The company’s warehouse plays a vital role in storing its products—essential tasks like picking and receiving occur there.

Companies need to reduce travel time and unnecessary steps to make warehouses more efficient. The proper warehouse layout can help achieve this. Designing the best layout requires paying close attention to details and analyzing data.

Consultants and companies specializing in handling materials and setting up racks can assist in determining the most suitable warehouse layout based on the available space. In this chapter, we will explore the concept of warehouse layouts, essential factors to consider when designing them, and the benefits they offer.

What is a warehouse layout?

A warehouse is an integral part of manufacturing and the supply chain. It’s where all the materials, from raw to finished goods, are stored. Companies need to organize the layout properly to make things run smoothly in the warehouse.

Warehouse layout involves planning how to arrange things in the warehouse for efficient operations. A well-designed design improves production and distribution processes.

Because there are many tasks in the warehouse, like receiving goods, shipping them out, and storing inventory, companies need to figure out the best way to set up the warehouse. Organizing the layout well allows companies to make the most of the space and keep costs low.

Managing warehouse activities is complicated, so companies often use Warehouse Management Systems (WMS) to automate things in the warehouse.

Read more: Understanding Warehouses: Definition and its Importance

3 important aspects of a warehouse layout

You need to consider three important things to create an efficient warehouse layout. Let’s take a look at each of these aspects:

Warehouse data gathering

According to a survey conducted by Cranfield University in 2008 (Baker and Perotti), allocation in the warehouse floor area is as follows: 52% for storage, 17% for pick/pack operations, 16% for receiving and shipping, 7% for value-adding services, and an additional 7% for storage areas like battery charging, empty pallet storage, and other uses.

Different operations determine the distribution of these areas. To ensure the warehouse is efficient, the company must collect data on the other sites it needs for its operations.

A company warehouse requires various areas for smooth operations. These areas include:

• Receiving area
• Backup storage
• Carton pick-up area
• Goods collection area
• Value-adding service area
• Packing area
• Delivery area
• Cross wharf area
• Rooms for storage of empty pallets and containers
• MHE charging area
• Warehouse Office
• Toilet

For accurate analysis, it is crucial to consider current and past data and future volumes and changes in product or area characteristics. This comprehensive approach allows for a more reliable understanding of the data.

Space calculation

Different companies have varying needs, which affect the calculation of required space. Below, you’ll find several commonly used formulas for space calculation.

Receiving & shipping area

To calculate the space needed for arranging vehicles at a vehicle manufacturing company, you can use this simple formula:

Space = hours to (unload cargo) / Shift time x (number of pallets × space per pallet)

For example, let’s say the company receives 20 vehicles each day. Each load has 26 pallets, each measuring 1.2 meters by 1.0 meters. It takes 45 minutes to unload a load and 30 minutes to inspect it. The company operates for eight hours.

Using the formula, we can calculate the space requirement like this:

Space = {rounded((20 × 1.25) ÷ 8) × (26 × (1.2 × 1))} = 4 × 31.2 = 124.8 square meters

In addition to this space, we also need to consider the work and travel space around the pallets. The amount of this space depends on the type of forklift or pallet truck used for unloading and loading the vehicles. It might be necessary to double the shipping area’s space to provide enough room to access the pallets.

Storage space

First, you need to evaluate and record the properties of each item and the attributes of the potential storage options. Calculate how many goods can be stored per product line and convert that into the number of pallets required. It will help you determine the pallets needed for each product line.

Next, create a chart that details the number of pallet locations needed and their height requirements. Remember that the height of the pallets may vary depending on the products.

Look at the table below, which shows the characteristics of each item and the different storage options we considered. The table also includes as much information as possible about storing and ordering the products. This information will guide you in choosing the most suitable storage and handling options for your needs.

The aisle width and other spaces

One important thing to consider when planning a warehouse layout is the width of the aisles. The aisle width is simply the distance between racks next to each other. To ensure everyone stays safe, companies must figure out how much space is needed between pallets once they are on the shelves. The aisle width depends on how much the forklift truck can turn and the size of the pallets it carries.

Source: Richard G. 2011. Warehouse Management. Aisle widths (courtesy of Carson Racking Systems Limited)

To keep things safe and efficient, it’s a good idea to add about 100 mm of space on each side of a typical pallet, making a total of 200 mm. This extra space helps with quickly storing and getting pallets when needed. Another thing to consider is the overall width of the forklift truck as it moves along the stacking aisle.

When choosing the aisle width, it’s crucial to find the best balance between productivity, making the most of the available space, flexibility, safety, and the cost of the equipment needed for the specific job.

In addition to the aisles, the warehouse reserves specific areas for tasks such as packing, enhancing product value, and managing returns. The size of these areas depends on factors such as the level and type of work, the number of people involved, and the equipment used.

When planning warehouse space, people sometimes forget to consider specific areas. These areas include the storage, recharging, and replacement spots for forklift batteries or gas cylinders, as well as parking spaces for equipment when it’s not in use. Remembering these things is crucial for using the warehouse space efficiently.

Types of flow in the warehouse

To determine the suitable warehouse layout for your needs, analyze your gathered information and goals. The flow of your warehouse relies heavily on the available space and how things will move in the entire operation.

Companies employ three warehouse layouts to organize their operations effectively: U-shaped, I-shaped, and L-shaped.

U-shaped warehouse flow

Companies commonly utilize the U-shaped warehouse flow because it effectively serves beginners. This layout arranges all the parts semi-circle, with the sending and receiving areas on opposite sides. In contrast, the storage area occupies the middle.

The U shape helps to keep the main traffic flows in the warehouse separate and efficient. By having the material come in and go out on different sides, we avoid jams and keep things running smoothly. This flow of goods also helps to save space.

The entrances and exits on the same side of the building reduce the need for ample package space. It enables our employees to swiftly transfer products between the reception and delivery areas. However, one drawback of the U-shaped flow is that it can create issues when the sending and receiving sites are nearby and share similar functions. These circumstances can result in production bottlenecks.

I-shaped warehouse flow

Big companies with large storage spaces prefer this type of warehouse flow. They like it because these companies usually have many things to make and need a straightforward way to bring something in and take them out.

The shape of this kind of warehouse goes straight from where things come into, where they go out, and the other way around. This type is the best way to make the most of the whole length of the warehouse.

It also keeps similar things apart, like on an assembly line, so working with them is more manageable. This way, there are fewer places where things can get stuck or delayed because they have to go back and forth.

But there’s a downside to this type of warehouse. The company needs enough space on both sides of the building for loading and unloading. It can cost more money to buy equipment for bringing things in and taking them out. Also, things often have to travel through the whole warehouse to get where they need to go.

L-shaped warehouse flow

The least common flow type is this one, used for buildings with an L shape. The L shape consists of a shipping area on one side and a receiving site on the adjacent side, forming a 90-degree angle. L-shaped flow and I-shaped flow share similar advantages.

The L shape helps prevent congestion by avoiding back-and-forth movement. It effectively separates products by placing inbound and outbound docks on opposite sides. However, the main downside of the L-shaped warehouse design is that it needs much space to work well.

Read more: 7 Tips for Selecting the Ideal WMS

Steps for designing a warehouse layout

Designing a warehouse involves considering all the crucial areas a company requires and using the available space best. Here are the steps to develop a warehouse:

1. Create a warehouse blueprint

Before you decide, take some time to create a visual tool that will help you estimate the available space. It involves marking areas where you can place shipping docks and accommodate recipients. Blueprints will assist you in seeing the warehouse as a blank canvas.

2. Start assembling the components

Begin by planning how to prepare the different components of the warehouse. This process involves considering offices, employee living areas, and shipping and receiving docks. Consider all the main areas, such as assembly lines, manufacturing materials, workstations, conveyor belts, and other equipment needing space.

3. Choose the flow that fits your location

Once you have carefully examined the room, you can determine which designs will naturally meet your needs. If you want to keep the shipping and receiving areas close together, you can opt for a U-shaped warehouse flow.

Suppose your priority is to maintain a smooth workflow with minimal space usage. In that case, you may prefer an I-shaped warehouse flow. If you have a warehouse with a unique shape, an L-shaped warehouse flow would be suitable.

4. Collect the equipment needed

Once you’ve decided on the ideal flow for your requirements, it’s time to buy and assemble all the equipment needed to optimize movement within the warehouse. This equipment comprises forklifts, racks, bins, pallet racks, rolling ladders, picking and packing stations, processing technology, and other machinery essential for efficient warehouse operations.

5. Test the plan

When you’re unsure, test your proposed plan. Track the most profitable traffic flows before installing equipment into the warehouse layout. Consider the opinions and concerns of the warehouse staff and other participating employees actively involved in the workflow.

Benefits of a warehouse layout

Here are some of the benefits of implementing warehouse layouts in companies:

Maximizing warehouse space efficiently

The main aim of designing a warehouse layout is to optimize warehouse space utilization. By effectively using the available space, companies can reduce the time required for product manufacturing and streamline processes at every stage.

It is essential to make the most of every inch of the warehouse. The size and area of the warehouse play a significant role as they directly impact the overall efficiency and productivity of the space.

Increase productivity

The main objective of creating a practical warehouse layout is to optimize operations, enhance productivity, and minimize the chances of congestion or errors. Surveys have shown that 67% of customers take their business elsewhere when they receive notification that an item they ordered is out of stock.

The warehouse management team actively collaborates with the operations management team to ensure a seamless production process from start to finish and efficient and accurate order fulfillment.

Utilize manpower and budget effectively

Some warehouse layouts can be more expensive to construct and maintain, depending on the available floor space. Understanding the materials on hand and determining the appropriate staff positioning are essential factors in finding a suitable design.

By implementing a suitable warehouse layout, companies can allocate resources more efficiently. It includes using the budget for warehouse maintenance and hiring the correct number of employees to carry out the operations in the warehouse environment.

Maintaining room tidiness

Maintaining tidiness and avoiding significant problems in the warehouse is possible by implementing an efficient warehouse layout. An appropriate floor plan for the warehouse reduces the risk of goods being misplaced or mishandled, ensuring that everything has its designated place in the flow of the operations.

Increases overall warehouse management

Efficiency is critical to organizing all warehouse operations. The design of a warehouse plays a vital role in effective warehouse management. It actively creates an environment where it effectively manages inventory, swiftly replenishes stock, treats staff fairly, and efficiently fulfills orders.

Solving the warehouse space shortage

When you face a space shortage in a warehouse, you have several options. You can expand the warehouse, rent additional space, or make more room in the existing building.

Another way to increase available space is by reducing inventory levels. However, the warehouse manager may not have the authority to do this. Nevertheless, the warehouse manager can identify slow or stagnant stock and collaborate with the sales and finance departments to dispose of it as agreed.

Here are some options you might have missed:

• Consolidate your stock: Take the time to check how many pallets are associated with each item that doesn’t have an expiration date. Then, consolidate them to make the most of your space.
• Adjust the warehouse beams: Lower the height of the beams in your warehouse so they can accommodate smaller or partially filled pallets.
• Switch to random location storage: Instead of sticking to fixed locations where the same product is always stored in the same spot, regardless of quantity, consider storing items in random places. This way, you can use empty spaces for other goods when something is out of stock.
• Explore temporary storage options: If your yard has enough space, consider using temporary storage structures like marine containers or trailers. However, consider safety and the potential for water damage before implementing these solutions.

Read more: 7 Warehouse Picking Methods: How to Choose the Right One

Summary

To create an efficient warehouse layout, we need to minimize the number of travel and labor touchpoints. It will help us avoid congestion and traffic jams as much as possible, ensuring that movement occurs logically.

There are three types of flow warehouses that companies can use. The most common one is the U-shaped flow, which makes it easier for warehouse traffic to move smoothly.

Furthermore, we can automate all of our company’s business processes by using an ERP system. ERP Impact also includes a WMS module that reduces waste and streamlines the picking process. In addition to the WMS module, ERP has various other modules, such as inventory, accounting, sales, and HCM.

References

Richard G. 2011. Warehouse Management. Great Britain: Kogan Page Limited.

Welcome to the next chapter of our SEO guide! In the previous chapter, we learned about technical SEO, which is all about making your website better for search engines. Now, we will talk about another important part of SEO: off-page optimization.

When we say “off-page optimization,” we mean things you do outside your website to make search engines see you as trustworthy and reliable online.

In this article, we’ll explain why off-page SEO is important and share five effective strategies that can help. Our main focus will be on link-related off-site SEO. We’ll teach you about creating a good link profile and show you what to avoid when building links. These strategies will help you build authority and improve your website’s rankings in search engine results.

What is off-page SEO?

Off-page SEO, or off-site SEO, means optimizing your website beyond its pages to boost its rankings and visibility in search engines. You achieve this by getting other respected websites, pages, and people to link to or promote your website, which acts as an endorsement for the quality of your content. 

Off-site SEO is different from on-site SEO. On-site SEO is all about optimizing the content on your website. You can observe the variations in focus through the image provided below.

Read more: On-Page SEO: Key Components and 4 Mistakes to Avoid

Why is off-page SEO important?

By doing off-page SEO activities, you can make your website more popular and reach more people. It helps your website rank higher in search engines and makes it more visible online. Here are some reasons why off-site optimization is important:

• Improved Search Engine Rankings: Off-page SEO helps your website rank higher in search engine results. Search engines see your website as more reliable and relevant by doing things outside your website, like getting links from other trusted sites.
• More Website Visitors: Effective off-page SEO techniques can bring more people to your website. When others recommend or share your content, visitors are interested in what you offer.
• Established Website Authority: Off-page SEO helps build your website’s authority and credibility. When reputable websites link to your content, search engines recognize your site as trustworthy and valuable, which can lead to higher rankings.
• Positive Online Reputation: Off-page SEO involves managing what people say about your brand or website online. Good reviews and positive mentions can enhance your reputation and attract more visitors. Giving quick responses can help protect your brand’s image.
• Increased Brand Awareness: By engaging in off-page SEO activities like guest blogging, social media marketing, and working with influencers, you can increase your brand’s visibility. 
• Social Media Engagement: Off-page SEO includes using social media platforms to promote your website and interact with your audience. When people like, share, or comment on your posts, it shows interest and can help improve your visibility in search results.

6 common off-page SEO strategies

Earlier, we explained off-page SEO as things done outside a website to boost its search engine rankings and make it more visible online. Now, let’s look at some popular off-page SEO strategies you can use.

Link building

Link building is important to improving your website’s visibility and credibility. It means getting other websites to link to your site, called a backlink. According to search engines like Google, these backlinks are like votes of confidence or endorsements for your content.

When reputable and relevant websites link to your site, it tells search engines that your content is valuable and trustworthy. However, not all backlinks are the same. Quality matters here. Backlinks from authoritative websites have a stronger impact on how search engines rank your site.

It’s essential to focus on acquiring high-quality backlinks to truly enhance your website’s SEO performance. This can be achieved through various link-building strategies, each tailored to create a diverse and robust backlink profile. Some effective link-building efforts include:

1. Guest Blogging: Writing articles for reputable blogs in your industry not only establishes you as an authority but also allows you to include backlinks to your site.
2. Content Creation: Developing high-quality, shareable content such as infographics, research reports, and how-to guides encourages other websites to link to your content.
3. Influencer Outreach: Collaborating with influencers or thought leaders in your niche can help generate backlinks when they mention or review your products or content.
4. Broken Link Building: Identifying broken links on other websites and suggesting your content as a replacement can be a win-win situation, providing value to both parties.
5. Directory Listings: Listing your website in reputable online directories can also enhance your backlink profile. Examples of this include industry-specific directories or general directories.

Content marketing

Content marketing is all about creating and sharing great content that is useful, interesting, and engaging for your specific audience. The idea is to consistently produce informative and engaging material that can bring organic visitors to your website, increase your visibility on social media, and earn natural backlinks from other sites. 

There are many different types of content you can use for content marketing, such as blog posts, articles, videos, infographics, ebooks, and podcasts. The main objective is to offer valuable information that caters to the needs and interests of your audience, establishing your website as a trusted source in your industry.

Read more: Content Marketing: 7 Steps to Strategize for Success

Guest blogging

Guest blogging or posting is a strategy where you write for other websites in your industry or niche. It’s a way to promote your content and establish yourself as an expert. When you contribute a guest post, the website editor often highlights you as a guest author. This strategy helps you reach a new audience and build relationships with other website owners.

When you write a guest post, you include a brief author bio that links to your website. It brings traffic to your site and improves its authority and visibility in search engines. Guest blogging is a content marketing tactic that can benefit your online presence and increase your website’s credibility.

Social media marketing

Social media marketing uses platforms like Facebook, Twitter, Instagram, LinkedIn, and others to promote your content, interact with your audience, and raise brand awareness. Google confirms that social signals don’t affect rankings, but they can help expand the reach of your content. 

Think of social media as discovery platforms that expose you to potential customers. Sharing and engaging with your content on social media can drive traffic to your website, boost brand visibility, and potentially lead to conversions.

Read more: Social Media Marketing: A Guide & 3 Strategies for Success

Brand mentions and PR

Brand mentions, and PR activities are important for your website’s online visibility and reputation. When your brand is mentioned or discussed on different online platforms, it can create awareness, increase website traffic, and get backlinks. 

PR efforts like press releases, reaching out to the media, and collaborating with influencers or industry experts can boost your brand’s message, grab media attention, and earn valuable backlinks from credible sources. These activities increase your website’s authority, build a positive brand image, and attract organic traffic.

Local SEO

Local SEO is a vital off-page SEO strategy to boost local traffic, visibility, and brand recognition. While Local SEO constitutes a distinct SEO domain, some of its elements align with off-page tactics, such as Google Business Profile (formerly known as Google My Business) and NAP citations. 

Google Business Profile is a no-cost business listing tool that enables you to shape your Google presence. As this occurs beyond your website, optimizing your profile becomes a pivotal off-page SEO approach.

It’s crucial for local SEO rankings, enhancing your website’s prominence on Google’s search results pages. Consider, for instance, a search like “plant store near me,” where optimizing your Google Business Profile could secure a prime spot in the map pack.

What is a link?

Link building is the main strategy that we will use in our off-site optimization efforts. To start, you must understand what a link is.

An inbound, backlink, or external link is a clickable connection between two websites. It’s equivalent to a virtual reputation currency that holds great online significance.

Similarly, internal links are connections between different pages within the same website. They work equally for your site. If you have many internal links pointing to a specific page, it signals to Google that the page is important. However, it’s important to ensure that these links are created naturally and not in a spammy manner.

Link profile: what makes a good link?

A ‘good’ link is one that follows Google’s rules and helps improve how a website appears in search engine results. It makes the site more trustworthy, easier to find, and boosts its overall SEO performance. Here are the factors that determine a good link:

Authority

The authority of the website that links to your page is paramount. A good link comes from a website that is trustworthy, popular, and has a strong reputation. Regarding search engine rankings, links from high-authority domains have a greater impact. Let’s take an example to illustrate this point.

A link from a reputable source like Harvard Business Review can significantly boost your website’s search engine ranking. On the other hand, links from less credible sources, like your friend’s blog, may not have the same impact.

Search engines like Google view links as “votes” influencing a page’s ranking. A page with strong votes from high-authority domains will have a stronger influence than a page with no or weak votes. So, it’s important to aim for quality links from reputable sources to boost your website’s visibility and improve its search engine rankings.

Relevance

A good link matches the content of the website it connects to. It should come from a source that relates to the topic or industry of the linked website. Search engines view links as more important and valuable when links are relevant.

For example, let’s say you have a business website that provides tips for entrepreneurs. Getting a link from a trusted business publication or industry blog is valuable for your content. On the other hand, a link from an unrelated website, such as a cooking blog, would have less impact because it doesn’t align with your business-focused content.

Anchor text

The text you click on to go to another page is called anchor text, and it affects the value of a link. Good anchor text should accurately describe what the linked page is about. It’s important to avoid using overly optimized or spammy anchor text because it can harm your search rankings. Instead, aim for a natural and varied distribution of anchor text to impact your website’s visibility positively.

Follow vs. nofollow

Regarding links, there are two types: “follow” and “no follow.” A good link is a “follow” link. It’s like a thumbs-up from search engines, telling them to pay attention to this link when ranking websites in search results.

On the other hand, we have “no follow” links. These links don’t have the same impact on search engine rankings. They can still bring traffic to a website, but they don’t directly affect how search engines rank it.

Generally, going for “follow” links is better because they have more weight and make a stronger impact. These are the links that can boost your rankings.

However, it’s still worth considering if you find a relevant and trustworthy page that offers a “no follow” link. Even though it won’t directly affect your rankings, it can still be beneficial in driving traffic to your website. So, don’t overlook the opportunity if it fits your website well.

Placement

Where you put a link on a page can make a difference. It’s important to consider the placement of the link because it can affect the number of people who click on it, known as the Click-Through Rate (CTR).

When it comes to placing links, there are some best practices to keep in mind:

• In-content: Place links within the main body of the content.
• Contextual: Ensure the link fits naturally within the surrounding text.
• Above the fold: Position links where they’re immediately visible without scrolling.

On the other hand, there are places where it’s generally not recommended to put links:

• Sidebar or footer: These regions receive less attention and are not as likely to be clicked on.
• Irrelevant locations: Don’t put links that don’t match the content.

Destination

When you add a link to your website, the link’s destination must be useful and related to what you’re talking about. There are three main places where you can direct your links:

1. Your homepage: The main page of your website.
2. Your linkable assets: Specific pages or resources that provide value.
3. Pages you want to rank well in Google: Targeted pages for improved visibility.

Avoid broken or low-quality links as they harm the user experience and SEO performance. Good links direct users to high-quality content.

4 common mistakes to avoid in SEO link building

Regarding off-page SEO techniques, it’s crucial to avoid common mistakes that can negatively impact your website’s ranking and reputation. Here are four key points to keep in mind:

Engaging in unethical link-building practices

Avoid buying links or joining schemes that promise quick results. Search engines, like Google, don’t like these practices and can penalize your website. Instead, focus on building good links naturally by forming genuine relationships, creating valuable content, and reaching out to others.

Over-optimizing anchor texts

Be careful not to overdo it with your anchor text. Anchor text is the clickable text in a hyperlink. When you use the same keyword or phrase over and over again as your anchor text, it can make search engines suspicious, and they might penalize your website. Instead, try to use a variety of anchor texts that describe the content of the linked page in a natural way.

Using low-quality and irrelevant links

When it comes to link building, not all links are the same. Getting links from low-quality or unrelated websites can harm your off-page optimization strategy. Concentrating on getting links from trustworthy sites related to your industry or topic is important. Quality is more important than quantity when it comes to building links.

Misleading redirects

We use redirects to guide individuals from one web address to another. Misleading redirects are when you trick people or search engines by sending them to a different page than they expected. This method can make people unhappy and harm your website’s reputation. Ensure your redirects are clear, relevant, and done correctly to avoid this.

Summary

Off-page optimization is an important part of SEO that goes beyond your website. Boost your website’s authority and search engine rankings with off-page SEO. Try these five strategies: link building, content marketing, guest blogging, social media marketing, and brand mentions. See the impact on your online presence.

One important thing to remember is the value of having good links to your website. When other relevant and trustworthy websites link to your content, it shows reliability.

To build a good link profile, think about the words used in the link (anchor text), whether the link is a regular one or a special kind (follow vs. nofollow), where the link goes, and its placement.

The warehouse is significant in manufacturing and supply chains because it stores everything from raw materials to finished products. You must have up-to-date information about the warehouse’s conditions to manage it well.

Today, companies need ways to exchange data quickly and safely for their warehousing needs because customers want modern solutions. That’s where a Warehouse Management System (WMS) can help. It automates warehouse tasks and makes them easier to see.

Now, let’s talk about a Warehouse Management System, its advantages, and how to pick the right one for your business.

What is WMS?

The Warehouse Management System (WMS) is software that helps organizations control and manage their warehouses. It takes care of tasks like receiving goods and sending them out. WMS improves visibility and assists with managing the supply chain from distribution centers to stores.

The main goal of the WMS is to make sure that goods and materials move through the warehouse efficiently and at a low cost. It handles different jobs like keeping track of inventory, picking items, receiving goods, and storing them.

WMS can be used independently or as part of an Enterprise Resource Planning (ERP) system. It supports the latest warehouse technologies like automation, RFID, and voice recognition.
Currently, companies can rent the WMS monthly using Software as a Service (SaaS) and Cloud computing. This system makes it more affordable because you pay for what you use, share resources, and use only the features you need.

Read more: Understanding Warehouses: Definition and its Importance

Benefits of WMS for companies

Incorporating a Warehouse Management System (WMS) into your operations brings many advantages. It not only makes your business more competitive but also helps you meet the increasing demands of customers. A good WMS must work in real-time, manage all warehouse processes, and communicate with other company systems.

A reliable WMS should process data quickly and coordinate movements within the warehouse. It helps companies generate reports and handle large amounts of transactions, like those found in e-commerce.

Here are some of the potential benefits of using a WMS for your company:

• Better visibility and tracking of stock.
• Improved accuracy of stock in warehouses.
• Automatic replenishment of inventory.
• Reduction in product returns.
• Accurate reporting.
• Faster response times.
• Access to warehouse data remotely.
• Enhanced customer service.

Trade isn’t just about goods; it’s about information. Goods stay in warehouses until information tells us what to do with them. So, having good knowledge of the warehouse is crucial.

The diagram below, known as the Tompkins diagram, shows how having good information can help increase sales and lower costs.

7 steps to choose the right WMS

When picking the right WMS for your company, first understand your company’s needs and main business requirements for the future.

Know your company’s strategy and ensure the chosen solution aligns with your business goals. Calculate the Return on Investment (ROI) for the WMS purchase.

To make sure you choose the right system, follow some helpful guidelines from the Business Application Software Developers Association (BASDA) (2009) and Sage Accpac (2005).

Here are seven steps that you must fulfill to get the most suitable WMS for you:

1. Form a project team

Gather a group of people who are good at logical thinking. This team will figure out what the company needs from a Warehouse Management System (WMS) and what features it should have. The unit can include people from finance, sales, production (if there are any), IT, and warehouse departments.

Once you form the team, choose a leader for the project and decide on the roles, responsibilities, and how much each person will be involved in making decisions and setting the timeline for this process.

2. Define, record, evaluate, and improve existing processes

The next step is to gather and compile as much information as possible about the company’s current processes and procedures. After completing that task, the team must actively review each method and determine its necessity.

Don’t automate processes that don’t work well. Involve the project team and warehouse staff to determine which methods they find frustrating, wasteful, or inefficient.

You should understand which processes to improve with a Warehouse Management System (WMS). Understand how warehouse staff communicates internally with other departments and externally with customers, suppliers, and transportation companies.

3. Create a main functions list

The project team must individually identify and prioritize the essential functions needed for the system. All team members must collaborate and create a list of basic requirements that we agree upon. We will include these requirements in a Request For Information (RFI).

This list should include a crucial function considered a ‘must-have.’ It will help swiftly eliminate systems that fail to meet the fundamental requirements.

4. Incorporate future growth plans into the specifications

To make informed decisions about your WMS, you must think about what might happen in the future. It’s not easy to predict the future, but there are some things you should consider.

For example, do you plan to have more SKUs in the next few years? Will your upcoming surgeries involve “kitting” procedures? Which systems will you need to work together with? These things will help you decide what’s best for your WMS.

5. List the benefits of WMS for your company

Having the right Warehouse Management System (WMS) can help you make the most of your workforce, space, and equipment while improving accuracy. It is crucial to compute and incorporate these advantages in the ROI report to show the worth of your investment.

6. Engaging multiple vendors & visiting reference sites

In Indonesia, many companies provide WMS (Warehouse Management System) services. Each company has its own differences and unique features. One of these companies is Impact, which also offers consultants and comparative data for different WMS options.

Before starting a bidding process, talking to several vendors and visiting their operational locations is a good idea. Direct discussions with users will give you a better understanding of the system’s abilities. They might even change your thoughts about it.

7. Generate ROI reports

Before you decide on an offer, involve your financial partner in calculating the potential return on investment. The ROI calculation will help determine how much money you can make from the opportunity.

Also, consider the following things, as suggested by Stephen Cross (2010) from ATMS:

1. Stock Accuracy: Think about how the Warehouse Management System (WMS) can help you track your inventory better. It can reduce mistakes, give you real-time information, and ensure you always know what you have in stock.
2. Productivity and Cost Savings: Look at how the WMS can help you work more efficiently and save money. It can help you use your employees, equipment, and space in the best way possible.
3. Traceability: Consider whether you need better ways to track your products. The WMS might offer improved methods for keeping an eye on your inventory.
4. Customer and Client Service: Consider how the WMS can help you better serve your customers and clients. It can improve your overall control of the warehouse and make sure your pick-up and delivery accuracy is top-notch.

You can divide WMS costs into the following different parts:

1. License: You need a software license to run the system. The cost of the permit depends on whether you’re using it on a PC or a radio data terminal.
2. Professional services: These fees cover project management, training, and support during the system’s implementation.
3. Development costs: If the standard package doesn’t meet your requirements, you must pay for additional software development, such as creating interfaces with other systems.
4. Support fee: This fee relies on the license and development costs. It’s crucial to thoroughly review the prices as they vary significantly among different suppliers regarding service coverage and charges.
5. Hardware and infrastructure costs: These include the expenses for the necessary equipment and systems to support the WMS.

Kindly request suppliers to indicate whether their prices are fixed or can vary. Be careful about additional costs that might not be obvious, such as travel expenses, time spent on travel, and project management time. Make a spreadsheet to summarize all the costs, starting with the initial payments and including fees for each year from year 1 to year 5, along with the total accumulated amount.

Remember that specific systems seem attractive at first glance. Still, calculating the costs over a more extended period could be significantly more expensive.

Ideal WMS components

To achieve effectiveness, a Warehouse Management System (WMS) must include the following components, as stated by Ruriani in 2003:

Integration with other systems

The system must work well with accounting software, ERP and MRP systems, and transportation management systems. It should also be able to connect with tasks in the back office, such as order entry, inventory control, purchase orders, and invoicing.

Additionally, the system must be compatible with automation systems, conveyors, material handling equipment (MHE), and modern picking technologies like voice commands, wearable scanners, RFID, and pick-and-put-to-light systems. We should make sure that these connections won’t cost too much.

Modularity & scalability

A modular system is an excellent choice because you only pay for the needed features. It also means you can get up and running faster with training and implementation. Plus, you have the option to add more features later.

On the other hand, buying a system with more features than you need will only cost you more for training. It will waste your time and, as a result, give you less value for your investment. So, avoiding unnecessary features and focusing on your needs is best.

Accessibility

Given the current staff mobility, the system must enable remote access through the web and ensure secure password protection. The system should prioritize critical functionalities such as generating performance reports, modeling service costs, and conducting standard inventory queries.

Easy to use

Opt for a WMS (Warehouse Management System) that is easy to use. Look for a system with a simple point-and-click interface that is easy to understand. Your staff can work more efficiently and accept the system more readily. Ensure the technology operates in real-time and provides instant updates on inventory.

Meets special needs

If you’re involved in storing customs and excise goods, ensure that the relevant authorities approve or can approve the system you use. Additionally, ensure the system can perform essential tasks for your business, such as tracking lot and serial numbers (if needed), managing expiration dates, identifying dangerous goods, and calculating royalties.

Supports warehousing best practices

According to BASDA, to achieve the best practices in warehousing, the system should be capable of optimizing movement within the warehouse. It involves effectively combining pallet placement and picking, known as task interleaving.

Ideally, the system should track the speed of goods in the warehouse and arrange them accordingly (slotting). It should also provide data in a format that transfers easily to a program with a slotting function.

Reporting capabilities

Ensure the system has a complete set of reports and can report any failures.

Tips for choosing a WMS vendor

The success of your project, like many other extensive service offerings such as outsourcing, depends on how well you get along with the people at the software company.

That’s why it’s essential to meet the salespeople and others who handle the day-to-day operations and support. When you’re choosing a partner or vendor, here are some critical things to look for:

• Experienced staff: Find a provider with knowledgeable employees who understand your needs.
• Company history and reliability: Check how long they’ve been in business and if they’re trustworthy.
• Excellent software focus: Choose a vendor prioritizing high-quality software, not just features.
• All-in-one services: Ensure they can handle installation, training, maintenance, and support.
• Comfortable collaboration: Pick a vendor you feel comfortable working with.
• Implementation support: Make sure they can assist you during the setup process.
• Consider time zone differences: Find a partner available during operating hours to avoid problems.
• Hardware partnerships: Look for vendors with established relationships with hardware providers.

WMS implementation

Before you make a final decision, ask the WMS provider to share a detailed plan for putting the system in place. This plan should include a timeline for installation and the resources needed.

Here are some important rules to follow when implementing a new system:

• Talk to the people in your business to determine the right time to introduce the new system. Make sure that all key individuals are available.
• Work with your vendor and project team to develop a realistic implementation plan.
• Ensure your key staff members are present and accessible during the implementation phase.
• Set a deadline that you are confident you can meet.
• Choose someone from your staff to be in charge of the implementation process.
• Create a training schedule for all staff members and include it in their orientation program.
• Avoid making any changes to the system until it has been installed and works as it should.
• Regularly review the timeline and take action if you notice any mistakes.

Summary

Having real-time data is crucial for effective warehouse management. It helps increase speed, productivity, and accuracy. You can use a Warehouse Management System (WMS) to achieve this.

Before implementing a WMS, there are a few steps you need to consider. First, form a project team and choose a vendor. Then, select the features that best suit your needs. Choosing the right WMS can improve your company’s efficiency and productivity.

Another way to streamline your company’s processes is using an ERP system. ERP Impact offers a WMS module that reduces waste and simplifies picking. In addition to the WMS module, ERP includes other helpful modules like inventory, accounting, sales, and HCM.

References

Richard G. 2011. Warehouse Management. Great Britain: Kogan Page Limited.

After picking, the warehouse performs other tasks. These tasks include replenishing inventory, providing value-added services, and delivering products. Additionally, this article will discuss how the stock is managed and calculated and the importance of keeping the warehouse clean and organized.

Read more: Understanding Warehouses: Definition and its Importance

What is replenishment?

To ensure a smooth and efficient picking process, it is essential to always maintain sufficient product availability at the picking locations. Replenishment is crucial in restocking those locations, benefiting the pickers by saving time and reducing costs.

Right now, a system called WMS gives real-time information about when and where replenishment is needed. It can also tell how many orders there are, so the restocking can be done before the next batch of orders arrives.

Replenishment is crucial because late replenishment can lead to space shortage and non-compliance with the “first in, first out” (FIFO) rule. Moving products directly from the picking area to the restocking area is preferable to ensure enough space, but planning is necessary.

If there’s no system like WMS, the warehouse manager needs to make sure they have planned how much of each product to have available based on how much they expect to sell and how much space they have. They must also train the staff to recognize when restocking is needed and tell their supervisors or forklift truck drivers.

There are different ways to make this process faster, like combining multiple places where the same product is picked, using unique shelves where restocking is done from other aisles, or scheduling different tasks for different times of the day. For example, they can refill in the morning and pick up in the afternoon.

Read more: 9 Vital Warehouse Processes You Need to Know

Things to consider in stock replenishment

Let’s examine the crucial factors of stock replenishment. Here are five factors you must consider:

Value-adding services

Several warehouses currently offer value-adding services in dedicated or co-owned warehouses. Third-party logistics companies provide these services to their customers. The value-adding services include:

• Changing labels
• Setting prices
• Attaching tags and packaging items
• Packing items into bundles, like buy one, get one free offer
• Rearranging items
• Assembling parts
• Repairing and fixing items

In addition to the mentioned services, more advanced tasks involve production processes. For instance, after a customer orders, these services include adding components such as a graphics card and installing software on personal computers and laptops. Value-adding services also encompass handling returns and providing repair services.

To efficiently perform these activities, having enough space near the dispatch bay is essential to minimize unnecessary movement. The ideal location is a warehouse with a height that allows placement above the dispatch bay, typically on the mezzanine floor.

Indirect activities

Support activities in a warehouse are essential for making processes more efficient. These activities, carried out by supervisors, specialized teams, and housekeeping teams, include:

• Ensure sufficient staff members and provide appropriate training for busy periods.
• Assign staff members to value-adding tasks.
• Optimize warehouse space utilization.
• Monitor work progress and identify any problems.
• Provide, assign, and maintain equipment.
• Identify and restock items in high demand.
• Identify immovable items.
• Maintained stock accuracy and promptly handled incorrect, lost, or found inventory issues.
• Manage regular inventory counts and organize comprehensive checks.
• Ensure the security of valuable or hazardous items.
• Maintain cleanliness in the warehouse and ensure the safety of staff and visitors.

You can group these activities into three sections:

• Managing staff, space, and equipment
• Controlling stock
• Ensuring the safety of supplies and people

Stock management

The warehouse manager guides inventory staff in determining the appropriate safety stock level and handling procedures for goods. Managers also actively identify items that suppliers can ship directly without requiring storage. Here is the classification table:

• Sell goods at significantly discounted prices through regular channels or specialized companies that deal with selling excess stock and outdated items.
• Determine if it is cost-effective to break down an item into its parts.
• Dispose of products at the lowest possible cost. While a fee may be involved, it will help create space for other products that sell more quickly.

Read more: Warehouse Manager: Roles and 10 Challenges to Overcome

Calculation

To quickly and efficiently handle slow-moving excess stock in a warehouse, follow the formula below:

Stock turn = cost of goods sold ÷ average cost of goods stored

Or

Stock return = Annual throughput in units ÷ average number of units held in stock

Suppose a company sells 1,200,000 units annually and keeps an average of 100,000 units in stock. In that case, they replace its stock 12 times yearly or once a month. This calculation means the inventory stays in the warehouse for too long, and the company has set too high safety stock levels.

Here are some examples of stock turnover rates in different industries:

• Just-in-time techniques: Achieving a turnover rate of 150+ units is considered very good.
• Cold food industry: Maintaining a turnover rate of 20+ units.
• Retail sector: Aiming for a turnover rate of 18+ units.
• European Manufacturing: Targeting a turnover rate of 10-30 units.
• Maintenance shop: Striving for a turnover rate of less than three units.

This example shows that higher numbers mean better company performance. The maintenance shop always keeps low stock because it needs to have some on hand if something breaks down.

1. Stock or inventory calculation

Doing a complete stock count requires closing the warehouse for a certain period. During this time, the warehouse stops receiving or sending out any items. Companies perform this task annually, usually at the end of the year. However, some companies do it more frequently, either every three months or once a year, depending on the auditor’s instructions.

The auditor will agree to conduct a yearly stock count and audit based on the company’s requirements, provided that the company can prove the reliability of its ongoing calculations. When the estimates are accurate, the Warehouse Management System (WMS) will give the final stock numbers for the year.

2. Cycle or perpetual inventory calculation

When performing cycle calculations, it’s better to use ABC analysis to ensure you count fast-moving, high-value items more often than slow-moving, low-cost items. Here’s a recommendation: measure fast-moving, high-value items every month and slow-moving goods once or twice a year.

To ensure comprehensive calculations, you can use the following percentages as examples:

• For item A, count 8% of it every week (so each SKU is counted once every quarter).
• Calculate 4% of item B weekly (twice a year).
• Calculate 2% of item C weekly (at least once a year).

Increasing the frequency of daily counting will give you more accurate calculations. However, it depends on the available resources and their costs. You need to consider the trade-off between the cost of potential errors and the cost of identifying those errors in the first place.

Security

Warehouse managers have a crucial responsibility to ensure the safety and security of products, regardless of ownership. They accomplish this by taking good care of the products, implementing security measures, and promoting a vigilant staff. Effective security management prevents inventory loss, reduces insurance costs, and minimizes personnel turnover.

Securing the loading dock and platform areas is paramount as they are vulnerable spots for outsiders to steal items. While traditional security systems focus on external threats, it is now essential to address internal theft within the organization.

Installing closed-circuit television (CCTV) at strategic locations in the warehouse is highly beneficial to maintain security. Conducting routine inspections and patrols proves cost-effective and practical. Boosting protection in loading bays can be achieved by separating them from employee parking areas, making it harder to remove goods. Implementing thorough checks of incoming and outgoing goods through staff or a system effectively prevents losses.

Protecting crucial warehouse management system (WMS) data requires specific measures. Using strong passwords and external firewalls to control access and enhance security is vital. Regularly backing up the data and storing backup files in a separate location is critical.

Secure equipment like servers, computers, and laptops for theft prevention and data security. Lock these devices with keys or access codes and regularly update passwords on personal computers. Here are essential security measures for warehouses:

• Maintain accurate records of incoming and outgoing products
• Authorize all shipments
• Establish a reliable audit trail
• Conduct regular stock checks
• Utilize appropriate storage equipment
• Foster a culture of constant vigilance.

Return process

The return or reverse logistics process includes different steps, such as managing product returns, handling transit packaging, and dealing with excess goods. Take a look at the image below to see the other steps involved:

Companies must prioritize handling returned goods to avoid unnecessary costs. Leaving these items in the warehouse leads to problems: they take up space, complicate stocktaking, and make valuation difficult. Companies can resell the products and restock them at a cost to deal with this.

The increase in e-retail has also led to more returns. The most commonly returned items are textiles and clothing. Customers with a 14-day return option frequently return high-quality items that we can quickly put back into stock.

Companies should handle product recalls with care. They must quarantine the products to ensure public safety, avoid mixing them with good products, and mistakenly send them out. The latest laws impose expensive landfill fees, prompting many warehouses to implement reverse logistics programs and establish special warehouses to manage returns.

Companies establish special warehouses dedicated to sorting, inspecting, repairing, and disposing of returned goods. The objective is to swiftly reintegrate stock into the supply chain, whether as finished goods or spare parts or dispose of them effectively. When conducting the return process in an existing warehouse, it is crucial to handle it with caution to prevent any mixing with other goods.

Before deciding on a reverse logistics operation, you need to calculate several things, such as:

• The percentage and value of goods returned directly to stock and vendors.
• The percentage of items that can be renewed and put back into stock.
• The percentage of goods that can be disassembled for spare parts.
• The percentage of items that need to be destroyed or given to charity.
• The percentage of items returned due to manufacturing defects.
• The percentage of items returned due to sales, warehouse, or consumer errors.

Once you have these calculations, you can choose between handling the reverse logistics internally or subcontracting to a third party. The decision depends on the following factors:

• Rate of return: How often and how many items are returned.
• Available space: Whether you have enough storage capacity for returned goods.
• Functional skills: If your team has the expertise to handle reverse logistics.
• Cost: Comparing the expenses of doing it yourself versus outsourcing.
• Control and effectiveness: Whether you can maintain control and ensure efficiency.
• Capacity and capabilities of third parties: Evaluating the expertise and resources of potential subcontractors.
• Lead time from returns to availability for dispatch: The time it takes to process returns for resale.

Regarding disposal, companies must obtain certification to prove proper disposal of non-recyclable products and packaging.

Read more: 7 Warehouse Picking Methods: How to Choose the Right One

Delivery

Effectively managing and coordinating the shipping process with other warehouse activities is essential. When the receiving and shipping operations utilize the same door, it is crucial to establish a daily schedule that optimizes labor and equipment utilization. It is necessary to adjust the workload according to the number of available doors To avoid congestion.

Loading bays in warehouses need enough space for cargo and various inspections. Coordinating well ensures that there is a correct delivery sequence for orders. As a result, the final delivery loaded onto the vehicle is given priority during the unloading process.

Many companies use a marked grid on the warehouse floor in the shipping area to determine the maximum vehicle area that can fit. For example, a warehouse that handles industrial pallets may have a grid equivalent to 26 pallets. A warehouse with euro pallets may extend it to 36 pallets. This process helps separate and quickly identify orders when a vehicle carries multiple shipments.

Ready-to-ship full pallets are picked up from the rack area and loaded onto vehicles. Just like during the receiving process, checking the driver’s documents to ensure they are transporting the correct cargo is essential. Additionally, trailers undergo inspections to ensure they are clean, watertight, and free from odors that could contaminate the product, have the right temperature, and their floors are undamaged.

The role of the driver

Some companies want drivers to help load and check the cargo. In contrast, others worry about safety when having external workers in the loading area. If it’s the latter case, the driver should go somewhere else.

Furthermore, let’s address what the driver should do after loading the cargo. If the driver personally witnesses the loading process and the vehicle is sealed before leaving the loading area, they can sign the document. If the truck is sealed, write down the seal number on the shipping document and provide the driver with additional paperwork, such as a hazard datasheet.

Summary

Receiving and picking are important tasks in a warehouse, but replenishment and dispatch are equally essential. Timely replenishment ensures efficient picking, while accurate, timely delivery satisfies customer expectations.

The warehouse’s ability to provide added-value services allows manufacturers to postpone certain activities until orders arrive. This postponement reduces the number of stock codes. It enables retailers to return actions to the warehouse, saving travel time. Maintaining accurate stock count, ensuring security is crucial for product integrity, and maintaining trust in internal and outsourced warehouse operations.

References

Richard G. 2011. Warehouse Management. Great Britain: Kogan Page Limited.

Barcodes, voice technology, and pick-by-light systems have made picking goods in warehouses faster and more efficient. These advancements are also considered valuable investments.

Today, warehouses use various methods to pick up goods. This article will discuss the most popular picking methods currently in use. We will build upon the information from the previous article, which covered the equipment used in the picking process.

Read more: Understanding Warehouses: Definition and its Importance

7 warehouse picking methods 

When it comes to selecting items from a warehouse, there are several picking methods that companies employ. These methods vary in efficiency, complexity, and suitability for different types of operations. Let’s explore seven typical ways for warehouse picking:

Paper pick list

If there is a mistake, write it on the selection list immediately. The supervisor will check it and find another place to get the item if insufficient. Ensure that you write neatly and correctly because you must enter the choice details by hand into the system.

Put the fast-moving things close to where they will be delivered to save time. To do this, people must help and change how things are collected. The people organizing the items will use carts, cages, and machines like forklifts to help them.

The paper with the list of things to collect usually have the order number, code, description, and how many items are needed. The system will show the details of each item in order so that the collection process will be fast and smooth.

Pick by label

We use a list of labels printed on sheets in the pick-by-label method. We organize the tags in the order of item selection. The picker attaches a label to each item and returns any 

unused labels. If there are any mistakes, we promptly check them and print more labels if stock is available elsewhere.

People play a crucial role in ensuring the accuracy of the recorded information in this method. As a result, we increasingly utilize technology to enhance warehouse management.

Read more: 9 Vital Warehouse Processes You Need to Know

Pick-by-voice

Warehouse management widely uses the pick-by-voice method, particularly during the picking process. Here’s how it works: the operator wears a headset, microphone, and a small computer attached to their belt. The computer receives messages from the warehouse management system (WMS) through radio frequency (RF) transmission.

Here are the benefits of using sound technology:

• Improved accuracy
• Increased productivity
• Reduced paper usage
• Error reduction by eliminating data re-keying
• Enhanced safety through hands- and eyes-free operation
• Decreased damage
• Real-time stock updates for fast and accurate replenishment
• Real-time updates on potential shortages
• More time spent on the warehouse floor
• Reduced training time
• Multilingual support to accommodate a diverse workforce
• Easy integration with other systems
• Possible decrease in employee turnover
• Faster return on investment (ROI)

In a survey conducted in 2007 by the ARC Advisory Group and Modern Materials Handling magazine, almost 60% of the people who participated said that using sound technology helped them increase productivity in the picking process by more than 8%. 

Additionally, over 83% of the companies that tried this technology reported that it met their goals. The image below shows other advantages of using sound technology when picking up goods.

Source: Warehouse Management; Benefits of voice picking

Pick by voice is now commonly used in the food industry, especially in cold and frozen environments. It offers advantages over paper lists, labels, and barcode scanning because it allows for a hands-free approach. This method of picking goods also improves accuracy for companies.

Improving accuracy can significantly impact your returns. Let’s consider a warehouse that handles half a million cases per week. It has an accuracy rate of 99.8% (resulting in 52,000 errors per year, or 2 per 1000). However, by increasing the accuracy to 99.96% (reducing the errors to 41,600 per year, or 0.4 per 1000), the total savings would amount to £624,000, assuming each error costs around £15.

Companies that have invested in voice systems have seen accuracy rates improve by over 99%. Additionally, they have reduced staff turnover and training time. The image below demonstrates how sound technology can simplify picking, increasing productivity and accuracy.

Barcode scanning

Barcodes comprise different vertical bars in different sizes for letters, numbers, and other symbols. They are commonly used to identify products, mark warehouse locations, label containers (like totes, cartons, and pallets), track serial numbers and organize batches. Two two-dimensional barcodes, like the one shown below, can store more information in a smaller space.

Barcode scanners come in different types: handheld, static, or wearable. Handheld scanners have screens and triggers that decode barcodes, store the data, and send it to the computer. They can read different types of barcodes, and some PDAs and cell phones now also have barcode scanners.

To access the scanner’s data, you can connect it to a computer using a USB cable. Alternatively, you can transfer data in real-time using RF technology. Using handheld scanners helps warehouses collect data faster and more accurately, which boosts productivity.

However, handheld scanners have some drawbacks. Operators must set up the scanner, and placing the scanner on a surface often leads to errors. This movement can cause mistakes in item counting or misplaced items. Companies use stationary scanners that read barcodes as they pass through a conveyor to address this issue.

Advancements in technology allow operators to use both hands by holding a barcode scanner, paper, or roll labels simultaneously. Wireless-enabled computers help operators receive instructions in real-time. These computers, with screens and tiny keyboards, are usually worn on the wrist.

Companies favor wearable equipment that workers can easily adjust and install. The wearable devices are lightweight, ensuring they do not cause discomfort. Utilizing wearable devices speeds up the picking process, reduces errors, and enables significant cost savings.

Let’s say there’s a warehouse with 20 pickers who handle 100 cases per hour (based on eight hours/day, 253 days per year). With an accuracy rate of 99.5%, would be 20,240 errors in a year. However, if the accuracy improves to 99.8%, the number of errors decreases to 8,096. Assuming each mistake costs £15, that adds up to annual savings of £182,160.

Computers can also have user-friendly touch screens and dual imaging. Some can even be voice-activated, which improves picking accuracy. Barcode scanning offers other benefits, too, such as better customer service, shorter training time, fewer accidents and damages, increased employee satisfaction, and more. However, it’s important to note that barcodes can be damaged easily, which makes scanning difficult and may lead to inaccurate information.

Radio frequency identification (RFID)

RFID (Radio Frequency Identification) is a way to identify items using radio waves. It involves exchanging data between tags and readers using specific frequencies. Library books, toll tickets, and identity cards commonly use RFID.

There are two types of RFID tags: passive and active. Passive tags don’t need their power source, can store limited data, and can only be read. They also have a limited range. On the other hand, active tags have their power source, can store more data, can be read and written to, and have a more extended range.

Passive tags store basic information and rely on a database for more detailed data. For example, in a sorting system, they can identify items and get instructions from a database about where to send them. Active tags have more capacity and can update an item’s status after completing a task. Still, they have a shorter range for writing data.

Regarding cost-effectiveness, it’s better to use RFID for identifying groups of items rather than individual items. Tracking things like roll cages, pallets, and reusable packaging (totes, barrels, and trays) becomes more accessible and affordable with RFID.

One challenge with RFID is that barcodes are cheaper to produce, so they’re still widely used for item identification. Additionally, the cost of running an RFID system depends on factors like the specific application, size of the installation, frequency used, and the number of tags needed.

To implement the RFID application, you will need the following items:

• RFID reader: Prices range from £300 to £1500.
• RFID tags: Prices range from £0.05 to over £0.10, depending on the frequency and how they are attached to the items.
• Middleware.
• System upgrade.
• RF network inside the warehouse.

However, there are some drawbacks to using RFID:

• Difficulty reading tags when they are close to liquids or metals.
• Areas where the signal is weak, may cause the system to turn off.
• Tags can get damaged by liquids, static discharge, and magnetic surges.
• Data retrieval can be intermittent, and there is a possibility of titles not being read.

Pick-by-light/pick-to-light

Pick to light, also called pick by light, uses light indicators attached to racks, flow racks, pallet racks, or other storage locations. The process starts by scanning a barcode on the tote or shipping carton to indicate the order number. Then, the system sends a message to the operator’s zone, and the pickup location lights up according to the instructions.

Implementing pick-to-light boosts productivity and requires simple training, making it easy to adopt. Many companies already use portable pick-by-light methods to move goods efficiently in the warehouse. Regarding system integration, pick-to-light is uncomplicated; you must download a file with the order number, product code, location, and quantity.

However, this type of goods picking has some downsides. A potential issue is that the scanner needs to be positioned accurately by the operator, as scanning surfaces that are not even can lead to errors. 

This drawback can result in the picker going to the wrong location or miscounting items. To address this issue, we now use stationary scanners to read barcodes as they pass through the conveyor, which reduces these challenges.

Put-to-light

The Warehouse Management System (WMS) gathers all store orders based on location or delivery time from the distribution center (DC). The goal is to ensure that each store group receives equal products. The staff can adjust the number of locations they handle based on the daily volume.

The required product lines are gathered in large quantities to fulfill store orders and given to operators. Operators use baskets, pallet trucks, or conveyors to move the items. They know where to place items with the aid of a flashing light.

The system immediately sends the confirmed ‘put’ results, updating the information in the WMS in real-time. When using pick-to-light or put-to-light methods, setting up a central processing area to create new layout designs and introducing additional equipment if needed is essential.

To utilize put-to-light technology, you must combine orders and select products in batches. If you don’t receive complete cases of products, you must return pallets or casings to stock. The pack or put-to-light approach can effectively integrate with cross-dock operations, where you receive, place, pick up, and ship goods on the same day if needed.

Comparison of methods for goods pick-up

The table below shows different picking methods in warehouse management. In Part One, there is a single-picking process where the picker collects all the items for an order and then moves them to ship. The picker can choose items from a lower shelf or, if there are many different items, from a higher shelf.

In Part Two, there are two main steps. First, we gather a large number of products, like a batch. Then, we sort them into individual orders. Even though it’s a two-step process, we have a high success rate in finding the right items. We also double-check to make sure everything is accurate. To speed things up, we use put-to-light picking to collect all the items needed for a specific order at once.

We use tools like carousels, conveyors, flow racks, and the AS/RS system in Part Three. These tools help us improve accuracy and handle many different products.

Choosing the right method for order picking

Managers have to think about labor, productivity, accuracy, and service level when deciding how to pick items. Here are the things to think about when choosing which picking methods to employ in the warehouse:

ROI & payback period

A significant amount of money invested will impact the decision between choosing automation or a more hands-on approach. It’s reasonable to expect a three-year payback period when investing in warehouse operations.

Ergonomic issues

Ergonomic problems are also significant when deciding which goods to choose. We need to consider worries about energy use and the potential for taxing equipment that is not environmentally friendly.

Long-term strategies

The company’s long-term plan will affect the investment in new equipment. Suppose there’s a possibility of moving the business, changing the products, or altering the distribution channels. In that case, we need to think carefully about investing in automation. The cost of taking apart and putting back together the equipment will be prohibitive because it’s a significant amount.

Intense periods during seasonal peaks

The period before Christmas is not the right time to automate everything. iForce, a fulfillment center in the UK, has decided not to invest significantly in automation. The company’s Managing Director, Mark Hewitt, believes that the large quantity of a few items during the busiest times can make the technology less useful.

Workforce availability

A large and stable workforce of skilled and unskilled operators, who receive reasonable wages, plays a crucial role in determining how much automation we can implement. This available workforce helps us gain benefits like increased operations flexibility, lower investment costs, and improved cash flow.

Simulation software enables the comparison of picking solutions like pick-to-light and pick-by-voice. It assesses essential performance indicators such as how quickly operators can pick items and the overall efficiency of order processing. The software recommends the most cost-effective picking method by analyzing the obtained results.

Read more: Warehouse Manager: Roles and 10 Challenges to Overcome

Summary

Every company has different warehouse management needs, so they use other methods to carry out operations. To ensure everything runs smoothly, warehouses need the right picking method. There are seven methods to do this:

1. Paper pick list
2. Pick by label
3. Pick by voice
4. Barcode scanning
5. RFID
6. Pick by light
7. Put by light

Barcode scanning is the most commonly used of these options because it’s easy and affordable. Different types of barcode tools can be used depending on the product.

In the following article, we will discuss replenishing stock for shipping.

References

Richard G. 2011. Warehouse Management. Great Britain: Kogan Page Limited.