8 new ways to think about putaway and storage in your warehouse

To meet the new requirements of omni-channel, e-commerce and other drivers of “speed” in the warehouse setting, companies are looking for new putaway and storage strategies that go beyond simply “putting away” goods to a reserve storage location.

“With omni-channel driving the need for more visibility across the supply chain, companies are thinking beyond just, ‘I have the product in my warehouse, I put it away, and now I have visibility over that SKU,’” says Davison Schopmeyer, managing partner with enVista’s Supply Chain Service Group. “Consumers are thinking in terms of ‘days’ and ‘hours’—not weeks—when it comes to deliveries, and that’s pushing the need for real-time visibility, more accurate data and better flow-through type processes in the warehouse.”

Here are eight ways companies are rethinking their putaway and storage functions to accommodate these changing customer demands and supplier requirements.

1. Receiving and crossdocking. Crossdocking is a hot topic, but many companies attempt it without necessarily having the right process or systems in place—or, perhaps their suppliers aren’t well positioned to use it.

“When a retailer can use advanced shipping notices (ASNs) and crossdocking,” says Michael Wells, director of supply chain services at Fortna, “it can then take deliveries from the inbound receiving dock right out to the outbound dock and then load them onto a trailer.”
In these scenarios, inventory never goes into the warehouse, “and that’s a good thing in today’s speedy distribution environment,” Wells points out. For example, the process increases space utilization while also avoiding all of those additional “touches” that happen when the dock, staging areas and detailed check-in processes are used.

2. Pallet receiving. Pallet receiving is another best practice for companies to think about, says Wells. In situations where goods come in with one SKU on a single pallet, for example, you can route those goods to reserve storage and then sync up the pallet quantities with exactly how your rack layout is set up. As such, you can avoid having to break down or re-handle cartons (i.e., by moving them from one pallet to another).

A supplier that wants to use 8-foot-tall pallets to take advantage of high trailer space, for example, can include a slip sheet at the midway point based on a client recommendation or requirement.

“When the shipment arrives at the dock, it’s then very easy to split that pallet into two in order to, say, assure that it meets customer requirements,” Wells explains. “This translates into labor savings on the inbound dock, where the product doesn’t have to be handled as much, and improves space utilization in the warehouse.”

3. Pre-allocating goods to common inventory. Rather than having designated putaway and storage locations for different DCs—or for different areas of the same DC—companies want one common inventory to pull from when shipping to stores, direct to consumers, and so forth, says Michael Warren, a staff consultant with The Progress Group.

“Organizations are learning that there’s a bit more to it than simply sharing inventory.” For example, a DC that’s shipping to stores will pre-price items for the retail store “so as not to waste the store’s labor time,” says Warren, but won’t want to do the same for direct-to-consumer shipments (due to Web-based price fluctuations, for example). One way to alleviate this issue and minimize prep time is to pre-allocate goods by channel, pull some of those goods forward, and then batch them in advance.

In other words, rather than having a reserve inventory and a picking location, you wind up with a reserve inventory that’s put through value-added services on its way to the picking location. “Instead of having a thousand items pre-destined for stores and another thousand for Internet customers,” Warren explains, “maybe you have a couple thousand prepped for either and focus on maintaining that core, common stock for as long as possible.”

4. Leveraging dynamic locations. Where companies once used a combination of product staging and reserved storage in the warehouse, more and more are turning to automated solutions to support and speed up the putaway process.

According to Mike Clemens, a senior consultant with Bastian Solutions, one approach would be to scan product information directly into a warehouse management system (WMS) as the items are being unloaded. “That gives you immediate visibility,” says Clemens, “and the ability to make quick decisions regarding pick locations.”

For a high-volume SKU, for instance, that destination could be a dynamic location (i.e., a picking location that’s not assigned to a specific SKU) or it could even be multiple locations. “You can put anything in a dynamic location and then pull from it as you need it,” says Clemens, “rather than using a fixed location.” Clemens says that while dynamic locations have been used in warehouses for years, such activity was generally limited by WMS capabilities. “Five years ago, dynamic locations weren’t common,” he adds, “but as WMS functionalities increase, we’re definitely seeing more of them being used.”

5. Use put-to-store right on the dock. Knowing that time is of the essence in today’s same-day shipping environment, Schopmeyer says companies should consider using put-to-store concepts right on their docks.

“This works particularly well in instances where all you have to do is break a shipment down and allocate it across stores, or if you have e-commerce orders that need to be fulfilled quickly,” he says. “In return, you’ll be able to go ahead and pull the product off and get it back out the door. That’s a major change that’s gone on over the last few years.”

By leveraging put-to-store capabilities right on the dock, Schopmeyer says companies gain from improved visibility over inbound shipments—an advantage that can translate into lower inventory costs. “Even a few percentage points of inventory reduction,” he says, “can free up a significant amount of capital for the average company.”

6. Tapping automation to handle small orders. With warehouse lead times shrinking and customers requirements constantly in flux, Jan van der Valden, senior manager, systems, at Vanderlande Industries, says companies need to be thinking in small quantities and higher volumes when establishing their putaway and reserve storage capabilities. He sees mini totes, vertical shuttles and other small-order automated solutions as good choices for companies that may be struggling under these new requirements.

“Companies are dealing with a lot of small orders that aren’t easy to manage manually,” says van der Valden. “Using automation, they can handle these tasks much more efficiently and effectively.” In addition, he says service levels are elevated, order time speeds up and quality improves when orders are no longer manually batched. “When you infuse automation in to the individual order process,” he says, “the entire setup speeds up significantly.”

7. Augmenting workforces with automation. With labor being one of the biggest expenses within a warehouse or DC operation, an increasing number of companies are looking for ways to minimize those costs while maintaining (or improving) productivity in the putaway/reserve storage realm. In certain settings, for example, finding individuals who can not only operate a lift truck, but who also aren’t bothered by heights and who want to be paid extra for those capabilities can be a real challenge.

“A lot of competing firms have the same peak seasons, so they’re all trying to staff up for those spikes,” says Warren. “With labor becoming more difficult to find, that task is getting harder.”

By using automated storage and retrieval options that incorporate shuttle systems, he says, companies can reduce their reliance on “highly trained, highly paid lift truck drivers” and/or the limited group of people who can operate a man-up vehicle at 45-foot elevations in a narrow aisle rack.”

“It’s getting harder to find and train and keep these types of skilled workers,” says Warren, “especially if you only need them for a certain number of months out of the year. By augmenting their workforces with automation, firms can create more efficient putaway and storage functions without having to spend more on labor.”

8. Putting a single carton in a single location. Where dynamic storage and dock-based putaway may make sense for smaller orders in some settings, Clemens says the best practice for carton storage is still simply “putting a single carton in a single location.” He points to the proliferation of SKUs in the e-commerce age as a driving factor for this advice, noting that workers need to be able to get to specific products as quickly as possible.

“We’re at the point where companies have a massive number of items available for shipment, which means you need storage that allows employees to access the product easily and quickly,” says Clemens. “In most cases, the answer is still to just put a single carton in one location and then do your picking from there.”

Companies mentioned in this article
Bastian Solutions
Envista
Fortna
The Progress Group
Vanderlande