Designing a Warehouse – Why it’s not as easy as it looks

Designing a Warehouse - The Logistics Business UK

So, you’re thinking about designing a warehouse? It seems quite straight forward – call a racking supplier, ask them to draw you a layout, and there you have it. Well actually, in this case what exactly do you have? The answer is lots of storage capacity but not much else. That’s fine if you are just storing and moving pallets (provided you have left enough marshalling area) but if you have a case picking, or woe betide you, a singles picking requirement, you will be on a hiding to nothing. Many a career has come unstuck because of failure to get goods moving to the customer, and the fact is that in warehouse design the storage bit is easy- it’s achieving the throughput which is the difficult part.

It’s a real surprise to see just how many businesses think they have a warehouse storage problem when in fact that’s the least of their worries. Solving a storage problem is usually easy and it’s almost always possible to find space in a warehouse ‘down the road’ if it’s just storage you are worried about. The fact is that when most companies face a warehousing problem it is more likely than not that it will be because they can’t generate enough throughput, or at least can’t generate it cost effectively, to meet customer service levels. And this is as true in good times as bad because you always want to achieve high productivity and use the minimum labour force to meet the customer demands. So warehouse design is not simply about designing for effective storage, it’s mostly about designing for effective receiving, picking, marshalling and despatch and it is in the development of these processes that warehouse design skills and experience come to the fore.

The starting point for warehouse design is to understand the characteristics and velocities of the goods that will move through the warehouse. Large, fast moving items will have to be managed differently than small, slow moving items. Some goods will move in pallet quantities and some might be kept on shelves and move fairly slowly. A spares warehouse, for example, will have a long tail of slow moving items, some of which are only picked a few times a year, whereas the warehouse of a fast moving consumer goods manufacturer will move most products in pallet quantities. These different characteristics have to be taken into account in the warehouse design so that pick locations can be properly sized to the product throughput or velocity. This in turn dictates replenishment frequency and helps to optimise the overall storage requirements.

The analysis of picking and storage requirements can be complex even for what are seemingly simple warehouse operations, but for businesses with a big range of products and wide variety of product sizes some really sophisticated techniques are required. Take home delivery, for example, with companies such as Tesco Direct or Argos.  Here the warehouse design and associated operating processes can make the difference between profit or loss. Customer expectations for next day delivery mean that efficient and accurate picking is vital to achieving service levels.

Regardless of the level of complexity, there is no getting away from the fact that good analysis brings good design. And that’s why, over many years, The Logistics Business has developed a suite of logistics and supply modelling tools which help us to optimise warehouse design for our clients. The use of these tools, combined with practical experience and know-how, means that warehouse picking and storage can be matched to the business needs and the warehouse will be fit for the purpose.

The benefits of good warehouse design cannot be underestimated, and whilst it might seem like a good idea at the time to get a ‘free’ layout from a racking supplier, it might not seem so good when service is failing and customers are complaining. But if you think of warehouse design as being the design of throughput processes, and ensure that the right skills and expertise are utilised, then your career is more likely to remain intact. And in the long term you will have many more happy customers.