In the previous chapter, we explained what areas of a new warehouse to zone for different tasks and how this affects efficiency.
In this chapter, we’ll examine how to set up a warehouse layout, specifically how to organize aisles, racks, levels, and bins and keep your new warehouse efficient.
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How Does Warehouse Shape Impact Layout?
There are endless ways to design a warehouse setup depending on the shape of the space available.
If warehouse space isn’t used optimally, it directly impacts efficiency, so always ensure that how you make use of your warehouse space isn’t hindering any processes.
There are three main warehouse shapes:
- L-shaped—Layout resembles an ‘L,’ with two perpendicular sections. Useful for separating warehouse operations.
- U-shaped—Resembles a ‘U,’ with entry and exit on the same side, facilitating easy access and circulation.
- I-shaped—Linear design with straight pathways. Ideal for streamlined processes with a straightforward flow.
Of course, not all warehouses fit into these three shapes. For example, your new warehouse may be an older or repurposed building, or its shape may be impacted by surrounding buildings and streets.
Want to learn more about warehouse layout optimization? Check out this blog post: How to Design a Warehouse Layout and Why It’s Important.
Warehouse layout has a ripple effect on other areas of your business further down the line. A good warehouse layout shape has the following benefits:
- Speeds up fulfillment—An efficient warehouse layout makes it easier and quicker for workers to pick, sort, and ship orders.
- Reduces inventory errors—As inventory is easier to access and manage, fewer mistakes are made.
- Happier customers—A well-organized warehouse will result in fewer order errors, meaning fewer customer returns.
- Improves inventory monitoring—Tasks like cycle counts become significantly easier.
- Reacting to supply and demand changes—It is easier to reorganize space according to demand changes.
- Improves efficiency—Designing an efficient warehouse layout will positively impact all other aspects of your business.
- Reduces costs—The above benefits directly impact business costs.
Conversely, a bad warehouse shape reduces productivity and increases the likelihood of damaged and destroyed inventory.
Best Warehouse Layout Practices
There are many warehouse design ideas and best practices that you should follow to ensure efficiency. Start by preparing a warehouse map, which you can use to devise the layout.
It may seem obvious, but it has to be said that what works for other warehouses might not work for yours. Other businesses will work in different-shaped warehouses with different products and workflows, so you must focus on your available space.
When mapping out your layout, consider things like doors and other spaces. You don’t want to designate areas only to discover that they block access to other warehouse parts.
There is software that you can use for warehouse layout design, or you can hire experts to design a warehouse plan for you.
You need to consider five key things:
- Inventory storage.
- Racks.
- Levels.
- Aisles.
- Movement and access.
Let’s dive into the best practices for each below.
Best Practices for Inventory Storage
Before designating space for inventory storage, it is vital to know your total storage capacity. This must be calculated before you start using your new warehouse and ordering inventory from suppliers.
You must know your inventory limits when you start using a new warehouse, or you could end up with excess inventory from day one that’ll be hard to shift.
Interestingly, according to a survey by Modern Materials Handling, a typical company uses only approximately 85% of its storage space effectively.
As mentioned in the previous chapter, perishable items require a designated storage space separate from non-perishable items.
Best Practices for Warehouse Racking
Warehouse racks are structures that use levels to efficiently organize and store inventory. You can have multiple racks in an aisle, and each rack can have multiple levels with multiple bins.
Your new warehouse may already have racking installed, but you must assess its suitability for your current needs.
If the previous business operated in the same industry, the racking may be suitable, though you must know its capacity to ensure it is strong enough for your inventory.
If you must invest in new racking, determine if it is possible to uninstall the racking in your old warehouse and reuse it in your new warehouse.
Not only would this be significantly cheaper than investing in new racking, but it would be racking that is readily equipped to deal with the products you sell at your business.
However, if the new warehouse is larger or has higher ceilings, you may still need to invest in new racking to maximize vertical and horizontal space.
If you must invest in new racking, though it would lower expenses to buy cheap racking, depending on what and how much inventory you will put on racks, you may want to acquire better, more solid racking.
Using ill-equipped racking to handle the weight of your inventory can be dangerous and cause accidents that can seriously harm employees.
It is also important to consider what kinds of loads your racking will support, such as pallets or boxes. How products are stored together will also impact the size and weight placed on the racking.
New racking must most often be custom-made according to your warehouse needs. So, if you need new racking, you must order it from a supplier.
While it’s crucial to check the different costs of racking options, you also need to consider how long it will take for the racking to be produced and installed in your warehouse.
The longer it takes, the longer it will be before you can use your storage space, interrupting your workflow and ability to fulfill orders.
Because of this, you may need to continue using your old warehouse until the racking in the new warehouse is ready, which can drive up operating costs.
You may choose a more expensive racking option if it is quicker to implement.
Best Practices for Levels
Levels are the different vertical spaces in a racking unit. Each level can house multiple bins. Stacking vertically with levels is a best practice for increasing space.
As mentioned above, depending on the weight of the inventory you need to store, you may need stronger levels.
It is a good idea to stack static storage that moves less frequently higher up and place popular inventory that needs to be picked regularly on lower levels that are easy to reach.
Best Practices for Aisles
It is a highly practical way for people to navigate and find what they are looking for. Aisles are often laid out in a similar fashion to grocery stores. All you need to form an aisle is a pathway with racks on either side utilized to hold inventory.
Most warehouses employ a ‘cluster method,’ which groups products by type. For example, if you sell shoes, you may cluster them by brand or whether they are sneakers or flip-flops, men’s or women’s.
Storing products by type is beneficial because if workers can’t find what they are looking for, they know that similar products are nearby (e.g., if they can’t find the sneakers they need, they at least know the aisle where sneakers are stored).
A good practice for planning aisles is to ensure that they are straight. Straight aisles make it faster and more efficient to pick items. Ideally, avoid having corners in your aisles.
More importantly, you must also consider the widths of your aisles to ensure enough space for large equipment, such as forklifts and autonomous mobile robots (AMRs), to maneuver and safely retrieve loads.
You must know how wide these machines are and design the aisles with this in mind. According to some sources, it is a good practice for aisles to be at least 12 feet wide for large equipment.
Another thing to consider is preventing cross-contamination. Your warehouse layout must avoid the possibility of items contacting things that can ruin or damage them.
Also, consider how the use of your aisles may change over time. Inventory can fluctuate as new inventory comes in, especially if your industry experiences periods of seasonality.
To be prepared for this, you should have areas designated for dynamic and static storage.
Dynamic storage is for popular products that leave bins quicker and should be easier to pick, while static storage should be reserved for products that sell less frequently.
It is also a best practice to place dynamic storage closer to the shipping area. The more popular the product, the closer it should be to the shipping area.
Best Practices for Movement and Access
Directly related to aisles is how workers move around the warehouse and access what they need.
Your warehouse layout should avoid ‘motion waste,’ which is where time is wasted by workers traveling to and from things—it is a major contributor to inefficiency.
Identifying areas of motion waste can be difficult. WMS (Warehouse Management System) tools can help warehouse managers determine the causes.
For example, Skustack Lens’s visualization features can map out a warehouse layout before buying racks and bins to ensure they do not inhibit workflow.
Recognizing how a warehouse workflow is interrupted can take time and might not be visible until you use space.
Because of this, it is good to think of planning a warehouse layout as a work in progress and experiment with different ways to improve how people move through the warehouse and access what they need.
There’s no need to settle on the layout the previous owners used or the layout you used in your previous warehouse, as more efficient layouts may be available.
Lastly, it is worth noting that not all e-commerce businesses are resellers—many also produce their own goods.
Businesses that produce their own goods will need a different layout. They may even have an entire warehouse sector solely for production.
In this case, it is often convenient for the production area to have direct access to where inventory is stored.
How to Strategically Place Bins in a New Warehouse?
Bins are the designated containers on level racks where items are placed. Multiple bins can be on each level, and each bin can house multiple items.
It all depends on the size of your products. You will find things that won’t fit on the bins in your racks, so it is a good practice to have space outside racks for large objects. For example, if you are selling a large furniture set.
However, a bin can be anywhere—it can even be a space on the floor. The area you designate as a bin doesn’t have to be on a level on a warehouse rack.
Where you plan your racks and aisles will determine where your bins go.
That said, it is a good practice not to put bins too close to incoming and outgoing docks where inventory is being moved from trucks as things might get confused or too close to doors and exits as they can block pathways.
What Are the Different Types of Bins?
The three most common types of warehouse bins are:
- Picking bins—Used to organize and store items for easy access during the picking process. The most common type of bin.
- Receiving bins—A place where you can put received inventory that just arrived at the warehouse. Using a receiving bin allows you to put POs (Purchase Orders) aside until you have time to process them.
- Temporary bins—Can be used for a wide variety of purposes. They can be used to store inventory while you reorganize your racks or move items that might need to be inspected.
You can have bins for all kinds of purposes depending on your warehouse processes.
For example, with Sellercloud, you can create ‘kit assembly’ bins where you have different kit components which you can then assemble them. (The opposite is also possible, ‘kit disassembly’ bins.)
You can also designate a bin for returns (a ‘returns bin’), where you put returned items until they have been processed. However, you can also use a temporary bin for this purpose.
What Are Primary Bins and Non-primary Bins?
Separating your bins between primary and non-primary makes the picking process easier. Here’s how the two are different:
- Primary bins—These are the easiest-to-access bins where workers should pick inventory.
- Non-primary bins—Usually stored on levels above primary bins that are harder to reach. Inventory can be moved down from non-primary to primary bins when primary bins are depleted.
Non-primary bins act as storage to refill bins that are easier to reach and can also be used as a place to store static inventory—items that don’t sell as frequently and, therefore, don’t need to be accessed as often.
Storing inventory vertically can save a lot of space and means you can make more use of space that is easily reachable by workers.
With a WMS like Skustack, you can ensure that items are always first searched for in the primary bin.
Bin Capacity
When planning your new warehouse layout, it is good to know the exact capacity of every bin. For example, depending on the item, can a bin hold 5 or 5,000 items?
You should also employ a method of monitoring bin capacity so you don’t end up with situations in which you bring hundreds of items to a bin that can only hold several.
Sellercloud keeps track of all the products in your bins, and you can see which is at capacity and near capacity so you know when not to put more inventory there.
Why Are Naming Conventions Vital for Racks, Aisles, Levels, and Bins?
In warehouse management, naming conventions are often simple alphanumeric combinations used to identify a location. They are extremely useful for helping warehouse staff find what they are looking for.
Naming conventions are typically designed to act as directions. Readers don’t need to be familiar with the location, but reading the naming convention tells them where they need to go.
This is particularly beneficial if you have a large warehouse or if an order item is located in an area staff don’t usually travel to.
For example, a naming convention such as ‘A1-R2-L2-B1’ can tell a worker to head to a bin in aisle 1, rack 2, level 2, bin 1.
Naming conventions can be highly customizable, and ultimately, it’s all about what works best for your team.
You should devise your naming convention only after you have settled on the layout you will use for your racks, aisles, levels, and bins.
How to Keep a New Warehouse Efficient? 4 Ways
When you move into a new warehouse, there may be certain things you need to change or update to make it easier for your employees to work there.
1. Lighting
A big thing to consider is lighting. Good lighting makes it easier for pickers to spot items, read labels, and differentiate colors and other defining product features, improving picking and reducing mistakes.
It’s worth considering switching to LED lights to optimize your new warehouse lighting. These are brighter and use less energy, so they will save money in the long run.
Another great piece of advice for warehouse lighting is to use motion-detecting lighting so you don’t have to keep all your lights on all the time—only when people are nearby.
This will save you a lot in energy bills if you have a large warehouse and avoid wasting power lighting areas that pickers rarely have to travel to.
However, it is important to consider whether you have security cameras operating in those areas. If so, you might not want motion sensor lighting so you can monitor everything at all times.
Additionally, warehouse lighting isn’t just about installing lights. It can also mean making the most of natural lighting from windows and skylights.
For more on warehouse lighting, check out our blog post here: How to Choose the Best Lighting for Your Warehouse.
2. Labeling
Investing in clear labeling and signage is another way to make your warehouse more efficient. It should be crystal clear what products are what and where things are, and it should be easy to differentiate between things on levels and aisles.
Labeling also includes marking the direction of the workflow, such as walking paths, the way shipments will arrive, and products will move.
Bins, racks, levels, and aisles should all be clearly and consistently labeled, physically and digitally, with the same naming convention.
Ensure labels are easily seen, protected, and will not fade.
3. Worker Comfort and Safety
In the previous chapter, we discussed having temperature-sensitive areas to prevent certain products from spoilage. You also have to consider heating and cooling for your workers.
Your workers will be more efficient in a well-ventilated space, shielded from hot or cold temperatures outside.
In addition, you need to consider any health and safety issues your new warehouse might have. A warehouse that doesn’t consider health and safety will not be efficient.
Anything that could be dangerous to employees should be removed, fixed, or relocated out of harm’s way. Dedicate some time to familiarizing yourself with OSHA’s warehousing standards.
4. Always Work Towards Improvement
Look for bottlenecks in your design and see how you can prevent them. As mentioned above, they might not be clear until you use the layout.
Lastly, it is worth noting that managing inventory is challenging even in the best-designed warehouses. If you don’t follow the best inventory management practices, the genius of your warehouse design will not matter.
Key Points
You are now well-prepared to plan the layout of your new warehouse. Remember these key points.
- Warehouse layout directly impacts how efficient your warehouse is and has a knock-on effect on many other areas of your business, so it must be taken seriously.
- By following best practices for storage, racks, levels, aisles, movement, and access, you can keep your warehouse efficient.
- The three main bin types you should have are picking, receiving, and temporary. However, depending on your workflow, you can have bins for all kinds of purposes.
- Employing a logical and easy-to-follow naming convention for aisles, racks, levels, and bins makes it significantly easier for workers to pick items.
- Ensuring your new warehouse is well-lit, locations are clearly labeled, and workers have a safe and comfortable work environment will keep it efficient.
In the next chapter, we’ll explain what warehouse equipment to consider when moving a warehouse.