What is a warehouse map and why is it needed?
What is a warehouse map, and why is it needed?
The centralization of supplies through the channel of the distribution center inevitably leads to an increase in the number of operations performed on it, as well as to a shortage of places for the selection and storage of goods. Sooner or later, before the next stage of development or budgeting for the next year, the question arises: how to optimize and automate a warehouse work, reorganize technological processes in such a way that with the same resource, number of personnel and on the same areas, perform more operations and increase work efficiency?
Optimization of the warehouse map will help to solve this problem - a set of measures that will allow the most efficient use of existing warehouse space, taking into account the development of the company and the centralization of supplies.
Common problems in the warehouse
In the previous article, we looked at why you should combine supply chain and category planning. Now let's talk about the warehouse map and how its optimization affects the entire supply chain.
In the course of its activities, the distribution center (DC) faces a number of problems.
Among the most common:
- inefficient processing of commodity flows - slow-moving goods are "lie too long" at the distribution center, and fast-turning goods stand idle for more time than we would like; as a result, this increases inventory and creates additional difficulties in processing;
- suboptimal location of goods, as a result of which pickers and employees involved in replenishment and selection are forced to repeatedly return to previously traveled places, which increases the time of searching for goods, reduces productivity, and leads to an increase in mileage in general;
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the problem of turnover and rotation of the assortment - before introducing a new position, it is always necessary to understand whether there are stale balances and how much they are in demand, whether they are needed in such quantity. You should consider the possibility of promotional sales of products or conclude stale SKU, thereby freeing up space for new products that will make a profit;
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unproductive work processes with the selection of goods - errors, low speed, and quality, suboptimal work in the selection of promotional items, etc.;
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placement of products when introducing a new assortment - new products are placed in empty places without taking into account the optimal location, there are no measures to control the input/output of goods;
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management of special flows - there is an uneven and rapid filling of storage places throughout the warehouse, the cargo is forced to be placed far from the places of picking, which increases the mileage of consolidators during replenishment;
- low level of supply service through the distribution center channel - end-to-end assessment from the end-user in terms of satisfaction with the service, detailing and analyzing such reasons is the painstaking work of several departments at the same time, so few people devote enough time to this.
Competent study of the process map solves these problems. But how to do it right, and what is needed for this? More on this later.
Welcome to check your logistics business processes: download the checklist 'Warehouse Process Management: WVO' and see where and how improvements can be made.
Preliminary data analysis before compiling a warehouse map
The first step towards solving problems in the diagnosis of warehouse logistics - processes and software solutions used. This approach allows you to form a system of warehouse performance indicators, namely:
- Service - the timeliness and accuracy of order fulfillment is determined (quantity, operations carried out on time, freshness of the products supplied, etc.).
- Efficiency - the cost of operations is estimated in terms of how many operations each warehouse employee performs in a certain unit of time. The map of warehouse zones allows you to optimize the time spent on order picking and moving around the warehouse, etc.
- Inventory - determines the accuracy of data on balances, the level of losses (spoilage, marriage, shortages), inventory turnover and the use of DC zones in terms of effective placement of goods.
Such indicators are formed mainly on the basis of statistical information contained in various systems used by the company (WMS, ERP, BI) and are expressed in graphs.
After the audit of the processes, a document called "Road map" or "Roadmap" is formed, which includes a set of initiatives to optimize all of the above key elements: service, efficiency and reserves.
This can be as a software solution update, as well as a change in business processes, as well as administrative changes. Once the initiatives are developed, the order in which they will be launched is determined.
An example of using some algorithms to manage a warehouse map
- Algorithm for determining the method of cargo handling in a warehouse: standard picking, pick by line, pick from stock, dynamic picking. This algorithm allows reducing the operating stock of the warehouse by 10-35% and provides flexible management of special commodity flows (fresh, import, seasonal purchases).
- Algorithm for determining the optimal location of goods in a warehouse, which leads to a decrease in the number of errors during order assembly, minimization of time, and labor costs for assembly. At the same time, the quality of the assembled pallets and containers is improved, the useful weight and volume of the pallet is used to the maximum: heavy or densely packed products are placed at the bottom, and lighter and more fragile goods are located incrementally at the top of the pallet.
For such a pallet formation, it is necessary to think over the warehouse map and place the goods in such a way that the assembler in the process of work gradually moves from the area with heavy products to the area where lighter positions are located. In this case, the lightest product group should already be located directly in the shipping area.
An indicator of the efficiency of the warehouse is the so-called heat map of the warehouse, which shows in which zone with what productivity operations are performed, how efficiently stocks are stored, what is the level of service of a particular zone.
Benefits of warehouse map optimization
Timely identified problems formed initiatives, and a well-designed Roadmap makes it possible to achieve fairly good results. So, the reorganization of the storage system allows you to get a positive effect in several planes:
- 25-45% free up storage for additional product flows;
- 5-10% reduction in time and minimization of errors when replenishing the assortment and placing products;
- 10–20% reduction in empty runs of warehouse equipment;
- 12-14% increase in productivity within warehouse operations;
- 15–20% reduction in the cost of warehouse handling of goods;
- 90-95% achievement of optimal utilization of the area / cubic capacity of the warehouse.
Optimization of the placement of goods in the warehouse map and product groupings allows increasing the utilization of outgoing pallets by an average of 8–22% while maintaining the product neighborhood required by stores.
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