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Warehouse Layout Design

Warehousing was supposed to disappear with Lean Manufacturing. This has rarely occurred but the nature of warehousing often does change from storage-dominance to transaction dominance.

Warehousing buffers inbound shipments from suppliers and outbound orders to customers. Customers usually order in patterns that are not compatible with the capabilities of the warehouse suppliers. The amount of storage depends on the disparity between incoming and outbound shipment patterns.

In addition, the trend to overseas sourcing has increased the need for warehousing and its importance in the supply chain.

Design Strategies

One key to effective design is the relative dominance of picking or storage activity. These two warehouse functions have opposing requirements.

Techniques that maximize space utilization tend to complicate picking and render it inefficient while large storage areas increase distance and also reduce picking efficiency. Ideal picking requires small stocks in dedicated, close locations. This works against storage efficiency.

Automation of picking, storage, handling and information can compensate for these opposing requirements to a degree. However, automation is expensive to install and operate.

The figure below shows how different transaction volumes, storage requirements and technologies lead to different design concepts.

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