What is the 7 Storage Technique?
The 7 Storage Technique is a fundamental warehouse organisation method designed to optimise space utilisation, improve picking efficiency, and enhance inventory management. This technique represent different approaches to arranging products within a warehouse or distribution centre, each with specific advantages suited to particular operational requirements, product characteristics, and business objectives.
Understanding and implementing the appropriate storage technique can dramatically impact warehouse performance, labour productivity, and overall supply chain efficiency. Modern warehouses often combine multiple storage techniques within a single facility to accommodate diverse product portfolios and varying operational demands.
The 7 Storage Techniques Explained
1. Fixed Location Storage (Dedicated Storage)
What it is: Each product has a permanently assigned storage location that remains consistent over time. The same item always returns to the same designated spot after being picked.
Best suited for: Operations with stable product lines, experienced warehouse staff who memorise locations, and situations where picking speed is prioritised over space efficiency.
Advantages: Simple to understand and implement, eliminates confusion about where items belong, enables fast picking once staff learn locations, reduces training time for experienced locations, and facilitates visual inventory checks.
Disadvantages: Inefficient space utilisation as empty locations remain reserved for out-of-stock items, requires more total storage space, inflexible when product mix changes, and difficult to optimise for seasonal variations.
Real-world application: Commonly used in automotive parts warehouses, pharmacies with controlled substances, and facilities handling hazardous materials requiring specific storage conditions.
2. Random Location Storage (Floating Storage)
What it is: Products are stored in any available location when received, with the warehouse management system (WMS) tracking the exact position. Items of the same SKU may be stored in multiple locations simultaneously.
Best suited for: High-volume operations with diverse product catalogues, warehouses with advanced WMS capabilities, and operations requiring maximum space efficiency.
Advantages: Maximises space utilisation by filling all available locations, provides flexibility to accommodate fluctuating inventory levels, optimises storage based on product velocity and characteristics, and adapts easily to changing product mixes.
Disadvantages: Requires sophisticated warehouse management system, completely dependent on technology for location tracking, increases complexity in picking operations, and demands rigorous adherence to system processes.
Real-world application: Widely used in e-commerce fulfilment centres, third-party logistics (3PL) operations, and large distribution centres with thousands of SKUs.
3. Zone Storage (Zone-Based Storage)
What it is: The warehouse is divided into specific zones, with products assigned to particular areas based on predetermined criteria such as product category, velocity, size, or special handling requirements.
Best suited for: Operations with distinct product categories, facilities requiring temperature-controlled zones, and warehouses optimising picker productivity through zone picking.
Advantages: Organises inventory logically for easier management, enables specialisation of equipment and staff by zone, facilitates zone-based picking strategies, supports different storage methods within each zone, and improves inventory accuracy through focused management.
Disadvantages: May create imbalances in space utilisation across zones, can lead to congestion in high-activity zones, requires careful planning to define optimal zone boundaries, and needs periodic rebalancing as product mix evolves.
Real-world application: Common in grocery distribution centres (frozen, refrigerated, dry goods zones), electronics warehouses (small parts zone, large items zone), and facilities with specialised storage requirements.
4. ABC-Based Storage (Velocity-Based Storage)
What it is: Products are positioned based on their picking frequency or sales velocity, with fast-moving items (Category A) stored in the most accessible locations and slow-moving items (Category C) in less convenient areas.
Best suited for: Operations with clearly differentiated product velocities, warehouses focused on minimising travel time and maximising pick rates, and environments with Pareto distribution of demand.
Advantages: Significantly reduces picker travel time and distance, maximises picking productivity by placing popular items near packing areas, improves order fulfilment speed, reduces labour costs per pick, and optimises use of premium storage locations.
Disadvantages: Requires regular analysis and relocation of products as velocities change, involves periodic physical reorganisation of storage, creates ongoing maintenance overhead, and may not account for product relationships or order patterns.
Real-world application: Essential in e-commerce fulfilment where order velocity varies dramatically across SKUs, retail distribution centres serving stores with bestsellers, and any high-throughput operation.
5. Family Grouping (Product Affinity Storage)
What it is: Products that are frequently ordered together are stored in close proximity to reduce travel time when picking multi-item orders. This technique considers order patterns and product relationships rather than individual item velocity.
Best suited for: Operations with predictable order patterns, businesses selling complementary products, and warehouses where multi-line orders are common.
Advantages: Reduces total picking distance for orders containing related items, improves picking efficiency for multi-line orders, enables batch picking of related products, supports cross-selling opportunities during manual picking, and creates logical product groupings.
Disadvantages: Requires sophisticated data analysis to identify product affinities, becomes complex as the number of products increases, needs regular updating as buying patterns change, and may conflict with other optimisation criteria like velocity.
Real-world application: Used extensively in fashion retail (tops near bottoms, accessories near clothing), hardware stores (related tools and supplies), and industries with kit assembly or project-based orders.
6. Size-Based Storage (Dimensional Storage)
What it is: Products are stored according to their physical dimensions, with storage locations designed to accommodate specific size ranges. This maximises space efficiency by matching product size to slot size.
Best suited for: Warehouses handling products with widely varying dimensions, operations focused on cube utilisation, and facilities with diverse storage equipment types.
Advantages: Maximises cubic space utilisation by eliminating wasted vertical space, allows for optimal selection of storage equipment for each size category, reduces product damage from improper storage, improves stack stability, and enables efficient use of specialised handling equipment.
Disadvantages: Requires accurate dimensional data for all products, may increase travel distance if size and velocity aren't aligned, complicates slotting decisions when combined with other criteria, and needs different equipment for different size zones.
Real-world application: Critical in furniture warehouses, building materials distribution, any operation with extreme size variation, and automated storage systems with size-specific compartments.
7. FIFO/FEFO Storage (First-In-First-Out / First-Expired-First-Out)
What it is: Products are arranged and picked in a specific sequence ensuring the oldest inventory or earliest expiration dates are selected first. This technique uses specialised racking and flow systems to enforce proper rotation.
Best suited for: Operations handling perishable goods, products with expiration dates, industries with strict lot traceability requirements, and businesses minimising obsolescence risk.
Advantages: Prevents product expiration and spoilage, reduces waste and obsolescence costs, ensures product freshness for customers, meets regulatory requirements for certain industries, improves inventory turnover, and maintains brand reputation.
Disadvantages: Requires specialised racking equipment (flow racks, gravity systems), increases initial capital investment, may reduce storage density, demands rigorous receiving and put-away discipline, and can be challenging with mixed lot sizes.
Real-world application: Mandatory in food distribution, pharmaceutical warehousing, cosmetics and healthcare products, and any industry where product dating affects usability or compliance.
How to Choose the Right Storage Technique?
Selecting the optimal storage technique requires careful analysis of multiple factors:
- Product Characteristics: Consider dimensions, weight, value, fragility, shelf life, and special handling requirements of your inventory
- Order Patterns: Analyse order composition, typical lines per order, order frequency, and whether single-item or multi-item orders dominate
- Velocity Distribution: Understand the sales distribution across your product range and whether you have clear fast, medium, and slow movers
- Space Constraints: Evaluate available square footage, ceiling height, and whether you need to maximise density or accessibility
- Technology Capabilities: Assess your warehouse management system sophistication, automation level, and tracking capabilities
- Labour Factors: Consider staff skill levels, turnover rates, and whether you need simple or complex processes
- Growth Plans: Factor in anticipated inventory growth, product line expansion, and changing business models
Comparing the 7 Storage Techniques
| Technique | Space Efficiency | Picking Efficiency | System Complexity | Implementation Cost |
|---|---|---|---|---|
| Fixed Location | Low | High (when learned) | Low | Low |
| Random Location | Very High | Variable | High | Medium-High |
| Zone Storage | Medium-High | Medium-High | Medium | Medium |
| ABC-Based | Medium | Very High | Medium | Low-Medium |
| Family Grouping | Medium | High | High | Medium |
| Size-Based | Very High | Medium | Medium | Medium-High |
| FIFO/FEFO | Medium | Medium | Medium | High |
Storage Techniques in E-commerce Fulfilment
E-commerce operations typically benefit from combining multiple storage techniques to handle diverse product catalogues and high order volumes:
Hybrid Approach: Most successful e-commerce fulfilment centres use a combination of random location storage for maximum flexibility, ABC-based slotting for bestsellers, and zone storage to separate different product categories or fulfilment speeds.
Dynamic Slotting: High-performing e-commerce warehouses implement dynamic slotting where product locations are continuously optimised based on real-time velocity data. Category A items automatically migrate to prime picking locations as their velocity increases.
Forward Pick Locations: Fast-moving items are stored in forward picking areas using fixed or ABC-based storage for rapid access, whilst bulk inventory uses random location storage in reserve areas to maximise space efficiency.
Returns Handling: Dedicated zones for returned merchandise with quality inspection areas allow for efficient processing before items return to active storage locations.
Multi-Channel Requirements: Zone storage separates inventory for different sales channels (B2C, B2B, marketplace) when service level agreements or packaging requirements differ.
Storage Techniques in Traditional Warehousing
Conventional warehousing and distribution operations adapt storage techniques to their specific operational models:
Bulk Storage: Wholesale distributors often use zone storage combined with size-based techniques to handle pallet-level inventory efficiently with appropriate material handling equipment for each zone.
Cross-Docking Operations: Facilities focused on cross-docking use zone storage to separate inbound and outbound staging areas, with minimal storage actually employed for inventory holding.
Cold Chain Logistics: Temperature-controlled warehouses mandate FIFO/FEFO storage within temperature zones, often combining this with ABC-based slotting to minimise time spent in cold areas during picking.
Manufacturing Support: Warehouses supporting manufacturing operations frequently use family grouping to store components for specific production lines or assemblies together, streamlining kitting and line-side delivery.
Retail Distribution: Regional distribution centres serving retail stores typically employ zone storage by product category, ABC-based slotting for high-velocity items, and fixed locations for store planogram compliance.
Implementing Storage Techniques Successfully
Start with Data Analysis: Before implementing any storage technique, conduct thorough analysis of your current operation. Gather data on product velocities, order profiles, product dimensions, and current space utilisation. This baseline establishes the foundation for informed decisions.
Phase Implementation: Rather than overhauling your entire warehouse overnight, implement storage techniques in phases. Start with a pilot area, measure results, refine the approach, and then expand. This minimises disruption and allows for learning.
Technology Enablement: Invest in warehouse management systems that support your chosen storage techniques. Advanced techniques like random location storage are impossible without robust WMS capabilities for location tracking and directed picking.
Continuous Optimisation: Storage techniques aren't "set and forget." Establish regular review cycles to analyse performance metrics, adjust slotting, reclassify product velocities, and reallocate storage as your business evolves.
Common Mistakes to Avoid
Organisations implementing storage techniques should be aware of these frequent pitfalls:
- Mistake: Implementing complex techniques without adequate WMS support
Impact: Leads to operational chaos, inventory inaccuracy, and picker confusion - Mistake: Neglecting to update slotting as product velocities change
Impact: Negates efficiency gains as fast-movers end up in poor locations over time - Mistake: Choosing techniques based on trends rather than operational needs
Impact: Creates misalignment between storage approach and actual business requirements - Mistake: Insufficient training for warehouse staff on new storage methods
Impact: Results in poor execution, resistance to change, and failure to realise benefits - Mistake: Ignoring product relationships when focusing solely on velocity
Impact: Increases travel distance for multi-line orders despite optimising individual SKUs - Mistake: Over-engineering storage techniques for small, simple operations
Impact: Adds unnecessary complexity and cost without proportional benefit
Measuring Storage Technique Effectiveness
Track these key performance indicators to assess whether your storage techniques are delivering desired results:
- Space utilisation percentage (occupied cubic footage versus available capacity)
- Average picker travel distance per order or per line item
- Pick rate (lines picked per hour or units picked per hour)
- Order cycle time from release to shipment
- Inventory accuracy by location and overall
- Percentage of picks from primary versus reserve locations
- Product damage rates during storage and handling
- Expired or obsolete inventory as percentage of total value
- Labour cost per order line picked
- Putaway time and accuracy metrics
Future Trends in Storage Techniques
Warehouse storage is evolving rapidly with technological advancement and changing business models:
AI-Driven Dynamic Slotting: Artificial intelligence and machine learning algorithms are enabling real-time, predictive slotting that anticipates demand changes before they occur, automatically repositioning inventory for optimal picking efficiency.
Robotic Integration: Autonomous mobile robots (AMRs) and goods-to-person systems are changing storage technique considerations, as robotic systems can access any location equally efficiently, reducing the importance of proximity-based techniques.
Micro-Fulfilment: The trend towards urban micro-fulfilment centres is driving ultra-dense storage techniques that maximise vertical space with automated storage and retrieval systems in small footprints.
Omnichannel Complexity: Growing omnichannel requirements are pushing development of more sophisticated zone and allocation techniques to manage inventory serving multiple channels from shared storage.
Sustainability Focus: Environmental concerns are influencing storage design with emphasis on energy-efficient lighting, heating/cooling, and material handling equipment placement to minimise energy consumption.
Conclusion
The 7 Storage Techniques provide a framework for organising warehouse inventory in ways that optimise space utilisation, picking efficiency, and operational performance. No single technique is universally superior; the optimal approach depends on your specific products, orders, constraints, and objectives. Most successful operations combine multiple techniques, applying each where it delivers maximum benefit.
Whether you're managing an e-commerce fulfilment centre, operating a traditional distribution warehouse, or overseeing specialised storage operations, understanding these fundamental storage techniques enables you to make informed decisions about warehouse layout and organisation. Success requires initial analysis to select appropriate techniques, proper implementation with adequate technology and training, and ongoing optimisation as your business evolves. By thoughtfully applying these storage techniques, organisations can achieve significant improvements in productivity, accuracy, and customer service whilst controlling costs.
