Profiling – How to Design the “Best” Warehouse
Profiling is a technique to study the behavior of ITEMS, ORDERS, CUSTOMERS and apply the analysis to the layout design, selection of storage types, slotting criteria. Unfortunately, in almost 95% of DCs, we do just the opposite in practice. Someone gives you a particular building with unique characteristics and tells you “to do the best you can.” Given the realities in our business, we will show you how “Profiling” can help you design the ‘best’ operation, both in the short-term and in the long-term.
Profiling Question 1
If you have just 1 sku with 20 pallets in the entire warehouse, where will you slot that product? This is a trick question.
Answer: I won’t slot it at all. I will unload that in-bound trailer. Keep all 20 pallets right next to the door. I will process my customer orders in the dock area itself and load the outbound trailer. By doing so, we have achieved the least amount of travel time. And the rest of the warehouse is clean and empty.
Profiling Question 2
What if you had 1000 sku’s with just 1 pallet per SKU, where would you slot them? (also a trick question)
Answer: The same. In theory, it still makes sense to keep all the 1000 items right in the dock area. But it is not practical. Only certain SKUs can be close to the dock. And some other sku’s will have to move away from the dock. How do you make this selection? This is called ‘Profiling”.
You may know that the silly answer above – keep all the 1000 items in the dock area – is followed by large discount merchandisers like Target, Wal-mart, etc and the process is called ‘flow-thru’. In these instances, the DC serves as a sorting station and not as a storage facility.
Definition of Profiling
Profiling is a process of determining the BEST configuration of the DC (distribution center) layout and product slotting. Based on:
The relative popularity of the items
How the customer places the order
- – Quantity
- – Frequency
- – Item spread
Written by Ram Krishnan