Clustering warehousing strategy: what are its advantages and disadvantages?

A clustering strategy usually has its foundations in a fixed-position strategy, where each item in the warehouse has its own fixed location. Nevertheless, the logistics manager organizes the shelves and determines the positions so that the goods that are most often removed together are stored as close as possible to each other. These are typically complementary products, for example skis and bindings. As a result, the strategy shortens the routes of warehouse workers, but on the other hand, it places high demands on the organization of the warehouse.

Clustering, as one of the few warehousing strategies, takes into account the relationships between goods. To be most effective, these relationships should be prioritized over stock date or even product expiration date. In the optimal case, the warehouse worker takes out one item and then reaches for the next one, which is currently closest. Regardless of stock or expiration date.

A pure clustering strategy is therefore not very suitable, for example, for food retailers or in general, warehouses, where the expiration date is important. On the other hand, logistics managers can combine the strategy with, for example, the FIFO approach, although then the clustering is no longer as effective.

Advantages of clustering strategy

The strategy optimizes the length of logistics routes. Warehouse workers do not have to go to two different places in the warehouse for products that are most often removed from storage together, but they always find them in one place, or in two places very close to each other.

Such optimization logically speeds up order picking and leads to warehouse workers being able to do more work in the same amount of time. Especially during peak seasons, a clustering strategy can provide a lot of relief to warehouses.

Disadvantages of clustering strategy

A clustering strategy, on the other hand, leads to lower warehouse occupancy. Warehouse workers cannot store goods that currently have their positions filled, even if otherwise there is enough free space in the warehouse.

However, the biggest limitation of this strategy is the accuracy of the data. For the strategy to work, the warehouse manager or logistics manager needs to know which products are removed together most often and which ones least. In the case of larger warehouses with tens of thousands of items, the connections of which are intricately intertwined, the design of an efficient warehouse layout is often difficult. In addition, the links between goods can change over time, which is all the more difficult in warehouses with a dynamically changing assortment.

For these reasons, the clustering strategy (similar to fixed position) is particularly suitable for warehouses

• with a permanent and rather low-turnover assortment,
• with a lower number of items
• and with more or less constant inventory for each item.
• warehouses where product finalization/configuration takes place before shipment