Warehouse Management

This topic was covered in detail at the WMS SIG at Collaborate 08 in Denver. Replenishment plays a key role in the warehouse as it ensures that there is a enough stock in the pick area to cover the expected demand. The replenishment in this context means an intra-warehouse replenishment from a reserver or bulk area that is optimized for storage (Think pallet storage, high bay warehouse etc.) to a small and compact pick area optimized for unit picks (think flow racks, shelving, pick to light systems, etc).



This post also covers steps to analyze pick area activity using task history from warehouse control board.

A replenishment policy for pick face involves deciding the following factors:

1. Should there be a pick face? :  The answer clearly depends on the business scenario. If the warehouse is involved in distribution activities where it sources or manufactures goods in bulk (think pallets) and fulfills a large number of smaller orders in lower handling units (think cases or each), a pick area can often boost productivity and order velocity significantly. In Oracle WMS world this pick area should be defined as a sub-inventory.

2. What items to stock in the pick face? : Clearly all items need not exist in pick face at all times. If that were to happen, the resulting bloat in pick face will obliterate any productivity benefits arising from a small and compact pick area. The best practice is to have as many "Fast"  moving items stored in pick face. The definition of "fast" moving is important: an item is fast moving if it is picked from pick face at a higher frequency. Therefore its important to analyze the demand from pick area only. It does not matter what is the total pick frequency of the item across the warehouse or what is the value of the item or how much is the average pick quantity. In Oracle WMS world, the item's task history can provide us with insights about how frequently an item is picked from a given sub-inventory on a historic basis. Using this insight, its possible to make a decision  about whether to stock an item in pick sub-inventory or not. If the item is stocked in pick area, item sub-inventory relationship needs to be defined in Oracle WMS for the item and pick sub-inventory including the replenishment parameters. 
   

3. Where the item should be slotted? Should the locator be fixed or floating?: Clearly an item that is picked often in the pick face should be stored in the most optimum location for picking. However if demand profile is seasonal or highly erratic, its possible to have a floating location for an item. This way Putaway rule in Oracle WMS can dynamically slot an item based on certain characteristics e.g. Slot in the golden zone during "High" season or slot in the high season when item is flagged as a "Promotional" item. However if the item has a high steady demand, a dedicated locator can be identified for the item. In oracle WMS, its possible to dedicate a locator for the item using the item-sub inventory relationship.

4. How much quantity to stock in the pick face?: One of the objectives for having a pick face is to avoid going back to your reserve area often. Therefore a pick face should stock enough to cover 5-10 picks. Therefore the maximum quantity of an item to stock can be 5-10 times an average pick. If you replenish pick face in a standard pack, you can round this quantity to the nearest pack size e.g. 5 cases, 3 boxes, etc.  The maximum quantity is also constrained by locator capacity i.e. the maximum quantity to be stored can not exceed the available cubic volume. For this reason, step 3 and 4 are somewhat iterative in nature.

5. When should replenishment be triggered?: This determines the minimum quantity before a fresh replenishment is triggered. Usually the replenishment should be initiated when the pick area stock has just enough quantity to cover 2-3 picks. Once again the average historical pick quantity can be used to set the replenishment minimum.

6. What should be replenishment lot size? If you replenish pick face in a standard pack, you should set the standard pack quantity as the replenishment lot size.

The replenishment analysis spreadsheet is a tool that can be used to analyze the task information from WMS control board. It allows you to classify items using their pick frequency into "Fast", "Medium" and "Slow" moving. This excel spreadsheet is being provided as-is. Please feel free to use or modify it as you see fit.

Note: The Excel Sheet can be used to Analyze only 5000 items. You must extend the Array Formula on item column in the "Frequency Distribution" worksheet beyond A5001 row to include additional items if you are likely to have additional items.

The following steps must be taken to perform the Pick Frequency analysis:

1. Copy task history from Oracle WMS Warehouse Control Board: The warehouse control board can be used to get information for a specific sub-inventory e.g. EACH, CASE, BULK, etc. In order to view the task history in control board, you must check the Completed status on the task Tab. In addition the shipping date range can be populated on the outbound tab before you press the "Find" button. The results on the Warehouse Control Board shows the task history for completed tasks. In order to select the tasks and copy the task history to the clipboard, select all the rows (use the square on the top left hand corner of the spreadsheet), use the left mouse click and select "Copy All Rows". This action will copy all the rows to the clipboard.

2. Populate Task Data worksheet: The task information from Warehouse Control Board can be pasted in "Task Data"  worksheet using Control+V or using Edit->Paste. (look at the bottom of this Excel window to navigate to this worksheet)

3. Configure Item and Quantity Columns: The columns containing item and quantity needs to be defined. This can be done using Range definition feature in Excel. Use Insert->Name->Define to configure which column on the "Task Data" sheet contains the Item and Pick Quantity information from the tasks. By default the item information is assumed to be in the "A" column (A2:A1500) and Quantity information in the "E" (E2:E1500) column. The column and the range should be modified based on the data.

4. Perform Data Analysis: Press "Analyze Data" button to execute the Excel macro that categorizes the items into Fast, Medium and Slow items. This macro will uniquely identify all the items and count the number of times each item was picked. The macro will sort the items in descending pick frequency and categorize the items based on the "Fast", "Medium" and "Slow" cutoff fences. It will also compute the avaerage quantity per pick for each of the item