Warehouse layout principles clarified

1. 1
Warehouse Layout
Space Planning
Flow

2. Warehouse Layout
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The goal of layout is to maximize your warehouse functions to achieve the grea
efficiency and space utilization
A warehouse is typically divided into the following areas to support its
everyday processes:
Receiving
Reserve Storage
Forward Pick
Sorting and/or assembly
Quality
Shipping

3. Warehouse Layout
3
The warehouse layout must satisfy these four primary functions:
Product storage
Inbound operations
Outbound operations
Value-added processes
Let’s look at each in some more detail….

4. Warehouse Layout
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The first step is determining space requirements for the four
functions
just mentioned.
Determining space requirements for each of these is a complicated process
which requires analysis of historical and projected volumes to include unit cube,
and weight requirements.
A typical analysis looks back at one year’s worth of history and then project
sales growth over the next three and five years.
Product Storage

5. Warehouse Layout
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Product Storage
1. Begin by looking at current average inventory levels and growth projections by SKU
2. Consider variations amongst SKUs (date sensitive, refrigeration required,
special handling requirements, weight/size limits?)
Use this info to sort SKUs into separate product categories
3. Classify each product by the number of activities (ie: picks) that are involved
over a span of time (month, year, etc…)
Use this info to find ways to reduce travel time (store high vol SKUs together)
4. Determine where to locate product based on cube, velocity, and how often you want to
replenish the forward pick locations
Determine how much of each SKU to place in forward pick and reserve

6. Storage Space Planning
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…There is more to consider….peak vs average volumes…
Planning the correct amount and type of storage space is one of the most
difficult decisions.
Some considerations:
What is the duration of peak storage requirements?
What are the average storage requirement needs?
What is the relationship between peak and average
storage needs?

7. If the duration of the peak is short and the ratio of the peak to average
is high, then invest in temporary storage to support the peak period.
Storage Space Planning
0
5,000
15,000
10,000
25,000
20,000
30,000
35,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Peak
Storage
Req
Average
Storage
Req
Minimum
Storage
Req
Ratio of Peak to Avg Vol = 2.64
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8. If the duration of the peak is long and the ratio of the peak to the
average is low, then the storage capacity should be designed near the
peak requirements.
Storage Space Planning
5,000
7,500
10,000
17,500
15,000
12,500
20,000
22,500
25,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Minimum
Storage
Req
Average
Storage
Req
Peak
Storage
Req
Ratio of Peak to Avg Vol = 1.20
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9. Storage Space Planning
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Another way to consider the type and extent of how much and which
type of storage is needed is by plotting the storage requirements vs
the picking activity on a 2x2 matrix.

10. High
High
Low
Storage Requirements
Picking
Activity
High Density Storage
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Low Density Storage
Dedicated Location
Dedicated Location
Dual Storage
Low Density Storage
Low
Picking Needs Dominate
Storage Needs Dominate
Random Location
Dense Storage

11. High Pick & High Storage
Indicates a large and active warehouse. In
these situations, high technology/
automated picking combined with
mechanized handling and high density
storage are justified
High Pick & Low Storage
With high picking activity but low storage, the
picking area should be compact and dense and
storage is simple. Some automation of picking
may be justified.
Low Pick & High Storage
Here the requirement is for high density storage
with high bays, multi-levels and dense packing.
Low turnover means that picking can be manual
or semi-manual
Low Pick & Low Storage
A simple, small warehouse requires neither
automation or sophisticated storage devices.
Stacked pallets, floor storage or simple racks
and shelves suffice. Handling is manual
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Inbound

12. Warehouse Layout
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Inbound Operations: How much space does receiving require?
Gather data to determine the typical receipt profile…
Profiles should include:
Average number of lines on a receipt
Average quantity and cube of a receipt
Average number of trucks received per day
Unit of measure (pallets, cartons, pieces, etc…)
Consider the overall receiving process
Outbound

13. Warehouse Layout
Value Added
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Outbound Operations: How much space do picking and shipping require?
Consider:
Are we picking eachs, cases, or pallets?
Are we batch picking or picking orders straight through?
Will we need to store pallets of product in shipping or direct load to trailer?
Will we pick and hold orders for long periods of time?
Will we perform QC audits in shipping?

14. Warehouse Layout
ValueAdded Processes: How much space is required for value added services?
Consider:
What type of value added service will be performed:
Price labeling
Re-labeling product
Kitting
Storing
Shipping
Will the value added service be performed in a separate section or will it be
part of picking, packing, receiving, etc…?
Material Flow
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15. Material Flow Planning
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There are four primary flow patterns:
1. U-Shaped
2. Straight Through
3. Modular
4. Multi-story

16. Material Flow Planning
1. U-Shaped: Product comes in one side of the building, moves to the back (pallet
storage), moves across the back (to forward pick and other process), and
back to the front (Shipping)
Pallet Storage
Receiving
Forward Pick
Sorting
Shipping
Packing
Advantages of U-Shaped Flow Pattern: Facilitates cross-docking, best use of
dock space (receiving and shipping can share dock doors), allows for expansion.
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17. 2. Straight Through: Product comes in one side of the building (receiving),
flows directly through the building (pallet storage to forward pick, to
processing, to the far end of the building (shipping).
Receiving
Pallet Storage
Forward Pick
Sorting/Packing
Shipping
Best for heavy cross-docking operations and operations with very systematic
processes (Dell, computer manufacturing)
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18. 3. Modular: Best suited for operations that have individual processes that are
large enough to merit multiple stand alone processes.
Cross-docking
Stand Alone
Process 1
Stand Alone
Process 2
Flow
Flow
Flow
Flow
Stand
Alone
Process
3
Flow
Stand
Alone
Process
4
Receiving
Receiving Receiving Receiving Receiving
Shipping Shipping Shipping Shipping Shipping
4. Multistory: Best used in locations where space is limited. Multistory is the least
efficient of the designs and adds complexity to the overall process.
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