Locations or addresses are one of the main components of a successful fulfillment operation. Locations categorize physical processes and provide easy access to inventory in your warehouse. The locations should be very clear to operators when they see the location codes on the mobile devices or paper tickets.
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How to Name Your Inventory Locations
While there is no perfect naming system for warehouse locations, I will share a simple methodology that we use at Logiwa for small business retail warehouses.
Location codes consist of three fundamental elements:
- Column (bay)
- Level (some warehouses have only one level of inventory)
Sector, column, and level codes can be made out of numbers, letters or both. In the case of both, your letter A would stand for first level and B for second level, and so on so forth.
The letter and number combination is most commonly used on defining sector codes. For example A-1 or B-02 ; where initial letter shows a zone, an aisle, a street or a block, followed by the number that indicates shows the row or line number.
You can apply below steps to start your naming process:
- Warehouse: If you have more than one warehouses, then a code referring the warehouse must be added preferably as an initial to the location code.
- Section Code: Define your sections according to your warehouse layout (Read: Optimize Your Warehouse Design)
- Inbound staging area: I suggest using a simple numeric character for your inbound staging area. In our sample warehouse layout, the naming formula for inbound staging area can be “Section-Sequential number”. Eg. A-1.\
- Outbound shipment area: Similar to the inbound staging area, the naming formula for outbound staging area can be “Section-Sequential number”. Eg. A-2.
- Back-to-back racks: Back-to-back racks need more attention. It is better to define aisles, levels and columns for back-to-back racks.
- I used “Section-Aisle-Column-Direction-Level” naming formula in my small warehouse.
- Eg. B-1-1-L-1 (Section B, Aisle 1, Column 1, Left side, Level 1), B-1-1-R-1 (Section B, Aisle 1, Column 1, Right side, side, Level 1)
- Free areas: In our sample warehouse design, the naming formula for the free areas can be “Section-Sequential number”. Eg. C-1 and C-2
- Value added services : The naming formula for the value added services area can be “Section-Sequential number”. Eg. E-1.
- Packing desks: The naming formula for the value added services area can be “Section-Sequential number”. Eg. D-1,D-2,D-3.
- Damaged product area: The naming formula for the value added services area can be “Section-Sequential number”. Eg. F-1.
- Moving Locations ; If you have locations that move (totes, carts or racks on wheels or other), you should use a name that identifies the function of that location.
- For example if you have cooling racks for baked goods you may want to call them “COOL-1” or “COOL-2”.
- Or you may just use a name that identifies the look of the cart for instance if you have red cart you might call “FERRARI-1” rather than using sector, column, level combination which might confuse pickers as they try to make sense out of that combination.
Location Labels: Why Do We Need It?
In order to have an effective inventory management in your warehouse Every physical location needs to be separated by clear lines in your warehouse and every physical location needs to have a location label with a matching location code available on Inventory Management System.
Inventory items needs to be located quickly for an efficient stock management process therefore items should be located in a way that leaves no question to which location. Location codes must be designed in a way that makes navigating in the warehouse effortless and smooth.
Here are examples of what location labels could look like:
Printing and Mounting Labels Checklist
Here are some guidelines you should follow when printing and mounting your own labels:
- Make sure to have a label printer and matching labels ready:
- Thermal transfer printers require ribbons and must be printed on the colored ribbon installed to normal label papers.
- Direct thermal printers only print in black and only on thermal label paper.
- Shelf labels should be white for maximum contrast to special color coding and arrows.
- If there are no shelf systems available in your warehouse and the inventory is being kept on the ground:
- All locations must be separated from all sides by clear lines
- Location labels can be mounted on a cartoon sheet or a plate right above the location attached to a cable or a simple rope.
- In this case, a letter sized paper is preferred to print the codes on. This way it is it easy for people to read and can be scanned with a barcode.
- Make sure that labels show the full name of the location and no two labels should be the same.
- Labels should be mounted so as not to obstruct normal activity or get easily ripped off or damaged.
- Before applying the label, make sure that the surface is clean. If you have any doubts about whether or not the label will stick over the long-term, cover the label with clear packing tape.
- If you are trying to apply a label to a wire rack, use the duct tape on one side of the wire so that the sticky side of the label and the sticky side of the duct tape will stick together with the wires in between.
- If you need to use arrows, print a sheet of arrows using a word processor and then cut and tape the arrows on either side of your labels.
- When location codes of two different levels are mounted on the same place between shelves an arrow stating the direction that location code belongs to can also be added to the label.
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Written by Erhan Musaoglu
Erhan Musaoglu is the CEO and Co-Founder of Logiwa.