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U n d e r s t a n d i n g A A I D C i n


Warehousing and Inventory Control



Within the current climate of rapid communications, electronic commerce and the customer reach provided by the Internet, the structure and in some cases the functions of warehouses are changing.

While the need to store items is a

continuing requirement within virtually any supply chain, growing pressures to reduce inventory and costs are placing ever increasing demands upon warehousing operations.

Those within the warehouse and inventory control business need to determine if their facilities can match the demands. Paper-based traditional processes are likely to be in need of re-engineering in order to remain

competitive. These demands, together with those arising from customer expectations, can be viewed as

opportunities to change. T o change in ways that can not only satisfy the

demands, but also yield some significant internal benefits and advantageous influences upon a company’s bottom line. Such benefits can be achieved in warehouses, large and small, and also in supermarkets with their significant warehouse features and the customers performing the picking operation!Flexibility, speed, accuracy and

immediacy of information are the keys to achieving better results and

and identifying areas and processes

where the technologies can be used

competitive advantage. These are the benefits that can be achieved through appropriate use of AIDC and other item-attendant technologies. By taking advantage of local wireless

communication technologies even more benefits can be achieved, and with some innovative integration the opportunities may be seen for setting new standards of performance. The impact of such an approach extends beyond the company boundaries to suppliers and customers often yielding significant improvements in supplier/customer relations.So where does one start? The short answer is by taking a look at existing processes to see where inefficiencies exist and improvements can be made.The questionnaire (see chapter 2) can assist as a thought provoking approach to establishing opportunities.

Basically we are looking to improve those processes in which paper-based,manual data collection is a significant component. These are error prone and slow, compared with the automatic or semi-automatic data capture. In doing so it is important also to consider the purpose of the process.How will it link with other processes?How is it being influenced by associated information management systems? In this way you can gain further insight into how improvements can be made.

For example, speeding up and improving the accuracy of a goods receipt process may allow the inventory to be better controlled.

Flexibilities to be gained in making the inventory more manoeuvrable, could provide the ability to

respond more effectively to customer pull.


Irrespective of changes in warehouse structures and the equipment for moving items around, the principal features of traditional warehouse activity remain:

!Receiving and Put-away !Picking and Packaging !Shipping




Inventory Control

By considering these in turn, ways may be seen for applying and integrating AIDC and other technologies in ways that can yield some significant benefits. T ypically, with integrated systems incorporating data capture and the widely available wireless communication technologies, more flexibility can be achieved, yielding:!More efficient stock location –

receiving, put-away, picking,packaging, inventory shifting,replenishment, loading and cycle counting.!Multiple picking support.

!Full and partial pallet order picking.!Interleaved pick and pack processing.!User-defined shipment configurations.!Planned and opportunistic cross-docking management.!Prioritisation of orders.


Added-value services to handle modular manufacture requirements,kitting and batch splitting requests.

The list is not exhaustive. Others may be identified that extend the capabilities of warehouse management and inventory control. However, these may seem

somewhat radical even unnecessary in some cases. Let us therefore begin in a more modest manner by considering data capture opportunities in the various, generally identified, warehouse processes.

Receiving and Put-away

Where information concerning in-coming items to a warehouse is in written, or human readable form, and requires manual transcription and/or key-board, entry into the warehouse computer system is likely to be slow. It is also likely to introduce errors, which unrecognized might cause problems and delays at some point in the item or goods-handling processes.

All of this adds up to wastage of time,effort and in some cases materials or product – particularly where perishable goods are concerned. Items misplaced as a result of an input error may be the cause of subsequent delays because of the time required to find them. This may also yield problems further down the line and create difficulties in

customer service. So the importance of accurate data capture cannot be overstated.

The item-receiving and put-away processes within warehouses can be dramatically improved through

automatic or semi-automatic capture of data and the resultant immediacy of information. Through customer-supplier collaboration items can often be

accompanied by machine-readable data carriers. These are often in the form of bar code labels, which are used to speedily identify and handle the items as they arrive. The information is

directed immediately to the information management system.



T o achieve this some basic equipment is required. The quantity and deployment of the equipment depends upon the application needs. The basic system requirements are:!

Bar code reader terminals. These ara usually portable but may be fixed position depending on needs.They range in sophistication from simple wand-type devices that need to be directly interfaced to a

computer for capturing and storing the data obtained, to computer-based terminals with processing and storage capability, and the facility to transmit data through a wireless link to an appropriately equipped information management system. Again the needs determine the technology required.!

A means of transferring the

captured data to a computer-based information management system.This of course is the connection between the data capture device and the computer and you would expect the terminals to incorporate a standard, serial or parallel,interface connector.


Software to control the transfer of data from the terminal to the host and make sensible use of the data obtained. The terminals will often,of course, be required to operate in concert with other enterprise software packages, and this will need consideration in the design of the data capture solution.

Both hardware and software

requirements will need to be established and satisfied in order to achieve an efficient and effective working system.Where the expertise to realize such systems is not available in-house it is important to seek the support of appropriate systems integrators or suppliers. With any solution it is

important to establish that it meets the needs, can be justified in both economic and technical terms, and can also be easily operated and maintained once the suppliers have left.

As far as the choice of bar codes are concerned it is important to identify appropriate symbologies and labels or form in which they are to be used. (If you are new to the subject, refer to the chapter on Barcoding for Beginners).

Suppliers and systems integrators can assist in this choice. Where industry standards are in place it is clearly

important to adhere to the symbols and to the label forms which they may

specify. Where a supplier or customer is in the loop for using such symbols it is important to also consider them in the decision process.

Generally speaking it is not a difficult choice to make. In many supply chain applications use is made of the

EAN.UCC system of numbering and identifiers and the adopted symbologies.Where such usage is indicated the bar codes to use are well specified.

An example of where standard bar code labels are used consistently is for materials handling operations within supply chains.

A number of industries now have application standards specifying both human-readable content and the use of bar code symbols. The ANSI materials handling label, MH10.8 and the European equivalent Multi-industry T ransport Label and the Serial Shipping Container label, incorporating the EAN.UCC Serial Shipping Container Code (SSCC-18) code are examples of such labels. These may seem a little complicated at first but in reality they offer a straightforward means of

specifying materials handling data in a way that can be used unambiguously by appropriate industry users.

Where bar code labels need to be

produced in-house the system must also include appropriate printers and

supporting software. The choice should again be determined by application needs, including the quantity, form and media on which the labels are to be printed. Quality of print is also an

important requirement. Good quality bar code symbols permit them to perform as effective data carriers. Poor quality bar codes, while not necessarily introducing errors, may be difficult or impossible to read. This can result in delays that you are setting out to avoid.

Because of the importance of quality,some form of verification and quality assurance should be established to

ensure that problems of poor quality are avoided. Software should be selected that allows bar codes to be printed that comply with standard symbology



specifications. Again supplier and

systems integrators can assist in ensuring appropriate software is specified. Linear bar codes generally carry relatively few characters, with 50 or so being the upper limit. They are effectively used as ‘licence plate’ data carriers. These provide keys to information stored elsewhere.

The check-out functions in supermarkets operate very effectively in this way. It does, however, require that the information concerning the bar coded items should be held and be accessible through the information management system.

An alternative to the ‘licence-plate’approach is to use portable data files. These may also be in the form of printable codes and in fact two types are available – multi-row bar codes and matrix codes (see chapter 3, The V arious T echnologies). Collectively they are often referred to as two-dimensional



The important point to grasp here, is

that they generally allow a lot more data

to be incorporated within them. A few

are designed for more specific use such

as reading under fast moving conditions,

such as items travelling on speedy

conveyer belts.

The higher capacity two-dimensional

codes are capable of carrying in excess of

2,000 characters. Consequently, they can

be used as portable data files, listing, for

example, a shipment of goods, which

when read by a suitable reader, can

provide immediate information on what

is being shipped or received.

As with linear bar codes this information

can be quickly delivered to the

information management system, by

hard-wired, optical or even via a wireless

link. Where immediacy of transfer is not

a requirement terminals may be selected

that offer batch transfer of information

through cradle or other interface facility.

Other data carriers can be

distinguished that offer ‘licence-

plate’, portable data file or a

combination of modes to suit

particular application

requirements. Where more durable

data carriers are required, or the

requirement is for re-usable or re-

writable data carriers, contact

memory or radio frequency

identification may be the



appropriate choice.



Benefits of identifying locations

Up to now consideration has been focused upon how items entering the warehouse can be identified and information more effectively entered into the warehouse management

system. But data carriers may be used in other ways to improve the receiving and put-away processes, including the identification of locations.

It is one thing knowing what has been received it is another knowing where an item has been put. Problems can still arise due to items being put in the wrong storage location or

temporally placed and forgotten. So,by identifying storage locations, and using a machine readable data carrier the facility is provided for reducing the uncertainty of put-away.

In a manual system supported in this way the operative takes the item to the location in which it is to be stored.By means of a hand-held reader of a portable or vehicle mounted data capture unit the item code can be read, followed by the location code.Through the use of appropriately structured software and

communications, the two codes are checked to ensure that the item being placed is being stored in the right location. If incorrect the operator can be alerted to the fact and informed of the location required. T o do this requires real-time link to the

warehouse information management system. Wireless, local area

networked, terminals are typically




required to do this.

As far as the identification codes and data carriers are concerned these may be low cost bar codes, touch memory devices or RFID devices. It makes sense, of course, to use devices which are compatible with the data carriers being used on the items being stored. If different devices are used, a reader will be required that is able to read both types of data carrier. For example it could involve barcode and RFID. The alternative is separate readers. This of course adds to the cost and inconvenience. Having a single reader that reads both item and location codes is usually the better option.

When it comes to the use of bar codes for identifying location it is worth remembering that today they can be obtained in very durable forms. Not all bar codes are printed or printed on paper. They can be formed onto plastics, metals and other durable substrates. Even bar codes printed onto paper substrates can be laminated for protection.

Some bar codes may even be produced in composite materials or plastics and formed into the floors or fabric of storage bays. However they are produced, it is important to ensure they are fit-for-purpose, durable enough for the conditions to be encountered and readable.Radio frequency identification (RFID) data carriers may be used for identifying locations and more expensive items than those normally identified by means of bar codes. Where containerized items are being stored, RFID can often provide a useful means of identification, particularly where returnable containers and pallets are concerned. These can also provide added benefit in handling applications where read-write capability is required or can be effectively exploited. As far as the location ID is concerned this generally needs to be read-only. Innovation may dictate otherwise!

Data carriers for distinguishing location may be used on all sorts of storage facility, bays, high-bays, fixed-position containers, storage-tanks, vertical and horizontal carrousels. They may also be incorporated into automated systems for put-away and picking.

Picking and Packaging

Being able to identify both items and location can provide considerable benefits in speed and efficiency in retrieving items. In manual picking processes, the picker can be given a picking list, down-loaded in to a portable data terminal which, through an appropriate display can direct the picker to the items required. By using appropriate software the route for picking may be more or less optimised, making for better efficiency and productivity. By scanning or otherwise reading the location and item codes for each pick, checks can be made to ensure the correct pick has been made and the store inventory up-dated accordingly to take account of the items removed. Similarly, with automated systems.

For real-time checking of items as they are picked, there is of course the need to have real-time connection to the information management system. As with the put-away possibilities this can generally be accommodated with wireless local area networking and appropriate data terminals. Suitable suppliers and systems integrators can advise on such systems components and the economics of different configurations. In realising such systems it is necessary to gain the complete picture on costs, including those of ownership, and maintenance or any





training that may be necessary.




There are of course alternatives to real-time data management in the put-away and picking processes. As a put-away or picking operation proceeds,the acquired data on item and location may be held in the terminal until the operation is completed, at which point the data is up-loaded to the store computer and checked. If mistakes are then detected, the correction will invariably require the return and change of an item or change of item to a different location. The performance will depend upon the system in place and diligence on the part of the operators who are performing the pick or put-away within a manual system.

Larger picks and automation

Where large pick systems are concerned which involve a wide range of different items or products and selection for multiple destinations, automated systems for identification and

conveyance are generally indicated.These are the sort of systems that mail-order and package handling

organisations require. Picked items are packaged to form consignments. They are labeled and identified with appropriate machine-readable data carriers. These are usually bar codes or low-capacity matrix codes specifically designed for reading on fast conveyers. The pre-packaged or packaged

consignments are fed to the conveyors.Suitably positioned multi-directional readers detect and read the consignment codes. The information management system can then alert the appropriate automated tip-tray or mechanism for directing each item to its assigned destination bay. In this way swift and effective sorting can be achieved.

The same principles, and

accommodation of item and location coding, may be applied in more modest handling situations as a means of

achieving automated sortation systems.This would include the handling of returned items – the reverse logistics end of a mail-order or similar business.The equipment and software

considerations for such systems will generally require the advice of systems integrators, with appropriate attention to the economic and technological




justification for the proposed solutions.


Packaging of goods is another area where suitable identification can yield benefits in better supporting the handling and shipping of items and the needs of others further down the supply chain, through to the retailer. Levels of packaging are often necessary, including items in cartons; cartons in logistical units; logistical units on pallets; and pallets in larger containers of various descriptions.

The EAN.UCC system of numbering and identifiers supports a standardised approach to identifying these various levels of packaging or containerization through the use of numbering and various bar code labels. The system is used extensively through supply chains and is an important consideration for anyone entering the business of supplying or handling items in the supply chains. The system is more extensive and accommodating than indicated here but three types of label are frequently used for identifying the


various levels of packaging:



GTIN or Global T rade Item


Number used on items destined for


retail and carrying the familiar

EAN-13 bar code data carrier.

!GTIN plus EAN.UCC Application

Identifiers on cartons or cases of

items in the form of UCC/EAN 128

bar code labels.

!Serial Shipping Container Code in

Logistics Labels on logistical units

or pallets.

While the numbers and identifiers are

generally used on EAN.UCC adopted

bar code data carriers it is possible to use

them in other data carriers. T o use the

numbers in any form requires a company

to register with the appropriate national

body representing the international

Numbering Association (EAN

International). In the UK this is the e-

Centre, details of which are included in

the Sources of Further Information.

Other data carriers may be used for

identifying items and different levels of

packaging. It is important to establish

any standard that is being used for any

application and where appropriate

adhere to that standard. It should also be

recognised that larger capacity data

carriers may be used where there is a

need to convey more information with

the item, including for example a

complete listing corresponding to a bill-

of-lading in a single two-dimensional


At the large containerization level RFID

is gaining ground as both a means of

identification, for vehicles as well as

containers, and for security support

purposes. By identifying containers and

vehicles in this way they can be used to

support all sorts of access control and

supply chain management functions.



Getting goods out of a warehouse in an efficient and effective manner can be greatly assisted by having some form of machine-readable identification. Reference has been made already to the standardised means of identifying items and the various levels of packaging using the EAN.UCC system (see Picking and Packaging) and also the use of higher capacity two-dimensional codes for consignment listing.

Shipping documentation may also benefit from the use of bar coding for document tracking and in machine-readable form, for conveying other information such as the bill-of-lading. Since the information for such documents is invariably in electronic form within the warehouse computer or management system, it makes sense to convey it to where it is needed in electronic form. Where there is a need for paper documentation you should consider including appropriate information in a printable two-dimensional code. For a bill-of-lading, for example, the consignment information can be read by a transporter picking up the consignment, using a suitable terminal. It can also be used as a means of checking the consignment against codes on items or packaged items to be transported.

The information can be transferred to

in-cab or vehicle computer for down load at the appropriate destination, or even transmitted ahead to the destination using the available mobile wireless networks. Y ou are also able to provide additional information as necessary concerning time of departure, estimated time of arrival, carrier details and so forth. In this way the opportunity is provided for building efficiency of service, more effective handling at the receiver end and enhanced customer confidence.

The efficiency and flexibility of preparing consignments for dispatch is governed to a large extent by the management system operatives, and the software upon which the system is based. This would be proprietary or custom depending upon needs. It is also dependent of course on the data collection capability. Unless the management system is appropriate to needs the data collection part is almost incidental, irrespective of how good it is.So the need is for good software and good hardware.

Once you are able to get information into a warehouse information management system rapidly and accurately and able to use that information in an efficient and timely fashion you can see the makings of efficient warehouse management. The better the data collection and speed of transfer of information the better one can realise flexibility within the management functions.

Such flexibility allows a more responsive approach to handling sudden changes in demand or contingency arising through delays and variations in workload requirements.

Where manual handling of goods is required the manual handling processes may be further enhanced through operator identification. This allows more effective management of warehouse personnel and variations in work load and will require more responsive use of





Inventory Control

In its broadest terms inventory control is about knowing and verifying what you have and should have. Where it is. Where it should be. Knowing when to replenish items appropriate to function.

Because items held in store present a cost rather than add any value to a process, it is not surprising to encounter growing pressures to reduce inventory in supply chain warehouses and either down-size on warehouse space requirements or seek to introduce added value processes such as modular manufacture.

T o satisfy the needs of inventory control and achieve reductions requires appropriate capture and management of inventory data, and where possible synchronization of production to customer demand.

Effective control requires good data entry facilities, both item and location, and the means to verify inventory data and inventory actions involving the movement of items. Appropriate software is needed to achieve the control. Real-time data entry supported by wireless data communication can facilitate the up-to-the-minute or real time inventory required.

The key to achieving reductions and/or better deploying of the warehouse facilities is in the application of item-attendant technologies and item management. It should be clear from the examples that appropriate application of what may be described as item-attendant information and communications technology (ICT) can yield significant inventory control with benefits in every aspect of warehouse activity.

In addition to accurate information on quantity and location of items, the inventory control system can also provide, through appropriate capture of data, information concerning the condition, demand and usability status, lot and expiration-date tracking, item history (including how long it has been in store) and so forth. Indeed the system can benefit from any information that can be used to better manage and improve warehouse operations and efficient utilization of warehouse space and resources.

This includes information to support the various operational approaches to stock management and item movement including first-in, first-out (FIFO), last-in, first-out (LIFO), stock rotation and physical counting of inventory.

Linked to appropriate enterprise software the control function can ensure essential flow of information between back-office and the warehouse floor, generate appropriate reports on order fulfillment and track inventory movements across the enterprise activities. Such structures also support better use and management of human resources within the warehouse environment.

Without AIDC and other components of item-attendant ICT such benefits can not be achieved or the challenges of change accommodated. These challenges, with associated opportunities, include the developments in modular manufacture and added-value processing of items in temporary store. Other challenges include the realization of ‘virtual’ warehousing wherein items stored or being produced at different locations can be viewed and managed as if they were available through a central warehouse facility, without the overhead, capital tie-up and space demands that the equivalent central facility would imply.

The message is therefore clear. Item-attendant ICT is the key to more cost effective, efficient and flexible warehousing and inventory control.Data Appliances and Enterprise Software Interfaces

Where different data appliances and software are specified for different applications the question often arises as to suitable interfaces and platforms for handling the hardware. This is particularly applicable for real-time information systems with AIDC and other item-attendant appliances. Proprietary platforms are now available together with interface platforms to facilitate the use of various Enterprise software packages. These platforms provide:

! A common interface between back-end enterprise software and a

disparate range of item-attendant data

collection devices.

!Forward compatibility for new data collection devices and support


!Plug and play capabilities with

respect to bar code, RFID and other

automatic identification and data

capture devices.

!Remote network management with optimized network reliability.

Other features include:

!Simple command structure that

allows easy configuration and


!Automatic recognition and

registration of new devices on the

network supporting a unique level of

interoperability with different data

collection devices.

!Flexible and extensible device facility that enables all the relevant

characteristics of the devices on the

network to be automatically

described, including properties,

methods and events.

!Automated monitoring of device availability and status.

!Alarm events to indicate problems with device functionality.

Such facilities are now providing more flexible and user friendly structures for realizing integrated systems and potentially innovative developments in warehousing, inventory control, transport and distribution processes. These are the developments that can accommodate the rising demands and challenges of the communication era.