Whether you are opening a new warehouse or distribution center, adding a product line, exploring automation, or just running out of space, there are many different considerations when optimizing a warehouse layout and associated processes. We wanted to share some insight regarding the Establish methodology for warehouse design projects, specifically the inputs we like to gather before any concepts are drawn or recommendations made.
First Steps – High Level Planning
The beginning of a warehouse design project should include a few conversations – those that define the scope of the project, success metrics, key stakeholders, and any headaches or concerns that should be solved by the new layout. It is important to lay everything out on the table, because the ‘optimal’ layout is not always the best suited to the operation and employees involved. Before beginning the project, it is paramount to understand company values, value propositions, goals, sales channels, customers, seasonality, and forecast. Additionally, involving all affected employees or group representatives and establishing rapport keeps everyone’s interests aligned.
Process & Material Flows
Following a high-level understanding of the business, the warehouse processes are of highest priority in determining warehouse layout. There is no better way to learn about process than physically being on the warehouse floor, walking through each decision point step-by-step. Shadowing, documenting, and talking with operators will be your greatest resources – no one knows the process better than those working it day-in and day-out. The time with operators develops buy-in for the future layout, ensuring that everyone’s needs and challenges are considered. While shadowing, it is important to remember to follow the entire lifecycle of a product through the warehouse, from the time it enters the premises through delivery into the customer’s hands. We’ve found that having a thorough understanding for the operation leads to better data analysis later in the project.
Data Analysis on Volumes
In addition to the qualitative observation of process, warehouse design should include a healthy amount of quantitative data analysis to determine product volumes and order profile as these are what dictate labor and spatial requirements. Order profile is the single most important piece of data for warehouse design, it is the driver for process and storage. Understanding how product is ordered, be it pallets/cases/eaches, will define what picking strategies you can deploy (think pick by order, batch, cluster, wave, or zone picking). Having a grasp on peak volumes, not just averages, assures the operation can withstand those high-volume days. Order profile, picking strategy, and volumes help determine inventory space necessary and labor hours involved.
Bringing it Together
The combination of process knowledge and data analysis as inputs for the design will allow for a better chance to land on a solution that is both optimal and meets the needs of the business. Once we’ve developed planning factors and worked through this qualitative and quantitative approach to the inputs, we can begin to iterate through concepts. Think of the observations and analysis we’ve done before as puzzle pieces – each piece (i.e. the amount of racking for a product, staging space, or machinery) is a defined amount of space. From here, we fit all those pieces together, draw material flows to follow the life cycle of the product, and visualize. After that, it’s all iteration.
Alex Krivan, EstablishInc, NY