In my last two posts I showed you fixed location storage and its disadvantages, random chaotic, and ABC storage. But there is more. Another option is some sort of combination of fixed location, random chaotic, and ABC storage. Let’s look at some of the variants.
Mix of Fixed Location and Not Fixed Location
Having some of your parts in a fixed location while others are either random chaotic (i.e., the closest slot to the stocking operator) or ABC is actually not too uncommon. For your most common parts, you may select a fixed location so operators can find them easier. These may also be in a location that is easier to access. Just make sure that only your most common parts are in a fixed location. If you assign a fixed location to too many part types, your space usage will go down. You could do this mixed approach if the benefit of remembering the location and finding it quicker is worth the extra storage space needed. Resist the temptation to do this because it may look neat and orderly. If you do it only for the looks, then it won’t be worth it.
Group Part Families
Another option is to cluster parts by part family. This could be done with fixed locations, but also with a variant of chaotic location or ABC storage. The basic idea is to group certain parts together and store them close to each other.
You may think it looks neat if your peas are sorted by size, and it certainly looks neat, but if this is your motive, then it is probably useless, or even worse. Do not arrange similar items next to each other just so they look good! If you have similar parts close to each other, then despite the visual appeal, you introduce errors. The operator picking the items may make more mistakes because the part he wants looks almost identical to the part next to it.
Storing items by part family makes sense only in a different aspect. If you have frequent item requests that include the same two (or more) part types, then you may choose to store these items close to each other to reduce walking distance. To give you an (outdated) example, if a customer buys a 3.5” floppy disk drive, he probably will also buy some floppy discs. Hence, if you store your floppy discs close to the floppy drives, the picker may have to walk less. There is the added bonus that the two items look different and there is little chance of mixing them up. The traditional example here would be a library or a bookshop. You want to have the travel books next to other travel books, crime next to other crime, science next to science, and teen paranormal romance … probably in the trash can … but that is just my opinion. Hence, storing by part families may make sense not for the visual appeal, but if the parts are commonly retrieved together. But please do not underestimate the effort to set up such a system and maintain it. While you may save 5m walking for an operator every now and then, you create hours of extra work for your system maintenance guys. Often it is not worth the effort.
Multiple Locations for Easy Access
Another variant both for fixed and not fixed locations could have the same items in different sections of the storage. This would happen automatically in random chaotic storage. For individually assigned locations, this would be part of the algorithm. If you would need to pick this item, you would walk to the closest one. Hence it reduces walking distance. If you have an automated system, a breakdown of one row of the retrieval system will not stop your production, since you can get the part from another storage row in the meantime. It is like pens or tissues at my home. You can find a pen or a box of tissues in almost any room somewhere, since I don’t want to walk through my entire apartment just for a tissue.
Which One Is Best?
Overall, there is again a magnitude of different options how you can stow your material. As always, the answer is that it depends on your system. Across your factory you probably have a combination of different systems.
Some articles claim that random chaotic is pretty good, and indeed it is. But it is not a universal solution for everything. Random chaotic is good if you have a large quantity of widely different materials to store, but it requires a good (meaning problem-free) digital inventory management system. It is the system of choice for Amazon.
Fixed location storage is good only for items that you use frequently. It should be only a very small number of items, because if the employees can no longer remember the location, the advantage vanishes. It is also your system of choice if you still manage your inventory using Excel or paper, since it has the least effort in updating the material database. However, if this is your reason, you should consider investing in an inventory management system for anything larger than a garage shop.
Individually assigned locations are hard to judge. It all depends on the algorithm behind it that assigns the locations. You can explore this, but beware of the complexity. It is easy to imagine more and more criteria that determine your location, only for the system to never work reliably despite draining your software budget. A simple ABC priority is good, but don’t overdo it.
Of course, this is also subject to other requirements. Large items go into large storage slots, small items into small ones, refrigerated ones into cold storage, and so on. You should also be aware that if your inventory approaches 100% full, it becomes more and more gridlocked, just like road traffic. No matter if you have random locations or assigned locations, the walking distances of the stower become longer and longer. A general rule of thumb is that systems work well if they are no more than 80% full. And 90% is also okay-ish. But I have had tours through warehouses that were 98% full and the manager proudly told me about their ABC storage system. No, ABC doesn’t work if you are 98% full!
Anyway, this concludes my small series on where to store your material. I hope this gave you inspiration for your own industry. And please, stop using Excel for inventory management! Now go out, manage your inventory, and organize your industry!