Strategies in a Warehouse

Strategies in a warehouse.
This note is to give some details of strategies used in a warehouse that is SAP managed. The
idea is that you should be aware of the concept behind using a particular strategy so that when
it comes to proposing a particular solution to the client for a specific requirement ,you are aware
of the possible standard strategies and when they are typically used.

I would like to reiterate here that every consultant thinks in a different way and it may be
possible that the solution proposed by one may be different than other for a particular
requirement.It is important that the concepts should be mastered.The quality of solution will
largely depend on a consultants understanding of the requirement,and clarity of concepts
regarding available options that provide a solution to the clients requirements . Here we will
discuss some of the standard and commonly used put away and picking strategies.

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PUT AWAY STRATEGIES

FIXED BIN STORAGE( F): This strategy is very commonly used. It is used when we need to
store material in a particular bin which is the fixed bin for the material. Small products and fast
moving items that need to be stored in pick face use this strategy.The material is stored in a
single bin.i.e fixed bin. The data regarding this bin is maintained in the materials master record.
Storage bin is entered into the material master and does not change unless the material master
record is changed.
Note: Pick face is the lower level bins from where material is easily picked. Fast moving items
are kept in pick face.The bins are called pick face because of the high picking activity in the
bins.

OPEN STORAGE (C): This strategy is applied to materials that are stored in areas of open
floor, where there are no racks or lines. The storage type is divided into sections and the
protocol is that one storage section is represented by one storage bin.This is typically used
when we want to store heavy or bulky items that cannot be placed on racks.

NEXT EMPTY BIN (L): Some warehouses are structured so that material can be stored in any
bin within the storage type. This structure can result from the nature of the material stored in the
warehouse: e.g., it maybe different materials all stored in the same size container. If this is the
case, the put away strategy can be configured so that the system will select the next empty bin.
In manufacturing industries that produce electronic components, the parts are often small,
delicate and liable to damage by static charge . These components are stored in containers in
the warehouse that are safe for all products. Many warehouse store these products use
carousel system that places new items in the next empty bin available.

BULK STORAGE (B): This is also a very commonly used placement strategy.It is for material
that is stored in large quantities. This is not to be confused with material that can be stored in
bulk containers, such as grain, sand, cement, fertilizer companies.
For eg.In beverage industry, a single production runoff of a beer may produce several thousand
cans of the product. Once this is placed in packs and then stored on pallets, it will be stored in
bulk storage type.
The bulk storage type needs additional configuration for defining the structure of the bin i.e the
bin is divided into stacks and levels. It is common to use storage units when storing material in
bulk storage.When placement is done in this bin the storage unit automatically occupies slots
within a bin.

NEAR PICKING BIN (K): This strategy is used for material that is being frequently picked,
because it is appropriate to store the material close to the picking areas. The warehouse can
use this strategy to see of the material can be placed in the fixed bin. If not, the system will try a
reserve area, and finally try to find a bin that is closest, using configured search.
In the search sequence this storage type is maintained next to fixed bin storage type. So if the
fixed bin for a particular material is full to the capacity ,the system will go to the next storage
type and find a bin in a area closest to the fixed bin.This reserve area needs to be told to the
system via maintaining relevant configuration.

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Picking strategies
Fixed storage Bin (P): This strategy is very widely used .It relies on the data that has been
entered into the material master record for the material to be picked. Fixed storage bin is
entered into the material master in WM2 screen view. This storage type needs to be maintained
1st in the put away search sequence.

FIFO first in first out (F) : This is also very commonly used strategy in a warehouse. Here
system proposes the oldest quant in the storage type for picking (using the GR date to define
the oldest quant). The GR date flows from IM at the time of goods receipt and is adopted by
Transfer requirement and at Transfer order creation during putaway this field is copied into the
quant table LQUA and stored with the quant.

Shelf Life Expiration Date (SLED) (H): Used for materials with the shortest remaining time
before the shelf life expiration date .In many industries especially retail and grocery the SLED of
materials is a very important characteristics. This can be sales focused shelf life, where the
material can only sit on a shelf until its sell by date. It can be production focused, as when
chemicals and raw materials can be kept only for so long that they still meet tolerance limits for
use in the production process. Under this strategy the materials is picked based on the shelf life
of the quant of material in a warehouse .
To set up the system to manage materials with a shelf life expiration date (SLED), you need to
carry out the following tasks:

Activate shelf life expiration date management in the Control Data section of the warehouse
number record.
Activate picking strategy H in the storage type records concerned.
Maintain the data in the Storage view of the material master record.

Partial Quantities First (A) : This strategy is especially useful with storage unit management.It
is used if the requirement is that there is a need to pick quantities less than the standard storage
unit i.e partial quantity. The warehouse manager does not want to break full pallets and return
the partial pallet to the return storage bin.This increases the number of partial pallets. So
basically this is used when you would like to reduce the number of partial storage units in a
warehouse to as few as possible

With this strategy the system overrides FIFO principle and searches for the partial storage units
first available.

When the system searches for a quant, it follows this logic:

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1. If the required quantity in the transfer order is the same or greater than the quantity of a
standard storage unit, the system attempts to remove a standard storage unit from
stock.
2. If no standard storage units are available, partial storage unit quantities are used.
3. If the required quantity in the transfer order is less than the quantity of the standard
storage unit, the system first tries to remove partial storage unit quantities from the
stock.
4. If no partial storage unit quantities are available, full storage units are broken.

Large and small quantities (M) : This strategy is less frequently used and useful for
companies whose warehouse store the same material in varying sizes of bins and storage
types. A more practical and easy to understand example will be taking partial quantities from
pick face and full pallets quantity from high rack. Here you need to maintain the control quantity
in material master. Control quantity is typically equal to the One less than the palletization
quantity. If the quantity to be removed is less than palletization quantity then system will pick
quant from the pick face.If the quantity to be picked exceeds the control quantity for that
material ,then the system will pick from the high rack storage type which needs to be maintained
in the sequence for Picking.

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