Warehouse Design – 5 Tips for Success

Efficient warehouse design is a key element of ensuring that material flow through the supply chain is achieved as quickly and as cost-effectively as possible. Gone are the days of ‘stores’ that simply had stock, and lots of it, piled high with limited thought to its expense.

Modern warehouse designs need to be super-efficient , handling the material throughput with speed and accuracy. To achieve this, detailed consideration needs to be given to every aspect of warehouse design, so in this article, we give 5 tips for success.

1. Order Picking – if you do nothing else, focus on picking

Of all the activities in the warehouse, order picking should be the primary determinant of design. In any warehouse, but especially retail operations, more than half of labour hours can be spent on order picking and furthermore, half of those hours will be spent on pickers travelling between pick and pack locations.

This fact has been the driver for automation and robotics in major e-commerce distribution centres. However, in terms of a modern warehouse design, rarely does a business have the volume, velocity, and revenue to get a sensible return on investment from advanced automation or robotics. This technology will ultimately come into the mainstream as competition increases and costs go down, but for the moment most businesses will need to consider more traditional options.

Aside from the spatial considerations of locating stock and activities efficiently, the key driver for picking efficiency is selecting the right picking methodology. Many warehouses operate discrete order picking i.e. one picker picks a single order. However, for higher volume operations there are other alternatives which may reduce the distance travelled and consequently order cycle times and labour hours.

These include zone allocation, where the picker is allocated to a zone in the warehouse and picks order lines of SKUs located in that zone only, and batch picking where a single picker picks multiple orders at the same time. Further variations also exist, such as wave picking and cluster picking. Whichever option you choose, the primary objective should be to reduce picking time.

2. Warehouse Management – get the right systems support

A Warehouse Management System (WMS) is crucial in any modern warehouse environment. Paper pick lists and stock location held on spreadsheets just don’t provide a platform for the efficiency needed to meet growing customer demands on order accuracy and speed of delivery.

The benefits of having the perfect warehouse layout design, with an optimally selected picking methodology, will be compromised on implementation without a fit-for-purpose Warehouse Management System (WMS).

There are a host of Warehouse Management Systems on the market that you can choose from, suitable for every size of operation and budget. However, due to the number of WMS available, and their varying functionalities and costs, you will need to produce a very clear WMS functionality specification before you go to the market. The specification should focus on three areas: interface, core capabilities, and output.

For the interface, you need to ensure that your specification prioritises that the WMS interfaces with your other management systems and does not require manual data entry or batch data processing, which will add both time and risk of error.

For core capabilities, you need to assess the activity requirements, typically around putaway, pick, pack, despatch, kitting, customisation, stock management, and returns. Finally, for outputs, you need to specify the labelling and despatch documentation requirements, along with KPI capture and management reports.

3. Operating Space – use the building’s height wherever feasible

There is an increasingly limited stock of warehousing in the UK. The planning timelines are constraining the rate at which new builds are coming to the market, and that constrained rate is well behind the demand rate. This is driving both lease and purchase prices up and means companies need to get ever more inventive with the space they already have.

Slow-moving products, bulk products, and even SKUs for picking can be held at height in racking provided you have the right manual handling equipment for retrieval. Further to this, mezzanine floors can be a very good option for fast-moving pick and pack operations with simple gravity conveyors taking the orders to ground level for despatch.

Both racking and mezzanine floors are a good solution to utilise the cubic space of your warehouse facility. Both can reduce the square footage requirement which will keep your fixed costs down. Also, remember that business rates in the UK are charged on a square foot basis, so not only will you benefit from reduced lease/purchase costs, but also reduced business rates.

4. Traffic Flow – get the material in and out as quickly as possible

This may sound like an obvious focus for warehouse design, but it is regularly overlooked or compromised in favour of maximising a building’s square footage. The traffic flow around the site is critical for getting material through receipt and into location and ready to sell as quickly as possible.

Go to any industrial estate in the UK and you will see trucks parked up on the public highway waiting to be able to access sites for unloading. This waiting time costs businesses money in both demurrage and the potential for delayed orders and lost sales. You must ensure that the exterior layout and traffic flow is sufficient to receive, offload, and despatch goods in the quickest turnaround times possible.

Efficient traffic flow starts with incorporating the right number of bays into the warehouse layout and the right configuration of bays. Depending on the type of operation, there should be a mix of level access bays and dock-level bays.

For example, in an e-commerce operation material may come in on curtain-sided trailers that need to be unloaded from the side and enter the warehouse through a level access bay. However, for despatch, orders may be despatched onto rigid vehicles requiring rear-loading and consequently dock-level bays.

It’s important to make a sensible assessment of the volume of inbound traffic and the likely inbound fleet configuration i.e. side loading, rear loading. Remember to also consider future volume forecasts as well as potential sourcing changes.

Changes in supplier sourcing, especially if moving from UK domestic suppliers to international suppliers, can lead to a change in inbound vehicle profiles. For example, international supplies are likely to arrive in containers requiring rear unloading versus domestic supplies, which are likely to arrive on curtain sided trailers requiring side unloading.

5. Equipment Specification – plan for the future

There are some types of equipment, such as forklift trucks, order pickers, and trolleys that can be changed with relative ease and limited expense. However, there are some types of equipment, especially storage equipment, that have a high capital cost, lengthy depreciation period and extended implementation times. High-density bulk storage systems, such as shuttle racking, is one such example.

Shuttle racking has remote-controlled shuttles moving pallets in and out of high-density storage tunnels. It is an excellent solution for reducing the space required and labour hours for an operation that receives, stores, and despatches large volumes of pallets for a limited number of SKUs. However, it is not good for high-velocity movements of multiple SKUs of less than full pallet loads. So, what happens if you implement shuttle racking and your order profiles start to change?

This is a very real risk in today’s logistics operations. Customer demands are changing – customers increasingly want less product serviced to them quicker. They want high frequency, low volume. This is starting to impact every tier of supply chains, from the retailer to the raw material producer upstream, as businesses increasingly focus on reducing inventory.

Effectively, if you deployed shuttle racking and, perhaps within 2 years, your order profile started to change, you would have a very expensive equipment redundancy situation on your hands. This issue can be avoided by making realistic, market-based predictions on forecast volumes, SKU proliferation, and order profiles.

The warehouse consultants at Paul Trudgian are experts in all aspects of warehousing – from design through to implementation. If you would like our advice on any aspect of warehousing, call us on 0121 517 0008 or email [email protected]

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