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Allocation strategies in warehouse

Put-away templates explained

Touching on the topic of warehouse management system in Microsoft Business Central again, I want to write about warehouse allocation strategies - what it is and how Business Central WMS supports automated allocation of items.

The need for an allocation strategy arises as soon as a company establishes a warehouse which is slightly bigger than a tiny storeroom. Although, even in the storeroom, goods should be stored in some kind of an order, not dropped randomly. In bigger warehouses the need for thoughtful and ordered placement of goods grows even stronger. Ordered placement usually means that the company wants to minimize the effort of placing items in storage bins, and picking them from the storage. But the ways of achieving this optimum can differ very much between companies. Warehouse strategy that works perfectly well for a wholesaling company, probably will not be a fit for a retailer. Storage conditions of fragile electronic devices are not the same as those for steel wire coils, etc. All this makes warehouse managers to be creative in planning the utilization of the warehouse space.

Whilst Business Central cannot help to develop a perfect allocation strategy, it can aid in putting this strategy in action once it has been developed. The key feature that facilitates the items allocation and which I want to write about in this post, is Put-away Template.

Location setup

To demonstrate the functionality, I imagined and then drew a warehouse configuration in the picture below. This is probably not the most efficient warehouse design in the world, but it works for demo purposes.

The layout is arranged in two racks: A and B, each having six two-layer sections. I assigned bin codes according to the actual bin position in the rack: first letter denoting the rack, A or B, followed by a digit 1 to 6, 1 being closest to the warehouse entrance. Finally the last letter in the bin code, B or T, stands for "Top" or "Bottom" bin location. Following this logic, th bin A1B is the bottom bin the rack A, closest to the receiving area, and the bin furthest from it is B6T. This is the bin coding which I am going to use in my examples.

Continuing the colour-coding traditional for NAV/BC location, I called this one PURPLE. All functionality that I am going to demonstrate further is available only for advanced warehouses with the "Directed Put-aways and Picks" option enabled. Therefore, the first setup I need to do is to switch on the toggle.

This switch turns on a number of other setup options shown in the screenshot above, and also enables warehouse zones and put-away templates. All the examples below will work only on a warehouse with Directed Put-aways and Picks enabled.

After enabling this key option in the location setup, I need to define zones and bins and bins' storage capacity. For the sake of simplicity, let's assume that all bins have equal capacity, size of a small 8ft shipping container, or 351 cubic feet. Receiving and shipping bins should be able to fit big 40 ft containers, so they have increased capacity of 2 387 cubic feet.

And here is the list of bins in the storage zone of my brand new Purple location.

To make the allocation algorithm respect the bin capacity constraints, we need to change the bin capacity policy in the location card.

Put-away template code is the key configuration parameter, but at this point let's assign the standard template code, as shown in the screenshot above. A few paragraphs later, I will explain the implications of this setup.

Item setup

Now let's have a look at the items which we want to store in the warehouse. To make the most of the warehouse management system, we must update item parameters, as well as the warehouse configuration. I will be receiving the item 1965-W Conference Bundle which includes a table and eight chairs. One thing I need to take care about is assigning the item size and weight. By default these parameters are not configured, so the warehouse management system cannot control the bin capacity.

In order to setup item measures, access item units of measure and fill the respective fields for the unit of measure. Remember that the bin capacity is set in cubic feet and kilograms, and item cubage and weight must be measured in the same units. I don't know the real size of the bundle, but just for the the demonstration I will assume that it is 36 cft and 50 kg.

Bin contents

Now we are all set and ready to explore the allocation options. But before delving deeper into the configuration of the put-away template, I need to introduce two definitions which are crucial for the understanding of the setup: Fixed Bin and Floating Bin. The difference between fixed and floating bins is defined by options set up in the Bin Content table. If you don't remember how to access the bin content, here is a reminder.

Alternatively, type Bin Contents in the "Tell me" search bar. This will open the full list of all existing bin contents which can be filtered down by location, item, unit of measure or other criteria.

Bin Content table links a warehouse bin with an item that is stored (or can be stored) in the bin. A bin content record can be marked as fixed for a specific item if it has the checkmark in the Fixed field. This is what we call a Fixed Bin.

Here, the bin W-01-0001 is a fixed bin for the item LS-75.

If a bin has no Bin Content records, or all of the bin contents have no checkmarks in any of the fields: Fixed, Default, or Dedicated, this bin is called a Floating Bin.

Put-away template

The introduction on the distinction between fixed and floating bins was necessary to understand the put-away template setup. The preconfigured setup of the Standard put-away template which I chose for the demo location is shown in the screenshot below.

Each line of the template is a set of search criteria applied to warehouse bins when the allocation algorithm is looking for the next bin to put an item to. Lines are prioritized from top to bottom, which means that first of all the allocation based on the Standard template will be looking for a bin which is:

  • set as fixed for the current item and

  • the same item is already stored in the bin and

  • the storage unit of measure matches the unit in the receipt and

  • the quantity in the bin is less than Min. Qty.

If the search with this set of criteria does cannot find any bin, the second line of the template is applied, and the search parameters are loosened slightly. As per the configuration, the second round of search does not check the Min. Qty. setting. If nothing is found again, the third template line is applied, and the algorithm starts looking for a floating bin instead of a fixed one. This search continues until a suitable bin matching all settings is found, or the search exhausts all template lines. So the last line of the template usually allows the most loose allocation, like in the example above, where the line #6 allows to place the item in any floating bin. If no more template lines are available and no bin is still found, an error is raised and the allocation process fails.

This example is a preconfigured template from Business Central demo data, but of course put-away templates are completely customizable, but we should keep in mind that some configurations won't possibly make sense. For example, a configuration with "Find Fixed Bin" and "Find Floating Bin" enabled in the same template line would be useless. BC checks the template setup and will not alow configurations that cannot work.

Example 1: Empty floating bin

Create a purchase order. Vendor is not important, but what does make difference are the location code, item, and quantity. We want to place the conference bundle 1965-W on the Purple location, and purchase a quantity large enough, so it has to be split in multiple bins. Volume restrictions on the Purple location allow allocation of 9 items in each bin, but the weight constraint limits the number to 6 conference bundles per bin. I will order 20 items to see how the total quantity is distributed across bins.

Release and create a warehouse receipt, then post the receipt. Now twenty conference bundles are stocked in the receipt zone, expecting to be put to storage. Posting of the warehouse receipt created a warehouse pu-away document which is suggesting the item placement in the storage zone.

As you can see, storage bins are ordered strictly according to the rank, with priority given to the bottom level bins, closest to the receiving zone.

Example 2: Same item in a floating bin

Delete the put-away

Create a new purchase order with two items: 1965-W Conference Bundle from the previous example and the lamp 1928-S. This time we don't intend to fill the bins, but on the contrary, want to post low quantity: a single conference bundle and two lamps. After creating the purchase order, release it, then create and post the warehouse receipt.

Take a closer look at the warehouse put-away created for the two items. Note that the allocation algorithm suggests bins A1B and B1B, splitting the allocation in two bins, although the bin with the highest priority A1B has enough capacity for both items. This is the result of the same put-away template condition as in the previous example: the warehouse management system looks for an empty bin if bins storing the same item are not found. This prioritization prevents mixing of items in a bin.

Let's change the suggested allocation and manually assign bin A5B for the Conference Bundle item.

Register the put-away with the new bin.

After registering the put-away, open the posted warehouse receipt with 20 conference bundles (remember that it is in the receiving area and not yet allocated into storage bins) and run Actions / Functions / Create Put-away.

Bin priorities in the new put-away look very different from the first version when all bins were empty.

The very first line of the put-away document suggests to place 5 items into the bin A5B which is quite far from the storage zone entrance, but already contains one of the conference sets. Another difference that draws attention is that bin B1B is skipped - there is no suggestion to place anything in this bin.

This allocation perfectly matches the selected put-away template: items are put together in the same bin wherever possible, and as long as an empty bin is available, different items will not be mixed in one bin.

This screenshot illustrates the priorities. There are no fixed bins, so the first two lines of the template are not applicable. Third line proposes a bin with the same item, so A5B is selected first. Empty floating bins are prioritized over bins that contain any other items, therefore bin B1B is never considered for put-away.

Actually, it would be considered as the least favorable allocation, in the last template line suggesting any floating bin, no matter the contents.

Example 3: Adding fixed bins to the mix

Previous example demonstrated that manual placement of goods can have consequences for the put-away algorithm, so that subsequent allocations that the algorithm generates can be far from optimal. But we can make it better by assigning items to specific bins before creating a put-away with the Fixed Bin setup.

Delete the put-away document again and sell all items currently stored in the Purple warehouse. Next example will start on the empty warehouse again.

In my warehouse setup, I was prioritizing bottom-level bins over the top-level row. Assuming that the conference bundle consisting of a big table and eight office chairs is quite heavy and bulky, this makes sense. But the lamp, on the other hand, is a small item and can be easily placed higher. So probably a better allocation solution would be to place small and lightweight lamps on top of the rack, while keeping lower bins available for heavier items.

We can do this by assigning fixed bins to specific items. To link a bin with an item, we need to have a Bin Content record and mark it as Fixed. I will reserve the bin A1T for the lamp, item No. 1928-S.

Select the bin in the warehouse bins list and open the Bin Content page. Currently it is empty, so I will need add a record manually, as shown in the screenshot.

Now let's repeat the purchase process: create a purchase order with two items: 15 lamps 1928-S and 20 conference bundles 1965-W.

As usual, release the order, then create and post the warehouse receipt. And this is the put-away created with the new setup.

The put-away created now looks much more neat, placing the lamps into the dedicated bin A1T and arranging the tables with chairs close to the entrance at the lower level in the storage.

This allocation is derived from the two template lines highlighted below. A fixed bin is selected for lamps, and empty bins are prioritized for other items according to their rank.

These are some of the features of the Business Central warehouse management system that enable automated allocation of items in a warehouse. Even though features like bin priorities, fixed bins, and put-away templates are not substitutes for experience, common sense, and a good analysis of warehouse workflows, they can be very handy in supporting the implementation of warehouse strategies.

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