Allocation strategies for storage and picking systems / warehouse operating strategies
In a company, it is important to define goals and to constantly monitor their consistency and achievability before developing strategies. In logistics, there are strategies for planning new systems, implementing their realization and optimizing existing systems during operation. For these purposes, among other things, utilization and allocation strategies are used. Depending on whether the goal is, for example, transport optimization or area minimization, a different arrangement of functional areas of a warehouse is determined in the respective strategy.
Allocation strategies are among the operating strategies for storage and picking systems. The planning of a new storage and picking system should evaluate the performance and costs of picking systems and reduce investment and future operating costs.
In general, the operating strategies can be categorized as follows:
- allocation strategies
- processing strategies
- movement strategies
- picking strategies
- replenishment strategies
- empty run strategies
The aim of the allocation strategies is to achieve optimal space utilization, short distances and low replenishment costs.
The location and storage zone of units can be determined by the following allocation strategies:
- Fast-mover concentration
- Fixed storage bin allocation
- Free storage bin allocation
- Zone-wise fixed storage allocation
- Equal distribution strategy
- Bin adjustment
- Single-item and single-batch bin allocation
- Mixed-item bin allocation
- Minimization of storage bins for partial pallets
Not all allocation strategies are compatible with the movement strategies. For example, the routing strategy movement strategy cannot be implemented at the same time as the fast-moving strategy. To achieve the desired strategy effect, only compatible strategies should be implemented. Otherwise, unnecessary programming effort would lead to ineffective workflows. Before the implementation of the operating strategies, it must therefore be checked whether the selected strategies are compatible with each other and can therefore be used sensibly.
The above-mentioned allocation strategies are described in more detail below:
Allocation strategies: fast-mover concentration
Fast-mover concentration is an allocation strategy used to determine in which location and in which storage zone units are stored and provided. The aim of the allocation strategies is to achieve optimal space utilization, short distances and low replenishment costs. For example, if products in high demand are stored near the picking zone, throughput can be increased. A distinction is made between the dynamic or static provision of goods.
The concentration of fast-moving items is a strategy for optimizing the routes of warehouse equipment and the routes of pickers. The routes of warehouse equipment are to be reduced by storing the units of fast-moving items in a place where they can be accessed quickly. A specific location is selected depending on whether the goods provision is static or dynamic.
Concentration of fast-moving items with static goods provision
Static provision refers to the person-to-goods picking process, i.e. an order picker picks the required goods directly from the storage location. The units of fast-moving items are therefore accessed near the base of the staging area.
Concentration of fast-moving items with dynamic goods provision
Dynamic supply refers to goods-to-person picking. The picker works through his picking order within a storage zone. The units are transported to the picker by conveyor. The access units of fast-moving items are stored near the storage and retrieval locations of the staging area.
When concentrating fast movers, it is possible to save up to 30 percent of travel time and improve performance by up to 10 percent during picking. The extent to which it is possible to achieve these percentages depends on the ABC distribution, the breadth of the assortment, how the access locations are arranged and the chosen movement strategy. The danger, or disadvantage, of concentrating fast-moving items is that the storage locations close to each other can hinder the pickers from each other.
Allocation strategies – fixed vs. free storage location organization
With a fixed storage location organization, the maximum expected stock for an item is determined and the necessary storage locations are reserved. With the free storage bin organization, storage bins are used for a loading unit as soon as they become available. For the use of the free storage bins, it is irrelevant which item was previously stored in the bin.
When bins are reserved for specific items, the fixed storage bin organization requires that bins be kept free that cannot be used for other items. The fixed storage location system makes sense, for example, in the staging area of picking warehouses. With a fixed storage location system within defined zones, care should be taken to ensure that only as many zones as necessary are created, as the space requirement can otherwise be very high. The advantage of fixed storage locations is that the storage location can be determined quickly and without system control.
A warehouse management system is required for space management in the case of free storage. The advantages of free storage are shorter distances and the best possible use of storage capacity, since it is not necessary to reserve storage space. When goods are put away, the first available spaces can be used directly, without having to drive through the entire warehouse to get to the designated storage location.
Allocation strategy: even distribution strategy
Another strategy for filling a warehouse is the even distribution strategy. In this strategy, identical items are distributed across different aisles so that the corresponding goods can be accessed in each aisle.
The storage location and storage zone in which units are located depends on the respective objective of the allocation strategy. Each strategy has a different objective. The objective of the even distribution strategy is to ensure maximum access security.
Allocation Strategy: Storage Bin Adjustment
If the warehouse is filled according to the storage bin adjustment strategy, this means that the storage bins are filled with units according to their capacities. Small storage bins are therefore filled with small storage units and low article stock, and large storage bins with large storage units and high article stock.
Allocation Strategy: Single-Item vs. Mixed Item Allocation
The single-item storage strategy is characterized by the fact that storage bins with multiple storage locations may only be filled with loading units of the ‘same’ items. ‘Same’ items are, for example, T-shirts or bicycle frames in the same size. In the warehouse management system, the items can be identified as ‘same items’ by an identification number or a barcode. In contrast, when storage bins are occupied by a mix of items, the storage spaces are occupied by units of different items.
Mixed items can be seen as a stopgap solution, but it is often the standard in e-commerce because WMS systems are used that work automatically. This storage method is used by Amazon, for example, and is called chaotic warehousing; it is one of the dynamic storage techniques.
Despite the term ‘chaotic’, this storage technique also follows certain rules that are defined individually (depending on the warehouse). The advantages include, among other things, an increased degree of space utilization as well as more efficient and faster work (for example, when stocking the warehouse); in addition, financial accounting, purchasing processes and the acceptance of customer orders are also simplified. However, this requires a high level of discipline in booking and an absolutely reliable, automated merchandise management system; the acquisition costs are correspondingly high.
However, more stock movements take place with mixed storage, which leads to a higher equipment requirement than with single-item storage. After all, with mixed storage, it may be necessary to move loading units of one item first in order to access the loading units of another item. To avoid problems in the management of storage bins, mixed-article space allocation requires a higher level of planning.
Allocation strategy: Minimization of partial storage locations
Depending on whether the goal is transportation optimization or area minimization, the storage location and storage zone in which units are located is determined. It may happen that the available space in a storage location is insufficient. In this case, the goods are then distributed among several storage locations, resulting in so-called partial storage locations. Loading units that are located in storage compartments that are not fully filled are retrieved first. This allocation strategy is designed to improve the fill level in a multiple storage location and to avoid breaking more than one storage location per item.
Summary
An allocation strategy determines how the functional areas of a warehouse are arranged. It also affects which services can be provided in a warehouse and which costs are incurred for them; the allocation strategy should therefore be used to reduce investment and operating costs. Correct planning and allocation of a warehouse are not only very important in terms of optimization. If the wrong allocation strategy is used, inadequate warehouse operations can be expected. For example, a lack of space, low fill level, bottlenecks in storage and retrieval, and poor space utilization can disrupt the material flow and all associated processes.
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