Guide To Choosing The Right Warehouse Management System

Posted by Marian

Warehouse or storage management systems are pivotal to making sure goods are kept in their best and pristine condition. In fact, choosing the right warehouse management system is important if you want to be on top of the logistics ecosystem.

There are various ways to store products in a facility, from stacking pallets directly on the floor (block stacking) to placing them in storage systems. The latter method is the most common as well as efficient, since depositing goods on racks optimizes warehouse space and, at the same time, maximizes operational productivity.

In a facility in which multiple products are managed, ideally, each one should be stored in the right system. So, at this point, you’re probably asking yourself: which storage system should I install? The choice depends on variables such as the goods’ characteristics, size, and turnover.

Defining a Storage System

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Many people find storage or warehouse systems complicated or too technical – but it’s actually integral to the flow of your business. So what is in a storage system? Well, it’s a set of physical structures designed to store goods optimally while prioritizing the effective use of space, ease of access, and the organization of the products according to certain criteria.

It’s standard to employ industrial racks or structures that are fixed to the warehouse floor and made up of locations in which the goods are placed. We can differentiate between two categories of racking: direct access or compact storage.

The first, as its name indicates, provides full accessibility to the products, facilitating storage and order picking tasks. The second, on the other hand, optimizes space in order to accommodate a larger number of products.

Choosing between a system with direct access and a compact one will depend on factors such as the number of SKUs, number of units of each one, and consumption criteria. Based on the company’s needs the balance will tip to one side or the other.

Below, we’ll take a look at the particular features and storage solutions comprising these two groups.

Mobile Racking Systems

These consist of racks installed on mobile bases that slide laterally and autonomously over rails in the floor. They incorporate motors and control devices to ensure their movement is smooth and safe.

Although they’re apt for facilities operating at any temperature, they’re especially convenient in freezer warehouses or cold storage facilities and, thus, are often employed by food businesses.

They are composed of two columns to which load-bearing arms are attached. One of their particular features is that the arms are easily attached, so their position can be changed based on the size of the goods.

They are characterized by the fact that they offer direct access to the merchandise and by their versatility in storing any type of unit load, regardless of size. Consequently, they are seen in the warehouses of businesses that manage extra-long products (automotive, spare parts, home decor, and machinery and component companies, for example).

Racks with direct access

Solutions with direct access are noted for making the goods directly accessible from the working aisles. This ensures that products are removed very quickly, at the cost of losing storage capacity. This category includes:

Pallet racks (Single- and Double-Deep)

Pallet racks are commonly seen in facilities that manage many SKUs and few pallets per SKU and in warehouses with a high volume of goods movements. They’re recommended for small or medium-sized facilities and those that store bulky products.

One of the particular attributes of these racks is their ability to adapt to any unit load, weight, and volume. Therefore, logistics providers usually resort to them to store very diverse products and pallets of different sizes and characteristics. Plus, picking can be done directly on the first pallet level.

Pallet racks stand out for their versatility, low cost, and easy implementation

Compact Racks

In contrast to racks providing direct access, these high-density racks make the most of the surface area and, therefore, offer a higher storage capacity. The following storage systems fall under this category:

Drive-in/Drive-thru Pallet Racks

Geared towards homogeneous products with a large number of pallets per SKU, drive-in racks are constituted by racks with lanes formed inside them, equipped on both sides with support rails on which the loads are deposited. The forklifts drive inside these lanes with the load lifted above the level on which it will be deposited.

They are often implemented together with other storage systems. They are only used as a single system in facilities of manufacturers or logistics providers of raw materials or consumer products and in cold storage warehouses.

Racks with the Pallet Shuttle System

This solution incorporates a motorized shuttle charged with loading and unloading the pallets, increasing the productivity of the compact storage systems.

The Pallet Shuttle system is ideal for facilities with high-density storage of homogeneous products, in cold storage warehouses, in storage buffers, and for orders already prepared.

The Pallet Shuttle is ideal for items requiring mass inflows and outflows

Push-Back Racks

Within the compact rack group, push-back racking systems provide more agility in goods management as well as better accessibility to the products.

The storage channels are set up on a slight incline so that the pallets can be pushed in. As the front part is lower than the back, when a pallet is removed, gravity moves the ones in the back forward towards the first position.

They’re a great option for products with few pallets per SKU and a high turnover.

Pallet Flow Racks

These are formed by slightly sloped channels equipped with rollers, enabling the pallets to move forward automatically by gravity and at a controlled speed.

As opposed to push-back racking, with these racks, the pallets are loaded on the higher end of the channel and move to the opposite end, ready for removal. The benefit of this solution is that it eliminates interference between the loading and unloading processes while facilitating management of the load in line with the FIFO principle (first in, first out).

Pallet flow racks are appropriate for facilities with perishable products. They can be set up between two working areas to streamline dispatches or can serve as a waiting area or storage buffer (for prepared orders, for instance).

Automated Storage and Retrieval Systems (AS/RS)

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By automating your warehouse, you’ll increase productivity, agility, and safety in your facility, in addition to reducing costs.

Pallet racks, pallet flow racks, and the Pallet Shuttle system can be automated through the use of stacker cranes that insert and extract the pallets from their locations. The Pallet Shuttle system in particular can also incorporate transfer cars on each level to boost goods movement flows.

Stacker cranes require a narrower working aisle compared to standard forklifts, so more space can be allocated to the storage of goods. Likewise, they ensure continuous product entries and exits. For all of these reasons, automation is an extremely viable solution for managing high-turnover merchandise.

Storage for Small Items

Companies that handle small products and boxes tend to install carton flow racks for picking and wide-span shelving for heavy loads. The main advantage is their flexibility and versatility, that is, the locations can easily be adapted to the size of the goods.

However, for much more agile and efficient management of these types of products, the best option is to install a mini-load system (AS/RS for boxes). It consists of racks specifically designed to hold boxes and equipped with a stacker crane for boxes that inserts and removes the products from their locations automatically.

What to Look for in a Warehouse or Storage System

The best storage system is the one that meets the needs and limitations of the warehouse in question in the most cost-effective way possible. When deciding on one, multiple factors should be considered, such as expected storage capacity, number of SKUs and pallets per SKU, available space, handling equipment, and budget for the project.

Best Inventory Management Techniques

Reviewing the inventory management techniques used in logistics nowadays might be necessary if you tend to find outdated perishables or other stock in your warehouse, your storage costs are through the roof, or you keep running into stockouts.

The FIFO method (First In, First Out)

This technique’s objective is to get rid of the oldest SKUs in stock, i.e., those at the front of your storage channels or racks.

Easy to apply, this method lets you handle, organize, and assign priority to the flow of goods and materials.

The LIFO method (Last In, First Out)

The last in, first out method means extracting your most recently stocked items or those which have arrived last.

Like the FIFO method, this contributes to better, more coherent, and streamlined product flows.

Wilson or Economic Order Model

This model, also called the EOQ method, is particularly suited to organizations that only manage a small number of daily orders. In other words, it’s apt for small and medium-sized businesses.

Companies order their raw materials and goods at certain times of the year. This technique is the simplest to implement but entails making orders at regular intervals.

The ABC analysis

The ABC analysis, a sorting technique that prioritizes the economic contribution made by each product, is one of the most important inventory management techniques. According to this theory, goods are classified into three categories: A, B, and C.

The most important products are in the A category and represent the highest annual consumption value. Keep in mind that these items must undergo rigorous stock control and be stored in areas with special ambient storage conditions. It’s fundamental to replenish this type of stock regularly to prevent incidents caused by a stockout.

Products in category B are considered intermediate or they have an average consumption value. How goods are slotted between categories A and C is a crucial step to getting things under control so that the goods get assigned to the right categories.

Products in category C are the least important, accounting for the lowest annual consumption value. For this reason, replenishment is less frequent. Generally, companies don’t store more than one item from this class and replenish it only when it’s out of stock.

Choose the Best Inventory Management Strategy

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Keep in mind that there are other inventory management techniques, such as the just-in-time system, which looks to keep inventory levels down to a minimum to cut costs. Another option is cross-docking, an order preparation method that ensures that the inventory remains in the warehouse for the shortest time possible.

However, before choosing a technique, you have to take into account a series of factors, such as order volumes, storage capacity, warehouse design, annual forecasts, and annual consumption values. The method implemented should meet the particular needs of each organization.

The FIFO technique, for example, is often the perfect strategy for businesses that sell perishable products, as it guarantees the timely exit of the goods. On the other hand, companies that distribute homogenous products with a long lifespan can opt for the LIFO method, as the exit date of the goods isn’t a conditioning factor.

Regardless of the technique chosen and the characteristics of each business, it’s essential to use a warehouse management system to optimize the various handling and inventory control tasks.

With that being said, Zip Logistics can help you streamline your operations with excellent precision and accuracy. Find out how we can manage your inventory like a pro with our experts manning your inventory from the ground up.

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