Your customer service offer is one of the most critical of these factors, particularly concerning order lead times. For example, if speedy delivery is a part of your service strategy (which is often the case in today’s on-demand environment), you will either need to locate your warehouses close to customers, or close to the facilities of your preferred carriers. This requirement, in turn, will influence decisions about the number of warehouses required, and their capacity.
What we’re looking for here is a logical sequence of operations within the warehouse where each activity is located as close as possible to that which precedes it and similarly, the function that follows it. We are concerned with the controlled and uninterrupted movement of materials, people and traffic with, if possible, no cross-flow clashes or areas of high traffic or work density.
Lin Padmer, warehouse assistant, DeliverTech
Aside from considering customer service aspects, such as lead times and supply chain velocity, you will also need to think about anticipated throughput and more specifically, receiving, storage, and dispatch volumes, as well as the types of processes that will be performed in your warehouse facilities. Your distribution strategy too, will have a bearing on network optimisation.
If you are already familiar with the FAST concept in warehouse design layout (if not, see the sections below), you will know that the objective of FAST is to ensure each activity-locations are close enough together to enable smooth workflows, but not too close to clutter the process and reduce efficiency. You can apply the similar thinking to the layout of your warehouse network, although the emphasis should be more on locating your warehouses close enough to customers to support your service offering, without introducing difficulties on the supply side.
Be open to the idea of getting expert advice. Warehouse design has changed a lot in recent years, as large distribution centers have moved away from single channel to multichannel inventories and even smaller warehouses have begun to automate many operations.
I wouldn’t try to convince anyone to the contrary, and indeed, I would recommend you to engage a reputable external specialist to help you, unless of course, yours is a large organisation with plenty of internal expertise in warehouse design. I hope though, that the points set out above will give you some idea of the primary considerations.
Sharing is caring. By sharing real-time warehouse information with key staff throughout the organization, you can realize significant improvements in cycle times while avoiding the need to field distracting “where is my stuff” calls from the rest of the organization.
Finally, concerning the structural and capacity requirements of individual warehouses, some of the most important things to think about are your service offering, the characteristics of your products, and types of activity that you expect to conduct within the facility.