This blog continues the series ‘Take a Walk with Me’, which invites you to virtually walk through each functional area of the warehouse with a focus on identifying improvements. These improvements might include reducing travel distances, decreasing material handling labor, improving accuracy, increasing storage capacity, adding locations, and enhancing safety. Despite differences in people, products, and systems, most facilities share core functions: receiving, stocking, storage, inventory management, order picking, packing, and shipping.
The previous blogs in this series covered Receiving, Stocking, and Order Picking and now we move onto Replenishment. This is closely tied to the Order Picking process but deserves its own blog. Replenishment accounts for up to 25% of the total labor cost and can shut down the order picking process.
Methods
When walking through the picking area, look for locations that are empty and/or cases sitting on the floor around the pick area. This gives you an indication of the replenishment strategy. There are primarily two replenishment methods for fixed pick location assignments – demand-based and min/max. Demand-based replenishment is triggered by the WMS based on the order allocation and amount of inventory in the pick location. If the amount of inventory in the pick location isn’t sufficient to support the order allocation, then replenishment is triggered. This is typically batched and released before picking begins. This method can result in too much inventory being sent to the pick location, and not having the replenishment done on time.
The min/max approach is a scheduled replenishment strategy to stock pick locations to the maximum inventory level on a continuous basis. When the minimum amount of inventory is reached in each location, a replenishment is triggered at the scheduled time per day. Scheduled replenishments are typically done on an off shift, before picking and not during the picking activity. This is the preferred method, but often companies don’t want to spend the labor to keep ‘all’ locations filled to the maximum level.
Handling Equipment
The material handling equipment used for replenishment depends on the order picking design. This can include forklifts bringing cases and/or pallets to the pick location, or conveyor systems moving cases to the pick area. One of the more common order pick designs includes multiple level pick modules. With this design, there are two fundamental replenishment design options – back stock or direct replenishment.
With back stock, pallets are stocked into racking behind the pick locations, and operators walk to the pick location for replenishment. With direct replenishment, an order picker, lift truck, or other means of conveyance, is used to stock items directly into the pick location. The decision between these two options is always tough, and I would say it leans towards using the back stock method.
Closing
Take a walk through your replenishment process and identify potential areas of improvement leveraging the information shared in this blog. Validate and document standard operating processes, review WMS capabilities, estimate current labor standards, and collect data to evaluate identified improvements. Determine the impact of the identified improvements and any related capital costs. Then, build the business case for change. If you need support with any of these tasks, please consider St Onge Company.
—Norm Saenz, St. Onge Company
