Guest article: Warehouse Performance Part 2/4

Christoph Feeser,

Breaking new ground with optimized inventory reservation

In our last article "Warehouse Performance: Discover and utilize hidden potential in the warehouse through the consistent use of data! (Part 1/4)", we gave you an initial overview of the options for increasing your warehouse performance. This time, we would like to introduce you to the first phase of optimizing your warehouse performance, namely the optimization of inventory reservations.

© S&P Computer Systems

Whether and to what extent an optimization of the stock reservation makes sense at all depends primarily on the putaway strategy currently in use. As a rule, there is only potential for optimization if the stored items in your inventory are located in several places in the warehouse - which sometimes also means different aisles. This is because these many reservation options for individual order items are one of the main reasons for excessively long picking routes and times for employees in the warehouse. The aim of optimizing stock reservation is therefore to form strategically sensible combinations from the various available options in order to keep the walking distances for an order as short as possible.

With regard to the use of a putaway strategy in which the stock of an item is stored in a single location, there is initially no alternative for optimized stock reservation. However, this does not mean that optimization measures cannot also be implemented in this case, for example through intelligent stock transfer processes as part of the "warehouse healing" strategy, which we will discuss in more detail in another article.

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But let's take this opportunity to briefly illustrate the optimization of stock reservations using a concrete example from practice:

Fig. 1: Original state - stock reservation © S&P Computer Systems

The different colored elements indicate the individual storage locations where the goods to be picked are located.

One thing is noticeable at first glance: the reserved items are stored in different aisles, the storage locations are apparently "far" apart, so that the walking routes for the employees during the picking round take up a lot of time. This process can be solved in a much smarter way if the items are stored in several locations in the warehouse.

What does this look like in practice? Optimization of stock reservation is initially based on the typology and layout of the picking areas in the warehouse. On this basis, the individual check sequences must also be configured to the requirements and conditions in each area. The overriding aim of stock reservation within an order is to minimize the distances covered in relation to the stock to be reserved. In short: in the course of stock reservation, the system checks at which point in the warehouse the individual items can be reserved as close together as possible in order to achieve the "dense" picking of the order. As a result of the stock reservation, the stock initially remains physically in the warehouse, but is no longer freely available.

Fig. 2 Application of the optimized inventory reservation strategy © S&P Computer Systems

Can you see the difference in Figure 2? That's right: in relation to an order, all items have now been reserved in just one aisle so that picking routes and times are kept to a minimum for employees in a round trip. This not only ensures increased efficiency when picking orders, but is also a first step towards optimizing the intralogistics processes in the warehouse as a whole.

As a connoisseur of the subject, you will now interject: But what about the other relevant reservation parameters such as FIFO, batch numbers, remaining lead times? You are of course right that these must still be adhered to within the picking route reduction, or at least to a certain extent.

Would you like to find out more about the individual phases for optimizing your warehouse performance? Then also read "Warehouse performance: from optimized stock reservation to intelligent batch planning for efficient warehouse logistics! (Part 3/4)"

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