Warehouse Automation: Inventory Management Systems

For most modern warehouse operations in the United States and Canada, the days of people hauling large loads of boxes on pallets, dragging them down the stacks and loading them up manually are rare. With computerization, in floor guide-wires, locations beacons, RFI and other technologies, much of the warehouse operations are now automated.

What isn’t completely automated
Many warehouses still need pickers. These are people who have a list of items they need to find in the warehouse and bundle together for shipment. While it seems counter intuitive, highly efficient warehouse automation techniques actually increased the need for pickers.

There was a time when all items of a given type were stored together. All towels in the same isle. All of a certain brand on a specific rack, and all of a given style in a specific bin. When everything is manual, this is the most efficient way to warehouse items. People needed a logical pattern to follow in order to remember where items are so they can pick them more quickly. Without the standard organizational technique, every time items were replenished, their placement would have to be manually recorded. Every time something needed to be picked, the picker would need to look up the location on a constantly updated master list.

While this was efficient for stocking and picking, it was terribly inefficient of space management. Warehouses needed to have large amounts of excess capacity in order to manage the seasonality or cycles of product flow. It was not uncommon to have warehouses with large swaths of empty racks because those items were simply not moving at the time. But, to maintain the organizational structure of item placements, the space had to remain preserved / left open for when the items did come in. In the modern computer era, this seems like a terrible waste… and it was.

Better space utilization & efficiency: Inventory Management Systems
With computer inventory management, the static structure of item locations was not necessary and even became counter productive. Sophisticated inventory management systems provided several advantages that allowed warehouses to keep larger stocks while using less space.

First, inventory management systems are able to predict item volume and velocity. They can determine how much space is needed for the current restock, and also easily anticipate what will be required for stock that will be coming in for months to come. This capability allows the system to overlap rack space allocations, no longer needing to preserve certain sections for what may come. The timing of outflow and inflow is well modeled.

Second, inventory management systems can easily track where items are placed and from where they are picked. This means that finding items in the warehouse is extremely easy for pickers… the computer tells them exactly where it is, and even maps the most efficient path to the item, telling the picker how to get there. This makes picking much more efficient.

The second advantage also extends the capability of the first advantage. For many items, the warehouse only needs to keep a few on hand. Before automation and inventory management systems(IMS), an entire bin could be dedicated to 3 smaller items; a waste of space. But, with IMS, the computer can allocated several different types of items (even stocks of 1), to a single bin, maximizing the space utilization. Of course, this means the picker has to spend a little more time at the bin collecting the stock item, but on balance it makes for a more efficient system.

A third advantage of Inventory management systems is clustering. When items are picked from inventory, the IMS can detect patterns, which items tend to be picked together. As it learns these patterns, the IMS can create clusters of products, making picking more efficient. And, because the computer “knows” where every individual item is, the same restock of items can be split up. Ten units of the same item can be stored as sets of 2 in 5 different locations as part of 5 different clusters. Should one cluster run out, the picker can be routed to a secondary cluster to get the item.

There are many aspects to warehouse automation. Inventory management systems are the cornerstone of the operation and have allow warehouse operators to manage far more stock with less space and greater operational efficiency.

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