An effective way to trigger a replenishment is when pick slot inventory falls below a preset minimum.
What is the hardest item to pick in your warehouse? That huge, heavy crate in the far corner? The cartons on the very top level of the pallet rack? Those tiny beads you wish you could get your vendor to pack in bags of a hundred? No, it’s any item that isn’t in its proper pick location when the worker goes there to select it. This kind of lag is especially frustrating when you have sufficient inventory in your distribution center, but it hasn’t yet been moved to its active pick location for order fulfillment.
Replenishments aren’t a problem just for manually controlled distribution centers. Even operations with a warehouse management system (WMS) can sacrifice productivity if the system is managed poorly or set up improperly. You must slot items into the right type and size of active location, set minimum/maximum levels correctly, and establish optimal replenishment rules to make the best use of your resources.
Many warehouses are organized into separate active and reserve areas. The active area keeps the frequently picked SKUs accessible and arranged compactly, whereas the reserve area provides dense storage of backup merchandise. Performing replenishments of the active area on a timely basis and with the right quantities is a key factor in maintaining effective operations.
Reserve areas often contain pallet racks and drive-in racks serviced by lift trucks for storage of pallet loads of merchandise. They may also contain decked racks for storing case quantities of goods, accessed by using a man-up order picker truck.
Active areas typically use flow racks and shelving to house the items used to fill customer orders. Since merchandise is stored on several shelf levels, many facings can be accessed with minimal walking. Mezzanines may be used to double- or triple-stack the flow racks and shelving to conserve floor space, while still keeping locations accessible without lift trucks.
Carton flow racks are suitable for storing fast- and medium-moving items in the active areas. Full cartons of product are placed in the back (charge side) of each rack for replenishment. Individual pieces, inner packs, and even full cartons are picked from the front of the rack. Since the pickers and replenishers operate in separate aisles, they do not interfere with each other, and the slots can be refilled on the same shift when orders are selected.
Shelving usually houses slower-moving items, and merchandise is picked and replenished from the same aisles. This results in interference between pickers and replenishers if both functions occur during the same shift, unless the pickers themselves refill the pick slots in their area. Material handlers collect replenishment cartons from the reserve rack and place them in staging areas at the end of aisles. The merchandise is typically placed on the active shelf locations in a second step.
Using carton flow racks on mezzanines makes replenishment more complicated, since the back of the upper-level rack is typically not accessible from the ground. Try these techniques to refill the upper levels:
If the charge side of the flow rack is set outside the mezzanine platform, a man-up order picking truck can replenish the flow racks directly. The material handler builds a pallet of replenishment cartons from the reserve rack, then removes individual cartons and places them in the back of the flow rack, a one-step process.
If the mezzanine platform extends beyond the charge side of the flow rack, the pallet of replenishments can be dropped on the mezzanine and cartons can be delivered to the flow lanes with carts or a conveyor. In this case, replenishing the carton flow rack will be a two-stage operation.
Pallet racks can be used behind the flow rack for temporary staging. The material handler places the pallets in the “ready rack” using a lift truck, and then the replenisher moves it to the proper flow rack lane, in a second stage.
Come and get it
Determining when an active pick location needs to be replenished and when to perform the replenishment tasks is crucial, and there are several options to choose from. Most warehouses will select a primary replenishment strategy plus alternative ones for especially high- and low-demand periods.
The simplest way to trigger a replenishment is for the picker to tell his supervisor that the location is empty. Although simple, this emergency replenishment method is reactive and inefficient. The material handler who does it is retrieving only a few items at a time, so he is rushing to the pick face to replenish the stock. Repeating this for each out-of-stock situation results in many less-than-full trips between the reserve and active areas. In addition, any pending orders will need to be held until the pick slot is replenished.
A better time to trigger a replenishment is when the amount of inventory in the pick slot falls below a preset minimum. The material handler will then bring enough product to fill the slot to its maximum level, so this strategy is called min/max replenishment. The chance that orders will need to be held pending the arrival of the merchandise is significantly reduced. This proactive strategy allows the material handler to group replenishments together so he is retrieving more cartons each time he travels to the reserve area.
Min/max replenishments can be generated at different times of the day, depending on the sophistication of the warehouse system. A WMS will typically group orders into waves and process several waves during the picking shift(s). The system can be set to generate replenishment tasks when creating the waves (before picking) or processing them (during picking).
Each of these trigger times has advantages and disadvantages. If tasks are created before picking, the material handler delivers material before the wave is completed, and may bring more material than will fit in the pick slot. However, it is unlikely that you will run out of product. If tasks are generated during picking, you run the risk of running out of product during times of high demand, but you won’t overfill the slots.
Another option is to fill the pick slots on an off-shift basis, a strategy called lean time replenishment. The WMS generates replenishment tasks for active locations that are below the minimum quantity, then batches them together to minimize trips between the reserve and active areas. Using lean time replenishment greatly reduces the need to perform replenishments during picking shifts because the slots are filled before picking begins. Some systems also permit “topping off” all the slots in an area whether they are below minimum or not.
Manually generated replenishment works if the warehouse knows that an especially heavy demand is coming. An operator walks through the active area and scans each location that needs replenishment, using a radio frequency (RF) terminal. The system then generates the replenishment tasks for those locations.
Take it to the max
The next challenge is to set up the SKUs and locations so that replenishment strategies will work efficiently. Establish the minimum and maximum levels for each item/pick slot combination. The minimum quantity, if used, sets the timing for triggering the replenishments. If it is set too high, slots will be replenished with small quantities, which will result in too many tasks. If the quantity is too low, you may run out of product before completing the replenishment.
The maximum quantity is the capacity of the location. The WMS uses this to tell the material handler how many cartons are required to refill the slot. If the maximum is too low, he will bring too few cartons. If the maximum is too high, the material handler may bring more cartons than will fit into the pick slot, so the excess will have to be staged and put away when room becomes available. Merchandise may have to sit in the aisles or under the flow rack before being handled a second time.
Items should be placed in pick slots that are sized to hold about a week’s supply of each item. Some products may need multiple facings to meet peak demand. If the minimum quantity is less than a one-day supply, the material handlers must be sure to replenish items promptly to avoid running out of product in the active area.
In replenishing, the material handler gathers a group of cartons from the reserve area to take to the active area. He will usually be directed to build a pallet of cartons that are all going to the same active area. For each destination active zone, the WMS should guide him through the reserve area in a best path sequence to minimize his travel time.
Alternatively, larger warehouses may have a conveyor system to sort and deliver the cartons to the active areas. In this case, the material handler does not need to build pallets by destination zone, so he can work more efficiently.
When putting the cartons away in their active locations, it is usually more productive for the material handler to select the cartons to process, rather than be directed by the system. Using an RF terminal, he scans the carton label and the WMS tells him where to put the product. Some computer systems also let you use a “best path” methodology in the active area, where the system tells the worker what location to fill and which cartons to use. You may want to use this option if your active zones are large. However, because the material handler must find specific cartons, it is important to build smaller replenishment pallets to reduce the amount of time he spends searching.
To ensure picking accuracy, replenishments must be placed in the proper active slot. Make sure that pick slots are clearly labeled, in both the front and the back for flow racks.
When RF terminals are used to fill pick slots, the replenisher should scan each carton or pallet into the active location to verify that it is put away properly. He should scan the carton label rather than the UPC or SKU barcode to verify that it is the correct carton. If UPC or SKU barcodes are scanned, it is too easy to scan the same label several times, then potentially put a wrong carton in the pick slot.
If the slots are filled without use of RF terminals, the label at each pick location should show the item number and its description in addition to the location number so that the replenisher can verify visually that he is putting the cartons and pallets away properly.
Easy does it
Even using the best techniques, sometimes the number of replenishment tasks may exceed what you can accomplish. Here are two other strategies to consider to reduce replenishment needs. You must evaluate your requirements, the layout of your facility, and system support to determine whether they are possible in your distribution center.
Using the “hot pick” method can reduce the replenishment burden if most of your customer orders are downloaded to the WMS the night before they need to be picked. In the morning, the system’s first task is to check the total requirements of each item for the whole day’s orders and compare that to the available amount in the active location. If more product is needed for the day than exists in the active location, the WMS generates instructions to pull full cases from reserve and move them to a temporary active picking location. This hot pick location will then be used to fill the orders until it is empty. Then, any remaining demand for that SKU will be pulled from the active pick location.
The hot pick method is most efficient when you need to perform multiple replenishments for the whole day’s requirements. It is particularly useful in active shelving areas where the pick slot may not be large enough to accommodate a peak day’s demand.
You can also send material directly to the active pick location when it is received, if there is space available in the active location. This strategy, called immediate needs, cannot be used when FIFO (first-in, first-out) or lot control is required. It reduces material handling effort by replacing the putaway to reserve storage and then replenishing active steps with a single putaway instruction. Some warehouse systems support automatically directed receipts to the active location, if they can be accommodated there.
By selecting and implementing the appropriate strategies, you should be able to refill your active slots efficiently. If you monitor outstanding tasks regularly, you can ensure that replenishments are being performed as directed. You can implement alternative strategies when special needs, such as very high or very slow demand, arise.
The result? The distribution center equivalent of the satisfaction you feel when you can reach the slice of pie you want in the midnight kitchen.
Pamela J. Davey is a consultant with Sedlak Management Consultants, specialists in information systems selection and fulfillment center planning. Contact her by phone at (330) 908-2286 or by e-mail at firstname.lastname@example.org.