There is a big difference between random stocking of goods and the so-called controlled chaos, which is used in their warehouses by companies such as Amazon, Škoda Auto and Geis CZ. When using the controlled chaos strategy (sometimes referred to as the random position strategy), warehouse workers consciously stock goods in a seemingly arbitrary free position in the warehouse, so that a T-shirt and a speaker can lie next to each other on the shelf. However, controlled chaos has rules that bring order to this random stocking.
What is controlled chaos?
Chaotic warehousing without any rules would mean that warehouse workers would store received goods in any free position in the warehouse according to the set process. However, this way of working would bring several problems - warehouse workers would quickly occupy the shelves near the reception and would subsequently walk unnecessary kilometers. Moreover, they would not be able to use the warehouse space efficiently enough. It is like randomly throwing things into the trunk of a car while going on vacation - you would not use the trunk space to the fullest.
The controlled chaos strategy brings a system to this approach. Although the essence remains the same - goods do not have fixed places in the warehouse and warehouse workers store them seemingly randomly in free positions - they must also follow several rules . For example, fast-moving goods are stored close to the pick-up, heavy goods are placed on the lower shelves, goods that are often ordered together are placed close to each other, and with the help of WMS they also think about upcoming goods receipts so that they are prepared for them and can use the available space as economically as possible.
Benefits of a controlled chaos strategy
One of the biggest advantages of controlled chaos is the higher average warehouse occupancy . By allowing warehouse workers to store newly arrived goods almost anywhere, they make the most of the storage potential. Individual positions are constantly filled without being unnecessarily blocked for other goods that will not be available for several weeks, for example. For example, Amazon, thanks to the transition to a controlled chaos strategy , stored twice as many goods as before , and according to other sources, this can "inflate" the warehouse by about a third.
Amazon, mentioned above, uses WMS to constantly evaluate which items are sold together in a single order and suggests storing these items as close together as possible. This optimization happens in real time and is constantly being refined, which speeds up order picking.
Another advantage of this strategy is a lower error rate when picking goods . Warehouse workers cannot walk around the warehouse blindly, because the position of the goods is constantly changing. Therefore, they are guided to the goods by an intelligent warehouse system such as WMS, which leads the warehouse worker to the right position and the right item. Moreover, if they come to a shelf where there is an electric kettle and a towel next to each other, it is easier for them to reach for the right goods.
Controlled chaos also makes it easier to recruit employees . Warehouse workers don't have to learn where the bookshelf is and where the refrigerators are, because a terminal guides them to the goods. From day one, they work as efficiently as more senior employees.
A controlled chaos strategy is generally suitable for a dynamic, fast-moving assortment with a large number of items. In any case, it is ideal to carry out a detailed process analysis of the shipping strategy at the beginning.
Disadvantages of the controlled chaos strategy
To effectively use the strategy, it is necessary to implement an information system for warehouse management , such as WMS (warehouse management system). This system records all warehouse movements and the system informs warehouse workers about the positions of items via a terminal. For some smaller warehouses, the deployment and management of such a system may be unnecessarily expensive, on the other hand, today they can purchase very cheap cloud WMS for tens of thousands of crowns.
Controlled chaos also cannot be applied to goods whose storage is subject to strict conditions – such as food, medicines, flammables, chemicals, etc. In these cases, you would have to insert so many rules and conditions into controlled chaos that the strategy would no longer be that effective.
Interested in other warehousing strategies?Download our whitepaper , where we describe and discuss them all.
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