Directed Putaway
Directed Putaway is a warehouse management system (WMS) functionality that instructs receiving personnel where to store incoming inventory, moving beyond random storage or operator-defined locations. This process optimizes space utilization, minimizes travel time for order picking, and enhances inventory accuracy by proactively assigning storage based on pre-defined rules. Unlike simple storage assignment, directed putaway considers factors like item velocity, size, weight, compatibility, and even order profile to determine the most efficient storage location, ultimately reducing labor costs and improving order fulfillment speed. The strategic importance lies in its ability to transform a warehouse from a cost center to a value-adding component of the supply chain, supporting scalability and responsiveness to fluctuating demand.
Effective directed putaway isn’t merely about placing items in the warehouse; it’s about positioning them for efficient retrieval. This proactive approach contrasts with reactive methods where pickers search for items, leading to wasted time and potential errors. By strategically allocating storage, directed putaway directly impacts key performance indicators (KPIs) such as order cycle time, picking accuracy, and warehouse throughput. This functionality is critical for businesses operating in competitive markets where speed, precision, and cost control are paramount, extending benefits across the entire commerce ecosystem from manufacturers to end consumers.
The origins of directed putaway can be traced back to the early days of computerized warehouse management in the 1960s and 70s, initially as rudimentary location assignment within mainframe-based systems. Early implementations focused on basic ABC analysis – categorizing items by velocity (A = fast-moving, B = medium, C = slow) and assigning faster-moving items to more accessible locations. The evolution accelerated with the advent of barcode scanning and radio frequency identification (RFID) in the 1980s and 90s, enabling real-time inventory tracking and more sophisticated location management. The proliferation of WMS solutions in the 21st century brought advanced algorithms, rule-based optimization, and integration with other enterprise systems, transforming directed putaway from a simple function to a core component of modern supply chain operations.
Foundational standards for directed putaway are largely driven by industry best practices outlined in organizations like the Material Handling Institute (MHI) and through adherence to ISO 9001 quality management principles. Governance frameworks should establish clear ownership of storage location master data, defining rules for location creation, maintenance, and decommissioning. Compliance with safety regulations (OSHA in the US, HSE in the UK, etc.) is paramount, dictating location accessibility, load limits, and aisle widths. Data integrity is critical; accurate item dimensions, weight, and storage requirements must be maintained within the WMS. Furthermore, robust audit trails are necessary to track storage assignments, identify discrepancies, and ensure accountability. Standard operating procedures (SOPs) should detail the putaway process, including exception handling for damaged goods, mislabeled items, or locations that are unavailable.
Directed putaway mechanics involve the WMS receiving advance shipment notices (ASNs) or real-time receiving data. Based on pre-defined rules (velocity, size, compatibility, order profile, etc.), the system calculates the optimal storage location and directs the receiving operator via a mobile device (RF scanner, voice picking). Common terminology includes “putaway tasks,” “storage types” (e.g., bulk storage, pallet racking, shelving), and “putaway strategies” (e.g., fixed location, random location, zone putaway). Key Performance Indicators (KPIs) to measure effectiveness include “putaway accuracy” (percentage of items placed in the correct location), “putaway cycle time” (time taken to put away a shipment), “storage utilization” (percentage of available storage space used), and “travel distance for putaway” (total distance traveled by operators during putaway). Benchmarks vary by industry, but generally, a putaway accuracy exceeding 99.5% and a putaway cycle time under 30 minutes per shipment are considered strong performance indicators.
In warehouse and fulfillment operations, directed putaway is integral to maximizing space utilization and minimizing order picking time. Technology stacks often include a WMS (e.g., Manhattan Associates, Blue Yonder, SAP EWM) integrated with RF scanners, barcode readers, and potentially automated storage and retrieval systems (AS/RS). For example, a 3PL providing fulfillment services for multiple e-commerce brands might use directed putaway to optimize storage for over 10,000 SKUs. Implementing a zone putaway strategy, where operators are assigned specific zones within the warehouse, can reduce travel time by 15-20%. Measurable outcomes include a 10-15% increase in warehouse throughput, a 5-10% reduction in labor costs, and a significant improvement in order accuracy.
Directed putaway plays a critical role in omnichannel fulfillment by enabling faster and more accurate order processing for all channels (e-commerce, retail stores, wholesale). By strategically positioning fast-moving items closer to the shipping area, businesses can reduce order cycle times and improve customer satisfaction. For example, a retailer offering buy online, pick up in store (BOPIS) might use directed putaway to ensure that frequently ordered items are stored near the front of the store for quick retrieval. Analyzing order patterns and customer preferences allows for dynamic storage allocation, ensuring that items are positioned for optimal fulfillment. This data-driven approach enhances the customer experience by reducing delivery times and improving order accuracy.
From a financial perspective, directed putaway directly impacts inventory carrying costs by optimizing storage space and reducing the risk of obsolescence. Accurate inventory tracking and location data are essential for compliance with regulations such as Sarbanes-Oxley (SOX) and industry-specific standards. Robust audit trails provide a clear record of all storage assignments and movements, facilitating internal and external audits. Analytics derived from directed putaway data can identify slow-moving items, optimize inventory levels, and improve forecasting accuracy. This data-driven approach enables better financial planning and decision-making, contributing to overall profitability.
Implementing directed putaway can be complex, requiring significant investment in software, hardware, and training. Resistance to change from warehouse personnel is a common obstacle, necessitating effective communication and change management strategies. Accurate data migration and master data cleansing are critical for success. Cost considerations include software licensing fees, hardware costs (RF scanners, printers, etc.), implementation services, and ongoing maintenance. Integration with existing enterprise systems (ERP, TMS) can also be challenging. Thorough planning, phased implementation, and ongoing support are essential to mitigate these risks.
Despite the challenges, directed putaway offers significant strategic opportunities for value creation. ROI can be realized through reduced labor costs, improved warehouse throughput, increased storage utilization, and reduced inventory carrying costs. Enhanced efficiency and accuracy can differentiate a business from its competitors, providing a competitive advantage. By optimizing the flow of goods, directed putaway can improve customer satisfaction and brand loyalty. Furthermore, data-driven insights can unlock new opportunities for inventory optimization and supply chain innovation.
Emerging trends in directed putaway include the integration of artificial intelligence (AI) and machine learning (ML) to optimize storage allocation in real-time, considering factors such as demand forecasting, seasonality, and promotional events. Autonomous mobile robots (AMRs) and automated storage and retrieval systems (AS/RS) are increasingly being used to automate the putaway process, reducing labor costs and improving efficiency. Blockchain technology is being explored to enhance supply chain visibility and traceability. Benchmarks are shifting towards same-day delivery and increased order fulfillment speed, driving the need for more efficient warehouse operations.
Future technology integration will focus on seamless connectivity between WMS, ERP, TMS, and other enterprise systems. API-based integration will enable real-time data exchange and automated workflows. Cloud-based WMS solutions are gaining popularity due to their scalability, flexibility, and lower total cost of ownership. Adoption timelines will vary depending on the size and complexity of the operation, but a phased implementation approach is recommended. Change management is crucial, requiring comprehensive training and ongoing support for warehouse personnel. A well-defined roadmap should outline the key milestones, deliverables, and timelines for each phase of the implementation.
Directed putaway is no longer a “nice-to-have” but a critical enabler of modern supply chain performance. Investing in this functionality drives significant operational efficiencies, improves accuracy, and positions businesses for scalable growth. Prioritizing data integrity, change management, and technology integration is essential for maximizing ROI and achieving long-term success.
