One of the few things that people outside of the industry tend to know about logistics is that the Pareto principle applies: some 80% of sales come from 20% of stock-keeping units (SKUs). What they may not know, however, is just what a headache slow-moving stock can be for logistics managers; the fallout from Pareto can make Pandora's troubles look lightweight in comparison! The natural result of Pareto is that most warehouses optimise their processes around the storage and picking of the fastest-moving items, with slow-movers often being an afterthought. This means that slow-moving inventory can end up representing a small number of total picks but up to 40% of labour costs. They are placed in distant locations and consequently rack up huge 'shoe leather' costs to pick. It follows that if the handling of slow-movers can be mastered, there are significant gains to be made.
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