Product storage problems pt.2

The comment that Eric left in the first entry is right on target with the suggestion to use parts bins. What you see more commonly used for apparel, are cardboard parts bins or even cardboard boxes with a slot cut into them to enable someone to reach inside and grab merchandise. Usually these bins are stacked when there are multiple sizes per item so that one item/colorway takes up one vertical column of bins. When you have more sizes than S, M, L and XL, this becomes less possible.

Warehouse/utility storage usually comes in dimensions to adequately fit warehouse/utility shelving. This is why using regular Rubbermaid type home storage bins rarely fits the space properly. In addition, warehouse/utility storage bins are usually deep enough to utilize the depth of warehouse/utility shelving.

Now that we have discussed that, there’s one more important issue:
Often, a business will use clear bins because they have multiple styles in the same bin. Typically, efficient warehousing only has one unique SKU (one unique color/size combination) per bin. For example, see the photos Vesta took of her inventory set up (two are below).

Her cubbies are set up with one SKU per cubby. You should not have two different prints nor two different sizes in the same bin. This can either cause a lot of wasted space for people who carry small quantities of small items, or it requires you to use smaller bins, or possibly compartmentalized bins.


There is good reason for this, the more you reduce the need to read, decipher or interpret differences between items, the better. Packing and picking becomes much quicker and less error prone.

A long time ago, I wrote a series of posts on proper item identification and the reasons for them. The idea is that anyone should be able to come in and pack one of your orders because the packages are appropriately identified in a way that matches a packing slip. Well, that is a primer for this. Your items should be warehoused in such a way that anyone can pull your orders without having to know the differences between colors or prints or whatever combinations you have. It’s also quicker because someone doesn’t have to sift through items to find the right size or color and this reduces errors tremendously. Typically one sku is used per bin, with the sku clearly labeled on the bin for easy identification. Bold, black, block letters are best.

Also when shelving items, you put your most popular items at the level of easy reach, and typically, easier to get to. If you have more product than fits in a single bin, you typically store the excess up top (maximize your use of vertical space) and bring it down and replenish the lower bins as needed.

And just on a personal note, there does not seem to be enough space between the rows of shelving. That’s a personal observation, but I would also urge the owners to check and make sure they are not violating occupational safety and hazard guidelines with that little bit of walking room between rows. It just seems to be a cramped space to pull orders in. Typically when pulling a lot of orders, the picker/packer would use a utility cart and the rows do not seem to have enough space between them for a utility cart and a person.

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8 comments

  1. J C Sprowls says:

    And, how do you manage this space, Mike? What best practices would you suggest for manufacturers who need to balance space constraints at the early stage of their business’s development?

    Do you double-stack inventory? In other words, is your storage area organized by style where the depth of the stack represents the various colorways?

    Have you costed out the alternative of outsourcing the warehousing and fulfillment? Is there a break-even point that would work for the scale of your business?

  2. jocole says:

    yea! i do this. only i don’t use cardboard boxes, i use grid cubby-hole thingies. but i love it. it makes processing orders a breeze! it’s nice to be reminded that i do some things the right way.

  3. Mike C says:

    And, how do you manage this space, Mike? What best practices would you suggest for manufacturers who need to balance space constraints at the early stage of their business’s development?

    About like you would expect. We use cardboard boxes that contain a single style #/size combination. Each style number can have up to five separate colorways. Individual items are housed inside sealed, clear, polybags. At least, that’s how we do it for pieces that are manufactured to a finished form.

    Some pieces are only partially manufactured, finished only when orders arrive, and those are handled a bit differently in another area of the shop.

    We’ll be investing a fair amount of money in software to help oversee our inventory and order management in 2007.

    Do you double-stack inventory? In other words, is your storage area organized by style where the depth of the stack represents the various colorways?

    If you think of a row of shelving as a two dimensional grid, the X axis represents increasing style number and the Y axis represents increasing size. Colorways are not specifically represented, you have to look in the box and find the color you want. In 2007, we’ll probably switch the definitions of the X & Y axis to squeeze a few more box slots out.

    Have you costed out the alternative of outsourcing the warehousing and fulfillment? Is there a break-even point that would work for the scale of your business?

    Outsourcing the warehouse and fulfillment is not possible for us. A lot of our product flexibility is possible because we store very shallow finished inventory in some pieces. For example, take a pair of yoga pants that comes in black with 4 sizes, 5 different colors of waistband, and 3 different inseams. That’s 60 SKUs for a single style. To get any reasonable depth of inventory per SKU for that style, you’re looking at 500+ pieces. Even that leaves you wide open to SKU holes developing in odd places which make inventory refresh a nightmare. So, what we do is cut and sew partially finished shells of that style by size and store them. We also cut a small inventory of color waistbands and finish them. First thing each morning, our cutter is given a list of SKUs that he needs to assemble from partially finished components. On that particular pant, he’ll pull an appropriately sized unfinished shell from inventory, use a template to trim the inseam to correct length (if needed) and put a waistband with it. The shell, waistband, and finished goods hangtag go into a small basket and is then routing to the sewing room.

    As sales volumes in a certain style grow, we may trade off some inventory growth for manufacturing efficieny. (For example, we may start storing unfinished pieces with waistbands already attached). But, our desire is to be more like a grocery store with its relatively shallow inventory and quick turnover than a car dealership with thousands of cars and millions in carrying costs.

  4. J C Sprowls says:

    Mike,

    Thank you for the analogy between the grocery store and the car dealer. I like that you have found a way to keep your business model nimble and completely, consumer-facing. That insight is helpful for several of us. You’ve illustrated that your product has been designed keeping a strong eye toward operations and turn-around-time.

  5. Yahzi Rose says:

    Its great to hear about the day to day operations stuff. I’m taking notes for the future, and trying to see if I can set up the processes early so my growth will more efficient.

    Mike, I’m wondering about the process. Did you guys come up with the shallow finished inventory/unfinished parts model over time, was it borrowed from another comapany or did you work everything out in advance?

  6. Mike C says:

    Mike, I’m wondering about the process. Did you guys come up with the shallow finished inventory/unfinished parts model over time, was it borrowed from another comapany or did you work everything out in advance?

    We started out with the philosophy of offering as much choice as possible to customers.

    Some of our production processes was planned out and implemented and some of it has grown organically. We getting closer to what we would consider “decent” each season though.

  7. Pam M says:

    This is a great topic and we have been trying to figure out the best way to store our items as well. We get our children’s clothing already packaged with the item number and size labelled on the back so if we store all items with the label at the left it is fairly easy to pull the right size.

    For now we have many stacks (8 bins in each stack) of these plastic containers from The Container Store. This way we can usually fit one style with all sizes in one stack. They stack well, are durable and can hold a decent amount of items. The only problem is they do get costly and to go buy them you can only fit about 8 in a decent size car at a time since they don’t nest.

    http://www.containerstore.com/browse/Product.jhtml?CATID=71232&PRODID=67288

    Pam

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