Macquarie University

BUSINESS L ENGG4104

1. How should the bin location for each SKU be decided? How an SKU should be directed to its bin at
the time of inward receipt.
The ware house of Raymond Limited was located in manufacturing unit of Vapi and Chhindwara. The
material which needs to be dispatched to the consumer was stored in the warehouse in different floors.
Each floor is divided in different zones and each zone comprises of different number of bins. The stocks
keeping unit (SKU) were located in bins and the location were decided based on several criteria which
includes:
i. Market Situation: The area for the storage is separated on the basis of market situation. For Example,
Raymond has different markets based on material and need of customer. It includes exclusive showroom,
good length as well as old length materials and branded outlets .So one of the criteria for placing SKU in
storage bin is market situation.
ii. Based on dimension of the material: In storage area, the bins are arranged vertically in different levels.
Each piece has different quality and length. For example, cotton fabric occupies less space as it is thin on
comparing with coat fabric.
iii. Based on put away team member’s experience: If the materials are identified without bar code, the put
away team staff will decide the relevant storage location of the bin for SKU by understanding the brand
name and based on experience.
iv. From Enterprise Resource Program/ Warehouse Management System: The SKU can be located in the bins
by the put away person based on the undertaking from the ERP/WMS. The SKU were placed in the storage
bins after appropriate scanning of the barcode of the material. So location of each SKU is based on the
information from ERP/WMS system
At the time of inward receipt the SKU is directed to its bin in different steps which includes:
 Step 1: The materials are collected in warehouse from the folding department. The materials are delivered
in a piece with defined dimensions.
 Step 2: The pieces are scanned with a device and transfer to the SAP system.
 Step 3: The pieces are moved by the workers using a trolley to warehouse. At the entrance of the
warehouse the receipt is scanned for confirming.
 Step 4: The put away staffs relocate the piece from trolley to the storage bins located in different levels.
 Step 5: As the final step the piece is again scanned for confirmation using handheld device.
These steps are followed for locating the Stock keeping unit in storage bin at warehouse from the folding
department.
2. How should the picking efficiency be improved?
Based on out bond delivery (OBD), the list for picking is created in the warehouse. The picking efficiency
can be improved in several ways which includes:
i. Stock Availability: Before generating pick list, the stock availability needs to be considered. Because
picking incompatibility occur when gap between demand and supply increases due to the lack of
stock availability.
ii. Picking plan: The picking schedule/plan needs to define prior because it can cause huge variance in
the rate of picking. The high and low picking rates can lead to non-utilization of the work force which
can reduce the productivity.