Directed putaway algorithms are used to suggest the most suitable location for a pallet or product. Directed putaway algorithms must be well designed to achieve more effective warehouse management.
Each warehouse may require a different putaway algorithm because of the layout, product specifications and industry etc. A warehouse management system should have customizable putaway algorithms to adopt different warehouses. A warehouse manager should consider below functions before designing the putaway algorithm:
Fast Moving Items
Before starting our putaway algorithm, we should calculate ABC analysis for our inventory. According to ABC classification, we can classify our inventory items based on below formulas:
- ‘A’ items – 20% of the items account for 70% of the annual consumption value of the items.
- ‘B’ items – 30% of the items account for 25% of the annual consumption value of the items.
- ‘C’ items – 50% of the items account for 5% of the annual consumption value of the items.
Once we find A, B and C type of items, we can try to put away our items equally to closer locations to dock. If one type of items move faster in the warehouse, this approach will provide more productivity in the warehouse.
We can see different product categories in a warehouse. E.g large items/small items or electronics/fashion products. A warehouse manager should define all the different product categories and match them with location zones or groups. This approach will give you an overview of your warehouse layout and putaway algorithm. You can see some samples below.
- Large items are assigned to free areas or B2B racks
- Small items are assigned to mezzanine shelves
- Food products are assigned to cold storage zones
- Electronics products are assigned to special locked zones
While designing our putaway algorithm, we have to define the dimensions and the capacity of our locations. We can use below approach to define the capacity for our locations.
- Pallet capacity can be defined for back-to-back pallet locations in your warehouse
- Volume can be defined for free areas such as staging area
- SKU capacity can be defined for lower picking locations
Above 3 functions are the essential ones to start with your putaway algorithm. For small warehouses, we usually use these 3 functions. When designing a warehouse putaway algorithm for a big warehouse, we can consider more functions such as zone picking, batch picking, picking lines, replenishment policies, FIFO, FEFO.
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