be optimised, such as the walking distance between picking points or the allocation of jobs. The result from the WMS will be a series of suggested re-slotting moves for layout alterations. It is up to the management of the warehouse to follow these plans. In addition, a WMS can determine racking requirements for new facilities or determine if changes are required within existing facilities to ensure a fully optimised slotting layout.
WMS and slotting: still work to do
Many WMS vendors have integrated a slotting system with their labour management functions, which record the distance between different locations and determine precise costs associated with picking. A simulation then shows if proposed changes are actual improvements on the existing plan. It is also possible to determine how much effort it will take to execute the proposed change. If the benefits are outweighed by the time needed to move a pallet to another location it may be better to leave the products in their original location.
A European survey from IPL Consultants and Fraunhofer IML shows that six out of ten WMS systems now support slotting. Most of these, however, consist of the alphabetical rearrangement of goods, or of the grouping of similar goods together to create more space. Only 43% of WMS possess further slotting functionality, such as the distribution of workload across different warehouse zones. Fewer than one out of three systems can suggest improvements to stock location based on factors such as the matching of pallet dimensions to a particular location.
Getting the green light
For true warehouse optimisation, an advanced slotting system is essential. Advanced systems can generally be bought as part of a WMS or as a stand-alone product and will take into account demand patterns at pallet, package and item level. For example, one item may be considered as fast-moving at pallet level, but slow-moving at package level. Manhattan Associates' Slotting Optimisation solution provides a score for each location in the warehouse, showing how well a product is placed. Results are indicated in colours on a screen, which shows the layout of the warehouse and the product locations. Green represents a perfect placement while red stands for a poor one. Only when all stock has been arranged optimally, taking into account all the different variables, will the locations be given the green light.
The warehouse is now one of the primary areas in which information technology can still bring about dramatic improvements in productivity. In the struggle to process orders ever faster while keeping costs under control, time lost due to an inefficient layout can make the difference between sending an order by lorry or by aeroplane; or between employing 50 people instead of 60. The optimised use of space can reduce bottlenecks, shorten order cycles and maintain level workloads. The human brain can produce a good layout with a combination of hours and effort, but the right software can produce an optimised one in a matter of minutes.
