Warehouse Layout Design Final

7/29/2019 Warehouse Layout Design Final

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Lean Management

Warehousing Decisions &

Layouts.


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The Nature and

Importance of Warehousing

Warehousing provides time and placeutility (primarily time)for raw materials,industrial goods, and finished products,allowing firms to use customer service as

a dynamic value-adding competitive tool.


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Warehouse Operations

Warehouse:

A warehouse is a commercial building used

for storage and distribution of goods.

Warehouses are used by manufacturers,

importers, exporters, wholesalers,

transport businesses, etc.


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The Role of the Warehouse in theLogistics System: A Basic Conceptual

Rationale The warehouse is

where the supply

chain holds or storesgoods.

Functions ofwarehousing

include: Transportation

consolidation Product mixing

Cross-docking Service Protection against

contingencies

Smoothing


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Warehouse Value-Adding

Roles


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Figure 8-1

Transportation Consolidation


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Figure 8-2

Supply and Product Mixing


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Figure 8-3

Basic Warehousing Decisions


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Basic Warehouse Decisions:

A Cost Trade-off Framework Ownership

Public versus contract versus private

Centralized or DecentralizedWarehousing

How many

Location

Size

Layout

What products where


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The Ownership Decision Public warehousing

costs mostly allvariable.

Private warehousingcosts have a higherfixed costcomponent.

Thus privatewarehousingvirtually requires ahigh and constantvolume.


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The Ownership Decision Factors to consider

Throughput volume (because of fixed costs)

Stability of demand

Density of market area to be served

Security and control needs Customer service needs

Multiple use needs of the firm


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Table 8-2 Firm Characteristics

Affecting the Ownership Decision


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Figure 8-6

Basic Warehouse Operations


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Public Warehousing Rationale for Public Warehousing

Limited capital investment

Flexibility

Public Warehousing Services

Bonded warehousing

Field warehouses


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Public Warehousing Public warehousing

regulation:

Liability Receipts

Public warehousingrates based upon:

Value Fragility

Potential damage toother goods

Volume and regularity

Weight density

Services required


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Contract Warehousing

Increasing phenomenon

Compensation for seasonality in products.

Increased geographical coverage.

Ability to test new markets.

Managerial expertise and dedicated resources. Less strain on the balance sheet.

Possible reduction of transportation costs.


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The Number of Warehouses

Factors Affecting theNumber ofWarehouses

Inventory costs

Warehousing costs

Transportation costs

Cost of lost sales Maintenance of

customer service levels

Service small quantity

buyers


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Table 8-3: Factors Affectingthe Number of Warehouses

Factor CentralizedDecentralize

d

Substitutability Low HighProduct Value High Low

Purchase Size Large Small

SpecialWarehousing

Yes No

Product Line Diverse Limited

Customer Service Low High


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Basic Warehouse Operations

Movement Receiving

Put-away Order picking

Shipping

Storage Stock location

Warehouse Management System(WMS)


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Warehouse Layout and Design

Develop a demandforecast.

Determine each itemsorder quantity.

Convert units into cubicfootage requirements.

Allow for growth.

Allow for adequate aislespace for materialshandling equipment.


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Provide for thetransportation interface.

Provide for order-pickingspace.

Provide storage space.

Provide recouping,office, andmiscellaneous spaces.


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Warehouse Layout

Warehouses must be laid out so theycan function in the most efficient

manner possible Different industries have different

warehouse layouts EXAMPLE: Food warehouses may have a

freezer section, cooler section, and dryfoods area.


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Warehouse Layout

Racking and islesalways runs towardthe dock doorswhen in the sameroom as the dockdoors.

Racking must alsotake in considerationany I-beams orother obstructions.


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Warehouse Layout

Each section of rackingis called a bay.

Each bay usually holds2 or more pallets.

Racking is usually 1 to 6bays high (dependingon how much space is

available in thewarehouse. Each bay usually has a

label with aidentification number.


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Warehouse Layout

Each section musthave 3 on each side

(front and back) freefor the pallets tohang over theracking.

This is a OSHAStandard

3 inches for each pallet


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Warehouse Layout

This is an example

of what happens

when the racking

does not have 3 oneach side!

A standard pallet is

usually 40 wide by

48 deep

Most pallets cannot

be stacked higher

than 60


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Warehouse Layout

A functional design must also take intoconsideration the isle space (area between

the racks.) If the isle does not allow enough space for

the material handling equipment (fork liftsand pallet jacks) to function properly,productivity goes down greatly.


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Warehouse SpaceRequirements


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Basic needs:

Receiving

Basic storagearea

Orderselection and

preparation

Shipping


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Layout and Design Principles:

Use one story facilities wherepossible.

Move goods in a straight-line.

Use the most efficientmaterials handlingequipment.

Use an effective storage plan

Minimize aisle space.

Use full building height.


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Warehouse Layout and Design:Layout and Design Objectives

Cubic capacityutilization

Protection Efficiency

Mechanization

Productivity


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Table 8-4: WarehouseProductivity Metrics

Pounds or units per day

Employees per pound moved

Pounds unloaded per hour Pounds picked per hour

Pounds loaded per hour

Percentage of orders correctly filled

Productivity ratio = pounds handled/daydivided by labor hours/day

Throughput = amt of material moved through

the system in a given time period


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Materials Handling

Definition: Efficient short distancemovement in or between buildings and

a transportation agency. Four dimensions

Movement

Time Quantity

Space

Coordination


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Objectives of MaterialsHandling

Increase effective capacity Use buildings height and minimize aisle space

Improve operating efficiency Reduce product handling

Develop effective working

conditions

Reduce heavy labor

Improve logistics service

Reduce cost

Table 8 5: Principles of Materials Handling


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Table 8-5: Principles of Materials HandlingTo effectively plan and control materials handling, the

logistics manager should recognize some guidelines andprinciples.


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Packaging

Interest in packaging is widespread

Logistics

Warehousing Transportation

Size

Marketing Production

Legal


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The Role of Packaging

Identify product and provideinformation

Improve efficiency in handling anddistribution

Customer interface

Protect product


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What Is Packaging?

Consumer (interior) packaging Marketing managers primarily concerned

with how the package fits into themarketing mix.

Industrial (exterior) packaging Logistics managers primarily concerned

with efficient shipping characteristicsincluding protection, ability to withstandstacking when on a pallet, cube, weight,shape and other relevant factors.


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Packaging Materials

Table 8-6 presents a comparison ofvarious packing material characteristics.

Basic considerations include:

Soft materials

Plastic

Environmental issues

Recycling (reverse logistics)


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Bar Coding

Standard markings that can be read byautomatic or handheld scanners that allow

for labor saving logistical activities for allsupply chain members.

Bar Codes contain information regarding:

Vendor

Product type

Place of manufacture

Product price


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Appendix 8A

Materials-Handling Equipment


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Dock Equipment

Forklifts

Dock bumpers

Dock levelers

Dock seals

Trailer restraintsystems

Pallets


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Pallets and Pallet Movers


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Figure 8A-1 Forklift Truck


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Figure 8A-2 Pallet Types


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Other Materials HandlingEquipment: Conveyors

Types

Roller or gravity style

Belt style Advantages

Assist in keepinginventory records an

location Ability to move

goods quickly andefficiently

Disadvantages

Very expensive

Relatively inflexible


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Other Materials HandlingEquipment: Other

Types

Cranes (overhead

and wheeled) Packers (COFC

and TOFC)

Automatic guidedvehicles

Advantages

Ability to handle

special movementsquickly and efficiently

Disadvantages

Very expensive andlimited use


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Cranes


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Figure 8A-3 Materials-HandlingEquipment Top-running


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Order-picking and StorageEquipment

Picker-to-part systems - order pickermust travel to the pick location within

the aisle. Bin shelving

Modular storage drawers

Flow racks Mobile storage systems

Order-picking vehicles


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Order-picking and StorageEquipment

Part-to-picker systems - the pick locationtravels through an automated machine to

the picker. Carousels

Horizontal

Vertical

Mini-load automated storage andretrieval systems (AS/RS)


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Figure 8A-4Order-Picking Equipment


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Figure 8A-5 Mezzanines


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Types of Materials Handling

EquipmentA Design Perspective Flexible path

Fork lifts, power lifts/skids

Very flexible, but usually labor intensive Continuous-flow fixed path

Conveyors, track-guided vehicles

Expensive but capable; limited flexibility;need high volumes to be efficient

Intermittent-flow fixed path

Rail-mounted cranes


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Equipment Selection Factors

Physical attributes of the product and itspackaging

Characteristics of the facility Time requirements

Sources of information

Vendor sales force Company engineers

Consultants

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Warehouse Layout Design Final

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