Give and Take

Feb 01, 2004 10:30 PM  By

Like so many issues in the logistics and distribution industry, many small improvements to gain flexibility are often the best path to the greatest benefit. At the same time, each opportunity involves a tradeoff. Below are a variety of options for either gaining or maintaining flexibility in warehouse layouts. What all of these recommendations have in common is that they emphasize planning ahead and often involve some capital commitment up front, in exchange for less cost, less disruption, or less waste of labor and material later on.

There are two fairly different scenarios under which one faces the question: “What is the most flexible layout I can have?” The easy one is a blank piece of paper and a full checkbook; its slightly less favorable cousin is a new, empty warehouse. The second — and more common scenario — is the one involving an already equipped warehouse, usually one in operation, but designed for a different business. Most of the techniques listed below apply to either scenario.

  1. Plan from the end game backward

    Base interim layouts on the final, complete-use scenario whether or not you plan to build it all at the outset. Make sure interim layouts are compatible with that final plan. Should you need to sublet or sell the facility later, the potential property value and value to another occupant will be higher if full-use options are understood and can be readily explained. This approach also provides a sound road map for additions. If you anticipate infrastructure requirements (footings and floor reinforcement, electrical and mechanical capacity) from the start, the costs of later additions will be lower. Figure 1 shows the difference between accommodating uprights and footings for a mezzanine over an outbound dock operation and planning a sortation layout purely on the basis of immediate needs.

  2. Anticipate future expansion

    Because of the competition for capital project funding and the speculative nature of strategic planning, it is often prudent to acquire the real estate for a bigger, better future facility while developing operating space for the short term. In laying out the workflow, conveyor and sortation systems, electrical and sprinkler systems, and other equipment, it is essential to keep expansion options in mind to avoid costly retrofit work (see figure 2).

  3. Avoid erecting barriers to future development

    Build hard-to-move installations out of the path of space to be used for future development. For example, anticipate where you will want to and can add more dock doors later. To make those doors easily available, be sure that the workflow and “permanent” installations made prior to adding the doors do not block access to those door locations (see figure 3).

  4. Design to subdivide

    Excess capacity can provide extra revenue if you sublet the space, assuming that it is suitable for use by other tenants. Figure 4 shows some simple options that will make subletting work. The space can be subdivided by temporary means (fence, wallboard, or non-load-bearing concrete block walls) without unreasonable expense or effort.

  5. Build extra mechanical or electrical capacity for later use

    Whether for subletting, to expand material handling equipment and systems, or to accommodate as-yet-undefined additional needs, add extra capacity to electrical and mechanical systems. It will cost less to do it all at once than in incremental pieces over time.

  6. Install flexible storage fixtures wherever possible

    Use incremental pallet, bin, and caseflow slot sizes. Selective pallet racks, bin shelving, and caseflow shelving all accommodate multiple vertical heights for any given location or group of locations. Beams and shelves can be located to suit with relative ease. Caseflow rails and rollers are adjustable along the horizontal axis to accommodate cases of various widths or to house product with the “wide side” running parallel to the travel aisle. A tier or stack rack (essentially a pallet with its own frame mounted on each pallet) affords maximum flexibility and good use of space in a dynamic storage environment.

    Within pallet fixtures, you can optimize space utilization by limiting the variety of pallet sizes (or, even better, using one pallet size) and restricting the height of pallet loads to increments that facilitate double or triple stacking of smaller loads. By requiring suppliers to ship in unitized loads that fit these specs, space can be put to optimal use in many situations without any additional handling. Figure 5 shows some of the benefits of this strategy.

  7. Avoid specialized equipment

    If at all possible, don’t buy equipment with limited, specific uses. Examples range from carousels to very narrow aisle storage and retrieval vehicles to unique pallet sizes to automatic storage and retrieval systems. This type of specialized equipment may be much less productive when used for other purposes. Capital costs are often higher, increasing the cost per location.

    Risk is another factor. Unless you have a high level of confidence in a five- to ten-year forecast of activity (the range of typical equipment depreciation), more generic equipment is clearly a lower-risk option.

  8. Don’t design into a corner

    Treat a capital-intensive and hard-to-move installation the same way you treat the space itself — plan to expand it. If a high-speed sorter is justified already, and your business grows, chances are you can justify expanding that equipment as volume increases. Avoid locating it in such a way as to preclude expansion (see figures 6 and 7.)

  9. Take advantage of vertical space

    Use expandable pick modules. Multilevel pick modules are a specific instance of a couple of points made above. They are essentially multiple levels of picking area and can be up to three modules high in many spaces. The second or third levels may not be warranted initially, but can be added later to great benefit.

    Locating the footings for additional mezzanines or pick modules at the outset will lower their costs significantly over building them later. The installation itself will be quicker and easier as well.

    Consider installing taller uprights than needed initially. The cost for the extra height is nominal, and you get maximum use of the existing clear height. None of the options for going higher later are as viable (see figure 8).

  10. Build only the fixtures you need

    Plans may change. In new facilities, it is usually prudent to construct only the fixtures needed for the first two years or so. While this may mean traveling farther to locate product in floor stack areas at the beginning, remember that horizontal travel is always faster than vertical travel. This approach also lends more certainty to the layout decisions that are postponed until additional capacity is needed. The design will then be better suited to the actual requirements.

Some final thoughts: It should be clear that flexibility can compensate for some unknown future developments. However, the more reliable your expectation for future needs, the more satisfactory the solution is likely to be. Therefore, carefully examine your assumptions and the validity of the data used for planning, and revisit those assumptions in light of any new information prior to installing that next increment of the plan. Both tactics will serve you well and can make flexibility that much more powerful.

Ron Hounsell is vice president of software solutions at distribution consulting firm Tom Zosel Associates in Long Grove, IL. Ron Grove of TZA also contributed to this article. The authors can be reached at rhounsell@tzaconsulting.com or (847) 540-6543.