25 November 2020

What Is The Cost Of A Disorganised Warehouse?

Bin Locations are what is known as the designated storage location for inventory in your warehouse. Each inventory line that is received into your warehouse and sent out should have a bin location. Either in the warehouse racking, shelving, marked floor areas or in small parts storage such as picking bins. Bin Locations are essential for warehouse organisation. Bin Locations can represent shelves, pallet spots, storage areas or any place in which inventory is stored. So what is the importance of bin locations and how can it be a cost saving tool for your organisation?


A client walks into your store, they ask if you have 4 ABCGadgets available. Looking up the computer it shows that there are 24 available in-stock in the warehouse.

A picking list is then created an sent to the warehouse to pack the order. After a while a worker from the warehouse comes into the office and explains that they cannot find the ABC Gadgets anywhere. Even though it is showing stock in the system, the warehouse has had no luck in finding them.

In this situation either you will find the ABCGadgets or you wont. Being in charge you organise all warehouse staff to join in the search for the ABCGadgets.

Outcome 1 - The Items Are Found

With great relief to you, the item is found in the warehouse and customers gets the item they were after. A time saving to filful the order.

Outcome 2 - The Items Are Not Found

After a long while of searching the items still are not found. The customer is disappointed and disgruntled with the service. You lose the sale and the business reputation. Next time that customer will most likely go elsewhere.

The Solution

Based on this scenario, the simple solution is to store inventory in proper locations, also known as bin locations. Whether it be a pallet spot in a Selective Pallet Racking system or a picking bin in a Open Span Shelving unit. There are several bin types referred to in a warehouse environment.
Bin types in the warehouse

Fixed Bins

Fixed bins are products that are always stored in the same place. Even when the product is out of stock the assigned space for that inventory item will remain empty until the stock is replenished. An inventory line may take up more than one fixed bin location in a warehouse. As an example stock to fill small orders can come from one bin location and larger orders can come from another bin location.

Random Bins

Random bins are bin locations that don't have a set inventory line assigned to them. The bin location can be filled with any custom or special inventory lines and then when the bin location is empty then it is available for another line of inventory.

Holding Bins

Holding bins are used on inventory lines that aren't available for selling. They can be either awaiting repackaging, returning to the supplier or repacking.

Setting Up Bin Locations

Setting up an efficient and successful warehouse lies in the warehouse racking design and the bin locations. Thoroughly assessing the layout of your warehouse will enable you to create a meaningful bin location system in your warehouse.

An example of a bin loaction could be A-08-04-25. This simple bin location means that the item to pick is in Row A of the Selective Pallet Racking system, bay 8, level 4 and it is in picking bin 25.

As a suggestion you could have odd bin locations on one side of the picking aisle and even on the other side to speed up the picking times. It will assist new staff in picking up locations quicker.
Warehouse Design Consultation - Warehouse Racking Layout
A good bin location numbering system will include leaving out some numbers in the sequence, this allows for changes in the future. The unused numbers can be used later without having to change the bin location structure of the whole warehouse. Utilise the floor space under racks for bin locations as well. You want your employees to have an efficient picking time as well as be able to find the inventory items, keep this in mind when setting out your bin locations.

In addition to setting out the bin locations, to improve your warehouse efficiency and cost you will also need to consider the most efficient picking paths. The picking path isn't necessarily dependent on the bin location numbering system that is used. In most cases there is a direct connection between the amount of effort in planning and setting up the bin locations and the overall efficiency of a warehouse. So, in summary the time and effort that is spent in planning the warehouse racking layout and bin locations will save you time and money in the future of your warehouse.

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