New warehouse design makes best use of assets

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Starting in the 1980s, all aspects of warehouse and distribution center operations have been challenged. Companies striving for maximum utilization of logistical assets (manpower and facilities) have reinvented how they receive, store and ship products. |ret||ret||tab|

Just-in-time manufacturing methods, cross-docking and direct shipping from vendors have altered the objectives of warehouses. In fact, the ideal warehouse is no warehouse at all. Large inventories are no longer thought of as assets on the balance sheet. Here are five themes shaping distribution centers and warehouses today:|ret||ret||tab|

First, keep it small and focused. Companies planning new facilities get too preoccupied forecasting product growth and future storage needs. As a result, they build buildings that are too big for their current operations, especially during the early years when the company's financial viability needs nurturing. |ret||ret||tab|

The rapid pace of change in the marketplace makes it unlikely that anyone can predict future demand. In fact, few companies have any inkling what product lines they will be offering in 20 years. Even when growth occurs, the ongoing movement to slash inventories can maintain stasis in the required warehouse volume.|ret||ret||tab|

The answer is to build in a modular form. When growth occurs and new facilities must be built, the additions are pre-planned and will not interrupt current operations. It is much more economical to invest in new facilities when they are needed instead of building extra space in the beginning. Obviously, good planning, stable construction costs and favorable interest rates are prerequisites for this right-sized concept to work.|ret||ret||tab|

The second point is transparent: make maximum use of every cubic foot of storage space. Most existing warehouses have great potential for improvement in this regard. Storage racks should not leave wasted space around products. |ret||ret||tab|

Products stored in containers should be full, rather than dispersed. Increasing the product density reduces the building size and it reduces travel time for employees.|ret||ret||tab|

Third, aisles should be as narrow as safely possible. Up to 40 percent of warehouse space stores no product at all and is dedicated to aisles the size of boulevards. A standard lift truck requires 10 to 15 feet to make a 90 degree turn. |ret||ret||tab|

Specialized equipment that loads from the side needs only four to six feet. This equipment may be more expensive, but remember that it can be depreciated over five years, whereas the building cost is depreciated over 39 years. Furthermore, it is not necessary that lift trucks be able to pass one another in every aisle. |ret||ret||tab|

The fourth factor influencing efficiency is proper zoning. A general rule across all industries is that the physically smallest SKUs (stock keeping units) generate the most volume. Small parts should be stored in low-rise shelves or compartments. |ret||ret||tab|

Products can be stocked and orders picked using hand carts or automated machinery. Keeping with the principle of maximum space utilization, offices and accessory spaces can be on a mezzanine over the storage area. Large products, and products with low inventory turnover, can be placed in high storage.|ret||ret||tab|

Finally, the configuration of the docks needs to be rethought. A traditional paradigm placed shipping and receiving docks on opposite sides of the building in a straigh-through configuration. While this is good for factories, two reasons make it a poor choice in distribution centers. |ret||ret||tab|

First, each dock must be designed separately to handle peaks. However, shipping peaks rarely coincide with peaks in receiving. Creating combination docks along one side of the warehouse accommodates the individual peaks with fewer docks required. Reducing the number of docks saves money.|ret||ret||tab|

The second reason shipping and receiving docks should be on the same side of the building is that it enhances productivity. In the straight-through setup, at least one trip to stock the item or to pick it off the shelves will be more than one-half the width of the building. |ret||ret||tab|

But if the high-volume zone is placed closest to the docks and the low-volume items are in the back of the warehouse, travel time is minimized. Most activity will require only short trips for both operations.|ret||ret||tab|

Some of the most dramatic gains can be had by very simple changes. |ret||ret||tab|

|bold_on|(Jeff Wells is chief executive officer of Pellham Phillips Hagerman in Springfield.)|ret||ret||tab|

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