The eternal question, how should I design the warehouse layout?

I have seen a lot of articles on LinkedIn regarding warehouse design. I have noticed that many people claim that they know the ultimate design. They also mention a lot of principles you should use when you make the layout in the warehouse.

Developing an optimal warehouse design is one of the most complex tasks regarding warehouse logistics. The warehouse design has a direct effect on productivity and quality in warehouse flow.

One thing is certain there is no universal or standard solution. Every warehouse is unique and have specific conditions regarding inbound and outbound flow. And of course what type of goods you store. There are many things like safety and climate (goods demanding specific temperatures for example) that affect the conditions for which layout and flow you should use.

Many consultants use the FAST principle, see below:

•  F-Flow
•  A-Accessibility
•  S-space
•  T- Throughput

It doesn’t say much about details but it is easy to remember the four key factors you should think of and consider when designing the warehouse.

As I mentioned before it is a very complex task and there is a lot to consider. Much is about balancing volume efficiency with productivity because they are not always walk hand in hand. It is very important senior management is informed about these decisions because of the future expectations on efficiency and productivity. For example, many consultants advocating one-way flow when you use manual operations in standard racks and shelf’s. It is very volume efficient because you can use very narrow aisles but it if you have a modern WMS there is often features that calculate the most optimal picking round or put away round and if you have one-way flow in the aisles you lose a lot in productivity. Therefore, it is very important to decide what is most important regarding cost savings, volume efficiency or productivity to save labor costs?

One important task when designing a warehouse in my opinion is to look into the WMS. What features can you use? Some of the features depending on how you design the warehouse to get maximum leverage.

Another very important task is analyzing historical data. The statistical data should be used regarding every decision when designing warehouse for example, designing packing areas and packing materials, dispatch areas, receiving areas and ABC categorizing and much more. Analyzing data and statistics is so important and have great and critical impact to volume efficiency and productivity. I often recommend that you use experienced consultants in case you are the least unsure of what you are doing.

As I have written in previous articles we humans can’t think statistically, you should never trust your instincts. In the logistical work use statistical data. Actually it doesn’t matter how much experience you have. Only if you don’t have any historical data you can use your or others experience.

I often meet people that is against floating locations in the warehouse. In my opinion it is the most efficient way of storing. It is both volume efficient and labor efficient. Categorize the goods depending on volume not what kind of goods as in the old days. Today the WMS keep track of the goods it may look like chaos when you use ABC and volume categorizing but it is the most efficient way of warehouse production. When you change ABC flag on one item you don´t need to manual move it to another location. Next time you receive it you will have a new suggestion of location. You save labor costs. Look at Amazon DC´s it looks like chaos but everything is decided by WMS regarding efficiency and productivity. Everything is calculated by WMS.

Let the data also decide if you should use static racking systems or automation and robots. It is a waste to invest in expensive technology if it is enough with conventional racking systems. And the same applies if you have a good ROI on automation. In that case it is a waste if you invest in conventional racking systems.

Don’t forget “open areas”! I have seen many warehouses where they have forgotten or deliberately kept open areas without racks to a minimum. A big mistake that affects both efficiency and quality negative. Especially in connection with outbound and inbound, you need open areas where you can put pallets in short periods. What you lose in costs of square meters you win in man-hours and less touches on the goods (lean)

To avoid bad decisions, it is extremely important to put together a competent project team. This is not a one man/women show. It is too complex. You need multi skills from many departments. Often you need external competence. Your decisions will affect your future KPI´s in your warehouse.

Roberth Karlsson