Storage and Inventory Control Best Practices

Storage and inventory control processes include the activities related to holding material and the processes of counting and transacting the material as it moved through the warehouse.

The layout of a warehouse that supports an adjoining manufacturing facility will have different requirements than a facility supporting product distribution to stores or a facility that supports end-user fulfillment. Some operations place emphasis on replenishment of product to the point of use, others on product picking or order fulfillment.

Regardless of the ultimate mission of the warehouse, best-practice companies have designed storage systems to meet the needs of the current and planned mix of storage types. They have optimized storage locations and layouts to fit product without the need to restack or repalletize it once received. The warehouse management system will track storage location profiles and properly assign product to the best storage location. As a result, best-practice companies have excellent cube-fill rates.

In addition to optimizing the cubic fill of storage locations, best practice is to minimize travel time. If a product is in high demand it should be placed closer to its next point of use. In this case demand should be based on the number times the product is required, not on the number of units required. The difficulty of retrieval should also be considered in travel time. Higher-demand product should be placed on the most easily accessed storage space, typically floor level for racking and between waist and shoulder level in pick racks.

Not all companies have the requirement to track product by lot or serial number, but if required, best-practice companies have integrated that capability into their warehouse and shipping processes and use the system of record to manage the lot and serial-number data.

Most companies put a lot of effort into the initial layout of the warehouse; however industry surveys will tell you that as many as half of the companies do not have an ongoing process in place to review their layouts. Reviewing how storage areas are configured and having processes in place to reconfigure storage areas as product mix changes is considered best practice and is critical to maintaining high levels of space utilization and efficiency. Making continuous small adjustments to racks, shelving, or other storage equipment can greatly improve space utilization.

All warehousing software runs on data, therefore product and storage location data must be kept current and accurate. Best-practice companies maintain all information on a single system of record and keep it current and accurate. Product data should include all product characteristics including cube data, lot/serial-number information, and special requirements so that product can be directed to special storage areas. Special storage areas may be used to segregate items with odor transfer or fire risk or that require temperature control. High-value product might require caged or controlled-access storage.

Kate Vitasek is founder of Bellevue, WA-based Supply Chain Visions.

This article was originally published in 2007 and is frequently updated