I see 3 common mistakes in establishing requirements for distribution centers and warehouses.

It’s about the design, and location selection.

You don’t have to make these mistakes.



Warehouse Design: 3 Common Mistakes


This week we are talking about warehousing and three common mistakes that I see businesses make when they’re going to move to a new distribution centre.

So I’ve had the good fortune to be helping companies for the last 26 years. I think in establishing their requirements for distribution centers, warehouses, uh, helping them design them, move and so on. And I see three common mistakes when the company is going through this process. So I thought I’d share them with you this week so that you don’t have to make these same mistakes and these three are very common. What are they? And right at the end, I’ll give you some links to other information as well on the channel which will help you if this topic is of interest.

So what are the three common mistakes?


1. Design Warehouse Layout


The very first one, which is probably the most common, is that a lot of companies will come to us, us being Logistics Bureau. And say, “Oh, we, we’ve bought a bit of land. We’d like you to design a warehouse for us or they say we’ve rented a new warehouse and we’d like you to come and design the internal storage and handling”. That’s fine! What do you think is wrong with that approach? They’ve obviously thought, you know, “Ohh, here’s a bargain in terms of land or warehouse rental. And I have to say right at the moment, it’s very hard to find good land for warehousing and good facilities for renting warehouses particularly in Australia. So what is wrong with that approach? Well, they’ve kind of got the cart before the horse. The reason I say that is they’re probably outgrowing their existing facility and quite rightly they’re looking to upgrade to a bigger facility. They’re going to build it or go and rent one. But have they actually gone through the process of working out exactly how big it’s going to be, not just in terms of footprint, but height, what the internal storage is going to look like because that impacts the footprint as all manner of things to work through.


2. Not Really Catering Enough for Growth


This is not quite as common, and people generally don’t get this quite as wrong, but it’s still a fairly common mistake and that is not really catering enough for growth. And I don’t just mean in terms of space. So if you look at your own business, for example, if you look back over the last 10 years, what has been the change in profile in your warehouse operations in terms of the amount of products stored, in terms of you know the temperature requirements? Do you have chill ambient frozen, you know has frozen grown more than chill? These sorts of things. What about the range of products, the actual stock keeping units, the skews, how many you know have you gone from 10,000 skews to 20,000? Has your order picking profile changed and so on? So you need to think in terms of future just not and this is quite common you know the CEO will say “Oh, well let’s just allow for 7% compound year on year growth”. Yeah, but is that with the same skew range and the same inventory terms? Or is it going to be an increase in skew range or a decrease in skew range? So you really need to sort of test that and make sure that that’s fully understood.


3. Future Profile in Detail


And then kind of links with that is mistake number 3 is getting down to that future profile in detail so it is not just a case of, you know, we need 10% more storage space. How many skews are you actually going to have? Are you going to have pick locations and reserve storage locations? So all of that, let’s say we’ve got, you know, 1000 skews and we’re going to have 1000 pick locations. We’re going to have 1000 reserve locations. So we’ve got 2000 storage locations. Depending on inventory profile, we might need two or three locations per skews. Now we’ve got 3000 reserved locations and 1000 peak locations. Just conceptually see where this is going. Do we expect a greater skew profiles. So we’ve got 1000 skews now we’re going to go to 2000. It’s not just about capacity. It’s about pick slots. So how are we undertaking our picking? Are we doing it all by hand at ground level, maybe from carton life storage or of pallets? That type of thing! Are we using some technology? Are we picking from higher levels to go from 1000 pick slots to 2000 pick slots is a huge impact in a warehouse and you need to design that in right at the beginning.


To delve deeper into the topic, watch the complete video above!


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Contact Rob O'Byrne
Best Regards,
Rob O’Byrne
Email: [email protected]
Phone: +61 417 417 307
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