CA1188814A - Warehousing system and method - Google Patents

Abstract

ABSTRACT OF THE DISCLOSURE

The most frequently-ordered items in an inventory of relatively small items such as fasteners, electronic parts, etc. are stored in both "A" and "B" sections of the warehouse.
The "A" section is smaller than the "B" section, and usually contains smaller quantities of an item than the "s" section.
The "A" section is located as close as possible to a retrieval station so as to minimize retrieval time and distance.
Parts are stored in containers of standardized sizes, the "A"
containers being open, the "B" containers being sealed.
The locations of incoming new items in the "B" section is random so as to maximize utilization of warehouse space. A
computer stores and updates the quantity of items in every container. Retrieval is made solely from an "A" container if the quantity in it is sufficient. If not, additional items are retrieved from one or more sealed containers in the "B"
section. When an "A" container is empty, a 'IB'' container is used to replace it. Each movement of stock items into, within, and out of the warehouse is controlled by systems of labels, shelving and retrieval instructions, and inventory records generated by a computer.

Description

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This invention relates to waxehousing 6ystems and methods, and more particularly to structures, appara~us, systems, and methods for storing and retrieving objects of diverse characteristics and relatively ~mall size, such as fasteners~ elec~ronic parts, etc., and maintaining control of a relatively large inventory of such objects. This invention also relates ~o the computer control of ~uch systems and methods.
Historically, in~entory control has been 1~ maintained manually; for example, o~ file cards. Each card contr~ls a single stock item, or n stockkeeping unit" (SXU~.
The file card sh~ws the current quantity of each item on hand, withou~ the need of physicall~ checking the items in the warehouse. A running balance is maintained by deducting shipments and adding receiptsO Most conventional computerized warehouse systems still keep their records in substantially the same way; that is, by creating and maintaininq files by s~ockkeeping unit.
It is plain, however, that in practice the SKU

2~ quantity shown on a card or i~ a computer file has no actual existence as a single, discrete unit in a warehouse, bu~
ra~her is the sum of items physically contained in several warehouse units or containers, the number and locations of which can change daily. The nature of these units can be as 2~ diverse as a single jet engine on a pallet, 500 ball-point pens in a box, 100 pounds of nails in a keg, 250 phonograph records in a carton, 5,000 feet of wire on a reel, QX 55 gallons of paint in a drum. In the absence of fail-safe computerized control over such items, a large warehcuse can experience any number of inventory difficulties, especially where a relatively large inventory of small parts is maintained.

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50me of th2 problems with such prior eystems are the following:
1. Incorrect shipments~ in whole or in part.
2~ Parts stored or replaced in ~he wrong place and thPn later fsund after they have been assumed to be lost.

3. Pilferage and o hex mysterious disa~pearances of goods, which may appear as shortages either on a day-to-day basis, or not until an annual inventory is taken.
~ 4. Laek of correspondence between the quantity shown on a computer file or manual card and the a~tual number of parts on hand.
5. Delays in shipping, particularly orders with many types of items.
6. Large areas of unused space committed to i~ems for which demand is declining/ while items for which demand is increasing require cumbersome overflow or annex storage areas.

7. Excessive warehouse labor and increased chance of error aused by awkward~ chanying, or indefinite inventory storage locations.
8. Lack of personal accountability ~f warehouse personnel.

. 9. Ad hoc and unrelia~le handling of ord2rs for future delivery and of parts sent out for special modification.
10. Mixed lots, caused by having multiple open eontainers in the same vicinity c~ntaining parts that are deceptively similar in appearance, and giviny warehouse workers the discretion ~o choose among the containers~

These problems, in varying degrecs, are found in most conventional warehouses, in which a fixed space usually 33~

is allocated for each type of object to be stored. This storage can be in containers on shelves, pallet racks, a bare floor, sr any comhination of these. ~sually, an attempt is made to store the i~ems in some logical sequence, 5 such as by part number. In some prior systems, items which are in more active demand are skored near the s~ipping department or in a localized area where the workers who gather items from the warehouse (known as ~stock pickers can get to those items more quickly. Also, in some prior systems, a computer is used ~o print a "picking" list; that is, a list giving the stock picker the locations of each ohject to be retrieved~ and instructions on how to retrieve several objects during one retrieval trip.

Applicants have recognized that some basic lS inefficiences exist in such prior systems. Basic economics dictates that restocking of a particular item take place when a comp~ny~s stock of the item either is exhausted or is - nearing exhaustion. Because a fixed area is assigned to a particular item, the result is that an averag~ of 50~ of the 2~ shelf, pallet, or floor area remains empty~
Thus, on the average, only 50% of the space in the entire warehouse is in use at a given time. This is undesirable for many reasons: a larger warehouse is required, stock pickers must travel greatex distances, on ~5 the average, to fill orders, and the likelihood that the parts containers (e.g., boxes) will be put in the wrong location is greatly enhanced. If an order for a particular product requises only a part of the contents of a giv~n box, the stock picker may not see a box which has been previously opened, and then will open a new box. Where more than one box is open at a particular time, the possibility of pilferage, mixed lots, and stock loss is increased.

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Another problem with ~uch prior systems is that if more parts of a qiven type are re~eived than will f it in the pre-assigned spaee, the exce s must go into an overflow area, which usually is some distance away from ~he first area.
Such an overflow would also take place if the demand for a particular item suddenly increased and it was necessary to maintain a larger ~tock permanently. Proper control of items in an overflow area is usually very difficul~.

Another problem in conventional systems is related to labor costs. For each order to be filled, a stock picker often must travel the entire length and width of the warehouse. Most likely, sto~k pickers will arrange for some combining and exchanging of the order~ they are to fill~
informally, in order to reduce the distance each must travel, ~ut this opens the door to new and greater errors and con-~usion. Labor investment and inefficiency are increased further if partial quantities must be measured, for example on a scale, or if incoming inventory must ~e divided between a principal area and an overflow area. If items are ~o be 2Q picked by part numher or by description, the error rate will be enhanced by misreadings and typographical errorsO ~lso, a substantial training period i5 required for ~ew stock pickers. Since all stock pickers must have universal access to all items, including all open boxes, it is difficuLt ~o hold any individual responsible for errors, ~ad housekeeping, or missing parts. ~ne common attempt to cope with such problems is to add a checker to verify the correct picking of stock items. This only serves further to increase the warehouse labor cost, and frequently allows stock pickers to 3~ bec~me even more careless, since the responsibility for errors i 5 now being shared.

The principal o~ o~ ~he invention is to provide a fast, aocur~te, economical, highly secure and reliable warehousing system and method which mînimizes or significantly reduces the foregoing problems.
S In accordan~P with the present invention, the foregoing objects are met by ~he provision of a ~ethod and system for storing and retrieving items having diverse characteristics. The items are stored principally in ~wo sections or areas of the storage facili~y. The first section is near a retrieval stationO Limited quanti~ies of items are stored in that section, preferably in ope~ con-tainers, usually only partially full. Preferably, the items stored in the first sectio~ are those which are most frequently retrieved. Also, it is preferred that there be no more than one container holding any one item in ths first section.
The second section of the storage facili~y preferably has much more storage space than the first se~tion. Additional quantities ~f the items stored in the 2Q first section are stored in the second section. Preferably, the items are stored in sealed containers, and most of the ,containers are full. It also is preferred that the con-tainers be stored in the second section in random order so as to ma~imi~e the usage of storage spaceO
When retrieving items, in filling orders for parts, for example, the items are retrieved solely from the first section, if the number of items stored in the irst section is sufficient. ~f notp then they are retrleved from both the first and second sections. If only integral 3~ multiples of the quankities in full containers are desired, then retrieval solely from the second section is in order.

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Preferably~ the items are packaged for storage in containers of ~tandardized sizes and ~hapes which are e-termi~ed so as to substantially ill he storag~ spaces in the first section and thus maximize ~he utilization of that and other storage spaces in the storage facility. Preferably, each container is filled with a pre-determined nu~ber or quanti~y of an item.
A computer systeM is provid~d to identify the locations of the items in storage, to enter orders, print labels ~earing rElevant control d~ta for application ~o containers and storage spaces for them, to print detailed retrieval instructions for retri~ving the items from storag~, to store and control records, and to perform other func~ions of the system to be described in greater detail below.
15Preferably, the computer system includes a central computer with input/output terminals and printers at various convenient locati~ns. For example, in a business organ-~ ization having several widely separated warehouses and sales offices, at least one input/output terminal is located at 2~ each such place of business, with telephone line or otherlinks between the remote terminals and the central computer.
This allows personnel at any such branch location to enter or fill orders for parts from any of the warehouses, and gives them the information they need to sell, fill orders 2~ and order new parts, as needed.
In the first section of the storage facility, a control card is attached to each container~ This card bears a record of all withdrawals from the container, and of transfers of full sealed containers from the second section to the first secti~n. The computer system provides a retrie~al list showing the retrieval worker, the correct beginning quantity, quantity to be removed, and ending quantity, and also a sequence Dumher.

A shipping document is also provided for each order, listing all the retrieved quantities that make up the order. Each por ion of an order retrieved from the first and second sections is also assigned a sequential container number, which is marked on the label provided for each such portion, and corresponds to the sequence in which the containers are listed on the shipping docum nt, on which the 1~ container numbers also appear.
The advantages of the invention are many.
The invention provides subctan~ial savings in labor costs.
The location of the first section (~" section) near the retrieval station, and the storage there of the most frequen~ly-retrieved parts, saves considerable amounts of retrieval timeD The full usage of space in the "An section reduces its size and further enhances the savings in retrieval time.
The use of computer-generated retrieval 2~ instructions also minimizes retrieval time~ The nearly full utilization of the larger second storage section ~B~
section) of the storage facility reduces its size and also enhances the retrieval time savings.
The provision of detailed computer-generated ~5 instructions for stocking and retrieval personnel also substantially reduces training time for them~ ~his further reduces labor eostS. The nearly continuously upda~ed inventory data available greatly reduces the time required to take a complete inventory~
The nearly full utilization of storage space saves on capital expenditures, since otherwise a larger facility would be required to store the same quantities of goods.

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The invention provides a high degree of security.
Losses due to pilferage and shipmen~ errors are minimi~ed.
The ~torage and handling of par s can be traced easily, back to their original receipt.
The invention provides a very high degree of accuracy and reliability in storage and retrieval ~f the correct quantities of the correct parts.
The system can be used by means of remote ter-minals in a network of widely separated storage facilities and sales offices. The ~uantities of items available, their locations, and other data thus are quickly available a~ all facilitiesO Parts can ~e shipped from any location; and parts ordered from vendors can be ordered from any location and shipped to any other location. The information available is updated to reflect every new transaction, so that up-to-date information is availa~le at every location in the system.
It is evident that the invention satisfies the a~ove objectives most admirablyO
2~ The invention, as w~ll as further objects ~nd adJantages thereof, will be understood more clearly and fully from the following description, when read with reference to the accompanying drawin~s, In the drawings:
Figure 1 i5 a plan view of a warehouse constructed according to an embodiment of the pr~sent i~vention;
Figure 2 is a block circuit diagram showing a com?uter network for use in the invention;
Figures 3a and 3b are flow charts showing the 3~ storing, retrieving and shipping of stored items in the warehousing system and method of the present invention;

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Figure 4 is a 10w chart ~howing a portion of the method of assembling shipping documents in the invention;
Figure 5 is a flow char~ showing ~he method of allocating stored items for retrieval in ~he i~vention:
Figure ~ is a flow chart showing a method of assembling data for directing the retrie~al of items from a container in the f irst section ~f the warehouse of the aisclosed embodiment;
Figure 7 shows a par~ially filled-out contrsl card for attachment to containers i~ he first section of the warehouse; and Figure B is a perspective view of part of a section of shelving in the first se~tion of the warehouse, the shelving being fully loaded with stored containers.
1~ G~:N~:RAI, DESCRIPTION
Figure 1 of the drawings shows the physical layout of a warehouse 20 construc~ed according'an embodiment of the present invention. In its preferred embodiment, the invention is used in a warehou.sing system and method for use with 2~ fasteners (bolts, nuts, screws, etc~) of diverse types, si2es, materials, etc. Bulk shipments of fasteners usually are made in kegs or similar containexs.
The warehouse ~0 is divided into different areas.
There is a receiving area R where goods are received, and a ~5 shipping area 32 from which orders are shipped to customers.
A packaging area P is provided for repackaging most of the fasteners in packages of standard sizes and shapes in order to facilitate their storage and retrieval, and to facilitate inventory control~

Bulk storaye areas 22 and 23 are provided.
Arca 22 is for the tem~orary storage of fasteners aw~iting repackaging, and area 23 is for the permanent ~B" storage of certain items, usually relatively large in size, which are stored most efficiently in bulk in their original shipping containers.
The major portion of the storage area in the warehouse is ~or repackaged goods. This area is divided into -two categories, labeled "A" and "B" in Figure 1. The "A" section is relatively small compared to the "B" section (e.g., the "A" section may be only about 10% of the size of the "B" section). The "A" section is located very near a retrieval station 30 where containers of fasteners are gathered so that the fasteners can be counted (usually by weighing), packaged, placed in cubicles 31, and assembled into a finished order, which then is sent to the shipping station 32. Most of the "B" storage is relatively remote from the retrieval station 30.
Figure 2 shows a data processing system 28 which forms a part of the warehousing system and method. The system 28 includes a central general-purpose computer 40, local or "in-house" input/output terminals 42 and printers 41. The computer 4Q, terminals 42 and printers 41 pre~erably are located in or near the warehouse 20, in a portion not shown in the drawings.
The data processing system also includes input-output terminals 44 and printers 45 located in at least one remote branch or separately owned warehouse 2OA
(preferably there are several such branch warehouses), and additional terminals 47 located in at least one remote branch sales office 20B. Also, at least one input-output unit 50 is located in a customer's place of business 20C to give the customer access to the inventory information provided by the system 28. Printers 48 and 50a may also be provided at locations 20B and 20C, respectively.

THE STORAGE AND RETRIEVAL PROCESS
ReEerring now to Figure 1, stock, items in containers are received through a door 21, and are stored on pallet racks in the area 22. The goods are checked in the receiving depart-ment R, which may include weighing on a scale 27. In receiving, documents are prepared for the entry of the shipment into the computer system 28, which will henceforth "track" the items received untll their eventual shipment to a customer.
Until ~he items are repackaged or otherwise processed for storage, they are designated in the system as being in inventory in the receiving area R. This R area acts as a reservoir, in the sense that one or two large receipts on the same day can greatly swell the packaging backlog, while the packaging rate usually proceeds at a relatively steady pace.
Items to be stored in the original containers then go directly to storage on racks in the area 23. Other items are repackaged before storage by means of one of several packaging machines 24, 25, or 26, located in the packaging area "P".
The general rules used for storing containers of repackaged fasteners in the "A" and "B" sections are that full containers are stored in the "B" section, whereas open containers are stored in the "A" section. Moreover, multiple containers of each type of fastener are stored in the B
section, whereas only one container holding a given type of ~astener is stored in the A section. The types of fasteners stored in the A section are those for which there is the greatest demand. The shelf space or other storage spaces in the A section are kept full at substantially all times, except when a container is temporarily absent when parts are being retrieved from it.

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When parts are retrieved, they are retrieved from the container in the A section alone, if it contains enough parts. If it does not contain enough parts7Or if the order ., ~
is or one or more full cont~iners of the part, then no parts are immediately retrieved ~rom the A section, but rather the required amount is retrieved first from unopened containers in the B section. The remainder of the order is then retrieved from the A section. If the amount in the container in the A

section i5 still insufficient, then after ~he contents of the current A con~ainer have been exhauste~, a container is brought from the ~ section which, after removal of the items required to fill the balance of the order, replaces the now-empty con-tainer in the A section.

Some parts, for which there is only infrequent demand, are stored only in the B section. If such an infrequently used item is to be retrieved in a quantity less than tha~ of the next available B container r the system assigns an A storage location, as discussed below, to which the container is re~urned aftex the partial quan ity is removed from it. The open container with the remaining parts then becomes the A container for those parts.
This storage of the most frequently-requested parts in the A section greatly reduces retrieval time and labor, because the A section is so close to the retrieval and shipping stations 30 and 32. Other advantages of this arrangement will ~e explained below~
The large warehousing operation depicted in Figures 1 and 2, with its f3r-flung sales offices and branch warehouses, has the need to control and account for inventory 3D stored at, shipped to, and shipped from a multiplicity of locations. For example, if a branch warehousc stores an extra quanti~y of popular items in order to conveniently service ~3~

local customers on a rapid basis, tight ~nventory control is as necessary as in a main warehsuse. Each branch, as a ~e-parate profit center, should be held accoun~able for goods either purchased, ordered, or temporarily held by that branch.
A computerized system such a5 that of ~he present invention~
which can identify a part according to its precise location, and even its precise shelf location, and keep a recor~ of what entity is responsible for it, substantially eliminates any need for visual inspection of a local inventory. Thus, 1~ nationwide control of inventory in many locations can be accomplished efficiently and quickly.
Furthermore, the system can be used to maintain inventory record-keeping on a contract basis for any firm, such as a vendor, a customer, or a company entirely unrelated to the owner of the system. Such an Gutside party can use either its own warehouse acilities or those of the owner.
With multiple warehouses, periodic shipments can be made from a central warehouse to satellite warehouses to replenish their inventory~ With the single order data entry 2~ which is provided by this invention, customer order~ are automatically shipped from one or more warehouses either directly to the customer or to another warehouse for sub-sequent ~hipment to a customer. When parts are shipped between warehouses, each container is assigned to a w~re-house location at the receiving warehouse at the same time that it is designated to be pulled at the .shipping ware-house. Thus, inventory control is not interrupted, and all original data are maintained at the new location. In addition, any warehouse in the system can receive new parts from a vendor and ship to any customer or to ~nother ware-house, regardless of which receiving warehouse was originallydesignated. Further, the methods and apparatus of this 33~

invention are applica~le to tracking, in an nin-process"
account~ par~s sent to a subcontractor for additional processing.

DETAI~ED DESCRIPTION
The computer 40 performs ~he following functions, When a customer order is being made up, the computer sys~em first determines whether the order can be filled from ~he current contents of A; if not, it then assigns full B
containers where possible, with the balance, if any, coming from A. If ~he quantity available in the respective A carton for this last operation is insufficient, the computer system anticipates this and sends a ealed container in advance of filling the order to replenish the supply in the A section.
The customer order is then filled first ~y exhausting the con~ents of the prior A container. Then the container from B is opened, the remainder of the order i5 filled from it, - and the container from B then becomes the new A container.
All containers going from B to the cu~tomer, from B to another 2~ warehouse, or from B ~o A, are assigned by date received in the warehouse, with the oldest container going first.
Each location in the A and B sections that is capable of holding goods is assigned a permanent location num~er. In a manner tha~ will be explained ~elow, incoming goods are randomly allocated to the B locations. The .~
section is also randomly allocated, according to when it first becomes necessary to maintain a partial container.
Considering, however, that the ~mount of stockpicking labor that takes place in the A section may be to~ally out of proportion to the percenta~e of total warehouse space that it includes, it may be desirable to further enhance eficiency in the A section. This can be done, for example, by shelving 33 ~11 the most active items relatively closë together, and such specific assignment of open box locations is an optional feature of the system of the present invention.
If the products being removed from the open containers in the ~ section are easy to handle, the stock picker c~n fill the customer orders from the A containers in the aisle area 29 shown in Fig. 1. If counting or weighing is required, the stoc~ Dicker can use a battery~operated electronic scale, ~till working in the aisle. If this is inconvenient~ th~n the A cartons can be t'aken off the shelves or racks and brought to counting tables at the retri~val station 30, where tha required items are removed.
A ~raJity conveyor (not shown) leading to the counting tables allows a su~stantial nu~ber of boxes to be accumu-lS lated and delivered to the counting tablesO On the counting tables, or in the aisle area, a particular customer order is rilled from an A box and then plaeed in smaller packaging as - - appro?riate .
It is desirable to group together all of the items 2~ accumula~ed for a particular customer order. This is done by means of pre-assigned cubicles ~ i~s~ 31, shown in Fig. l. The cubicles 31 preferably are near ~he A shelves or the r~trieval station 30. Alternatively, they can be located some distance away, with parts being tran~ported to them by conveyor. Each cubicle is designed to handle an order of average ~ize, and can contain sealed cartons brought fro~ B to be shiDped to a cus~omer, as well as partial quantities removed from cartons in the A section. .Either the system or warehouse personnel can optionally assign to a gi~ren customer order more than one cubicle, either i~

necessary to hold a large order, or if it i5 desired to Drovide separate respective holding spaces for items from the ~ and B sections.

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When all of the items fcr a given order have been accumulated in a cubicle, the items therein are put into one or more shipping cartons and sent to the ~hipping area 32, where th~y are wei~hed, sealed, and sen~ to ~he customer.

STORAGE OF PACKAGED OBJECTS I~ A AND B STORAGE AREAS
A simplified flow chart ~f the system and method of the present inventi~n for storing items is shown in Fig.
3a. In the r~ceiving depar~ment R, two types of shipments are received: ordexs from vendors, and customer returns (se~ -step 33). Customer returns are sent to the inspection statio~ 34. If the items are of acceptable qualitv Sstep 34~, they are returned to B stock as if they came dirQctly `.~ from a vendor. If their qu~lity is unacceptable, then at 3~o step ~t~ they are either scrapped or sent to the shipping department 32 for return to the vendor.
A shipment from a vendor is first inspected (step - 34). If it is unaceeptable (step 34a), it is sent to the shipping department 32 for return. If it is accepta~le, and 2~ if it is of a nonstandard item purchased for a particular single customer order (step 34b~, it is sent to a special order desk 35 (not shown in Fig. l). If the special order was backordered (step 36~, the items are sent directly to shipping, if not, surplus quantities of the special items 2~ and items for future orders are placed in B stock.
If a shipment from a vendor is a standard item (step 34b), it is dctermined at step 34c whether it is backordered, and if so, it is sent directly to shipping. If not, and if it is to be stored in area 23 of ~ stor~ge in 3~ its original vendor container, it is sent at step 34d to B
storage. Other standard items are sent in step 34d to the packaging area P, and then to B storage.

3J--'t 11 The objec~s to be stored are packed in standard-ized containers, either by the vendor, or in the warehousing operation. Each container is of a predetermined size and shape which will fit on the helves in ~he A and B sections and substantially fill them, so as t~ make maximum use of the A and B sec~ions.
Each oontainer is assigned, by ~he computer, to an empty, pre-numbered, unique location in storage area B. For each container, an operator uses an input/output device such as 42 to store in the computer system 28 the item number, quantity, vendor number, purchase order number, date received, and actual costO When parts are to be gathered to fill a customer order, the computer directs the stock clerk or "picker" to a specific location in B for each container r~quired for the order. Pressure-sensitive labels are applied to the boxes throughout the system to direct the stock clerks.
Self-check digits are generated by the system to be compared - to other such digits at each point in the retrieving process~
to assure that each operation is carried ~ut correctly.
It may be that an order directed to be filled from the B section can be filled solely with full, sealed containers found therein. If the quantity required for all or part of the order is less than the quantity in ach of the sealed B containers, however, the system will direct the stock clerk to take parts from a respective one of the containers in the A section that contains ~he desired items.
A control c~rd on the A box contains further verification features, as well as sh~wing the identification and quantity of the items contained in the box~
Routine orders are usually printed as a single batch on a daily basis. Rush orders can be printed i~mediately on an individual basis when needed. The orders ~ 33~

c ~-, ~ . \, :.
printed in batch are pre-assigned e~by numbers, ~nd all of the A items to be pulled to fill all of ~hese orders are 1' '~, printed in a sinqle pi~king order. ~he items in the picXing order are printed in shelf loc~tion sequence, and all orders f~r a par~icular stock i~em are listed together, irrespective of the number of separate customer orders for whic~ that item is to be pulled. Thus, ~he stock clerk makes a single pass through the A section, filling all ~rders for the day.
Movements of items in~o or out of the A and B
1~ sections are controlled by the computer system 28, ~ record i5 kept of the quantity contained in each container in A, and a container is automatically moved from B to ~, before any items are pulled from A, if it is anticipated that the orders in the day's batch will exceed the items in the A

box.

A convenient system for taki~g a physical inve~tory in B is also provided. The system provides a report by shelf number showing which locations should be full, empty, or allocated to a current orderO The boxes are 2~ sealed, so no closer examination is necessary~ It is believed that a company with 50,000 containers in its B
section could do a physical verification in about 2 to 3 hours using eight 2-person teams. Inventory of the A boxes is unn~cessary for two reasons. First, the quantity s ~ ~ O ~-~ C~
contained in the boxes is relatively small~ Seee~,/bv definition~the turnover o~ the A boxes is relatively rapid, and any minor discrepancies in the contents of an A ~ox app~ar and must be reDorted when the box is exhausted. The effect of th;s is that whenever the quantity in an A box goes to zero, a physical inventory has automatically been taken.

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In addition to the basic elements described previously, the complete system -that can track any desired movement of the items in inventory or isolate all containers of a particular item that were received in a given single batch. A full complement of reports for management showing exceptions, audit trails, and significant status reports are also available. Daily, monthly, and on demand reports are all available, and can be requested at any computer terminal with management authority.
PURC~ASING AND RECORD KEEPING
The system 28 (Figure 2) controls the storage and di~position Of stock items from the moment they are ordered from the vendor. ~ach purchase order is entered into the system, and one of the printers 41 prints the vendor order.
The original copy is signed and mailed, one copy is kept for reference in the purchasing department, and two copies are sent to the receiving department R to await receipt of the shipment.
The system controls two types of items. One type is the actively used item that is reordered on a revolving, regular basis. The reorder point for these items depends on several factors, including lead time, demand, and margin ~or safety, parameters governing each of which are entered into the system. The system prepareS reports that recommend those items to be bought at any given time. The system can traclc either the actual cost of each container, the average cost of all purchases o~ an item, or the standard market cost of the item.
The second type of item is that which is required for a particular customer on a particular occasion. Such items are bought on an as needed basis~ The ~ystem records thP actual cost of these items, and if like p~rts are bought for other speci~ic jobs 7 the sys~em tracks them separately but reports the duplication either on request by means of an on-line inventory search7or by a regular inventory report. Where multiple warehouses are csncerned, ~he system reports on the profitability of such sales for each individual branch.
The two copies of each purchase order held in th~
1~ receiving department are helpful~ but not necessary to ~he operation of the syskem. If a ~hipment ~hould be received at the wrong branch warehou~e throu~h an error, such ware-house can still enter the receipt, print oustomer shipping orders, ~nd generally handle all appropriate processing of the ~oodsO The original receiving department copies of the purchase order can either be forwarded to the branch that received the goods or destroyed. These documents are not required for the audit trail for the received items; all necessary data are in the computer system~
In the normal course~ whe~ a shipment is received, one copy of the purchase order showing a temporary pallet loca~ion to which the go~ds are assiyned is sent to a data entry area, and the other is kept with the goods. Data representing the receipt (consider in the examples that follow that the purchase order number is E010~150, and the receipt consists of parts whose item number is AlKA02G) are entered into the system, and if there are any customer back-orders, retrieval documents to fill them ~t immediately. Such back orders are expedited, and any 3~ remaining parts are held for repackaging or shelving.
On a daily basis, ~or each receipt the system will prin~ a UVcndor Receipt VoucherH to initiate the accounts payable function. This voucher shows the vendor name, order number, ~reight terms, and the item numbers and prices exactly as they appear on the purchase order, which has, as before stated, been entirely under the control of the system. The voucher also shows the quantities received, thus verifying that the ordered quantity has been correctly put under the control of the computer system.
The actual vendor packing sllps and purchase order copies handled by the receiving department do not have to be sent to the accounts pa~able department. These warehouse documents, which cannot easily be forwarded if goods are received at multiple locations, for example, are not needed by the system in order to input the receipt of a shipment into the system.
Rather, control is maintained by means of the ~endor receipt voucher, since only an authorized person in the purchasing department can enter a vendor order, and once a quantity of goods has been received into the system, every piece must be accounted for as either being shipped to a customer or placed in stock. If the goods go into stock, the quantity in each stock container is independently controlled. Particularly, if the items are repackaged for storage in B, any variation between the received quantity and the repackaged count is immediately shown on a manage-ment report. Management reports are also prepared toshow discrepancies between receipts and eventual shipments to customers.

RANDOM STORAGE OF PARTS
After receipt, the system makes a record of pertinent data for each container and directs the storage of each in a random distribution pattern either on a shelf, a rack, a pallet, or a pre-designated area of the bare floor.

Two files are maintained to record the data for each containex in a given wareh~use. One is an ~item detailfile~ kep~ in item number sequence. The ~her is a ~shelf location file,~ kept in shelf location sequence. The i~em detail file has o~e record for each container in stock, and the shelf location file has one record for each shelf location~
whether or n~t it holds a container.
- Th~ typical warehouse usually contains a mix of different-sized cartons, kegs, crates, and so forth.
Separate, randomly-controlled areas ar~ maintained for each different size of container, with newly received parts going into the apDropriate warehouse area. To initiate the system, every locatiGn in the warehousP in which a container can be stored is nu~bered, and the location number is entered into the computer~ In order to implement the sy~tem of the ~15 present invention with a pre-existiny inventory, data for items already in these locatio~s are also entered into the sys~em. Thereafter, the system directs each incoming container into a specific warehouse location, and likewise designates the particular location from which each container 2~ to be shipped is to be pulled.
Even within a single received shipment of a sinyle type of stock item, containers can contain different quantities and be of different sizes. For each container, however, regardless of its size or where it i~ stored in the warehouse, the system records the warehouse location, quantity, item number, date received, actual cost f~r the parts in the container, vendor number, and purchase order number. These data stav in the system, for that par~icular container, until the container is shipped. Complete traceability for each container is availa~le at all times, the system using the purchase order number as a control reference for that quantity of goods. All of thesn data are .S ~
printed on each document associated with ~he goods, includ-in~ labels on the face of each container ~oming from either A or B st~c~ and the even~ual cus~omer shipping documentO
The system can accommodate at least three conventional types of warehouse storage structures. First is the storage pallet stored on a rack from which the entire pallet is removed to gain access ~o the containers stored on it. The system can maintain control over all containers on the pallet, regardless of whether they have different siæes or contain different quantities. Each pallet is classified with a code which designates ~he number of con~ainers, regardless of their shapes, ~hat it will be designated to hold. A record is maintained of how many conta~ners are on 1~ each individual pallet, and therefore it is known how many additional containers can still be accommodated. When a shi~ment is received, data are entered representing the number of containers that have been received and their sizes, and which pallet classification they should be assigned to. The system assigns the containers to a pallet with that classification, and furthex selects a pallet~ if possible, which can accomodate all of the containers from that receipt.
When all of the contain2rs have been removed from a pallet, its size classification is deleted. A new size slassification is assigned when new containers are placed on it. If it should happen that many pallets contain only one or two containers apiece, the system prints a report in-dicating these pallets, and other containers can then be consolidated on them. This creates additional empty pallet locations, which are desirable for receipts consisting of a large number of containers. If a shipment of containers is -2~-:L ~
already palletized, an entire incoming pallet can be routed to a pallet rack location that is emp y, and the system will automatically reclassify the container size for that palle~
locatiGn .
The second type is rack storage, which is an alternate method of storing kegs and other 1 arge containers.
I~ this method, only one particular container a~ a time need be removed, without disturbing the other containers on the rack. Each space on the rack th2t can hold a container is prenumbered, and the system maintains re~ords of each available location for the assignment for appropriately-siz~d containers as necessary.
The third type is shelf storage~ which is the normal method of sealed box storage in the B warehouse area~
The containers can ~e shelved one- or wo-deep, and may, in addition, be stacked two- or three-high. In any case, each space on the shelf that is capable of storing a container - is prenumbered and labelled and the system controls all container movement in and out of each space.
2~
- LOCATION LABELS
All parts entexing inventory go to the sealed B
section. The system prints location labels on demand, for placing new incoming containers in rack and shelf storage, each location label representing an empty location on the B
shelf or rack. ~abels are printed for pallet storage after descriptive information, including the number and si2e of the containers in the received shipmentt has been entered into the system.
An example of the information contained in such a label is shown below in Table l. In this examplc, let us suppose that this is the fifth label in a batch of eleven, ~ t~
running from location 11-22-14 ~o location 11-22-36.
Plainly, this series of location numhers is not continuous.
The location numbers that have been skipped represent locations that are already fU11G

Table 1 ~, . _ 7 A~Y CITY S 0005 @ ~ @@ @@ ~@@@ _ Q @ @ Q @ ~ ~ @ ~ @
@ Q H Q @ H @ @ Q
@ ~ @ ~ ~ ~ @
@@@ @@~ ~@@@ @@@@ @~@@ @@
11-22-20 ~OX 08/81 ",.,~,.
The data printed on the label include the location number in large and small characters, the city in which the warehouse is located, the month the label was printed, the size or type of container (in this case, for example, the word 7'box" indicates a standard ~ype of storage box), a serial number showing the position of each label in the sequence of the labels printed at that particular time (here, 0005~, a batch control l~tter ~in this casel the letter "5"), and a self-check digit (here, 7~ derived from the shelf location number by a conventional modulus 11 residue computation algorithm.
The location labels can ordinarily be printed in batches of ~rom one to several thousand, depending on the degree of activity. Each new batch of labels uses location numbers startin~ ~lhere th~ last batch stopped. Assignments 2~ depend to some extent on the type o~ container, as various areas within the warehouse ac~ommodate di~ferent sizes and shapes of containers. Sub~ect to this limitation, the system proceeds in assigning locations continuously throughout the entire warehouse, thus assigning each new batch of received con-tainers to -that area for which the longest time has elapsed since the empty spaces in that area were last filled. The result of this process is a built-in bias favoring a closer grouping of similar boxes, while still within the principle of random close-packed storage.
The result is increased economy, both in initially shelving a receipt, and in pulling a plurality of containers of a similar -type, as might be required for a large customer order.
PRODUCT IDENTIFICATION ~ABELS
At the time of receipt of goods, another pressure-sensitive label, called a product identification label, is printed by a printer 41 under the control of the computer, in addition to the location label. Both labels are affixed to each box or container going into stock. This identification label shows the part number, description, order date, vendor number and purchase order number (which is used as the control number throughout the life of the container and the goods).
Referring again to Table 1, the purpose of the serial number is to provide a convenient determination of the number of containers in each batch. The roles of each of the other numbers on the location label will be discussed further helow.
TRAVELER SUPPLEMENT
Referring to Table 2, there are seen the data contained in a "traveler supplement", which is the document governing the receipt of pertinent information for each container as it is entered into the system. The data in the illustration correspond to the data in the previous , ~' ', .

examples. Note that the location numbers for full Table 2 Order ~ E0100150 Part # AlKAO2G

Complete Pcs./Box 10,000 # Boxes 10 ~tal Pcs. 100,000 Boxes ~6 Fractional 8OX: Pcs. 2000 Shelf position S 1~-22-36 Count: Complete Boxes 100,000 Practional Box 2,000 Total received 102,000 boxes, the location number for a fractional box, and the batch control letter all correspond to the location numbers discussed above.
When the B locations assigned for a given received item are ~ntered into the system, although all the locations are listed on the traveler supplement, as shown in Table 2, only the first and last of the locations for a given group of complete containers need be entered, in this example 11-22-14 and 11-22-35. There is no limit to the number of locations in such a group that may be thus entered r as the computer, having assigned the labels, retains its record of which locations are empty until such input data are received. The only requirements for making such an input are that the same quantity must be in each container in the group, the quantity per container must be known, the number of containers must be indicated, and further, the batch control letter must be given. The batch control letter indicates ~o ~he comDuter in which of its label~printing runs it allocated these stora~e locations to this particular i~coming shipment. The system is ~huc enabled to skip over any locations, even if they may be empty, which were not assigned the same batch control letter by a label-printing run.
- Note that a specifis batch control letter, a shelf position number, and a quantity have been listed for the last fractional box individually, after the inc~mins shipment has been allocated to an initial ten boxes, each containing 10,000 pieces Possiblyp an excess shipment was received of 2,000 pieces. 9ecause this container had an odd quantity of items, its shelf posi ion and contents were required to be input separatelyO
Under this structured data entry system, errors made at the time a shipment is received and shelved are minimiæed. The dat~ entered by the warehouse personnel, namely the first and last location numbers, the contents of each container, and the number of containers, must be correct or the entries will not be accepted by the sys~em.
i~or example, if the correct data were 10 containers ~rom locations 11-22-14 to 11-22-35, but the operator entered 11-22-13 instead of 11-22-14, the system would either indicate that location 11-22-13 was already filled or that there were not 10 available locations from 11-22-13 ~o 11-22-35.
Although the system can function with individual received containers each containing different amounts, if the operator separately enters data for each container~

useful economies are obtained, as explained above, when all containers except the last one for a particular incoming shi?ment, either originally or after repacX~ging, are filled -~8-33 411.

wi~h the same qusntity of goods. The last remainin~ parts after this uniform packaging compose the contents of the only partially filled box. This sy~tem thus require~ the entry of only two sets of data for the received shipmen~9 one for all of the filled boxes, and the other for the last partial box. If, however, it is desired to ~tore ~e goods in the ~endor's no~-uniform con~ainers, any number of entries may be required for the shipment, depending on the number of differQnt quantities ~ontained in the respecti~e containers.
If inc~ming parts are to be stored in the vendor's containers, and if the incoming part counts can be ~eri~iPd quickly, the internal repacka~ing step can be eliminatea . completely, and location la~els can be printed on a custom basis. In this case, one entry is made to tell the computer system the total quantity received, and another entry is made of ~pecific containèr dat~. The specific container data include the quantity per container, and the number of containers for each yroup of containers that has diferent 2~ quan~ities~ Since most shipments in practise have the same quantity in each container, only a single entry of this type will usually be required. When the data entry is completed, the system prints a single label for each container, incorporating bokh the description and location data.

ORDER PROCESSING
An overview of the features for entering and filling customer orders will now be givenO The operator uses one of the input-output devices to enter the customer account number and each quantity and part number for the order. The system displays the customer name and item descriptions on the CRT screen o~ the input-output device _~9~

a~ ~ .L 1 for visual ~erification. Prices can be generated by the system or entered by the ~perator. The otal sale5 and cost amoun~s are upda~ed ~n the screen as each item is entered~
The system will immediately allocate inventory, if available, or report necessary backorders, bc>th on the screen at time of entry and on a printed daily rep~rt.
Orders may be entered for immediate, same-day shipmen~, next-day shipment, or shipment at a :Euture date. In-structions can al50 be entered so that shipment will n~t ~e lQ made until all items in an ord~r are ready and can go or~
a single shipment. The warehouse documents will not be printed until the parts are available, and the due date, if any, has been reached. Thus, any changes or cancellations of back~orders or future orders can be made easily.
If multiple warehouses are in the system, a code on the order will eithex permit or prohibit shipments to ~e made from other warehous~s, either to the ordering warehouse or directly to the customer, if parts are not available at the ordering warehouse. This feature, combined with the 2~ same-day delivery feature, permits satellite warehouses to operate with little or no inventory and still offer service better than that of many conventional systemsO
In picking B containers for customer ordersJ a choice of two picking strategies is available, depending on the size, weight, and number of the containers beins picked.
Either a sinyle set of picking instructions can be printedt in warehouse location sequence, for all containers to be shipped that day, or sepàrate picking instructions can be printed, also in warehouse location sequence, for each order. The former method will require an additional operation to combine the containers for each ordcr but only a single traverse ofthe warehouse will have to be made for that ~ay's work. The computer greatly simplifies this alternative.
A separate pressure sensitive picking label is printed for each container to be "pulled" (retrieved from storage). Each label lists the warehouse location of the container to be pulled, the quantity, item number and description of the parts therein, the customer name and order number, and the cubicle number assigned to that customer's order.
The computer furnishes an additional fail-safe control to ensure that the correct container is being pulled.
As it has been described above, when the parts are first received the computer designates the warehouse location for each container by printing a pressure-sensitive location label to be placed on the front of each container. In addition to the ware-house location number, a sel~-check digit (modulus eleven is preferred) is also shown. When the container is to be pulled, the pressure sensitive picking label described above also shows this self-check digit. This second label is pasted on the container next to the first label, and before the shipment is made, a circle is drawn around both self~check digits to confi.rm that they match. Depending on the number of digits in the warehouse location nun~er, it is believed that this self-check digit will detect all but about one in ten thousand errors.
After ~ and B containers are allocated to shipments by the system (the allocation process will be discussed below), usually at the end of the day for routine orders, and once or twice in the afternoon for rush orders, the computer prints documents directiny the warehouse personnel to pull the assigned containers. These documents are as follows:

33~

one shipping document (packing list) for each ~ustomer ~rder~
one master warehouse picking order in wareh~se location sequence listing all items incl~ded on all the ~ustomer orders.
- one labe~ for each B container going directly to the customer.
- one lab~l for each B container going into A, one label for each partial quantity going to the customer from the A ~ontainer~
A flow chart cf the system and method for retrieving items for ~n order is shown in Figurç 3b~ At 120a, 120b, 120c, and 120d, the shipping document, B to-customer la~els, B-tu-A labels, picking list; and A-to-lS ~ustomer labels are prepared and distributed ~o s~ck workers. At steps 121a, 121b, and 121c, the shipping document is placed in the cubicle area 31, and it is determined from the shipping document and the presence or - absence of B-to-customer labels whether items are to be retrieved from B for customer shipment. If ~o, a worker takes the labels to B, pulls the containers, attaches the labels to the boxes, and confirms that the check digits match. At 122, if no ~ parts are needed, the B boxes with labels then go directly to shipping 32. If, however, items are required from A, then at 122 the B container await them in a h~lding space 31a, whi~h may be ~ cubicle 31, an overfl~w ~ubicle associated with a primary assigned cu~icle, or a separate selected shelf or cubicle space.
The retrieval of A stock is carried out as follows. Working from the B~to-A labels prepared at 120~, a clerk retrieves at step 123 any B stock that is necessAry for replenishing insuffic;ent A supplies and delivers it to the vicinity of the counting tables 30. Another clerk, working from A-to-customer labels, pulls the A containers required at step 124a. A w~rk~r at a counting table 30, guided by the picking list (received at step 120c), prepares ~3~-the cus.omer order, which is then placed in the cubicle 31.
Any excess items after order preparation are returned to A
stock at step 124b.
The ~ items and shipping document in the cubicle 31 are matched at step 125, and the container numbers in parentheses on the documents and labels are compared to ensure that all necessary A items have been pulled. If the document indicates that s items also were ordered (step 126), they are retrieveA from the B holding space 31a, matched with the A items and shipping document, and sent to shipping.
If no B items are needed at step 126, the A items and shipping document matched at step 125 are sent to shipping directly.
An assembly-line approach is used in the warehouse to fill the orders. Typically, three stock workers can process an average day's orders in an existing system which actually uses the invention. Worker #l ~irst brings the B
boxes to the counting table. Next he or she pulls the s boxes going to the customer and puts them in the shipping area if no parts from A are needed, or puts them in the holdiny space 31a near the A cubicle 31 i~ additional A goods were requixed, and then goes to the shipping area ~o pack early orders, which now are ready for shipment. Working from the A-to-customer label, Worker #2 brings the A containers to the counting table and returns any finished A containers to their proper warehouse locations. Gravity conveyors going to and from the counting table allow several containers to accumulate to await their turn to be counted. Worker #2 can also take any bags or boxes packed ~or the customer order and put them in their Aesignated cubicles.

Customer orders for fewer than four items are placed in the cubicles so that when the items are ready they can be put into a shipping carton and sent promptly, by another conveyor, to the shipping area. Customer orders for four or more items are assPmbled when the master warehouse picking order is finished, or almost finished. Worker #3 is stationed at the counting table, and working from the master warehouse picking order, counts the required parts for the customer order. If the quantity in the ~ container is insufficient, Worker ~3 opens the B container which was brought to the table, and attaches the pre-existing A box control card to it. (See Figure 7 and discussion below.) That container then becomes the A container and is returned to the A warehouse location. When all items are counted, Worker #3 can help with the remaining consolidation of the customer orders having four or more items.
The customer's packing slip, which guides the assembly of the shipment, shows the cubicle number and the number of containers of each size that have been pulled for that shipment. As an additional check, the container picking labels are sequentially numbered so that each container is accounted for when assembling the shipment.
Further, each container is itemized on the customer packing slip along with the sequential container numbers, to enable 2~ the customer to check the receipt quickly and efficiently.
For large numbers of orders, additional workers may be added where needed, but the three functions preferably should remain discrete. If the parts coming from the open con-tainer do not have to be scale-counted, a single person can perform the functions of Workers #2 and #3.

_E ALLOCATION PROCESS
In entering a customer order into the system, a sales worksheet is first filled out, containing basic information such as customer name, order date, customer 7 . /
-34a-33~

account number, part number, and a ~hash total~ n which is the total ~f all the i~em ~uantities that will be entered for the ~rder. Working from the workshee~, a system operator enters the account number and ~he system displays S the customer's bill-to and ship-~c addresses. The buyer name and preferred method of shipment are usually ~tored on a master account record, and will automatically be displayed by the system. If desired, they can bs changed at will for a particular order. The operator also enters the cust~mer lû order number and the hash total. ~he sys~em will verify ~hat the hash to~al matches the total of the individual item quantities, when these quantities are later entered. The system records the order date and then assigns a ten-digit:
order number.
The operator enters the item number of each item, and the system displays the descriptions of the items for visual verification. The operator then enters the item quanti~y, and may also enter the price. If prices are entered, they are then checked to confirm that they fall 2~ within pre-established minimum and maximum amounts. If desired, the system can also generate prices on the basis of previous arrangements with the custcmer.
As soon as the order is entered, items that are in stock are allocated for shipment from the nearest warehouse to the customer, and retrieval and shipping documents are printed with the next processing batch.
The basic computer memory file maintained by the system is the customer or vendor order file. This file has a header record for each order, which is chained to a series of detail records. In addition to ordinary customer orders, the system can also accommodate certain vendor orders known as "process orders," in ~hich basic items are sent out for -35~

further processing. After proces~ing, ~uch par~s are received back into stock under another part ~umber. ~he procedure for sending out a process order i5 the same as that for a shipment to a customer~
Also, eertain orders are for transfers to xemote sales locations or branch warehouses, either to repleni~h -local stock, or for subsequent shipment to a customer.
These orders are also handled in th~ same fashion as ~us~
tomer orders, except for the -hipping address. Instead of producing an invoice when the part~ are shipped, however, each container is allocated to a predesignated shelf loca~
tion at the receiving branch and entered directly into the branch's financial and other records.
Each item to be included in a given customer o.rder requires a minimum of three detail records, in the followinq sequence:

- item quantity, price, and part number record.
- one or more description records.
- one shipping record for each shipping point~
(To each of these shipping records, one or more con~ainer records will later be add~d by the system.) 2~
Each customer order also contains order status codes, shipping record sta~us codes, and shipment routing codes as follows:
ORDER STATUS CODES

0 = Cancelled (no shipments made) 5 = ~ntry in progress ~ not yet allocated l0 = Allocat~d order - being changed or on hold - 15 = Allocated order awaiting accounting approval only 20 - Allocated order ~ awaiting accounting purchasing approval 30 = Allocated order - awaiting purchasing approval only 50 = Allocated order - ready to print first 3~ shipping document 5i = Allocated order (at least one shipping document printed) ~ temporarily displayed for change S0 - Allocated order ~at least one shippin~

33~

document printed) - rsAdy for shipment or more printing 3 Al~ocat~d ordex - order complete = Allocated order ~ final invoice printed SHIPPING RECORD STATUS CODES
- O = Cancelled 1 = Stock transfer shipping summary ready to print 2 = Stock transfer shipping summary printed 3 = Stock transfer labels printed

4 = Stock tr~nsfer shippPd = Customer shipping summary ready to print 6 Y Customer shipping summary printed 7 = Customer la~els printed ~ - Customer shipment made 9 = Invoice~ printed 1~
S}~IPMENT ROUTING CODES
C - Ship direct to ~s~omer W - Wai for designated shipping date and then ship to customer S = Stock transfer to first designated . wareh~use and then ship to customer FL~W CHARTS
.
~ iqure 4 is a flow chart showins the routine followed by the system for selec~ing orders that are ready for shipment from the active open order file. ~he system reads the header record at 37, and at a step designated 51 determines whether the order status code is 50 or 60 (i.e.
whether goods have been allocated o the order and at least part of the shipment is ready for printing of shipping documents, and shipment~. At step Sla, the first item detail record is read, and at step 51b, it is determined whether the detail record ~eing read is a shipping re~ord that has been prepared according *o the allocation of the goods to the customer order. At step 52, if the status of the shipping rec~rd is either CS or Sl (stock is ready ~o be shipped to a customer or to a designated warehouse), then a finder record pointing to these imminent shipments is created at 53 and 54 for eac~ shipping warehouse, so that when the shipping documents, container allocations, and 3 ~

~icking order for a given shipping warehouse are being prepared, it will only be necessary for the system, as directed by the finder record, to read ~hose orders ready for shiDment, warehouse by warehouse. The creation of the finder records7 in a batch mode, eliminates the need either to write in and update such finder records in an on-line mode as orders are entered, or to read the entire active open srder file each time shipping documents and processing orders are prepared~for each particular warehouse., Additional economies ari~e from the fact that there may be more th~n one shipping warehouse for a given order. It would be quite in~fficient to read a single incomplete order more than once, if separate passes through the order file were madQ
After the orders ready for shipment have been d~signated, the s~stem prints a picking listt which lists each it~m to be pulled from warehouse section A in shelf - location sequence. When more than one customer order calls for the same item, the quanti~ies for each order are Iisted separately, one after the other. In addition to the picking list, the system prints several typQs of pressure-sensitivo labels. These labels and the picking list coordin-c c~ c~
a' e the shipment o~ containers from both the sea~c~box B
area and the open-~ox A area.
~5 Containers are ordin~rily pulled from B stock in a single sequence ~or each day. Containers are pulled either for direct shipment to a customer, or to replenish the A
shel~ stock when an open A box i5 anticipated to be in-sufficient for the orders currently being processed, or to be shipped directly to a branch warehouse for a special customer order or to replenish the branch' 5 authori~ed stock. If the order is to be shipped to a branch, the B

shelf location at the receiving warehouse is assigned at the same time the container to be pulled at the shipping ware-house is aesignated. In this way substantially complete ~race-ability is still maintained, receiving warehouse labor is greatly reduced, and errors associated with the transfer are almost completely avoided.
Further improvements in accuracy are brought about by the use of the modulus 11 self-check digit, as described above. When the picking list is prepared, a label is printed by the system calling for that shelf location with the same self-check digit as was included on the original location label when the item was shelved. This lable must be placed on the box by- the warehouse worker next to the original location label. The two self-check digits must match, to ensure that the correct container has been pulled.
It is preferred that the stock clerk circle the two self-check digits, in order to demonstrate that they were verified.
Also printed on every A-to-customer and B-to-customer label, as well as on the customer order shipping document, is the basic cubicle number in which the various boxes that comprise the customer shipment will be placed. The order is then sent to the shipping department after all items for a given customer order have been pulled and placed in the cubicle. Also, in order to further control the consolidation of the order, each A-to-customer and B-to-customer label is sequentially numbered, and this container number is also printed on the customer packing slip, which lists in detail each A or B package for that particular order item. This list, when received by the customer, greatly facilitates the customer's receiving function, and offers substantially complete and permanent source 33~

traceability as well~ ~e systém also prints a ~ummary of all bags and boxes from the A~ B, and R areas that go ~ut for each customer order.
Figure 5 is a flow char~ showing the logic followed by the system in designating boxes from the B
section to be allocated to cus~omer orders, and ln ~l-locating the order as between the ~ and B sections of the warehouse. At step 55, the system reads the "shipping record" quantity into an order search quantity field. At 1~ step 55a, the system determines whether the quantity of the item in the A section, if any, i5 sufficien~ to fill ~h~
ord~r. If so, then at 55b, an appropriate quantit~ of the `. items in the A container ~ allocated to the order, by an allocation process which will be explained further below, and the order all~cation i5 ended. If the A quantity is not sufficient, however, no items from A are allocated at this ti~e. Rather, at steps 56 and 57, the system determines the quantity in the oldest B container containin~ that item, if any. If the B box quantity is equal ~o or less than the customer item quantity ~stsp 581, that box is allocated against the customer order and the customer order quantity is reduced accordingly at step 59O If the revised order search quantity has thereby gone to zero, the search is ended (step 60). If not, the new customer order qua~ity is compared again at step 56 to the next-oldest B container, and the process is repeated until the customer item quantity is found (at step 58) to be less than the quantity in the oldest B container.
When this happcns, the system then refers to the A container for the item, if any (step 61). If the quantity in the A container is found (step 62) to be equal to or grcater than the customer order quantity, then the items in --~0--3~

~he A container are allocated in an appropriate amount to the customer order at step 63, and the order allocation process is ended.
If, however~ the qu~ntity in the A container is S found to be less ~han the revised customer order quantity, ~hen at step 64 all of the parts in the A container are allocated ~o the C~UStGmer order, and ~hen at step 65 the system performs a subtraction to determine the remaining required order search quantity. At step S6, the system determines whethex additional items exist in the next-oldes B container. If no~, the system determines whether ~he required goods are present in the receiving section R, at steps 67, 6B, and 69/ If the R section contains in-sulficient goods, then at step 70 an error message is given, as the allocation process should not have begun if the warehouse did not contain sufficient goods in the A, B, and R sectionst If, however, it is determined ~hat the B
section does contain sufficient stock (step 71), then the system directs the oldest unallocated B container to be 2~ moved ~o ~he A container location and become the new A
container for that item of inventory ~step 72). Then, returning to step 63, the remaining parts needed for the customer order are allocated from the new A container.
The processes of allocating A, B, and R records to a customer order and moving the B record data to the A
record area gDnerate additional ins~ructions to prlnt labels to direct this movement around the warehouse. The al-location of A, B, and R records also adds a container record to the detail record string following each shipping record.
Also, each alloc~tion or movement updates the container record in the item detail file to show the order reference 3 3 ~

number ~:o which the container has been assigned, and the B
and A records by she~ f lo~atit)n are updated as well.
The s~quence of steps f~llowed in allocating goods from an A container to a customer order is shown in detail in the flow chart of Figure 6. At 76, the order search quantity is subtracted from the quantity shown as the A
container contents in ~he item detail file. At 77 the A
quantity in the item detail file is split into an allocated part and an unallocated part to reserve the proper quantity for the order, and at 7B a similar entry is made in the shelf location file. At 79, a record sh~wing the items to be withdrawn from the A container is add d to the detail recoxd string following the shippi~g record, At 80, the sequence number of the last filled spaee on the A box control card is i~cremented by 1 to determine the space on the card in which this order will be entered. (See Figure 7 and discussion below.) If the result is divisible by 20, then at 81 and 82, the system creates a record to direct the printing of a new label with updated sequenee num~ers for the A card. Step 83 assembles the data to be printed in the warehouse r~trieval instructions ~shown in Table 4 and discussed below), and step 84 assembles the data for printing an A-to-customer label (see below~

CUSTO!IER ORDER DOCUMENTS
Table 3 shows two customer orders printed by the system of the illustrated embodimentt for fictitious cus'comers ABC Hardware and DEF Electri~ (lines 136). P~t lines B7, it i5 seen th~t the first order concerns the same item AlKA02G seen previously when it was oxiginally received under purchase order E0100150 (see line 8B~. The order d~cument, on the line designated 88, shows that one quantity 33~

of goods c~mprising 3,000 items will be drawn ~rom box 80-01-lS in zone A. On the line designated 89, the document shows th~t one full con~ainer containing 10,000 units will be drawn from zone B ~t location 11~22-19o The summary at the bottom of the order (lines 90-91~ shows that one container from A and one container from B will be required for the shipment. 5eparate container numbers, shown in parentheses, are assign~d f~r each group of A and B
containers shown on the cus~omer packing and shipping documents (lines 88-89).

Table 3 Item Zone DescriP~ Qty.Ord- QEY~ Price C
[86] Cust. ABC Hardware Order # 0181226001 l87]AlXA02G 2-56 Hex Nut 13000 13000 8.00 45 [88](13 A 80-01-15 3000 E0100150 ~89](1~ B 11 22-19 10000 E0100150 190] A B Total 104.00 191] 1 1 13000 __________________~____ ________~___________ ___ _________ ___~
~86~Cust. DEF Electric Order # 0181226002 .
[87]AlKA04G 4-40 Hex Nut 5000 5000 10~00 19 1921~1) A 80-01-16 1000 E0100113 [93)(2) A 80-01 16 4000 E0100113 190] A B - Total 50~00 [91] 2 0 5000 This number will match the number shown in parentheses on the A and B labels themselves, as will be further discussed below. Each A ~nd B total number of oontainers will also add up to the \umbers in the summar~ lines 90-91. Also, on line 87, e~bb~ number 45 is designated for the assembly of this shipment. In the summary, a dollar figure shows the order value, if the shipment i5 to be insured, and the hash total is also shown, for use in determining the shipping weight and freight charges. A data entry is made at the time of shipping showing that this hash total was shipped, whereup~n an inYo~.ce ~s automatically sent to the customer.
In the order document ~or DEF Electric, the order calls for 5,000 pieces of a single item. Because the A
container initially contained only 1,000 units ~see line 92) two separate listings were made. B~tween ~hese tw~
- withdrawals from the A container at location 80-01-16, a container was brought from the 3 section to replenish the A
supply. Thereafter, a second withdrawal of 4,300 items was made from that container (see line 93). Thus the container numbers in parentheses indicating the sequenc2 of with-drawals from ~ach section of ~he warehouse are seen to have increased from one to two. The source designations in the "Qty.Ord." column at lines 92-93 were the same for the tw~
withdrawals from A, but this need n~t have been the caseO
An invoice corresponding to a shipped order i5 automatically generated by the system after the warehouse has reported the shipping weight and shipping charges. In the event that an order is not shipped exactly as printed, 2C~ an override feature allows the system operator to indicate what was not shipped and why. If there was a missing B box ~r a shortage in the A box, for example, this is immediately shown on a management report. If a customer cancels an item, or the entire order, ater the order was printed but before it was shippQd, this is reported to the system. The system then requires that each A and B container not shipped be reassigned t~ a new B location, thus verifying that all stock items have been accounted for.

PICKING LIST
Table 4 shows the picking list, which controls all movement into and out of the A location for two stock items, 33~

AlKA02G and AlKA04G. These picklng instructions are printed in A ~helf location sequence, as shown in the column designated 110~ They include all customer orders to be pulled in a given batch. This example shows that two ~ustomers have ordered the irst item and one cus~omer has ordered the second item. Also seen (colO 111) are the source designations, i.e., the original purchase orders under which the items were ohtained, and the ~u}by-numbers for assembl~ of each customer's order. In column 112 are seen the sequence numbers for posting this order ~n ~h~ A
box card, which will be explained further below.

able 4 Whse. Order #W0181~2?01 Ttem Zone Descri~ QtY.Ord. Tot.Qty. C Seq.
- [110] tll3] 1111] [112]
194~ AlXA02G 2-56 Hex Nut 80-01-15 8000 E0100150 1114] 018122fiOOl A ABC Hdwe. 3000 SOOO 45 247 1115] 0481226009 A Acme Prods. 2000 3000 72 243 195] AlKA04G 4-40 Hex Nut80-01-16 1000 E0100113 [116] 0181226002 A DEF Elec. 1000 0 19 814 [1171 B 17-14-39 9000 goooE0100113 815 ~118~ 0181226002 A DEF Elec~ 4~00SOOO 19 816 Table 4 also illustrates how the system handles the situation in which the quantity of parts in the A box is less than the quantity on the customer order, and further illustrates a situation where the A quantity is suf~icient.
This is shown by means of the starting and running A box totals in column 113.
With respect to the item shelved at location 80-01-15, note (line 94) that the opening quantity in the A

box was 8,000 items. Af~er pulling an order of 3,0~0 item~
(see line 114), the running balance is ~een to be 5,000.
~hen on li~e 115 ano~her order of 2,000 items is pulled, leaving the final balance of 3,000 items.
With respect to the item shelved at location 80-01-16 (line 95), the situation is more complex. There was an openiny item count ~f 1,000 units in the A containerO
After the removal at line 116 of the entire 1,000 units, satisfying part of the customer order, the remaining balance is zero. At line 117, it is seen th~t a box from zone B, originally shelved at B location 17-14-3~, containing ~,000 items, was brought to the A ~ection, leaving a new balance of 9,000. Then, 4 ,oon items were removed from the box fill fxom A the remainder ~f the orderl leaving a final balance in the A box of 5,000 units.
The system would generate a B to A label to control the transfer of the container from B location 17-14-39 to A location 80-01-16. The contain~r itself i not brought directly to the A shelf. Instead it is brought 2~ ~o the vicinity of the counting table at which the parts in the old A box are counted and removed. The remaining parts needed for thP customer order are taken from the new ~ox from B, which is then returned to the A shelf with the A box card (discussed below) attached~ The data on the B-to-A
label would comprise the item number AlKA04G, the batch control number li.e., the original order number~ E0100113, c ~
the e~ number 19 in which the customer order (for which the box was brought from B) will be assembled~ the self check digit 6, which must match the self-check digit printed on the original B label, the sequence number 815, which is the line on which the posting of the removal of the goods will be made on the A box card (see below), the letter B to 33~~11 designa~e the B section, the quantity 9000 in the container, the A and ~ warehouse locations, ~nd khe date on whi~h the ~ontainer was stocked. This label i~ pasted on the B b~x that is to be brought to the A area when it is anticipated that the original ~ box will be insufficient to fill the day's customer ordersO This box is brought to the A section at the beginning of the work shift~

"A" CONTAINER CONTROL CARD
Figure 7 shows an A box card, which provides ~he ultimate control of the A inventory, tracking all m~vement in and out of the A storage location. This particular example shows, among other things, a withdrawal from A
storage correspondi~g t~ the data on lines 114 and 115 of Table 4, i.e., filling the orders for ABC Hardware an~ Acme Products. ~t the top of the card is seen an A box card label 133 showing the part number 134, the part iden~ificati~n 135, and the shelf location 136> At 137 are seen the first two digits of the ten sequence numbers for the ten 2r, transactions to be entered in the left-hand column on th~
box card, and at 138 are the corresponding digits for the right-hand column.
Accordingly, in this example, the first transaction on the card is sequence nu~ber 240, the second is sequence nu~ber 241, and co forth. After ~his card is filled, the sys~em will anticipate that the next transaction will take place on line 260 (more generally~ a line number divisible by 20~, and a new A box card label will be printed.
The data are entered on this card by the stocX
workers, but oach entry is directed by the comput~r system.
~he card c~rries the xunning balance in the box, exactly as it is shown in the computer file, 5V a physica~ inventory count can be take~ at any time in the confidence that al~
customer ordPrs that may be moving through the warehouse will have been ~aken into account. Since the entries are made by the ~oxkers themselves, personal accountability and motivation ~o be correct ~re enhanced. Any discrepan~ie~
must be resolved in the warehou~e, and cannot be blamed on a remote machine or someone in another department, Explaining this example in more detail, it is seen at line 139 that the contents of the box went to zero on th~

date 8-3-81. At that time, a box containing 10,000 pie~es was brouqht from B lo~ation 11-22-14. This information appears on the line designated 140, which the system has assigned sequence number 245. Order number 0181347005, the filling of which begins at the line designated 139, called for 4,000 piecesO Two thousand pieces were in the A ~ox to start, and then 2,000 more pieces were removed from the B
box that was brought to A, leaving a balance vf 8,000 pieces (see line 141~.
At line 142 (sequence number 247) is seen order n~mber 0181226001, which in Table 4, line 114, was seen to be for ABC ~ardware. Three thousand items were removed, ~eaving a balance of 5,000. The sequence number (2471 of this transaction is shown in column 112 of Table 4. ~ike-wise, at line 143 (se~uence number 248~ is seen the trans-action for Acme Products, order number 0481226009, which i5 shown a~ line 115 of Table 4.
Note that on B-4-81, when these latter two ~rders were pulled, hoth the opening balance of 8,000 at line 141 of Figure 7, and the sequence numbers 247 and 248 at lines 142 and 143, must match the opening balance in column 113 33~

and the ~equence numbers ~ co~ ~ ~112 of the picking list shown in Table 4. If these data do not match, then the wrong par~s are being pulled, and at 144 it i5 seen that the worker has entered an initial to confirm that all these

5 cross-checks ha~e been made~
~he system also prints A to~customer and-- B-to-customer labels. They are used to pu~l the corre~t par s from the A or B sections and then are pasted o~ the ~ox or bag going ~9 the customer to identify it before shipping. ImPortant data on the B-to-customer label are the B location number and the self-check digit, which must match those on the original B l~cation label. Other data on the labels are the customer name, the customer purchase or~ler number, the quantity in the particular co~tain~r, the total lS quantity of this item heing hipped for this order, the part number, the description of the part, the original vendor order r~r~ ~b~\e_ number, and the ~ number. If requested by the customer, the customer's part number or other information could be shown instead of or in additisn to the system' B description. Also, 2C~ the container picking numbers appear, enclosed in parentheses.
Each such container number to be included in the customer shipment is shown on the shipping documents, and labels beariny each of the container numbers must be present to ensure that the entirety of the customer's order is being packed for ship~
ment. An A-to-customer label contains the same information, except for the self-check di~its, which are not used in the A section.
In practice, then, the R-to-customer label is pasted on a B box that is being sent in full against a customer order, while an A-to-customer label is pasted on a bag or other small contai~er containing parts taken from an A box for a customer order. The quantity in such a bag will _~9_' ~-qll always be smaller than the quantity in a full A or B box, because if a larger quantity had been needed, a full B box would have been designated. If the quantity i~itially oontained in the A box was less than the quantity needed f~r the customer ordPr, two A-to-customer labels are printedO
One calls for the quantity remaining in the origin~l A box and th~ other calls for the quantity to be taken from the new A box brought from the B section. There cannot be more than two labels for a given shipment from A.
~his use of separa~e labels on the ~wo A
quantities making up a customer order permits lots with differ~nt origins to remain unmixed, thus improving the handling of quality con~rol problems, minor variations in finish, and so forth.
A and B labels can also be prepared for an A or B
container going to another branch or sales location. The up~er portion of such a label contains the receiving bran~h name and the shelf location at that branch.
These various labels and lists allow a stock picker to fill customer orders by either working in the warehouse aisle (with or without a scale), or taking the A
cartons off the shelf or rack and bringing them to a counting table where the required parts are laid out. The pickinq order is printed in sequence by shelf location, as are ~he A-~o-customer l~bels. Therefore, if counting tables are used, the stock pickcr can put the A-to-customer labels in the open containers as he takes them from the shelves and puts them on the gravity conveyor, allowing the person at the counting table to work from the picking order. The 3~ containers are then taken off the counting table and returned to the shelf, still in shelf location sequence, therehy assuring that all containers are returned to their 33~

proper places. Since every shelf loca~ion in A i~ filled, maintaining the basic s~quence ensures tha each cont~iner will go back ~o the right place.
On the other hand, if i~ems are to be removed from ~he A ~on~ainers in ~he aisle to fi71 the customer order, then the stock picker can work with both ~he pic~ing order and A-~o-customer labels. In either event; all controls still operate to guarantee tha~ the correct parts are ~hipped.
1~
n A~ SE CTION STO~GE STRl~C TURE

.
Figure 8 shows a typical A shelf storage section.
Two shelves 101 are seen to be packed two deep, with boxes 102 and 103, among others, and two shel~es are packed one-deep with, e.g., a larger carton 105. On the front edge of each shelf 101 are two shelf posi~ion labels 106, Dne or box 102, and another for box 103. Each of shelves 104 has only one label 107. A box control card 108 of the type shown in Figure 7, with a label 109, is attached to each ~ox 2C~ on the shelves. As can be seen in he figure, the shelves are filled with cartons. This minimizes the floor space required for the A section, and helps to maximize the efficiency of stock clerks working in this section.
Two different sizes of standardized containers are shown in Figure B~ The standard sizes for the containers can vary, but sh~uld be determined so that integral numbers of ~he containers will substantially fill each shelf or other storage co~lpartment. This maximizes the utilization of storagP space in the A section, and in the B section as well.
On the basis ~f the various forms and documents already discussed, shipping takes place in a con~entional -51~

33~

manner. ~n addition, the system flags multiple orders for the same customer so that they may be combined, if desired, into a single shipment.

SECURITY AND ACCUR~CY
A number of controls over inventory security and h~ndling accuracy oDer~_~ simultaneously under the discipline of this system. One is ~hat the total quantity going onto the B shelves plus the quantities shipped to l~ cus~omers must ma~ch the quantity previously entered as the vendor receipt quantity. ~nv variation will indicate either an incorrec~ container count or a vendor shortage or overage.
These variations, when theY occur, are printed on a m~nage-men~ report for further review.
The system also tracks vendor receipts that are allocated in whole or in part to customer orders while they are still in ths "R" section. If thQ original input to the syst~m that is entered after ~ackaging, e.g., on the traYeler supplement (Table 2~, does ~ot reflect an allowance ior the exact customer quantity that was allocated, it indicates ~ither that goods for a customer order are still in the packaging or receiving department or that an order was shi~Dcd from the wrong receipt. In either case, the problem must he r so1ved before the system will accept the en~ry.
In the warehouse, placement of all incoming t~\~
containers in their correct locations is~guaranteed since each sPac~ in each section must be filled or otherwise accounted for. If a container is put in an incorrec location, it will be discovered when anoth~r incoming container is directed to ~e put on the shelf, most likely either the same or the next day. To facilitate the pr~cess, each shelf position is marked with its permanent shelf 3 J ~
$~
location number which matches the location number printed on the label attached to the containex~
If incoming items are to bs st~red only in the vendor's containers, the individual container tracking embodied in this system is especially valuable D e~en if the ~ _~c ~ O ~s quantitie in the inGoming ~e~ are n~t carefully-chec~ed~
. "
Since each container i5 independently controlled, any discrepancy in the vendor coun s will quickly be brought to light and tracked to it5 . ource. ~uality control pro~lems7 1~ as well, can be pinpointed under this system, allowing customers who receiv~d defective items to be alerted, and avoiding additional shipments.

RANDO~ STORAGE IN_nB" SECTION
Many advantages flow from the random storage and individual container control in the sealed-~ox B stock ar~a.
~I~ r ~
First, marlagement has~complete conkrol over every item stored in the system. Whether at the cen ral warehous~
or at a branch warehouse, management, i~ an interactive 2~ mode, can call up every container loca~ion for a given item, or scan any given range of shelves in a warehouse to -~ee the items on those shelves. The system also prints out a complete audit trail for all containers~ A status report each month lists each container in stock for a given item.
2~ This report is printed in both item number and shelf number sequence~ A transaction report lists the movement for that month of every B and A container, also in item number and shelf location sequence.
Total security of the inventory is virtually 3~ assured with this system. The combination of the self-check digit, the convenient periodic inventory taking, and the fact that la ge numbers of specifically designat~d -~3-J.5~

containers are pulled daily, assure that any mysterious disappearences will come to light quickly. With this early warning and pinpoint ~ontrol~ the cause of the problem can usually be found quickly, and further errors of this type can be elimi~a~ed. This control is difficult or impossible to achieve with a system ~hat only tracks a sinyle order quantity of an individual stock item. Since ~nly sealed co~tainers are going onto and coming off the shelves or racks, no ~omplex tasks need to be done and the assigned personnel can be limited to one or two people. If the volume of.activity i5 too great, separate zones can be established to limit the responsibility of the personnel, who will exercise no discretion in any event. When only one or two people have access to an area, a discrepancy can ~e easily detected, and the integrity of the inventory will be vPry high.
Since in effect all incoming parts lose their product identity and assume a location identity,~skilled warehouse personnel are not required~ Virtually no err~rs are ma~e and a new stock worker can be productive in less than one hour. As a convenience, labels showing the sh21f, bin, or pallet location numbers are pasted on the li~ ~f each shelf, bin, or pallet. These location numbers will exactly match the numbers shown on the location labels prin~ed by the system for incoming container~.
Substantial warehouse labor is saved by directiny new stock to designated vacant locations, since the ware-house clerk does not have to look for an empty location and then assign it tG incoming goods. Furthermore, when çon-tainers are to be put away, the system assigns them to agroup of locations in close proximity to one another.

realistis estimate of the shelf utilization under this system is 90 to 95 percent, owing to the close control of incoming and outgoing goods and vacant spaces.
secause of this control, physical inventory of tens of thousands of containers can be taken in a very short time. Typically an inventory of about 50,000 containers can be verified in under two hours by eight two-person teams.
The inventory can be taken at any time without cutting off the shipment of orders. The system indicates which containers should be there, and which should not. Locations earmarked for current shipments or spaces reserved for incoming transfers are specially flagged on the worksheet.
These locations do not have to be checked since they will be verified by the current transact~on.
The relatively simple search strategy of the invention achieves a great deal by way of controlling and expediting the ~illing of the orders. First, the system automatically ships the oldest inventory. Any items with a finite shelf life can be flagged on a special report before their expiration dates. Also, by pulling the A boxes in shelf location sequence, the walking needed to fill the orders is reduced to the absolute minimum, and by grouping the items in this way, all customers' requirements for a given item are filled at one time, and the same box .is not pulled twice to ~ill customer orders in one batch. Since each A location has been assigned, there are no empty spaces on the shelves except for the few boxes absent during retrieval~
Therefore, when an A box is taken off the shelf to fill an order, there will be only one space or very few spaces to which that box can be returned, thus minimizing errors in returning the boxes to their proper places. To further assuxe the correct shelf placement, the system will print, on demand, special lables to be pasted on the lip of the shelf under each A

kox. This~label will match the label the system prints to go on the face of the ~,:.., 33~

box. It {s a ~imple matter ~o verify that the label on the face of the. A box matches the label on the lip of the shelf directly ~eneath it. The data ~hown on both labels include the shelf location and ~he item numbPr and description.
S The information on the A control card also serves many purposes. It pre~ents the wrong item from being ~ shipped, since the card on the box from which the parts are taken must have an opening balance and a preprinted sequence number that match the data printed on the picking list.
-10 Immediately upon beginning to make the necessary entries on ~he card, the stock worker will immediately see if ~he wrong box has been pulled. The probability that another box will have the same opening balance and preprinted sequence number is virtually nilr Because of the manual entries on 1~ the card, including the clerk's initials, warehouse personnel are closely identified with the integrify of the inventory balances. Here again, only one or two wor~ers are needed to be assigned to a predefined A stock area.
Further, since a new closing balance must be pos~ed on an A box card each time parts are removed, a count veriication can be made at will without allowing for other customer orders that may be in process at the time J Thus, no elaborate cutoff must be established if a physical inventory is to be taken~ In fact, no inventory at all may be necessary since each time the contents of ~he A box go to zero there is an automatic verification against the balance in the computer record. If the parts that the computer lists as'in the A box are not really there, no items will be available to fill the customer order, and the clerk will io - have no choice but to report this fact to the system, which in turn will print a mangement report reflect.ing this condition. In a traditional syste~ if parts are missing from a box, the clerk would simply take more parts from the ~ext box on the shelf and would probahly not even know that a shortage existed.
The provision of ~he picking list and th~ A
control card for use in tandem is particularly advantageous, although not necessary ~o the broad aspects of ~he ln-~ention. It is convenient to use the picking list to yuide the stock worker's removals of items from the A container, rather ~han a customer purchase order document or a shipping list, in order to achieve the step-by-step matching of the quantities entered on the control card and the theoretical quantitie~ tracked by the system that is for accurate inventory control.

One thing that can be done if a shortage is discovered in an A box is to check the counts in B boxes that arrived in the same lot to be sure that the correct amount was received and put into the box initially. If the initial amount is found to be correct, the next step could be to check the customer orders that were removed from that 2~ A box since it was brought from B. If it is a fairly active item, perhaps only a few days or weeks have elapsed since the box came from the B section. In this case the actual shipping weights of orders shipped since th~t time could be compared to their theoretical weights. This would uncover an overshipment to a customer that may have been accidental or otherwise.
This control system is especially well suited to inventories of high value, and inventories where it is important that the balances carried by the computer accurately reflect the balances on the shelf~ It will control branch and main warehouses in the same manner, and management terminals can display ~he contents of each and t~t~

33~

every A and B box at any warehouse by both item number and shelf number. The system is interactive and permits the transfer of full or partial containers between warehousesD
When parts are shipped between warehouses, the system assigns the shelf location at the receiving warehouse at the time it selects the container to be pulled from the shipping warehouse. This permits all data associated with that container to be carried along no matter how many times the parts mcve from warehouse to warehouse.
Considering the bread~h of usefulness of the inv~ntion for warehousing, the terms and expressions tha~
have been employed herein are used as terms of description and not of limitation, and there is no intention in the use of such terms and expressions of excluding any equivalents of the features shown and described or portions thereof, bu~
rather it is to be recognized that various modifications are possible within the scope of the invention as claimed.

-57a

Claims (13)

THE EMBODIMENTS OF THE INVENTION IN WHICH AN EXCLUSIVE PROPERTY
OR PRIVILEGE IS CLAIMED ARE DEFINED AS FOLLOWS:

1. A method of storing and retrieving relatively small objects of diverse characteristics, said method comprising the steps of selecting from said objects at least some of those to be retrieved most frequently, storing limited quantities of said objects in first containers at a first location in a storage facility, said first location being near a retrieval station, storing additional quantities of said selected objects in other containers at a second storage location in said facility, said second location being more remote from said retrieval station than said first location, storing in the memory of a digital computer data presenting the quantities of the objects in said first containers, using said computer to compare said data for one type of said selected objects with the required quantity of objects needed to satisfy a particular retrieval requirement for said one type of objects, thereby determining whether the quantity of said one type of object stored at said first location is sufficient to satisfy said retrieval requirement, and, if so, retrieving said required quantity from said first location, and, if not, retrieving said required quantity from said first location and/or said second location.

2. A method as in claim 1 in which said containers are of standardized sizes, the containers at said first location being open, and those at said second location being sealed.

3. A method as in claim 1 in which containers of a standardized size are used for the same objects stored in the first location and the second location, and including the step of utilizing one of said other containers from said second location to replace a container for the same objects in said first location when the latter container is empty.

4. A method as in claim 1 in which said objects are stored in containers of standardized sizes, there being a plurality of storage compartments at said first location, and including the step of determining said sizes so that an integral number of said containers will occupy each compartment.

5. A method as in claim 4 including the step of maintaining said compartments occupied except when said containers are removed during retrieval.

6. A method as in claim 3 including the step of transporting to said retrieval station a first container containing said given one type of said selected objects from the first location and a second container containing the same type of objects as the first container from the second location, emptying said first container, removing objects from said second container, combining the objects from both containers to fill the retrieval requirement, and returning said second container to the former location of said first container.

7. A method as in claim 1 in which said determination step includes comparing said required quantity with the quantity of objects of said one type in the oldest of said other containers containing said objects of one type, and either using said oldest other container in its entirety to satisfy said requirement, or using said oldest other container to replace an empty one of said first containers of objects of said one type.

8. A method as in claim 1 including storing in said computer memory data representing the location of each type of object in each of said first and second locations, and the locations of the empty spaces in said second storage location, and directing the storage of incoming items in available empty spaces on a random basis, so as to maximize the utilization of the storage space in said second storage location.

9. A method as in claim 1 or claim 4, in which said objects are received in non-standard containers, and are measured and repackaged in standardized containers prior to storage.

10. A method as in claim 1 including the step of using said computer to compute trip instructions for a worker travelling through one of said locations to retrieve a number of different items for different retrieval requests.

11. A method as in claim 1 in which said objects are selected from the group consisting of fasteners and electronic components.

12. A method as in claim 3 including the step of attaching to each container at said first location a record member, marking on said record member the quantity of objects remaining in the container to which it is attached, and attaching said record member to a container from said second location when it replaces one at said first location.

13. A method as in claim 12 including the step of using said computer to compute trip instructions for a worker travelling through one of said locations to retrieve a number of different items for different retrieval requests, listing in said instructions the quantities to be marked on said record member, and the locations on said record member where said quantities are to appear, and utilizing said locations and/or said quantities to verify the identity of the container from which a retrieval is being made.