A while back, I wrote a blog post about chaotic storage at online retailer Amazon.com. The advantages of this kind of warehouse organisation from Amazon’s point of view were clearly visible. But this is not supposed to mean that other types of storage had no right to exist. I would therefore like to present a completely different kind of storage with this three-part blog post: the Locator Storage System (LSS).
A warehouse that follows the locator storage principles is at heart a precisely optimised fixed location warehouse. What makes it different from a standard fixed location warehouse is the exact planning of the storage positions. In this process, it is of prime importance to record the article data comprehensively.
A LSS is an interesting alternative for companies that need to store larger numbers of spare parts. First and foremost, this includes dealerships and repair shops for cars, lorries and busses, but also businesses in the bicycle and motorcycle industry. Those are the firms where a LSS will usually make quite a difference.
How to organise a LSS?
Previously, many companies stored their items according to order numbers or name. The problem with this kind of system is that the storage takes up too much space and time, because the differences in sizes and turnover rates were hardly taken into account. The LSS is therefore the most logical improvement.
Each article’s characteristics, basically size, weight, value, current inventory, turnover, sensitivity and potential hazards (hazardous goods) need to be recorded into the system. Additionally, every storage position has to be labelled in such a way that humans and machines are able to read it, i.e. with code digits and barcodes. This is a prerequisite in order to assign the right storage location to each article.
This is a task for a special computer software. It calculates the ideal warehouse organisation based on the recorded data. Each stockkeeping unit gets its own storage location, which is registered by the computer. And the computer remains indispensible as the operation progresses, because it keeps track of the inventory and the storage locations. Each storage and order picking operation therefore needs to be done with the computer.
The warehouse is organised around the idea that items with similar characteristics should be stored together. This might lead to situations in which otherwise unrelated items, such as screws, o-rings and hose clamps share the same drawer (but not the same insert box). This increases the storage density and uses the available space more efficiently. Another feature of this kind of storage is that items are placed according to turnover. The more often a certain article is required, the closer it should be to goods issue. Those items, for which demand is highest, are then located within a radius of just 5 m.
Then again, these storage locations are not set in stone. The system is flexible enough to adjust to changes in the range of articles or in turnover. In a real life application, it is common to form families of parts. As an example, all light bulbs would then be put together, irrespective of size or turnover. That wouldn’t be necessary, but it improves the convenience and understanding of the warehouse staff.
Would you like to know why the LSS is a particularly interesting option for car dealerships and repair shops and what exactly the advantages of this type of storage are? Then go ahead and read part 2 of this blog post!