Put-away Concepts – Part I

This article explains system directed put-away in detail; what it is and how it works. The goal of this article is to help the reader understand the concepts and terminology of system directed put-away. In later postings, I also want to show some tricks how to allow both a system directed put-away and a free put-away, using To-Increase Warehouse Management and Distribution for Dynamics AX.

Locating free locations (put-away) is a key capability of a warehouse management system (WMS). Put-away is normally thought of as the process of moving received inventory from the dock, kitting area, or production department to a storage bin. The put-away process is also used to relocate inventory within the warehouse and to replenish dedicated storage bins with inventory from a reserve storage bin. Any time inventory is being placed in a storage bin it is being put away. System directed put-away is when the WMS chooses the destination storage bin rather than the operator.

The benefits of system directed put-away versus operator directed put-away are

  1. The WMS consistently follows inventory storage rules to improve space utilization and increase storage capacity
  2. The system consistently follows inventory storage rules to make picking more efficient
  3. Warehouse workers do not need to be familiar with all of the products the distributor carries in order for inventory to be placed in the correct bin
  4. It is faster – the operator does not have to look for a bin that contains the same item or search for an open bin. For example:
    1. The WMS can determine if the inventory to be put away will fit in the dedicated bin for the item and send the operator there depending on available capacity and/or lot mixing rules
    2. The WMS can determine if the inventory to be put away will fit in a partially full bin that contains the same item (not the dedicated bin for the item) and send the operator there depending on available capacity, zoning rules, and/or lot mixing rules

A good system directed put-away function finds storage bins based on velocity, storage requirements (refrigerated, hazardous, wire storage system, etc.), and usage requirements. Velocity is how often an item in a specific package configuration (most often called package type) is picked to satisfy sales, transfer, kitting, or production orders. Some examples of package types are carton, pallet, bundle, and bag. There are two key words in the above phrase. The first is package configuration; put-away rules are not just by item, but consider the manner in which the item is packaged as well. The second key word is “picked”. The directed put-away function stores inventory in order to make picking more efficient.

All discussion of system directed put-away is with respect to a single location (warehouse or distribution center). An item in a specific package type at a given location will be referred to as a SKU (stock keeping unit) for the remainder of this article.

An ABC coding scheme is used to assign velocity codes for put-away. A velocity code of “A” is assigned to the SKUs picked most often. A velocity code of “B” is assigned to SKUs picked the next most often, and so on. Note that a velocity code is assigned to a SKU, not an item. For example, a carton of an item could be assigned a velocity code of “A” while a box of the same item could be assigned a velocity code of “C”. Velocity code is not concerned with type of item, weight, dimensions, cost, customer, or vendor; just how often the item is picked. This is a different ABC code than is used for purchasing.

System directed put-away based on velocity stores items picked more frequently in bins that are more accessible (knee to chest high near the shipping dock) and items picked less frequently in bins not as accessible (up high in the back of the warehouse). This reduces travel time during picking which helps to improve picking efficiency.

Package type and storage requirements are considered next when selecting a storage bin. Pallets and individual cartons are usually stored in different areas of the warehouse. The same is true for bundles of threaded rod, spools of wire, and hazardous materials; items that require special storage. Storage areas for cartons may be further broken down for large vs. small cartons or heavy vs. light cartons. Package type and the type of storage used determine the material handling equipment required to put away and pick the inventory.

The third factor to consider for system directed put-away is how the inventory is used. Inventory may be used for sales orders, production, or for kitting. Do orders for clean room supplies only include clean room supply items? If so, then it can be productive to store all clean room supply SKUs together. If sales orders for products from a given vendor only include items from that vendor then it would be productive to store the SKUs from that vendor together. If a customer predominately orders items that only that customer uses, then those customer-specific SKUs should be stored together. Otherwise SKUs should be stored based on package type. No matter how SKUs are grouped for storage (package type, customer, vendor, or type of business) storage bins within each section of the warehouse are selected based on SKU velocity. Other factors can come into play for selecting storage bins, but velocity, package type, and how items are sold work most of the time.

The three factors described above (velocity, package type / storage, and how items are sold) are used to build put-away zone lists. Put-away zone lists tell the WMS how to find a bin for inventory that needs to be put away. There may be put-away zone lists for “A” velocity items stored in full pallet quantities, “C” velocity items stored in boxes, “B” velocity items only used by a single customer, or “B” velocity bundles of threaded rod. Put-away zone lists are specific to a warehouse. Depending on your software you assign a put-away zone list to a SKU or the WMS deduces which put-away zone list to use for each SKU depending on the value of the three factors for the SKU.

A put-away zone list is literally a list of put-away zones. The warehouse is divided into put-away zones. Each put-away zone contains a group of storage bins. The bins in a put-away zone are of roughly equal value for some group of SKUs when the WMS is searching for a storage bin in which to place inventory. For example, a put-away zone may contain bins for fast moving carton items or slow moving bar stock. A section of shelving, floor storage bins, one or more sections of pallet rack, or a cabinet of drawers could be put-away zones.

The first put-away zone in a put-away zone list is the preferred put-away zone for the SKU. The WMS looks first for a bin in which to place the inventory in the preferred zone. If a satisfactory bin is not available in the preferred zone, the WMS looks in the second zone in the list, and so forth, until a suitable bin is found or the put-away zone list is exhausted.

Other rules can come into play when the WMS is looking for a bin in which to place the inventory to be put away.

• The WMS could look for a bin that is dedicated to the SKU first to determine if there is enough capacity available

• The WMS may look for an empty bin in the preferred zone before it looks for a bin with available capacity that already contains the same SKU in another put-away zone

• There could be limitations concerning mixing lots of the same SKU

• Rules about filling a bin that contains the same SKU where the age difference is too great (when there are expiration or recertification considerations) could apply as well

• Additional rules apply to the storage of hazardous inventory

A put-away zone could contain many bins. Each bin in a put-away zone is assigned a put-away bin ranking. The put-away bin ranking tells the WMS which bin is better to choose when the WMS finds more than one bin in a zone in which the inventory could be placed. For example, a bin closer to the dock would be assigned a better (higher or lower depending on your software) put-away bin ranking than a bin that is further from the dock.


Source : http://www.distributionstrategies.net

10 thoughts on “Put-away Concepts – Part I

  1. Pingback: System Directed Putaway & Replenishment: Setup in Sage X3 – Supply Chain

  2. The concept of system directed put-away is explained in extremely simplistic terms. The advantages of an automated WMS are many and it shows in the overall efficiency of operations. Space utilization is the biggest challenge in warehouse management. Great post..


  3. Hi Thanks for the explanation you’ve given us-Great job.

    Please assist with the following:

    Is there no better/more efficient way to allocate a new SKU into an empty location.

    At our Retail warehouse we have to slot a new style via a mobile scanner into an empty location and this is very time consuming before the pallet can be bulked.

    For an allocation by Merch to take place all SKUs must be in an active location, is there no way that a new SKU coming in at INBOUND can be pre-slotted into an existing empty location and then replen team just to fill the carton.

    Please advise, looking forward to hear from your expert opinion to speed this process up as this is slowing our productivity down immensely.



  4. If we compare to AX 2009 a location has a type of Inbound, Bulk/Buffer, Picking and outbound location. Everytime we place items into a location it is a put-away, regardless of what type it is. (Maybe expect of the outbound location type, where the procedure is normally staging). So you do a put-away from the receive, and also when transporting goods from buffer to picking locations. With the WM&D the system will decide where to put the items (Either buffer or pick) based on minimum quanity or on existsing orders (sales, production, transfer etc). So Put-away is a process and not a location type.

    I hope this clearifies.


  5. How is a put away location different from a bulk location in a warehouse? Is it the terminology, which identifies a free bulk location as a put away location to store the goods at the best location in a warehouse?


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