Table of contents
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Declaration of Originality
I hereby certify that this material, which I now submit for assessment on the module Warehouse Design & Management is entirely my own work, except where fully & properly referenced. I certify that it has not been submitted in whole or in part for assessment for any academic purpose other than in partial fulfilment for that stated above. In addition, I certify that the soft copy submitted through Safe Assign is an exact replica of the Hard copy version handed up.
This report was drafted via academic books, articles, journals, case studies, online resources and e-books.
Name Signed Student Number Date
Ziran Xu D16122897 19/11/2018
The main goal of this report is to have a comprehensive understanding of the warehouse layout & design.
To achieve the goal, the general knowledge of warehouse layout & design is provided. In addition, a significant degree of comparison and analysis between warehouse layout & design and other functions & sectors within warehouse will be included in the main body.
According to the comparison and analysis, the warehouse layout & design plays an important role in the warehouse management. As the first step of building a warehouse, it is designers’ responsibility to consider every functions ; sectors that are required before the building process as they are highly connected.
Warehouse, “layout & design”, comparison, analysis, “other functions & sectors”, connect.
Honestly speaking, it is not just the case anymore of build the biggest ware house you can and put as much equipment and staff into it as possible. Roy, De Koster, ; Johnson states that warehouses play a critical role in matching product demand with supply across different echelons in the supply chain. No supply chain design and management is adequate without deciding the location, design and management of warehouses. (Roy, De Koster, ; Johnson, 2017). Today warehouses need years of planning and consideration of where the company could or may be in the coming years.
The purpose of this Research Project is to delve deep into the knowledge of warehouse layout ; design and find the association between this topic and other points relate to warehouse. Through to discuss these comparison and analysis, a broad range of knowledge of warehouse design ; layout will be given.
The first part of this report will focus on the general knowledge of warehouse layout ; design. The second part will compare and analyze the warehouse layout ; design with other points relate to warehouse.
Objective of warehouse layout ; design
The role of warehouse layout ; design is summarized by Mulcahy (Mulcahy, 1994) said that the designing layout usually include a request or requirement to (1) maximize the space utilization or provide the maximum storage and pick position within the building structure; (2)allow an efficient product flow from the receiving area to the storage-pick areas and from the storage-pick areas to the assembly, packing, and shipping areas. In total, the objective of warehouse layout design is to optimize the warehousing functions and achieve maximum productivity, operational efficiency and space utilization in the warehouse.
Importance of warehouse layout ; design
Syed Abdul Rehman Khan and Yu Zhang, the professor of Chang An University in Economics and Management claims that the warehousing layout has strategic importance in the firms’ supply chain management strategy and service level. Usually, firms design their warehouse, which can increase service level, reduce order fulfilling process time and cost. (Zhang & Abdul, 2017). It is true that a well-designed warehouse layout has ability to help company extract maximum value from its facilities, removing the obstacles of inventory management which inflate supply chain costs and increase the company’s competitive advantage. DHL supply chain, the world’s leading contract logistics provider ranked No.1 in the top warehousing firms in 2017. (2017 Top Warehousing Firms, 2018). One of the reasons that DHL supply chain can acquire this achievement is they have a 40,000 square meters warehouse which is well organized (DHL, 2017). The sound layout of DHL supply chain is beneficial to achieve the high value of space utilization, at the same time the efficiency of the warehouse is increased. According to the example above, the well-organized layout makes an important contribution to company’s succeed. Indeed, a reasonable warehouse layout is the foundation of everything.
Areas of Warehouse layout
Interlake Mecalux, the international company engages in storage system market has the statement said that the created layout must respect the basic rules of good storage and avoid areas and points of congestion, facilitate maintenance tasks and establish the resources required to obtain the greatest possible workflows, with the associated reduction in runtimes. (Interlake Mecalux, n.d.). In addition, the company points out that to perfectly defined a warehouse layout, six areas need to be organized.
Loading and unloading area
The loading and unloading area is described by Interlake Mecalux as the place which located outside the warehouse or incorporated into it, it allows trucks and vehicles to direct access to the warehouse to transport and distribute goods. (Interlake Mecalux, n.d.). Furthermore, two types of loading and unloading areas are explained by Interlake Mecalux: Independent loading and unloading areas and Integrated loading and unloading areas
Independent loading and unloading areas
Interlake Mecalux explains that this type of area located away from the warehouse and it operates completely independently of the warehouse itself. They believe this option is best used in warehouses where only one of the two functions is carried out, i.e. where goods are loaded or unloaded. The option can achieve the high-speed of handling, as there is no need for the trucks to back up to the building. (Interlake Mecalux, n.d.)
Integrated loading and unloading areas
The company expounds that if the loading and unloading area is built directly into the sides, then goods are deposited and collected without the need for any detours. (Interlake Mecalux, n.d.). Apparently, the greater load handling speed can be achieved in this situation.
The location of reception area is explained by Interlake Mecalux, in order to achieve the multiple uses of the area (receiving goods, quality control and sorting), the reception area must be located as independently as possible from the rest of the warehouse.
Strictly speaking, a storage area is an area that used to store goods. Interlake Mecalux provides different ways of storing such as directly on the ground, directly on the ground but stacked or in blocks and on racking units. To explain these ways in greater detail, the company claims that the choice of one or the other will depend above all on the type of product to be stored, whether it can be stacked, and the storage quantity and time.
Order Picking area
The order picking area is not required in all warehouses said by Interlake Mecalux. The company comments that the area is only used when outgoing goods must have a configuration or composition that is different to the one that entered with, or any type of modification is required.
Interlake Mecalux indicates that the dispatch area is used for packing orders prepared in the previously described areas, other functions for example dispatching and loading into the distribution vehicles are available in this area. Besides, the company points out the dispatch area should be designed in a specific location and differentiated from the rest of the installation to ensure the correct speed of movement within the warehouse.
The service area is introduced by Interlake Mecalux, it is a part of the warehouse and must be assigned to support activities at the facility, such as management office, changing rooms, bathrooms, and the area for collecting and recharging the electronic handling devices. The company suggests the management office should be located between the reception and dispatch area in order to achieve the greater operability and efficiency. As for changing rooms and bathrooms, the company advices assigning them close to the management office. In the case of the area for collecting and recharging the devises, they recommends it must be isolated and well ventilated, to minimize the probability of potential risks.
Types of warehouse layout
Frazelle (2002) states in flow planning, four types of flows need to be specified which are U-Shape, straight-thru, modular-spine, and multistory flow pattern. Each of them has its own virtue and disadvantage, the decision depends on the characteristics of the products and the space of the warehouse.
An example U-shape warehouse flow design is illustrated by Frazelle (see Appendix A for a figure showing the typical U-shaped flow pattern). According to the figure, the inbound and outbound gates are placed in the same side of the warehouse. The storage area designed based on the units’ usage, the highly using/ ordering units locate near the inbound gate. Therefore, SKUs are arriving at the receiving gate, where items are sorted into three groups based on their priority of shipping which are cross-docking, fast and low moving SKUs. Cross-docking items are directly moved to the outbound gate as they are highly demanded. The rest will go to storage section and sorted depending on their usage level. (Frazelle, 2002).
An example Frazelle (2002) sources from Bruce A. Strahan is provided. (see Appendix B for a figure showing the Straight-thru flow pattern). Using the figure, the flow is a straight-line movement, the framework is typically clear and direct which includes only four areas: receiving, storing, selecting and shipping area.
An example of Modular-spine flow design is illustrated by Frazelle (2002) (see Appendix C for a figure showing the modular-spine flow pattern). Through observation, the module is dedicated to specific order flows and item popularity designations. Therefore, it is noticed that this type of layout divides the warehouse into sectors based on the order flow, items order frequency and volumes of orders. Frazelle (2002) continues discussing about the usage of Modular-spine flow, it is well suited for large-scale operations in which individual processes are so large they merit stand-alone and uniquely designed buildings.
Frazelle (2002) comments the use of multistory layout is to deal with the extremely scarce land. It represents to build the warehouse in different floor as there is not enough land area. However, the author argues the potential constraints exist, for example the bottlenecks encountered in moving merchandise between floors.
External Layouts Design
The main function of a warehouse is to receive, sort and distribute goods, a key aspect of this is how goods get into the warehouse. Rushton, Croucher & Baker (2017) describes the goods enter the warehouse at a point called the gatehouse. Three aspects are mentioned and included in the external areas of warehouse. (Rushton, Croucher & Baker, 2017).
A key aspect of any warehouse is accessibility, and vehicle roadways are the core to that. Rushton, Croucher & Baker (2017) describe the vehicle roadways as the vehicle flow that can be routed one-way or two-way to and from the loading bays. To be more details, they suggest a clockwise rotation may be better suited for right hand vehicles in the terms of one-way design, because it allows drivers to reverse easier.
It is suggested by Rushton, Croucher & Baker (2017) that adequate vehicle, trailer and swap-body parking need to be set out to ensure smooth flow and to keep the warehouse running at pace. As for the aspect of security, a suggestion is given by the authors, the parking area should be separate from the heavy-goods-vehicle areas as it can cause delays and safety issues.
These areas have to be considered from the layout onset as they can be a key turnaround feature of the warehouse. Several examples are listed by Rushton, Croucher & Baker (2017) such as fuel points, vehicle washing facilities, weighbridge and generators. These additional services all play key roles to the functionality and operational aspect of warehouse.
To achieve the functional warehousing operations, five main activities are given by Tomé: Receive, Put away, Storage, Pick and Ship. (Tomé, 2014). It is noticed that these five activities are capable to be achieved in the “6 areas” which have been mentioned in the topic “Areas of Warehouse layout”. (see Appendix D for a table showing the relationship of warehousing operations and “6 areas”). Thus, the warehouse layout & design has the great connection with warehouse operations, two parties are highly relied on each other. In this case, the designer of the warehouse layout should follow the principle of the warehousing operations, and the “6 areas” should be designed for the good use for the five activities.
The picking process which is the important part of warehousing operations has a great impact on warehouse layout & design. As a part of warehousing operations, it is defined by Warehouse solutions (2018) as the activity that select items from a warehouse inventory, to satisfy several independent customer orders. The process is identified as the most costly and laborious activity in the warehouse. Murray (2018) describes the cost of order picking is estimated to be as much as 55% of the total warehouse operating expenses. Therefore, the optimization of the layout of order-picking area is necessary as it can not only reduce the costs but also increase the efficiency of warehouse operations.
Public V’s Private Warehousing
In terms of warehouse layout ; design, private warehouse is more flexible in customization aspect. According to the comments from Reyes (2018), company can design specific efficient layout and prepare specialized handling equipment in private warehouse, while the layout type and equipment in third party warehouse is settled and is unchangeable. Clearly, the private warehouse can be designed to meet the various requirements of company and is more flexible than public warehouse. However, in the aspect of geography, public warehouse becomes more flexible than private warehouse. According to Commercial Warehousing (2015), private warehousing may restrict the geographical flexibility of the company. If the company wants to change the location of warehouse to meet customers’ demand, it will cost a lot due to the leases and other capital costs. As for public warehouse, it is easier for company to find a new public warehouse due to the typical lease agreements that only requiring a 30- or 60-day notice before leaving. (Commercial Warehousing ,2015).
Facility Development (Size, Number, Location)
Size, number and location are some decision criteria that company used to decide how they carry out their activities. Among which size is the most relevant factor that has impact on the warehouse layout & design. This statement has evidenced by Ziegler (2018) says because the size of your warehouse will inform countless parts of your design build strategy such as layout types, operational flow, cost of land, etc.). The author continues to describe that it should realistically be one of the first things that you settle once you have decided to move ahead with a design build. It is true that the design of the warehouse layout type depends on the size of the warehouse. Large warehouse has plenty of place to design amounts of chain for operations. In addition, the large space of warehouse allows designers to choose different types of layout from complex to simple to meet the specific requirements. For instance, big-size warehouse is capable to be applied to U-shaped flow pattern, Modular-spine flow pattern and Straight-thru flow pattern. While the small-size warehouse is constrained by its space and capacity, and in most cases, there is not much choice for building different types of warehouse.
Appendix A Typical U-shaped flow pattern
Figure 1. Typical U-shaped flow pattern
right-30416500Appendix B Straight-thru flow design
Figure 2. Straight-thru flow patter
Appendix C Modular-spine flow design
Figure 2. Modular-spine flow 097155pattern
Appendix D The relationship of warehousing operations and “6 areas”
Activities of warehousing operations Corresponding “6 areas” Definition of activities
Receiving Reception area It is suggested by Mulcahy (1994) that receiving activity involves unloading delivery and verifying the arrived quantity is equivalents to the firm’s purchase order quantity.
Put away Storage area Vitasek (2007) describes Put-away is the process of moving material from the dock and transporting it to a storage.
Storage Storage area Storage area is an area that used to store goods.
Picking Order Picking area Warehouse Solutions (2018) says order picking process can be defined as the activity of selecting items from a warehouse inventory, to satisfy several independent customer orders.
Shipping Dispatch area Hector (2018) describes shipping is the final warehouse process and it is implemented in dispatch area.
Table 1. The relationship of warehousing operations and “6 areas”