WAREHOUSE LAYOUT AND PLANNING

The goal of warehouse layout design is to optimize your warehousing functions and achieve
maximum efficiency and space utilization.

A warehouse is typically divided into areas to support your everyday processes. These areas
include: reserve storage, forward pick, cross docking, shipping, receiving, assembly/special
handling lines, and quality/inspection area.

Designing a new facility starts with analyzing your current and projected data on the
activities in each of these areas, including the receiving, shipping and inventory levels. This
data should be supported by other considerations such as process flows, material handling
equipment, type and styles of racking equipment, special handling requirements, and
personnel.

When considering the layout and operation of any warehouse system, there are fundamental
principles that embody a general philosophy of good practice. The principles are:

1) Using the most suitable unit load

2) Making the best use of space
3) Minimizing movement
4) Controlling movement and location
5) Providing safe, secure and environmentally sound conditions
6) Maintaining at minimum overall operating cost
Successful warehouse layouts must adhere to the principles, regardless of material being
stored to:
i) maximize the use of space
ii) maximize the use of equipment
iii) maximize the use of labor
iv) maximize accessibility to all items
v) and maximize protection of all items

Although the objectives of warehouse layout and operation are easily recognized, warehouse
layout problems are often complicated by large varieties of products needing storage, varying
areas of required storage space and drastic fluctuations in product demand.

Therefore, an effective layout design of the warehouse is required to address these problems
and accomplish the objectives.

Space Requirements Planning

The first step in laying out a warehouse is to determine the overall space requirements for all
warehouse processes. The space requirements for each process should be computed and
summarized to estimate the overall building requirements. Effective space utilization makes
good use of total building volume and not merely the floor area.

For example, when calculating the space required for the receiving and shipping staging area,
the number of receiving and shipping dock doors and the turnaround time for each dock
would be considered. A common practice is to allocate enough staging space behind each
dock door to accommodate a truckload’s worth of material.
Some other processes that would be considered in the space requirement planning include
case picking, pallet storage, broken case picking, packing and unitizing, customizing, cross
docking and more.

Warehouses should also be designed based on current and future needs to:

 Facilitate changes in business/agency growth, and size/population of office and

warehouse spaces within the building. Warehouse space should be easily adapted to
new functions such as office (on ground or upper levels), computer centers, or light
industrial/fabrication.
 Accommodate need for future loading docks, truck space, and car parking spaces if
space configuration changes through effective site design.
 Address material handling technologies and business practice, such as "just-in-time"
storage, which have fundamentally changed operation of warehouses and distribution
centers, and will continue to do so.
 Include roof design with built-in extra structural capacity to handle addition of future
rooftop equipment.
 Be designed with fire protection capacity to accommodate storage of materials with a
greater fire hazard, especially needed with high plastic product content or packaging,
and plastic shrink-wrapped pallets.

It should also be able to maximize utilization of space while providing adequate circulation
paths for personnel and material handling equipment such as forklift trucks. We should also
use higher bays to take advantage of height allowances in the space.
Alternative material handling methods will determine other building aspects, such as aisle
widths, lighting design, need for mezzanine space, fire protection, and egress design.
Businesses will often use different methods of storage handling simultaneously for different
products.

Factors affecting warehouse layout & planning

Outside Factors
various external factors influence the design and layout of a warehouse operation. These
factors have to be taken into considerations to achieve an optimum overall system.

 Size & configuration of site: must be adequate to accommodate the required

equipment
 Site access: must be adequate for the types of vehicle and volume of traffic using that
particular site
 Local authority plans: the proposed warehouse can be greatly affected by the
government development plan
 Site details: characteristics of the facilities found in the site such as drainage and
ground.
 Financial considerations: consider about the rents, costs of ownership, investments
grants
 Building factors: existing building to be use as a warehouse.
Inside Factors

These factors has a dominant influence on how effectively a warehouse can be operated.

 Flow of goods in the warehouse: ‘U’ flow or through flow

 Movement of people and equipment
 Access to stock and minimize congestion
 Identification of stock and codes
 Stock location, rotation( FIFO)
 Stock checking requirements
 Stock replenishment
 Handling of goods in and out of the warehouse
 Supervision, safety, stock security

Warehouse aisles and gangways need to be properly design in order to achieve one of the
warehouse objectives, which is maximizing effective use of space. The widths in between
should be adequate enough for movement of people and equipment. It is ideal to have
separate doors for people on foot and for forklift trucks.

Some areas should also be set aside for other warehouse activities. These include:

 Areas for loading and unloading vehicle

 Staging or temporary storage areas
 Office space, washroom and lunch rooms
 Area for repacking, labeling, marking
 Area for equipment storage and maintenance Hazardous or high-value items

Five main areas of warehouse operation

There are five main areas of warehouse operation. They consist of the following:
1. Goods in
2. Main store – reserve stock
3. Order picking – forward stock
4. Marshalling
5. Goods out

Each area is briefly categorized as below:

Goods In (Incoming of goods)
• Receipt – unload, temporary hold
• Check – correct goods received, grade, package, quantity, damage or shortages
• Record receipts & discrepancies
• Unpack, repack if necessary
• Decide goods location

Main Store – reserve store

• Locate goods in reserve storage area
• Confirm goods location to control function
• Issue goods to replenish order picking stock

Order Picking – forward store

• Select goods for customer orders
• Pack & check
• Packaging material store
Marshalling
• Assemble goods by customer, or by vehicle loa
Goods Out – outgoing goods
• Loading facilities for vehicles
• Vehicle dispatch schedules

These areas can be illustrated in the image below:

Through flow and U flow

Material Flow Planning

Planning the flow of materials is important in a warehouse. This is because with a plan, we
would most likely be aware of the location of items in the warehouse and also the status and
location of the handling equipment. With these information, better control of the warehouse
can be achieved.

There are two main approaches of the plan of material flows. They are the 'U' flow and
'Through' flow.

'U' flow
A 'U' flow occurs when the goods receipt and dispatch functions are located at the same end
of a warehouse building.

Products flow in at receiving, move in to storage in the back of the warehouse, and then to
shipping, which is located at the adjacent to receiving on the same side of the building.

Items with higher throughput level are located closer to the loading bays. An example of a 'U'
flow design can be seen in the diagram below.

Advantages of 'U' Flow

 Excellent utilization of dock resources because the receiving and shipping processes
can share dock doors
 Facilitating cross-docking because the receiving and shipping docks are adjacent to
one another and may be co-mingled
 Excellent lift truck utilization because put away and retrieval trips are easily
combined and because the storage locations closest to the receiving and shipping
docks are natural locations to house fast moving items
 Yields excellent security because there is a single side of the building used for entry
and exit

'Through' flow

'Through' flow happens when separate loading bay facilities for outbound and shipping are
provided, often at opposite end of warehouse.

Products flow in at receiving, move into storage, picking area and then the marshalling and
dispatch area in a straight line.
Items with a higher throughput level are located at the center of the warehouse because the
total distance travelled would be shorter. An example of a 'Through' flow layout design is
shown on the diagram below.

The major disadvantage of a 'Through' flow layout is goods need to travel the full length of
the warehouse, even for goods that have a higher throughput level. It is also harder to control
and less flexible.

When is it better to adopt a 'Through' flow?

 When there is a risk of interference or confusion between goods in and goods out
 When goods inwards vehicles and dispatch vehicles are very different; for example
differences in platform height or nature of unit load
 When a warehouse is connected to a production plan

Usefulness and Constraints of Layout Design

Usefulness of layout design

1) An effective warehouse layout design can help to optimize the efficiency and space
utilization.

With the 5 main areas of operations, goods can move in swiftly from the unloading area, into
the main storage; picker can also pick goods from the picking area. Congestions are
minimized and these help to increase the efficiency of the different tasks in the warehouse.
By storing goods with a plan to locate them neatly; more space can be utilized; either
horizontally or vertically.

2) There would also be higher labor efficiency and lesser errors.

A layout plan would minimize the movement of the employees and the time used for moving
can be used to do other operations or work; thus increasing labor efficiency.

A neatly planned warehouse would have lesser errors such as picking the wrong item or
storing the wrong goods in wrong place.

3) Safety and security of a warehouse would most likely be enhanced through an effective
layout because employees would know where the walking spaces are and no goods would be
left lying around.

For efficient warehousing;

 Consider siting of stores
 Construction of buildings
 Stockyards
 Internal layout of stores
 Types of warehouses
 Storage equipment

Siting of warehouses

i) Clear, level, well drained, land capability of providing foundations suitable for
building of stockyards required
ii) Size sufficient to accommodate stores buildings, stockyards, access roads, car and
lorry parks and possible future expansion
iii) Convenient for main services, such as drainage, water, electricity, gas
iv) Convenient for transport facilities-motorways, rail, airports collecting and
delivering.
v) Close to user departments or centrally situated to serve a number of units
vi) Within the financial limits.

What needs to be taken into account?

i) The size, weight and handling characteristics of goods and materials
ii) Nature and quantity of goods to be stored
 iii) Methods of transporting goods to and from the warehouse
iv) Loading and unloading facilities with due regard to maximum weights and sizes
v) Traffic volume anticipated influencing the type of handling equipment
vi) Storage methods
vii) Any security systems that will be needed
viii) The number of staff required to operate in the building

Construction of warehouses and stockyards

i) Type of building,; Single or multi-storey
ii) Type of structure; the load bearing of the framework and suitable foundation
iii) Load bearing floors suitable for the goods to be stocked. Floors need to be dust-
free and non-slip
iv) Receiving bays and loading docks need to be correct size, type and height to suit
vehicles using the stores.
v) External doors and windows to meet security requirements
vi) Heating, lighting and ventilation
vii) Welfare facilities.

Stockyards
i) Storage of items like bricks, sand, gravel and timber etc may need a stockyard
ii) Needs a firm surface and handling equipment such as cranes and forklift
iii) Adequate lighting required
iv) Security fencing and good gates

Layout

Planning layout requires;

 Deciding the best that can be done in terms of grouping stocks
 What can be provided in terms of building or site for each group
 Exactly what type of service the store will provide
 What kind of supporting facilities a particular stores area will require.

Requirement of individual stores

 Determination of material needs

 Receipt and inspection of incoming materials and supplies
 Storage, safekeeping and issue of materials and supplies
 Centralized or decentralized storage of materials and supplies
 Recording and administration of stocks
 Handling administration of materials
 The need for “work flow” to be considered in the particular location
 The working space required by each of the functions involved
 The type of materials involved
 The type of materials involved and the mix of materials in the particular

Constraints of layout design

Space Constraint
It is very important that when you plan the design layout of the warehouse, you need to
ensure that the use of space is at the optimum level, by making the best use of space, you will
be able to have a higher amount of inventory storage. Maximizing the use of space can also
help to reduce the total cost of the warehouse therefore it important to take note of the usage
of space when designing the warehouse layout.

Constraint of the 5 main areas

Beside making best use of the space, when we design the layout, we should also consider
where are we going to locate the different areas of the warehouse. (Goods in, Main storage,
order picking, marshalling, goods out) It is because by considering this factors, you will be
able to minimize the movement and congestion in the warehouse and therefore, the rate of
accident in the warehouse would also decrease. One example is the separation of the main
storage and the order picking area.