There are different methods of storing goods in a warehouse. Distributors that understand this can make the most of them to ensure an effective storage strategy. While equipment and technology such as Microsoft Dynamics NAV Barcode Scanning can help, there is only so much hardware can do. Without a decent plan, picking, packing and transporting orders to customers becomes inefficient very quickly. By creating an effective strategy, whether based on prior precedent or custom designs with the building in mind, there is a greater chance a company can maintain effective control over their portion of the supply chain.

Getting a plan together

MultiBriefs noted a large number of companies fail to have a basic warehouse storage strategy in place. Thus, placement of merchandise is on the whims of employees, whether they pick a product for an order manually or move a pallet of materials to another part of the warehouse. More often than not, they take the path of least resistance and find the nearest empty space to place stuff. The end result is not only a disorganized space, but also makes physical inventory counts extremely tedious and difficult to complete without errors.

Consequently, it only makes sense that a company should work on developing a warehouse strategy that takes location and placement of materials into consideration. Sometimes, the best solution isn’t always the most sensible one at first glance. Placing items that are likely ordered together may make for a random-looking organization, but the end result could be something that is more efficient in the long run.

When developing said strategy, it’s a good idea to take into account what merchandise must be separated. Consider food producers and distributors, for example. There is often a need for refrigeration for certain perishables, as well as a climate-controlled space for other processed foods. Hazardous materials are also an issue to consider, as they requires special measures to ensure compliance with local laws as well as employee safety. Most importantly, a distributor or manufacturer should take into consideration the amount of space available. In the event that the warehouse reaches full capacity, it may be time to consider disposing of old or out-of-date products by whatever means necessary. If removing inventory isn’t enough, contingency plans such as temporarily renting space in vehicles or nearby buildings may be necessary.

Placing products properly

Once a company understands the space they’re based in, it’s essential to utilize an effective strategy that incorporates the various elements within the warehouse to its best advantage. One particular strategy suggested by logistics firm is based on product popularity. In this scenario, the company splits up merchandise based on demand, and places them in the appropriate locations. The fastest-moving items are usually in the most easily accessible locations in the warehouse, the next tier gets pushed inward and so on. From there, a company could theoretically place products based on proximity to the packing station or which end of the aisle they’re on.

Another aspect to consider is the cube-per-order index strategy. COI refers to the ratio between the volume of inventory for a particular item to its popularity at a given period of time, according to Intech. Devising storage methods in this situation requires an adept understanding of production and order levels as they relate to the circumstances. While this previously required a statistician, enterprising resource planning software such Microsoft Dynamics NAV often has the means to compute this ratio automatically. If a company uses this model, they can make adjustments to the way their storage works so they can better handle product movement.

For more information on how Microsoft Dynamics NAV Barcode Scanning can help your business improve inventory management, check out the “Keeping the Physical World and the Virtual World in Sync” white paper today.