Page 31 - Logistics News - September October 2023

THE PARE T O P RIN CIP LE

replenishment cycles, an operation can begin to optimise accessible and can be picked quickly, ensuring that the
inventory levels and reduce inventory carrying costs. fastest-moving items get priority.

By applying this data, an operation can reconsider Using the Pareto Principle to drive
warehouse layout, slotting practices and picking automation decisions
methodologies. The Pareto Principle is not just an inventory concept; it
• Warehouse layout. By taking the SKUs in the top 20 can help drive decisions on the types of automation and
percent, an organisation can create an operational operational processes needed. A clear understanding of
design that maximises the SKUs’ velocity for on-the-floor inventory value and velocity can highlight the technology
placement, picking travel time and order fulfilment speed. and automation an organisation will need to grow and
• Slotting opportunities. Slotting SKUs from a Pareto continue to satisfy customer demand.
Principle analysis can slot inventory in the best optimised
spaces, creating faster fulfilment and throughput. For instance, if an organisation is genuinely 80/20
• Picking optimisation. Employing a picking regarding its inventory and its SKUs can fit into a tote or a
methodology to match the findings of the Pareto bin, a high-density solution like AutoStore or an automated
Principle analysis can reap productivity gains. For storage and retrieval system (AS/RS) could be worth
example, an organisation employing FSN classification investigating. Other automated solutions could be more
can use a zone-picking concept to place its SKUs in appropriate if an operation has SKUs that fall into the 70/30
the top 20 percent into one zone where SKUs are easily to 60/40 area of value and velocity. •

www .l o g ist i csn e w s .c o .z a SEP T E MB E R/O CT O B E R 2023 29