How effectively a Sites works, how lean the running processes are and how high the time and cost factor turns out to be, depends essentially on where which goods are stored according to which rules. One possibility is so-called chaotic warehousing. What is meant by this, how a chaotic Sites works, what advantages and disadvantages it brings with it and why it is not as chaotic as the name suggests, we reveal in this article.
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A chaotic Sites - also known as dynamic Sites - is a form of warehousing in which changing areas that are currently available at Sites are occupied with goods. The placement is independent of product group, manufacturer or materials.
Thus, no fixed storage location is assigned to the products. Nevertheless, chaotic warehousing - unlike the name suggests - follows a strict order. Although there is no fixed assignment of a product group to a specific storage bin, the order is based on the inventory turnover and thus on the classification of A-B-C products.
When the goods arrive at inbound , they are assigned a place in the Sites that is currently available. In order to be able to locate the product, it is marked with a unique barcode, which in turn is linked to the respective storage location. In this way, employees always know exactly where which item is located. For this to work, a warehouse management system must be in place in any case.
Chaotic warehousing is the opposite of traditional static warehousing. This is characterized by the fact that each stored item is assigned a fixed and predetermined place in the storage system.
To ensure that a chaotic Sites does not become truly "chaotic" in the literal sense of the word, employees at Sites must be able to record both the goods and the storage locations digitally.
In addition to efficient warehouse management software, chaotic warehousing also requires the following:
Like all different types of warehouses, chaotic warehousing has certain advantages and disadvantages that make it more useful for one company than another.
If chaotic warehousing is implemented optimally, it has significant advantages over static warehousing. These advantages include:
Optimal use of space
Since newly arriving goods are always assigned to a new, free storage location and empty spaces are avoided, a chaotic Sites allows optimal use of the available storage space. The Sites can react quickly and flexibly to fluctuations in stock or a change in the product range - because as soon as a storage location is occupied, the next free location is simply used. This increases the degree of space utilization and reduces the cost factor, which is not small in traditional warehousing due to unoccupied spaces.
Higher flexibility
If a company stores many different goods and merchandise, chaotic warehousing allows it to react flexibly to changes in the material. Fluctuations in the operational process are avoided and the logistical processes can continue to run smoothly. This advantage of chaotic warehousing is particularly important for logistics companies, as they handle many different goods and product types from different customers.
Faster placement
A chaotic Sites can be filled with goods more quickly than a static Sites. This is due to the fact that the storage location is not allocated manually, but computer-aided: The warehouse management system knows the specified parameters and uses them to select the appropriate storage location. The employees can then simply assign the goods in question to the specific storage bin, but do not themselves need any special knowledge of which bins are available where at the moment. This also shortens the training phase for new employees, as they do not have to undergo time-consuming training to familiarize themselves with the system.
Shorter travel times
By storing the goods in the storage location that can be reached most quickly, chaotic warehousing also reduces travel times. The warehouse management software records the locations of the individual products as well as available areas and thus automatically assigns newly arriving goods to a free storage location. Employees can retrieve the necessary information in real time as needed. By tracking routes according to storage locations, the warehouse management system can optimize movements and processes at Sites .
Increase precision
Due to the fact that work in a chaotic Sites is largely computerized, warehousing is far less prone to errors than other types of warehouses. The warehouse management software minimizes the risk of human error enormously. All employees receive the relevant information about incoming and outgoing goods, shapes and colors of goods, and storage locations automatically via the software on their end devices - and in real time. This means that every employee at Sites always knows where which goods are located and where there is a free storage space.
Of course, a chaotic Sites - like all other types of warehouses - has not only advantages, but also certain disadvantages that do not make it recommendable for all companies.
High organizational and documentation effort
With comparatively high investment costs, for example for Sites- and automation technology, a chaotic Sites also goes hand in hand with a high level of organization and documentation. All employees at Sites must always know where which goods are located and where there is free storage space. In a large Sites , this can only be realized with the help of appropriate, efficient warehouse management software or an ERP system (enterprise resource planning system).
Software dependency
Another disadvantage of chaotic warehousing is that the entire inventory management is dependent on a computerized process. If there is a defect or a system failure, goods can no longer be removed specifically or cannot even be located. The management system used must therefore offer a high level of fail-safety.
High discipline of employees
Even though many processes in chaotic warehousing are automated and computer-aided, they are of course not free of human error: Because here, too, there is a risk that stocks and free spaces are not correctly entered into the system by the employees at Sites . Incorrect storage of goods on the wrong shelf often goes undetected - both by employees and by the warehouse software. Therefore, chaotic warehousing only works if employees are very disciplined and conscientious.
Not suitable for all industries
Chaotic warehousing is unsuitable for companies that handle hazardous substances, for example, because the required safety distance of the goods cannot be maintained during storage. There are also certain limits to flexibility: Heavy pallets cannot be stored on a high rack, and goods with a high turnover rate must in turn be stored in storage locations that can be reached quickly by employees.
In order to compensate for the disadvantages of dynamic warehousing and at the same time take advantage of its benefits, several types of storage are often combined in practice. Storage space is then allocated in a mixture of free space allocation and fixed space allocation: while the strong-selling items are located in a fixed, easily accessible zone, the rest are freely allocated to a storage space.
If the conditions are right, the advantages of chaotic warehousing clearly outweigh the disadvantages:
Although chaotic warehousing offers many advantages, it is still not suitable for every company and every industry. For companies that offer a regularly changing assortment for seasonal or other reasons, a dynamic Sites is worthwhile. Free spaces in Sites can be used flexibly and are identified quickly and error-free by automatic processes and software support.
Even for online retailers with high capacity and turnover frequency, a chaotic Sites is an efficient type of warehouse, as the time required to ship goods is significantly lower compared to static warehousing.
On the other hand, anyone who only runs a small and manageable Sites with a small assortment that hardly ever changes, tends to benefit less from chaotic warehousing.
A chaotic Sites has numerous advantages compared to traditional warehousing. Nevertheless, the storage type not only requires certain prerequisites, but is also not suitable for every company. So how can the storage type be optimally implemented and used?
In any case, powerful warehouse management software is required - without it, a chaotic Sites cannot be organized. Otherwise, without software and barcode scanners, chaos does indeed ensue, in the truest sense of the word.
The barcode scanners should be able to connect with the software to facilitate the processes around the inbound and outbound . The warehouse management system must be fully integrated into the ERP. Only if this is given, the company can store all stock movements via the software.
Employees can then call up the information they need in real time or feed it into the inventory management system using the barcode scanners. Absolutely reliable inventory management is essential here. This in turn requires a high level of discipline on the part of the employees. To ensure that all processes run smoothly, employees must also be trained in the use of the warehouse management system.
In addition, the most important thing is smooth cooperation - because only if all the players from purchasing, goods delivery, site logistics, sales and outbound work together can the costs and time involved in the individual processes be kept as low as possible.
TradeLink makes this possible: With our software, you increase productivity around warehouse logistics, reduce costs in incoming and outgoing goods processes, and benefit from lower demurrage and mishandling costs.
How does it work? The software not only simplifies and partially automates the coordinative tasks, but also provides all players with the necessary information as a central source of information. All warehouse documents are summarized in a clear, cloud-based tool. External suppliers and business partners can easily access the information with their personal access - without any complicated IT implementation and, of course, DSGVO-compliant.
Thanks to TradeLink, expensive and error-prone paper processes are now a thing of the past - because with TradeLink you ensure 100% transparency over the performance of your delivery partners and service providers and no more surprises at the ramp. Simply contact our experts for a free initial consultation:
