Whether you are setting up a warehouse operation for the first time, or restructuring an existing operation to meet increased demand as your e-commerce business grows, it is well worth spending time to consider the physical layout of your warehouse and how you will organise the storage of your inventory items. Careful planning at this stage can lead to great benefits in terms of process efficiency when you implement the PVX warehouse management system (WMS), and will also help make future expansion less disruptive. This article gives you some advice on the aspects you should consider and some good practice for organising and labelling your storage locations.
Arranging your warehouse layout
Planning the physical arrangement of the inventory storage and work areas in your warehouse is a fundamental first step in implementing a WMS.
Try to arrange the warehouse so that inventory flows through it in one direction. Ideally, goods will be received at one end and despatched from the other, with the storage areas located in between. Take advantage of all available doors to help make this happen.
Create a generic Goods In area into which product can be registered and received before being put away. This can be quite a small area as PVX enables items to be checked in and put away quickly and efficiently. A similar area can also be set aside nearby for handling returned items.
Design a despatch area with a suitable layout to allow picked items to flow through the scanning, label printing and packing processes. Ideally ensure that the packing process can be expanded or contracted as needed to cope with seasonal variations (if applicable). Setting up the despatch area is covered in more detail in a separate article.
Decide on the location storage types in your warehouse (such as zones, aisles, bays, etc.) depending on the type of items you store. For example, large items like washing machines may be stored on a floor location which is a zone in itself without any associated aisles, bays or shelves. Bear in mind the height of racking and the associated issues with reaching items, depending on the equipment you have available. Also remember that each location where items are stored will need to be barcode-labelled (see Labelling locations).
Leave spaces for operators to walk around and between aisles and bays. This will improve the efficiency of picking operations using location sequencing.
Store products on shelving one item deep when possible, to avoid operators having to move items to reach those behind.
When storing lots of small items, divide the shelving into smaller slots so that each slot contains fewer different types of items. This will help operators find items quickly when picking. The picture shows an example of shelving that would benefit from being divided into smaller slots.
Location uses
Consider the location uses available in PVX (bulk, pick, quarantine, despatch) and decide how many locations of each type you are likely to need in your warehouse. Create bulk locations for bulk inventory that you store within the warehouse. Create pick locations for items to be stored in and picked from to fulfil sales orders. Create quarantine locations for damaged or faulty items; inventory stored within these locations will not be available for picking so need not be as accessible. Despatch locations can be created for items to be picked into prior to packing and shipping to customers. These are often trolleys that are moved around the warehouse during picking and then taken to the despatch bench.
Some warehouses have all locations set up as pick locations which makes storage and picking inefficient. Ideally, pick locations should hold enough inventory to fulfil the orders for the day/shift. Try and keep pick locations close to the despatch area, especially for items that are currently selling in larger quantities such as seasonal goods and promotions. (The time that operators spend walking around during picking can consume as much as 60% of the cost of the order fulfilment operation.)
All other inventory should be stored in bulk locations. These locations will often need larger amounts of space for access because fork-lift trucks will be used to move items in and out of them, so they are best kept separate from pick locations for safety reasons. They can also be located further from the Goods In area if necessary as they will not normally need to be frequently visited.
Organising location numbering
Follow the steps below to create the numbering for the locations in your warehouse which can then be used in the location barcodes. You can find more information on the different types of barcodes that are available in a separate article.
Organise the location groups you are using in the warehouse into a sensible hierarchy. This is normally based on the physical capacity of the groups, for example Site - Warehouse - Zone - Aisle - Bay - Shelf - Slot/Box.
Assign numbers or letters to each level of the hierarchy. Even if you only have one site with one warehouse, assign codes for these groups to avoid the need to relabel everything if the business expands in the future. To help make the coding less confusing and easier to read, it's helpful to alternate between letters and numbers (see the example in the table).
When assigning codes for the physical objects in each location group (zones, aisles, etc), start the numbering from the location nearest to a wall and increase the values outwards from this point. This allows coding to develop logically if expansion of the warehouse is needed in the future. Similarly, always start the coding of shelves from the floor and work upwards so that shelves can easily be added above without affecting the coding structure. Always be consistent in your numbering.
Use the structure to determine the unique codes for the last level in the hierarchy (the locations themselves) as illustrated in the table. These will be used on the location labels in the warehouse.
To make the codes easier to read, you can use dots between characters. We recommend that you use dots rather than dashes as dots take up less room on the labels and are easier to type into a handheld device if required. However, bear in mind that certain types of barcode cannot include characters other than letters or numbers, so check that the barcode type you are planning to use for your location labels is suitable for your codes before printing and applying the labels. If in doubt, do not use dots or dashes as they may cause the location codes on the labels to be different from those stored in PVX.
Location group |
Example layout |
Example location |
Example location code |
Site |
Company |
SD Toys |
SD |
Warehouse |
Warehouse 1 |
Warehouse 1 |
SD1 |
Zone |
Zones 1-4 |
Zone 3 of Warehouse 1 |
SD1.3 |
Aisle |
Aisles A-C within each zone |
Aisle B of Zone 3 |
SD1.3B |
Bay |
Bays 1-6 within each aisle |
Bay 2 of Aisle B of Zone 3 |
SD1.3B.2 |
Shelf |
Shelves A-D within each bay |
Shelf C of Bay 2 of Aisle B of Zone 3 |
SD1.3B.2C |
Slot |
Slots 1-3 on each shelf |
Slot 3 of Shelf C of Bay 2 of Aisle B of Zone 3 |
SD1.3B.2C3 |
Labelling locations
Once you have set up the barcode label printer and templates in your warehouse, you can print out the location labels using the coding you have developed from your warehouse layout.
Go to the Locations tab in the Warehouse module of the PVX web app.
Click through the location hierarchy until you see the locations themselves displayed in the tab window.
Tick the Print checkbox for the location labels you want to print.
Click Print.
In the Select a printer dialog, choose a printer from those available on your system and select a template from the drop-down list. You can tick Remember the printer selection at the top right of the dialog to save these settings.
Click OK and the location labels will be printed.
Choosing a template with the right label size is important to ensure that all the necessary information is displayed and that the label is clear and easy to read. The 76 x 51 mm label is ideal for labelling most locations, with the 51 x 26 mm label being available for labelling smaller slots on shelves.
You can find tips and suggestions on placing your location labels below:
Label bays facing each other with odd and even numbers as shown to enable more efficient pick sequencing to be set up.
Racking with multiple shelves can be labelled at a single level for ease of scanning. Use single or multiple arrows to indicate the location barcodes for the shelves 1, 2, 3, etc levels above or below the label.
If you plan to store smaller items in locations increase the number of slots on the shelf. Bigger items can still be placed in the slots and scanned with the barcode furthest to the left.
When labelling areas of open floor used to hold inventory, remember that barcodes do not survive if stuck directly to the floor unless in a protective case. It is more common to put items on to pallet bases and label these. Some warehouse operators also hang location barcode labels from the ceiling.
If you decide to label trolleys with round frames with location barcodes (for example, as despatch locations), we recommend that you place the barcodes vertically as they do not read well on curves.
Remember that most people are right-handed, and will tend to hold items in their left hand while scanning with the right hand. Bear this in mind when placing the locations barcode labels, and also consider the picking route that operators will take through the warehouse as this may mean that the optimum position for labels will be different between adjacent aisles if operators move along them in opposite directions (see the article on location sequencing for further information).
Avoid placing barcodes immediately adjacent to each other as this can cause the wrong barcode to be scanned in some cases, particularly if the older scanners are being used that read from a horizontal beam. Separate or offset the labels to avoid this, or tilt them slightly to the right (this can also help avoid repetitive strain for operators scanning the labels).
If regular layout changes in the warehouse are anticipated, it is worth applying barcode labels to magnetic tape so they can be quickly moved around as needed.