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  1. 1. NASHVILLE STATE Community College Warehouse & Inventory Management LOGI 1030 Warehouse Layout Space Planning Flow 1
  2. 2. Warehouse LayoutThe goal of layout is to maximize your warehouse functions to achieve the greaefficiency and space utilization A warehouse is typically divided into the following areas to support its everyday processes: Receiving Reserve Storage Forward Pick Sorting and/or assembly Quality Shipping 2
  3. 3. Warehouse LayoutThe warehouse layout must satisfy these four primary functions: Product storage Inbound operations Outbound operations Value-added processesLet’s look at each in some more detail…. 3
  4. 4. Warehouse Layout Product StorageThe first step is determining space requirements for the fourfunctionsjust mentioned.Determining space requirements for each of these is a complicated proceswhich requires analysis of historical and projected volumes to include unitscube, and weight requirements.A typical analysis looks back at one year’s worth of history and then projecsales growth over the next three and five years. 4
  5. 5. Warehouse Layout Product Storage1. Begin by looking at current average inventory levels and growth projections by SKU2. Consider variations amongst SKUs (date sensitive, refrigeration required, special handling requirements, weight/size limits?) Use this info to sort SKUs into separate product categories3. Classify each product by the number of activities (ie: picks) that are involved over a span of time (month, year, etc…) Use this info to find ways to reduce travel time (store high vol SKUs together)4. Determine where to locate product based on cube, velocity, and how often you want to replenish the forward pick locations Determine how much of each SKU to place in forward pick and reserve 5
  6. 6. Storage Space Planning …There is more to consider….peak vs average volumes…Planning the correct amount and type of storage space is one of the mostdifficult decisions.Some considerations: What is the duration of peak storage requirements? What are the average storage requirement needs? What is the relationship between peak and average storage needs? 6
  7. 7. Storage Space PlanningIf the duration of the peak is short and the ratio of the peak to averageis high, then invest in temporary storage to support the peak period.35,000 Peak Ratio of Peak to Avg Vol = 2.64 Storage30,000 Req25,00020,000 Average Storage Req15,00010,000 5,000 Minimum Storage Req 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 7
  8. 8. Storage Space Planning If the duration of the peak is long and the ratio of the peak to the average is low, then the storage capacity should be designed near the peak requirements.25,000 Peak Ratio of Peak to Avg Vol = 1.20 Storage22,500 Req20,000 Average Storage Req17,50015,00012,50010,000 Minimum Storage 7,500 Req 5,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 8
  9. 9. Storage Space PlanningAnother way to consider the type and extent of how much and whichtype of storage is needed is by plotting the storage requirements vsthe picking activity on a 2x2 matrix. 9
  10. 10. Storage Requirements High Low High Picking Needs Dominate Low Density Storage High Density Storage Dedicated LocationPicking Activity Storage Needs Dominate Dedicated Location Random Location Dual Storage Dense Storage Low Density Storage Low 10
  11. 11. High Pick & High Storage High Pick & Low Storage Indicates a large and active warehouse. In With high picking activity but low storage, the these situations, high technology/ picking area should be compact and dense and automated picking combined with storage is simple. Some automation of picking mechanized handling and high density may be justified. storage are justifiedLow Pick & High Storage Low Pick & Low StorageHere the requirement is for high density storage A simple, small warehouse requires neitherwith high bays, multi-levels and dense packing. automation or sophisticated storage devices.Low turnover means that picking can be manual Stacked pallets, floor storage or simple racksor semi-manual and shelves suffice. Handling is manual Inbound 11
  12. 12. Warehouse LayoutInbound Operations: How much space does receiving require? Gather data to determine the typical receipt profile… Profiles should include: Average number of lines on a receipt Average quantity and cube of a receipt Average number of trucks received per day Unit of measure (pallets, cartons, pieces, etc…) Consider the overall receiving process Outbound 12
  13. 13. Warehouse LayoutOutbound Operations: How much space do picking and shipping require?Consider: Are we picking eachs, cases, or pallets? Are we batch picking or picking orders straight through? Will we need to store pallets of product in shipping or direct load to trailer? Will we pick and hold orders for long periods of time? Will we perform QC audits in shipping? Value Added 13
  14. 14. Warehouse LayoutValue Added Processes: How much space is required for value added services?Consider: What type of value added service will be performed: Price labeling Re-labeling product Kitting Storing Shipping Will the value added service be performed in a separate section or will it be part of picking, packing, receiving, etc…? 14 Material Flow
  15. 15. Material Flow PlanningThere are four primary flow patterns: 1. U-Shaped 2. Straight Through 3. Modular 4. Multi-story 15
  16. 16. Material Flow Planning1. U-Shaped: Product comes in one side of the building, moves to the back (pallet storage), moves across the back (to forward pick and other process), and back to the front (Shipping) Sorting Pallet Storage Forward Pick Packing Shipping Receiving Advantages of U-Shaped Flow Pattern: Facilitates cross-docking, best use of dock space (receiving and shipping can share dock doors), allows for expansion. 16
  17. 17. 2. Straight Through: Product comes in one side of the building (receiving), flows directly through the building (pallet storage to forward pick, to processing, to the far end of the building (shipping). Receiving Pallet Storage Forward Pick Sorting/Packing ShippingBest for heavy cross-docking operations and operations with very systematicprocesses (Dell, computer manufacturing) 17
  18. 18. 3. Modular: Best suited for operations that have individual processes that are large enough to merit multiple stand alone processes. Shipping Shipping Shipping Shipping ShippingCross-docking Stand Alone Stand Alone Process 3 Process 4 Flow Flow Flow Flow Stand Alone Stand Alone Flow Process 1 Process 2 Receiving Receiving Receiving Receiving Receiving4. Multistory: Best used in locations where space is limited. Multistory is the least efficient of the designs and adds complexity to the overall process. 18