Bin location – Organization within the warehouse is everything

11 05 2011

Within a warehouse, thousands of items of various shapes, volumes and types could be stored at once.  In order to use the rare space in a warehouse at the optimum and find specific articles quickly a clear and coordinated storage space allocation is necessary. Without this assumption, a warehouse is not able to operate in an economically and efficient way.

In general there are two different ways of storage space allocation:

  • The fixed storage space allocation
  • Entire free or chaotic storage space allocation

Fixed place for each article:

A very simple way to allocate articles bin locations is to store articles always at the same place.

Characteristic of this fixed storage space allocation is that every class of goods is stored separately. The advantage thereby is that items are found easily. Furthermore articles are also accessible if for instance the warehouse software fails. On the other hand, the utilization of the warehouse’s capacity is low, especially when the warehouse stock is fluctuating.

Another way to allocate the storage areas effectively is to separate them in product groups, for example, to separate them by their access frequency and to define specific areas for each product group.

Articles which are frequently transferred and released to stock should be placed closed to the delivery entrance. On the other hand, items with a large volume per sales unit should be stored away from rolling in and out point in order to keep the required transportation ways for most of the items as small as possible.

Therefore articles could be classified by for instance an ABC – Analysis.

In general ABC analysis divide customers, products, or delivery chains depending on a
certain value like for example sales or consumption into three classes. After that this classes are going to be prioritized.

Regarding logistics an ABC analysis provides information about the allocation of capital to individual goods or article groups in the warehouse. Often a large part of tied capital is spread just over a piece of numerically small number of articles. An ABC analysis clearly points out at which goods should be paid special attention in terms of stock optimization. Therefore the capital commitment and transport- such as packaging cost could be minimized.

The following video introduces you in an easy way to ACB – analysis:

Chaotic organization within the warehouse:

If there isn’t a specified fixed storage space allocation by type of goods within a warehouse, then it is called a free storage space allocation, single-location storage or chaotic storage.

Every single good could be stored on every currently free storage place.  This procedural method aims to exploit the storage room ideal – if possible even when the demand is highly fluctuating.

Because every good is stored in this chaotic storage at a random available storage place, with a large number of storage places, an electronic control and monitoring of storage and removal from storage is required.

This is managed by an electronic data processing system, which instructs an item to be stored automatically a storage place of the required size. The system registers how much of a specific good is stored on which place in the warehouse.





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