Warehouse storage area optimization for picking

The travelling time takes 75% of the whole picking time. The travelling time during picking can be decreased by using Pareto rule:

Pareto analysis is a statistical technique in decision making that is used for selection of a limited number of tasks that produce significant overall effect. It uses the Pareto principle – the idea that by doing 20% of work you can generate 80% of the advantage of doing the entire job. Or in terms of quality improvement, a large majority of problems (80%) are produced by a few key causes (20%). http://en.wikipedia.org/wiki/Pareto_analysis

The 80% of sales comes from 20% of the stock. By sorting out these 20% of stock and by locating them together close to dispatch zone the travelling time during put-away and picking can be decreased. Easy to say, hard to do. Because Company operates a department store, there are to many SKUs to sort out. For every 1 m2 of sales area there are 15 different SKUs in the warehouse. For a store having net sales area of 700 m2, there are should be stored 10 500 different SKU's in warehouse on average. So the scope of the sorting should be considered in a higher level than SKU. By reading Product data analysis, one step higher level of product description is Size. Practically it will be difficult to sort merchandise by size so we get one step higher on product group hierarchy: color. Color is same as size will be difficult to implement sorting. Model(Stroke ID) is also hard to implement practically in warehouse and StrokeID will change for every new season. The easiest is to sort by Department ID. The whole product range consists of 86 different product departments: man shoes, ladies shirts, children apparel, man underwear, furniture, cosmetics, food, kitchen, home textile and so on. By analyzing sales it was discovered 70% of sales comes from Ladies merchandise and other 30% of sales from man and cosmetics items. But the average price for Ladies merchandise is 800% higher than the average for cosmetic items and cosmetics items SKU count is not more than 20-30. So the most frequent picking is done for cosmetic items. The next is for ladies merchandise and the next is for man merchandise. Inside the ladies group of merchandise Shirts are sold the most, then lingerie, then trousers and so on. So warehouse was divided to the total departments count and departments were sorted out according their sales rate.

There are also other methods could be applyed to decrease travel time in warehouse in addition as batch picking, picking before put-away or even accross-the-dock method.