How to Design and Layout your Warehouse to improve efficiency and profits

Planning the Design and Layout of Your Warehouse

Warehouses are designed to store and handle products for the company. With that said, efficiency needs to be taken into account. A warehouse is only as effective as it is efficient. A poorly designed warehouse will lead to lost productivity and lower profits.

Inventory management relies heavily on the ability to easily and quickly navigate the isles in your warehouse. If the layout is poorly planned, the simplest tasks will take longer to fulfill, ultimately leading to frustration and possible business disruption. Being able to navigate the warehouse easily is only a portion of the overarching warehouse design structure.
Let’s delve into what the best design layout might be for your warehouse. Does your business move enough products to require enhanced technology to keep things running smoothly? Or can you manage with a cross-docking method? These questions and more need to be answered to determine the best layout for your needs.

Basic Principles for your Warehouse

Your warehouse design needs to incorporate several processes into a sequence that streamlines productivity, operations and minimizes travel time. By creating a practical approach to your warehouse design, you’ll be able to make improvements on order fulfillment rates, worker safety, and inventory management.
The design and implementation of the best warehouse structure and layout need to be determined during the initial planning phase of construction. Once things get going and the building is being fitted, the costs of changing the layout and design grow exponentially.
What are the critical factors in the design of a warehouse fill? There are several factors to include in your plan. Let’s break down some principal concerns that should be considered before starting construction.

Budget

The average consumer thinks a warehouse is some magical place that automatically provides them with the product they ordered. They don’t take into account things like construction costs, budgets, layouts, and everything else involved in the supply chain. Budgets are critical. What can you afford?
Determining the budget of the project needs to take place before anything else moves ahead. Do you want the most efficient and streamlined warehouse in the world? That’s great, but does it fit your budget?
Your warehouse needs to be highly efficient, cost effective, and safe. You’re bound to find some options and layouts beyond your expectations, but are they within your budget? Don’t bankrupt your business by going too grandiose.

Space

Proper space management and utilization are critical. Creating a system that will allow improved operational efficiency will pay huge dividends. Maximizing storage space while minimizing other areas like charging stations, offices, and other non-storage items will improve inventory processing and management. Keep in mind the importance of shelving design and layout.
Utilizing space can mean several things. Some things need to be decided here. If the product is going to be ordered “as needed,” you could use the cross-docking warehousing method. If your inventory needs to be stored, space will obviously be required. Be sure to plan for every last inch. Warehouse optimization means leaving no unused space behind.

Flow

What products need to be easily accessed? What products tend to stay in the warehouse longer? Be sure to plan accordingly. Placement of goods within the warehouse will play a crucial part in travel time and stock rotation efficiency.
Plan out the most efficient travel routes for smooth transportation from storage to shipping. Avoiding inefficient routes and improper placement of goods will give the warehouse a flow that improves worker safety, travel time, and profit. While a good flow is ideal, you need to ensure that all items are easily accessible. Every area of the warehouse needs to be easily accessed.
The average worker is not going to last at a poorly designed, inefficient warehouse. Experienced workers know that with better productivity comes greater profit. Toiling away in a warehouse that doesn’t keep the worker in mind will result in high turnover and poor customer loyalty. Eliminate all processes that don’t provide a value add to the business.
With proper flow, a warehouse is ready for shift work, which in itself can improve productivity.
Inflow and outflow both need to be considered. Receiving of goods needs to be as smooth and straightforward as the outflow of those goods. Difficulties in receiving can have significant impacts on every other part of the organization.

Stock on Hand

Stock rotation and storage are challenges that need to be met straight on. Carrying too much stock on hand is just sitting on money. The longer stock sits, the longer it takes to recuperate value. Rotating stock to keep items fresh and up to date is critical. Old inventory might become a written-off loss, which means you’ve lost the income possibility and have been paying the storage on the item all along. The result is a net negative. Working with a properly designed warehouse will help avoid issues like wasted inventory and holding too much for too long.
The business must identify its product requirements before planning the warehouse structure. Designing the best warehouse configuration for the needs of the company can be daunting. Several factors need to be taken into account. Once you’ve determined the space and structure requirements, it’s time to look at the functional layout.

Test Your Design

Before installing the shelving and equipment, take a walk through the warehouse to confirm that everything is ready to go. Use tape to mark out work areas and where the stacks will be. Make sure the aisles are wide enough to walk through with machinery if needed. Use the area like it will be used once built. You’ll see right away if there are bottleneck areas or if isles are too narrow. It’s also possible to have aisles that are too wide, which can be a waste of area. If you encounter problems here, know that they’ll be far worse once everything is installed.
Minor tweaks to the design can be made, though the cost will be higher than catching these issues at the beginning. However, it’s far better to take care of them here than to forge on without resolving them at all.

Warehouse Layout Considerations

Determining the layout of a warehouse is step one in the design of the facility. The layout needs to be painstakingly planned to avoid any wasted space in an area that is already limited. The internal design is important, as is the external setup. Worker and pedestrian safety must be taken into account. The parking lot and any roads must be as streamlined and safe as possible.
Regardless of any specific needs or issues, the general setup of a warehouse needs to facilitate the following needs:

Loading and unloading areas

Loading and unloading areas can be located outside the main warehouse facility or incorporated into the warehouse itself. Keeping these areas separate from the other parts of the operation will provide the amount of space needed without interrupting the workflow in the rest of the facility.
The loading area is built into the side of the facility so the goods can be moved throughout without any detours or work stoppage. In that case, the operation is considered integrated into the facility. Integrated loading and unloading are the preferred methods, though space is an issue. If there is sufficient space, the speed at which loading and unloading can occur is far faster than non-integrated docks.
Docks separated from the warehouse are the perfect option if the warehouse has specific environmental or special storage requirements. Those may include temperature-controlled environments like cold storage or materials that require safe storage like chemicals. These docks generally have a conveyor that feeds goods through a small door to avoid any temperature changes or risk to the other parts of the warehouse.
Flush docks allow trucks to back up to the wall of the warehouse. Using this method may require a hermetically sealed system such as a dock shelter or a metal seal.

Reception area

The reception area is generally kept independent from the rest of the facility. It’s not just used to receiving goods but makes a great place for sorting and ensuring quality control. These areas are located away from the central warehouse. Once inventory is completed to ensure the delivery matches the order, the goods are staged to be loaded into the warehouse.
Some products may need to be reorganized into smaller pallets, have straps removed, or other adjustments before hitting the warehouse. Once completed, the products are ready to go into storage.
Since the entire process of storing these products relies on the ability to check for accuracy and stage them for storage, the area needs to be as large as can be allowed. Once the products are scanned in, labels can be applied immediately, and they can be sent into storage. It’s all integrated within the current technical abilities of today’s warehousing.

Storage area

Storage areas do precisely as their name depicts. They store goods. The layout of that storage depends on the goods being stored. A pallet of cinderblocks can be stored directly on the warehouse floor, while a pallet of fresh asparagus should be stored on a rack. Storing goods really breaks down to what the product is and how it should be handled.
Different storage techniques can be used. For example, storing in stacks is basically taking goods and stacking them directly on top of each other without anything between them. This practice works perfectly for goods that are able to handle the weight on them without concern of them degrading but may be frowned upon if the product is less durable.
Stacking works well for extremely durable goods like bricks, ceramic blocks, etc. Bags of cement or animal feed can typically be stacked as well. Everything being stacked does have a weight limit in what they can handle. Thus, the stack can only be so high, depending on the product. The downside to this style of storage is that anything stored under other products cannot be accessed easily.
Using racks is the perfect option for goods that cannot be stacked or products that need to be readily accessed. Being able to pull products quickly and rotate to ensure proper FIFO (first in, first out) will ensure accurately and easily maintained inventory management.

Picking area

A picking area is only used when the outgoing items need to be set up or configured differently than when they arrived. Not every business will need a picking area. Think of it as a staging area, but for the outgoing product. These areas can be integrated into the overall storage area but are easier to maintain if set aside as their own portion of the warehouse.
Keep in mind that not all warehouses will need a picking area.

Dispatch area

Dispatch areas are used for preparing the packaging for shipment, then loading onto the delivery or destination-bound vehicle. Dispatch areas must be set up in areas apart from the rest of the warehouse. They will have easy access to the shipping and receiving portals as they play a vital role in outgoing product shipments.
If setting up the dispatch area near the reception area, utilization of the shipping and receiving docks can be used. If not, there needs to be another port for shipping goods.

Warehouse Layout Designs Suggestions

Now that we’ve covered the essential portions of what makes up a successful warehouse let’s dig into different design layouts. There are several to consider, though we will focus on the most common.
The main shapes used are the U-shaped, the T-shaped, the I-shaped, and the L-shaped designs. Let’s look at each type a bit closer:

U-Shaped Design

A U-shaped layout is a great option for warehouses. It’s a simple setup that can be easily integrated into most warehouses. The concept is that the warehouse is structured in a “U” shape, as the name suggests. The shipping and receiving areas are at the same end of the facility, allowing the incoming and outgoing product to flow around the warehouse in the same direction. Stocking and pulling can be done in the same direction. There is also the ability to expand the warehouse easier than in other workflows.
T-Shaped Design
The T-shaped design takes after the U-shaped layout. The big difference between the two is at the shipping and receiving are on the same side of the warehouse, but at opposite ends from each other. The storage works by having the most popular goods stored in the middle, between the products that move out less frequently.

I-Shaped Design

High-volume warehouses benefit the most from the I-shaped layout. Loading and unloading are located on one end of the warehouse, and the shipping portion is at the opposite end. The middle section makes up the storage area. The ideal setup here is to arrange products, so the higher-volume goods are easily accessed. One downside is that all product has to venture the entire length of the warehouse to be shipped.

L-Shaped Design

Traffic flows in an “L” shape, with loading and reception on one end and the shipping and picking sections on the other end. Everything in between is storage. The pros of this style are that the storage area tends to be more robust. The negatives are that high-volume products have to go through the entire warehouse to ship out.
With any warehouse layouts, you’re going to need a warehousing philosophy as well. There are several out there, from working with the 5S method to using the standard Lean storage principles. Adding a unique management style to a well-designed layout will provide your business an exceptionally smooth operating, fully optimized workflow from the moment the product arrives at the facility until departure.

Conclusion

Choosing the right warehouse design and layout is a challenging endeavor. Work with professionals who have experience creating fully optimized storage facilities. Create a layout that not only takes advantage of todays’ technology but can easily be retrofit to future technologies.
Being able to prepare for the unknown future will enable you to hit the ground running while also staying ahead of your competition. While we don’t know what the next breakthrough will be, we know it will happen. Future-proofing your warehouse entails understanding nothing stands still and keeping up with the latest trends will keep you up with the top businesses in the industry.
Technology, design, layout, and management philosophy can all be intertwined to create a nimble, easily adaptable, agile business. Incorporating that into your warehouse will take time and planning but will return dividends for years to come. Think of the profit you can realize when designing a warehouse that will consistently outdo your competition.

[cp_popup display=”inline” style_id=”576″ step_id = “1”][/cp_popup]
Uncategorized

David Hoicka

Rent Lease Buy Sell Rent Lease your next Factory Manufacturing Space in Singapore! 2022-10-31 No Comments Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut …

Introduction to Warehouse Safety in Singapore

Two forklifts align themselves at each end of a fully-loaded 30′ storage rack and slide their forks under. The idea is to “carefully” lift the …

Read More →

Grow Your Business in Singapore

How Urban Redevelopment Authority (URA) Helps you Grow Your Business in Singapore

In this article, you learn how URA will help your business grow. We’ll cover the following critical issues:
* URA Oversees Development in Singapore, and What You Can Do with Your Property
* Changing the Use of Your Property
* URA’s Business Opportunities for Industrial and Commercial Enterprises
* URA Handbooks with Crucial Guidelines