The Pareto Principle, often referred to as the 80/20 rule, suggests that 80% of outcomes stem from just 20% of causes. This concept, initially applied to economics, holds profound implications for modern warehouse management and order picking. By identifying the small fraction of SKUs that drive the majority of warehouse throughput, businesses can streamline their order picking processes, drastically improving efficiency and productivity.
Implementing the Pareto Principle in order picking requires a strategic approach to inventory management. It involves analyzing SKU data to pinpoint which items contribute most to order volume and throughput. Once identified, these high-impact SKUs can be placed in easily accessible locations, reducing travel time for pickers and minimizing bottlenecks. This method not only enhances operational efficiency but also supports better space utilization and inventory control.
Incorporating the Pareto Principle also means embracing continuous improvement. As product demand and SKU dynamics change, regular reviews and adjustments are necessary to maintain optimal performance. This adaptive approach ensures that warehouses remain responsive to shifting business needs while consistently maximizing productivity.
Applying the Pareto Principle to Order Picking
60% to 80% of a warehouse’s throughput results from 20% to 30% of its SKUs. Identifying and targeting these SKUs are where order picking performance can be drastically improved. Investigating the metrics (size, weight, throughput, value) helps determine the appropriate storage medium for each SKU.
When examining picks, on average, 80% of the throughput will come from 20% of the SKUs. These are the SKUs that are not ideal for carton flow. Often these high throughput SKUs are best picked from pallets.
The optimal carton flow SKUs are within the remaining 80%, which also includes SKU’s that are so slow-moving, that basic shelving is the best storage medium, based on both cost and storage density. Would you be surprised to hear that the SKU’s targeted for carton flow are the 20% of this remaining lion’s share?
Once the proper SKUs and storage mediums are identified, a warehouse layout can be optimized. An aisle of pallet pick bays of the fastest moving SKUs is fairly typical, as is an aisle of carton flow bays or a dedicated pick module. The downside is that a picker must walk both aisles in order to pick a complete order.
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The goal of the Pareto Bay is to combine both pallet storage and carton flow into one aisle that optimizes SKUs not only on throughput but also on frequency.
Again, 20% of a warehouse’s SKUs account for 80% of their picks. However, these are not necessarily the same 20% that account for the throughput. The beauty of the Pareto Bay is, it doesn’t matter.
Storing pallets on the floor with one level of carton flow above allows a warehouse to increase its SKU density per bay by 500% on average. By combining these two storage mediums into one aisle, the pick path for these Pareto SKUs can be shortened by half.
UNEX Solutions for Optimized Order Picking
UNEX offers a range of solutions tailored to enhance the efficiency and productivity of order picking processes, particularly aligning with the Pareto Principle. These solutions include:
SpanTrack: A cutting-edge carton flow solution that seamlessly integrates into existing structures, creating a powerful and efficient flow system. This innovative system not only maximizes SKU storage but also boosts throughput while reducing strain on pickers. Whether for dynamic storage, order picking, lineside storage, or material handling carts, SpanTrack stands out for its durability and reliability in high-throughput environments.
SpeedCell: Revolutionize storage solutions by maximizing space utilization and enhancing pick speed. By condensing 200 feet of rack or shelving into just 40 feet of meticulously organized space, SpeedCell significantly increases SKU density and minimizes travel time.
FlowCell: UNEX FlowCell workstations offer a modular and dynamic approach to storage units, aligning with lean principles to organize inventory and maximize space utilization for improved picking efficiency. FlowCell is designed to elevate productivity, enhance ergonomics, and ensure FIFO inventory rotation seamlessly.
Apply Pareto's Principle with UNEX
By implementing UNEX's SpanTrack, SpeedCell, and FlowCell solutions, warehouses can effectively apply the Pareto Principle, optimizing storage and picking processes to handle the most impactful SKUs efficiently. For more information on how UNEX can help you embrace Pareto's Principle and increase SKU density in your facility, contact us today!
