Top 5 Considerations When Building a New Warehouse or DC

Most successful operations will, at one point or another, consider building a new warehouse or distribution center. Often, this will be to accommodate growth in the business that simply can’t be accommodated in the existing facility. Other times, it will be to facilitate expansion on the regional, national, or international stage. And other times still, it will be because the existing facility is so out of date, that it simply makes sense to start from scratch rather than try to retrofit.

Whatever the case may be, building a new warehouse or DC is a great way to bring your operation into the 21st century. Warehouse automation technologies like AS/RS, sortation, automatic shipping, and more all have the potential to dramatically increase your efficiency, boost your productivity, and reduce costs, ultimately boosting your bottom line.

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It’s easy to get caught up in the excitement of the potential that these new technologies and solutions can bring. But there are other factors, aside from the technology that you will implement, that must be taken into consideration for a successful design build.

These factors will impact everything from the kinds of technology you choose to leverage, to the order fulfillment strategy you choose to pursue, to everything in between, and it’s important to understand how everything fits together before beginning any project.

1. Flow

Before committing yourself to any particular layout or design, it is critical that you have a firm understanding of the sequence of operations that occurs within your facility, especially where the flow of raw materials, product, and orders through your facility is concerned.

When product or materials enter your facility, do they go into storage or are they immediately moved into production? If they are moved into storage, what is your current slotting strategy? Is inventory processed on a first-in/first-out (FIFO) basis, or in another way? If it moves directly into production, how is it sorted? How is it picked and packaged into orders? How is it ultimately shipped?

Understanding your current flow of sequences and processes will allow you and any partner to pinpoint areas of inefficiency and potentially identify areas of improvement in your new facility. These takeaways will inform the ultimate layout, structure, and technology that you choose to incorporate.

2. Accessibility of Product

In order for your operation to be as efficient as possible, your new facility must take accessibility of product into consideration. Specifically, how will product be accessed, handled, and transported? Certain questions to keep in mind that will help you frame your thinking around this include:

• Is inventory stored on a short-term or long-term basis, or a combination there of?
• Is product handled primarily by pallet, case, tote, or individual units?
• Is it necessary to segregate inventory into individual lots and batches?
• How is product currently picked and processed into orders?

Questions around accessibility are important because it will impact the storage/inventory strategies you ultimately choose to implement as well as the specific technologies that you leverage.

3. Available Footprint

It should go without saying that the level of space available for your new facility will, of course, impact the final design and layout of your operation. But because footprint touches and influences so much of what your facility will ultimately look like, at least some time needs to be spent discussing the implications.

To inform your discussions about space, keep these questions in mind:

• What square footage is available for your new facility?
• What percentage of this space must be allotted to offices, inventory, and other processes (sortation, handling, packaging, shipping, etc.)?
• Is building up instead of out a viable option?

In addition to informing design and layout, discussions of space may inform the technology you implement (an operation with a limited footprint may choose to implement AS/RS that enables them to build up to make better use of their vertical space) and even the type of structure you choose to build (for example, rack-supported vs. traditional steel structures).

4. Product Specifications

To determine the most appropriate technologies and processes to implement in your new facility, it is critical to have a firm understanding of your products’ specifications. What, exactly, needs to be handled? What characteristics of that product might impact how it gets handled?

Size, fragility, weight, weight distribution, and other factors are all important considerations, especially when it comes time to select inventory solutions and handling systems.

Questions to be answered with regard to inventory and handling include:

• How will product be stored?
• How might product specifications limit or impact inventory options?
• Do different products have different storage requirements?
• Where is the product’s center of gravity, and how might this impact the conveyors, sorters, and gap generation technologies used?
• How much does a typical tote/case/pallet of product weigh, and how will this impact the technologies selected?

5. Throughput and Peak Volume

But you can’t just know what is to be handled. It is also important to understand how much needs to be handled: Both on a daily basis as well as during peak. These rates will be especially important in determining what machinery and technology is required to hit your operational targets.

In addition to understanding your current throughput and peak volumes, it is critical to have a firm understanding of what future throughput and peak volume is expected to look like one year, five years, ten years down the line. This understanding will allow you to make sure the solutions you put in place today can accommodate the growth of tomorrow.

The Bottom Line

Each of the factors discussed above will have at least some impact on the ultimate layout and design of your new facility, sometimes in ways that are difficult to predict. A skilled systems integrator or warehouse design consultant will help you piece together the puzzle and ensure that nothing is overlooked.