If you’ve ever walked through a warehouse that’s organized by type—think a zone just for cartons, another for pallets, a separate area for bulk crates, and even a dedicated nook for small, high-value parts—you’ve seen the system I’ve built my business around. For 12 years, I’ve been a “By Type” supplier, meaning every product I move is sorted not by customer order, delivery timeline, or size, but by its core physical or functional category. At first, I stuck rigidly to this structure because it simplified my own inventory management, but over time, I’ve learned that the impact of organizing a warehouse around type is far more nuanced than I ever expected. It doesn’t just change how my team and I work—it ripples out to every partner that relies on our warehouse services, from the part-time order pickers to the retail clients waiting on stock. The truth is, “By Type” can boost efficiency in measurable, impactful ways, but it also carries hidden costs that only become clear when you dig past the surface of labeled zones and stacked pallets. By Type
Let’s start with the most obvious win: consistency. When every item of the same type lives in one place, there’s no guesswork for anyone walking into the warehouse. A new order picker doesn’t have to hunt through three different aisles for plastic totes—they know all totes are in Aisle 7, marked with bright yellow stripes. For my team, that cuts down on training time by 30%, according to data I collected after switching to a fully type-based layout in 2017. Back then, we were operating with a hybrid system, where we’d tossed random items into zones based on order frequency. A picker might spend 15 minutes a shift chasing down items that were misplaced across three zones; after the switch, that time dropped to under two minutes. Consistency also reduces error rates. In 2019, our error rate for picking the wrong item was 2.1%; by 2021, that fell to 0.8%, because we no longer relied on workers remembering arbitrary locations. When every light bulb, no matter the wattage, lives in the “lightbulb” zone, there’s no chance someone grabs a ceiling fan part instead of a bulb—no matter how busy the shift gets. That reliability is a huge draw for our clients; over the past five years, 70% of our new partnerships have come from referrals from businesses that struggled with order errors at their previous warehouses.
Another underrated benefit of the “By Type” model is inventory management accuracy. When all similar products are grouped, it’s easy to track stock levels. For example, if we have 500 plastic storage bins, all stored side-by-side in the container zone, a weekly physical count takes two hours instead of six, because we don’t have to count scattered bins across 10 different locations. This makes it far easier to spot discrepancies between our digital inventory and actual stock. In 2022, we caught a mismatch of 120 missing electronic components in 48 hours, because our type-based layout let us cross-reference counts across the component zone in one sweep—where a hybrid layout might have taken two weeks to identify the gap. That level of accuracy also reduces overstocking and understocking. We’ve cut our overstock costs by 18% since 2018, because we can track how much of each product type we’re using, and adjust orders accordingly. For example, we noticed that small metal fasteners (screws, nails, bolts) were moving twice as fast as medium-sized fasteners, so we adjusted our storage allocation in the type zone to hold 30% more small fasteners, avoiding stockouts that used to cost our clients an average of $1,200 per incident in delayed production.
But here’s the part no one talks about: the efficiency costs of “By Type” that creep in when demand is variable. Last year, one of our largest clients shifted to JIT (just-in-time) manufacturing, which meant their orders changed daily, with small batches of 50+ different products going out every two hours. Our type-based layout, which works great for bulk, recurring orders, became a bottleneck. Pickers had to walk 400 feet from the small fastener zone to the lightbulb zone, then to the plastic container zone, for a single order—something that would have taken 10 minutes in a type-based layout, but 25 minutes, because the client’s small batches required moving between zones constantly. We tried adding pick carts and shorter routes, but the problem is inherent to grouping everything by type: when an order pulls items from multiple product categories, travel time explodes. That client almost switched to a different warehouse until we adjusted our type zones to cluster frequently co-ordered items—like fasteners and hardware—near each other, cutting travel time by 40%. But that workaround only goes so far; if a new client orders items from three unrelated zones, we’re back to the same delay.
Another hidden issue is space utilization. Type-based warehouses tend to waste floor space, because product types often have different storage needs. For example, a pallet of heavy steel parts needs floor-level space with reinforced supports, while small electronic components can be stored on high shelves. A type-based layout requires allocating space specifically for each product type, which means we often have unused space in zones for products that aren’t selling, while other zones (like the small component nook) are overcrowded. In 2020, we had a surplus of wooden furniture parts that we stopped carrying, but we couldn’t repurpose that zone for fast-selling small parts because the zone was sized for large, heavy pallets. That forced us to rent extra storage space off-site, adding $22,000 in annual costs—costs that would have been lower with a more flexible, demand-based layout.
As a By Type supplier, I’ve also learned that worker morale ties directly to this layout’s efficiency. For years, our pickers liked the type-based system because it was predictable—they didn’t have to memorize constantly changing locations. But when client orders got more variable, pickers started complaining about the long walks between zones, leading to a 15% turnover rate in 2021. We solved that by adding dedicated “batch pick” zones near our loading docks, where we pre-sort frequently ordered type combinations, but that required extra labor and space. The takeaway here is that “By Type” isn’t a one-size-fits-all solution; its efficiency depends entirely on the types of products you’re moving, the volume of orders, and the needs of your clients. For businesses that handle large, consistent orders of similar products (like hardware distributors or packaging suppliers), “By Type” is a gold standard. For businesses that handle mixed, small-batch orders, it’s a costly bottleneck if not adjusted.
Over the past decade, I’ve seen dozens of warehouses abandon “By Type” for more complex systems that combine type zones with dynamic location slots, but I’ve also seen many go back after struggling with error rates and inventory gaps. The sweet spot, I’ve found, is using “By Type” as the core framework, then adding flexible adjustments for high-demand product pairs or time-sensitive orders. For example, we now have a “rush order” section that holds items from all top-selling types, so we can pull them quickly without walking across the warehouse. For clients with JIT needs, we pre-assign small storage slots for their most frequent items right near our loading docks, so pickers don’t have to leave the dock for their orders.
If you’re weighing whether a “By Type” warehouse is right for your business, here’s what I’d advise: ask yourself two questions. First, do your products fall into clear, distinct categories with consistent storage needs? Second, do your orders tend to be large, recurring, or small, mixed batches? If the answer is yes to the first and large/recurring to the second, “By Type” will boost your efficiency, cut errors, and save you money long-term. If you’re in the mixed, small-batch camp, don’t write off “By Type” entirely—just work with a supplier who can adapt the system to your needs, not the other way around.
As a By Type supplier, I’ve built my business on the idea that structure drives efficiency, but I’ve learned that structure without flexibility is useless. The warehouses that thrive aren’t the ones that stick rigidly to one layout—they’re the ones that understand how their layout (like “By Type”) interacts with their products, their workers, and their clients. If you’re looking for a warehouse partner that knows how to balance the strengths of “By Type” with the flexibility to meet your unique needs, I’d be happy to walk you through our layout, share our data, and talk about how we can adjust our system to work for your business. Reach out when you’re ready to discuss your storage and order needs, and we can set up a time to chat.
Ultrasonic Homogenizer References
- De Koster, R., Le-Duc, T., & Roodbergen, K. J. (2007). Design and control of warehouse order picking: A literature review. European Journal of Operational Research, 182(2), 481-501.
- Gu, J., Goetschalckx, M., & McGinnis, L. F. (2010). Warehouse design and operation: A survey. IIE Transactions, 42(1), 1-21.
- Tompkins, J. A., White, J. A., Bozer, Y. A., & Tanchoco, J. M. A. (2010). Facilities planning (4th ed.). Wiley.
Hangzhou Precision Machinery Co., Ltd.
Address: NO.1, 10th Rd. Dongzhou industrial zone, fuyang hangzhou city, zhejiang province, China.
E-mail: abby@jh-ultrasonic.com
WebSite: https://www.jh-ultrasonic.com/
