Warehouse Operations: Optimizing the Putaway Process

This Article originally appeared in Logistics Brief on December 11, 2019.

The putaway process is often ignored by warehouse managers when optimizing warehouse operations but is a critical step to increasing warehouse efficiency. The initial placement of goods has a direct impact on all subsequent warehouse processes, especially the picking process. If goods are not stored in the optimal location, travel time increases, as does the time it takes to pick and pack goods. Failing to store cargo in the optimal location also adds risk to the security/integrity of the cargo and/or the safety of the employees.

Warehouse managers suggest that inventory control (53%), picking (47%), putaway & replenishment (45%) are the most inefficient warehouse processes

In this article, we will review some of the foremost best practices and technologies that warehouse managers can implement to optimize the putaway process and increase warehouse efficiency.

Putaway Process Objective

First, let’s review the main objective of the putaway process.

The prime objective of the putaway process is to move goods from the dock to the most optimal warehouse storage location.

At the heart of the process is assuring that:

  • Cargo is stored fast and efficiently
  • Warehouse travel distance is reduced to a minimum
  • Security of goods and the safety of warehouse employees is ensured
  • Warehouse space utilization is maximized
  • Cargo is easy to find and track within the warehouse
  • Goods are stored in a location that is quick and easy to retrieve during the picking process

Failing to properly implement an efficient process will have a direct impact on the productivity of warehouse operations.

Collect Data & Introduce Real-Time Analytics

Data is king when it comes to improving warehouse operations and implementing an efficient putaway process.

With the objective of finding the most optimal storage location, data on cargo size, weight, height, receiving and shipping frequency, cargo type (e.g. Hazmat, perishable, high value, etc.), order/sales volume, and storage availability must be consistently and accurately collected and analyzed.

Therefore, the warehouse management system (WMS) must comprise two key elements: adequate/flexible data collection capabilities and on-going data analysis.

Once the appropriate WMS is in place, the next step is to make sure that we are collecting data accurately and efficiently by automating collection as much as possible. This in turn will allow us to eliminate entry errors and reduce overhead.

For example, if we are collecting cargo weight data, an integrated digital weighting scale does the job, while a parcel or pallet dimensioning system collects data on dimensions. Both solutions automate these tasks and eliminate data entry errors

Monitor Storage Capacity & Space Availability

Another important element in process optimization and increased warehouse efficiency is avoiding unnecessary traveling time to locations lacking space or capacity to store the cargo by monitoring storage capacity and availability.

To monitor capacity and space availability, warehouses can use barcode scanners and bin locations to track used/unused space across warehouse zones. This solution is currently available across most warehouse management systems (WMS). However, this system is prone to human error, as it relies on the warehouse clerk to scan the bin location and cargo every time he/she performs a putaway or pick task.

Another approach is to use RFIDs to automatically record tasks without any human intervention. Although this solution is still being fine-tuned and tested, the use of RFIDs combined with more advanced solutions, such as sensors, will be part of an ecosystem of technologies to deliver real-time tracking of capacity and space within the warehouse.

Reduce Traveling Time

Reducing traveling time is another important factor when optimizing the putaway process and warehouse operations in general. The goal here is to reduce travel time of goods from the receiving area to the storage location.

Travel distance in a warehouse is 60% to 70% of labor cost.

To accomplish this, warehouse managers can conduct an ABC analysis to better understand high volume/frequency cargo closer to shipping areas, with the goal of reducing traveling time.

Note: For this to be effective, it is important to actively monitor order volume and frequency on an ongoing basis and adapt as major shifts occur.

Defining routes for the shortest path to the storage location is another way to reduce traveling time. When doing so, it is important that warehouse managers consider factors such as distance, warehouse traffic congestions, and potential conflicts with other processes that involve traveling.

Use Direct Putaway when Possible

Another best practice is to use direct putaway when possible.

When using this method, the cargo is directly moved from its receiving area to its final location without going through a staging phase. By eliminating the need for designated staging locations, this approach not only speeds up the process but also reduces handling and space requirements in the warehouse.

When implementing this approach, it is important to remember that the WMS must be able to assign final locations from advance shipment notice (ASN) or from the point of delivery at the receiving dock. Without this capability, it is almost impossible to run an effective direct putaway process.

Use Fixed & Dynamic Locations

It’s also possible to leverage a proper mix of fixed and dynamic locations, if conditions allow.

A fixed location is a pre-determined storage space, warehouse zone, aisle or bin assigned by specific criteria. For example, a fixed location can be associated with a specific product category, customer, final destination, etc. Fixed locations help increase the efficiency of the process because warehouse clerks can memorize a cargo’s specific location assignment.

On the other hand, dynamic locations provide more flexibility by allowing clerks to put anything in the first available space they find on their way. When using dynamic locations, a reliable inventory management system to track goods and locations is paramount.

Dynamic locations can also be leveraged to temporarily store high-volumes shift.

Keep the Warehouse Clean & Organized

Last but not least, a clean and organized warehouse/distribution center can make all the difference in running an efficient process.

A cluttered and poorly organized facility will have a direct impact on the speed at which goods are put away. Clerks take more time to find available locations, move cargo around to open space, and maneuver around obstacles to reach the desired location. Most importantly, poor warehouse organization increases safety hazards to employees and the risk of compromising the integrity of the cargo.

Without a clean and organized warehouse, streamlining your warehouse processes or using the latest warehouse technology won’t matter.

As we have learned, there are various ways to optimize the putaway process and increase warehouse efficiency. Optimizing warehouse operations through simple best practices such as keeping a clean and organized warehouse, using technology to track space utilization, or performing an ABC analysis to re-structure the warehouse layout is a matter of attention to detail, careful planning, and mindful execution.

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