Previously, we discussed an in-depth process for improving warehouse efficiencies – reviewing current processes and identifying areas of improvement; documenting process workflows; projecting inventory and SKU requirements; defining cost drivers and developing alternatives to be reviewed. This month, we will identify space and equipment requirements.

Warehouses often run out of space the longer they are in operation as businesses continue to add more product offerings to capture more sales. Managers need to look at the inventory to make sure they have enough of the products that are selling and less inventory of merchandise that isn’t selling. They also need to make sure that they are using the existing warehouse space appropriately.

Right-Sizing Inventory

Working with the sales and marketing team, warehouse managers can review sales projections to ensure the warehouse is carrying the correct number of items needed to fill orders. If there are too many products in stock of certain items, and not enough storage shelves for them, the overflow can fill aisles, which can lead to accidents. Inventory management tools need to be used to right-size inventory to avoid overstock and understock of items. Getting rid of obsolete merchandise will free storage space as well.

Warehouse Redesign

Finding more space, when adding footprint is not an option, requires a warehouse redesign. Warehouses need to be designed to accommodate the loads of the materials to be stored, the material handling equipment, along with the receiving and shipping operations, and the needs of the operating personnel.

Often businesses simply add a sortation unit or conveyor system thinking it will increase throughput in the warehouse. But, warehouse automation can’t just be dropped into the operations without considering the spatial relationship (or 3D). When designing distribution processes, visualize the overhead conveyors, line conveyors, sortation units, mezzanines, etc., all interacting with each other over time to avoid any potential design/fit problems. Get a thorough understanding of the current materials handling situation, as well as the company’s goals for future growth. With these parameters in mind, design the ideal distribution center or warehouse with the best quality material handling systems that deliver a quick return on investment.

Another option is to use 3D simulation software which allows users to walk through or flyby with animation of all or part of a material handling system. Simulation enables an organization to analyze and experiment with its warehousing process in a virtual setting, reducing the time and cost requirements associated with physical testing. Simulation incorporates the amount of labor needed, type of material handling equipment to use – all in a risk-free environment without disturbing the original warehouse space.

Some benefits of simulation are:

– Reduce design and development time
– Reduce risk of operation bottlenecks
– Model simple or complex systems
– Highest degree of modeling accuracy
– Enhance confidence in process design
– Reduce risk of costly design mistakes
– Supports capital equipment investment analysis
– Increase worker productivity

3D simulation brings the warehouse model to life and allows viewing the warehouse on a deeper level, ensuring clearances are met and throughput rates can be achieved.

Next month we will focus on defining the framework to manage and monitor processes, developing a transition plan, and prescribing re-engineered business processing procedures. The final step is to implement changes and test that they meet specific requirements.

Jim McLafferty is Director of the Professional Services Group at DMW&H. He brings 25+ years of experience in the material handling industry, building lasting partnerships with clients by delivering cost effective, high quality professional services that keep clients’ businesses operating smoothly and efficiently. Jim is also a thought leader in postal deliveries and parcel shipments, and the equipment and systems needed within a warehouse or distribution center to facilitate package deliveries.