Note: Descriptions are shown in the official language in which they were submitted.
33~
This invention relates to waxehousing 6ystems and
methods, and more particularly to structures, appara~us,
systems, and methods for storing and retrieving objects of
diverse characteristics and relatively ~mall size, such as
fasteners~ elec~ronic parts, etc., and maintaining control
of a relatively large inventory of such objects. This
invention also relates ~o the computer control of ~uch
systems and methods.
Historically, in~entory control has been
1~ maintained manually; for example, o~ file cards. Each card
contr~ls a single stock item, or n stockkeeping unit" (SXU~.
The file card sh~ws the current quantity of each item on
hand, withou~ the need of physicall~ checking the items in
the warehouse. A running balance is maintained by deducting
shipments and adding receiptsO Most conventional computerized
warehouse systems still keep their records in substantially
the same way; that is, by creating and maintaininq files by
s~ockkeeping unit.
It is plain, however, that in practice the SKU
2~ quantity shown on a card or i~ a computer file has no actual
existence as a single, discrete unit in a warehouse, bu~
ra~her is the sum of items physically contained in several
warehouse units or containers, the number and locations of
which can change daily. The nature of these units can be as
2~ diverse as a single jet engine on a pallet, 500 ball-point
pens in a box, 100 pounds of nails in a keg, 250 phonograph
records in a carton, 5,000 feet of wire on a reel, QX 55
gallons of paint in a drum. In the absence of fail-safe
computerized control over such items, a large warehcuse can
experience any number of inventory difficulties, especially
where a relatively large inventory of small parts is
maintained.
-1- r~
33~
50me of th2 problems with such prior eystems are
the following:
1. Incorrect shipments~ in whole or in part.
2~ Parts stored or replaced in ~he wrong place
and thPn later fsund after they have been assumed to be
lost.
3. Pilferage and o hex mysterious disa~pearances
of goods, which may appear as shortages either on a
day-to-day basis, or not until an annual inventory is taken.
~ 4. Laek of correspondence between the quantity
shown on a computer file or manual card and the a~tual
number of parts on hand.
5. Delays in shipping, particularly orders with
many types of items.
6. Large areas of unused space committed to i~ems
for which demand is declining/ while items for which demand
is increasing require cumbersome overflow or annex storage
areas.
7. Excessive warehouse labor and increased chance
of error aused by awkward~ chanying, or indefinite inventory
storage locations.
8. Lack of personal accountability ~f warehouse
personnel.
. 9. Ad hoc and unrelia~le handling of ord2rs for
future delivery and of parts sent out for special
modification.
10. Mixed lots, caused by having multiple open
eontainers in the same vicinity c~ntaining parts that are
deceptively similar in appearance, and giviny warehouse
workers the discretion ~o choose among the containers~
These problems, in varying degrecs, are found in
most conventional warehouses, in which a fixed space usually
33~
is allocated for each type of object to be stored. This
storage can be in containers on shelves, pallet racks, a
bare floor, sr any comhination of these. ~sually, an
attempt is made to store the i~ems in some logical sequence,
5 such as by part number. In some prior systems, items which
are in more active demand are skored near the s~ipping
department or in a localized area where the workers who
gather items from the warehouse (known as ~stock pickers
can get to those items more quickly. Also, in some prior
systems, a computer is used ~o print a "picking" list; that
is, a list giving the stock picker the locations of each
ohject to be retrieved~ and instructions on how to retrieve
several objects during one retrieval trip.
Applicants have recognized that some basic
lS inefficiences exist in such prior systems. Basic economics
dictates that restocking of a particular item take place
when a comp~ny~s stock of the item either is exhausted or is
- nearing exhaustion. Because a fixed area is assigned to a
particular item, the result is that an averag~ of 50~ of the
2~ shelf, pallet, or floor area remains empty~
Thus, on the average, only 50% of the space
in the entire warehouse is in use at a given time. This
is undesirable for many reasons: a larger warehouse is
required, stock pickers must travel greatex distances, on
~5 the average, to fill orders, and the likelihood that the
parts containers (e.g., boxes) will be put in the wrong
location is greatly enhanced. If an order for a particular
product requises only a part of the contents of a giv~n box,
the stock picker may not see a box which has been previously
opened, and then will open a new box. Where more than one
box is open at a particular time, the possibility of
pilferage, mixed lots, and stock loss is increased.
3~
Another problem with ~uch prior systems is that if
more parts of a qiven type are re~eived than will f it in the
pre-assigned spaee, the exce s must go into an overflow area,
which usually is some distance away from ~he first area.
Such an overflow would also take place if the demand for a
particular item suddenly increased and it was necessary to
maintain a larger ~tock permanently. Proper control of
items in an overflow area is usually very difficul~.
Another problem in conventional systems is related
to labor costs. For each order to be filled, a stock picker
often must travel the entire length and width of the
warehouse. Most likely, sto~k pickers will arrange for some
combining and exchanging of the order~ they are to fill~
informally, in order to reduce the distance each must travel,
~ut this opens the door to new and greater errors and con-
~usion. Labor investment and inefficiency are increased
further if partial quantities must be measured, for example
on a scale, or if incoming inventory must ~e divided between
a principal area and an overflow area. If items are ~o be
2Q picked by part numher or by description, the error rate will
be enhanced by misreadings and typographical errorsO ~lso,
a substantial training period i5 required for ~ew stock
pickers. Since all stock pickers must have universal access
to all items, including all open boxes, it is difficuLt ~o
hold any individual responsible for errors, ~ad housekeeping,
or missing parts. ~ne common attempt to cope with such
problems is to add a checker to verify the correct picking
of stock items. This only serves further to increase the
warehouse labor cost, and frequently allows stock pickers to
3~ bec~me even more careless, since the responsibility for
errors i 5 now being shared.
The principal o~ o~ ~he invention is to
provide a fast, aocur~te, economical, highly secure and
reliable warehousing system and method which mînimizes or
significantly reduces the foregoing problems.
S In accordan~P with the present invention, the
foregoing objects are met by ~he provision of a ~ethod and
system for storing and retrieving items having diverse
characteristics. The items are stored principally in ~wo
sections or areas of the storage facili~y. The first
section is near a retrieval stationO Limited quanti~ies of
items are stored in that section, preferably in ope~ con-
tainers, usually only partially full. Preferably, the items
stored in the first sectio~ are those which are most
frequently retrieved. Also, it is preferred that there be
no more than one container holding any one item in ths first
section.
The second section of the storage facili~y
preferably has much more storage space than the first
se~tion. Additional quantities ~f the items stored in the
2Q first section are stored in the second section. Preferably,
the items are stored in sealed containers, and most of the
,containers are full. It also is preferred that the con-
tainers be stored in the second section in random order so
as to ma~imi~e the usage of storage spaceO
When retrieving items, in filling orders for
parts, for example, the items are retrieved solely from the
first section, if the number of items stored in the irst
section is sufficient. ~f notp then they are retrleved from
both the first and second sections. If only integral
3~ multiples of the quankities in full containers are desired,
then retrieval solely from the second section is in order.
-5-
33~
Preferably~ the items are packaged for storage in
containers of ~tandardized sizes and ~hapes which are e-
termi~ed so as to substantially ill he storag~ spaces in
the first section and thus maximize ~he utilization of that
and other storage spaces in the storage facility. Preferably,
each container is filled with a pre-determined nu~ber or
quanti~y of an item.
A computer systeM is provid~d to identify the
locations of the items in storage, to enter orders, print
labels ~earing rElevant control d~ta for application ~o
containers and storage spaces for them, to print detailed
retrieval instructions for retri~ving the items from storag~,
to store and control records, and to perform other func~ions
of the system to be described in greater detail below.
15Preferably, the computer system includes a central
computer with input/output terminals and printers at various
convenient locati~ns. For example, in a business organ-
~ ization having several widely separated warehouses and sales
offices, at least one input/output terminal is located at
2~ each such place of business, with telephone line or otherlinks between the remote terminals and the central computer.
This allows personnel at any such branch location to enter
or fill orders for parts from any of the warehouses, and
gives them the information they need to sell, fill orders
2~ and order new parts, as needed.
In the first section of the storage facility, a
control card is attached to each container~ This card bears
a record of all withdrawals from the container, and of
transfers of full sealed containers from the second section
to the first secti~n. The computer system provides a
retrie~al list showing the retrieval worker, the correct
33-411
beginning quantity, quantity to be removed, and ending
quantity, and also a sequence Dumher.
A shipping document is also provided for each
order, listing all the retrieved quantities that make up the
order. Each por ion of an order retrieved from the first
and second sections is also assigned a sequential container
number, which is marked on the label provided for each such
portion, and corresponds to the sequence in which the
containers are listed on the shipping docum nt, on which the
1~ container numbers also appear.
The advantages of the invention are many.
The invention provides subctan~ial savings in labor costs.
The location of the first section (~" section) near the
retrieval station, and the storage there of the most
frequen~ly-retrieved parts, saves considerable amounts of
retrieval timeD The full usage of space in the "An section
reduces its size and further enhances the savings in
retrieval time.
The use of computer-generated retrieval
2~ instructions also minimizes retrieval time~ The nearly full
utilization of the larger second storage section ~B~
section) of the storage facility reduces its size and also
enhances the retrieval time savings.
The provision of detailed computer-generated
~5 instructions for stocking and retrieval personnel also
substantially reduces training time for them~ ~his further
reduces labor eostS. The nearly continuously upda~ed
inventory data available greatly reduces the time required
to take a complete inventory~
The nearly full utilization of storage space saves
on capital expenditures, since otherwise a larger facility
would be required to store the same quantities of goods.
7-
~ .!; 33~
The invention provides a high degree of security.
Losses due to pilferage and shipmen~ errors are minimi~ed.
The ~torage and handling of par s can be traced easily, back
to their original receipt.
The invention provides a very high degree of
accuracy and reliability in storage and retrieval ~f the
correct quantities of the correct parts.
The system can be used by means of remote ter-
minals in a network of widely separated storage facilities
and sales offices. The ~uantities of items available, their
locations, and other data thus are quickly available a~ all
facilitiesO Parts can ~e shipped from any location; and
parts ordered from vendors can be ordered from any location
and shipped to any other location. The information available
is updated to reflect every new transaction, so that up-
to-date information is availa~le at every location in the
system.
It is evident that the invention satisfies the
a~ove objectives most admirablyO
2~ The invention, as w~ll as further objects ~nd
adJantages thereof, will be understood more clearly and
fully from the following description, when read with
reference to the accompanying drawin~s,
In the drawings:
Figure 1 i5 a plan view of a warehouse constructed
according to an embodiment of the pr~sent i~vention;
Figure 2 is a block circuit diagram showing
a com?uter network for use in the invention;
Figures 3a and 3b are flow charts showing the
3~ storing, retrieving and shipping of stored items in the
warehousing system and method of the present invention;
-8-
33~
Figure 4 is a 10w chart ~howing a portion of the
method of assembling shipping documents in the invention;
Figure 5 is a flow char~ showing ~he method of
allocating stored items for retrieval in ~he i~vention:
Figure ~ is a flow chart showing a method of
assembling data for directing the retrie~al of items from a
container in the f irst section ~f the warehouse of the
aisclosed embodiment;
Figure 7 shows a par~ially filled-out contrsl card
for attachment to containers i~ he first section of the
warehouse; and
Figure B is a perspective view of part of a
section of shelving in the first se~tion of the warehouse,
the shelving being fully loaded with stored containers.
1~ G~:N~:RAI, DESCRIPTION
Figure 1 of the drawings shows the physical layout
of a warehouse 20 construc~ed according'an embodiment of the
present invention. In its preferred embodiment, the invention
is used in a warehou.sing system and method for use with
2~ fasteners (bolts, nuts, screws, etc~) of diverse types, si2es,
materials, etc. Bulk shipments of fasteners usually are made
in kegs or similar containexs.
The warehouse ~0 is divided into different areas.
There is a receiving area R where goods are received, and a
~5 shipping area 32 from which orders are shipped to customers.
A packaging area P is provided for repackaging
most of the fasteners in packages of standard sizes and
shapes in order to facilitate their storage and retrieval,
and to facilitate inventory control~
Bulk storaye areas 22 and 23 are provided.
Arca 22 is for the tem~orary storage of fasteners aw~iting
repackaging, and area 23 is for the permanent ~B" storage of
certain items, usually relatively large in size, which are
stored most efficiently in bulk in their original shipping
containers.
The major portion of the storage area in the
warehouse is ~or repackaged goods. This area is divided
into -two categories, labeled "A" and "B" in Figure 1. The
"A" section is relatively small compared to the "B" section
(e.g., the "A" section may be only about 10% of the size of
the "B" section). The "A" section is located very near a
retrieval station 30 where containers of fasteners are
gathered so that the fasteners can be counted (usually by
weighing), packaged, placed in cubicles 31, and assembled
into a finished order, which then is sent to the shipping
station 32. Most of the "B" storage is relatively remote
from the retrieval station 30.
Figure 2 shows a data processing system 28 which
forms a part of the warehousing system and method. The
system 28 includes a central general-purpose computer 40,
local or "in-house" input/output terminals 42 and printers
41. The computer 4Q, terminals 42 and printers 41 pre~erably
are located in or near the warehouse 20, in a portion not
shown in the drawings.
The data processing system also includes
input-output terminals 44 and printers 45 located in at
least one remote branch or separately owned warehouse 2OA
(preferably there are several such branch warehouses), and
additional terminals 47 located in at least one remote branch
sales office 20B. Also, at least one input-output unit 50
is located in a customer's place of business 20C to give the
customer access to the inventory information provided by the
system 28. Printers 48 and 50a may also be provided at
locations 20B and 20C, respectively.
--1 0--
THE STORAGE AND RETRIEVAL PROCESS
ReEerring now to Figure 1, stock, items in containers
are received through a door 21, and are stored on pallet racks
in the area 22. The goods are checked in the receiving depart-
ment R, which may include weighing on a scale 27. In receiving,
documents are prepared for the entry of the shipment into
the computer system 28, which will henceforth "track" the
items received untll their eventual shipment to a customer.
Until ~he items are repackaged or otherwise processed for
storage, they are designated in the system as being in inventory
in the receiving area R. This R area acts as a reservoir, in
the sense that one or two large receipts on the same day can
greatly swell the packaging backlog, while the packaging
rate usually proceeds at a relatively steady pace.
Items to be stored in the original containers then
go directly to storage on racks in the area 23. Other items
are repackaged before storage by means of one of several
packaging machines 24, 25, or 26, located in the packaging
area "P".
The general rules used for storing containers of
repackaged fasteners in the "A" and "B" sections are that
full containers are stored in the "B" section, whereas open
containers are stored in the "A" section. Moreover, multiple
containers of each type of fastener are stored in the B
section, whereas only one container holding a given type of
~astener is stored in the A section. The types of fasteners
stored in the A section are those for which there is the
greatest demand. The shelf space or other storage spaces in
the A section are kept full at substantially all times,
except when a container is temporarily absent when parts are
being retrieved from it.
33~
When parts are retrieved, they are retrieved from
the container in the A section alone, if it contains enough
parts. If it does not contain enough parts7Or if the order
., ~
is or one or more full cont~iners of the part, then no parts
are immediately retrieved ~rom the A section, but rather the
required amount is retrieved first from unopened containers
in the B section. The remainder of the order is then retrieved
from the A section. If the amount in the container in the A
section i5 still insufficient, then after ~he contents of the
current A con~ainer have been exhauste~, a container is brought
from the ~ section which, after removal of the items required
to fill the balance of the order, replaces the now-empty con-
tainer in the A section.
Some parts, for which there is only infrequent
demand, are stored only in the B section. If such an
infrequently used item is to be retrieved in a quantity less
than tha~ of the next available B container r the system
assigns an A storage location, as discussed below, to which
the container is re~urned aftex the partial quan ity is
removed from it. The open container with the remaining
parts then becomes the A container for those parts.
This storage of the most frequently-requested
parts in the A section greatly reduces retrieval time and
labor, because the A section is so close to the retrieval
and shipping stations 30 and 32. Other advantages of this
arrangement will ~e explained below~
The large warehousing operation depicted in
Figures 1 and 2, with its f3r-flung sales offices and branch
warehouses, has the need to control and account for inventory
3D stored at, shipped to, and shipped from a multiplicity of
locations. For example, if a branch warehousc stores an extra
quanti~y of popular items in order to conveniently service
-12
~3~
local customers on a rapid basis, tight ~nventory control is
as necessary as in a main warehsuse. Each branch, as a ~e-
parate profit center, should be held accoun~able for goods
either purchased, ordered, or temporarily held by that branch.
A computerized system such a5 that of ~he present invention~
which can identify a part according to its precise location,
and even its precise shelf location, and keep a recor~ of what
entity is responsible for it, substantially eliminates any
need for visual inspection of a local inventory. Thus,
1~ nationwide control of inventory in many locations can be
accomplished efficiently and quickly.
Furthermore, the system can be used to maintain
inventory record-keeping on a contract basis for any firm,
such as a vendor, a customer, or a company entirely unrelated
to the owner of the system. Such an Gutside party can use
either its own warehouse acilities or those of the owner.
With multiple warehouses, periodic shipments can
be made from a central warehouse to satellite warehouses to
replenish their inventory~ With the single order data entry
2~ which is provided by this invention, customer order~ are
automatically shipped from one or more warehouses either
directly to the customer or to another warehouse for sub-
sequent ~hipment to a customer. When parts are shipped
between warehouses, each container is assigned to a w~re-
house location at the receiving warehouse at the same time
that it is designated to be pulled at the .shipping ware-
house. Thus, inventory control is not interrupted, and all
original data are maintained at the new location. In
addition, any warehouse in the system can receive new parts
from a vendor and ship to any customer or to ~nother ware-
house, regardless of which receiving warehouse was originallydesignated. Further, the methods and apparatus of this
-13-
33~
invention are applica~le to tracking, in an nin-process"
account~ par~s sent to a subcontractor for additional
processing.
DETAI~ED DESCRIPTION
The computer 40 performs ~he following functions,
When a customer order is being made up, the computer sys~em
first determines whether the order can be filled from ~he
current contents of A; if not, it then assigns full B
containers where possible, with the balance, if any, coming
from A. If ~he quantity available in the respective A carton
for this last operation is insufficient, the computer system
anticipates this and sends a ealed container in advance of
filling the order to replenish the supply in the A section.
The customer order is then filled first ~y exhausting the
con~ents of the prior A container. Then the container from
B is opened, the remainder of the order i5 filled from it,
- and the container from B then becomes the new A container.
All containers going from B to the cu~tomer, from B to another
2~ warehouse, or from B ~o A, are assigned by date received in
the warehouse, with the oldest container going first.
Each location in the A and B sections that is
capable of holding goods is assigned a permanent location
num~er. In a manner tha~ will be explained ~elow, incoming
goods are randomly allocated to the B locations. The .~
section is also randomly allocated, according to when it
first becomes necessary to maintain a partial container.
Considering, however, that the ~mount of stockpicking labor
that takes place in the A section may be to~ally out of
proportion to the percenta~e of total warehouse space that
it includes, it may be desirable to further enhance eficiency
in the A section. This can be done, for example, by shelving
-14
33 ~11
the most active items relatively closë together, and such
specific assignment of open box locations is an optional
feature of the system of the present invention.
If the products being removed from the open
containers in the ~ section are easy to handle, the stock
picker c~n fill the customer orders from the A containers in
the aisle area 29 shown in Fig. 1. If counting or weighing
is required, the stoc~ Dicker can use a battery~operated
electronic scale, ~till working in the aisle. If this is
inconvenient~ th~n the A cartons can be t'aken off the
shelves or racks and brought to counting tables at the
retri~val station 30, where tha required items are removed.
A ~raJity conveyor (not shown) leading to the counting
tables allows a su~stantial nu~ber of boxes to be accumu-
lS lated and delivered to the counting tablesO On the counting
tables, or in the aisle area, a particular customer order is
rilled from an A box and then plaeed in smaller packaging as
- - appro?riate .
It is desirable to group together all of the items
2~ accumula~ed for a particular customer order. This is done
by means of pre-assigned cubicles ~ i~s~ 31, shown in
Fig. l. The cubicles 31 preferably are near ~he A shelves
or the r~trieval station 30. Alternatively, they can be
located some distance away, with parts being tran~ported to
them by conveyor. Each cubicle is designed to handle an
order of average ~ize, and can contain sealed cartons brought
fro~ B to be shiDped to a cus~omer, as well as partial
quantities removed from cartons in the A section. .Either
the system or warehouse personnel can optionally assign to a
gi~ren customer order more than one cubicle, either i~
necessary to hold a large order, or if it i5 desired to
Drovide separate respective holding spaces for items from
the ~ and B sections.
-15-
3~
When all of the items fcr a given order have been
accumulated in a cubicle, the items therein are put into one
or more shipping cartons and sent to the ~hipping area 32,
where th~y are wei~hed, sealed, and sen~ to ~he customer.
STORAGE OF PACKAGED OBJECTS I~ A AND B STORAGE AREAS
A simplified flow chart ~f the system and method
of the present inventi~n for storing items is shown in Fig.
3a. In the r~ceiving depar~ment R, two types of shipments
are received: ordexs from vendors, and customer returns (se~ -
step 33). Customer returns are sent to the inspection
statio~ 34. If the items are of acceptable qualitv Sstep
34~, they are returned to B stock as if they came dirQctly
`.~ from a vendor. If their qu~lity is unacceptable, then at
3~o
step ~t~ they are either scrapped or sent to the shipping
department 32 for return to the vendor.
A shipment from a vendor is first inspected (step
- 34). If it is unaceeptable (step 34a), it is sent to the
shipping department 32 for return. If it is accepta~le, and
2~ if it is of a nonstandard item purchased for a particular
single customer order (step 34b~, it is sent to a special
order desk 35 (not shown in Fig. l). If the special order
was backordered (step 36~, the items are sent directly to
shipping, if not, surplus quantities of the special items
2~ and items for future orders are placed in B stock.
If a shipment from a vendor is a standard item
(step 34b), it is dctermined at step 34c whether it is
backordered, and if so, it is sent directly to shipping. If
not, and if it is to be stored in area 23 of ~ stor~ge in
3~ its original vendor container, it is sent at step 34d to B
storage. Other standard items are sent in step 34d to the
packaging area P, and then to B storage.
3J--'t 11
The objec~s to be stored are packed in standard-
ized containers, either by the vendor, or in the warehousing
operation. Each container is of a predetermined size and
shape which will fit on the helves in ~he A and B sections
and substantially fill them, so as t~ make maximum use of
the A and B sec~ions.
Each oontainer is assigned, by ~he computer, to an
empty, pre-numbered, unique location in storage area B. For
each container, an operator uses an input/output device such
as 42 to store in the computer system 28 the item number,
quantity, vendor number, purchase order number, date received,
and actual costO When parts are to be gathered to fill a
customer order, the computer directs the stock clerk or
"picker" to a specific location in B for each container
r~quired for the order. Pressure-sensitive labels are applied
to the boxes throughout the system to direct the stock clerks.
Self-check digits are generated by the system to be compared
- to other such digits at each point in the retrieving process~
to assure that each operation is carried ~ut correctly.
It may be that an order directed to be filled from
the B section can be filled solely with full, sealed
containers found therein. If the quantity required for all
or part of the order is less than the quantity in ach of
the sealed B containers, however, the system will direct the
stock clerk to take parts from a respective one of the
containers in the A section that contains ~he desired items.
A control c~rd on the A box contains further verification
features, as well as sh~wing the identification and quantity
of the items contained in the box~
Routine orders are usually printed as a single
batch on a daily basis. Rush orders can be printed
i~mediately on an individual basis when needed. The orders
~ 33~
c ~-, ~ . \, :.
printed in batch are pre-assigned e~by numbers, ~nd all of
the A items to be pulled to fill all of ~hese orders are
1' '~,
printed in a sinqle pi~king order. ~he items in the picXing
order are printed in shelf loc~tion sequence, and all orders
f~r a par~icular stock i~em are listed together, irrespective
of the number of separate customer orders for whic~ that item
is to be pulled. Thus, ~he stock clerk makes a single pass
through the A section, filling all ~rders for the day.
Movements of items in~o or out of the A and B
1~ sections are controlled by the computer system 28, ~ record
i5 kept of the quantity contained in each container in A,
and a container is automatically moved from B to ~, before
any items are pulled from A, if it is anticipated that the
orders in the day's batch will exceed the items in the A
box.
A convenient system for taki~g a physical
inve~tory in B is also provided. The system provides a
report by shelf number showing which locations should be
full, empty, or allocated to a current orderO The boxes are
2~ sealed, so no closer examination is necessary~ It is
believed that a company with 50,000 containers in its B
section could do a physical verification in about 2 to 3
hours using eight 2-person teams. Inventory of the A boxes
is unn~cessary for two reasons. First, the quantity
s ~ ~ O ~-~ C~
contained in the boxes is relatively small~ Seee~,/bv
definition~the turnover o~ the A boxes is relatively rapid,
and any minor discrepancies in the contents of an A ~ox
app~ar and must be reDorted when the box is exhausted. The
effect of th;s is that whenever the quantity in an A box
goes to zero, a physical inventory has automatically been
taken.
-18-
.-J i~
In addition to the basic elements described
previously, the complete system -that can track any desired
movement of the items in inventory or isolate all containers
of a particular item that were received in a given single
batch. A full complement of reports for management showing
exceptions, audit trails, and significant status reports are
also available. Daily, monthly, and on demand reports are all
available, and can be requested at any computer terminal
with management authority.
PURC~ASING AND RECORD KEEPING
The system 28 (Figure 2) controls the storage and
di~position Of stock items from the moment they are ordered
from the vendor. ~ach purchase order is entered into the
system, and one of the printers 41 prints the vendor order.
The original copy is signed and mailed, one copy is kept for
reference in the purchasing department, and two copies are
sent to the receiving department R to await receipt of the
shipment.
The system controls two types of items. One type
is the actively used item that is reordered on a revolving,
regular basis. The reorder point for these items depends
on several factors, including lead time, demand, and margin
~or safety, parameters governing each of which are entered
into the system. The system prepareS reports that recommend
those items to be bought at any given time. The system can
traclc either the actual cost of each container, the average
cost of all purchases o~ an item, or the standard market
cost of the item.
The second type of item is that which is required
for a particular customer on a particular occasion. Such
--19--
items are bought on an as needed basis~ The ~ystem records
thP actual cost of these items, and if like p~rts are bought
for other speci~ic jobs 7 the sys~em tracks them separately
but reports the duplication either on request by means of
an on-line inventory search7or by a regular inventory
report. Where multiple warehouses are csncerned, ~he system
reports on the profitability of such sales for each
individual branch.
The two copies of each purchase order held in th~
1~ receiving department are helpful~ but not necessary to ~he
operation of the syskem. If a ~hipment ~hould be received
at the wrong branch warehou~e throu~h an error, such ware-
house can still enter the receipt, print oustomer shipping
orders, ~nd generally handle all appropriate processing of
the ~oodsO The original receiving department copies of the
purchase order can either be forwarded to the branch that
received the goods or destroyed. These documents are not
required for the audit trail for the received items; all
necessary data are in the computer system~
In the normal course~ whe~ a shipment is received,
one copy of the purchase order showing a temporary pallet
loca~ion to which the go~ds are assiyned is sent to a data
entry area, and the other is kept with the goods. Data
representing the receipt (consider in the examples that
follow that the purchase order number is E010~150, and the
receipt consists of parts whose item number is AlKA02G) are
entered into the system, and if there are any customer
back-orders, retrieval documents to fill them ~t
immediately. Such back orders are expedited, and any
3~ remaining parts are held for repackaging or shelving.
On a daily basis, ~or each receipt the system will
prin~ a UVcndor Receipt VoucherH to initiate the accounts
-20-
payable function. This voucher shows the vendor name, order
number, ~reight terms, and the item numbers and prices
exactly as they appear on the purchase order, which has, as
before stated, been entirely under the control of the
system. The voucher also shows the quantities received,
thus verifying that the ordered quantity has been correctly
put under the control of the computer system.
The actual vendor packing sllps and purchase order
copies handled by the receiving department do not have to be
sent to the accounts pa~able department. These warehouse
documents, which cannot easily be forwarded if goods are
received at multiple locations, for example, are not needed
by the system in order to input the receipt of a shipment
into the system.
Rather, control is maintained by means of the
~endor receipt voucher, since only an authorized person in
the purchasing department can enter a vendor order, and once
a quantity of goods has been received into the system, every
piece must be accounted for as either being shipped to a
customer or placed in stock. If the goods go into stock,
the quantity in each stock container is independently
controlled. Particularly, if the items are repackaged for
storage in B, any variation between the received quantity
and the repackaged count is immediately shown on a manage-
ment report. Management reports are also prepared toshow discrepancies between receipts and eventual shipments
to customers.
RANDOM STORAGE OF PARTS
After receipt, the system makes a record of
pertinent data for each container and directs the storage of
each in a random distribution pattern either on a shelf, a
rack, a pallet, or a pre-designated area of the bare floor.
Two files are maintained to record the data for each
-21-
containex in a given wareh~use. One is an ~item detailfile~ kep~ in item number sequence. The ~her is a ~shelf
location file,~ kept in shelf location sequence. The i~em
detail file has o~e record for each container in stock, and
the shelf location file has one record for each shelf location~
whether or n~t it holds a container.
- Th~ typical warehouse usually contains a mix of
different-sized cartons, kegs, crates, and so forth.
Separate, randomly-controlled areas ar~ maintained for each
different size of container, with newly received parts going
into the apDropriate warehouse area. To initiate the system,
every locatiGn in the warehousP in which a container can be
stored is nu~bered, and the location number is entered into
the computer~ In order to implement the sy~tem of the
~15 present invention with a pre-existiny inventory, data for
items already in these locatio~s are also entered into the
sys~em. Thereafter, the system directs each incoming
container into a specific warehouse location, and likewise
designates the particular location from which each container
2~ to be shipped is to be pulled.
Even within a single received shipment of a sinyle
type of stock item, containers can contain different
quantities and be of different sizes. For each container,
however, regardless of its size or where it i~ stored in the
warehouse, the system records the warehouse location,
quantity, item number, date received, actual cost f~r the
parts in the container, vendor number, and purchase order
number. These data stav in the system, for that par~icular
container, until the container is shipped. Complete
traceability for each container is availa~le at all times,
the system using the purchase order number as a control
reference for that quantity of goods. All of thesn data are
-22-
33
.S ~
printed on each document associated with ~he goods, includ-
in~ labels on the face of each container ~oming from
either A or B st~c~ and the even~ual cus~omer shipping
documentO
The system can accommodate at least three
conventional types of warehouse storage structures. First
is the storage pallet stored on a rack from which the entire
pallet is removed to gain access ~o the containers stored on
it. The system can maintain control over all containers on
the pallet, regardless of whether they have different siæes
or contain different quantities. Each pallet is classified
with a code which designates ~he number of con~ainers,
regardless of their shapes, ~hat it will be designated to
hold. A record is maintained of how many conta~ners are on
1~ each individual pallet, and therefore it is known how many
additional containers can still be accommodated. When a
shi~ment is received, data are entered representing the
number of containers that have been received and their
sizes, and which pallet classification they should be
assigned to. The system assigns the containers to a pallet
with that classification, and furthex selects a pallet~ if
possible, which can accomodate all of the containers from
that receipt.
When all of the contain2rs have been removed from
a pallet, its size classification is deleted. A new size
slassification is assigned when new containers are placed on
it. If it should happen that many pallets contain only one
or two containers apiece, the system prints a report in-
dicating these pallets, and other containers can then be
consolidated on them. This creates additional empty pallet
locations, which are desirable for receipts consisting of a
large number of containers. If a shipment of containers is
-2~-
:L ~
already palletized, an entire incoming pallet can be routed
to a pallet rack location that is emp y, and the system will
automatically reclassify the container size for that palle~
locatiGn .
The second type is rack storage, which is an
alternate method of storing kegs and other 1 arge containers.
I~ this method, only one particular container a~ a time need
be removed, without disturbing the other containers on the
rack. Each space on the rack th2t can hold a container is
prenumbered, and the system maintains re~ords of each
available location for the assignment for appropriately-
siz~d containers as necessary.
The third type is shelf storage~ which is the
normal method of sealed box storage in the B warehouse area~
The containers can ~e shelved one- or wo-deep, and may, in
addition, be stacked two- or three-high. In any case, each
space on the shelf that is capable of storing a container
- is prenumbered and labelled and the system controls all
container movement in and out of each space.
2~
- LOCATION LABELS
All parts entexing inventory go to the sealed B
section. The system prints location labels on demand, for
placing new incoming containers in rack and shelf storage,
each location label representing an empty location on the B
shelf or rack. ~abels are printed for pallet storage after
descriptive information, including the number and si2e of
the containers in the received shipmentt has been entered
into the system.
An example of the information contained in such a
label is shown below in Table l. In this examplc, let us
suppose that this is the fifth label in a batch of eleven,
-24
~ t~
running from location 11-22-14 ~o location 11-22-36.
Plainly, this series of location numhers is not continuous.
The location numbers that have been skipped represent
locations that are already fU11G
Table 1
~, . _
7 A~Y CITY S 0005
@ ~ @@ @@ ~@@@ _
Q @ @ Q @ ~ ~ @ ~ @
@ Q H Q @ H @ @ Q
@ ~ @ ~ ~ ~ @
@@@ @@~ ~@@@ @@@@ @~@@ @@
11-22-20 ~OX 08/81
",.,~,.
The data printed on the label include the location
number in large and small characters, the city in which the
warehouse is located, the month the label was printed, the
size or type of container (in this case, for example, the
word 7'box" indicates a standard ~ype of storage box), a
serial number showing the position of each label in the
sequence of the labels printed at that particular time
(here, 0005~, a batch control l~tter ~in this casel the
letter "5"), and a self-check digit (here, 7~ derived from
the shelf location number by a conventional modulus 11
residue computation algorithm.
The location labels can ordinarily be printed in
batches of ~rom one to several thousand, depending on the
degree of activity. Each new batch of labels uses location
numbers startin~ ~lhere th~ last batch stopped. Assignments
2~ depend to some extent on the type o~ container, as various
areas within the warehouse ac~ommodate di~ferent sizes and
shapes of containers. Sub~ect to this limitation, the
system proceeds in assigning locations continuously
-25-
throughout the entire warehouse, thus assigning each new
batch of received con-tainers to -that area for which the
longest time has elapsed since the empty spaces in that area
were last filled. The result of this process is a built-in
bias favoring a closer grouping of similar boxes, while
still within the principle of random close-packed storage.
The result is increased economy, both in initially shelving
a receipt, and in pulling a plurality of containers of a
similar -type, as might be required for a large customer
order.
PRODUCT IDENTIFICATION ~ABELS
At the time of receipt of goods, another
pressure-sensitive label, called a product identification
label, is printed by a printer 41 under the control of the
computer, in addition to the location label. Both labels are
affixed to each box or container going into stock. This
identification label shows the part number, description, order
date, vendor number and purchase order number (which is used
as the control number throughout the life of the container
and the goods).
Referring again to Table 1, the purpose of the
serial number is to provide a convenient determination of
the number of containers in each batch. The roles of each
of the other numbers on the location label will be discussed
further helow.
TRAVELER SUPPLEMENT
Referring to Table 2, there are seen the data
contained in a "traveler supplement", which is the document
governing the receipt of pertinent information for each
container as it is entered into the system. The data in the
illustration correspond to the data in the previous
-26-
, ~' ', .
33
examples. Note that the location numbers for full
Table 2
Order ~ E0100150 Part # AlKAO2G
Complete Pcs./Box 10,000 # Boxes 10 ~tal Pcs. 100,000
Boxes
S 11-22-14
18
19
~6
34
Fractional 8OX: Pcs. 2000 Shelf position S 1~-22-36
Count: Complete Boxes 100,000
Practional Box 2,000
Total received 102,000
boxes, the location number for a fractional box, and the
batch control letter all correspond to the location numbers
discussed above.
When the B locations assigned for a given received
item are ~ntered into the system, although all the locations
are listed on the traveler supplement, as shown in Table 2,
only the first and last of the locations for a given group
of complete containers need be entered, in this example
11-22-14 and 11-22-35. There is no limit to the number of
locations in such a group that may be thus entered r as the
computer, having assigned the labels, retains its record of
which locations are empty until such input data are
received. The only requirements for making such an input
are that the same quantity must be in each container in the
group, the quantity per container must be known, the number
of containers must be indicated, and further, the batch
control letter must be given. The batch control letter
33-411
indicates ~o ~he comDuter in which of its label~printing
runs it allocated these stora~e locations to this particular
i~coming shipment. The system is ~huc enabled to skip over
any locations, even if they may be empty, which were not
assigned the same batch control letter by a label-printing
run.
- Note that a specifis batch control letter, a shelf
position number, and a quantity have been listed for the
last fractional box individually, after the inc~mins
shipment has been allocated to an initial ten boxes, each
containing 10,000 pieces Possiblyp an excess shipment was
received of 2,000 pieces. 9ecause this container had an odd
quantity of items, its shelf posi ion and contents were
required to be input separatelyO
Under this structured data entry system, errors
made at the time a shipment is received and shelved are
minimiæed. The dat~ entered by the warehouse personnel,
namely the first and last location numbers, the contents of
each container, and the number of containers, must be
correct or the entries will not be accepted by the sys~em.
i~or example, if the correct data were 10 containers ~rom
locations 11-22-14 to 11-22-35, but the operator entered
11-22-13 instead of 11-22-14, the system would either
indicate that location 11-22-13 was already filled or that
there were not 10 available locations from 11-22-13 ~o
11-22-35.
Although the system can function with individual
received containers each containing different amounts, if
the operator separately enters data for each container~
useful economies are obtained, as explained above, when all
containers except the last one for a particular incoming
shi?ment, either originally or after repacX~ging, are filled
-~8-
33 411.
wi~h the same qusntity of goods. The last remainin~ parts
after this uniform packaging compose the contents of the
only partially filled box. This sy~tem thus require~ the
entry of only two sets of data for the received shipmen~9
one for all of the filled boxes, and the other for the last
partial box. If, however, it is desired to ~tore ~e goods
in the ~endor's no~-uniform con~ainers, any number of
entries may be required for the shipment, depending on the
number of differQnt quantities ~ontained in the respecti~e
containers.
If inc~ming parts are to be stored in the vendor's
containers, and if the incoming part counts can be ~eri~iPd
quickly, the internal repacka~ing step can be eliminatea
. completely, and location la~els can be printed on a custom
basis. In this case, one entry is made to tell the computer
system the total quantity received, and another entry is
made of ~pecific containèr dat~. The specific container
data include the quantity per container, and the number of
containers for each yroup of containers that has diferent
2~ quan~ities~ Since most shipments in practise have the same
quantity in each container, only a single entry of this type
will usually be required. When the data entry is completed,
the system prints a single label for each container,
incorporating bokh the description and location data.
ORDER PROCESSING
An overview of the features for entering and
filling customer orders will now be givenO The operator
uses one of the input-output devices to enter the customer
account number and each quantity and part number for the
order. The system displays the customer name and item
descriptions on the CRT screen o~ the input-output device
_~9~
a~ ~ .L 1
for visual ~erification. Prices can be generated by the
system or entered by the ~perator. The otal sale5 and cost
amoun~s are upda~ed ~n the screen as each item is entered~
The system will immediately allocate inventory, if
available, or report necessary backorders, bc>th on the
screen at time of entry and on a printed daily rep~rt.
Orders may be entered for immediate, same-day shipmen~,
next-day shipment, or shipment at a :Euture date. In-
structions can al50 be entered so that shipment will n~t ~e
lQ made until all items in an ord~r are ready and can go or~
a single shipment. The warehouse documents will not be
printed until the parts are available, and the due date, if
any, has been reached. Thus, any changes or cancellations
of back~orders or future orders can be made easily.
If multiple warehouses are in the system, a code
on the order will eithex permit or prohibit shipments to ~e
made from other warehous~s, either to the ordering warehouse
or directly to the customer, if parts are not available at
the ordering warehouse. This feature, combined with the
2~ same-day delivery feature, permits satellite warehouses to
operate with little or no inventory and still offer service
better than that of many conventional systemsO
In picking B containers for customer ordersJ a
choice of two picking strategies is available, depending on
the size, weight, and number of the containers beins picked.
Either a sinyle set of picking instructions can be printedt
in warehouse location sequence, for all containers to be
shipped that day, or sepàrate picking instructions can be
printed, also in warehouse location sequence, for each
order. The former method will require an additional
operation to combine the containers for each ordcr but only
-30-
a single traverse ofthe warehouse will have to be made for
that ~ay's work. The computer greatly simplifies this
alternative.
A separate pressure sensitive picking label is
printed for each container to be "pulled" (retrieved from
storage). Each label lists the warehouse location of the
container to be pulled, the quantity, item number and description
of the parts therein, the customer name and order number, and
the cubicle number assigned to that customer's order.
The computer furnishes an additional fail-safe
control to ensure that the correct container is being pulled.
As it has been described above, when the parts are first
received the computer designates the warehouse location for each
container by printing a pressure-sensitive location label to be
placed on the front of each container. In addition to the ware-
house location number, a sel~-check digit (modulus eleven is
preferred) is also shown. When the container is to be
pulled, the pressure sensitive picking label described
above also shows this self-check digit. This second label
is pasted on the container next to the first label, and
before the shipment is made, a circle is drawn around both
self~check digits to confi.rm that they match. Depending on
the number of digits in the warehouse location nun~er, it is
believed that this self-check digit will detect all but about
one in ten thousand errors.
After ~ and B containers are allocated to
shipments by the system (the allocation process will be
discussed below), usually at the end of the day for routine
orders, and once or twice in the afternoon for rush orders,
the computer prints documents directiny the warehouse
personnel to pull the assigned containers. These documents
are as follows:
-31-
33~
one shipping document (packing list) for each
~ustomer ~rder~
one master warehouse picking order in
wareh~se location sequence listing all
items incl~ded on all the ~ustomer orders.
- one labe~ for each B container going
directly to the customer.
- one lab~l for each B container going into A,
one label for each partial quantity going to
the customer from the A ~ontainer~
A flow chart cf the system and method for
retrieving items for ~n order is shown in Figurç 3b~ At
120a, 120b, 120c, and 120d, the shipping document, B to-
customer la~els, B-tu-A labels, picking list; and A-to-
lS ~ustomer labels are prepared and distributed ~o s~ck
workers. At steps 121a, 121b, and 121c, the shipping
document is placed in the cubicle area 31, and it is
determined from the shipping document and the presence or
- absence of B-to-customer labels whether items are to be
retrieved from B for customer shipment. If ~o, a worker
takes the labels to B, pulls the containers, attaches the
labels to the boxes, and confirms that the check digits
match. At 122, if no ~ parts are needed, the B boxes with
labels then go directly to shipping 32. If, however, items
are required from A, then at 122 the B container await them
in a h~lding space 31a, whi~h may be ~ cubicle 31, an
overfl~w ~ubicle associated with a primary assigned cu~icle,
or a separate selected shelf or cubicle space.
The retrieval of A stock is carried out as
follows. Working from the B~to-A labels prepared at 120~, a
clerk retrieves at step 123 any B stock that is necessAry
for replenishing insuffic;ent A supplies and delivers it to
the vicinity of the counting tables 30. Another clerk,
working from A-to-customer labels, pulls the A containers
required at step 124a. A w~rk~r at a counting table 30,
guided by the picking list (received at step 120c), prepares
~3~-
the cus.omer order, which is then placed in the cubicle 31.
Any excess items after order preparation are returned to A
stock at step 124b.
The ~ items and shipping document in the cubicle
31 are matched at step 125, and the container numbers in
parentheses on the documents and labels are compared to
ensure that all necessary A items have been pulled. If the
document indicates that s items also were ordered (step 126),
they are retrieveA from the B holding space 31a, matched
with the A items and shipping document, and sent to shipping.
If no B items are needed at step 126, the A items and
shipping document matched at step 125 are sent to shipping
directly.
An assembly-line approach is used in the warehouse
to fill the orders. Typically, three stock workers can
process an average day's orders in an existing system which
actually uses the invention. Worker #l ~irst brings the B
boxes to the counting table. Next he or she pulls the s boxes
going to the customer and puts them in the shipping area if no
parts from A are needed, or puts them in the holdiny space 31a
near the A cubicle 31 i~ additional A goods were requixed, and
then goes to the shipping area ~o pack early orders, which now
are ready for shipment. Working from the A-to-customer label,
Worker #2 brings the A containers to the counting table and
returns any finished A containers to their proper warehouse
locations. Gravity conveyors going to and from the counting
table allow several containers to accumulate to await their
turn to be counted. Worker #2 can also take any bags or boxes
packed ~or the customer order and put them in their Aesignated
cubicles.
-33-
Customer orders for fewer than four items are
placed in the cubicles so that when the items are ready they
can be put into a shipping carton and sent promptly, by
another conveyor, to the shipping area. Customer orders for
four or more items are assPmbled when the master warehouse
picking order is finished, or almost finished. Worker #3 is
stationed at the counting table, and working from the master
warehouse picking order, counts the required parts for the
customer order. If the quantity in the ~ container is
insufficient, Worker ~3 opens the B container which was brought
to the table, and attaches the pre-existing A box control card
to it. (See Figure 7 and discussion below.) That container then
becomes the A container and is returned to the A warehouse
location. When all items are counted, Worker #3 can help with
the remaining consolidation of the customer orders having four
or more items.
The customer's packing slip, which guides the
assembly of the shipment, shows the cubicle number and the
number of containers of each size that have been pulled for
that shipment. As an additional check, the container
picking labels are sequentially numbered so that each
container is accounted for when assembling the shipment.
Further, each container is itemized on the customer packing
slip along with the sequential container numbers, to enable
2~ the customer to check the receipt quickly and efficiently.
For large numbers of orders, additional workers
may be added where needed, but the three functions preferably
should remain discrete. If the parts coming from the open con-
tainer do not have to be scale-counted, a single person can
perform the functions of Workers #2 and #3.
-34-
_E ALLOCATION PROCESS
In entering a customer order into the system, a
sales worksheet is first filled out, containing basic
information such as customer name, order date, customer 7
. /
-34a-
33~
account number, part number, and a ~hash total~ n which is
the total ~f all the i~em ~uantities that will be entered
for the ~rder. Working from the workshee~, a system
operator enters the account number and ~he system displays
S the customer's bill-to and ship-~c addresses. The buyer
name and preferred method of shipment are usually ~tored on
a master account record, and will automatically be displayed
by the system. If desired, they can bs changed at will for
a particular order. The operator also enters the cust~mer
lû order number and the hash total. ~he sys~em will verify
~hat the hash to~al matches the total of the individual item
quantities, when these quantities are later entered. The
system records the order date and then assigns a ten-digit:
order number.
The operator enters the item number of each item,
and the system displays the descriptions of the items for
visual verification. The operator then enters the item
quanti~y, and may also enter the price. If prices are
entered, they are then checked to confirm that they fall
2~ within pre-established minimum and maximum amounts. If
desired, the system can also generate prices on the basis of
previous arrangements with the custcmer.
As soon as the order is entered, items that are in
stock are allocated for shipment from the nearest warehouse
to the customer, and retrieval and shipping documents are
printed with the next processing batch.
The basic computer memory file maintained by the
system is the customer or vendor order file. This file has
a header record for each order, which is chained to a series
of detail records. In addition to ordinary customer orders,
the system can also accommodate certain vendor orders known
as "process orders," in ~hich basic items are sent out for
-35~
33-411
further processing. After proces~ing, ~uch par~s are
received back into stock under another part ~umber. ~he
procedure for sending out a process order i5 the same as
that for a shipment to a customer~
Also, eertain orders are for transfers to xemote
sales locations or branch warehouses, either to repleni~h
-local stock, or for subsequent shipment to a customer.
These orders are also handled in th~ same fashion as ~us~
tomer orders, except for the -hipping address. Instead of
producing an invoice when the part~ are shipped, however,
each container is allocated to a predesignated shelf loca~
tion at the receiving branch and entered directly into the
branch's financial and other records.
Each item to be included in a given customer o.rder
requires a minimum of three detail records, in the followinq
sequence:
- item quantity, price, and part number record.
- one or more description records.
- one shipping record for each shipping point~
(To each of these shipping records, one or
more con~ainer records will later be add~d
by the system.)
2~
Each customer order also contains order status
codes, shipping record sta~us codes, and shipment routing
codes as follows:
ORDER STATUS CODES
0 = Cancelled (no shipments made)
5 = ~ntry in progress ~ not yet allocated
l0 = Allocat~d order - being changed or on
hold
- 15 = Allocated order awaiting accounting
approval only
20 - Allocated order ~ awaiting accounting
purchasing approval
30 = Allocated order - awaiting purchasing
approval only
50 = Allocated order - ready to print first
3~ shipping document
5i = Allocated order (at least one shipping
document printed) ~ temporarily
displayed for change
S0 - Allocated order ~at least one shippin~
-36-
33~
document printed) - rsAdy for shipment
or more printing
3 Al~ocat~d ordex - order complete
= Allocated order ~ final invoice printed
SHIPPING RECORD STATUS CODES
- O = Cancelled
1 = Stock transfer shipping summary ready to
print
2 = Stock transfer shipping summary printed
3 = Stock transfer labels printed
4 = Stock tr~nsfer shippPd
= Customer shipping summary ready to print
6 Y Customer shipping summary printed
7 = Customer la~els printed
~ - Customer shipment made
9 = Invoice~ printed
1~
S}~IPMENT ROUTING CODES
C - Ship direct to ~s~omer
W - Wai for designated shipping date and
then ship to customer
S = Stock transfer to first designated
. wareh~use and then ship to customer
FL~W CHARTS
.
~ iqure 4 is a flow chart showins the routine
followed by the system for selec~ing orders that are ready
for shipment from the active open order file. ~he system
reads the header record at 37, and at a step designated 51
determines whether the order status code is 50 or 60 (i.e.
whether goods have been allocated o the order and at least
part of the shipment is ready for printing of shipping
documents, and shipment~. At step Sla, the first item
detail record is read, and at step 51b, it is determined
whether the detail record ~eing read is a shipping re~ord
that has been prepared according *o the allocation of the
goods to the customer order. At step 52, if the status of
the shipping rec~rd is either CS or Sl (stock is ready ~o be
shipped to a customer or to a designated warehouse), then a
finder record pointing to these imminent shipments is
created at 53 and 54 for eac~ shipping warehouse, so that
when the shipping documents, container allocations, and
-37-
3 ~
~icking order for a given shipping warehouse are being
prepared, it will only be necessary for the system, as
directed by the finder record, to read ~hose orders ready
for shiDment, warehouse by warehouse. The creation of the
finder records7 in a batch mode, eliminates the need either
to write in and update such finder records in an on-line
mode as orders are entered, or to read the entire active
open srder file each time shipping documents and processing
orders are prepared~for each particular warehouse.,
Additional economies ari~e from the fact that there may be
more th~n one shipping warehouse for a given order. It
would be quite in~fficient to read a single incomplete order
more than once, if separate passes through the order file
were madQ
After the orders ready for shipment have been
d~signated, the s~stem prints a picking listt which lists
each it~m to be pulled from warehouse section A in shelf
- location sequence. When more than one customer order calls
for the same item, the quanti~ies for each order are Iisted
separately, one after the other. In addition to the picking
list, the system prints several typQs of pressure-
sensitivo labels. These labels and the picking list coordin-
c c~ c~
a' e the shipment o~ containers from both the sea~c~box B
area and the open-~ox A area.
~5 Containers are ordin~rily pulled from B stock in a
single sequence ~or each day. Containers are pulled either
for direct shipment to a customer, or to replenish the A
shel~ stock when an open A box i5 anticipated to be in-
sufficient for the orders currently being processed, or to
be shipped directly to a branch warehouse for a special
customer order or to replenish the branch' 5 authori~ed
stock. If the order is to be shipped to a branch, the B
-38-
shelf location at the receiving warehouse is assigned at the
same time the container to be pulled at the shipping ware-
house is aesignated. In this way substantially complete ~race-
ability is still maintained, receiving warehouse labor is
greatly reduced, and errors associated with the transfer are
almost completely avoided.
Further improvements in accuracy are brought about
by the use of the modulus 11 self-check digit, as described
above. When the picking list is prepared, a label is
printed by the system calling for that shelf location with
the same self-check digit as was included on the original
location label when the item was shelved. This lable must
be placed on the box by- the warehouse worker next to the
original location label. The two self-check digits must
match, to ensure that the correct container has been pulled.
It is preferred that the stock clerk circle the two self-
check digits, in order to demonstrate that they were
verified.
Also printed on every A-to-customer and
B-to-customer label, as well as on the customer order
shipping document, is the basic cubicle number in which the
various boxes that comprise the customer shipment will be
placed. The order is then sent to the shipping department
after all items for a given customer order have been pulled
and placed in the cubicle. Also, in order to further control
the consolidation of the order, each A-to-customer and
B-to-customer label is sequentially numbered, and this
container number is also printed on the customer packing
slip, which lists in detail each A or B package for that
particular order item. This list, when received by the
customer, greatly facilitates the customer's receiving function,
and offers substantially complete and permanent source
-39-
33~
traceability as well~ ~e systém also prints a ~ummary of
all bags and boxes from the A~ B, and R areas that go ~ut
for each customer order.
Figure 5 is a flow char~ showing the logic
followed by the system in designating boxes from the B
section to be allocated to cus~omer orders, and ln ~l-
locating the order as between the ~ and B sections of the
warehouse. At step 55, the system reads the "shipping
record" quantity into an order search quantity field. At
1~ step 55a, the system determines whether the quantity of the
item in the A section, if any, i5 sufficien~ to fill ~h~
ord~r. If so, then at 55b, an appropriate quantit~ of the
`. items in the A container ~ allocated to the order, by an
allocation process which will be explained further below,
and the order all~cation i5 ended. If the A quantity is not
sufficient, however, no items from A are allocated at this
ti~e. Rather, at steps 56 and 57, the system determines the
quantity in the oldest B container containin~ that item, if
any. If the B box quantity is equal ~o or less than the
customer item quantity ~stsp 581, that box is allocated
against the customer order and the customer order quantity
is reduced accordingly at step 59O If the revised order
search quantity has thereby gone to zero, the search is
ended (step 60). If not, the new customer order qua~ity is
compared again at step 56 to the next-oldest B container,
and the process is repeated until the customer item quantity
is found (at step 58) to be less than the quantity in the
oldest B container.
When this happcns, the system then refers to the
A container for the item, if any (step 61). If the quantity
in the A container is found (step 62) to be equal to or
grcater than the customer order quantity, then the items in
--~0--
33
3~
~he A container are allocated in an appropriate amount to
the customer order at step 63, and the order allocation
process is ended.
If, however~ the qu~ntity in the A container is
S found to be less ~han the revised customer order quantity,
~hen at step 64 all of the parts in the A container are
allocated ~o the C~UStGmer order, and ~hen at step 65 the
system performs a subtraction to determine the remaining
required order search quantity. At step S6, the system
determines whethex additional items exist in the next-oldes
B container. If no~, the system determines whether ~he
required goods are present in the receiving section R, at
steps 67, 6B, and 69/ If the R section contains in-
sulficient goods, then at step 70 an error message is given,
as the allocation process should not have begun if the
warehouse did not contain sufficient goods in the A, B,
and R sectionst If, however, it is determined ~hat the B
section does contain sufficient stock (step 71), then the
system directs the oldest unallocated B container to be
2~ moved ~o ~he A container location and become the new A
container for that item of inventory ~step 72). Then,
returning to step 63, the remaining parts needed for the
customer order are allocated from the new A container.
The processes of allocating A, B, and R records to
a customer order and moving the B record data to the A
record area gDnerate additional ins~ructions to prlnt labels
to direct this movement around the warehouse. The al-
location of A, B, and R records also adds a container record
to the detail record string following each shipping record.
Also, each alloc~tion or movement updates the container
record in the item detail file to show the order reference
3 3 ~
number ~:o which the container has been assigned, and the B
and A records by she~ f lo~atit)n are updated as well.
The s~quence of steps f~llowed in allocating goods
from an A container to a customer order is shown in detail
in the flow chart of Figure 6. At 76, the order search
quantity is subtracted from the quantity shown as the A
container contents in ~he item detail file. At 77 the A
quantity in the item detail file is split into an allocated
part and an unallocated part to reserve the proper quantity
for the order, and at 7B a similar entry is made in the
shelf location file. At 79, a record sh~wing the items to
be withdrawn from the A container is add d to the detail
recoxd string following the shippi~g record, At 80, the
sequence number of the last filled spaee on the A box
control card is i~cremented by 1 to determine the space on
the card in which this order will be entered. (See Figure 7
and discussion below.) If the result is divisible by 20,
then at 81 and 82, the system creates a record to direct the
printing of a new label with updated sequenee num~ers for
the A card. Step 83 assembles the data to be printed in the
warehouse r~trieval instructions ~shown in Table 4 and
discussed below), and step 84 assembles the data for printing
an A-to-customer label (see below~
CUSTO!IER ORDER DOCUMENTS
Table 3 shows two customer orders printed by the
system of the illustrated embodimentt for fictitious
cus'comers ABC Hardware and DEF Electri~ (lines 136). P~t
lines B7, it i5 seen th~t the first order concerns the same
item AlKA02G seen previously when it was oxiginally received
under purchase order E0100150 (see line 8B~. The order
d~cument, on the line designated 88, shows that one quantity
-42-
33~
of goods c~mprising 3,000 items will be drawn ~rom box
80-01-lS in zone A. On the line designated 89, the document
shows th~t one full con~ainer containing 10,000 units will
be drawn from zone B ~t location 11~22-19o The summary at
the bottom of the order (lines 90-91~ shows that one
container from A and one container from B will be required
for the shipment. 5eparate container numbers, shown in
parentheses, are assign~d f~r each group of A and B
containers shown on the cus~omer packing and shipping
documents (lines 88-89).
Table 3
Item Zone DescriP~ Qty.Ord- QEY~ Price C
[86] Cust. ABC Hardware Order # 0181226001
l87]AlXA02G 2-56 Hex Nut 13000 13000 8.00 45
[88](13 A 80-01-15 3000 E0100150
~89](1~ B 11 22-19 10000 E0100150
190] A B Total 104.00
191] 1 1 13000
__________________~____ ________~___________ ___ _________ ___~
~86~Cust. DEF Electric Order # 0181226002
.
[87]AlKA04G 4-40 Hex Nut 5000 5000 10~00 19
1921~1) A 80-01-16 1000 E0100113
[93)(2) A 80-01 16 4000 E0100113
190] A B - Total 50~00
[91] 2 0 5000
This number will match the number shown in parentheses on
the A and B labels themselves, as will be further discussed
below. Each A ~nd B total number of oontainers will also
add up to the \umbers in the summar~ lines 90-91. Also, on
line 87, e~bb~ number 45 is designated for the assembly of
this shipment. In the summary, a dollar figure shows the
order value, if the shipment i5 to be insured, and the hash
total is also shown, for use in determining the shipping
weight and freight charges. A data entry is made at the
-43-
33-411
time of shipping showing that this hash total was shipped,
whereup~n an inYo~.ce ~s automatically sent to the customer.
In the order document ~or DEF Electric, the order
calls for 5,000 pieces of a single item. Because the A
container initially contained only 1,000 units ~see line 92)
two separate listings were made. B~tween ~hese tw~
- withdrawals from the A container at location 80-01-16, a
container was brought from the 3 section to replenish the A
supply. Thereafter, a second withdrawal of 4,300 items was
made from that container (see line 93). Thus the container
numbers in parentheses indicating the sequenc2 of with-
drawals from ~ach section of ~he warehouse are seen to have
increased from one to two. The source designations in the
"Qty.Ord." column at lines 92-93 were the same for the tw~
withdrawals from A, but this need n~t have been the caseO
An invoice corresponding to a shipped order i5
automatically generated by the system after the warehouse
has reported the shipping weight and shipping charges. In
the event that an order is not shipped exactly as printed,
2C~ an override feature allows the system operator to indicate
what was not shipped and why. If there was a missing B box
~r a shortage in the A box, for example, this is immediately
shown on a management report. If a customer cancels an
item, or the entire order, ater the order was printed but
before it was shippQd, this is reported to the system. The
system then requires that each A and B container not shipped
be reassigned t~ a new B location, thus verifying that all
stock items have been accounted for.
PICKING LIST
Table 4 shows the picking list, which controls all
movement into and out of the A location for two stock items,
-44-
33~
AlKA02G and AlKA04G. These picklng instructions are printed
in A ~helf location sequence, as shown in the column
designated 110~ They include all customer orders to be
pulled in a given batch. This example shows that two
~ustomers have ordered the irst item and one cus~omer has
ordered the second item. Also seen (colO 111) are the
source designations, i.e., the original purchase orders
under which the items were ohtained, and the ~u}by-numbers
for assembl~ of each customer's order. In column 112 are
seen the sequence numbers for posting this order ~n ~h~ A
box card, which will be explained further below.
able 4
Whse. Order #W0181~2?01
Ttem Zone Descri~ QtY.Ord. Tot.Qty. C Seq.
- [110] tll3] 1111] [112]
194~ AlXA02G 2-56 Hex Nut 80-01-15 8000 E0100150
1114] 018122fiOOl A ABC Hdwe. 3000 SOOO 45 247
1115] 0481226009 A Acme Prods. 2000 3000 72 243
195] AlKA04G 4-40 Hex Nut80-01-16 1000 E0100113
[116] 0181226002 A DEF Elec. 1000 0 19 814
[1171 B 17-14-39 9000 goooE0100113 815
~118~ 0181226002 A DEF Elec~ 4~00SOOO 19 816
Table 4 also illustrates how the system handles
the situation in which the quantity of parts in the A box is
less than the quantity on the customer order, and further
illustrates a situation where the A quantity is suf~icient.
This is shown by means of the starting and running A box
totals in column 113.
With respect to the item shelved at location
80-01-15, note (line 94) that the opening quantity in the A
-45-
33-411
box was 8,000 items. Af~er pulling an order of 3,0~0 item~
(see line 114), the running balance is ~een to be 5,000.
~hen on li~e 115 ano~her order of 2,000 items is pulled,
leaving the final balance of 3,000 items.
With respect to the item shelved at location
80-01-16 (line 95), the situation is more complex. There
was an openiny item count ~f 1,000 units in the A containerO
After the removal at line 116 of the entire 1,000 units,
satisfying part of the customer order, the remaining balance
is zero. At line 117, it is seen th~t a box from zone B,
originally shelved at B location 17-14-3~, containing ~,000
items, was brought to the A ~ection, leaving a new balance
of 9,000. Then, 4 ,oon items were removed from the box
fill fxom A the remainder ~f the orderl leaving a final
balance in the A box of 5,000 units.
The system would generate a B to A label to
control the transfer of the container from B location
17-14-39 to A location 80-01-16. The contain~r itself i
not brought directly to the A shelf. Instead it is brought
2~ ~o the vicinity of the counting table at which the parts in
the old A box are counted and removed. The remaining parts
needed for thP customer order are taken from the new ~ox
from B, which is then returned to the A shelf with the A box
card (discussed below) attached~ The data on the B-to-A
label would comprise the item number AlKA04G, the batch
control number li.e., the original order number~ E0100113,
c ~
the e~ number 19 in which the customer order (for which
the box was brought from B) will be assembled~ the self
check digit 6, which must match the self-check digit printed
on the original B label, the sequence number 815, which is
the line on which the posting of the removal of the goods
will be made on the A box card (see below), the letter B to
-46-
33~~11
designa~e the B section, the quantity 9000 in the container,
the A and ~ warehouse locations, ~nd khe date on whi~h the
~ontainer was stocked. This label i~ pasted on the B b~x
that is to be brought to the A area when it is anticipated
that the original ~ box will be insufficient to fill the
day's customer ordersO This box is brought to the A section
at the beginning of the work shift~
"A" CONTAINER CONTROL CARD
Figure 7 shows an A box card, which provides ~he
ultimate control of the A inventory, tracking all m~vement
in and out of the A storage location. This particular
example shows, among other things, a withdrawal from A
storage correspondi~g t~ the data on lines 114 and 115 of
Table 4, i.e., filling the orders for ABC Hardware an~ Acme
Products. ~t the top of the card is seen an A box card label
133 showing the part number 134, the part iden~ificati~n
135, and the shelf location 136> At 137 are seen the first
two digits of the ten sequence numbers for the ten
2r, transactions to be entered in the left-hand column on th~
box card, and at 138 are the corresponding digits for the
right-hand column.
Accordingly, in this example, the first
transaction on the card is sequence nu~ber 240, the second
is sequence nu~ber 241, and co forth. After ~his card is
filled, the sys~em will anticipate that the next transaction
will take place on line 260 (more generally~ a line number
divisible by 20~, and a new A box card label will be
printed.
The data are entered on this card by the stocX
workers, but oach entry is directed by the comput~r system.
~he card c~rries the xunning balance in the box, exactly as
-47-
33-411
it is shown in the computer file, 5V a physica~ inventory
count can be take~ at any time in the confidence that al~
customer ordPrs that may be moving through the warehouse
will have been ~aken into account. Since the entries are
made by the ~oxkers themselves, personal accountability and
motivation ~o be correct ~re enhanced. Any discrepan~ie~
must be resolved in the warehou~e, and cannot be blamed on a
remote machine or someone in another department,
Explaining this example in more detail, it is seen
at line 139 that the contents of the box went to zero on th~
date 8-3-81. At that time, a box containing 10,000 pie~es
was brouqht from B lo~ation 11-22-14. This information
appears on the line designated 140, which the system has
assigned sequence number 245. Order number 0181347005, the
filling of which begins at the line designated 139, called
for 4,000 piecesO Two thousand pieces were in the A ~ox to
start, and then 2,000 more pieces were removed from the B
box that was brought to A, leaving a balance vf 8,000 pieces
(see line 141~.
At line 142 (sequence number 247) is seen order
n~mber 0181226001, which in Table 4, line 114, was seen to
be for ABC ~ardware. Three thousand items were removed,
~eaving a balance of 5,000. The sequence number (2471 of
this transaction is shown in column 112 of Table 4. ~ike-
wise, at line 143 (se~uence number 248~ is seen the trans-
action for Acme Products, order number 0481226009, which i5
shown a~ line 115 of Table 4.
Note that on B-4-81, when these latter two ~rders
were pulled, hoth the opening balance of 8,000 at line 141
of Figure 7, and the sequence numbers 247 and 248 at lines
142 and 143, must match the opening balance in column 113
-48-
33~
and the ~equence numbers ~ co~ ~ ~112 of the picking list
shown in Table 4. If these data do not match, then the
wrong par~s are being pulled, and at 144 it i5 seen that the
worker has entered an initial to confirm that all these
5 cross-checks ha~e been made~
~he system also prints A to~customer and-
- B-to-customer labels. They are used to pu~l the corre~t
par s from the A or B sections and then are pasted o~ the
~ox or bag going ~9 the customer to identify it before
shipping. ImPortant data on the B-to-customer label are the
B location number and the self-check digit, which must match
those on the original B l~cation label. Other data on the
labels are the customer name, the customer purchase or~ler
number, the quantity in the particular co~tain~r, the total
lS quantity of this item heing hipped for this order, the part
number, the description of the part, the original vendor order
r~r~ ~b~\e_
number, and the ~ number. If requested by the customer,
the customer's part number or other information could be shown
instead of or in additisn to the system' B description. Also,
2C~ the container picking numbers appear, enclosed in parentheses.
Each such container number to be included in the customer
shipment is shown on the shipping documents, and labels beariny
each of the container numbers must be present to ensure that
the entirety of the customer's order is being packed for ship~
ment. An A-to-customer label contains the same information,
except for the self-check di~its, which are not used in the
A section.
In practice, then, the R-to-customer label is
pasted on a B box that is being sent in full against a
customer order, while an A-to-customer label is pasted on a
bag or other small contai~er containing parts taken from an
A box for a customer order. The quantity in such a bag will
_~9_'
~-qll
always be smaller than the quantity in a full A or B box,
because if a larger quantity had been needed, a full B box
would have been designated. If the quantity i~itially
oontained in the A box was less than the quantity needed f~r
the customer ordPr, two A-to-customer labels are printedO
One calls for the quantity remaining in the origin~l A box
and th~ other calls for the quantity to be taken from the
new A box brought from the B section. There cannot be more
than two labels for a given shipment from A.
~his use of separa~e labels on the ~wo A
quantities making up a customer order permits lots with
differ~nt origins to remain unmixed, thus improving the
handling of quality con~rol problems, minor variations in
finish, and so forth.
A and B labels can also be prepared for an A or B
container going to another branch or sales location. The
up~er portion of such a label contains the receiving bran~h
name and the shelf location at that branch.
These various labels and lists allow a stock
picker to fill customer orders by either working in the
warehouse aisle (with or without a scale), or taking the A
cartons off the shelf or rack and bringing them to a counting
table where the required parts are laid out. The pickinq
order is printed in sequence by shelf location, as are ~he
A-~o-customer l~bels. Therefore, if counting tables are
used, the stock pickcr can put the A-to-customer labels in
the open containers as he takes them from the shelves and
puts them on the gravity conveyor, allowing the person at
the counting table to work from the picking order. The
3~ containers are then taken off the counting table and
returned to the shelf, still in shelf location sequence,
therehy assuring that all containers are returned to their
-50-
33~
proper places. Since every shelf loca~ion in A i~ filled,
maintaining the basic s~quence ensures tha each cont~iner
will go back ~o the right place.
On the other hand, if i~ems are to be removed from
~he A ~on~ainers in ~he aisle to fi71 the customer order,
then the stock picker can work with both ~he pic~ing order
and A-~o-customer labels. In either event; all controls
still operate to guarantee tha~ the correct parts are
~hipped.
1~
n A~ SE CTION STO~GE STRl~C TURE
.
Figure 8 shows a typical A shelf storage section.
Two shelves 101 are seen to be packed two deep, with boxes
102 and 103, among others, and two shel~es are packed
one-deep with, e.g., a larger carton 105. On the front edge
of each shelf 101 are two shelf posi~ion labels 106, Dne or
box 102, and another for box 103. Each of shelves 104 has
only one label 107. A box control card 108 of the type
shown in Figure 7, with a label 109, is attached to each ~ox
2C~ on the shelves. As can be seen in he figure, the shelves
are filled with cartons. This minimizes the floor space
required for the A section, and helps to maximize the
efficiency of stock clerks working in this section.
Two different sizes of standardized containers are
shown in Figure B~ The standard sizes for the containers
can vary, but sh~uld be determined so that integral numbers
of ~he containers will substantially fill each shelf or
other storage co~lpartment. This maximizes the utilization
of storagP space in the A section, and in the B section as
well.
On the basis ~f the various forms and documents
already discussed, shipping takes place in a con~entional
-51~
33~
manner. ~n addition, the system flags multiple orders for
the same customer so that they may be combined, if desired,
into a single shipment.
SECURITY AND ACCUR~CY
A number of controls over inventory security and
h~ndling accuracy oDer~_~ simultaneously under the
discipline of this system. One is ~hat the total quantity
going onto the B shelves plus the quantities shipped to
l~ cus~omers must ma~ch the quantity previously entered as the
vendor receipt quantity. ~nv variation will indicate either
an incorrec~ container count or a vendor shortage or overage.
These variations, when theY occur, are printed on a m~nage-
men~ report for further review.
The system also tracks vendor receipts that are
allocated in whole or in part to customer orders while they
are still in ths "R" section. If thQ original input to the
syst~m that is entered after ~ackaging, e.g., on the traYeler
supplement (Table 2~, does ~ot reflect an allowance ior the
exact customer quantity that was allocated, it indicates
~ither that goods for a customer order are still in the
packaging or receiving department or that an order was
shi~Dcd from the wrong receipt. In either case, the problem
must he r so1ved before the system will accept the en~ry.
In the warehouse, placement of all incoming
t~\~
containers in their correct locations is~guaranteed since
each sPac~ in each section must be filled or otherwise
accounted for. If a container is put in an incorrec
location, it will be discovered when anoth~r incoming
container is directed to ~e put on the shelf, most likely
either the same or the next day. To facilitate the pr~cess,
each shelf position is marked with its permanent shelf
3 J ~
$~
location number which matches the location number printed on
the label attached to the containex~
If incoming items are to bs st~red only in the
vendor's containers, the individual container tracking
embodied in this system is especially valuable D e~en if the
~ _~c ~ O ~s
quantitie in the inGoming ~e~ are n~t carefully-chec~ed~
. "
Since each container i5 independently controlled, any
discrepancy in the vendor coun s will quickly be brought to
light and tracked to it5 . ource. ~uality control pro~lems7
1~ as well, can be pinpointed under this system, allowing
customers who receiv~d defective items to be alerted, and
avoiding additional shipments.
RANDO~ STORAGE IN_nB" SECTION
Many advantages flow from the random storage and
individual container control in the sealed-~ox B stock ar~a.
~I~ r ~
First, marlagement has~complete conkrol over every
item stored in the system. Whether at the cen ral warehous~
or at a branch warehouse, management, i~ an interactive
2~ mode, can call up every container loca~ion for a given item,
or scan any given range of shelves in a warehouse to -~ee the
items on those shelves. The system also prints out a
complete audit trail for all containers~ A status report
each month lists each container in stock for a given item.
2~ This report is printed in both item number and shelf number
sequence~ A transaction report lists the movement for that
month of every B and A container, also in item number and
shelf location sequence.
Total security of the inventory is virtually
3~ assured with this system. The combination of the self-check
digit, the convenient periodic inventory taking, and the
fact that la ge numbers of specifically designat~d
-~3-
J.5~
containers are pulled daily, assure that any mysterious
disappearences will come to light quickly. With this early
warning and pinpoint ~ontrol~ the cause of the problem can
usually be found quickly, and further errors of this type
can be elimi~a~ed. This control is difficult or impossible
to achieve with a system ~hat only tracks a sinyle order
quantity of an individual stock item. Since ~nly sealed
co~tainers are going onto and coming off the shelves or
racks, no ~omplex tasks need to be done and the assigned
personnel can be limited to one or two people. If the
volume of.activity i5 too great, separate zones can be
established to limit the responsibility of the personnel,
who will exercise no discretion in any event. When only one
or two people have access to an area, a discrepancy can ~e
easily detected, and the integrity of the inventory will be
vPry high.
Since in effect all incoming parts lose their
product identity and assume a location identity,~skilled
warehouse personnel are not required~ Virtually no err~rs
are ma~e and a new stock worker can be productive in less
than one hour. As a convenience, labels showing the sh21f,
bin, or pallet location numbers are pasted on the li~ ~f
each shelf, bin, or pallet. These location numbers will
exactly match the numbers shown on the location labels
prin~ed by the system for incoming container~.
Substantial warehouse labor is saved by directiny
new stock to designated vacant locations, since the ware-
house clerk does not have to look for an empty location and
then assign it tG incoming goods. Furthermore, when çon-
tainers are to be put away, the system assigns them to agroup of locations in close proximity to one another.
realistis estimate of the shelf utilization under this
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system is 90 to 95 percent, owing to the close control of
incoming and outgoing goods and vacant spaces.
secause of this control, physical inventory of
tens of thousands of containers can be taken in a very short
time. Typically an inventory of about 50,000 containers can
be verified in under two hours by eight two-person teams.
The inventory can be taken at any time without cutting off
the shipment of orders. The system indicates which
containers should be there, and which should not. Locations
earmarked for current shipments or spaces reserved for
incoming transfers are specially flagged on the worksheet.
These locations do not have to be checked since they will be
verified by the current transact~on.
The relatively simple search strategy of the
invention achieves a great deal by way of controlling and
expediting the ~illing of the orders. First, the system
automatically ships the oldest inventory. Any items with a
finite shelf life can be flagged on a special report before
their expiration dates. Also, by pulling the A boxes in
shelf location sequence, the walking needed to fill the
orders is reduced to the absolute minimum, and by grouping
the items in this way, all customers' requirements for a
given item are filled at one time, and the same box .is not
pulled twice to ~ill customer orders in one batch. Since
each A location has been assigned, there are no empty spaces
on the shelves except for the few boxes absent during retrieval~
Therefore, when an A box is taken off the shelf to fill an
order, there will be only one space or very few spaces to
which that box can be returned, thus minimizing errors in
returning the boxes to their proper places. To further assuxe
the correct shelf placement, the system will print, on demand,
special lables to be pasted on the lip of the shelf under each A
kox. This~label will match the label the system prints to go on the face of the
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~,:..,
33~
box. It {s a ~imple matter ~o verify that the label on the
face of the. A box matches the label on the lip of the shelf
directly ~eneath it. The data ~hown on both labels include
the shelf location and ~he item numbPr and description.
S The information on the A control card also serves
many purposes. It pre~ents the wrong item from being
~ shipped, since the card on the box from which the parts are
taken must have an opening balance and a preprinted sequence
number that match the data printed on the picking list.
-10 Immediately upon beginning to make the necessary entries on
~he card, the stock worker will immediately see if ~he wrong
box has been pulled. The probability that another box will
have the same opening balance and preprinted sequence
number is virtually nilr Because of the manual entries on
1~ the card, including the clerk's initials, warehouse
personnel are closely identified with the integrify of the
inventory balances. Here again, only one or two wor~ers are
needed to be assigned to a predefined A stock area.
Further, since a new closing balance must be
pos~ed on an A box card each time parts are removed, a count
veriication can be made at will without allowing for other
customer orders that may be in process at the time J Thus,
no elaborate cutoff must be established if a physical
inventory is to be taken~ In fact, no inventory at all may
be necessary since each time the contents of ~he A box go to
zero there is an automatic verification against the balance
in the computer record. If the parts that the computer
lists as'in the A box are not really there, no items will be
available to fill the customer order, and the clerk will
io - have no choice but to report this fact to the system, which
in turn will print a mangement report reflect.ing this
condition. In a traditional syste~ if parts are missing
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from a box, the clerk would simply take more parts from the
~ext box on the shelf and would probahly not even know that
a shortage existed.
The provision of ~he picking list and th~ A
control card for use in tandem is particularly advantageous,
although not necessary ~o the broad aspects of ~he ln-
~ention. It is convenient to use the picking list to yuide
the stock worker's removals of items from the A container,
rather ~han a customer purchase order document or a shipping
list, in order to achieve the step-by-step matching of the
quantities entered on the control card and the theoretical
quantitie~ tracked by the system that is for accurate
inventory control.
One thing that can be done if a shortage is
discovered in an A box is to check the counts in B boxes
that arrived in the same lot to be sure that the correct
amount was received and put into the box initially. If the
initial amount is found to be correct, the next step could
be to check the customer orders that were removed from that
2~ A box since it was brought from B. If it is a fairly active
item, perhaps only a few days or weeks have elapsed since
the box came from the B section. In this case the actual
shipping weights of orders shipped since th~t time could be
compared to their theoretical weights. This would uncover
an overshipment to a customer that may have been accidental
or otherwise.
This control system is especially well suited to
inventories of high value, and inventories where it is
important that the balances carried by the computer
accurately reflect the balances on the shelf~ It will
control branch and main warehouses in the same manner, and
management terminals can display ~he contents of each and
t~t~
33~
every A and B box at any warehouse by both item number and
shelf number. The system is interactive and permits the
transfer of full or partial containers between warehousesD
When parts are shipped between warehouses, the system
assigns the shelf location at the receiving warehouse at the
time it selects the container to be pulled from the shipping
warehouse. This permits all data associated with that
container to be carried along no matter how many times the
parts mcve from warehouse to warehouse.
Considering the bread~h of usefulness of the
inv~ntion for warehousing, the terms and expressions tha~
have been employed herein are used as terms of description
and not of limitation, and there is no intention in the use
of such terms and expressions of excluding any equivalents
of the features shown and described or portions thereof, bu~
rather it is to be recognized that various modifications are
possible within the scope of the invention as claimed.
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