What is the key point of Warehousing Design and Location Considerations?

Warehousing Design and location consideration, today Warehousing plays vital role in the supply chain so we will try ro learn how to specify the type of warehouses used in practice, what are the factors used for warehouse site locations and understand the major criteria used for warehouse design and safety and security considerations in warehousing. The competitiveness is a key contributed to the internal strength of the organisation and warehouse plays a major role especially in the price as well as market differentiation. We all know that How the quick response requirement for a customer is vital to survive in the business market place, So warehouse plays a vital role in delivering the goods when the customer wants it. The internal strength of the organisation is mainly on the warehouse and associate supporting systems, this can be seen with respect to many case studies. For example the Caterpillar logistics, they have a global logistics function and that reveals that warehouse plays a critical role in the overall supply chain. Warehouse optimises the performance of the supply chain and with over80% of the fortune500 companies indicate it is vital and highly relevant. Warehousing is a critical link that determine's the speed of response to the customers. In the supply chain we all know that from the vendor to the customer the product goes through various phases and in the phase, warehousing plays a vital role. Primarily product sales, product production after sales work then providing after sales support to the product or part of the supply chain and only then the customer will be satisfied. There are good warehouse infrastructure is essential to drive the business of primary products and services. The competitive advantage in building the best practices in warehousing is clearly measurable on time delivery is one of the factors and dealer and customers satisfaction is the second important parameter and third is the warehouse productivity, how the products come into warehouse and they get distributed to the customers. Then space and cost utilitilization which is how much investment you make in the warehouse and what is the term-over you get from the warehouse that is performance measurement in the case of warehouse. The warehousing has tangible benefits  and its impact namely on time delivery dealer or customer satisfaction the productivity the space and cost utilisation. Warehousing process starts from the supplier material coming inside the warehouse till it leaves the warehouse that stage is one is warehouse viability, warehouse efficiency and warehouse flexibility and various other consideration are once it had been determined to use a warehouse the next key step is design the warehouse to meet the particular demands of the business. Whether the warehouse is a small manual operation or large automatic facility the following principles become very important.1) Type of warehouse 2) location and design criteria 3) Material handling and the degree of automation 4) Storage plan and packaging 5) Safety and security measures. In this lesson we see all these aspects of the warehouse. The types of warehouses has been classified into three types namely the private warehouses, public warehouses and the contract warehouses. A private warehouse facility is owned and managed by the entrepreneur that owns the facility and stores the product in that facility. A public warehouse in contrast is operated as an independent business offering a range of services namely storage, handling, transportation on the basis of a nominal fee. Public warehouses operators generally relatively standardised services to all its clients. The contract warehousing evolve from the public warehousing segment provide benefit of both the private and public warehousing alternatives. The private warehouses is operated by the firm owning the product and services. The actual facility may however may be owned or leased. The decision as to which the strategy best fixed and individual form is essentially the financial aspect or the trait of costing parameters. Often it is not possible to find a warehouse for release that fix the exact requirement of a particular form. The public warehouses on the basis of specified operations, they are classified as cold storage facilities or refrigerated warehouses, general merchandise warehouses, special commodity warehouses, bonded stores then household goods and furniture dealing FMCG goods. Each warehouse type differs in its material handling and storage method and technology as a result of the product and environmental characteristics. General merchandise warehouse are designed to handle general package commodities such as paper, small appliances and household appliances. The refrigerated warehouses or cold storage facilities handle mainly food, medical items, perishables, chemical products with special temperature requirements. Commodity warehouses are designed to handle bulk material or item with special handling consideration such as steel, clothing, tiles, textiles etc. The bonded warehouses are licensed by the government to store the goods prior to the payment of custom duty and taxes. There exists mainly in the airport and the seaport and in order to differ the payment of custom duties importers often use the bonded warehouses to store their imported items. When the goods are required for manufacturing or sale they are taken out of the warehouse after paying the necessary excise or custom duty as applicable. Finally the household goods or the furniture warehouses is designed to handle store large bulky items such as appliances and furniture. Of course many public warehouses offer combination of these particular operations. The contract warehouses is a long term mutually beneficial arrangement which provides unique and specified tailored warehousing and logistic services exclusively for a particular client, whether the vendor or the client share the risk associated with the particular operation. Important dimensions of the contract warehousing are public warehouses and extended time frame of the relationship tailored services exclusively and they mutually share the risk. Third party logistics service providers often provide contract warehouses, transportation distribution as a one point solution to the clients and customers.  The contract warehousing combines both the characteristics of private and public operations. The long term relationship and sharing the risk result in lowering the cost than typical public warehouse arrangement. The contract warehouse operations can provide benefits, expertise, flexibility and economy of scale by sharing the management labour, equipment and other resources across a number of clients. Examples of warehouses, warehouses owned and operated by FMCG companies such as Hindustan Leaver and Nirma are private warehouses. Central warehousing corporation of government of India which operates more than460 warehouses including110 custom bonded warehouses is a public warehouse provider. In Bangalore MSIL provides the bonded warehouse facility at the Bangalore airport. IMC limited which is a large third party liquid storage facility provides facilities near seaports in India. The Information Technology limited is a third party service provider that stores documents for its customers.

The Warehouse site selection. Location analysis techniques are available to assist in selecting a general area for warehouse location. Once location analysis is completed a specific building must be selected. Few considerations for the site selection are1) Commercial zone( Industrial parts available nearby)2) Out laying areas accessible by Road. Rail, Air or Sea transport 3) Central areas convenient for the distribution of the goods and products near ports or near Railway stations are best considerations for site selection. The primary factors for site selections are - The availability of land at a particular cost - Then availability of infrastructure such as power water - Cost of transportation land cost and labour cost - Accessibility to transport railway sliding platforms, Roads that support the movement of  truck and rail - Then the type of product to be stored - Regulations especially for petroleum products, chemicals and explosives, - Then Local levis like sale tax, octree etc Techniques for warehouse selection are based on the distribution model that has to be supported by the warehouse modelling techniques are used to recumbent warehouse site location based on several factors such as Market size, Area to be covered by each warehouse, Customer service Labels, operating cost, type of product and the demand pattern. Here we apply the quantitative modelling technique to optimise the cost involved in investment vs the Logistics. The warehousing cost at a particular point depending upon the number of warehouses the total cost becomes optimal. So that parameter is used for selecting the particular location of the warehouse. The next module is the Warehouse Design Criteria: The warehouse Design criteria address the physical facility and characteristics and the product movement, The design criteria include- How you use the space to the maximum using a unutilized lot system suitable for storage, Minimise the movement of goods within the warehouse, Provide flexibility for future needs like expansion of the number of goods to be stored, maintain safe, secure and clean working condition ware the basic criteria for designing a warehouse. The layout recommendations are defined specific locations for receiving and shipping functions, allocate separate areas for slow medium and fast moving items so that the fast moving items need not spend time in the warehouse. Define the minimum path for material handling equipment and personal movement, keep specific places for stationary and material handling equipments conduct regular fire and safety checks and provide drills and training so that in case of an emergency the warehouse will be having the sufficient resources to cope with unexpected eventualities. The item movement EC access quick retrieval of fast moving items or essential layout considerations of a warehouse, the space utilisation ratio of the space utilised empty is recommended to be around70-30% or75-25%for semi-automated warehouses, and for fully-automarted warehouses it can be unto85-15%. The product configurations are heavy and large items should be stored where access is convenient, special attention needs to be provided for such heavy items so that all the safety aspects are not violated. Shelf-life, special storage conditions items that are perishable or need special handling need to be managed appropriately such as the fruits, vegetables etc. so that they don’t get wasted and that wastage is minimum. Utilization of storage height, regardless of the storage height the design should maximise the usage of available of cubic space by allowing for the greatest use of height on each floor. Most warehouses have20-30 feet of ceiling height, although the modern automated high raise facilities can effectively use a ceiling height unto100 feet, thought the use of racking or other hardware, it should be possible to store the product unto the buildings ceilings maximum effective ceiling height is limited by the safe lift capabilities of the material handling or fork-lift etc which is installed and in operation in that particular warehouse. The next important consideration is the Product Flow. The warehouse design should also allow the straight product flow through the facility weather items are stored or not, in general this means the product should be     received at one end of the building stored in the middle and then shipped from the other end so that it doesn’t make any U-Turn. Straight line product flow minimise the congestion and the confusion. The next is Movement of Continuity Movement continuity means that it is better for a material handler or a piece of handling equipment to make a longer move than to have a number of handlers make numerous individual short moves of the same product. In exchanging the product between handlers or moving it from one piece of equipment to another waste time increases the potential for damage as well as decreases the warehouse productivity. Thus as a general rule, few are longer movements in the warehouse are preferable. Scale of economy Movement scale of economy imply that all warehouse activity should handle or move the largest quantities possible instead of moving individual cases. The activities should be designed to move group of cases such as pallets or containers. This grouping or backing might mean that multiple products or orders must be moved or selected at the same time while this might increase the complexity of an individual activity since multiple products or products must be considered the principle reduces the number of activity and result in reducing the cost and increasing the productivity of the warehouse. The next is the Storage plan Warehouse layout design should consider the product characteristics particularly those pertaining to volume weight and storage. We know that the product can be in a solid state or a liquid state or a gaseous state. Product volume is the major concern when defining a warehouse storage plan, High volume sales or throw put product should be stored in a location that minimises the distance it moves, such as near primary aisle, and in low storage racks. For eg: Storage location of the Hindustan Lever the fast moving items like LUX toilet soap they are stored closer to the place where it is getting dispatched, so it reduces the movement within the warehouse. The travel distance and the need for extending the lift usage reduces and increases the productivity. Conversely the low volume product can be assigned to locations that are distant from the primary aisle or higher up in the storage racks i.e you segregate the principle of fast slow and non-moving principle in the warehouse storage plan. Sample storage area consists of three different kind of product store and there is a primary aisle and another location where the shipping and receiving can take place. Similarly the storage plan should include the specific strategy for products depending on weight and storage characteristics, relatively the heavy item should be assigned to locations     low to the ground or closer to the ground to minimise the effort and the risk of heavy lifting, Bulk or low density products require extensive storage volume so open floor space or high level racks can be used for that, on the other hand smaller items may require storage shelves or drawers. In certain places we handle attractive items and they need to be kept under lock and key For eg; The watches with gold plating or studded with diamond on the cellphone. The integrated storage plan must consider and address the specific characteristic of each of the product which require the warehousing facility. The various storage method we can look at it next, one is the open storage facility where level well drained ground, then you have ventilated cover security cover etc. For ed: We store the steel rods, steel bars or even wood bars(plywood) etc in open storage yard where there is no much of rain and cover with a polythene or a tarpon. The other items stored in open are Iron ore, minerals, coal, sulphur, steel rods etc. Then covered storage space are required for the goods that require protection like say for example paper or stationary, They need to be in the closed storage condition affecting from the natural wear and tear, The functional usage of the storage types are raw material, production materials, maintenance repair materials, tools, work in progress, then packaging material, finished goods, spare parts, salvage materials then cold or refrigerated items requiring perishable items, flammable goods, then rubber and tyre etc. The physical location consists of receiving the goods, storing and then issuing it and in case of modern automated storage practices the computer controls the above set functions namely storage and retrieval they call us ARS(Automated Retrieval and Storage mechanisms) The modern storage practices can be considered in two categories, the drawbacks in the traditional storage are inadequate use of the vertical space then they are highly labour oriented variety of racks for different size and shapes of items, a place of everything, and everything in place resulting in50% of storage space not being utilised. The above drawbacks are overcome by the modern storage practices namely increasing the storage rack height then mechanise using the modern material handling equipment then Unit Load concept or paletization or containerisation and standard racks they are dispensed with fixed location concept i.e store wherever empty storage is available and computerised the storing locations that is not prevalent in the automated storage systems. Then the automated storage system uses the vertical space very effectively and error in retrieving and dispatch of goods are very very minimum Safety and security considerations require proper storage using the appropriate equipment, Proper packaging of the material and keeping them safe Next is the pest control. We all know in the food corporation of India more then25 to30% of the food grains are eaten by the rats and other pests, Then fire alarms and control systems, humidity control, Temperature control, Protection from Rain, Heat, Dust, then authorising the exit entry of only permissible people into the warehouse. Another important aspect is Accident prevention, Comprehensive safety program and training of people is essential in a warehouse to prevent accidents. If anything happens then it need to be investigated and corrective measures to be put in place. Environmental protection, the spill kits and the spill plan affect the layout and they again lead to accidents namely Greece/Oil spill while transferring from a larger container to a smaller container. Then Maintenance: scheduled maintenance of the building material handling equipment of collision and damage prevention is essential. A periodical maintenance schedule is required for all the equipment as well as the storage racks and other related equipment in the warehouse. The safety and security considerations the major issues are1) pilferage2) Damage/Deterioration The pilferage protection is protection against theft of goods has become a major factor in warehouse operation, Such protection is required as a result of the increased vulnerability of the firms to civil disturbance. All the normal precautions employed throughout enterprise  should be strictly enforced at each warehouse. Security begins right at the fence. A standard procedure only authorised personal should be permitted into the warehouse facility and surrounding grounds and entry to the warehouse should be controlled through a single gate like you control a password protection in case of your computers. Computerised inventory control and other ordering processing control system help protect the goods from being carried out of the warehouse doors , no items should be released from the warehouse unless accompanied by a computer released document. if samples are authorised for use by the sell person the product should be separate and away other than from the inventory. Proper entry should be made. Today technology like RFID and barcoding can help in protecting the pilferage or unauthorised take of material from the warehouse. Numerous instances have been discovered where organised efforts between the warehouse personnel and the truck drivers resulted in a deliberate overpricing of high for low value product substitution in order to have unauthorised merchandise out of the warehouse. Employee rotation total case counts an occasional complete item check can reduce vulnerability of such collaboration. Here in major warehouses we have based on the value of the product we have periodical count check or store audit being carried out in case of high value attractive items in the beginning of the day and end of the day the stock is checked and verified. Similarly in the case of other items at least once in a week, stock checking is done so you can adopt the ABC classification for stock checking reconciliation and see that there is no unauthorised lifting of materials or products from the warehouse. Next important thing is the product deterioration, within the warehouse number of factors can reduce the product or material to a non-useable or non-marketable state, the most obvious form of product deterioration is damage from careless transfer or storage, another major form of deterioration is non-compatibility of the product stores in the same facility and another important factor is Improper material handling devices are utilised to lift and put the commodity of the products. The primary concern is a deterioration that consults from improper warehouse procedures. Constant concern is a carelessness of the warehouse employees, in this respect the fork-lift truck may well be managements worst enemy. Regardless of how often the operators are warned against carrying overloads, some still attempt such shortcuts when not properly supervised so there is a necessity for having a good supervision at the warehouse and award of the operators who do not damage the products periodically will also motivate them from behaving in a rash and negligent manner, a stack of four pallets was dropped off a fork-lift truck at a receiving dock of a food warehouse. The standard procedure was to move two pallets per load. The value of the damaged merchandise exceed the average daily product of two supermarkets. The product deterioration from careless handling within the warehouse is a form of loss that cannot be ensured against, and it constitutes100% loss with no compensating revenue for the company. In summary the type of warehouses include Private public and Contract warehouses. The key consideration for site selections of a warehouse include the necessary infrastructure, accessibility, type of product and the operating cost of the warehouse; Warehouse design should allow for higher utilisation of space balanced with minimising material handling and movement of goods; Safety to people, equipment, and good is paramount importance in a warehousing situation this concludes this module.

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The main key point of warehouse design is the accessibility to store & withdraw the materials with ease requiring minimal man & machinery power and also occupying less space.  And also the proper storage condition along  with the health and safety of the workers. 

Regarding location, it is better to have near sea/airport and industrial area with proper transport network for quick movements of goods.

The location of a warehouse should ideally be situated in a flat ground. The location should be easily approachable and in an area suited for this nature of business. Locations closer to markets or to national highways would be ideal. Public transportation and communication infrastructure should also be available. The layout of the building should be designed to accommodate fleet parking, and enable containers to drive in and drive out easily. Any time two containers should be able to pass through on the path without any interruption. There should be enough free space for vehicles to maneuver. The layout should also provide for other utility, safety and security operations. Building is normally constructed using galvanized metallic sheets mounted on C Section girdles. The flooring should be RCC concrete with weight bearing capacity as per requirement of the load to be calculated in each case. The ground should be flat, even and smooth surface to facilitate MHE movements and dust free. The roof height would be a major consideration to be able to install multi vertical storage racking installation. The walls and roof should be designed with suitable lighting panels and ventilators for air exchange fitted with bird cages. The number of loading and unloading docs and placement of these docs play an important role in the design of operations and efficiency of operation. All weather docks and the facility should enable24 hours operations of dock levels. The docks should be equipped with dock levelers and all these have to be installed during construction phase itself. Ramps have to be provided to facilitate movement of forklift etc. Lighting design will depend upon the layout and the racking design.

Internal Layout

Internal layout design will be built taking into account the operational process, nature of goods, volumes of transactions both inbound and outbound, storage types, in house operations involving put away and pull sequences and process requirements including packing, kitting etc. and the availability of floor space coupled with building layout design of inbound and outbound docks. The design aims to maximize space utilization, minimize MHE movement and Manpower movement.