With integrated warehouse management technology, the concept of profiling orders to improve warehouse efficiency is within reach for many companies. Order profiling combines factors like item velocity with item relationships to create a system of rankings and a more effective warehouse stock pattern.

SKU Velocity

SKU velocity refers to how well your product sells when it is readily available on your warehouse shelves. It is often ranked using an A-F grading scale, where the A items make up the majority of your order lines, and are very fast moving. Meanwhile, F level products are those that sit on your shelves for extended periods of time, and make up less than 1% of your total order lines. Looking at all of the products in your warehouse, you can group them according to their velocity before you consider where they should be placed in your warehouse. Oftentimes, your A-list items are placed at sight level, close to your shipping and receiving docks, while your F-list items can stay in the far corners of your warehouse where they will be out of the way and not disrupt picking density.

Item Relationships

A second factor that impacts warehouse efficiency is the relationship between items. You can study associated item relationships in order to determine which items are most likely to be purchased together. Even if the second item is a B or C ranked item in terms of velocity, it can be placed close to its A-list partner because an order for item A is more likely to include a line for item B as well. There are several ways of determining this association but one simple way is to look at the total number of times the two items are purchased together divided by your total number of orders.

Order Mix

The next step is to look at the type of orders you are taking. Warehouses that receive mostly multi-line orders calling for a combination of low and high-velocity items typically benefit from having their products mixed on the floor so that all items are equally accessible to pickers. However, warehouses that take mostly single-line orders that are either high velocity or low velocity, but not both, can benefit from separating their products on the floor. This ensures that the vast majority of picking is done in high-density areas, while only a few outliers require going to the back corner of the warehouse. Your picking strategy and order profiling will vary depending on the type of orders you are getting and the actual velocity of the items therein.

In the past, all of these data points were typically collected by different departments, and may not have been readily available to help you improve warehouse efficiency. Fortunately, the modern Warehouse Management System brings all of this data together and can help you classify items by velocity and relationship to achieve the best possible order mix and distribution. By taking advantage of this information, you can stock your warehouse in a way that drives productivity and reduces waste.