Want to improve your warehouse performance? Then your first step is to optimize your warehouse design and layout. Sounds great, doesn’t it? You already know your warehouse operations should be more efficient, but you can’t pinpoint the problem. Now you know where to start: reviewing your warehouse design!
Do something crazy today and forget that you work in your warehouse. Come in as if you are stepping across that threshold for the first time. What do you see?
- Is your warehouse full of pallets sitting in the aisle instead of up in the racks?
- Do you see workers, forklifts, and products moving up and down in your warehouse?
- Do you need a bigger facility to satisfy your business’ growth forecast over the long term?
Answering yes to any of these questions is a sign you may need to optimize your warehouse design for higher efficiency.
Keep calm and optimize your warehouse layout design using these 3 golden steps:
- Gather Information
- Create Plan
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Gather Information About Your Current Warehouse Design
Get a paper and a pen and draw a map of your warehouse (or use an already existed one). Be sure to pick one where you can clearly see the following warehouse specifications:
- storage racks,
- docks doors,
- height restrictions
Identifying the operational locations is a crucial step of information gathering. A good warehouse layout plan covers the following 7 operational locations in your warehouse:
1. Inbound staging area
When you receive products, your warehouse employees usually puts them into a free area. Then they transfer those products to their designated locations in the warehouse. Go find that location in your warehouse and add it to your map - It’s your inbound staging area!
2. Back-to-back racks
Do you have racks where you place your items in the warehouse? Do you place the same products back to back- there you are – your “back-to-back racks”
3. Packing desks
After you pick your products, do you carry them over to a desk or station where products are being packaged & readied for shipping? Perfect, mark those stations as your “packing desks”.
4. Outbound shipment area
After you pick or pack your products, you put them all on a free area prior to shipping, don’t you? There you go, that’s your “Outbound shipment area”
5. Free areas
You created a beautiful map but there are some areas where the products sit that are not in your map - You can call those as your “Free areas”. Although it feels like it’s better to have everything in designated spaces, there may be times that you need your “free areas” to temporarily store products. Embrace those free areas and add them to your map. ☺
6. Value- added service areas (Kitting, labeling etc.)
Do you put products into bundles and create kit items? Do you use a desk or a station while labeling them? Add those locations to your map as well. We call them “value-added service areas”. You can call them whatever you want, but make sure to add them to your map!
7. Damaged product area
It’s sad, we know, but we separate the damaged products from their friends and usually place them in the gloomiest corners of the warehouse. Give them a location, and add that location to your map.
Now that you have your map, the next thing you should do is to add the flow of your warehouse to your map.
Add Your Warehouse Flow to Your Map
Start by listing the main processes and then draw the workflow directions of those operations. Get creative and color it up by drawing the secondary operations that follow those main processes.
Don’t forget, it’s your first day in the warehouse so you should be talking with the warehouse personnel, pickers, packers, warehouse managers etc. to find out about the warehouse processes. You have no idea how much input you’ll receive about your daily operations. Added bonus? Catching up with the warehouse personnel and seeing how they run their daily operations.
First, go to a far corner of the warehouse and start watching the movements. Where do your workers start and where do they go to? Does it appear smooth or erratic? If it’s a smooth flow, then that means your employees intuitively created a flow. If it’s a mess, then you need to pull the trigger and create a movement guide.
Either way, you should cover the following 6 points on your warehouse flow:
- The putaway flow from the inbound receiving area to back-to-back racks or free areas
- The walking paths and directions for the pickers
- The picking path or direction for the forklift drivers
- The outbound flow for picked orders
- The movement of returned products to the damaged area or inventory
- The flow of packed and labeled boxes to outbound shipment area
You’ve finished your warehouse map drawing and added the flow of your warehouse to your sketch. Here is an example of what it could look like:
Take photos of the warehouse, like it’s your first time in. Don’t forget to take lots of notes. Now you are ready to move to the next step of your warehouse layout optimization process: Analyze!
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Analyze Your Warehouse Design and Layout Notes
Time to come back to reality. This is your warehouse and you need to gather your warehouse management team. It’s time to analyze all the data you have collected. Carefully analyze the data on operational locations, shipping, receiving, assembly, special handling lines, and quality & inspection areas along with the warehouse flow you have drawn. Clear product and location identification are critical to receiving, picking and putaway efficiency and accuracy.
Storage area and staging lane identification is another must. Go through your notes on inbound and outbound operations, and value-added processes with your team and make sure nothing is missing. Keep in mind that even little things can dramatically affect warehouse efficiency. So make sure to cover all the locations and operations in your warehouse.
You can use below checklist to make sure you have covered all of the 9 points below while analyzing your data:
- Draw all the possible movements in your warehouse.
- Focus on main paths which will carry most of the movements. Draw them bold.
- Reserve enough space for forklift movements.
- Always reserve a free area which you can use for multi-functions.
- Try to use separate locations for inbound receiving and outbound shipments.
- Reserve the first 2 levels of back-to-back racks for pickers.
- Do not put damaged items and sellable items in the same location. Draw a separate location for damaged items.
- Consider smaller shelves for small items.
- Consider drawers for smaller items which cannot be barcoded.
Optimized warehouses also make sure to place easy-to-read labels on pallets, cartons, storage shelving, pallet racks, and aisles and floors Try not to miss anything, not even a little detail. Then discuss and analyze all the data with your warehouse managers.
Following your analysis, you should have an idea of the areas you want to optimize. You should annotate them on your warehouse flow & location designs.
Create a Warehouse Layout Optimization Plan
Now that you have analyzed the information you gathered, the last step of warehouse layout optimization is using your analysis to create a plan. Your plan should include:
1. Your main tasks & subtasks
Your plan should first show the major tasks. Then each of those main operations should be sub-divided into the individual tasks that you need to accomplish.
2. Resources Required for tasks
Review each task and allocate resources as necessary. Add estimated time required to the plan along with when a task needs to start and finish based on resource availability. Make sure to also state if the task is dependent on another task or not.
3. Warehouse layout models you have created
Based on your tasks, resources, timelines, and optimization list, you should draw your locations and warehouse flows from scratch. Make sure to design a few alternative warehouse layout models as you will be presenting those to your warehouse management team.
Final Thoughts on Planning Your New Warehouse Layout
Whether you bring in some external help or go it alone, keep the 4 golden tips in mind when planning your new warehouse layout:
Once the plan has been created, check to see:
- Can we meet this timeline?
- Are there enough resources for the tasks?
- Does the selected warehouse layout model support my timeline and resources?
If you notice you are failing to reach these goals, create a new plan following the above steps. Test it again until you reach the most efficient warehouse layout model for your operation.
Once the plan has been created, it should be checked to see if the timeline is attainable, if there are enough resources for the tasks and if the selected warehouse layout model is supporting your timeline and resources. If you notice they are failing to reach the goals, create a new plan following the above steps and test again until you reach the most efficient warehouse layout model for your operation.
Download our Warehouse Management Software Whitepaper
Logiwa uses real-time data to help you get up to 100% inventory accuracy and 2.5x increased shipments.
At the same time, our software allows you to execute advanced fulfillment strategies like wave-planning and cross-docking.
You can learn more about our full capabilities by reading our whitepaper.Download Now
Written by Merve Doruk
Merve Doruk is the Customer Success Executive at Logiwa WMS.