Years ago, I was in charge of a 9000 square foot 3PL warehouse. The warehouse is small with a max storage capacity of 400 pallets. Everything was fine since I could remember where most products are and our warehouse management system also had a simple product to location feature which enable us to assign a SKU to a location, then it would show on the picking slip. This is my first ever experience with product, location and where to find products.
I must admit, this simply set up worked very well in the small warehouse. In fact, our paper based picking system was so fast that we would not even consider switching to other ways of managing and tracking inventories in the warehouse. When you can remember where is everything, what do you need a computer for?
Two years later, the company grew and moved to a 24,000 square foot warehouse. The storage capacity went to 1200 pallets and the number of SKU also went up by 4 times. Suddenly, the warehouse staff were no longer able to remember where are the products! A SKU could end up in multiple places – picking bins, storage racking and even left by the receiving door.
Then more problems came.
· Inventory discrepancies gets bigger everyday
· Inventory received but could not be found
· Staff were circling the warehouse trying to find an unit which is supposed to be in stock according to the inventory management syste
· No idea how many units are left on the rack or in the picking bin
· Inventory just disappears from a location: Did the forklift driver moved it? There’s no way of knowing.
Before getting into more trouble, I finally switched to a license plates based system to manage inventory movement. A license plate is an additional layer added between inventory and physical locations. It provides a method for grouping and managing inventory by containers. A container is defined based on your fulfillment requirements. When shipments are received, no matter on pallets, in cartons or even by single units, license plates are attached to the shipments. The license plates could go on a pallet, a carton or a single unit of products, depending on the nature of the products and how would we fulfill the orders. When these license plates move around in the warehouse, they are tracked by scanners. It works exactly like a UPS or Fedex tracking label.
At Y3PL Software, we built the concept of license plates into the root of the software. License plates are used in the full process of order fulfillment, from receiving, put away, restocking to shipping, even inventory adjustment. Following the practise of license plates, you know exactly how many units of inventories in any given locations. It’s all about accuracy and efficiency.
Lastly, it’s worth to mention that with Y3PL Android App, a $150 tablet plus a $50 Bluetooth enabled scanner are all you need to track the movement of license plates. That’s cost efficient.