An enormous number of advanced inventory systems are involved in the procurement, handling, and shipment of inventory, all of which require different types of controls. While I realize that control for a wide ranging [i.e.: from paper-based inventory acquisition systems, through bar-coded tracking systems, cross docking, pick-to-light systems, and zone picking, and on to controls for manufacturing resources planning and just-in-time systems] are required, In this post I will be solely focus on control system for advanced inventory warehousing only. Enjoy!
Advance technology and management concepts can be built on top of the basic computerized perpetual inventory tracking system to improve the overall level of efficiency while also reducing the amount of manual transaction processing. However, since so many different systems are in use, they are not described here as a single integrated system. Instead, each one receives a separate description and set of associated controls. The systems are described next.
Bar Code Scanners Control System
Under bar code scanner system, the warehouse staff creates a bar-coded part number for each item as it enters the warehouse and attaches the bar code to the item. It also creates preset barcode labels for each warehouse location and posts them at each location. Anyone moving stock then scans the part number bar code and the bar code for the location to which it is being shifted and manually enters a quantity and transaction code to complete the transaction. This information typically is entered on a portable scanner that can be placed in a cradle to upload batched information to the central computer system or used in real time with a built-in radio to transmit and receive transaction information.
Related controls are described next:
Print part description on bar code labels. A major risk with a barcoded scanning system is that the bar code label contains an incorrect part number, which will then be scanned multiple times as the item to which it is attached moves through the warehouse. To make it easier to detect incorrect bar codes, always include the item description on the bar code label, which should print out just below the bar code.
Laminate warehouse location tags. The bar-coded tag identifying each bin location in the warehouse can be subject to a great deal of abrasion from forklifts and other materials-handling equipment, resulting in damaged bar codes that cannot be scanned. To avoid the risk of having the warehouse staff manually input the location information [with the attendant higher risk of data entry error] into their bar code scanners, laminate all location tags to increase their durability.
Regularly review location tags. Given the durability problems with location tags as described in the preceding control point, it is useful to conduct a regularly scheduled review of all location tags to determine which ones should be replaced. This is also a good way to determine if inventory is now being stored in locations where there is no identifying tag at all, so that tags can be created for those locations.
Require specific character lengths for scanner data entry fields. Entering an inventory movement transaction in a bar code scanning device will require several entries: for the item number, bin location, transaction code, and quantity being moved. If the scanner accepts character strings of any length in each of these fields, it is quite likely that the materials handling staff will enter scanned and keypunched information into the wrong fields. To avoid this, set up the scanner to allow specific maximum character strings in each field. For example, eight digits may be both the minimum and maximum character string for a location code, while ten digits is required for an item number, and nothing over four digits is allowed for quantities. As an additional control, always use different numbers of characters for location codes and item numbers, so they cannot be confused with each other.
Require scanner uploads at all scheduled breaks. If the materials handling staff is using batch-mode scanners that must upload their contents to the central computer, require the staff to put the scanners in their upload cradles whenever they have scheduled breaks. This prevents an excessive amount of information from being stored in the scanners while also keeping location-specific inventory counts more accurate.
Assign picking and put-away responsibilities by aisle. Since bar code scanning requires the materials handling staff to both move items and record transactions, it is possible that the staff will forget to conduct scanning transactions in the midst of other duties. To track down which employees are most likely to not be completing their scanning chores, assign picking and put-away responsibilities by aisle. By doing so, errors found through cycle counts can be traced more easily to specific employees.
Cross-dock Inventory Control System
Under cross-dock inventory control system, items arrive at the receiving dock and are moved immediately to a shipping dock for delivery elsewhere. This approach eliminates inventory moves into a storage rack as well as subsequent picking and movement back to the shipping dock.
Related controls are described next:
Use warehouse clerks for all data entry. When the materials handling staff is responsible for recording both receiving and shipping transactions, as well as moving the physical goods, it is entirely likely that they will occasionally forget to record transactions. To avoid this problem, concentrate all transaction-recording tasks with warehouse clerks whose sole responsibility is to ensure that receiving and shipping transactions are properly recorded.
Replace receiving data entry with advance shipping notices (ASN). If suppliers can reliably send the company exact information about the precise contents of each truckload being shipped to the company, it is possible to use each ASN as a receiving document that is entered as a receipt as soon as the truckload arrives. This approach works only if suppliers can prove that they can be relied on to send an ASN for every shipment and to detail the contents of each truckload in the ASN correctly.
Pick-to-light Control Systems
Under pick-to-light systems, light sensors are mounted on the front of each bin location in the warehouse [though usually only for small, easily picked items]. Each sensor unit is linked to the computer system’s picking module and contains a light that illuminates to indicate that picking is required for an order, a liquid crystal display (LCD) readout listing the number of items to be picked, and a button to press to indicate completion of the pick. When a stock picker enters an order number into the system, the bin sensors for those bins containing required picks will light up and their LCDs will show the number of units to pick. When a stock picker has completed picking from a bin, he or she presses the button, and the indicator light shuts off.
Related controls are described next:
Assign put-away responsibilities by location. Even the best pick-to-light systems still will result in errors if the materials handling staff is putting goods away in the wrong locations, which causes the pick-to-light system to direct employees to pick the wrong items. To detect materials handlers who put-away in the wrong locations, always assign put-away responsibilities by location.
Assign picking responsibilities by location. Though the pick-to-light system is quite intuitive, some employees are better than others at using the system to accomplish accurate picks. Accordingly, always assign picking responsibilities by location and then use cycle counts to determine count inaccuracies by assigned picker locations.
Stage Received Goods for Zone Put-away
This approach involves setting up several portable conveyors at a dock door, each one leading to a separate staging area representing a different put-away zone; the receiving staff then places items on the correct conveyor for a specific put-away zone.
Related controls are listed next:
Identify put-away zones by computer. If a company has thousands of products in stock, it should not rely on the memory of the receiving staff to determine which conveyor to place incoming items on. This problem is exacerbated if the warehouse manager regularly optimizes warehouse locations, which makes it even more difficult to remember where products are stored. The result is inventory piling up in the wrong aisles, which delays their storage as well as their entry into the computer system. To avoid this problem, have the receiving staff enter each part number into the computer as it arrives, so that a nearby computer monitor automatically calls up the correct put-away zone, telling the user which conveyor to place the received item on.
Record incorrect put-away zones for employee training. If a company relies on employee knowledge of where products are to be stored, then all items sent to the wrong zones should be recorded, so that employees can receive rapid feedback regarding where the inventory was sent and where it should have gone.
Zone picking Control System
Under zone picking system, an entire day’s picks are consolidated into a single master pick list, which is then sorted by warehouse location. Different pickers are then sent to specific sections of the warehouse with their portions of the master pick list, where they complete their share of the picks with much less travel time than would be the case if they were picking for all items on the list. All picked items are then consolidated in a central order breakdown area, where they are broken down to fulfill individual orders.
Related controls are described next:
Record picks at the central picking area. Inventory pickers are much more efficient when they have no data entry responsibilities. Also, since zone picking results in all picked items being sent to a central order breakdown area, these two factors combine to make it highly efficient to have a designated data entry person record all picks in the order breakdown area.
Have pickers specialize in limited picking areas. Though zone picking is a very efficient process, its main difficulty is that no single employee is responsible for all items to be picked, which makes it difficult to determine who is responsible for missed or incorrect picks. Responsibility can be more closely traced by giving employees specific responsibility for selected areas of the warehouse. This also gives pickers greater knowledge of where products are located and what they look like, resulting in both faster and more accurate picking times.
An advanced inventory warehouse does nor meant to be a let the technology work itself. It need more advance control eventually. As usual, the number of controls demonstrated above may appear to be oppressively large, and could certainly interfere with the efficient running of inventory-related activities. Consequently, always be mindful of the need to install only those controls that are truly necessary to the mitigation of significant risks.