Intentional fragmentation for material storage

Abstract

A novel technique (location-relaxed storage) of mixing products within warehouse storage bins is presented and evaluated. Analyses of warehouse operations, storage space efficiency, error sensitivity, and placement policies are presented and compared to traditional warehousing techniques. The major factors that drive the performance differences between traditional, highly organized storage and location-relaxed storage are shown to include the number of unique stock keeping units (SKUs) served by the warehouse and the picking lot size characteristic of demand. The analyses demonstrate traditional storage techniques have greater difficulty dealing with a large SKU base. Furthermore, location-relaxed storage is shown to have a lower sensitivity to operation errors and a greater opportunity for cost savings through optimization opportunities. Finally, a new placement strategy especially suited for location-relaxed storage is presented. As the popularity of Radio Frequency Identification (RFID) increases and the technical issues of widespread RFID implementation are addressed, new applications of RFID technology will change the way the world operates. An ongoing, industry-wide effort to implement RF-tags throughout the material goods supply chain has the support of manufacturers, retailers, and technology companies. RFID in the supply chain represents an enabling technology that will allow warehouse operations to break away from traditional methodologies and adopt revolutionary techniques, such as location-relaxed storage.