Warehouse Stock Management Basics 101

Warehouse optimisation is a term that is readily thrown around the marketplace today and for many is an unachievable target but something you have to try and deliver. Too many times these projects end up costing more than budgeted, are delivered late and fail to live up to expectations.

Proper planning, scoping and equipment selection can deliver the optimised performance you are looking for. In this article, we will go through the key processes and points you need to consider to maximise your chances of success in optimising your warehouse management and processes.

Evaluate your current warehouse

Measure up the size of your warehouse, most installations will require a wireless network and different access points have different ranges. Look at your racking height and other obstacles as these can in some cases block or restrict the range of a wireless network. Every wireless network access point has a maximum effective range in sq. metres. The cost of installing the required numbers of access points needs to be included. Have a scan completed of the radio signals entering in from outside, these can be other warehouse wireless networks, mobile phone networks or two way radios being used nearby. Select a wireless network that operates on a channel that won’t clash with surrounding background interference if possible. Typically a secure wireless network with good data encryption is the solution, good planning will eliminate this problem.

Review your stock handling

Calculating how many different product items you process and their volumes on a daily, weekly and monthly basis is essential. Warehouses that handle large volumes of stock, consisting of many low volume product types require a different management system to large volumes of the same product. Another consideration to include is stock that requires specialised handling or storage. Today’s forklifts can be fitted with an endless arrangement of material handling devices for any conceivable product. If included in your project they can reduce stock damage and the time taken to handle goods.

Labelling requirements

Too many times the barcode labelling aspect is forgotten or downplayed in a warehouse management project. In reality barcode labels should be included in every management system as they are the cornerstone of goods movement management. Check what barcodes if any are on the products as they arrive to you, do you need to re-label them at the point of receipt, or are they already barcoded in a format that both you and your customers can use. Most optimised warehouses opt for mobile barcode printers as the workers can print and apply the barcodes as they receive the goods from anywhere within the warehouse, as well as printing labels on outward bound goods at order picking and dispatch areas. Having a fixed location desktop barcode printer will require all goods to be brought to the printer for labelling and then moved again to their allocated storage location. This process can either create or save huge amounts of man hours on a daily basis.

Racking or stacking

Many times a warehouse is going through the optimisation process due to growth and increased workload but along with that growth comes demand on storage space. Depending on the types of products in your warehouse, the option of stacking products instead of using racking can be a real space saver. To do this another level of stock management needs to be put in place. A perfect example of this is the Skytrax indoor positioning system. Using similar technology to a GPS system, this solution can track the movements of your stock down to 3 sq. centimetres and up to 6 items high, displaying the locations and details of every item on the warehouse manager’s computer. This technology can be deployed by hand scanning of product barcodes, automated optical readers placed on the front of your forklift or RFID (Radio-Frequency Identification) tagging of each of your products, depending on the end solution you require.

These stacking systems will save a large percentage of your warehouse space but come at an extra cost. However, if you are considering re-locating to a large facility, it’s worth considering and doing the numbers as an alternative to the expenses and disruptions of moving.

If you have a current bin location system, then check to make sure that they consist of a mix of alpha and numeric characters. The system needs to be consistent, with simple, logical and sequential identification, allowing operators to quickly locate bins and stock. If you don’t have a bin location system then it must be included in your project.

Current systems

It’s not always necessary to dump all of your current systems to make way for a new deployment. If your backend ERP (Enterprise Resource Planning) is capable of processing the stock management reliably and provides the reports you require, then modify your new warehouse handling solution to integrate with it. Apart from the cost of installing a new ERP this will save time and disruptions on training and deployment.

Do you have automated storage or conveyor systems already in place? Look at what automation investments you have purchased in the past and see if they can be integrated instead of thrown out. Reducing the cost of your new system implementation will increase the ROI (Return on Investment) and success of your new system providing it does not hinder the performance.

Key areas of improvement

Take some time with this step and look at all the significant areas of opportunity for improvements to be made. Review your processes and look at the costs and procedures of completing tasks. These key areas will define the key functionality of your new system. For example, if you find that you are always completing stocktakes due to inaccuracies from fast turnover of stock, then your new system must be able to handle large SKU (Stock Keeping Unit) deliveries and order picking. If your stock rotation is failing then your new system needs to record the exact location and details of every product. If your forklifts and other indoor vehicles are underutilised, then you should include an indoor vehicle management component.

No two warehouses are the same and your key improvement points will be unique to your operations.

Which technology to choose

Data capture technology is improving in leaps and bounds providing an endless range of alternatives in product identification. Different technologies are generally designed for specific purposes and following is a generalised guide on the three key alternatives as to what technology is most suitable for specific scenarios.

Manual barcode scanning

Manual scanning of barcodes can seem like a backward step in your goals to optimise and automate but it definitely has a place and can provide great improvements in your workplace practices. Companies such as Motorola manufacture wearable terminals (WT4000) that can strap to your wrist and the scanning function is actioned via a laser barcode scanner worn on a finger. This allows warehouse workers full use of their hands and the barcode scanning process doesn’t disrupt their duties. This is an efficient solution for order picking, where many small items are packed into an order or in the case of handling products off and onto a conveyor system and both hands need to remain free.

This same function can be performed via a mobile computer but will require one or both hands to hold and operate. If complex orders or interactive input is required, then the mobility of the unit and ability to hold powerful programming can provide great improvements.

It’s rare nowadays to include the use of a tethered barcode scanner that uses a USB cabled connection but they have their place in some instances where goods’ processing is completed at a single point where a computer is located.

Automated barcode reading

In most instances this technology has its place where pallets and large boxes are being handled. Automated barcode reading is performed using an optical reader, where a single photo image is taken of the barcode and the included programming can identify the details on the barcode via the use of OCR (Optical Character Reading) technology. These barcode readers can be placed on a trolley or an indoor vehicle such as a forklift and actioned to take a read via a motion detector that will identify when an object is placed within range. By placing this technology on the backrest of a forklift for example, every pallet or product picked up is automatically scanned and the barcodes read. The downside of this technology is the limited area that an OCR reader can read, requiring all barcodes to be always placed in the scan area all on one side. If the barcode is out of visual range to the camera then it won’t be identified.

RFID

There has been a lot of press about this technology both good and bad and it has not taken over warehouse practices as first thought. It does have value in some warehouse processes and can provide time saving functionality and data accuracy improvements. The main key improvement from RFID technology is to understand that its ability to read without a line of sight is unique to any other solution. In the case where pallets or boxes containing smaller boxes or products are being received, an RFID read of the container will in many cases disclose the contents of the main container without the need to unpack or break it down. This can save many man-hours and eliminate the need to manually enter into your ERP when goods have been received or dispatched.

The downside to RFID technology is the cost, not of the installation of readers so much as the cost of purchasing single use RFID tags for every product or package. Re-useable, hard cased ridged RFID tags can be applied to your pallets to reduce this on-going costs factor but will limit the read to only what has been pre-identified on the pallet. However, this solution can provide real-time tracking of the location of the pallet within your warehouse facilities, when combined with the right programming.

Voice

Voice has become more and more reliable, mostly due to technical advancements in the headsets themselves. This solution is a perfect fit for situations where even a wearable manual scanner is impractical, such as freezer rooms where works have large gloves on and any hand movements or hand data input is impractical. Voice systems allow the user to read out the bin location check digits and depending on the functionality required, can make complex data input by simply speaking the required commands.

The problem has always been that in the environments where voice is most suitable such as the above freezer room scenario, other environmental issues are also present such as noisy air conditioners and fans. The latest headsets have improved microphones that can filter out many of the unwanted sounds and should be considered if required.

How to get started

This is critical to get right and there are many companies approaching businesses with so called “optimised warehouse solutions”. Ideally you need to be working with as few suppliers as possible in the overall project. The more suppliers involved, the more you will find one company saying that this or that area is the others responsibility and so on.

Your providers should keep you well informed of all details for every step of the project starting with the first proposals. Don’t let them convince you it is too complicated. If you don’t have the time to be 100% involved, assign another employee to the project on your behalf. Always ask for references and the contact details of other customers who have had a completed project.

Ask the questions:

Can the supplier complete a detailed proposal?
Can they do the site surveys?
Are they able to provide post sales programming and equipment support after completion?
Can they customise your solution to your requests and will they be there working with you on go-live day?

Optimisation is by its definition improvement, make sure that you have done the numbers and know exactly what areas of your operation is projected to improve and measure the results in detail to compare. Never forget the business drivers that prompted you to begin this project, they have to be fulfilled.

Peacock Bros. has been designing and implementing optimised smart warehouse management solutions for many years and has a dedicated team of pre and post sales technical, engineering and business systems experts. With locations in Melbourne, Sydney, Brisbane and Auckland, New Zealand, we provide local hands-on advice and support through every aspect of your project.