Is your warehouse full of pallets sitting on the aisle instead of up in the racks?
Do you need a bigger facility to cater for the forecast growth of your business over the medium to long term?
Is your warehouse operation inefficient?
Does your warehouse storage and layout design desperately need optimisation?
Is your current warehouse lease ending, leaving you to decide between staying put and moving to a new facility?
Perhaps it’s Time to Review Your Warehouse Design
If you answer yes to any of the above questions, it’s probably time to give your warehousing requirements a thorough review. That being said, it’s not always easy to know where to begin, so here are a few tips to help you get a well-structured, methodical, warehouse review/redesign process under way.
1) Understand the Design Objectives and Constraints
The first step in your review should be to determine and prioritise the objectives for your warehouse facility and operation. It’s also important to document any constraints that will impact your plans to meet those objectives.
For example, your company’s objective might be to achieve maximum operational productivity, to improve customer service, or perhaps to minimise capital expenditure. If you don’t plan to commission a new warehouse on a greenfield site, your plans might be constrained by the characteristics of an existing facility.
A clear understanding of objectives and constraints will provide you with the starting point for your design review, so it’s important to get them documented and to make sure all stakeholders are aware of them.
2) Know Your Operational Profile and Requirements
In order to maximise the benefits of your warehouse review, you should be completely familiar with the characteristics of all products that are to be stored.
The most important SKU characteristics to understand are as follows:
- Dimensions, weight, number of units per pack, pack dimensions, pack weight
- Pallet size, height, and weight
- Special handling needs and environmental/temperature control requirements
What are the throughput velocities of your products? It’s important to be familiar with the inbound and outbound history of each SKU, and to know how fast or slowly it turns around in your warehouse.
Order and picking profiles should be examined too. For example, is an SKU typically ordered by the pallet, carton, split carton, or individual unit?
In addition to profiling individual SKUs, you should try to look at the relationships between them. For instance, do you have two or more SKUs that are commonly ordered together? If so, you should plan to slot them close together to improve picking efficiency.
Another key factor in warehouse-design planning is the quantity of inventory you intend to hold, either in an existing or new facility. This means taking into account stock currently on hand, along with any plans for expansion. Stock-on-hand snapshots should be taken during peak, normal, and low seasonal periods.
When planning, remember also to consider requirements for specialised storage and processing areas, such as a production room or caged-off quarantine areas.
3) Storage & Layout Design
Having evaluated your operational profile, you should be able start thinking about warehouse storage media and the number/capacity of storage locations.
Will you fit your warehouse with standard racking, or do you see a need for more specialised apparatus such as carousels, or an automated storage and retrieval system (ASRS)?
Of course this stage of planning can become pretty complex, and it will often pay to seek advice from equipment suppliers or even engage a consulting firm to help you develop your storage strategy.
Whether you bring in some external help or go it alone, keep the following tips in mind when planning your new warehouse layout:
- Optimise flow by minimising the number of touches as SKUs pass through the warehouse
- Prioritise workforce safety when designing your solutions
- Model a few design options and determine the best solution through quantitative/qualitative comparisons
- Involve all stakeholders in the planning and design process to attain their buy-in
It will pay to make use of digital design and modeling software to help you arrive at an optimal warehouse layout and strategy. There are a number of very good applications on the market. These tools will help you design different solution-options to compare and evaluate. You might try any of the following three examples, or hire external specialists that work with them:
- CLASS (Cirrus Logistics Ltd):
- Commonly used by 3PLs, the CLASS software license is expensive but the application is user-friendly and provides 2D/3D views of your layout designs, including elevation views of storage media.
- CLASS allows users to design the layout of their warehouses ahead of commissioning projects and without disrupting current operations.
- CLASS delivers scale models and drawings that are clear and easy to understand.
- An AutoCAD software license is less expensive than CLASS. However, the application is less user-friendly and is typically used by engineers and racking vendors for design and specifications.
- Google Sketchup
- Sketchup is not specifically intended to be a warehouse layout design tool, but has the capabilities necessary for warehouse modeling and can generate perfectly good design visualisations. The biggest benefit of this tool though is cost, as the license is less expensive than either AutoCad or CLASS.
4) Document All Results and Assumptions
Throughout the warehouse planning and design process, you will gather a lot of facts and probably make a fair number of assumptions. It’s good practice to document all facts and assumptions, because this will help you recall how designs were derived. Your records will also prove useful for future layout reviews, which should ideally be conducted every couple of years.
Design with Competition in Mind
There are any number of reasons why you might wish to review (and perhaps redesign) the layout and operation of your warehouse facility, but they all boil down to the same thing—securing or increasing your company’s competitive advantage.
By taking a thorough and methodical approach (like the one outlined in this article) to warehouse design reviews and improvement plans, your company can extract maximum value from its facilities, removing many of the inventory management obstacles that inflate supply chain costs and ultimately erode profitability.