STORAGE AND WAREHOUSING:WAREHOUSE LAYOUT PLANNING

5. WAREHOUSE LAYOUT PLANNING

5.1. Objectives of a Warehouse Layout

Before layout planning can begin, the specific objectives of a warehouse layout must be determined. In general, the objectives of a warehouse layout are:

1. To use space efficiently

2. To allow the most efficient material handling

3. To provide the most economical storage in relation to costs of equipment, use of space, damage to material, and handling labor

4. To provide maximum flexibility in order to meet changing storage and handling requirements

5. To make the warehouse a model of good housekeeping

The astute observer will notice that the first three objectives are essentially identical to the overall objectives of a warehouse. Recall that the objectives of a warehouse are:

1. To maximize effective use of space

2. To maximize effective use of equipment

3. To maximize effective use of labor

4. To maximize accessibility of all items

5. To maximize protection of all items

It is true that the objectives of a warehouse layout are redundant. This shows the importance of layout planning to warehouse planning. Without a good warehouse layout, it is impossible to have a good warehouse. The objective of layout planning is to arrange and coordinate the space, equipment, and labor resources of the warehouse. Poor layout planning can undermine superior space, equipment, and personnel planning. Put another way, accomplishing the objectives of warehousing depends on having a good layout. If the warehouse layout is bad, the warehouse as a whole will be bad. Con- versely, if the warehouse as a whole is bad, chances are the warehouse layout is bad.

The fourth objective of a warehouse layout recognizes the fact that warehousing exists not within a static, unchanging environment but within a dynamic, ever-changing environment. If the mission of a warehouse changes, the warehouse layout should very likely change, too, to adapt to the new mission. However, a good warehouse layout possesses the flexibility to absorb minor variances in expected storage volumes and product mixes with few or no alterations required. This flexibility allows the warehouse to function even if the forecasts on which it was planned prove to be wrong, as they inevitably do.

The last objective of warehousing follows the principle that there is efficiency in order. Good housekeeping is essential to good warehousing; a good warehouse cannot exist without good house- keeping. Yet good housekeeping by itself will not ensure a good warehouse. If the space, equipment, personnel, and layout are not properly planned, all the housekeepers in the world could not get a warehouse to function. But poor housekeeping will surely undermine good space, equipment, per- sonnel, and layout planning.

5.2. Layout Planning Methodology

Warehouse layout planning methodology consists of two steps:

1. Generate a series of warehouse layout alternatives

2. Evaluate each alternative against specific criteria to identify the best warehouse layout These two steps are discussed in the following sections.

5.3. Generate Alternative Layouts

Generating alternative warehouse layouts is as much art as science. The quality of the layout alter- natives will largely depend on the skill and ingenuity of the layout planner. This fact is crucial to the most common approach to generating layout alternatives: template juggling. The word ‘‘juggle’’ means ‘‘to skillfully manipulate a group of objects to obtain a desired effect.’’ Consequently, template juggling is the skillful manipulation of a group of templates, models, or other representations of

warehouse space, equipment, and personnel in order to obtain a warehouse layout that meets objec- tives. In other words, template juggling is a trial-and-error approach to finding the proper arrangement and coordination of the physical resources of the warehouse.

The quality of the alternatives created from template juggling depends on the creativity of the layout planner. Unfortunately, layout planners often either lack creativity or do not attempt to express their creativity. Many layout planners approach the problem with a preconceived idea about what the solution should be. They tend to base the layout planning process on that preconceived solution. As a result, creativity is stifled. Oftentimes, the layout chosen for a new warehouse looks exactly like the layout used for the old warehouse. The generation of layout alternatives thrives on the creativity of the layout planner, yet many layout planners withhold this basic and essential ingredient.

The generation of warehouse layout alternatives should be accomplished by the following pro- cedure:

1. Define the location of fixed obstacles. Some objects in a warehouse can be located only in certain places, and they can have only certain configurations. These objects should be identified and placed in the layout alternative first, before objects with more flexibility are located. Some fixed obstacles are building support columns, stairwells, elevator shafts, lavatories, sprinkler system controls, heating and air conditioning equipment, and, in some cases, offices. Failure to consider the location of these types of items first will prove disastrous. The warehousing corollary to Murphy’s law states: ‘‘If a column can be in the wrong position, it will be.’’ Don’t be the layout planner who designs a warehouse and buys the storage and material-handling equipment only to find that when the equipment is installed, the location of the building columns makes an aisle too narrow for the handling equipment.

2. Define the location of the receiving and shipping function. Oftentimes, the configuration of the warehouse site will dictate the location of the receiving and shipping functions. When this is not true, however, the receiving and shipping location decision becomes an important one. Receiving and shipping are high-activity areas and should be located so as to maximize pro- ductivity, improve material flow, and properly utilize the warehouse site. The location of access roads and railroad tracks, if rail service is required, are important considerations in locating receiving and shipping. The question of whether receiving and shipping should be located together or in different areas of the warehouse must be addressed. Common receiving / shipping docks can often result in economies of scale related to sharing space, equipment, and personnel. Separate receiving and shipping areas may, on the other hand, be best to ensure better material control and reduce congestion. Energy considerations are important. Where a choice exists, receiving and shipping docks should not be located on the side of the building that faces north. Avoiding this location reduces the amount of heat loss in the winter from northerly winds entering the warehouse through the open dock doors. The preferred location of the receiving and shipping docks is the south side of the warehouse, with east and west as second and third choices. The particular weather patterns around each warehouse site should be examined, however, to identify the prevailing wind direction at that particular site. Then the docks should be located away from the prevailing wind.

3. Locate the storage areas and equipment, including required aisles. The types of storage areas and equipment to be used will dictate to some extent the configuration of the storage layout and the aisle requirements. Be sure to make allowances for the fixed obstacles in the facility. Main warehouse aisles should connect the various parts of the warehouse. The cross-aisle at the end of the storage area may need to be wider than the aisles within the storage area, depending on the type of material-handling equipment used. For example, a side-loading fork truck that can operate with a 7-foot-wide storage aisle may require 12-foot-wide cross-aisles at the ends of the storage aisles to allow maneuvering into and out of the storage aisle.

4. Assign the material to be stored to the storage locations. This step in the generation of layout alternatives ensures that storage allowances have been made for all the items to be stored. In addition, it allows the performance of a mental simulation of the activities expected within the warehouse.

5. Repeat the process to generate other alternatives. Once a warehouse layout alternative has been established, following the four steps just outlined, the process must be repeated many times to generate additional layout alternatives. Different layout configurations, building shapes, and equipment alternatives should be used. The creativity of the layout planner should be taxed to ensure that each succeeding layout alternative is not essentially identical to the first layout alternative generated.

5.4. Evaluate the Alternative Layouts

A number of warehouse layout philosophies exist to serve as guidelines for the development of an effective warehouse layout. Each warehouse layout alternative should be evaluated against the specific criteria established for each of these warehouse layout philosophies.

1. Popularity philosophy: In a typical warehouse, it is not unusual to find that 85% of the product throughout is attributable to 15% of the items, another 10% of the product throughput is attributable to 30% of the items, and the remaining 5% of the product throughput is attributable to 55% of the items. Consequently, the warehouse contains a very small number of highly active items (often called A items), a slightly larger number of moderately active items (often called B items), and a very large number of infrequently active items (often called C items). The warehouse layout philosophy on popularity suggests that the warehouse should be planned around the small number of highly active items that constitute the great majority of the activity in the warehouse. The popularity philosophy maintains that the materials having the greatest throughput should be located in an area that allows the most efficient material handling. Con- sequently, high-turnover items should be located as close as possible to the point of use. The popularity philosophy also suggests that the popularity of the items helps determine the storage method used. Items with the greatest throughput should be stored by methods that maximize the use of space. For example, if bulk storage is used, high-turnover items should be stored in as deep a space block as possible. Because the items are moving into and out of storage at a relatively high rate, the danger of excessive honeycombing losses is reduced and excellent use of space will result from the high-density storage. Low-throughput items in deep bulk storage blocks will cause severe honeycombing losses because no other items can be stored in that location until the low-throughput item is removed.

2. Similarity philosophy: Items that are commonly received and / or shipped together should be stored together. For example, consider a retail auto parts distributor. Chances are that a cus- tomer who requires a spark plug wrench will not buy, at the same time, an exhaust system tail pipe. Chances are good, however, that a customer who buys the spark plug wrench might also require a condenser, points, and spark plugs. Because these items are typically sold (shipped) together, they should be stored in the same area. The exhaust system tail pipe should be stored in the same area in which the mufflers, brackets, and gaskets are stored. Sometimes, certain items are commonly received together, possibly from the same vendor; they should be stored together. Similar types of items should be stored together. They will usually require similar storage and handling methods, so their consolidation in the same area results in more efficient use of space and more efficient material handling. An exception to the similarity philosophy arises whenever items are so similar that storing them close together might result in order-picking and shipping errors. Examples of items that are too similar are two-way, three- way, and four-way electrical switches, which look identical but function quite differently. Storing these items close together will inevitably result in order-picking and shipping errors.

3. Size philosophy: The size philosophy suggests that heavy, bulky, hard-to-handle goods should be stored close to their point of use. The cost of handling these items is usually much greater than that of handling other items. This is an incentive to minimize the distance over which they are handled. In addition, if the ceiling height in the warehouse varies from one area to another, the heavy items should be stored in the areas with a low ceiling and the lightweight, easy-to-handle items should be stored in the areas with a high ceiling. Available cubic space in the warehouse should be used in the most effective way while meeting restrictions on floor loading capacities. Lightweight material can be stored at greater heights within typical floor loading capacities than heavy materials can. The size philosophy also asserts that the size of the storage location should fit the size of the material to be stored. Do not store a unit load of 10 ft3 in a storage location capable of accommodating a unit load of 30 ft3. A variety of storage location sizes must be provided so that different items can be stored differently. In addition to looking at the physical size of an individual item, one must consider the total quantity of the item to be stored. Different storage methods and layouts will be used for storing 2 pallet loads of an item than will be used for storing 200 pallet loads of the same material.

3. Product-characteristics philosophy: Some materials have certain attributes or traits that restrict or dictate the storage methods and layout used. Perishable material is quite different from nonperishable material, from a warehousing point of view. The warehouse layout must en- courage good stock rotation so that limitations on shelf life are met. Oddly shaped and crush- able items, subject to stacking limitation, will dictate special storage methods and layout configurations to use available cubic space effectively. Hazardous material such as explosives, corrosives, and highly flammable chemicals must be stored in accordance with government regulations. Items of high value or items commonly subject to pilferage may require increased security measures such as isolated storage with restricted access. The warehouse layout must be adapted to provide the needed protection. The compatibility of items stored close together must also be examined. Contact between certain individually harmless materials can result in extremely hazardous reactions and / or significant product damage. Specific steps must be taken to separate incompatible materials. Oftentimes, the easiest way to accomplish this objective is through the warehouse layout.

5. Space-utilization philosophy: This philosophy can be separated into four areas: conservation of space, limitations on use of space, accessibility of material, and orderliness.

(a) The conservation-of-space principle asserts that the maximum amount of material should be concentrated within a storage area, the total cubic space available should be effectively used, and the potential honeycombing within the storage area should be minimized. Un- fortunately, these objectives often conflict. Increased concentration of material will usually cause increased honeycombing allowances. Therefore, determining the proper level of space conservation is a matter of making trade-offs among the objectives that maximize use of space.

(b) Limitations on use of space must be identified early in the layout planning process. Space requirements for building support columns, trusses, sprinkler system components, heating system components, fire extinguishers and hoses, and emergency exits will affect the suit- ability of certain storage and handling methods and layout configurations. Floor loading capacities will restrict storage heights and densities.

(c) The warehouse layout should meet specified objectives for material accessibility. Main travel aisles should be straight and should lead to doors in order to improve maneuverability and reduce travel times. Aisles should be wide enough to permit efficient operations, but they should not waste space. Aisle widths should be tailored to the type of handling equipment, using the aisle and the amount of traffic expected.

(d) The orderliness principle emphasizes the fact that good warehouse housekeeping begins with housekeeping in mind. Aisles should be well marked with aisle tape or paint; oth- erwise, materials will begin to infringe on the aisle space, and accessibility to material will be reduced. Void spaces within a storage area must be avoided, and they must be corrected when they do occur. If a storage area is designed to accommodate five pallets, and, in the process of placing material into that area, one pallet infringes on the space allocated for the adjacent pallet, a void space will result. Because of this, only four pallets can actually be stored in the area designed for five pallets. The lost pallet space will not be regained until the entire storage area is emptied.

The alternative warehouse layouts should be evaluated by comparing each against specific ex- pectations relative to the layout philosophies as discussed here. The layout planner must determine which layout philosophies are most important under the specific circumstances and attempt to max- imize the extent to which the recommended layout adheres to those philosophies. Remember, how- ever, that warehousing exists within a dynamic environment; therefore, the layout chosen as best today may not be so as conditions change. The extent and timing of changing requirements in the future should be forecast and a warehouse master plan established to compensate effectively for the changing mission of the warehouse.