Planning a Warehouse

March 1, 2002
Make the most of a new warehouse design by making better us of cube and analyzing all aspects of handling.

Planning a Warehouse

Every warehouse has unique problems, but planning for a new one calls for basic decisions. Going through the planning process may help make better use of your existing space.

by Leslie Wood

Space Utilization

Before putting time and effort into planning a new building, take some basic steps to increase the space available in the current warehouse.

• Get rid of any junk equipment that has found a home there.

• Use JIT deliveries and shorter runs to reduce inventories.

• Use racks. There are many types of racks. Become familiar with them and their applications before making any decisions. They can increase storage capacity, but they are expensive and may not gain you as much space as expected. Analyze the potential space gained and the financial benefits.

The Layout: Inventory Analysis

Arrange the warehouse to fit the nature of the inventory. If it will store large quantities of few SKUs, many deep rows are needed. If the inventory will be small quantities of many SKUs, mostly shallow rows with many faces is more practical.

A simple spreadsheet analysis calculates how many rows of varying depths and how many racks are needed. From this it calculates the area needed for storage and aisles. Space for docks, offices and future expansion are not included.

The analysis is based on a “snapshot” of current inventories, modified to include future changes. Although individual SKUs may vary from week to week, the mix of deep and shallow rows is surprisingly stable and one period can be very representative. The height pallets can be stacked depends on the weight of the product, strength of the packaging, building height, etc.


Aisle width depends on the type of lift trucks used. Aisles should be wide enough for trucks to make a single turn into the row. Making them too narrow will save space but slow down the store-and-retrieve operations and result in greater damage. Cross aisles can reduce travel times but take up valuable space. Balance the two.


Design rows wide enough to allow drivers to carry loads in and out without causing damage. Lift trucks fitted with side shifters allow drivers to move loads a few inches from side to side so they can work in narrower rows.


The number of shipping doors needed depends on how long it takes to load and unload trailers, the number of trailers handled, and how many shifts are worked. The dock is the busiest and most dangerous part of the warehouse. Don’t squeeze down the space.

Material handling

Lift trucks are the basic means of handling pallets. They come in many shapes and flavors. There are clamp trucks and fork trucks and push-pull trucks. There are counterbalanced trucks, stand-up trucks, straddle trucks, swing mast trucks, narrow aisle trucks, very narrow aisle trucks... The list goes on and on. Work with reputable dealers. Explain your situation and let them advise you.

When they recommend products (most often, their own), ask to visit sites with similar applications and request demonstrations in your own facility. If things become too confusing, hire an experienced, independent consultant to advise you.

Conveyors are a common means of delivering cases of product from manufacturing to the warehouse. They are expensive to install and maintain but can be less costly to operate than drivers on lift trucks. Whether or not a conveyor system is justifiable depends on the amount of material, the composition of the inventory and the distance that the products have to be moved.

Automatic guided vehicles (AGVs) are an alternative to conveyors. They are most economical when hauling product over long distances.


Over the last 10 years, there has been an explosion of software available for managing warehouses. Designers promise it will reduce inventories and labor costs while improving customer service, inventory accuracy and storage capacity. What they may not say is that it can take over your operation, tying up a quarter of your workforce to satisfy its demands for more and more information.

You do need a means of tracking your inventory and the software that fits your needs can bring most of the promised savings, but beware of bells and whistles that sound good. They can become a cacophony when you try to implement them.


Orderpicking is the most labor-intensive operation in the warehouse. The objective is to get the correct product to the customer in the shortest time while maintaining high productivity.

Whether you are picking individual parts from cases, picking cases from a pallet or picking full pallets, specialized equipment is available. Again, work with suppliers, study the options and ask to see demonstrations.

Whatever the type of picking, making the most frequently picked SKUs the most accessible will reduce picking times.

There are many more decisions that will confront you than we could cover in this article: where is the best location; should you lease or buy; do you need a central distribution center; etc. Do not become overwhelmed. Take them one at a time and they will fall into place.

About the author

Leslie Wood is the founder of Les Wood Associates (, a North Andover, MA-based consulting firm that has provided industrial engineering services to manufacturers and warehouses since 1989.

Previously, he was director of industrial engineering for Sweetheart Plastics. He has held similar positions in other industries including telecommunications, semiconductors, electronics, machine shops.

Reach Les Wood at (978) 681-8705 or by e-mail: [email protected].

Slotting Optimization as High-Return Project

In recessionary times, distribution and supply chain managers are looking for short payback projects to optimize their operations. Many companies are delaying implementing broader-based supply chain initiatives such as warehouse management and supply chain process management (visibility, event management, process integration) in favor of lower cost, faster return continuous improvement projects. Inventory slotting optimization is a good starting point.

Slotting optimization is an execution-focused process using software with advanced algorithms to improve product-to-location assignments within the distribution center. Slotting can be undertaken on a one-time basis; however, its real power rests in its use on a continual basis — either on weekly, monthly or seasonal periods.

Is your company a candidate for slotting? Consider four indicators:

• Do burdensome replenishment volumes adversely affect your ability to complete pick waves on time, pick accurately or productively?

• Does travel time account for more than half of your pick/replenishment labor time?

• Are your pick rates not in line with industry best practices?

• Do your pick and replenishment productively levels decrease when you enter a new season?

If the answer is “yes” to any of these questions, your facility may be a candidate for a slotting optimization project.

While many of these ills can be cured using common sense and a good industrial engineer the complexities of today’s distribution center operations has lead to the introduction of slotting software packages. Slotting software integrates logic for pick sequence, path and reach optimization. The solutions consider and optimize multiple storage modes, product configuration, velocity and balancing criteria. If these packages can be integrated with WMS a more powerful nearly automated slot optimization effect can be created.

Slotting projects can typically return gains of 10 percent to 15 percent or more based on:

• Reduced golden zone reach time;

• Reduced travel time;

• Reduced stockout conditions and long replenishment cycles;

• Improved pick productivity;

• Pick line balancing;

• Reduced accidents through better ergonomics;

• Reduced product damage through reduced handling;

• Slot integrity.

Slotting projects can typically be completed in 2-6 weeks, based on availability of data.

This “Two Minute Tip” is by Rodney Goulet, senior consultant, eSYNC International, and Paul Maurer, partner, Streamsoft LLC. E-mail them at: [email protected] and [email protected].

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