Inventory Management System for a General Items Warehouse of the

Textile Industry

MUHAMMAD ASAD ALI1, JAWAD ALI GUL2, SYED MEHMOOD HASAN3, SATYA SHAH4

Engineering Operations Management Group – Electronics Engineering3,4; Industrial and

Manufacturing Engineering1,2

Royal Holloway University of London3,4; NED University of Engineering and Technology1,2

11 Bedford Square London WC1B 3RF3,4; University Road – Karachi1,2

UNITED KINGDOM3,4; PAKISTAN1,2

Abstract: - This research is based on Inventory Management System for a General Items Warehouse of the Textile

Industry. The overall inventory is managed by applying classification tools such as ABC, FSN & HML that

categorize inventory based on consumption value, issuance rate and unit price respectively. Also, it helps to

appropriately position the items on the desired rack and position. The optimized layout is designed that reduces

the retrieval time, uplift the storage capacity, and have the cross aisles that reduces the retrieval time of any item

from the warehouse. The system for proper traceability & tracking of the items is also studied that is based on

the 1D Barcode. This whole study improves the overall operation of the Supply Chain.

Keywords: - inventory management; classification; layout; tracking; FSN; fast-moving, slow-moving, and non-

moving items; warehouse; textile industry; retrieval time; traceability; 1D barcodes; one-dimension barcodes.

Received: May 25, 2022. Revised: June 22, 2023. Accepted: July 26, 2023. Published: August 29, 2023.

1 Introduction

The warehousing is one of the principle or

component of supply chain, the products or items are

stored to meet the demand. The flow of items or

products can be controlled through the warehouses.

These items need to be managed continuously after

desired period, otherwise it may affect on cost and

time [1]. In this era of industrial globalization,

warehouse inventory management system has got

much significance because it is contributing to the

overall profit. The products are stored in the

warehouse on large scale in very efficient way and

meeting the requirement whenever needed. The

warehouses are the ultimate requirement to store the

different type of items to meet the production and

customer demand [2].

The need for the classification of SKUs with an

automated traceability and tracking system arises

from the fact that unclassified SKUs lead to advanced

retrieval time and causes delays in other warehouse

operations, a layout with no prior planning of space

utilization for SKUs and no Storage Location

Assignment Policy (SLAP) may lead to paucity of the

space, whereas, in contrast to automated system, a

manually handled warehouse system may cause

human errors and which could further effect

utilization of the warehouse [3].

The primary goal in warehouse is the management of

movement and storage of goods in such a way that

they can easily be identified and are traceable in the

most efficient way [4]. This paper reveals the

methods of how an inventory management system

should work, what classification techniques should

be adopted with an automated traceability and

tracking system and how should be a layout designed

with what factors and policy being adopted.

However, an extensive study was performed to

address such questions to fulfill the objective of this

study in such a way that, different classification

techniques like ABC, FSN and HML classifications

were reviewed and FSN was selected amongst of all

for some reasons based on the objective of this study

for decline in retrieval time, which are addressed in

classification section. Moreover, a tracking and

traceability system comprising of barcodes, scanners

and an automated excel generated algorithm was

proposed to get the process automated meanwhile

eliminating human errors, finally an optimized layout

was designed considering classification technique as

FSN and a SLAP for the proper placement of SKUs.

2 Problem Formulation

An Inventory Management System is the matrix of

technology, process and procedure that overlook the

control and maintenance of the stocked products,

whether the products are company’s assets, supplies,

raw materials and finished goods.

There are several inventory models which are used to

manage inventories such as ABC, FSN, VED etc. In

single criterion classification, the different inventory

management techniques such as ABC, FSN, VED

and SDE are used individually with a single criterion

defined for the classification of inventory items.

International Journal of Applied Sciences & Development

DOI: 10.37394/232029.2023.2.11

Muhammad Asad Ali, Jawad Ali Gul,

Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

101

Volume 2, 2023

ABC (always better control) is an analytical

tool for managing inventory. It enables the

management to identify the high value items and low

value items, for which each inventory item’s unit

price and usage are considered. The technical

problems associated to protecting each item are also

identified which helps in identifying the level of

control for items. The high value items have more

sophisticated level of control that’s why their safety

stocks are kept to minimum to avoid extra cost. On

the other hand, low value items have large safety

stocks and have lose control. There are three

categories of items according to their contribution to

total inventory value i.e. A, B and C category.

Furthermore, ABC is used to segment inventory

items, which is based on classical 80 - 20 principle

proposed by Vilfredo Pareto which states that 20

percent of causes generate 80 percent of results. The

researchers then proposed method for controlling the

inventory according to ABC analysis. It was

suggested by the researchers that A items though are

of less quantity, normally 5% to 20% of the total

items, but are of more value and have greater impact

on total inventory cost, nearly between 50% to 80%,

so they are subjected to close control or more frequent

control then the other items. Also, B items are

subjected to regular control with quantity ranging

from 20% to 40% and value ranging from 25% to

45%, and C items are subjected to lose control though

they constitute many items normally from 50% to

70% but are of less value ranging from 5% to 25%.

FSN (fast, slow, non-moving) analysis is an

inventory management tool which helps to identify

those items that have high rate of consumption as well

as items which are still i.e., they are not moving at all.

The inventory items are categorized into three

categories i.e., F-category items with high

consumption rate, S-category items with slow

consumption rate and N-category; items with no

consumption or items which are dead.

In addition, every industry require inventory to

meet the demand. Where, inventory items are

frequently consumed and some are not, therefore

proper placement of such items are essential for easy

retrieval and subsequently reduction in retrieving

time, in order to classify such items FSN (Fast, slow

and Non-moving) method is used [5], which is based

on the consumption pattern of items, that are fast

moving and are placed at higher level due to greater

consumption. This analysis is used to control the

purchases of the items which are possible by

identifying the unit prices of each item. In this

classification, the items are classified into H, M and

L categories referring to High price items, medium

price items and Low-price items. In addition, some of

the items in industry need special cure due to high

cost and are important items. For such items HML

(high, Medium, and Low item) classification method

is used which is based on unit price of items.

A company holds inventory due to uncertain

market conditions, abrupt demands, fail cushions

and many other reasons. For this purpose, a company

needs a warehouse. Warehouse is the place inside or

outside the company which is used to keep the

inventory of the company. Warehouse is very

important for any company. They are amongst the

key factor resulting the proper and smooth execution

of the supply chain network [6], has divided the

designing process of warehouse into three broad

categories: Strategic, tactical, and operational

planning. Layout design and determination is one of

the most important and necessary tasks. Many

researchers have worked on this matter to provide

the optimal solution. The problems related to the

design of the layouts of warehouse has been divided

into two broad categories; Facility layout Design,

which deals with the placement of different

departments and Internal Layout design which deals

with layout design of the order picking area only

e.g., number of racks, number of cross isles and pick

isles etc. Our main interest also lies in the designing

of the Internal Layout of the warehouse but the main

hindrance in this is that there is very limited research

on this topic [6]. The internal layouts have further

been classified into two further categories:

Conventional/traditional layout and Non-traditional

layout. The conventional layout incorporates those

layouts in which the racks are placed either

horizontally or vertically. For traditional layout the

length to width ratio for an optimal layout

approaches 1:2 [7].

Conventional Warehouse layouts with cross-

aisles are much more efficient (in terms of retrieval

time) than those without cross-aisles [8], but

according to [9], even these layouts results are not as

efficient to the Non-traditional Layout, which

provides shorter paths by providing shortcuts. In

these layouts, the pick aisles are horizontal or

vertical, but the cross-aisles are not required to be

perpendicular to the pick aisles.

Three major non-traditional layouts are Flying V;

in which the cross-aisles forms a big V starting from

the depot and all the pick aisles are parallel to each

other (vertical), Fishbone layout; the cross aisles

form V and the pick aisles above the V are vertical

whereas the pick aisles below the V are horizontal,

Chevron; it has one single cross aisle and all the pick

International Journal of Applied Sciences & Development

DOI: 10.37394/232029.2023.2.11

Muhammad Asad Ali, Jawad Ali Gul,

Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

102

Volume 2, 2023

aisles are in V shape. This layout is suitable for very

large facility and is optimal for multiple depots.

Layout alone cannot enhance the efficiency of

warehouse because mostly, the efficiency of the

layout is measured through the retrieval time and

retrieval time also highly depends upon how things

are placed within the layout meaning that

efficiency depends upon it. This is known as

storage location assignment policy (SLAP).

According to [10] there are two main factors which

control the performance of the warehouse: the

specified allocated space and retrieval time. This

can be achieved with the help of proper storage

allocation. SLAP is generally incorporated at the

designing stage of warehouse to make it effective

and economical which is one of the fundamental

criteria of a warehouse [11] because the mere

adaptation of expensive ERP system cannot help in

doing this [12]; [13]; [14]. Three main types of

storage location assignment policy have been

placed forward by [15]; [11] dedicated storage,

random storage, and class-based storage.

Dedicated Location Strategy is one of the

methods that provides the optimum allocation of

the products in the storage area. In this method,

each product has a fixed location in the storage area

i.e., a specific location in store is allocated to a

product and that space cannot be used by any other

product despite the space being available at that

time. In randomized or shared slot policy/strategy,

any free or available space is used to place the item

in the storage system [16]. Class-Based Storage

system, basically a combination of Dedicated and

Random Location storage policy. In this system, a

maximum space required by a class/group of

products throughout the year is calculated and then

a fixed space is allotted to that class. In that space,

the products of that specific class can be kept

anywhere. This is suitable for a place where the

item variety is less, and a better tracking system is

available.

Barcodes (1D and 2D) are straight forward

printed machine-readable patterns where data is

encoded utilizing graphics and offer low

fabricating cost and strong readability. They are

widely used in numerous commercial applications

counting transportation and warehousing. The

application of barcodes in data storage and retrieval

system is useful at all business levels. The barcode

technology is also used in warehouse management

system and logistics. Barcode technology has

become very popular and is being used in many

businesses worldwide. They are widely used in

manufacturing companies, warehouses, shopping

malls or retail stores and hospitals for the unique

identification of an entity. The barcode technology

is also famous in medical fields as the record

keeping for each medicine is complicated even if

the system is computerized, so to meet the

requirements barcode technology is integrated into

the system [17]. Barcodes traditionally represent

the data by parallel width and spacings and may be

of two types i.e., 1-D Barcodes and 2-D Barcodes.

Barcodes vary in various parameters such as

configuration in multimode or alphanumeric, width

and the generation algorithm of barcode. These

barcodes are not readable by human eye and hence

required special hardware named as barcode

reader. The scanner for barcode use OCR (Optical

Character Recognition) technology to decode the

information that is hidden. The scanner recognizes

white spaces and bars that are encoded with

information, scanner extract or decode the

information and display the data with actual finding

and integrity. Barcodes that contain information

are brought into the computer by using some

cameras. The captured image contains the

information. The colorful image is converted into

grayscale to increase the readability [18].

QR code may be scanned from phones or scanner

with access of internet, as a result user can receive the

information about origin and real-time conditions.

RFID tags were also used along with QR codes in

many projects for determination of location through

GPS, temperature measurement, moisture [19]. A

traceability concept shown in [20], where the field

data are collected with the help of web-based system

integrated with QR code system for processing of

data. To develop a system of traceability based on QR

code, it is necessary to make sure the fast and easy

decoding as well as code ruggedness [21]. Two-

dimensional code that is QR code, is most often used

[22], and keeps an adequate amount of information,

maintain exceptionally great readability and

coherence even on little size labels, and which

moreover has exceptionally great readability in case

of physical harm or damage of a portion of the code.

2.1 Classification

It is possible to employ ABC-analysis for the

formation of model for rational inventory

management policy which can minimize the

production investment cost and can give the best

possible service level to production. ABC-analysis

attempts to show the importance of each item based

on its value and puts a suitable level of control for

each item. ABC-analysis was used to classify items

International Journal of Applied Sciences & Development

DOI: 10.37394/232029.2023.2.11

Muhammad Asad Ali, Jawad Ali Gul,

Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

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Volume 2, 2023

based on value. “A” item, though are less in quantity,

normally 5% to 20% of the total items, but are of

more value and have greater impact on total

inventory cost, nearly between 50% to 80%, so they

are subjected to close control or more frequent

control then the other items. “B” items are subjected

to regular control with quantity ranging from 20% to

40% and value ranging from 25% to 45%, and “C”

items are subjected to lose control though they

constitute many items normally from 50% to 70% but

are of less value ranging from 5% to 25%. ABC-

analysis is an appropriate technique for classifying

items based on their contribution to the annual

inventory cost and is the basis for material

management processes.

ABC analysis is the most efficient method to

control and reduce total inventory cost. The items of

industry’s inventory were analyzed by the following

methodology.

 Items with consumption value were identified

first.

 The unit cost of each item was known.

 Consumption of each item was multiplied with

the unit cost of that item. In this way the total

value of each item was known.

 Items were then arranged in descending order

with the items having high consumption value

being kept at the top.

 Items were then sorted out in three categories:

items with high consumption value, B items

with less proportion of the consumption value

and C items with very low value.

Below is the control policy for ABC items.

Industries do not require all inventory items for

manufacturing with the same frequency [23]. Some

items are needed more frequently than others and

some are needed very rarely. Keeping all the items in

store without knowing the actual frequency of usage

and demand of each item, is not always the best

option for any industry. Investing capital in those

items which are less required or have very low

frequency of usage results in increase of total

inventory costs. Avoiding this, industries use FSN-

analysis to maintain inventory according to their

usage or demand. FSN analysis categorizes items into

three groups, F-fast moving items, S-slow moving

items, and N-nonmoving items respectively. All

these three categories have different inventory

policies as the category suggest. Inventory items are

analyzed using turnover ratio and some other

techniques depending upon the nature of the data

[23].

Turnover Ratio= Annual Demand/Average

Inventory

Items whose turnover ratio is more than 3 are kept

in Fast moving items category. These items are

generally 10%-15% of total items. Items with

turnover ratio between 1 and 3 are kept in Slow

moving items category and are generally 30% -35%

of total items. Items with turnover ratio less than 1

are considered as Non-moving items and they are

generally 60%-65% of total inventory items.

FSN can also be categorized by calculating inventory

holding days, after analyzing all the items based on

above-mentioned criteria, different managing

policies are set for each category separately which is

shown in the table below.

Table 1 Particulars of FSN Analysis

HML analysis is used to control the purchases of

the items which are possible by identifying the unit

prices of each item. In this classification, the items

are classified into H, M and L category referring to

High price items, medium price items and Low-price

items. Moreover, HML helps to maintain the level of

inventory at optimum level and reduces the space and

inventory holding cost up to large extent [24]. The

criteria set for these three categories is mentioned by

[25]:

 H-category items: about 10%-15% of items

usually and are costly.

 M-category items: about 20%-25% of items

and have moderately low cost.

 L-category items: about 60%-70% of items

and have very low cost comparatively.

2.2 Layout

In randomized or shared slot policy/strategy, any free

or available space is used to place the item in the

storage system. The total capacity required by the

Particulars

F-

Class

item

S-Class

item

N-Class

item

Stock

High

Intermediate

Low

Control

High

Intermediate

Low

Check

Tight

Intermediate

Safety

stock

High

Low

Rare

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DOI: 10.37394/232029.2023.2.11

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Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

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Volume 2, 2023

storage area in this type of system can be calculated

by selecting the maximum value from all the

occupied space in inventory.

The most difficult part of this policy is, it becomes

very difficult to know the current location of a

particular product and is applicable to place where

there is an advance tracking and traceability system

or warehouse management system (WMS).

This is basically a combination of Dedicated and

Random Location storage policy. In this system, a

maximum space required by a class/group of

products throughout the year is calculated and then a

fixed space is allotted to that class. In that space, the

products of that specific class can be kept anywhere.

This is suitable for products having less variation and

have a better tracking system available.

But a large drawback in the above-mentioned storage

optimization analysis was found that it doesn’t

consider retrieval time of the products which also

affects the cost directly [10] so a new tool was

developed to resolve this issue. This new tool

considers the following factors: [10]

 Storage area layout design

 Data analysis

 Inventory management

The first tool of this new tool is performing as-is and

what-if analysis in a modifiable layout of the

warehouse. Certain KPIs (like distance from depot,

retrieval time etc.) are set to compare the alternative

layouts. As-is analysis can be used to measure the

current performance of the storage system (by factor

weighting method of the KPIs) and what-if analysis

can be used to measure the future performance of the

storage system if any changes are made in the layout

for studying their effect of KPIs.

Second part consists of the analysis of data. In this

section, the maximum and minimum number of

locations/places required by all the products to be

placed are calculated.

After successfully analyzing the data, the same SKUs

are classified into fast, slow and non-moving items.

And then by considering the constraints (area of

warehouse, height of racks, size of ladder available

etc.), total space for un-racking items and total

required slots are calculated, Inputs and outputs of

the storage facility are determined. Thenceforth the

distances from each slot are measured in which both

the vertical (from ground) and horizontal distances

(from depot) are both covered which in turn provides

the retrieval time of the product placed in those slots

[10] and in this way the slots are classified into hot,

warm, and cold slots.

 Hot slots: easily accessible and near to the

depot

 Warm slots: at a little distance from depot

 Cold slots: farthest from depot

Another method that has been suggested by [26]. In

that method, all the products are classified into Fast

moving, slow moving and non-moving items and

after that they’ve been further classified on the basis

whether they can be placed on racks or shelves,

forming the category of racking items or if they

cannot be placed on racks and are to be stored on

ground forming the category of un-racking items. For

this, their size and weight were measured. After

complete collection of data, a matrix was formed of

the data of FSN and Racking and Un-racking items,

and on that basis, a layout was designed.

2.3 Traceability & Tracking

Tracking is very known phenomenon and is very

common but the system through which the tracking

is carried out is all a matter of concern, most of the

warehouses in multinational as well as in local

companies use Barcode Tracking system along

WMS. The reason to use barcode over RFID in these

warehouses is that the setup and operational cost of

Barcode Tracking system is very cheaper than RFID.

In addition, barcodes are machine printable codes and

can be printed easily on any paper (requiring open-

source barcode) whereas RFID is small chip that

cannot be printed or fabricated easily at the time of

receiving of retrieving items through warehouse.

The modern network of supply chain in textile

industries uses a tracking system that incorporates

suppliers, producers, distributors, and retailers [27];

[28].

The modern warehouse system is making easiness in

managing items or commodities. this automated

tracking system has reduced workload by 25-30

percent approximately, and this rate might be

increased up to 50 percent when everybody is

completely trained. To implement or actualize a

barcode enabled WMS, the project given the Central

Warehouse with modern hardware and computer

program (software), that includes computers, servers,

printers, and barcode scanners. The new framework

benefits in such a way that:

 The management of large shipments received

has improved.

 The distribution of items becomes easy.

 Management of expiries are improved or large

warehouse, location management is

improved.

International Journal of Applied Sciences & Development

DOI: 10.37394/232029.2023.2.11

Muhammad Asad Ali, Jawad Ali Gul,

Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

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Volume 2, 2023

A detailed study and research were made to obtain

some related algorithm and open sources for barcode

generation. Eventually, Barcode was generated

through Excel by putting Algorithm of Code 39 and

changing the font to code 39, which was obtained

from the font pack. Code 39 was selected for the

proposal because this is currently being printed by the

company and it has a simple algorithm with no prone

to errors in decoding.

 Code 39 is the most used to form Barcode.

 The information to be encoded starts and ends

with Asterisk '*'

 After the algorithm is applied, the code 39 font

is used.

 The information is then encoded successfully.

3 Problem Solution

After collection of the data, different inventory

management techniques were reviewed and came to

a decision about suitability of technique as far as this

case is concerned. Since, Objective of this paper

includes identification of aged items and removing

them as they occupy a large space in store, organizing

SKUs in a proper way with the suitable inventory

management technique and placing items according

to their frequency of consumption for easy retrieval.

Therefore, these ABC, HML and FSN techniques

were finally decided to be used for some specific

reasons defined below.

Since there are many inventory management

techniques available but they are used according to

the objective for some specific works and out of

which, these three techniques, that is ABC, HML and

FSN were taken into consideration for the

classification analysis, as the current scenario of

production site warehouse predicts to have issues like

shortage of floor space, increased retrieval time,

increased number of dead items. To tackle these

issues, FSN analysis is the most suitable. With this

analysis, dead stock can easily be identified, items

which have almost no stay in store i.e., they are

received and issued on the same date or items which

are frequently used. FSN analysis also helps in

arrangement of items based on their consumption rate

which ultimately reduces retrieval time.

Moreover, ABC and HML analysis will help in

finding the value of items and will ultimately give

some control policies regarding where to place

expensive and inexpensive items. Since there are

imported items in store and they are consumed rarely

(spare parts of machines etc.) but are expensive,

therefore, they need to have a separate place instead

of placing them in an open rack, where they could get

rusted or expired off. Hence, ABC and HML analysis

will eliminate such problem, which is also a concern

in the objective provided.

Below are the statistics of the ABC classification

applied to three-month data provided by the

company.

Table 2 Statistics of ABC Analysis of Items

From the table, it was found that from a total of 2501

items, 182 are those which fall into A-category and

are 7% of the total inventory items, they constitute

around 75% of the total inventory value, 527 are

those items which fall under B-category and are 21%

of total inventory items, they contribute 20.06% of

the total inventory value and 1792 items fall under C-

category, and are around 72% of total items, which

contribute 5% of the total inventory value.

From the statistics of ABC analysis, it is very clear

that A category items need more sophisticated

control policy. Since, they are most expensive items

and generate more value than other inventory items.

Similarly, B category items require medium control

as compared to A category, and C category items can

be kept in lose control as they are less valuable as

compared to other two categories but require a large

space in store as far as their quantity is concerned.

The total number of items in the store was 2501.

The results obtained from HML analysis are shown

in Table 4.2. It was found that high price items were

249 in number and 10% of the total inventory items,

and these items have 88.56% of total holding days in

store. Therefore, this makes it clear that they

constitute a major portion of inventory cost.

Similarly, medium price items were found to be 500

in number and are 20% of total items with a total of

9.27% holding days in store. Similarly, low-price

items were found to be 1752 in number, which is a

large portion of items as compared to the H-price and

M-price items. The total percentage of Low-price

items is 70% and have a stay period of 2.16% in store.

Table 3 Statistics of HML Analysis

Classification No of items % of items Total stock value % of total holding days

H249 10% 18,390,690 88.56%

M500 20.00% 1,926,807 9.27%

L 1,752 70% 447,571 2.16%

Total 2,501 100% 20,765,068 100%

Classification No of items % of items Total value % of total value

A182 7% 108,596,054 74.90%

B527 21% 29,077,150 20.06%

C1792 71.57% 7,248,470 5.00%

Total 2501 100% 144,921,674 100%

International Journal of Applied Sciences & Development

DOI: 10.37394/232029.2023.2.11

Muhammad Asad Ali, Jawad Ali Gul,

Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

106

Volume 2, 2023

After applying FSN on over all data without

considering the category in first phase, below are the

statistics in which, it was found that 144 items fall in

F-class category with the stay period of 1 to 2 days,

262 items fall into S-class having 3 to 21 days of stay

period and there are 880 items falling in N-class with

a long stay period of 22 to 2361 days. Furthermore,

above table shows a total number of SKUs to be 1286

excluding dead and temporary stock. As they were

identified and separated which comprised of 791

items and items with no stay in the store comprises of

47 items. Layout for the placement of SKUs is also

finalized, which is based on FSN analysis mentioned

in the layout section. In a way that fast-moving items

will be placed near the exit or at a feasible position in

the rack for the reduction in retrieval time and for

ease in picking and placing items and likewise for S

and N-class items. Below are the statistics of total

SKUs in table, depicting number of dead stock and

those items which are received and retrieved on the

same date having temporary stay in the store and the

number of those items on which FSN is applied.

Table 4 Statistics of FSN Analysis on Overall SKUs

Place and classifying items without grouping them

into category also makes it difficult for the worker to

place and retrieve items and causes problems when

they are very in need of that item. Therefore, FSN is

also applied in each category to find which items are

fast, slow, and non-moving based on category. It will

make the situation easy in such a way, now workers

would just need to know the place of a particular

category and can retrieve or place items easily.

Finally, items were placed in group’s category wise

as shown below.

Table 5 Fast, Slow and Non-moving Items in Each

Category

Above table, depicts the items based on FSN in each

category, and found which category is fastest moving

in all categories by considering the stay period of

each category. However, the above arranged category

is in the order that Mechanical items category is fast

moving then mechanical spare parts is fast then

electrical items and so on. 25 items are fast in

mechanical items and 35 items in machine spare parts

which are greater in number but the items holding

time in those machine items is less than those in

machine spare parts and this how the priority in

category is decided with an order arranged shown in

table.

Table 6 Dead Stock in Each Category

Dead stock are the items consumed rarely and have

very long holding period and needed to be identified

and removed because it consumes high holding cost

and a large space which could be utilized by those

items which are fast moving.

Therefore, dead stock category wise was

identified and decided to place them on the first floor

of the main store as its empty and not being utilized

anymore, this is how enough space will be available

in the store and will be able to place those items at

desired place, there will not be any blockage in

pathways, worker can move easily for placing or

retrieving items. It can be Seen in Table 8 that many

dead stocks are found in Machine spare parts, since

spare parts are rarely utilized whenever there is a

problem or breakage of machine parts, then machine

items are on second number having 214 items

considered as dead stock and so on.

Layout Design

Before designing a new layout, the current layout

must be analyzed so that mistakes in the current

layout do not repeat in the new one and so it can be

used for comparison of current and proposed. Once

when done with visual observation, parametric

values were needed to be collected like racks size,

placement of racks in the provided area, their

distance from the depot. Through this a current layout

was drawn. Furthermore, fifty sampled SKUs were

randomly selected, and their distance from depot was

measured with the help of measuring tape. The

measured distance thus was divided with the average

worker’s walking velocity, resulting the estimated

retrieval time of the sampled SKUs. Furthermore,

Classification No of items % of items Total stock value % of items holding days

F144 11.19% 3,998,345 7.24%

S262 20.40% 4,697,448 8.51%

N880 68.40% 46,522,119 84.25%

Total 1,286 100% 55,217,911 100%

Category F S N

Mechanical Items 25 53 184

Machine Spare Parts 35 73 257

Electrical Items 38 79 251

Printing & Stationary 13 29 95

General Items 18 14 79

Leno Threads 3 3 7

Oil & Lubricants 1 1 5

Packaging Materials 1 3 11

Medicines 1 1 0

Chemical Items 1 1 2

Computer Items 1 1 0

Dead Stock No of SKUs

Machine Spare parts 785

Machine Items 214

Electrical Items 153

General Items 8

Computer Items 1

Oil & Lubricants 1

Printing & Stationary 6

International Journal of Applied Sciences & Development

DOI: 10.37394/232029.2023.2.11

Muhammad Asad Ali, Jawad Ali Gul,

Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

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with the help of the “Classification Data”, the

category to which a specific SKU belongs.

After performing the above-mentioned method, it

was found that no classification was being followed

in the current layout (neither FSN, nor ABC). the

condition was this bad that in many places the non-

moving items and C classed items were placed near

depot and the fast-moving items and A classed items

were placed farthest from the depot. Storage location

assignment problem deals with the placement of

items in the warehouse or store. This tool helps in

increasing the efficiency of the layout and its

productivity.

Once all the Pre-Requisites for the

Implementation of SLAP were performed, Finally,

SLAP was implemented. The initiation for the

implementation was taken on the excel file, where a

specific place was allotted to each SKU. Then, it was

further traced in the layout for proper identification

of the placement of each category on the layout so

that it can easily be understood by the labors and staff

of the store.

SKU Classification

Through the data provided by the company regarding

their SKUs, they were classified into ABC, FSN and

HML. Through detailed study of the classifications,

FSN was selected to arrange the items in storage

location assignment policy. The following facts

which defend the selection of FSN are:

 Retrieval time of the SKUs was to be reduced

so FSN was preferably best as it arranges the

items based on the frequency of their

movement.

 Forming a storage assignment policy based on

HML wouldn’t result in a desired outcome as

most of the high-cost items are rarely required

in the factory and so are retrieved rarely and

thus will block the locations near the depot.

Those items which are often retrieved will be

pushed back and thus retrieval time will be

increased.

4 Conclusion

The following study can provide several insights

related to the system of inventory management that

can be effective as well as beneficial for warehouse

managers and other staff of warehouse of the textile

industry for general items. The study incorporates

inventory management techniques that are comprised

of ABC, FSN as well as HML analysis to arrange

items based on their consumption rate and price.

Furthermore, the category wise placement of items

can reduce the holding cost and enable managers to

utilize the remaining space in layout for productive

task. In addition to this, employees can also find out

how the retrieving as well as tracking systems work

after arranging items based on their respective

category. A well-managed inventory can lead to

reduction in the investment cost of production as well

as provide services at production level. Also, the

system of inventory management can be applied to

almost any industry where the movement of goods

takes place whether in the form of raw materials or a

finished goods. Inventory management is the most

critical process in every business but if it is managed

well, it will not cause continuous stock outs, high

inventory cost and low inventory turnover rate.

In today’s manufacturing world, every company

strives to maintain balance between critical stocks

and inventory holding cost, which occurs mainly due

to the dead inventory. Therefore, SKUs were

classified using FSN inventory management

technique. It was found that there were around 37%

of items having nil consumption rate or they are

insignificant and occupied a large space, blocking the

pathways for the worker and ultimately contributing

increment in retrieval time but once FSN was

applied, it was ensured that items are placed with

their category, so that the worker can easily trace the

location of items, keeping in mind that each category

can have more than one location as FSN was applied

in each category. Consequently, Items were properly

arranged and placed according to their consumption

rate, identification of dead stock helped in freeing

extra space occupied by the dead stock i.e., clearing

pathways for the worker, making it easy for the

worker to place, retrieve and reporting the items,

which ultimately decreases retrieval time.

Furthermore, space left after shifting dead stock

to the first floor was further utilized by fast-moving

and slow-moving items, which is contributing more

decrease in retrieval time. In addition to this, those

imported items falling into non-moving class were

shifted to the first floor to be placed in Almirah, that

is freeing more space for the temporary items to be

placed in quarantine area (extended) and those which

were fast-moving were placed within the store and

control measures were suggested for categories.

In nutshell, implication of FSN technique helped in

arrangement of SKUs based on their consumption

rate, identified the dead stock, cleared pathways,

contributed decrease in retrieval time and ultimately

increased the efficiency and productivity of the

workers and operation.

Once, the proper layout was designed and

analyzed, it was found that the Quarantine area was

increased by 33% and office area by 72% by

International Journal of Applied Sciences & Development

DOI: 10.37394/232029.2023.2.11

Muhammad Asad Ali, Jawad Ali Gul,

Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

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Volume 2, 2023

providing two-story office Other than this, the new

store design was more efficient and secure with

window drop off and cross aisles for shifting between

the pick aisles. This new layout also had a pathway

from outside directly to the lift for proper space

utilization. Further implementation of the new

storage assignment location policy insured to

increase the efficiency of the layout, by making sure

that the fast-moving items are placed nearest to the

depot, ensuring their quick retrieval. Other than this,

it became easy for existing and new workers to

identify the location of an SKU as it was made sure

that items are placed with their categories, though

one category can have more than one location as they

are also divided into Fast, slow and non-moving and

secondly the racks coding was coded in such a way

that they could easily be interpreted by the workers.

This helped in a further decrease of the retrieval time.

In short, the new layout and the storage location

assignment policy increased the efficiency of layout

by reducing the retrieval time and distance of the

SKUs, thus simply improving the productivity of the

workers.

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Contribution of Individual Authors to the

Creation of a Scientific Article (Ghostwriting

Policy)

The authors equally contributed in the present

research, at all stages from the formulation of the

problem to the final findings and solution.

Sources of Funding for Research Presented in a

Scientific Article or Scientific Article Itself

No funding was received for conducting this study.

Conflict of Interest

The authors have no conflicts of interest to declare

that are relevant to the content of this article.

Creative Commons Attribution License 4.0

(Attribution 4.0 International, CC BY 4.0)

This article is published under the terms of the

Creative Commons Attribution License 4.0

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International Journal of Applied Sciences & Development

DOI: 10.37394/232029.2023.2.11

Muhammad Asad Ali, Jawad Ali Gul,

Syed Mehmood Hasan, Satya Shah

E-ISSN: 2945-0454

110

Volume 2, 2023