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Just as every snowflake and fingerprint are unique, so is every warehouse. Even though, in the broadest sense, almost all product distributors perform the tasks of receiving, storing, picking, packing and shipping, there are an infinite number of variables that impact the characteristics of the operations thereby rendering each warehouse or distribution center distinctive. Building shapes, locations and numbers of dock doors, building column spacing, beam or joist clear heights are only some of the physical constraints that the facility itself can place upon us when designing the material handling system and the associated operational work flow. Added to these constraints are the unique order profile the distributor typically fulfills, which might even have one or more seasons during the year looking different than the rest of the time. Further complicating matters might also be the various sales channels, either consumer direct through an e-commerce or phone order platform that requires parcel shipments, or through retail stores using a dedicated fleet of trucks, or finally, through a wholesale network which might require either parcel, LTL shipments or dedicated truckload shipments. Furthermore, and probably most influential, are the physical characteristics of the inventory and the load type in which they are received, stored, and shipped (by pallet, case, or the item itself). Because there isn’t one size to fit all distributors, nor is there an all-encompassing software program that can return the optimal warehouse design, the solution to maximizing the cubic space with material handling systems in order to reduce labor costs, expand distribution capacity and improve quality typically requires a lot of data, some institutional knowledge, and most importantly, a defined process.

Step 1 – Understanding Data

Because land and construction are not inexpensive, a priority should be placed on analytically determining the appropriate amount of space that is needed and including room for growth and expansion. Ultimately, the goal is to use the most cubic space possible with the material handling solution that works best for the distributor. As it relates to storing, picking, and replenishment, area and volume planning should be broken down by total amount per load type. For example, a detailed SKU velocity analysis might show a need for 5,000 pallet positions with 3,500 SKUs and 2,000 case positions with 1,500 SKUs. This same velocity analysis would also dictate the appropriate storage media for each SKU. As an example, a high velocity SKU that is sold typically as a pallet load might be best stored and picked out of deep lane pallet flow rack or drive-in/drive thru pallet rack whereas a SKU that is a very slow mover and is only sold as an item or case might be more appropriately stored in carton flow rack or static shelving. Each of these storage types have a different amount of cubic space utilization with the aisle space for each storage type largely dictating the utilization percentage. The final by-product of the SKU velocity analysis with the associated storage type for each SKU and cubic space utilization percentage and growth percentage applied results in a net cubic area required for inventory storage.

As it relates to area planning for functional tasks, there are industry standards to use, but this is also where institutional knowledge helps. For example, a typical pack station in a value-added services area might require about fifteen square feet of space (3’ x 5’ table with shelves and dividers) plus another ten square feet for operator space, but some distributors require special marketing material to be printed and placed inside the box. This would require additional room for a printer at each station. On top of that, optional custom gift wrapping may be available thereby requiring the pack stations to accommodate more room for all the various choices. In this same example, processing times at the pack stations would need to be understood to calculate the total number of pack stations required.

In addition to the value-added services functional tasks, others that should be considered in area planning include the receiving operation, shipping operation including sorting, manifesting, labeling, wrapping and staging, recycling operations, quality assurance and facility maintenance. Most, if not all these operations require floor space with some operations needing to be adjacent to others. For example, the quality assurance operations will likely be located prior to the shipping operations.

Even though most of these functional tasks are floor level, it does not mean that they must be performed on the ground floor. Multi-level mezzanines, either using a prefabricated structural mezzanine solution or a pallet rack or shelf supported solution, can provide cubic space utilization for these labor-intensive tasks. Even more so, by connecting the functional task areas with conveyors or other forms of automation to bring the products to and from the associates, productivity can be improved by increasing the amount of time that actual value-added services are performed by the associates and reducing the wasted travel time which hinders their efficiency.

Step 2 – Understanding Constraints

Although designing the layout and processes that occur inside the four walls of a warehouse or distribution center requires a certain level of creativity or artistry, hardly ever is the canvas blank. In fact, unless the owner of the warehouse is also the operator and the facility to design is a new construction opportunity, a building with the desired shape, column locations and clear heights might not even be available in the local real estate market.

Some physical constraints that the building creates include:

• Shape – The application of each storage type is optimal in some building shapes and can be grossly sub-optimal in others. For example, an Automated Storage and Retrieval System (AS/RS) would have a hard time being justified if the building shape did not allow for long aisles and appropriate overhead space to maximize storage density and minimize the number of crane aisles required.
• Dock Door Locations – In conjunction with the shape of the building, the locations of the dock doors determine the “flow” of the building. A straight “flow through” building with shipping and receiving doors on opposing sides typically has the inventory storage (floor stack, pallet rack, shelving, etc…) rows perpendicular to the walls of the dock doors. To the contrary, a “U-shaped flow” building with shipping and receiving doors on the same wall may or may not have the inventory storage rows parallel to the wall with the dock doors.
• Clear Height – The height of the lowest ceiling obstruction will determine the height of the storage types and consequently the number of storage levels, as well as the number of levels a multi-level platform can accommodate.
• Column Spacing – This constraint is probably the number one source of frustration for material handling system designers. Building column locations impact pallet rack rows, forklift aisles, pick module size, conveyor paths, and the locations of larger material handling units such as Vertical Lift Modules (VLMs), AS/RS, or carousels.
• Ceiling Joist Capacity – One of the best uses of vertical space as it relates to moving product around a warehouse of distribution center is to elevate the conveyor system by supporting it from the ceiling joists. Sometimes, however, based on the live load and dead load of the conveyor and the products being conveyed, the ceiling joist capacity does not allow this strategy. Many times, this can be overcome by structurally stiffening up the ceiling joists.

In addition to the physical constraints, there are others that impact the cubic space utilization of a system design, including:

• Fire, Building, & Safety Codes – All municipalities have their own ordinances and codes that must be adhered to. Fire marshals have requirements that typically entail two unencumbered egress paths from anywhere inside the warehouse to an outward opening door within a certain distance. Building inspectors place limitations on the overall square footage allowed by a mezzanine in a single room. These requirements alone have major bearing on material handling system design strategy of maximizing the cubic space.
• Insurance – Just like any other business, distributors must protect their assets, including their property and inventory, through insurance. The premiums for the insurance policies are largely dependent on the amount of inventory, the commodity classification of the inventory, the ways in which the inventory is stored and the ability to suppress any fire or smoke. Additionally, documented OSHA violations or previous workplace accidents can also impact insurance premiums. These factors play a major impact in storage system design and the design of any multi-level equipment or system where personnel perform daily duties or inventory is typically stored.
• Lift Equipment – When taking advantage of clear height that is available in a building for material handling and storage systems, the limitations of the lift equipment must be considered. Forklifts, order pickers and any other mobile lift equipment all have height capacities as well as load limitations at their highest points. This can become a game of inches and pounds, so priority should be placed on performing the due diligence on the storage system design and ensuring that it meets the planned lift equipment capacities.
• Personal Preference – There are many types of material handling solutions whose focus is to maximize the available cubic space. Automated Storage and Retrieval Systems (AS/RS), horizontal or vertical carousels, vertical lift modules, high bay racking, and multiple level pick modules and mezzanines are just a few concepts. Each of these concepts work well in specific situations while others do not. Since we all live and learn, we develop preferences toward types of solutions, especially as it relates to specific applications.

Step 3 – Evaluating Options

Once the data analysis is complete and the constraints are understood, it is time to put concepts to paper and evaluate solution alternatives. The trick to performing this step in the process is to stay at the highest level as possible, especially if there are a wide variety of options. Block diagrams, equipment budget pricing and expected labor force to support the system layout are typically the main drivers in narrowing down multiple concepts for consideration.

For example, one solution might include an AS/RS with some type of goods to person (GTP) workstation configuration, while another option might have a bank of VLMs picking in batches and connected together with conveyors that go to a deconsolidation station, and finally, a third option might be Very Narrow Aisle (VNA) high bay racking layout using a platoon of order pickers. The capital required for each of these options are extremely varying and can be budget estimated (+/- 10%) using typical industry rules of thumb or historical project experience. At the same time, the amount of labor required to support the design is reasonably easy to calculate. By simple comparison and ROI analysis, usually one or two options can be eliminated quickly, and the focus starts to narrow down.

Narrowing down the focus in developing a final material handling solution that optimizes the available cubic space, while efficiently fulfilling all the operational needs, is a closed loop and collaborative process. Block diagrams become replaced by detailed drawings and specifications. Budget prices become firm and much more exact. And more parties become involved in the process. Maintenance, operations, engineering, information technology, management and executive leadership staff should all be a part of the decision-making process and give their stamp of approval to have complete and total buy-in. This will build ownership to the system design by team members, and therefore, will minimize the criticism or negativity that can occur when a group of stakeholders are not involved.

In summary, although the process to develop a material handling system that maximizes the cubic space in the warehouse can be an intimidating one, it can also be extremely beneficial if done correctly. Increased labor efficiency, improved throughput, or deferred or reduced construction costs are only a few benefits that can be realized.