Warehouse Labelling – A detailed guide 2020

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The flow of content:

What Is The Need Of Labelling In Warehouse Management
Types Of Labels Used In Warehouses
Guide To Labeling Activities For Proper Implementation
Benefits Availed By Using Labels In Your Storage Facility
Wrapping Up

Warehouse labeling is one of the most undermined aspects of supply chains across the globe. Unlike other parts of running a business, managing a warehouse is a purely analytical job devoid of any working experience. Labeling here refers to identifying items within the storage facility with reference to the areas assigned for stacking it. However, it is not limited to the products as the storage areas, aisles, shelves, material handling equipment, and packing/shipping stations. Warehouse labeling depends on the nature of your businesses, the volume, and a variety of SKUs. 

In this article, we will discuss all principles and technicalities of warehouse labeling. Dive in deeper to learn more about the subject.

 

What Is The Need Of Labelling In Warehouse Management

Most of the businesses didn’t have a storing mechanism in place when it was set up. The merchandise is stored in an intuitive manner as it increases in volume with time. The same type of items or the ones sourced from the same suppliers is kept adjacent to each other. Also, the storage facility isn’t stacked in a planned manner. Instead the items are piled in the empty space as required. When such firms occupy a bigger warehouse to store their inventory, there is a negligible improvement in the storing pattern. That is when scientific methods help businesses streamline operations. Let us understand where the significant loopholes lie.

Maintaining Handwritten Inventory Logs On Spreadsheets

Writing down things on paper and doing data entry later is the most significant source of mistakes. Usually, the handwritten notes are vulnerable to getting misplaced or staining. Also, then recognizing the data from handwritten notes is challenging and leads to errors when fatigued. On the other hand, maintaining the inventory logs on spreadsheets that are sourced through this technique is equally gullible. This will only compound the discrepancies in data. Having false inputs further dent the smooth functioning of the warehouse.

Missing Out On Information

Even if the data entry is done accurately, the spreadsheets will not deliver proper efficiency beyond a specific volume. Providing business intelligence requires the far more detailed computation of various data types. 

Operating a warehouse without information is like aiming in the dark. When your employee doesn’t know the exact location of an item, they will spend a lot of time walking around the aisles of your storage facility. This increases order fulfillment time, proliferation, picking wrong things, and misplacing of the stock. This also backlashes accounting activities. Thus, failing to gather data is equal to losing opportunities. 

Chaotic Worker Movement Due To Poor Navigation

Like cities, warehouses too need maps. Workers need to have proper data regarding where the concerned item is stored. In the absence of adequate knowledge of storing patterns, material handling equipment, and floor map, picking every item results in chaos. Navigation through the aisles and picking up the right piece is challenging if markings aren’t made on the floor, and zones aren’t defined. In case a new employee is hired, it will add to the troubles instead of easing them.

All three of them point towards the need for a methodical approach to warehousing. Labeling is the holistic process of assigning a relationship between various areas, inventory, material handling equipment, and storage equipment. 

 

Types Of Labels Used In Warehouses

The labels used in warehouses are grouped on the basis of the purpose of identification they satisfy. Based on the technology used, they are classified as RFID tags, Barcodes, Painted Labels, and Retro Reflective labels. Moreover, the adoption of invisible barcodes is gaining pace lately. All of them are also considered against IoT and AS/RS compatibility. 

They help workers identify various items stored and navigate through the pathways quickly. Usually, the labels are divided into the following categories:

Floor Labels/Markings

Once the areas inside the warehouse are identified as per the warehouse layout, they are marked with the help of markings, labels, and signboards. Color coding is also used in the facility. They can be differentiated on the basis of the proximity to the gates. Arrows are also used to make the identification easier. Usually, the labels used for this purpose are dust-resistant and have high-durability. They are also engineered to sustain contamination by chemical and physical agents. 

Bin And Shelf Labels

Usually, the bins and shelves are labeled with the help of barcodes and RFID tags. This helps in the quick identification of SKUs and establishing a relationship between the warehouse areas and the SKUs stored. The bins and shelves are identified with respect to each other, so their labels are generated accordingly.

 

Guide To Labeling Activities For Proper Implementation

When you start relabelling your storage facility or start it afresh, you should follow a pre-labeling routine for the best results. They are related to housekeeping, inventory management, and training your workforce. You can follow these basic steps regardless of the size and domain of your business. Have a look at the following step-by-step guide below:

Cleanup The Entire Facility

A dirty warehouse makes it difficult for the workers to access the inventory. The unclean floors and racks also lead to accidents. Having dirt in the working space slows down the operations. It also increases the chances of misplacing goods due to stained labels. You should start by isolating sections of your facility one by one. As per this approach, the goods of that respective location are transferred temporarily for prompt cleaning. Once the cleanup is completed, you can bring the goods to their respective area.

Run ABC Analysis 

ABC analysis works on the principle of Pareto’s principle. It states that a significant portion of results (around 80%) is generated by a small proportion of efforts (20%.) These figures need not necessarily add up to 100. In ABC analysis, the inventory is classified in proportion to the revenue it generates. The fast-moving, high revenue-generating items are kept in near proximity to the gates while others are given lower priority, respectively.

Start With Safety As Pivotal Point


American warehouses and storage facilities have a fatality rate of 26 per hundred. (BLS)


When the arrangement of any industrial facility is considered, safety serves as the primary basis of layout and design. However, the warehouses seldom take safety considerations into account. This leads to compromising the safety of the workers who will work more carefully to avoid accidents. This, in turn, reduces their efficiency as work is completed slowly.  

Reorganize The Slot Allocation 

Once ABC analysis is concluded, redistribute the slots according to the priority. This will result in a reduction in picking time. It is also noteworthy that the chances of workers hindering each other’s pathways while fetching items. 

Make Provisions For Cross-Docking

Today, most warehouses are compatible with cross-docking. It has become an industry norm with the advent of eCommerce. Lean warehousing principles too promote cross-docking as a measure to raise efficiency. Thus, when you conduct the preliminary exercise before labeling your warehouse, make sure to include it in the planning process too. It is because certain products have hardly a dozen orders per annum. Instead of storing them, it is more convenient to dropship them.

Cross-Docking

(Image Source)

Label Selection

You have to select robust materials for the labels as they have to withstand heavy wear and tear. The same applies to glue materials. The font size and color code should promote visibility. This principle also applies to position too. Using appropriate positioning aids visibility and reduces picking time. You can also complement labels with arrows to improve navigation and identification.

Label Everything

Start with labeling the floor and continue with the racks next. The bins and inventory shall come next in your plan. This will help in establishing relationships between all elements. It will require the adoption of technologies like barcode and RFID scanners. You also need to integrate them with your inventory management system. 

 

Benefits Availed By Using Labels In Your Storage Facility

In this section, we will discuss both functional and strategic benefits availed by using warehouse labels. Again, these advantages are applicable to businesses of all sizes and functional areas. Have a look at them below.

Prompt Navigation

Warehousing floor labels make navigation intuitive and curbs confusion among workers. Having clean pathways and navigation signs improves the promptness as unnecessary clutter regarding positioning is eliminated.


Sales of physical goods through eCommerce sites is expected to touch $735 B by 2023 in the US alone. (Source: Statista)


Reduction In Lags And Errors

Errors happen when the identification of goods requires additional efforts. In larger storage facilities, failing to locate the exactly required rack or bin also translates to mistakes. Since you can identify the shelves and bins precisely on will, the effort needed to find them is decimated. Moreover, the workers don’t need to be as cautious as before since they have instant verification at their disposal. Hence, this will result in fewer lags as work is done faster, and errors no longer stall shipping.

Smarter Picking 

As discussed above, the workers already know about which path to choose and which rack to attend. Moreover, they are provided with the exact line of action that contains which product to pick in what order during their schedule. When looking at an individual level, this makes picking virtually effortless and simple.


Walking takes upto 50% of the total time spent in picking activities which translates to 50% labor costs. (Source Amware Logistics)


Better Inventory Management

Labeling has a direct effect on inventory management. You can exercise greater control over the stock movement and the process of moving your inventory inside the facility. Stock audits and cyclic counting are tremendously benefited. Subsequently, the organization can reduce/increase the inventory levels and organize the spacing accordingly.

Higher SKU Visibility

Lastly, we have the higher SKU visibility as the most prominent and quick benefit availed. Every employee in your organization right from the workers to the managers and the housekeeping get access to storage information. Higher SKU visibility also enables better business intelligence reports.

 

Wrapping Up

In this article, we have discussed warehouse labeling in detail. Towards the end, the author would like to stress out that increased SKU volume and diversification will anyway demand enhanced visibility. Using digital solutions requires cyber-physical mediums in the form of barcode labels and RFID tags. They form the basis of integrated management solutions and thereby build an omnipotent warehouse management system.

 

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