I love science. Well, most of science, not a big fan of equations and statistics. However, I love science, even more, when I get the opportunity to apply it to issues going on in my world of warehousing. Science?! In a warehouse? Really?! I think the best way to prove it, is to show you how we can use science in your warehouse.
Order picking, like receiving is another one of those critical areas of any warehouse whether picking raw materials for manufacturing or picking orders to be shipped to a commercial store or residential retail customer. Your goal is to get the correct item to the customer intact and within the timeline the customer demands. You want to pick in an uninterrupted flow, like a serene river, with the pick order set in a sequence to build a stable and good-looking pallet, able to stand up to the rigors of shipping and within the customer’s specs.
If your warehouse pick operation is already set up for maximum efficiency you are to be commended. If you would like to get your order picking to that point here are some tips and history to get you there. It begins with Vilfredo Federico Damaso Pareto, born July 15, 1848, and the young Italian grew up with many interests and talents including engineering, sociologist, economist, and scientist. He was the first who observed in 1906 that 80% of the land in Italy was owned by 20% of the population and he further developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas. This all gave birth to the Pareto principle of 80/20.
This principle applies to your warehouse in that 20% of your SKU, (stock keeping unit) accounts for 80% of the volume picked. Why is that significant? When you set up the locations of your picking slots you want the fastest movers closest to the dock for convenient quick movement. In fact, depending on the quantities you ship you may want to look into cross-docking some of these items as well. You also want to give the physical pick location ample space to hold enough product for orders to be picked with the least amount of replenishments. It also means that the items that account for only 5% of your pick volume can be placed the furthest away from the dock and can sometimes be stored in gravity flow racks and picked in batch style. How does one find out how fast the product moves? You should be able to have generated a velocity report, and I would bet that the sales and purchasing groups have access to this report as well. It’ll break down for you the total number of units moved for each SKU over a designated period of time. This information can show you seasonal variations in quantities of specific SKU shipped and other patterns. I found running a velocity report quarterly was enough but you may want to look at it on a monthly basis. Now you can categorize your SKU into their different types of mover groups, fastest to the slowest and can be broken down into three or four groups depending on the number of SKU you maintain on hand. A items=20% of the products that account for 80% of cases moved. B=30% of the products that account for 15% of cases moved and C=50% of the products that account for 5% of cases moved.
With that accomplished we can begin planning the slotting sequence and layout of your pick slots. Usually want to set it up with heavy & large sturdy items picked first to form the base of the pallet and smaller lighter cases on top to avoid any crushing of boxes. If you’re picking strictly raw materials for production put your heaviest items closest to production. Make sure to purposely leave a few empty pick slots here and there for future expansion or to help give added slots for holiday season quick movers.
Once you have the sequence in order, to help maintain maximum picking efficiency you want to know how many cases of an item can actually fit into the picking slot. That information helps determine the size of the pick slot you want and the number of replenishment you’ll need to make during any given workday. The best way to accomplish this is by Cubing. No, it’s not the art period but the cubic footage the case, carton, the box actually exists in. However, to stop and measure every single SKU you have and calculate the cubic space it uses is extremely labor-intensive and there is also a greater risk of error. There are machines like Cubiscan that you can purchase or lease to accomplish this task in no time. Moving forward, as new items come to the warehouse you can get the carton size specs from purchasing or the vendor for calculating cubic feet.
Keeping the flow. I strongly recommend that once you have gone through all this effort to get your picking operation in order keep it fresh by reviewing velocity reports on a regular basis and reviewing your slotting. Listen to feedback from the pickers as they’re in the trenches every day and believe me they enjoy building the perfect pallet and they catch subtle differences in carton sizes or weights and other changes in the product. They have some great ideas for picking sequences. Most importantly put all this information together and develop a written slotting guide and procedures for your company on how the product is set up in the warehouse. State your list of categories of velocity, A – ?, how often you’ll do velocity reports, and Include what input is needed from purchasing and a suggested timeline for this process on new items coming in with their dimensions, weight, and estimated usage. Make sure all old inventory is used up before beginning a new replacement item to avoid dead inventory.