06 June, 2022

Warehouse layout design best practices

There’s more to warehousing than just piling inventory. In fact, the design of your warehouse can make or break your overall operational efficiency. You should make sure to design your warehouse to optimize for clear visibility, smooth transfer of goods, and easy equipment accessibility. All of these factors make order fulfillment both easier and faster.

So, what’s the best way to arrange your warehouse? Read below to help streamline your workflow and make the most of your warehousing space.


What is warehouse layout?

Warehouse layout refers to both the physical structure of your warehouse and the many components within it. Proper warehouse layout ensures that workers have enough space to operate at maximum capacity. Additionally, optimal warehouse layout leads to smoother inventory flow and less wasted time.


Factors affecting warehouse layout

There are several considerations for optimal warehouse design and workflow. Here are some common factors that should define the layout of your warehouse.



Warehouse layout factor #1: Your budget

When you decide to build a warehouse, you should consult with your finance department to determine your budget. If you have proper funds, you can hire a warehouse design expert to create a layout based on your requirements with accurate measurements.

However, that can be expensive. Make sure to conduct a cost-benefit analysis and see which structures and equipment best fit your budget. After careful consideration, you should pick the one that provides the most value for your specific circumstance.


Warehouse layout factor #2: Space needed

Depending on your budget and layout plan, you can determine the amount of warehousing space you need. By efficiently using your warehousing area, you can both increase the visibility of your inventory and reduce travel and stocking time. When planning warehouse layout, how you divide the space determines your warehouse’s capacity and ability to store goods. For example, you should allocate more space for storing and processing inventory, and less space for office areas and charging stations.

You shouldn’t overlook vertical space, as stacking products helps maximize your warehouse’s storage capacity. You can form clusters of products by grouping and stacking them together —— which leads to quicker sorting later.


Warehouse layout factor #3: Equipment needed

To efficiently run a warehouse, you need to use conveyors, lifting and packing tools, pallet racks, and more. Forklifts are one of the most important pieces of equipment for warehousing operations, and you need to consider this tool as you design the layout of your warehouse. Forklifts are able to transport bulky items around your warehouse effortlessly. However, it can be more economical to rent a forklift than own one.

Pallet jacks are similar to forklifts, but they help transport smaller loads of inventory across shorter distances. Pallet jacks can be either electric or manual. The size and shape of equipment should heavily influence the layout of your warehouse; for instance, most conventional forklifts need a minimum aisle width of 12 feet. After analyzing your equipment needs, you can evaluate the best-suited warehouse layout and go from there.


Warehouse layout factor #4: Staffing requirements

Understanding staffing requirements can help you estimate how many people you’ll need, shift timings, and necessary level of training for each task. These factors can help determine the size and structure of your warehouse’s layout. It’s important to make sure your layout does not impede the movement and productivity of your employees. The layout should also be designed while keeping the future in mind — you should have a large enough space so new employees can be added comfortably down the line.


Warehouse layout factor #5: Safety regulations

The safety of your employees should also be of prime concern to you. Make sure to invest in training your employees and providing adequate safety equipment for their welfare. This, in turn, will increase job satisfaction and productivity. While designing your warehouse layout, you should also make sure to comply with safety guidelines according to your local authorities and government. This helps prevent both employee injuries and legal actions. By strategically planning your warehouse layout with these things in mind, you can eliminate inefficiencies and boost productivity.


The 3 types of warehouse work flows

Your warehouse’s workflow layout can be U-shaped, I-shaped, or L-shaped. Each style has benefits and drawbacks; let’s look at them in detail, and, based on your needs, you can determine the best possible structure for your warehouse.


The U-shaped warehouse flow

U-shaped warehouse flows are the most popular due to their simplicity and ease of replication. When all the inventory is arranged in a “U” shaped semicircle, the middle portion is used for storage, and then shipping and receiving are performed on either side.


After receiving orders, products are placed in the “staging” or reception area. This is where unloaded products are sorted and placed at appropriate storage locations. Storage space goes on the back side of the warehouse, and there are two types:

  • Static Storage are slow-selling products more likely to sit on the shelves for a longer period of time.
  • Dynamic Storage are products with higher demand and turnover.

The “U” shape helps streamline inventory flow and keeps everything separate. By keeping incoming and outgoing shipments on parallel sides, the U shape also helps to avoid bottlenecks, too. Because shipping and receiving are on the same side of the building, employees can swiftly move products between these two stages. Some people consider this a downside because close proximity to the entrance and exit can lead to congestion.


The I-shaped warehouse flow

Then I-shaped warehouse flow is usually preferred by larger businesses that have larger warehouses. Larger companies produce in higher volume, and I-shaped design offers a clear “in and out” view of product workflow.


In this type of flow, receipt and unloading are both done at one end of the warehouse, and storage is done at the middle. The shipping area is at the opposite end. The I-shaped design allows for a linear flow from receipt to shipment. From a bird’s eye view, the flow is similar to an assembly line, which both helps minimize bottlenecks and reduces back and forth movement.

The challenge associated with I-shaped warehouse design is that some companies like to have loading and unloading spaces on both sides of the warehouse. This means that products need to travel the entire length of the warehouse.


L-shaped warehouse flow

The L-shaped warehouse flow is the least popular style of warehouse layouts — and it is best suited for buildings that are also L-shaped.


As you can see, the inventory flow in these types of warehouses are in the shape of an “L.” The receiving and unloading areas are on one side of the warehouse, and the shipping and picking areas are on an adjacent side, creating a 90-degree angle. The remaining space is then designated for storage purposes.

Like the I-shaped flow, the L-shaped flow also reduces back and forth movement. It separates the received and shipping area on different sides of the warehouse, too. However, the downside of the L-shape is that it requires considerable space to run your operation smoothly.


5 best practices for optimal warehouse layout

To make the most out of your warehousing strategy, here are some tips you can implement.


Best practice #1: Mapping workflow

While finalizing the schematics of your warehouse’s design, you should make sure to get the most accurate measurements possible. After selecting your warehouse design, you need to label various areas on your premises according to their function. Workflow should be established from entry to exit. When the workflow is designed, you’ll be able to understand how each function connects. After that, you’ll be able to define best work processes and train your employees correctly.


Best practice #2: Optimizing picking processes

When you adequately plan your picking and packing workflows, you’ll be able to accurately ship the right products to the right customers. There are several picking methods that you can implement to improve your picking processes.

  • Batch picking consists of picking similar orders in batches, all at once. This method is faster than picking one order at a time, and it allows you to fulfill similar orders by utilizing the same SKUs.
  • Zone picking is when pickers are assigned specific zones and only pick orders from that specific area. Zone picking is commonly performed one at a time. If an order needs products that are outside a certain zone, a conveyor belt is often used.
  • Wave picking is helpful for warehouses that contain larger volumes of products with a large amount of SKUs, and it combines both batch and zone picking. In this method, the picker has to stay within the zone assigned to them, and they are able to pick multiple orders simultaneously.
  • Discrete picking is used in small businesses with a lower number of SKUs. Whenever an order is received, the picker retrieves all items for the order from different zones of the warehouse. This is time-consuming because pickers are only able to process one order at a time.

As always, you should select the picking strategy that best suits your business. Whatever method you choose, you should focus on maintaining high picking accuracy to reduce the risk of returns.

Ideally, it’s best to have your picking areas close to storage areas — which can dramatically reduce the time spent to grab ordered items. To increase the efficiency of the picking process, you can also install conveyors. In fact, a study by Westernacher consulting found that the pick rate increases from 60-80 picks to 300 picks per hour when using conveyors.


Best practice #3: Improving accessibility

It’s crucial to place all necessary tools and equipment in spots that make it easily accessible to your warehouse workers. Your warehouse should be designed to facilitate easy access to navigate and pick items without interfering with other products. This speeds up the order fulfillment process and makes it possible to deliver more quickly to customers.


Best practice #4: Streamlining the shipping process

The shipping area is where final packing and preparation for shipping take place. Ideally, you want to keep this area separate from other warehouse spaces to avoid any mixups. The best selling products should be kept near shipping areas, and products that don’t sell as well should be kept farther away. This helps minimize travel picking time and can be accomplished more easily with L- and U-shaped layouts.


Best practice #5: Testing and collecting feedback

After finalizing your layout and warehouse flow, you should make sure to run tests and confirm that everything flows smoothly. Equipment like forklifts and conveyors should also be tested to make sure they work correctly. Allow the employees who will be handling the equipment to test them out, and take their feedback into account. Since your picking team will be constantly moving around the warehouse, you should also work with them to optimize for faster fulfillment and less confusion. Based on this feedback and test results, you can optimize your strategy and figure out the best possible configuration and processes.


Final step: Choosing a warehouse management system

Once you decide on your warehouse’s layout and its flow, it’s time to think about choosing your warehouse management system. You’d be surprised how much smoother your day-to-day operations and order fulfillment can become with the right management system.

A warehouse management system gives you a real-time view of your inventory’s performance and helps you greatly optimize your warehouse. In fact, 77% of organizations consider warehouse automation systems a crucial part of maximizing performance. If you’re interested in implementing a warehouse automation system for your business, get in touch with the Cin7 experts to learn more about how we can help.

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