September 1996 € Volume 6 € Number 9
Building Item Families
By Jan Young, CFPIM
Modern warehouses often handle between 30,000 and 100,000 different items
with a product life extending from three months to 30 years. It is not unusual
for a warehouse to handle 5,000 to 25,000 new items annually. New items
are frequently the hottest ones in the business and there is often great
pressure to begin receiving, picking and shipping these items immediately.
Conflicting with the need for rapid product introduction is the warehouse's
need to plan the handling of these items: where they will be stored and
how they will be picked. Planning takes time, and with several thousand
new items, it can be a massive job. Yet the efficiency of the warehouse
depends on handling each item to the best advantage.
One solution to this conflict is the concept of an item family. An item
family is simply a group of similar items. Properly structured, all of the
items in a family would share similar warehousing practices. With a set
of item family definitions in place, procedures can be developed for each
and then new items can be planned by simply assigning them to a family.
Even if the process is done manually, it is much faster for a planner to
locate a similar item and determine the family than it is to do a complete
analysis. The time needed to plan a large slug of new items can thus be
reduced from months to a matter of days or, with computer assistance, even
less.
Once definitions are established for the item families, changes can be made,
but aren't desirable. Item families, therefore, should be well-thought out.
To help you in the development of item families, here is a list of some
of the characteristics of well-designed families:
In most businesses there should be between 10 and 50 item families.
If there are fewer than 10, it usually means there is not enough division
of the products to achieve good control. If there are more than 50, it usually
means there is not enough savings in planning effort to be worthwhile.
Item families should be based on the item's physical handling and storage
characteristics and on control requirements for it. Typically, families
should consist of items of the same general size, shape and weight, they
should be stored in the same type of storage devices and should share pick
methods.
Item families should be consistent in terms of packaging requirements.
Material hazards and special handling/packing/shipping requirements should
also be considered.
Items with shelf-life requirements, or the need for special storage
environments, should be in different item families from other items which
do not have these considerations. Similarly, the need to track lot numbers
or serial numbers is reason to classify items in a different family.
Item families created by engineering and production organizations are
generally not acceptable for warehouse use because they divide the products
into inappropriate groups and are not adequately aimed at warehouse handling
and practices. Item families, for instance, should not be based on the item's
cost or selling price, the market that the item is sold into, the product
line it belongs to, the type of item it is assembled into, its source or
supplier, or the kind of material it is made from.
Jan B. Young, CFPIM, is director of warehouse technology for Catalyst
International, Inc., a supplier of off-the-shelf warehousing and distribution
systems. He is the author of Modern Inventory Operations, published
by Van Nostrand Reinhold in 1990.
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