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 Distribution Center 101
Introduction: A basic distribution center performs three primary functions: receiving, stocking, and shipping. Incoming products are received into an inventory tracking system at a point of entry usually designated as the receiving dock. Once items are received into inventory they usually need to be put into storage for retrieval at a future time. (The exception would come in a cross-docking operation which is the subject of a future article.) This process is referred to as stocking. Finally, the retrieval of products from storage to fill orders is called shipping. The storage of product is the transition step between receiving and shipping. Therefore the stocking function has direct impact on both receiving productivity and shipping productivity. The choice of where to store a product directly effects the time and labor of the put away actions from the receiving dock. The location and quantity of that stocking action will directly effect the efficiency of retrieval, called picking and ultimately shipping.

 D.C. Layout:  The layout of the distribution center will directly effect it’s operations. By clearly understanding the process flows within a D.C. the storage designer can set up the most efficient layout. The storage requirements of a D.C. are dictated by the products being distributed, and all D.C. layouts must consider the product categories and expected velocities of movement. As a general rule most D.C. storage revolves around two fundamental categories. These are case products and split case products. Case products are picked and shipped as a unit or part of a palletized unit load. Split case products, also referred to as repack, are normally picked to some type of consolidating container, a shippable tote or over-packing case. Typically case products are single SKUs, while over-pack cases may contain multiple SKUs. In general, split case picking and over-packing are more time and labor intensive than full case picking. It is also not unusual for split case product to represent 65% or more of a D.C.s orders. The size of split case products and the extra time involved in picking and shipping them usually cause them to be stored differently than full case products. For full case products we normally divide them into three storage groups : full pallets, partial pallets, and bulk reserves. A particular SKU, based on it’s physical attributes, will have a different piece count for each of these storage groups. Storage rack configurations will determine slot or bin attributes. The attributes of a SKU for storage and shipping are normally established as part of the receiving process for first time received products. Split case products can normally be divided into four storage groups: full pallets, shelf boxes, carousel boxes, and over-sized. Like full case products, each storage group for a specific split case SKU will vary in the number of pieces stored based on the SKU’s attributes and the physical configuration of the storage equipment being used.

 Random Slotting: The storage of products for the facility, having now been subdivided into designated full case and split case areas, can be fully randomized by slot location. A slot is defined as a storage location which has a specific set of storage attributes. One key to successful random slotted storage is the definition of both physically attributed storage groups and physically attributed SKUs. For any product , SKU, it is easy to define rules of storage and to determine put away quantities once these definitions have been established. At this point, it may be useful to point out the advantages of random slotting. The most obvious advantage is the flexibility that random slotting exhibits over fix location assignments. In a fix location scheme, storage locations are assigned to specific products in advance. If the assigned product is in short supply it’s prearranged locations are wastefully reserved. If the velocity of the assigned product increases, requiring larger stocking levels, the storage scheme for the facility must be reworked to accommodate for more adjacent storage space. In a random slotted system, products are dynamically assigned to storage slots which means that if the product stocking levels decrease, slots are automatically used by other products. If the stocking levels increase, there is no need to rearrange the storage plan as adjacent storage is not required. Additionally, because random slotting does not require the same SKU to be stored in adjacent locations, you can add rules to your product put away logic that can stage product across multiple picking zones to facilitate more productive distribution of picking assignments by improved zone balancing.

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