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WAREHOUSE

DESIGN & LAYOUT PROJECT 3

BY: SAURABH PATIL

PRATEEK MISHRA

ABHISHEK BOLIMERA

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INDEX:

LIST OF DIAGRAM:

SR.NO. CONTENT PAGE NO.

1. Introduction 1

2. Warehouse Operations 2

3. Product Description 3

4. Calculations 4

5. Layout 9

6. Racking Arrangements 10

7. Costing 15

8. Assumptions 17

DIAGRAM NO. TITLE PAGE NO.

1. Warehouse Layout 1

2. Plant layout 9

3. Pallet Live Racking 10

4. Fork Lift 10

5. Double Deep Racking 11

6. Reach Truck 12

7. Narrow Aisle Racking 13

8. Narrow Aisle Truck 13

9. Cost Analysis 16

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LIST OF TABLE:

TABLE NO. TITLE PAGE NO.

1. List of Products 3

2. Pallet requirement 4

3. Demand analysis 5

4. Pallet Calculation for Receiving Area 5

5. Pallet Calculation for Shipping Dock 6

6. Pallet Calculation for Picking Area 7

7. Pallet Calculation of Sorting Area 8

8. Pallet Calculation for Bulk Storage 8

9. Plant Layout 9

10. Forklift description 10

11. Reach Truck Description 12

12. Narrow Aisle Truck Description 14

13. Warehouse Leasing Cost 15

14. Racking Cost 15

15. Equipment Cost 15

16. Indirect Cost 16

17. Total Cost 16

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1. INTRODUCTION:

Warehouses are commercial building for storage of goods. Warehouses are used by

manufactures, importers, exporters, wholesalers, transport businesses, customs etc.

It is important to understand the design of a warehouse for smooth flow of operations

like loading, unloading of goods, movement of goods within warehouse and their

storage in their respective place. The dimensions and characteristics of the

warehouse infrastructure are important and must be accurate. They are important for

the design of shelves, to calculate the capacity of the installations and the distribution

of the goods inside the warehouse. There are various things which need to be

considered access, floors, windows, columns, boxes, lines and power lines.

Buildings regulations, design according to weather and location should be studied

properly.

Diagram1: Warehouse layout

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2. WAREHOUSE OPERATIONS:

Operation of warehouse depends upon the type of industry and the products stored.

Receiving: It starts with advance shipping notification before arrival of goods

(ASN). It helps in planning proper unloading of products which helps in

completing rest of operations faster.

Storage: It is one of the major activities of the warehouse. Products are

divided according to their category and then stored in their respective places.

Order Picking: When a customer order is received, a checking process should

be performed to verify that the products are available for the customer. Then

a picking list guide is produced to help the pickers in their activities. Packing and shipping: Products are packed and then they are ready to be

shipped. Packing is preferred near the out area as product can get damaged if

more movement is done.

Pallet storage and Racking: Pallet storage systems are considered while

designing warehouse. Pallet is a frame on to which goods are loaded in bulk.

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3. PRODUCT DESCRIPTION:

This particular warehouse deals with 20 different products. There are 5

different items that fall into the ‘A’ category, 5 products that falls under the ‘B’

category and 10 products in ‘C’ category. The names of the individual products

along with their demands are listed in the below table.

SR. NO. SKU CATEGORY DEMAND / MONTH DSI

1 Kit Kat A1 1 Million 15 Days

2 Mars A2 1 Million 15 Days

3 3 Musketeers A3 1 Million 15 Days

4 Milky way bar A4 1 Million 15 Days

5 Baby Ruth A5 1 Million 15 Days

6 Nestle Butterfinger B1 300 K 30 Days

7 Hershey bar B2 300 K 30 Days

8 Cadbury chocolate B3 300 K 30 Days

9 Almond joy B4 300 K 30 Days

10 Bounty B5 300 K 30 Days

11 Galaxy C1 50 K 60 Days

12 Hershey’s C2 50 K 60 Days

13 Reggie bar C3 50 K 60 Days

14 Snickers C4 50 K 60 Days

15 Sky bar C5 50 K 60 Days

16 Toblerone C6 50 K 60 Days

17 Twix C7 50 K 60 Days

18 Uno C8 50 K 60 Days

19 Zero bar C9 50 K 60 Days

20 Welch’s fudge C10 50K 60 Days

Table 1: List of products

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4. CALCULATION

4.1 CALCULATIONS OF SIZE OF EACH PRODUCT:

Pallet Size: 48*40*4.5” (Taking U.S. Standard Pallet)

Carton Size: 16*8*10” (This will account for 100% Utilization of the

pallet)

Size of product A, B & C: 8*4*8” (Same size for all three products)

Catron’s per pallets = Pallet size/ Carton size = (48*40*60) / (16*8*10) = 90 carton/pallets

Item’s per carton = Carton size/ Item size = (16*8*10) / (8*4*8) = 5 items/carton

Item’s per pallet = Pallet size/ Item size = (48*40*60) / (8*4*8) = 450 items/pallet

Number of pallets for demand:

Table 2: Pallet requirements

Total demand = No. of items * Demand

Pallets required = Total demand/450(items/pallet)

No. OF

ITEMS DEMAND

TOTAL

DEMAND

PALLETS

REQUIRED

PRODUCT A 5 1000000 5000000 11112

PRODUCT B 5 300000 1500000 3334

PRODUCT C 10 50000 500000 2223

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4.2 INVENTORY CALCULATIONS:

Inventory in days for the items

o A items: 15 days

o B items: 30 days

o C items: 60 days

DEMAND STORAGE

DAYS

ACTUAL

DEMAND

SAFETY

STOCK

DEMAND

WITH SS

FINAL

DEMAND

PRODUCTS

A 5000000 15

5000000/2=

2500000 10% 250000

2500000+250000

= 2750000

PRODUCTS

B 1500000 30 1500000 20% 300000

1500000+300000

= 1800000

PRODUCTS

C

5000000 60 5000000*2=

1000000 30% 300000

1000000+300000

= 1300000

Table 3: Demand analysis

Actual demand = Demand*number of months

Demand with safety stock = Actual demand*Safety Stock

Final Demand = Demand+ Demand with safety stock

4.3 CALCULATION FOR RECEIVING DOCK:

The receiving dock is designed to hold one day of incoming goods and can be

block stacked 2 Pallets high. The assumption is that the pallets would be moved into

bulk storage area within this time frame. Since the pallets contain the same product,

we can safely assume that we utilize 100% of the pallet space.

DEMAND DAILY DEMAND

(Demand/30Days) PALLETS NEEDED

(Demand/450)

PRODUCTS A 5000000 166667 371

PRODUCTS B 1500000 50000 112

PRODUCTS C 500000 16667 38

TOTAL 512

Table 4: Pallet calculation for receiving area

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Pallet Needed = Demand/(Items/Pallets)

512 Pallets are needed in the receiving dock.

With the reference

(http://www.spartanwarehouse.com/warehouse-space-calculator) we can calculate

the total area needed for the Receiving Deck.

We get 4267 Sq. ft. with 80%Utilization.

4.4 CALCULATION FOR SHIPPING DOCK:

The Shipping dock (Dispatch Area) is designed to hold 1.5days worth of

goods, within this timeframe the goods will be loaded onto an outgoing truck. Since

the pallets are essentially mixed, they cannot be safely stacked over each other. Thus,

we assume a 70% cubic efficiency on each of these outgoing pallets.

Demand Daily Demand

(Demand/30Days)

Demand for 1.5day

(Daily demand*1.5)

Pallets needed

(Demand/315)

PRODUCTS A 5000000 166667 250000 794

PRODUCTS B 1500000 50000 75000 238

PRODUCTS C 500000 16667 25000 80

TOTAL 1112

Table 5: Pallet calculation for shipping dock

Pallet Needed = Demand/(Items/Pallets)

(As the cubic efficiency is only 70%, we would consider it to be 450 instead of 315

i.e. 70% of 450 is 315)

We require 1112 pallets in shipping docks

With the reference

(http://www.spartanwarehouse.com/warehouse-space-calculator) we can calculate

the total area needed for the Shipping Deck.

Thus, we get 18533 Sq. ft. for 80% space utilization

Pallet efficiency is 70% as these pallets cannot be stacked to 100% since they are

made up of mixed product and would not stack safely.

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4.5 CALCULATION FOR PICKING AREA:

The picking area will be loaded at the end of each day with 1 full day of product for

each of the 20 SKUs sold. This product will be in full pallets, any partial pallets left

in the picking area at day’s end will remain there.

DEMAND DAILY DEMAND

(DEMAND/30DAYS) PALLETS NEEDED

(DEMAND/450)

PRODUCTS A 5000000 166667 371

PRODUCTS B 1500000 50000 112

PRODUCTS C 500000 16667 38

TOTAL 512

Table 6: Pallet calculation for picking area

Pallet Needed = Demand/(Items/Pallets)

512 Pallets are needed in the receiving dock.

With the reference

(http://www.spartanwarehouse.com/warehouse-space-calculator) we can calculate

the total area needed for the Shipping Deck.

Thus, we get 8533 Sq. ft. for 80% space utilization

Thus, to give some leeway for products left over from previous days picking,

we calculate the picking area to be of 8600 sq.-ft.

4.7 CALCULATION OF SORTATION AREA:

The sortation area is designed to hold 1 hour worth of goods, and the space

utilization is just 10% of the actual foot print of the product. This is because there

are a number of packaging equipment’s which takes up floor space. Here the pallets

are sorted; stretch wrapped, labelled and is sent to the correct dock so that it can be

loaded onto an outgoing truck.

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DAILY

DEMAND

(Demand/30Days)

DEMAND/HOUR

(Demand/16)

PALLETS

NEEDED

(Demand/450)

PRODUCTS A 166667 10417 23

PRODUCTS B 50000 3125 7

CPRODUCTS 16667 1042 3

TOTAL 33

Table 7: Pallets calculation for sorting area

Thus, we get 860 Sq. Ft for 10% utilization as these pallets cannot be stacked to 100

%since they are made up of mixed product and would not stack safely.

4.8 CALCULATIONS FOR BULK STORAGE:

DEMAND SAFETY

STOCK

DEMAND

WITH SS

ITEMS/

PALLET

NO. OF

PALLETS

AREA

(sq. ft.)

PRODUCT A 2500000 1.1 2750000 450 5556 21166

PRODUCT B 1500000 1.2 1800000 450 3334 12693

PRODUCT C 1000000 1.3 1300000 450 2223 8469

TOTAL 11113 42328

Table 8: Pallets calculation for bulk storage

Total number of pallets required are 11113 and the area is 42328 with 70%

efficiency.

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5. LAYOUT

Following the final layout of the warehouse. Minor adjustments have been done to

the shape so that the layout looks for practical implementations.

SR.

NO. TYPE OF AREA

DIMENSIONS

(L*B)

TOTAL

AREA

(SQ. FT.)

PERCENTAGE

1 Receiving Dock 160*26 4267 5.72%

2 Shipping Dock 200*80 18533 24.84%

3 Picking Area 240*45 8600 11.53%

4 Sorting Area 85*10 860 1.15%

5 Bulk Storage Area 350*120 42328 56.76%

TOTAL 470*160 74600 100% Table 9: Plant layout

Thus, Total Area of the Warehouse according to the layout will be: 470*160=74600

sq. ft.

Diagram 2: Plant layout

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6. RACKING ARRANGEMENT

FOR PRODUCT A:

Racking System: Live Pallet Racking

Diagram 3: Live pallet racking Diagram 4:Fork lift

The bulk storage of product A is going to comprise of 278 columns containing 20

pallets each. Let assume 8.5 ft. between each or these sections. Now let’s assume

0.5 ft. between each of the columns for the supporting structure of the racking.

Advantages of Pallet Live Racking

o Enables perfect pallet turnover (FIFO SYSTEM).

o Maximum capacity as storage system is compact.

o Time and space saved in pallet handling.

Picking equipment: Counter Balanced Fork Lift

We chose to employ counter balanced forklift to undertake operation on live

pallet racking. Since the forklift will be operating inside the warehouse so to keep

the emissions inside the warehouse limited it is advisable to operate an electric

counter balanced forklift.

Table10: Forklift description

Manufacturer Toyota

Model 7FBEST10

Capacity 1 – 1.5 tons

Type of Drive Electric

Overall Length 2365 mm

Overall Width 990 mm

Turning Radius 1230 mm

Cost $16,033

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The racking system we are implementing for Product A bulk storage is Live Pallet

Racking and we are stacking 5 pallets high. Using these conditions, we have

calculated that dimensions of the Product A bulk storage should be 300 ft. long and

70 ft. wide which would occupy 2100 sq. ft. of area which is well within the allocated

area of 21166 sq. ft. for Product A bulk storage

o Length = 300 ft.

o Width = 70 ft.

o Height = 5 pallets

o Area = L*B = 300 * 70 = 21000 sq. ft.

FOR PRODUCT B:

Racking System: Double Deep Racking

Diagram 5: Double deep racking

Advantages of Double Deep Racking

o Increased storage capacity compared with Selective Racking

o Medium to low storage system.

o Can increase pallet storage by as much as 10-15% depending on racking

layout.

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Picking Equipment: Reach Truck

To operate on a double deep racking the forklift needs to reach inward towards to

racking to store or pick a pallet that is stored against the, hence we need to employ

a reach truck and again to minimize the emissions inside the warehouse we need to

employ an electric forklift.

Diagram 6: Reach truck

Manufacturer Toyota

Model 8BDRY15

Capacity 3 – 3.5 tons

Type of Drive Electric

Overall Length 2200 mm

Overall Width 1023 mm

Turning Radius 1158 mm

Cost $36,000 Table11: Reach truck description

The racking system we are implementing for Product B bulk storage is Double Deep

Racking and we are stacking 5 pallets high. Using these conditions, we have

calculated that dimensions of the Product B bulk storage should be 210 ft. long and

60 ft. wide which would occupy 12600 sq. ft. of area which is well within the

allocated area of 12693 sq. ft. for Product B bulk storage.

o Length = 210 ft.

o Width = 60 ft.

o Height = 5 pallets

o Area = L*B = 210 * 60 = 12600 sq. ft.

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FOR PRODUCT C:

Racking System: Narrow Aisle Racking

Diagram 7: Narrow Aisle racking

Advantages of Narrow Aisle racking

o Less floor area for aisle

o FIFO inventory management

o Design Flexibility

o Immediate access to every pallet.

Diagram 8: Narrow aisle truck

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The isles of powered mobile racking are too narrow for a common counter balanced

forklift to access, hence a narrow aisle truck needs to employed.

Manufacturer Toyota

Model BTVECTOR

Capacity 1.25 – 1.5 tons

Type of Drive Electric

Overall Length 1700 mm

Overall Width 1430 mm

Turning Radius 1023 mm

Cost $15,000 Table 12: Narrow aisle truck description

The racking system we are implementing for Product C bulk storage is Narrow Aisle

Racking and we are stacking 5 pallets high. Using these conditions, we have

calculated that dimensions of the Product C bulk storage should be 286 ft. long and

29 ft. wide which would occupy 8294 sq. ft. of area which is well within the allocated

area of 8469 sq. ft. for Product C bulk storage

o Length = 300 ft.

o Width = 70 ft.

o Height = 5 pallets

o Area = L*B = 300 * 70 = 2100 sq. ft.

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7. COSTING:

Costing of the warehouse is done on annual basis. Warehouse construction cost is

taken and all the direct and indirect cost have been included.

COST OF WAREHOUSE:

UTILITY COST/sq. ft.

($) TOTAL AREA

(Sq. ft.) TOTAL COST

($)

Warehouse 60 74600 4476000

Table 13: Leasing cost

COST OF RACKING:

PRODUCT TYPE OF RACKING COST/RACK

($) TOTAL

RACKS

COST OF

RACKING

($)

A Flow Rack 100 556 55600

B Double-Deep Racking 70 150 10500

C Narrow aisle Racking 50 150 7500

TOTAL 73600

Table 14: Racking cost

Cost of equipment:

TYPE OF

RACKING EQUIPMENT

COST OF

EQUIPMENT

($)

NUMBER OF

EQUIPMENTS

TOTAL

COST

($)

Flow Rack Counter Balanced

fork lift 17000 2 34000

Double-Deep

Racking Electric fork lift 36000 1 36000

Narrow aisle

Racking

Narrow aisle

truck 15000 2 30000

TOTAL 100000

Table 15: Equipment cost

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INDIRECT COST:

UTILITY COST/sq. ft.

($) TOTAL AREA

(Sq. ft.) TOTAL COST

($)

Electricity 0.24 74600 17904

Maintenance 0.15 74600 11190

Office equipment 0.1 74600 7460

Insurance 0.3 74600 22380

TOTAL 58934 Table 16: Indirect cost

TOTAL COST:

UTILITY COST ($)

Cost of warehouse 4476000

Cost of racking 73600

Cost of equipment 100000

Indirect cost 58934

TOTAL COST 4708534

Table 17: Total cost

Thus, the total cost of warehouse for a single year would be $729334.

Diagram 9: Cost representation diagram

4476000, 95%

73600, 2%

100000, 2%58934, 1%

COST ANALYSIS

Warehouse

Racking

Equipments

Indirect cost

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NOTE: Cost is taken warehouse electricity, equipment etc. is from google

8. ASSUMPTIONS:

o One material picking equipment of each kind is sufficient for handling the

volume of goods.

o The warehouse is located in a corner such that it is feasible to locate two dock

doors on either side of the warehouse.

o We ignore the weight constraints associated with the product.

o We do not calculate costs for dock doors, offices or employee lounges.

o We assume that products are stored linearly, there is no application of random

storage in this warehouse.