Bin location warehousing

January, 2012
proto$ gen VI mod 3FFECA (Londinium)
Ulmart.ru, Partsdirect.ru
The intricacies of bin location warehousing as applicable to the custom needs of different companies" working process. Ulmart and PartsDirect.ru: bin location warehousing for transshipping boxes and handling small and delicate but expensive odds and ends, respectively

If you try to google the phrase "bin location warehousing" you will not see any reference to the definition given by the generally recognized reliable source [at least at the time of this case writing — 16.01.2012]. Wikipedia has no such article.
Although, any person who faced a bit the warehouse management understands this instinctively.
?Each product has its own "address" in the warehouse. So this product can easily be found by any employee and not only by an expert qualified in this product category.

Generally it goes like this.
Just about the same deal as "democracy is the rule of the people".

However, by closer inspection of each particular case, we get fids of details.

A primitive section form of warehouse management is also a kind of bin location warehousing, to start with.
Each product has its own address section. And you may theoretically find this product in the section.
In fact, this product can be easily found only by the staff that works in this section and knows the stock. And even then it is sometimes a challenging task.

Going forward.
Is the product attached to the "address" or the address is attached to the "product"? Physically the
difference is as follows: on the one hand, the product may be placed exceptionally in the given specific place and nowhere else (therefore some other goods may also occupy this specific place); on the other hand, one and the same product may occupy many places in the warehouse but each of these places are attached only to this product.

Further on.

What kinds of products are stored in the warehouse in terms of visual identification? It is one thing when there is a fridge of known size and identification mark of the model and manufacturer (although this does not help, as people mix up the stuff), and it is quite another thing, like some electronic loose components (for example a computer processor; all Intel processors of the same series are alike, and the difference is in microscopic marks, that is difficult to find, but the difference in their prices can be up to 10 times). It is clear that in both cases bin location warehousing technology and its storage reasonability solution will be taken differently.
For rank pedantry we may specify that in the second case the use (or non-use) of additional identification tools is essential (such as primitive sticky notes, barcodes or even RFID).

Going further.
If we deal with the pallet storage warehouse, the product is assigned to the pallet, and the pallet is placed at the certain address. At the same time, on the one hand, the pallet occupies just one address, and the product can be placed on a number of pallets which can basically be anywhere within the warehouse. Furthermore, a pallet may contain many kinds of products. If we use the floral visualization approach, in this case the warehouse is set out with pallets with many bunches of flowers, made of the same mass of flowers but composed in different compositions.
It is possible to imagine the existence of outsourced pallet storage of some logistics operator who handles the pallets with no idea of its contents (a more complex case when different pallets have different storage requirements: temperature, humidity, security level, etc.).

If we look at sea container warehouse, their storage is additionally complicated with minimization of containers
moving (as they are stored one on another) and expensive equipment operation. The management company of container storage has information about the route of each container and the assumed date of the estimated shipping and the reception of new containers.

Shall we look at the peddlery, sorts of small screws and transistors. It is clear that matchboxes and plastic cases of the similar caliber will act as a container in this situation. Unlike the pallet storages, such small containers may be of different size, and a few of them may occupy one address in the storage.

There are two options of warehouse inventory reference system: the product is directly attached to the address, and containers serve as a package only; or the addressing goes under the rule "product-container-address". The best choice usually depends on the real product range and nature of company activity.
Moreover, some warehouses of one company may practice different set up of storage. For example, the long-term storage of manufactured goods or constituent parts storage or dynamic storage of incomplete production goods.

Going further.

Shall we imagine the situation when there is a mix of different goods: huge and small, visually diverse (like plasma TV) and electronic loose components. In this particular case in terms of one storage (at least one single warehouse unit) several logically detached small repositories with different storage schemes are likely to exist.

The difficulty selection of specific bin location warehousing implementation not by any means is limited to physical specifications of the product.
The rate and rhythm of warehouse activity, time, speed, accuracy requirements, suppliers" proficiency (efficiency and promptness of deliveries, the quality of goods), acceptance and shipment procedures complexity (the necessity of additional operations like bar coding, bar code scanning, packaging, etc.), duration of customer order generation (the order is placed within a week or a minute before shipment) and many other attributes are significantly important.


Let us suggest you mentally doing the following exercise. Shall we imagine a company which sells rakes? For example, there are 500 sorts of rakes. The company is huge and ships millions of rakes monthly. Here is how this company warehouse would look like if a) the company sold the rakes by wholesale or retail with an average order of 400 items; b) received the rakes from one factory once in 3 months and from each of 300 hundred suppliers every 2 weeks; c) all rakes were of the best quality (or of the low one, as this isn’t that important in this particular case) or vice versa, 3-5% of the stock were unacceptable.
Any options combination is possible. You may add any you want.
So we get some different storage situation without spending much time for consideration. And the rakes are all the same, only the environment changes.
By the way, the suggested alternatives of rakes options are taken from Humanless client practice.

If we talk about specially regulated goods, such as jewellery, medicines, this is a real hot mess. Thanks to the government for administrative barriers for businesses.

Not enough? There some other funny things like pushback racks. In this case the "address" definition significantly changes. Lots of cats and dogs have been invented.

And do you know what the point is?
The thing is that "bin location warehousing" is not a solution. It is a collective name of entire class of warehouse storage procedures, aimed to improve the depot operation efficiency.
But the specific solution choice depends on your approach to efficiency performance.
What is more important for you?
Speed? What about the acceptance, search, order compilation or shipment speed?
Cost? What about labor, equipment, storage lease costs? There could also be cumulative cost for warehouse faults processing (including client claims) resulting from the regrading or goods breakage.
And so on: accuracy? The maximum number of products at the minimal surface; day-and-night service?
It is clear that like everything else, the solution is made by balance of incompatible parameters.

When you put your socks into the underwear box it is a practical application of "bin location warehousing" technology. Each sock has its address in the relevant wardrobe drawer. If the technology is kept, you have no issues with socks, just open the wardrobe to get one, if not, you have to make the inventory of the whole house.

Here are some slides.
Ulmart and PartsDirect.ru are at the same activity field at first sight: electronic sales in one form or another. Both are in dia$par. Well, each of them is a top leader in CIS business segment for a reason.
At the second sight the similarity between them vanishes.
Ulmart main turnover of goods consists of so-called "boxes", such as laptops, sheet-devices, screens, printers etc. PartsDirect.ru has purely electronic parts, generally these parts are not user-friendly, just microchips.
Ulmart product line changes very quickly, as the laptop may get outdated in a month. By contrast, PartsDirect.ru assortment is practically eternal.
Ulmart client wants the product "here and now" as this is retail; PartsDirect.ru makes a next day shipment and material part of sales goes to regions via express delivery courier.

Settings of Warehouse cells

The purpose of bin location warehousing is the upgrade of warehouse activity. But different requirements demand different efficiency performance criteria. The above listed differences in companies" business made them choose the diverse bin location warehousing set ups. We shall not go into details but Ulmart implemented considerably a more complicated set up.
This basically appears from a number of differences.

The Receipt Document: Goods Distribution into Bins


  • Ulmart: the average time of retail delivery note shipment reduced from 7 to 3 minutes. The speed of the
    complete cycle of goods receiving increased by 10%.
  • PartsDirect.ru: the regrading is clearly gone (here was also a cumulative effect of simultaneous introduction of pervasive bar codes identification). The speed of delivery notes compilation increased by 10 times (however from the fact of such development possibility we may see not so critical value of this parameter in case of PartsDirect.ru).

You can see at once by what parameters one measures the efficiency, can’t you?

This is how dia$par solves real time tasks and helps its clients to achieve highly ambitious business goals. We are happy to assist you.

Being inside dia$par. Some stories
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