Planning for Your AS/RS Inventory Replenishment

Information provided by Sapient Automation.

April 17, 2012—The benefits of automated storage and retrieval systems (AS/RS), horizontal and vertical carousels, and vertical lift modules (VLMs) are improved throughput, more accurate picking, less operator strain and fatigue. The result is significant improvement in order picking and fulfillment efficiency.

One aspect of automated storage and retrieval system operation that organizations often misunderstand, however, is the replenishment side of the picking and fulfillment operation. The misunderstanding is that automated storage and retrieval systems, such as horizontal and vertical carousels and VLMs, cannot be restocked as easily and efficiently as traditional rack and shelving systems.

Replenishment plays a critical role in fulfillment operations, reducing system throughput and overall picking efficiency. While this is true for all material handling systems, the impact of inefficient replenishment procedures can reduce the overall effectiveness of horizontal and vertical carousels and VLMs and negate some of the benefits associated with their use.

To realize the true value of these automated storage and retrieval systems to bottom-line improvement, it’s important to consider replenishment as well as retrieval. That is most easily done through a simple information collection and analysis process.

Generally, replenishment becomes an issue when an organization fails to understand the dynamics of the complete order fulfillment process. It’s vital to the success of an automated storage and retrieval system that management build a stock-keeping unit (SKU) profile that describes inventory, how and to whom it’s distributed, and in what quantity and time frame specific products in the inventory are distributed. This data-collection process should include a listing of part numbers and descriptions, part sizes and weights, stock quantity, reorder point and reorder quantity, the quantity of the individual product picked, a list of products that are used or picked together, which products move faster because of seasonal and other factors, and product/process throughput and flow.

Use this information to categorize the inventory. Assign products into categories of velocity, for example, fast, medium and slow movement. Categorize them by their physical characteristics such as small, medium and large sizes, light or heavy, conveyable or not conveyable, and by the manner in which they are packaged.

By taking the time to categorize parts and group them by families or common usage, the time saved in retrieval, and, consequently, replenishment will be significant and productivity will improve.

With this information in hand, it’s relatively easy to match each SKU’s velocity (speed of demand) plus the physical size of the SKU for order picking efficiency by selecting the right equipment for the items to be stocked and for the type of picking operation required. Once the proper system is selected, it’s a matter of initially stocking the system for the most efficient operation by the assignment of items to a particular location in a storage and retrieval system to maximize system capacity and improve the efficiency of the operation. Storing parts in their appropriate distribution quantities significantly reduces part handling time and, consequently, the costs associated with unnecessary handling, whether that be in picking or restocking.

By incorporating bar code scanning, pick-to-light technology, voice picking, and RFID with automated storage and retrieval systems, the picking and restocking operations become even more efficient. These technologies not only improve picking and restocking throughput, they also improve accuracy to 99.99 percent.

The 5 to 10 Percent Solution

When should replenishment occur? The efficient flexibility of horizontal and vertical carousels and VLMs makes it easy to replenish by restocking as picks are made, between waves, during off peak times, or slower shifts. What is more important is how much to restock.

To take optimum advantage of the efficiencies of horizontal and vertical carousels and VLMs, restock no more 5 to 10 percent of SKUs each day, regardless of what typical supply is. For example, some operations might keep a month’s supply of specific SKUs on hand, whereas another operation might keep a week’s supply on hand.

If items move so fast that the replenishment requirement is more than 10 percent per day, then a storage and retrieval approach different from Horizontal and Vertical Carousels and VLMs should be considered.

One alternative is the flow rack pick module. These rack systems can be replenished from the rear of the rack while picking is done at the front. The disadvantage is that pickers have to walk and search for items. It is not uncommon for pickers to have to walk miles per day and use up to 75 percent of their time traveling rather than picking. While pick modules often appear to be a good solution to efficient picking/replenishment needs, they are often underutilized because they are stocked with inventory that doesn’t require daily replenishment.

A better solution is the universal workstation concept. The universal workstation is a combination of horizontal and vertical carousels and VLMs and a manual pick-to-light flow rack. This is where understanding the SKU profile is extremely important. Faster moving SKUs are stored in the flow rack for more efficient picking. Slow and medium movers are stored in carousels or VLMs where they can be efficiently retrieved and replenished.

Batch picking and replenishment can also improve overall automated storage and retrieval system efficiency. Batch picking and replenishment is most frequently used in conjunction with Horizontal Carousels and universal workstations integrated with inventory management software. Batch picking is the technique of picking multiple orders simultaneously. Batch replenishment is the process in reverse. Software directs operators to the correct restock location, just as it directs them to the correct pick location, in the system. Using this technique, an operator can replenish an automated system with the same speed and accuracy as items are picked.

Horizontal and vertical carousels and VLMs offer significant advantages in space utilization, picking accuracy, employee productivity, system throughput, and improved ergonomics. Improved productivity resulting from the installation of automated storage and retrieval systems can reduce labor costs, make more efficient use of floor space and reduce maintenance and energy costs. These savings often result in a return on investment (ROI) in 12 months. Likewise, these systems often help organizations realize sustainable design, Lean, JIT, Six Sigma, and Good Manufacturing Practices objectives. Through up front planning, replenishment efficiency, as well as picking efficiency, can be optimized.