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July 24 2006 04:08 PM

Are you planning a new warehouse or distribution center or reorganizing or expanding an old one? You know youll be able to ship more products more efficiently, but the benefits of a new warehouse can sweep through your entire organization. You can realize major savings in labor costs, slashed product acquisition costs and even new product launches that were previously impossible.


However, you must plan the expansion carefully. The penalties for poor planning on a warehouse expansion can haunt your firm for years. The best advice to anyone considering a new warehouse or even as an expansion/reorganization of an older one is: Get the help of someone who really knows this business. The payoff for extra experience in planning the project can be huge.


Looking at Lift Trucks

Lets start with the lift trucks that will help to run your new warehouse. Many companies do start at just that point, for excellent reasons. Depending on the situation, selection of the types of lift trucks to be used can determine the entire layout of the warehouse.


The variety of lift trucks and related material handling equipment available can be bewildering. Units can range from small pallet jacks at around $4,000 to huge turret trucks with multiple capabilities for $70,000 or more. Some can lift heavy loads 40 feet in the air. They can be powered electrically or by gasoline, diesel fuel, natural gas or propane; they can be bought, leased or rented, either new or used. Depending on the design, they can work in aisles as narrow as 65 inches and require aisles 12 feet or more in width. They can roam freely or run in limited areas on rails or guided wires. Just what capabilities do you need?


If the warehouse or distribution center will be a new structure using new lift trucks, there is great freedom in equipment selection. However, many companies want to utilize their existing lift truck fleets in the new warehouses. In this case, trucks determine the overall design, starting with aisle width and lift height.


Here are a couple examples of the considerations that come into play. Turret trucks can operate in very narrow aisles, 65 inches to 71 inches wide, and depending on the model can lift up to 40 feet high. By contrast, rider reach and double reach lift trucks are less expensive, but require 81/2-foot to 91/2 -foot aisles. Sit-down rider trucks need 10-foot to 12-foot aisles. Many of our customers tend to think of forklifts first, but we often recommend electric pallet trucks instead because they have no mast sticking up into the air and cost less on average.


A few general tips on lift truck selection:

A survey of your existing lift truck fleet by a professional lift truck dealer is often very helpful in pinning down the equipment decisions. Experienced dealers can spotlight the condition and age of each of your existing vehicles and can recommend which ones may be candidates for overhaul or replacement.

Dont forget to allow plenty of room to park your lift trucks when they are not working. Allow for a service area, especially battery-charging stations for electric trucks.

           Narrow-aisle situations are good places to put equipment on rails or on in-the-floor guide wires. This will reduce work for your operators, speed operations measurably and more than pay for itself in prevention of damaged products and equipment.


Things Your Planner Will Need to Know

You can help your warehouse planner substantially if you can supply certain facts about your operation. Focusing on these facts can also help shape your own plans. Heres a quick checklist of things to know before you start working on a design and why each is important:


1.         Total number of SKUs your new facility will store. Obviously, this will determine the total size of the new or reorganized warehouse.

2.         What products will be your fastest movers in the new facility? Most distribution operations embody the old "80/20 rule" 80% of your shipments will come from 20% of your inventory. One key goal of the new design should be to make that vital 20% flow as smooth as possible. Your product line will determine the material handling throughput.

3.         Will your operation use piece pick, case pick or pallets? This information can determine aisles as well as lift truck equipment and suggest the best pick method to use.

4.         The size of every carton/package/SKU that will be stored and shipped, in four dimensions length, width, height and weight. This will help your planner set proper shelf sizes and determine the number of vertical levels. For companies that cannot easily come up with this information, the lift truck dealers/warehouse designers can employ machines that swiftly measure these dimensions for you.

5.         How much room will you need for pallet or bulk storage? This question leads to others, principally how you will handle incoming shipments will they be broken down, counted and inventoried immediately or stored and broken down later? Will your inbounds arrive at predetermined times or randomly throughout the day? Will your new facility have separate doors for inbound and outbound shipments (the ideal is inbound doors on one side of the building, outbound doors on the other), or (like most companies) have to schedule inbound and outbound shipments through the same set of doors? The goal is to have your people handle incoming products only once if possible.

6.         Which sortation and manifesting systems will you use? This will depend on how your product will move over the road. The majority of companies distributing small products use one of three shippers: Federal Express, trailers or UPS. Each has a different manifesting system and different requirements. Some are willing to leave a trailer by your shipping dock, allowing you to fill it overnight and have it picked up in the morning. Your planner needs to know your intentions about outbound shipments to help plan your facility effectively.

7.         What kinds of shifts will your workers operate on not just today but six months or a year in the future?

8.         Will there be seasonal needs within your operations? Many businesses experience seasonal surges of activity. They can generate more incoming and/or outbound shipments, increased bulk storage needs, a need for more lifting capacity and other dislocations. Youll need to provide for these surges in storage and pick capacity, and your facility should be designed with these maximum traffic periods in mind. One tip: Extra lifting power can be gained by renting lift trucks for limited periods rather than investing in new ones.

9.         Will you be able to handle a full days picking operations without replenishing the shelves? This is a good goal to strive for it is desirable to keep replenishing lift trucks out of the shelves during the heaviest picking times. This question also deals with product velocity, and your planner will need to know about that, too.


Pick Method Is Important

One of the most important decisions you and your planner will make is the order picking method. Here, your options seem to multiply every year, as picking technology is moving very rapidly.


The pick method determines the basic shelving and conveyor configuration as well as your work force and the equipment it will use. Consultation with your planner is essential. Will your order pickers roam the entire facility, or would it be more efficient to use a zone pick method? Will they pick by hand, by pick-o-light system or using handheld computers? Will your order picking be completely paperless, almost paperless or conventional?


Depending on the above decisions, your planner may recommend normal shelves, a pick modular system (products go into a container and direct to packaging), carousel conveyors (multiple spinning carousels) or some combination. This may in turn deter-mine where powered conveyors (as opposed to gravity) are needed.


Even More to Consider

Plan for growth. Specifically, you should plan for three different types of growth: increases in SKUs handled as the operation grows, increases in products and lines handled and increases in inventory as a result of smart buying. Its important to remember that a more efficient distribution operation may allow purchasing to realize real savings via bulk buying. This can change not only the amount and type of inventory storage you need but also your inbound shipment and breakdown plans.


           Do not underestimate this potential growth in your planning. It may sound incredible, but there are companies who planned new warehouses and literally outgrew them before they were able to move in.

           Know your workforce well. Labor is the single biggest expense item in most distribution operations. Tremendous savings are possible we have seen 12-man operations do the same work with six people after an efficient redesign. However, it is essential for a company to dialogue with its workers, explaining things to them and cultivating their approval before throwing them into a completely new warehouse operation. Remember that when you change the equipment your workers use, you are changing their work. It makes sense to involve them and solicit their suggestions. If new lift trucks are being ordered, it may pay to rent one or two or take early delivery and let your workers try them out.

           Know your managers. Are they ready for the changes a new warehouse design will bring? We have seen companies more than double their warehouse production, going from 85 to 100 cases per hour up to 185 to 247 cases per hour. Can the managers you have now adapt to an order of magnitude change like this? What kind of retraining might they need?

           Remember that "tryout period" doesnt apply. Unfortunately, in todays world, companies usually arent able to gradually adapt to a new warehouse and make changes as they adjust, much as they would like. The simple truth is, once you move into the new building or operation, youre committed to it. This makes it even more important to plan thoroughly before acting; you must get it right the first time.


Professional warehouse designers can walk you through the steps you must take before opening a new warehouse/distribution center or revitalizing an old one. A dealer with the capabilities to offer these essential layout and design services is necessary. Good luck!


Harvey Levin is an allied product manager, Material Handling Supply, Inc. in New Jersey. For more information, call 888-UFT-TRUCK.