Optimising the Engine for Success (Uncover the Secrets of Warehouse Design)

  • 3 September 2015
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Understanding the importance of flexibility

‘The definition of Flexibility is the quality of bending without breaking, an ability to compromise or change, and an ability to be modified’. These simple definitions are the fundamentals of any warehouse. Despite this simple definition WBS Group would say the majority do the exact opposite. Is it just our nature as human beings to complicate everything or is it our attitude to the true definition of what a warehouse is and does.

 

After many years of walking around and assessing warehouses and delivering multiple transformation projects WBS Group Consultants have realised that warehouses are the very engine of success that enables your supply chain boat to float. If you get it wrong your whole network will fail to deliver and you risk losing customers and contracts to competitors. These centres of stock consolidation are the very interfaces between your customers and your suppliers, the buffer that allows manufacturing to keep up with the modern day demands that we as customers now expect as the norm. With such high importance placed on these centres of distribution why is that very few people invest in them to maximise their supply chain capability. WBS group think it goes back to the history of what a warehouse was designed for and what it has become.

Breaking away from legacy concepts of warehousing

Back in the 1970’s in the days before the internet, the big retailer and when communication and systems travelled at the speed of sound across the telephone, life for the manufacturer, who incidentally used to be local and not based in Poland or the Far East, was quite an easy scenario to imagine. Manufacturers made things in huge batches, dictated price by forcing customers to buy in bulk and delivered when they felt like it, huge waiting times were the norm for customers.

Warehouses really were overflow houses for over-purchased raw materials, over-produced goods or wholesalers for much smaller retail chains and their customers. 

The 1980’s onwards saw huge leaps in the way we think forcing massive changes to the way we deliver. 

  • rise of the giant retailer
  • internet retailers
  • massively improved communication and technology
  • off shoring of manufacturing to the East
  • opening up of the Global trade options
  • increased choice demanded by customers 
  • improvements in our road and freight networks

Most of all the improvements in our road and freight networks forced everything to change. The volatility of change moved from sound speed to instantaneous and so did our expectations of what service and value really are. The last 20 years has seen the rise of the 100,000M² and above distribution centres, the centralising and de-centralising of logistics, the re-locations to more effective and more cost effective locations. Overall, the change requirements for warehouses has changed out of proportion. 

Designing a warehouse for the 21st Century

Of course building a warehouse or re-designing a warehouse is not just as simple as putting up a shell, putting in some racking and hoping for the best. We can take this approach and it may be appropriate for a company with 100 different product types or parts. But as soon as you start handling varieties in the multiple hundreds, multiple thousands you soon realise that the design if not taken seriously can add huge costs in labour and your service levels become constrained by capacity. 

Building and designing a warehouse has multiple dimensions each carrying their impact on the complexity of what you are trying to achieve. 

As always you start with the customer and product demands to determine

  • positioning of your warehouse
  • volumetric sizing of your product
  • flow by which movements happen
  • stock source points
  • weight of the product
  • height at which it is stored
  • frequency of its demand
These are just some of the sides to the multi complex shape by which you service the customer. 

Get it wrong and you 

  • run out of space
  • affect productivity of pick and loading
  • increase journey times and hence transport costs
  • risk high obsolescent rates
  • fail deliveries because of lack of cover for the right goods
  • lose contracts and customers due to consistent service failure 
This central point becomes the master of complexity and the enabler to supply chain, get it wrong and you soon find your competitive advantage disappear.

Uncovering the deeper secrets of warehouse design

In the next few articles WBS Group Supply Chain Consultants would like to take you on a journey through some of these complexities, where WBS Group will try to share some of my experiences and thoughts about how to build world class warehouse. The articles will look at all the practicalities of designing and building a warehouse fit for purpose. The following are some of the areas we will look at and will be covered in our upcoming e-book on Supply Chain Optimisation.

  • Understanding your customer, industand type of warehouse you need
  • Building  warehouses with a lifespan to cover change and growth
  • Making Flow the enabler to everything
  • Balancing source points and delivery points – managing true demand at SKU level
  • Building in Volumetric allowances and maximizing physical cube
  • Using more than one planning method for inventory and how it links to speed of response
  • Building into the equation the practicalities of design such as mezzanine designs, sprinkler systems, MHE trucks
  • Choosing the right system to support your design
  • Flexible automation, full automation or manual - when is it time to choose?       

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