Setting Up the Warehouse for Success with a Good Location Master Structure

Setting up a proper warehouse location master in a Warehouse Management System (WMS) is crucial for efficient operations and accurate inventory management.

Understand Your Warehouse Layout

Physical Layout: Map out your warehouse into zones, aisles, racks, and bins. Each location should have a unique identifier.

Logical Layout: Determine how you will categorize locations (e.g., by product type, velocity, storage conditions).

Location Identification

Location Codes: Develop a systematic code for each location that reflects its position in the warehouse. This could be alphanumeric, with each part indicating zone, aisle, rack, and bin.

Barcode/RFID: Assign barcodes or RFID tags to each location for easy scanning and tracking.

Define Attributes

Capacity: Specify the maximum storage capacity (e.g., pallets, bins) of each location.

Attributes: Define any special characteristics (e.g., temperature requirements, hazardous materials) associated with specific locations.

Hierarchy and Structure

Zones and Areas: Organize locations into zones (e.g., receiving, picking, shipping) and further into smaller areas or sections.

Rack and Bin Levels: If applicable, define levels within racks or bins to specify vertical positioning.

Integration with Inventory Management

Link to SKUs: Associate each location with the SKUs that can be stored there based on size, weight, and other constraints.

Stock Allocation Rules: Establish rules for how inventory is allocated to each location based on factors like demand, expiration dates, or picking frequency.

Utilize Software Features

WMS Capabilities: Leverage features of your WMS for automated storage allocation, replenishment, and picking route optimization.

Reporting and Analytics: Utilize reports to monitor location utilization, pick rates, and storage efficiency.

Regular Maintenance and Updates

Audits: Conduct regular audits to ensure location accuracy and optimize space utilization.

Updates: Modify location attributes or expand capacity as needed based on changes in inventory or operational requirements.

Training and Documentation

Training: Train warehouse staff on how to use the location master effectively and accurately.

Documentation: Maintain clear documentation on location codes, attributes, and any updates made to the location master.

Scalability and Flexibility

Future Expansion: Design the location master with scalability in mind to accommodate future growth or changes in warehouse layout.

Flexibility: Be prepared to adjust the location master based on operational feedback and changing business needs.

Security and Safety

Safety Protocols: Ensure that locations are set up to comply with safety regulations and that hazardous materials are stored appropriately.

Security: Implement access controls and monitoring to prevent unauthorized access to sensitive areas.

Through proper planning, you can establish a robust warehouse location master in your WMS that supports efficient operations, accurate inventory tracking, and scalability for future growth. In my warehouse operations transformation experience, I noticed that many organisations do not spend sufficient time mapping out the warehouse zone carefully against operational plan for the products/verticals that their Commercial & Strategy team is working on. Therefore, it takes them years to reverse bad decisions and unfortunately, waste money on automation, equipments or warehouse systems that do not help in the day to day operations or future scalability.

It is important to work with an experienced team when a warehouse is being organised, transformed and especially greenfield sites.

Keeping things simple and planning for a location master in the future is key to scalability. It is also extremely important to ensure that your system locations are organised in accordance to your physical locations with scheduled housekeeping. A good location master setup will benefit the warehouse operation's pick logic and in turn, optimize logistic operations and storage efficiency.