There are two storage methods, namely the fixed storage location and random storage location.
For fixed location, every location has an assigned product to be stored. Meaning the products in the warehouse will always be stored at the same location. By using this method, it may be easier for workers to locate products as their locations will not change. However, this method has its limitations. Since each location will only be used to store specific products, there will be empty spaces when there is no more of the specific products to be stored at those locations. Other products cannot be stored at those locations resulting in wasted storage space. Thus, this method is not recommended in reserve storage areas in most of the industries.
This problem of having unutilized storage space can be solved by using the random storage location method. An example of a company using random storage location is NTUC Fairprice. The have large amounts of Stock Keeping Units (SKUs) going in and out of their warehouse everyday and could not afford to waste warehouse space by leaving locations empty. By using random location method, product could be stored at any empty locations. In this way, they will be able to better utilize their warehouse space, resulting in higher space utilization.
Companies should always consider the advantages and disadvantages of these two methods to choose a suitable method for the company.
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