Location codes are key to stock traceability, fast picking, and reliable WMS integration. 

Warehouse location coding assigns unique identifiers to zones, aisles, racks, and bins. A well-designed system reduces human error and supports barcode-based stock movements.

Location coding in a warehouse is a critical practice for optimizing storage and picking operations, ensuring efficient stock flow management, and reducing errors in inventory handling. In a warehouse equipped with shelving, where space is utilized both vertically and horizontally, a well-designed coding system is vital for maximizing efficiency.

See also: " Coding Locations Racking System "

Advantages of Location Coding

1. Quick Access to Products
   By coding each location uniquely, operators can quickly locate products. Picking lists can directly include exact locations, eliminating unnecessary searches and saving time.

2. Reduced Errors in Picking and Storage
   Clear and unique coding minimizes the risk of placing products in the wrong locations or picking incorrect items during order preparation.

3. Increased Efficiency in In-Out Operations

   • Inbound Operations: Products can be directly stored in designated locations based on predefined rules (e.g., FIFO or LIFO stock management).

   • Outbound Operations: Operators can follow optimized routes thanks to clear codes, reducing the time needed to prepare orders.

4. Ease of Inventory Checks
   Coded systems allow for fast and accurate stock verification during periodic inventories or daily checks.

5. Integration with WMS (Warehouse Management System)
   Location coding enables efficient use of warehouse management systems, automating allocation, picking, and reporting processes.

Structure of Location Codes

An effective coding system must be logical, intuitive, and scalable. The structure can include:

• Rack: The vertical rack number.

• Column: The horizontal position.

• Level: The exact level (for multi-level storage).

• Slot : a slot is the crossing of a column and one particular level , where can be stored 1,2 or more pallets or 1,2 or more boxes , each of them on a place named "location".

Example of a Code: R2-C5-L3-S1
This code can be interpreted as follows:

• Rack 2

• Column 5

• Level 3

• Slot 1  - Location 1 (from a Slot with 1, 2 ,3 or more locations)

There are two types of storage in a warehouse equipped with industrial shelves:

• Slots (locations) for storing large volumes (pallets)

• Slots (locations) for storing small volumes (boxes, pieces...) also called "picking zones".

• "Picking zones" are located at level 0 or 1 of the shelves for manual access by workers to operate picking lists.

• "Storage zones" are those on the upper shelves, and pallet handling is done with special equipment that lifts the pallets to the height.

• In the case of "bookshelf-style racking system" the same location can be "picking" and/or "storage zones" , due to the fact that it operates at the box level, not the pallet level . I saw warehouse with more then 10,000 items stored at box level on "bookshelf-style racking system" , on 5-6 levels, where the worker was using a ladder to pick the items.

Role of Picking Lists

Picking lists are essential documents in the order preparation process. They include:

• Precise Location Indications: Location codes for each product.

• Optimized Sequencing: The order of locations to minimize operator travel.

• Product Details: Name, required quantity, and other relevant information.

The "picking list" do not include :

• Item price

A picking system based on coded locations simplifies operators’ work and reduces order preparation time.

Useful application for coding locations

We've created a web application for coding locations  with the help of ChatGPT that you can be use for both type of racking systems : industrial shelves an booking-style shelves.

Conclusion

The process of coding locations in a warehouse is a crucial step for operational efficiency. By using well-defined codes, the product flow becomes faster, more accurate, and better organized, contributing to reduced operational costs and improved customer satisfaction. Investing in such a system not only optimizes internal processes but also creates a foundation for better scalability in case of increased business volumes.