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Labeling warehouse racks might seem like a minor detail. But if you’ve ever been to a large grocery store or hardware store that lacked proper labeling, its importance becomes obvious. Paying a little attention to proper rack labeling and addressing will lead to big payoffs in picking time and overall warehouse efficiency.
The perfect time to make decisions about your rack labeling is when you are engaged in your warehouse setup. After all, setup is when you’ll pay careful attention to how your warehouse operates. Think of it this way: your warehouse layout is the roadmap. The labels are the road signs that help your employees navigate it.
The best way to create an address system and begin labeling focuses on optimal pick paths. Your layout and labels need to create a direct line from point A to point B with workers taking the shortest routes possible. With the right labeling method, you’ll see efficiency. Without it, get ready for the chaos.
The ideal label address includes precise information that describes an item’s location. It starts by naming the largest area and drills down to the smallest.
Think about how the post office sorts mail. There are millions of addresses, but your mail carrier manages to get your mail into your mailbox (at least most of the time!). This reliability is all thanks to a proven method of using unique addresses.
At the post office, items are first sorted by state, then by zip code. The city follows, then the street, and finally, the street number.
A warehouse storage area should be organized and labeled in the same way, except they will reference things like a SKUs aisle, bay, level, and bin. Let’s look at an example:
Any item on any shelf has its own unique address. If the pick-slip reads 2-01-B-03, we know that in aisle 2, in the first bay, we’ll find the item in the third bin on the middle shelf. (Notice how the use of alternating one- and two-digit numbers and letters makes the address easier to read.)
Whether your warehouse is automated or uses paper pick-tickets, the unique address will tell stockers and pickers exactly where items are. Any successful warehouse address system follows these principles:
The down-forward picking area, which typically contains the items needed to process a day’s worth of orders, needs a labeling system, too. It can use a different numbering method than the bulk storage area, but the same rules apply regarding sequencing, alternating, and logic.
Your warehouse storage should already be set up based on your pick paths. We use the analogy of a highway to describe an active warehouse. The space must be designed to allow people, products, and machinery to travel smoothly. Cross traffic, backtracking, bottlenecks, and collisions should be avoided at all costs.
Using predictive analytics, you know the velocity of your products. In your storage area, common items are conveniently located in easy-to-reach spots. Backup inventory or seldom-ordered items are on higher racks or further away from the down-forward picking area. The down-forward picking area is reserved for units that will be picked and packed right away. This area is replenished frequently. (We discuss the best way to set up your storage area in our Warehouse Set-Up 101 articles for small, medium, and large warehouses.)
So what do pick paths have to do with how to label shelves in a warehouse? In a word: everything.
Smart pick sequencing accounts for pick paths as it directs pickers through the space. The labels are their signposts. Again, the goal is to have employees traveling the shortest, most efficient route to collect the items on their pick ticket.
When organizing your pick sequencing for optimal flow and efficiency, you should consider the following:
As we discussed in our Warehouse Set-Up 101 series (small, medium, large warehouse setup), it’s crucial to complete a dry run of any warehouse concept you adopt. The same goes for your labeling system. Think ahead to how you expect your business to grow or change and make sure you can modify your plan if and when things change.
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