Design and Planning 
Warehouses

Supply chain design and planning is essential for any company, since its competitiveness is closely related with the efficient integration of logistic activities and the fulfilment of the required service levels, at the lowest possible cost. In particular, warehouses are known as an area where significant performance improvements can be achieved

Warehouse design

• Overall Structure;
• Sizing and dimensioning;
• Dock dimensioning;
• Equipment selection;
• Department layout;
• Operation strategy;
• Workforce dimensioning

Warehouse operation

• Receiving and Shipping;
• Storage strategy selection;
• Order picking method selection;
• Pallet handling area;
• Forklifts and hand pallet trucks;

Project site evaluation

  •  Financial analysis;                          Performance evaluation;                Sensitivity analysis;                         

Impact of the warehousing 

Warehousing operations and processes around storage activity. Warehouse is a central element of the logistics system. The way it is organized has an influence on all other processes in the company

Basic principles of warehousing

• Maximum possible mechanization and automation of operations;
• Optimal use of space and capacity of storage facilities;
• Organization through "continuous-flow" of goods;
• Planned system of storage operations;
• Safety of goods

Functions of planning and control of material flow in the company are executed by the logistics department. The main task is to serve as a bridge between the sales department and production units of the enterprise, to ensure timely and full implementation of customer applications.

Distribution Logistics

Warehouses as part of the logistics system in the supply chain

• Storage should not be considered separately, but only as part of the logistics system. The effectiveness of the warehouse must serve the interests of the efficient functioning of the system.
• It is necessary to take into account the interaction and relationships of the warehouse at the level of the entire external environment.
• It is necessary to link technical and technological possibilities of the material flow passing through the warehouse, with the external transport, as well as with direct suppliers and buyers.
• Reduction of warehouse handling of goods costs should not lead to a lowe- ring of the level of customer service.
• Technical and technological solutions in the warehouse should not come from trends but should be efficient and cost-effective.
• To reduce labor costs associated with the document, it is advisable to provide a unified approach to documentation between all participants of the system.
• To automate the flow of information in the system and in a warehouse in particular, it is crucial to implement bar coding of goods in manufacturing plants.

Why to focus on warehousing

1. Planning and management of material flow in terms of independence and interde- pendence of all elements in the production process.
2. Control of product distribution processes, from the planning of production vol- umes to the delivery of products to final customers.
3. Inventory Management to satisfy consumer needs.
4. Description of logistics inventory management processes, distribution of products and their integration into the overall system of processes going on in the company.
5. Analysis of logistics costs throughout the supply chain.
6. Development of logistics services.

Optimize Your

Logistic Operations!

When developing a model of the distribution logistics enterprises use a systematic approach. It is done because the main objective of the logistics system is managing the material flow, starting with order and ending with the delivery to the customer

01.

Planning, organizing, and management of freight moves during the production process and after the product is ready for the customer;

02.

Inventory management; On time processing of customer orders;

03.

Assembly, packaging, and fulfillment of other logistics operations preparing the final products for distribution;

04.

Proper arrangement of shipment; Delivery management and control over the execution of transportation process.

Costs Reduction

To identify possible ways of logistics costs reduction, efficiency of logistics services should be evaluated and analyzed. Logistics costs can have a large share of the price decision of the goods sold. However, it should be understood that a high level of logistics strengthens the relationship between the enterprise and its customers. It may be a reason of attraction for new customers and, as a consequence leads to an in- crease in sales and earnings. Therefore, during the analysis of the overall perfor- mance of the logistics system, it is found that not only cost of processes is driving factor. There is a whole range of indicators to be precisely studied while assessing the state of logistics department and its activities in the company

Categorization of warehouse activities

The basic function of a warehouse is to receive customer orders, retrieve required items, and finally prepare and ship those items. There are many ways to organize these operations but the overall process in most warehouses shares the following common phases

01.

Receiving

the process of unloading, checking quality and quantity, and dissembling or repacking items for storage

02.

Putaway

defining the appropriate location for items and transferring them to the specified storage location to wait for demand

03.

Order picking

retrieving items from their storage locations and transporting them either to a sorting process or straight to the shipping area

04.

Shipping

inspecting, packing, palletizing and loading items into a carrier for further delivery

   Average costs of warehousing operations

The way, in which various warehousing functions are arranged, depends on many issues, the physical quality of the warehouse facility may set certain restrictions. For example, receiving and shipping functions should normally be located near the facility input and output points. On the other hand the facility may have some fixed obstacles that hinder entering and performing work tasks in certain areas

Wearhouse operation

Receiving and putaway belong to the inbound logistics process which means that they are concerned with the flow of materials coming into the warehouse. Order picking and shipping, on the other hand, belong to outbound logistics and are concerned with moving materials out of the warehouse. table represents the typical distribution of costs between various warehousing activities as a percentage of total warehousing costs

Receiving
%
Shelving
%
Storage
%
Floating and liquid assets
%
Picking
%

Wearhouse operation

management typically wants to balance the flow patterns between various activities and minimize the travel distances for stock movement. This can be achieved through systematic identification of stock locations and adjacency requirements between different warehouse activities. Product attributes may require certain kind of handling procedures

Packaging
%
Shipping
%
Stock taking
%
Value-added services
%
Returns and claims
%

Warehouse design 

The overall warehouse design  is to specify the relations between systems and
processes by which material and information flows are governed. Warehouses must be
designed to accommodate the loads of materials to be stored, the associated trucking in
receiving and shipping operations, and the needs of the operating personnel. The design of
the warehouse space should be planned to best accommodate business service requirements
and the products to be stored and handled. The economics of modern commercial
warehouses also dictate that goods are processed in minimal turnaround time.

Overall structure 

▪ Material flow
▪ Department identification
▪ Relative location of departments 

Sizing and dimensioning 

▪ Size of the warehouse
▪ Size and dimension of departments 

Department layout 

▪ Pallet block-stacking pattern 
▪ Aisle orientation
▪ Number, length, and width of aisles
▪ Door locations 

Equipment selection 

▪ Level of automation
▪ Storage equipment selection
▪ Material handling equipment selection 

Operation strategy 

▪ Storage strategy selection 
▪ Order picking method selection 

Industrial Distribution and the Service Approach

Industrial markets involve the sale of goods between consumer groups that are composed of
companies and organizations. These markets include selling finished goods, raw materials,
components, and services. Whereas consumer marketing is aimed at the mass market,
industrial marketing tends to be focused to a smaller number of customers.

Cycle time Improvement 

There are several efforts suitable for reducing warehouse cycle times. Streamlining multiple
efforts, however, can yield a much more efficient process resulting in cost and time savings
and customer satisfaction. 

Performing activities in parallel.

Most of the steps in a business process are often performed in sequence. A serial approach results in the cycle time for the entire process being the sum of the individual steps, not to mention transport and waiting time between steps. When using a parallel approach
different process task become overlapping which can reduce the cycle time dramatically

Changing the sequence of activities

Documents and products are often transported back and forth between machines, departments, buildings, and
so forth. For instance in a warehouse, a document might be transferred between two departments a number of times for inspection and signing. If
the sequence of these activities can be altered, it may be possible to perform much of the document's processing when it comes to the building the first time. 

Reducing interruptions

Any issue that causes long delays and increases the cycle time for a critical business process is an interruption. The
production of an important order can, for example, be stopped by an order from a far less valuable customer request which must be rushed because it has been delayed.  The main principle is that everything should be done to allow uninterrupted operation of the critical processes and let others handle interruptions. 

Improving timing

Many processes are performed with relatively large time intervals between each activity. For example, some orders may only be issued at certain time intervals. Individuals processing such orders should be aware of deadlines to avoid missing them, as improved timing in
these processes can save many days of cycle time. 

Warehouse Layout Design Framework

01

Define Warehouse Objective

Identify warehouse type and prioritize design criteria. Identify the warehouse role in the supply chain network by investigating the material flows in the network. The corporate strategy in terms of product portfolio and expansion plans is investigated.

02

Map warehouse activities

Map warehouse material flow. Identify and observe warehouse activities.

03

 Plan space requirements

Determine space requirements for the warehouse activities  based on the growth scenarios developed  and number of Inventory positions needed in the equipment setups 

04

 Generate warehouse layouts

Generate layout configurations and analyze their inventory availability, potential honeycombing waste, material flow, flexibility for future expansion/decrease and cost structure.

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