Kardex Storage Systems
Storage and Order Picking Solutions for Florida & South Georgia

Inventory Management Should Include Consolidation

Inventory management should include consolidation

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Inventory consolidation simplifies your logistic supply chain, enabling you to meet higher demand and lower turnaround times. Reduced inventory saves money in retail, medical, manufacturing, and anywhere materials or finished goods are stored.

Optimization of inventory storage and retrieval is a major factor in a company's success in implementing consolidation. Inventory needs to be readily available for workers to pick accurately in a minimal amount of time.

Today's customers want what they want as quickly as possible, and workers must be able to respond throughout the supply chain.

Why is warehouse consolidation so important?

warehouse consolidation

Inefficient storage of raw materials and parts impacts profitability in several ways:

Labor costs

  • It takes workers extra time to transport parts and tools to their workstation or facility from remote storage areas.
  • Productivity lags as time is diverted to fixing order picking errors.
  • Departments merge but don't have the physical space to store everything, so workers cannot find what they need.

Production delays

  • Important plans such as adding a critical new production line are delayed because there isn't enough floor space.
  • Storage dilemmas impede productivity, as well as a lack of timely inventory replacements.
  • Delay in resourcing maintenance parts extends downtime.

Take the struggle out of storage with better inventory management through consolidation and relocation.

Facility overhead and labor costs are large components impacting profits

Multiple buildings are more expensive in terms of rent or mortgage, utilities, security, and upkeep. The costs multiply for every additional building the company has.

Labor costs escalate when more workers are required to keep production levels up. In addition, productivity suffers when workers make frequent order picking errors, spend time looking for missing or lost parts and tools, and make multiple trips between storage bays and workstations instead of doing their primary job. The result is more employees needed which increases labor costs.

Addressing these perennial challenges requires strategic solutions.

Storage solution plan

Consolidating stored items into a more compact area accomplishes all these goals without losing easy, on-demand access to stored goods. This strategy keeps supplies and tools close to the point of use, minimizes travel time within and between facilities, and reduces the size and/or quantity of buildings.

Post-covid warehouse storage

COVID-19 has been a new and urgent driver of change

Around the world, the COVID-19 pandemic has forced many companies to rethink how they operate.

Employers have had to get by with less staff per shift to comply with social distancing requirements or because of workers out sick or caring for children and family members. Global slowdowns due to the pandemic resulted in slower manufacturing and delayed supply chains, which impacted companies and consumers further down the chain.

At the same time, many consumers were largely confined to their homes, and as a result, e-commerce and home product delivery expanded rapidly. This required faster order picking and efficient shipping and delivery operations, with fewer workers and multiple warehouses.

For many businesses, the economic downturn, labor challenges, and increased demand for products mean finding ways to do more with less. Implementing automated storage and retrieval equipment driven by custom software to consolidate facilities, inventory, supplies, parts, and tools is an excellent and effective measure to achieve that goal.

industrial automated vertical storage and retrieval
Kardex XP Shuttle Vertical Lift Module
Click to animate.

Automated storage and retrieval support successful consolidation

Automated storage and retrieval systems (ASRS) are high-density storage units with multiple, adjustable shelves for compact, customizable storage of materials.
"Any facility that needs to store items and access them easily is a candidate for space-saving ASRS units."

In some cases, instead of being fixed in place, each shelf is movable, either horizontally or vertically, so that while one shelf is accessible through a doorway or opening in the unit, the rest are secured inside. Smaller items can be further organized and secured on shelves with trays, bins, tubs, or totes.

Other units have fixed shelves and a robotic arm or conveyor pulls the shelf or item needed and delivers it to the user through a door or opening.

The machine can be programmed with special automation software to rotate the desired shelf into place at the touch of a button or by scanning a barcode so that items can be retrieved or stowed from a single point of access. Because each stored item is tagged and coded into the computerized system, users don't need to remember what shelf an item is on to find it.

What kinds of organizations use ASRS?

Any facility that needs to store items and access them easily is a candidate for space-saving ASRS units.

For parts, tools, products, supplies, records, and more, these units open up floor space, speed up workflow and throughput, and improve efficiency in many industries including:

  • Warehousing
  • eCommerce - wholesale, and retail; (order picking, product buffering, and staging)
  • Manufacturing storage (tools, parts, assemblies, buffer stock)
    • Automotive/transportation; (parts and tires)
    • Chemical, medical, and pharmaceutical
    • Food and beverage
  • Service industries (records and supplies)
    • Public and corporate administration
    • Hospitals
    • Third-party logistics

Automated storage units come in a variety of configurations - it's easy to customize and keep items consolidated yet still organized and accessible. And they're a flexible technology that can be adjusted to suit your changing operational needs and meet your goals over time.

Essential terms and ideas for saving space

As you plan options for consolidating inventory and working with more items in less space (or more items in the same space), it helps to be familiar with some major ASRS concepts.

The following principles allow for optimal storage density within the unit and the automation features that help employees be more productive:

☴   Goods-to-person principle

Instead of making a worker travel to a different area to obtain the tool, part, product, or item needed, it is delivered to them at their work area. The result is less unproductive "travel time" between the work area and storage area. Another benefit is less ergonomic strain from bending, lifting, reaching, and carrying items. In an automated system, items are stored and retrieved so that the person can retrieve them on demand from a single point of access with user-friendly software and a touchscreen or barcode scanner.

☴   Product mix

This refers to the sizes, shapes, weights, and heights of items to be stored. With automated storage, items can be stored relative to their size and shape or grouped logically by type or use. It's flexible because the machine brings the item to the user, rather than the user having to find it among the shelves .

☴   User access management

This is a tool to reduce inventory shrinkage while still allowing access to needed shelves. It restricts access to specific shelves or units with pin-based access or other computerized security systems. A user's account can be set so that only certain shelves or items can be retrieved. It's also a great way to ensure items are returned to the correct shelves.

☴   Automatic Identification Data Capture (AIDC)

This is a way to limit error-prone manual data entry in computerized retrieval and make it easier to return items to storage. Common methods are barcodes to check tools or bins in or out and radio frequency ID (RFID) tags. In both cases, the unit calls up the correct shelf for the item without having to type in a code.

☴   Kitted storage

This efficiency concept refers to grouping sets of tools, parts, or products to make them faster to retrieve. Like filling a toolbox, kitted storage lets you assemble items into bins that are either used in the same process or frequently picked together, so they can be retrieved and stowed as a unit. The result is fewer trips to the storage area or fewer shelves within the ASRS unit.

☴   Buffering and sequencing

Entire storage units or portions of storage units can be used for temporary or transitional storage. This is especially useful for storage between production and shipping, to build buffer or safety stock, or to store items in intermediate stages, such as partial assemblies or part kits.

With sequencing software, stock can be rotated round-robin style to use older items first or to distribute tools and supplies evenly between workstations.

☴   Vertical lift unit

A vertical lift unit features rimmed trays arranged in two columns separated by a central shaftway. When a tray is requested, it is fed into the shaftway and lowered to the access window, the same way an elevator operates. It is a flexible option for multiple sizes and shapes of items, and trays can remain in fixed positions or change location based on patterns of access.

☴   Vertical carousel unit

The vertical carousel, (modeled after the "paternoster", a doorless elevator), has shelves connected to a rotating mechanism that moves around a vertical track. When a shelf is requested, the machine rotates it into position at the access door. Items are stored in pull-out bins, making it an excellent option for the high-capacity storage of small items.

☴   Horizontal carousel unit

This type of unit has shelves connected to a rotating mechanism that moves around a horizontal track. Like the vertical carousel, when a shelf is requested, it rotates into position at the access door.

Automation software makes picking and retrieving items more efficient

The idea of consolidating storage into a compact shelving unit can seem counterintuitive to efficiency.

You may wonder, won't that make it harder to find items on very full shelves? What if related items don't all fit next to each other and they're scattered throughout the machine? What happens if multiple workers are picking orders at once?

industrial storage and retrieval software
Kardex Power Pick® Global Software

If you've ever used a vending machine, you know that the automation software inside is the answer to these questions. Because each item, bin, or shelf section has a unique ID tagged in the ASRS inventory management system software, it's easy to have the machine locate and bring the specific shelf to the user. So, no matter where parts are in the unit, they are always easily accessible.

Programmable automation software, such as Power Pick® Global from Kardex, is what makes ASRS inherently flexible to accommodate a mix of items, employees from multiple departments, and rapid retrieval of stored items.

Some of the software-enabled options that improve inventory management processes:

  • Batch picking
    Instead of accessing the same shelves repeatedly for items that overlap orders, consolidate multiple orders into a single picklist, so employees can gather overlapping items efficiently.
  • Light-guided picking/pick-to-light
    Onboard LED lights can be programmed to illuminate the specific bin or shelf section where the item is, reducing the chances of a mispick to correct later. This is also useful for ensuring tools and bins are returned to the correct location after use.
  • Color-coded order picking
    When multiple workers pick orders at the same time, different color lights can be assigned to each person to ensure they select the correct items.
  • Client management
    Create "clients" that represent departments or job roles, then associate users with the appropriate clients. For example, designate shelves 1-5 for tools, shelves 6-12 for parts, and shelves 13-20 for office supplies. This makes it easy to restrict user access or track how often certain shelves and items are being retrieved for accounting or inventory control.
  • Load balancing and stock levels
    This feature is useful when storing multiples of the same tool or part to distribute wear and tear over each tool more evenly. The machine is programmed to retrieve the tool in round-robin mode rather than the same item each time.
  • Zone handling
    Use this feature to efficiently integrate items stored in traditional racking (e.g., heavy or cumbersome parts) into picklists to optimize the picking route between the ASRS unit and additional storage areas.
  • Inventory management software
    ASRS software can be used as a standalone or integrated with a warehouse management system (WMS) to keep track of multiple warehouses or storage areas within a single facility. Many reports are available including inventory lists, metrics, and user access history.
  • User access/credentials
    Balance user access and security by setting up varying levels of access for each user with a pin or other credential. This is also a good way to restrict which shelves users can retrieve, further reducing mispicks and misplaced items.

How to relocate or consolidate your inventory

When you're ready to consolidate or relocate, follow these steps to keep the project manageable:

1. Identify challenges with your current setup

Spend some time identifying problems with your current workflows. The closer you get to identifying the root of the issues, the better they can be addressed.

Things to look for include:

  • Missing or lost items
  • Illogical grouping of products or tools
  • Frequent picking errors
  • Cumbersome return handling
  • Extensive travel time between storage and work areas

2. Determine which ASRS unit you need

This will depend on available floor space for the units, the amount of space you need to reclaim, ceiling height, amount and weight of inventory to store, and how often items need to be accessed. You can also factor in things like rent/mortgage cost per square footage of your facility, and the proportion of the facility occupied by order picking compared to other company operations such as office space.

Making room for automated storage and retrieval systems

3. Determine which accessories and applications are required

You will want items organized on shelves in such a way that workers don’t have to wait for access and can find what they need without errors or bottlenecks.

Here are some of the many options:

  • Bins, trays, and dividers can keep small or related items together.
  • Order picking can be made easier with special lights that illuminate the exact bin or item to pull (and color-coded lights can help multiple workers pick orders at once).
  • Barcode scanners or RFID tags enhance security and speed retrieval.
  • Other options include light-guided and color-coded picking, barcode scanners, and multiple retrieval bays.

4. Make a temporary accommodation plan

Consolidation and relocation can take several weeks, so set up a plan to remain productive. Consider the following:

  • Where will you store items during the transition? For how long?
  • How much access is required?
  • Which items are the most critical to get to and which can be stored in less accessible areas for the time being?
  • How will you prevent damage and inventory shrinkage?
  • What impact will limited access to stored parts and tools have on operations and KPIs?
  • How will you ensure workers will stay safe in the alternate storage location?
  • How will you transport stored items to their temporary location? Also, be sure to keep track of where everything was moved so you can find everything when it's time to load the new ASRS unit.

5. Install the ASRS unit and bring it online

Your vendor should take the lead on this.

6. Load the unit

There are some decisions to make as the unit is stocked, including:

  • Product mix, grouping/kitting, and which departments will store items in the unit.
  • Balancing weight and height of shelves for optimal operation of the machine.
  • Which users require access to certain shelves.

7. Train staff on new workflows, machine operation, and features

In addition to the basics of logging in, scanning items, and working with a light-guided pick or other features, be sure to review new workflows, traffic patterns, and procedures. Because ASRS units feature intuitive controls, training often takes hours instead of days or weeks.

calculate benefits automated storage and retrieval systems

What to look for in an ASRS vendor

Finding the right vendor is about more than just the equipment. A responsive vendor who can help with consolidation and moving makes the project easier for your team. Whether you're consolidating inventory into units you already own, moving it into new ASRS units, or moving to a new building, vendor support and assistance is the difference between a smooth transition or confusion and delay.

Kardex offers turnkey services that ensure your equipment continues to meet your needs in any location, in any configuration, such as:

  • A survey of the current and future sites
  • Consulting for process optimization
  • Customized moving plan and cost estimate
  • Experienced factory-trained technicians
  • A thorough inspection of the unit(s) before disassembly
  • Disassembly, preparation for transport, and reassembly at the new location
  • Inventory packing and transportation, if necessary (additional charges apply.)
  • Refurbishment of used or damaged parts (e.g., wiring) or modifications to the unit
  • 6-month warranty for existing units under 10 years old

Keep in mind your vendor should be able to help with small and in-house moves too. Relocation doesn't have to be across the country, state, or city. Many organizations shift storage to a different part of an existing facility to open up space for new operations such as adding manufacturing workstations, new CNC equipment, kitting or packaging stations.

Real-world organizations in Florida using ASRS

These case studies show how automated storage is used to streamline supply chains and increase production.

Florida locations using automated storage and retrieval systemsHillsborough County Division of Supply Chain Logistics Department

Hillsborough County Fire & Rescue
Tampa, FL

Two Shuttle XP vertical lift modules (VLM) were installed in the county's new Emergency Management Center and reduced the previous inventory footprint by 81 percent. The units store 3,200 part numbers that are used to maintain and repair the engines for 74 fire departments and stations. See the details here.

Florida locations using automated storage and retrieval systemsVac-Con, Inc.

Green Cove Springs, FL

Six Shuttle XP vertical lift modules (VLM) with Power Pick® Global software were used to consolidate thousands of parts from two existing warehouses into a single location. Not only was travel time between the warehouses eliminated, but the company was also able to meet its goal of increasing production. See more details here .

Consolidating inventory is a powerful way to save space, time, and money. Whether you're storing parts, tools, records, or products, Kardex Storage Systems can help you stay productive and profitable with ASRS solutions - please contact us today!