Stuffing 10 lbs of SKUs Into a 5 lb Bag

In my garage we seem to keep buying things and storing them but never seem to remove anything.  Once in a while I realize that some of the things stored there will never be needed or used. 

So too you see it in distribution centers where SKU growth has made it difficult to efficiently replenish, pick and manage inventory.  So what can we do about it?

A good first step is to understand the dimensions of our products.  At a minimum we should know the length, width, height and weight of the unit size we pick from whether it be cased or individual picks.  If you don’t know the SKU volumes then schedule an effort monthly to capture this information using a Cubiscan which you can rent or purchase. 

A close second step is to understand how fast our SKUs move.  Typically, you will want to look at a year’s worth of data so that you may account for any seasonality or for unnatural spikes in demand.  Understanding how fast your SKUs move allow you to store them in the right type of picking media (rack, shelving, pick modules or storage and retrieval systems such as carousels or more advanced systems such as mini-loads and AS/RS). 

It is wise to have assigned locations for your SKUs.  Assigning multiple SKUs to one large location often causes many issues:

·        Order pickers have difficulty finding the appropriate item to pick for the respective order. If you have item in cases that look alike only distinguishable by item number and they are collocated in the same SKU location, miss-picks will surely follow.  

·        Replenishment operators need to efficiently find and place the respective SKUs where they belong.  If it is difficult to know where to put it, operators will just use their best judgment.   A more systematic approach is necessary. 

·        Cycle counting is never a fun thing but imagine doing it with SKUs all mixed up in a collocated location?  Having to pick up unit picks and looking at code designations to get the correct SKU inventoried is expensive and a waste of labor.    

 
Curing these issues often is not an expensive proposition.  Rather it requires a little distribution center elbow grease.  Most Warehouse Management Systems homegrown or otherwise can handle assigning SKUs to what level you require.  SKUs can be measured and recorded for future slotting use.

Finally, SKUs that are seldom used or never used can be relocated to more remote areas of the distribution center to allow for the prime movers to be picked efficiently.

 

For more information from Greg, view his page at www.trifactor.com/greg