One of the major problems that all people in the logistics field constantly encounter is how to determine and recommend an appropriate storage technology system that will best serve their clients. In a world where warehousing trends are constantly changing, the recommendation of a system becomes even more challenging when taking into consideration the numerous factors that must be evaluated and critiqued before a final recommendation can be considered.
What is a warehouse storage system? It can typically be defined as the function which provides the proper space for the safe keeping of goods while providing a system to economically coordinate the necessary activities, facilities and manpower; and the overall control of the entire operation. With this in mind the logistics consultants can begin their work.
To recommend a system, the logistics consultants must understand exactly what is being requested when designing a warehouse storage system. When determining the best storage system, it is always recommended that the actual objectives of the final system be kept in mind and constantly reflected upon. Some of these objectives could be:
- Do I need to maximize the use of the available or proposed space? Many businesses are maintaining their current warehouses and actively searching for alternate storage systems to increase both their capacity and productivity levels;
- Should the system be conventional or automated?
- How do I effectively utilize both labor and equipment within the facility?
- Do I have easy access to all my items? There is a constant pressure to increase productivity by giving order selector’s immediate access to their products. The number of sku’s within a warehouse is constantly increasing.
- Is there a quick and efficient movement of goods in and out of the storage system? Stricter enforcement of first in and first out (FIFO) is becoming the standard;
- Are my products safe and secure within the storage system? Remember that packaging is becoming lighter and weaker which is resulting in increased product damage and reduction in pallet height.
Typically most warehouse applications require a mix of storage types to match inventory and sku’s facing requirements. It is important to remember that any proposed storage system must also take into consideration the many warehouse activities that will be required function within systems. These functions typically include the receiving, put away, selection and shipping of products.
Unfortunately there are constantly other factors being thrown into the formula. As previously stated there are a vast number of storage systems that can be recommended for the storage of products. To determine which system is most suitable requires an in-depth analysis and the consideration of many factors. Some of these could be:
- Manpower requirements: How many people are required to perform warehousing functions? Potential savings in this area are typically substantial;
- Productivity gains: Obviously an important factor when justifying one system over another;
- What are the current inventory levels? Are they excessive? It is important to keep in mind that many people immediately assume that they require a high density storage system to increase their capacity therefore solving their inventory problems. Inventory levels should always be re-evaluated before any system is recommended.
- What is the relationship between the inventory levels and the facings required? How many products must be accessed for picking? Are the products being received on pallets, slip sheets, etc? Are products being selected in full pallets, cartons or broken cartons? Some storage systems are ideal when selecting or storing split case products while other’s are more suited towards full case and pallets selection;
- What are the characteristics of the orders? How many lines are being selected per order? How are orders being selected? Are order selectors picking on carts, pallet jacks, etc?
- Land and building square footage requirements: Are there restrictions? The reduction in the square footage of a new warehouse due to a proposed storage system, even a costly one, can often be justified because of the projected construction cost savings. The cost of constructing a higher warehouse and proposing an AS/RS system to reduce overall warehouse costs may be attainable. Often a warehouse expansion or new warehouse may be restricted due to site considerations. In this case the proposed cost may not be a significant factor;
- Mobile Handling Equipment: Never underestimate the cost of mobile equipment. Though you may gain in productivity with a swing reach truck. Is the capital cost justified?
- Payback period: Most clients are very interested in understanding the capital investment that will be required for their respective storage system. The recommendation of a system whether it be completely automated, semi – automated or not automated must be justified. Most clients in North America will not go beyond a 1 to 2 years payback for their system. To justify the system many factors may be considered. There is always a trade off when recommending one system over another. Productivity and manpower improvements are always an important consideration;
- Flexibility! Can a system be designed for a company that will fully solve all their storage needs for the next five years? Typically most systems today are designed for a maximum of 5 years of growth. In the event a company’s operations change over time. Is the system still flexible? High cost automated systems are typically not flexible. When a decision is made to pursue a high tech option you may be compromise flexibility.
As you can see, the decision to recommend and move forward with a particular type of storage system is not always a simple task. Before a storage system is implemented, it must be thoroughly justified with many of the previously stated factors taken into consideration. Taking the time to properly evaluate a storage system before it is implemented will always prove worthwhile in the long run.