NASHVILLE STATE Community College

Warehouse & Inventory Management

LOGI 1030

Warehouse Layout

Space Planning

Flow

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 Warehouse Layout

The goal of layout is to maximize your warehouse functions to achieve the grea
efficiency and space utilization

A warehouse is typically divided into the following areas to support its

everyday processes:

Receiving

Reserve Storage

Forward Pick

Sorting and/or assembly

Quality

Shipping
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 Warehouse Layout

The warehouse layout must satisfy these four primary functions:

Product storage

Inbound operations

Outbound operations

Value-added processes

Let’s look at each in some more detail….

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 Warehouse Layout

Product Storage
The first step is determining space requirements for the four
functions
just mentioned.
Determining space requirements for each of these is a complicated proces
which requires analysis of historical and projected volumes to include units
cube, and weight requirements.

A typical analysis looks back at one year’s worth of history and then projec
sales growth over the next three and five years.

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 Warehouse Layout

Product Storage

1. Begin by looking at current average inventory levels and growth projections by SKU

2. Consider variations amongst SKUs (date sensitive, refrigeration required,

special handling requirements, weight/size limits?)

Use this info to sort SKUs into separate product categories

3. Classify each product by the number of activities (ie: picks) that are involved
over a span of time (month, year, etc…)

Use this info to find ways to reduce travel time (store high vol SKUs together)

4. Determine where to locate product based on cube, velocity, and how often you want to
replenish the forward pick locations

Determine how much of each SKU to place in forward pick and reserve

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 Storage Space Planning

…There is more to consider….peak vs average volumes…

Planning the correct amount and type of storage space is one of the most
difficult decisions.

Some considerations:

What is the duration of peak storage requirements?

What are the average storage requirement needs?

What is the relationship between peak and average

storage needs?

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 Storage Space Planning

If the duration of the peak is short and the ratio of the peak to average
is high, then invest in temporary storage to support the peak period.
35,000
Peak
Ratio of Peak to Avg Vol = 2.64 Storage
30,000 Req

25,000

20,000
Average
Storage
Req
15,000

10,000

5,000 Minimum
Storage
Req
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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 Storage Space Planning

If the duration of the peak is long and the ratio of the peak to the
average is low, then the storage capacity should be designed near the
peak requirements.

25,000
Peak
Ratio of Peak to Avg Vol = 1.20 Storage
22,500 Req

20,000 Average
Storage
Req
17,500

15,000

12,500

10,000
Minimum
Storage
7,500 Req

5,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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 Storage Space Planning

Another way to consider the type and extent of how much and which
type of storage is needed is by plotting the storage requirements vs
the picking activity on a 2x2 matrix.

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 Storage Requirements
High Low

High
Picking Needs Dominate

Low Density Storage

High Density Storage Dedicated Location

Picking Activity

Storage Needs Dominate Dedicated Location

Random Location Dual Storage

Dense Storage Low Density Storage

Low

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 High Pick & High Storage
Indicates a large and active warehouse. In
these situations, high technology/
automated picking combined with
mechanized handling and high density
storage are justified
Low Pick & High Storage
Here the requirement is for high density storage
with high bays, multi-levels and dense packing.
Low turnover means that picking can be manual
or semi-manual
High Pick & Low Storage
With high picking activity but low storage, the
picking area should be compact and dense and
storage is simple. Some automation of picking
may be justified.
Low Pick & Low Storage
A simple, small warehouse requires neither
automation or sophisticated storage devices.
Stacked pallets, floor storage or simple racks
and shelves suffice. Handling is manual
Inbound
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 Warehouse Layout

Inbound Operations: How much space does receiving require?

Gather data to determine the typical receipt profile…

Profiles should include:

Average number of lines on a receipt
Average quantity and cube of a receipt
Average number of trucks received per day
Unit of measure (pallets, cartons, pieces, etc…)

Consider the overall receiving process

Outbound
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 Warehouse Layout

Outbound Operations: How much space do picking and shipping require?

Consider:
Are we picking eachs, cases, or pallets?

Are we batch picking or picking orders straight through?

Will we need to store pallets of product in shipping or direct load to trailer?

Will we pick and hold orders for long periods of time?

Will we perform QC audits in shipping?

Value Added
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 Warehouse Layout

Value Added Processes: How much space is required for value added services?

Consider:
What type of value added service will be performed:
Price labeling
Re-labeling product
Kitting
Storing
Shipping

Will the value added service be performed in a separate section or will it be

part of picking, packing, receiving, etc…?

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Material Flow
 Material Flow Planning

There are four primary flow patterns:

1. U-Shaped

2. Straight Through

3. Modular

4. Multi-story

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 Material Flow Planning

1. U-Shaped: Product comes in one side of the building, moves to the back (pallet
storage), moves across the back (to forward pick and other process), and
back to the front (Shipping)

Sorting
Pallet Storage
Forward Pick
Packing

Shipping
Receiving

Advantages of U-Shaped Flow Pattern: Facilitates cross-docking, best use of

dock space (receiving and shipping can share dock doors), allows for expansion.

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2. Straight Through: Product comes in one side of the building (receiving),
flows directly through the building (pallet storage to forward pick, to
processing, to the far end of the building (shipping).

Receiving

Pallet Storage

Forward Pick

Sorting/Packing

Shipping

Best for heavy cross-docking operations and operations with very systematic
processes (Dell, computer manufacturing)

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 3. Modular: Best suited for operations that have individual processes that are
large enough to merit multiple stand alone processes.

Shipping Shipping Shipping Shipping Shipping

Cross-docking

Stand Alone

Stand Alone
Process 3

Process 4
Flow

Flow

Flow

Flow
Stand Alone Stand Alone
Flow

Process 1 Process 2

Receiving Receiving Receiving Receiving Receiving

4. Multistory: Best used in locations where space is limited. Multistory is the least
efficient of the designs and adds complexity to the overall process.

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