Efficient Warehousing – Warehouse Efficiency Strategies Pyramid

Axis Global Partners is introducing a series of articles over the next few months that will address how companies can strive to improve their warehouse efficiencies.  These articles are provided from the experience that AXIS Integrated Solutions has gained over the years on “onsite” implementations and from the publishers of the software products implemented.

These articles will be a warehouse technology and process selection roadmap, giving Small and Mid-sized Business (SMB) distributor’s insight into initial investments that they can afford. Additionally, it outlines an upgrade path with incremental investments that result in greater operational sophistication and savings.

Warehouse Efficiency Strategies Pyramid 

In light of the proliferation of WMS in the SMB market, we suggest the following pyramid as a model to consider when formulating your own strategy for implementation. This model allows you to start small, think big, and step up your savings over time while keeping business disruption at a minimum.

We selected a pyramid structure because as you ascend the pyramid, each layer of technology represents process improvement and cost savings over the previous layer. Companies may elect to skip stages in the pyramid. The appropriate approach for each company depends on organizational resource availability, tolerance to change over time and requirements that will define the scope of the solution. This paper describes the different levels of possible incremental investment.

Stage 1 – Current Process Automation
Stage 2 – Business Process Re-engineering
Stage 3 – Infrastructure & Business Process Re-engineering
Stage 4 – Integrating Warehouse Automation Equipment into Business Processes

Stage 3 – Infrastructure Re-engineering
The third level of the pyramid lets you achieve productivity and profitability by optimizing all the resources within the warehouse including labor, equipment, storage, space and inventory. This strategy typically results in a revamped warehouse layout that cuts down on picking and can make huge differences in order cycle time and warehouse efficiency.

Define warehouse layout, configuration and rules
Your warehouse, and any WMS you install, will perform best if you draw up a plan that optimizes the layout of the facility based on warehouse activities, size of product and handling requirements. Sometimes, this may require outside advice or consultation. The plan should include contingencies for warehouse expansion.

Re-slotting re-defines your warehouse
Effective slotting is necessary to achieve commonality, which helps the picking process run at peak efficiency. Most companies can apply Pareto’s law to their product mix- 20% of their products can be found on 80% of their orders.

• Put the fastest moving products in the golden zones – High velocity products are placed in a "golden zone" to reduce bending and reaching activity. Heavy or oversized items are placed on lower levels in the pick zone or placed in a separate zone where material-handling equipment can be utilized.
• Some items require special handling – Slotting sometimes involves identifying handling requirements of a product, such as ‘hazmat’ for hazardous material, heavy materials requiring special equipment to lift, or perishable products requiring refrigeration or freezing. Keep these items together to optimize use of special equipment or resources required for handling them.

Stage 4 – Automation Equipment
The highest level of the pyramid involves the implementation of automation equipment such as vertical or horizontal carousels, “smart” conveyors and pick-to-light equipment. These systems need corresponding WMS software to optimize their operation. They can
be combined with traditional RF-Based warehouse management systems to create a complete high-efficiency warehousing solution.

Automate your distribution center using carousels
With carousels, bins are brought to pickers at a fixed workstation significantly reducing travel time. Carousels can also let the warehouse store a high density of product in a smaller area.

“Smart” Conveyors
Cartons and totes can be tracked and routed through the warehouse making consolidation for shipping much more efficient. Routing happens automatically via fixed scanners on the conveyor and barcodes or RFID tags located on the cartons and totes.

Pick-to-light systems
Pick-to-light systems offer paperless picking using lights to identify bins from where picks are required. In addition to identifying the bin, the quantity for each product is also displayed.

Where Do You Go From Here?

The benefits of a WMS have been well documented from various sources and case studies. Any warehouse can benefit from some WMS technology and processes, but the extent and timetable for implementation is up for discussion.  A business has to make clear decisions about its objectives, both long term and short term. The next step is to determine what kind of WMS technology and re-engineered processes best serve those objectives.

The plan for implementation also needs to be evaluated. Is it better to adopt WMS technologies in a piecemeal fashion with minimal disruption, or is it best to make a plan and go for it all at once? One can argue that if you are going to involve your warehouse time and staff in such an endeavor, it may be better to undertake the entire installation at once, despite the intensity.

In the final analysis, cost and ROI must be thoroughly explored and plans for WMS technology and processes must be tailored for each business. Regardless of the when and how, WMS technology must be embraced as a means to profitability in today’s economic environment.

This article has provided some insight on why now more and more business are moving to improve their warehouse operations to gain efficiencies.  If you are interested in obtaining more information on warehousing, please feel free to contact us directly via email at info@axisglobalpartners.com.  To view previously published articles on warehouse management solutions please visit us at AXIS Newsletter Archive.

Four Ways To Efficient Warehousing, Version 1.3, Radio Beacon Inc., Copyright © 2004 Radio Beacon Inc.