Warehouse Design & Layout Archives - AMS https://www.amsc-usa.com/blog/warehousing/warehouse-design-layout/ Your Quality Contract Manufacturer Mon, 16 Sep 2024 17:10:02 +0000 en-US hourly 1 Warehouse Packing Stations: Process, Layout, Design & More https://www.amsc-usa.com/blog/warehouse-packing-stations-process-layout-design/ Sat, 05 Aug 2023 22:56:04 +0000 https://www.amsc-usa.com/?p=1462 Discover the secrets to efficient warehouse packing stations! Optimize workflows, increase productivity, and enhance customer satisfaction.

The post Warehouse Packing Stations: Process, Layout, Design & More appeared first on AMS.

]]>

Warehouse Packing Stations: Process, Layout, Design & More

Discover the secrets to efficient warehouse packing stations! Optimize workflows, increase productivity, and enhance customer satisfaction.

Every efficient warehouse depends on a well-designed warehouse packing station. The packing station plays a crucial role in the order fulfillment process, ensuring orders are shipped quickly, efficiently, and accurately to customers. The focus on e-commerce and rapid order fulfillment has made warehouse packing stations more crucial than ever.

Get A Free Quote – Tell Us About Your Warehousing Requirements

an example of a warehouse packing station
Table of Contents

What is a Warehouse Packing Station?

A warehouse packing station is a dedicated area within a warehouse where products are prepared for shipping. This preparation could involve packing items into boxes, labeling the packages, and preparing them for dispatch. The warehouse packing station is a hub of activity and should be designed to optimize workflows and increase productivity.

There are different types of warehouse packing stations, each designed to meet specific operational needs.

Manual Packing Station: This type of station is usually used for complex orders or items that require special handling.

Automated Packing Station: Uses machinery to automate certain tasks, such as wrapping or labeling, freeing workers for other tasks.

Picking and Packing Station: An area where orders are picked from inventory and then packed for shipping.

Workstation for Heavy Items: Specifically designed to handle large or heavy products.

Understanding the importance of warehouse packing stations and optimizing their design can make the difference between a slow, error-prone warehouse and a smooth, efficient operation.

Benefits of Using a Warehouse Packing Station

Warehouse packing stations play a crucial role in streamlining warehouse management. They enhance efficiency and precision in order processing, boost space utilization, and improve worker productivity. Further, they bolster safety standards by minimizing clutter. Ultimately, the use of packing stations leads to improved customer satisfaction due to timely and accurate deliveries, fostering customer loyalty and enhancing the company’s bottom line.

a well organize warehouse packing station

Warehouse Packing Process:

In most cases, the warehouse packing process involves printing order details, wrapping products for protection, boxing products securely, and labeling the boxes for shipping. This sequence of tasks is crucial to ensuring orders are dispatched accurately and without damage. Each step in the packing process should be optimized for speed and accuracy. As described in the pick, pack, and ship process, the packing stage is crucial to maintaining customer satisfaction and loyalty.

Warehouse Packing Station Layout

A productive warehouse packing station layout is driven by three key factors: the nature of the products being packed, the equipment available, and ergonomics.

Start With Our Warehouse Layout Guide

Have you read our guide about warehouse layout? If not, then jump over there first before following the steps below.

1. Products

The nature of your products should guide your layout decisions. Fragile items, for instance, might require special packing materials and techniques. Similarly, large or heavy items might need a specialized packing station.

2. Equipment

Your choice of packing equipment will also impact your layout. Automated packing machines, for instance, will require more space but can also speed up the packing process. Other key pieces of equipment include scales, barcode scanners, and label printers.

3. Ergonomics

Ergonomics involves designing the packing station so that it supports the worker’s body and minimizes strain or discomfort. This aspect is crucial, as it affects worker productivity and reduces the risk of injuries. For example, packing tables should be at a height that allows workers to work comfortably without bending over.

warehouse packing station in a large warehouse

Setting up an Efficient Warehouse Packing Station

An efficient warehouse packing station should maximize productivity, minimize errors, and provide a comfortable workspace for employees. Here are some strategies to achieve this:

1. Have a lean warehouse

Adopting lean principles can help you minimize waste and inefficiency in your warehouse. An effective e-commerce warehouse layout is a great starting point to achieve this.

2. Implement an efficient workflow system

You should design your warehouse packing station layout to ensure a smooth flow of work. This could mean arranging your packing stations in the order that tasks are completed, ensuring workers have everything they need within arm’s reach, and avoiding unnecessary movements.

3. Customize packing station tables

Your packing tables should be customized to suit the needs of your warehouse and your employees. They should be sturdy, large enough to accommodate your products and packing materials, and adjustable to suit the heights of different workers.

4. Assign tasks to different workers

It might be efficient to divide tasks among different workers, each focusing on one part of the packing process. This could increase speed and accuracy.

5. Don’t make your packers walk

A well-optimized packing station layout ensures that packers have everything they need within arm’s reach. This minimizes unnecessary walking and increases productivity.

6. Undertake a 5S program

5S, a Japanese concept, involves sorting, setting in order, shining, standardizing, and sustaining. This process helps maintain an organized and efficient warehouse.

7. Incorporate ergonomic design features

Ergonomics should be a key consideration in your warehouse packing station layout. This can help reduce worker fatigue and the risk of injuries.

8. Incorporating vertical lift modules (VLMs)

For handling heavy items, VLMs can be an excellent solution. They can improve storage density, increase picking accuracy, and reduce picking times.

9. Check if the packing process is working fine

Continually analyzing and adjusting your packing process can help you improve over time. Look for bottlenecks, errors, or inefficiencies, and work to address them.

a large warehouse packing station

Components of an Effective Warehouse Packing Station

Creating a high-performing warehouse packing station demands careful selection and arrangement of several key components. While the exact components can vary based on individual warehouse requirements, the following elements are commonly found in effective packing stations:

Workbench

This is the heart of the packing station where the bulk of the packing activities occur. A good workbench is sturdy and spacious, providing ample room for packing products and keeping necessary tools and materials close at hand. The height should also be adjustable to cater to the needs of different workers and minimize physical strain.

Upright

Uprights, or vertical posts, are used to support overhanging elements such as overhead lighting, monitor mounts, or roll holders. They are a crucial component for maximizing space usage and improving ergonomics in the packing station.

Roll Holders

Roll holders are essential for efficiently storing and dispensing materials that come in roll form, such as bubble wrap, foam, or tape. They are usually mounted either on the workbench or on the uprights, allowing easy access to packing materials.

Edge Rails

Edge rails are protective barriers installed around the edge of the workbench to prevent items from falling off, enhancing safety and efficiency in the packing process.

Shelving & Cabinets

Shelves and cabinets are important for organizing and storing packing materials, tools, and other necessary items. Good shelving and cabinets provide easy accessibility, save space, and can greatly improve productivity by reducing the time spent searching for needed items.

Lights and Computer Accessories

Appropriate lighting is essential for maintaining a high level of accuracy and reducing the strain on workers’ eyes. Computer accessories, such as monitors and keyboards, are typically used for order processing and tracking. These elements should be ergonomically positioned to minimize physical discomfort for the workers.

By incorporating these components effectively, a warehouse packing station can significantly increase productivity, improve worker comfort, and minimize errors, making it a key asset for any warehouse operation.

To learn more about warehouse efficiency, check out our blog on how to pick faster in a warehouse.

Embracing Warehouse Excellence

A well-designed warehouse packing station is the heart of any successful warehouse operation. By carefully considering the packing process, layout, and components, you can create a station that increases productivity, reduces errors, and improves worker comfort.

We hope this article has given you insights into optimizing your warehouse packing stations. If you need more information on warehouse management or if you need help setting up an efficient packing station, feel free to contact us at AMSC to get started. AMSC offers a range of warehousing and fulfillment services to support your business growth.

Your pathway to warehouse optimization begins here. Reach out today, and let us guide you through the process.

Related Content

Looking for a warehouse partner?
Trust our classic customer service.

There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.

Warehousing

The post Warehouse Packing Stations: Process, Layout, Design & More appeared first on AMS.

]]> Warehouse Size: Is a Small or Large Warehouse best for me? https://www.amsc-usa.com/blog/warehouse-size/ Tue, 07 Mar 2023 21:09:45 +0000 https://www.amsc-usa.com/?p=1262 Warehouses come in lots of different sizes. But what warehouse size is best for your business? Check out this article for help!

The post Warehouse Size: Is a Small or Large Warehouse best for me? appeared first on AMS.

]]>

Warehouse Size: Is a Small or Large Warehouse best for me?

Warehouses come in lots of different sizes. But what warehouse size is best for your business? Check out this article for help!

Warehousing is a crucial component of many businesses. It provides a safe and secure location for storing goods, ensures timely delivery of products to customers, and streamlines order fulfillment processes. However, when it comes to choosing the right space for your business, one of the most important factors to consider is the warehouse size. In this article, we will explore the difference between a small and large warehouse and help you determine which size is the right fit for your business.

So, whether you plan to build a new warehouse or an existing one, or even lease a warehouse, this article can help you determine your exact needs. That way you do not end up with too much space for your needs and future growth.

Get A Quote – Tell Us About Your Warehouse Size Requirements

warehouse size
Table of Contents

What Is A Warehouse?

Before we dive into the differences between a small and large warehouse, let’s define what a warehouse is. A warehouse is a commercial building used to store goods for commercial purposes. Warehouses can vary in size and layout depending on the needs of the business. They can be used to store raw materials, finished goods, or products that are in transit. Warehouses can be operated by the business that owns them or by a third-party logistics provider.

a small warehouse size with some trucks around it

Warehouse Size

The size of a warehouse is an important factor to consider when choosing a warehouse for small business or large businesses. The size of the warehouse can impact the cost, efficiency, and effectiveness of your operations. The average warehouse size in the United States is around 180,000 square feet, but this can vary widely depending on the industry and the specific needs of the business.

Furthermore, how much space, or the warehouse capacity that is actually available depends largely on the type of activities that occur in the building. Manufacturing lines require a lot of warehousing space, and so do offices. So, sometimes warehouse sizes can differ but still have a drastic difference in total available space to store goods.

How big is a small warehouse?

A small warehouse is typically between 5,000 and 15,000 square feet. Small warehouses are ideal for businesses that have limited storage needs or operate in industries where storage space requirements are not as significant. They offer great warehouse storage solutions for small items. Small warehouses are also ideal for businesses that are just starting and need to keep overhead costs low. A small warehouse can help a business keep inventory levels low and manage cash flow more effectively.

Small warehouse organization is critical to maximizing the use of limited space. In a small warehouse, it’s important to optimize every inch of space to ensure efficient operations. Small warehouse layout can be customized to fit the specific needs of the business. For example, a small warehouse may benefit from vertical storage solutions, like tall shelves or pallet racks, to maximize storage space.

How big is a large warehouse?

A large warehouse is typically over 100,000 square feet. Large warehouses are ideal for businesses that have significant storage needs, operate in industries that require large storage spaces, or have high-volume operations. Large warehouses are also ideal for businesses that require more advanced services, like specialized storage solutions, automated inventory management, and order fulfillment systems.

A smaller warehouse size with lots of types of equipment around it

Difference in Large business and Small Business Warehouse Space

There are several warehouse services that may differ between large and small business warehouse space. When getting started, you need to consider what warehouse services will meet your business needs. Some of these services include:

  • Pick and Pack
    A small business warehouse may offer basic pick and pack services, while larger warehouses may offer more advanced solutions.
  • Sub-assembly
    Larger warehouses may be better equipped to handle sub-assembly services, while smaller warehouses may not have the space or resources to do so.
  • Distribution Center Management
    Larger warehouses may offer more comprehensive distribution center management services, while small warehouses may only provide basic management services.
  • Vendor Managed Inventory
    Larger warehouses may be better equipped to handle vendor-managed inventory, as they have more space and resources to manage and track inventory levels for multiple vendors.
  • Cross-docking
    Large warehouses may have dedicated cross-docking areas, which allow for faster processing of inbound and outbound shipments. Small warehouses may not have the space or resources to offer this service.
  • Fulfillment
    Large warehouses may have more advanced fulfillment capabilities, including automated picking and packing systems and real-time inventory tracking. Smaller warehouses may offer more basic fulfillment services.

Warehousing Requirements Difference Between Small Warehouse and Large Warehouse

There are also differences in warehousing requirements between small and large warehouses. When setting up a warehouse, you will want to keep these differences in mind. Some of these requirements include:

  • Timing
    Small warehouses may have more limited hours of operation, while large warehouses may be open 24/7.
  • End Customer
    Small warehouses may be located closer to the end customer, while large warehouses may be located farther away.
  • Order Fulfillment
    Small warehouses may have a shorter lead time for order fulfillment, while large warehouses may require longer lead times due to increased order volume.
  • Brand Experience
    Large warehouses may offer a more polished brand experience, while small warehouses may offer a more personalized experience.
  • Payment terms
    Small warehouses may offer more flexible payment terms, while large warehouses may require more stringent payment terms due to higher operating costs.

Need warehousing help?

Let AMS’ Warehouse Services Do It for You
Warehousing Services

Benefits of Different Sizes of Warehouse Space

Small Warehouse Benefits

Small business warehousing offers several benefits. For one, small warehouses are typically more affordable than larger warehouses. Additionally, small warehouses can help small businesses operate more efficiently by reducing inventory levels, minimizing transportation costs, and improving order fulfillment times. Small business warehousing can also provide flexibility, allowing businesses to scale their operations as needed.

Large Warehouse Benefits

Large warehouses also offer many benefits that appeal to businesses. One benefit is advanced technology and equipment. Large warehouses are often equipped with state-of-the-art technology and equipment, which can improve efficiency and reduce errors. Another benefit of large warehouses is specialized storage solutions, such as climate-controlled areas, hazardous materials storage, or high-security areas. Finally, large warehouses may be able to offer bulk pricing discounts due to their high order volumes.

Considerations when Choosing the Right Warehouse Size

Every business is different, and so are their warehouse needs. When choosing the right warehouse size for your business, there are several factors to consider.

Factors to Consider with Small Warehouses

While small warehouses offer several benefits, there are also some factors to consider when choosing a small warehouse.

  • Space limitations – Small warehouses may have limited space for inventory storage, equipment, and personnel. That may require some tricky work to maximize warehouse storage space.
  • Flexibility – Small warehouses may offer more flexibility in terms of lease agreements and customization of the small warehouse layout and small warehouse organization.
  • Location – Small warehouses may be located in more urban areas, which can be beneficial for businesses that need to be close to their end customers.

Factors to Consider with Large Warehouses

When considering a large warehouse for business, it’s important to keep the following factors in mind:

  • Cost – Large warehouses may be more expensive to rent or purchase, and may have higher ongoing operating costs.
  • Complexity – Large warehouses may be more complex to operate, and may require more advanced systems and personnel.
  • Location – Large warehouses may be located farther away from end customers, which can impact shipping times and costs.

Final Thoughts About Small and Large Warehouse

Choosing the right warehouse size for your business is an important decision that can impact the success of your operations. Whether you choose a small warehouse or a large warehouse, it’s important to consider your business needs, budget, and growth projections.

With careful consideration and planning, you can choose a warehouse size that meets your needs and helps you achieve your business goals. Contact an expert for help choosing the best warehouse to meet your business needs!

Free Warehouse Design Tools

Warehouse Capacity Calculator

Need help figuring out the total volume of usable space in your warehouse? We built a simple tool to help you calculate that.

Calculate Space

Pallet Storage Capacity Calculator

The pallet storage capacity calculator quickly determines the total number of pallets your warehouse can store based on rack configuration.

Calculate Pallets

Warehouse Size FAQs

The decision between a small or large warehouse will depend on a variety of factors, including the size and scale of your business operations, your budget and resources, the types of products you handle, and your growth projections. Small warehouses may be a better fit for businesses with smaller inventory volumes, limited budgets, and more flexible operations, while larger warehouses may be necessary for businesses with higher inventory volumes, more complex supply chains, and more specialized equipment and technology needs.

Small warehouses offer greater flexibility and adaptability to changing business needs, as well as lower overhead costs and a more personalized approach to customer service. However, they may have limited storage space and technology, as well as reduced economies of scale. Large warehouses offer greater storage capacity and advanced technology, as well as economies of scale and more efficient operations. However, they may be more expensive to operate and less flexible in responding to changing business needs.

Small warehouses offer great warehouse storage solutions for small items. Costs can vary, but for a warehouse small will range from $25,000 to $35,000.

Related Content

Looking for a warehouse partner?
Trust our classic customer service.

There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.

Warehousing

The post Warehouse Size: Is a Small or Large Warehouse best for me? appeared first on AMS.

]]> Building vs. Outsourcing Your Warehouse: Pros and Cons https://www.amsc-usa.com/blog/building-vs-outsourcing-your-warehouse/ Mon, 23 Jan 2023 19:33:24 +0000 https://www.amsc-usa.com/?p=1198 Get the information you need to make an informed decision about building vs outsourcing warehouse services in this article.

The post Building vs. Outsourcing Your Warehouse: Pros and Cons appeared first on AMS.

]]>

Building vs. Outsourcing Your Warehouse: Pros and Cons

Get the information you need to make an informed decision about building vs outsourcing warehouse services in this article.

When it comes to meeting the warehousing need for your business, there are two main options: running your own or outsourcing to a third-party provider. Each option has its own set of pros and cons, which can be difficult to evaluate without understanding the specifics of your business.

In this article, we will compare the pros and cons of building vs. outsourcing your warehouse, so that you can make an informed decision about what is best for your company.

Construction workers building a warehouse

Table of Contents

A warehouse aisle with good stacked on either side

The Pros and Cons of In-House Warehousing

Evaluating the pros and cons of doing in-house warehousing is an important process for any business. There are a variety of factors to consider, from upfront investment costs and staffing needs to the potential for increased profitability through cost efficiencies and improved service levels.

One of the primary benefits of doing in-house warehousing is control over operations, allowing you to customize processes and systems to best meet your company’s needs. Additionally, doing everything yourself gives you direct control over inventory management. If you want faster order fulfillment services or improved customer service levels, then you can make the changes necessary to accomplish that.

However, there is a significant upfront cost associated with building a new warehouse, which may require investing in equipment and staffing. Additionally, there are ongoing operating expenses such as utilities and maintenance costs.

In-House Warehousing Pros & Cons

Pros

  • Complete control over operations
  • Direct inventory management
  • Lower internal fulfillment costs

Cons

  • High up-front capital expenditure
  • Requires additional staffing & equipment
  • Increased operation expenses
  • Less location options

The Pros and Cons of Outsourcing Warehousing

Outsourcing warehousing operations has several advantages over running your own facility. For one, there are no upfront investment costs associated with setting up a 3PL provider, allowing you to save on capital expenses.

Additionally, third party logistics providers offer access to a larger pool of supply chain professionals and the latest in logistics technology. In turn, you get faster order fulfillment times and improved customer service levels without the need to invest in additional staff or equipment. Additionally other shipping costs and transportation costs are generally more competitive through fulfillment centers rather than an internal fulfillment or in-house logistics management system.

However, outsourcing your warehouse does come with its own set of risks and challenges. For example, it is important to understand how your 3PL provider operates so that there is no disruption in services or mistakes that could affect customer satisfaction. Additionally, the fees associated with using a 3PL provider should be factored into your budget planning process.

Outsourced Warehousing Pros & Cons

Pros

  • Reduced operational and overhead costs
  • Zero capital expenditure
  • Reduced risk of cost overruns
  • Accessing more capabilities
  • Many location options
  • Lower shipping costs

Cons

  • Lack of control over inventory
  • Potential higher fees
  • Less flexibility to scale space
  • Risk of data breach and security

Let's Talk About 3PL Fees

One of the pros and cons of building vs outsourcing warehousing services is the cost. As you’ve already read, it generally costs more to build your own warehouse. But running the warehouse (with your own staffing and infrastructure) could cost less than outsourcing.

But depending on the circumstance, this may not be the case. Why is that? It all comes down to the scale and level of efficiency that your potential outsourcing provider is capable of.

For example, many order fulfillment companies have deep volume-based discounts with shipping supplies and carriers. Depending on your business, the cost savings in this area alone may be greater than the total operational and capital expense in your entire in-house logistics plan.

This is why any time a company is considering building its own warehousing facility we recommend also pricing out a third-party logistics provider (3PL) option at the same time.

Let’s take a closer look at the costs…

Comparing costs of 3PL vs own warehouse

When deciding between building vs. outsourcing warehousing operations, pricing is an important factor to consider. Any business is going to favor the most cost effective option, all else being equal. Building an internal warehouse operation requires a significant upfront investment in equipment and staffing, as well as ongoing operational costs such as utilities and maintenance.

On the other hand, to outsource fulfillment and warehouse management does not require any upfront capital expenditure. However, there are fees associated with outsourcing to a third party logistics company. The option that is best for you depends on your business needs and budget.

What is the average cost to build your own warehouse?

The average cost to build your own warehouse varies widely depending on the size, type, and location of the facility. Generally speaking, it is estimated that a building can range from $40 per square foot (including land) for a basic and utilitarian structure to upwards of $300 per square foot for a larger, more complex, and energy-efficient facility.

Location plays a significant role as well, as inner-city plots will cost more. In addition, there are operational costs to staff, equip, and run the business (we will estimate these later).

Building out the assumptions...

(ha, did you see what I did there?)
Skip to Results

For this comparison, we will assume that the total required square footage to meet our business needs is 15,000 sf. This includes shared space and offices. We decide to build a fairly modest building.

Building Size

15,000 square feet

Land cost. Prices range all over the map depending on zoning, location, geographical features, and more. However, in Texas (which is where we are) the average cost of commercial acreage cost about $500,000 per acre. One acre is just under 50,000 sf. A central location like inside the Austin city limits could cost a lot more.

If you assume parking requirements drainage and other engineering requirements, it’s reasonable that a half-acre would be enough to fit your building requirements. So the total cost could be $250,000 (possibly more since you are only purchasing a half acre) for the land, assuming a seller is willing to subdivide. Assuming there are no improvements necessary (which there always are) to make to the land (tree clearing, etc.) let’s use $250k for our cost assumption here.

Land

$250,000

Infrastructure cost. $20-60 per square foot. Let’s assume $40 as a “middle of the road” structure. $40 X 15,000 = $600,000. When we add in the cost of racking and other equipment, we could use $65 per pallet position. In a 15,000 sf warehouse, our total pallet spaces are 535 with a standard racking configuration, pallet sizes, and shared space.

$65 x 535 pallet positions = $34,775 (rounded to $35k). You could double this cost to cover a used forklift, pallet jacks, desks, and computers. So the total infrastructure cost could look as follows:

Infrastructure

$250,000 - Warehouse Structure
$35,000 - Racking
$35,000 - Equipment
Total Infrastructure

$920,000

Utility cost. Again, the cost can range widely based on the infrastructure such as the amount of climate-controlled space or high-energy equipment like welding machines. For our scenario, let’s assume that only the shared space (like office space) is climate controlled (assume 3,750 sf). Based on that assumption, a good average cost of utilities is about $3.50 per square foot annually.

Utility

$3.5 x 3,750
Total Annual Utility

$13,125

Labor cost. Assume 100 orders per day managed by 3 people. 8 hours per day @ 20/hour. 125k in raw labor cost per year. 8.45% taxes and unemployment. Another 5% for retirement benefits = 13.45% for employee costs. Add $500 per month for medical and dental for each employee times 3 employees equals $18,000 annually.

Labor

($125,000 x 13.45%) + $125,000 + $18,000
Total Annual Labor

$160,000

Shipping

Assume $15 per order at 100 orders per day
$15 x 100 = $1500 per day
$1500 x 252 business days
Total Annual Shipping Cost

$378,000

Annual Operation Cost

Excluding capital cost
Annual Utility

$13,125

Annual Labor

$160,000

Annual Shipping Cost

$378,000

Total Annual Operation Cost

$407,125

How much does it cost to outsource warehousing services?

The cost of outsourcing warehousing services can vary greatly depending on the provider, the size and complexity of the facility, and various other factors. Generally speaking, 3PL providers charge a fee that is based on the volume of order fulfillment. This fee may include a fixed cost per order, as well as other fees for any specialized services such as custom packaging or order tracking. Additionally, third party logistics services charge for storage space, usually on a monthly rate.

Let’s assume the same figures for our outsourced warehousing service. For help calculating the average actual usage of pallets for your warehouse, you can use our pallet capacity calculator.

  • 15,000 square feet
  • 100 orders per day at 1 item per order
  • 535 maximum pallet positions
  • 80% average on-hand
  • 535 pallets x 80% average usage = 428 total pallets
  • $20 per pallet per month average storage fee

Storage Fees

428 pallets x $20 = $8,650 per month
$8,650 x 12 months
Total Annual Storage Fee

$102,720

Order fees. For our project, let’s assume a $4 per pick average (some 3PLs are higher some are lower but carry higher storage fees.) Let’s add $0.50 for inbound fees and miscellaneous other fees and hourly labor projects. = $4.50 per pick average

Order Fees

100 orders x $4.50 = $450 per day
252 business days per year
$450 x 252 = $113,400
Total Annual Order Fees

$113,400

Shipping Fees

Assume $11 per order
(fulfillment center gets better discounts)
$11 x 100 orders per day = $1100
252 business days per year
$1100 x 252 = $277,200
Total Annual Shipping Fees

$277,200

Annual Service Cost

Annual Storage

$102,720

Annual Pick & Pack

$113,400

Annual Shipping Cost

$277,200

Total Annual Operation Cost

$493,320

Need warehousing help?

Let AMS’ Warehouse Services Do It for You
Warehousing Services

Conclusions From the Cost Comparison

Based on our assumptions, building a warehouse is the less costly option by about 17.5%. However, this does not include many of the other costs that can stack up such as insurance, regulatory fees, and business software. Additionally, the outsourced option does not include any capital expenditure, which we calculated to cost $920,000 to build the warehouse.

Outsourced vs. Built Warehouse Cost Comparison

Built

  • Utility - $13,125
  • Labor - $160,000
  • Shipping - $378,000
$407,125annual

Outsourced

  • Storage - $102,700
  • Pick & Pack - $113,400
  • Shipping - $277,200
$493,320annual

What about the capital expense?

Let’s not forget the almost $1 million dollars in capital costs to build the warehouse. How do we account for that?

Assuming there are not any additional costs in the build model, it will take roughly 9 years to pay off the cost of the warehouse. That is, when we compare the difference in cost between the to options alone.

However, this is a big if! Many buildings are financed and carry an interest rate. In general, this is one of the risks of doing your own warehousing – the potential for extra costs.

But what does this mean? Is one of these the clear winner? Let’s discuss…

So, which scenario should you choose?

In our scenario, the outsourced warehousing option is the less costly option. It’s important to note that the cost to build a warehouse becomes significantly more competitive as the size of the operation increases. For example, if the warehouse is 4x the size, a full acre of land may cost less per square foot than only purchasing a half acre. The same goes for the number of packages shipped. A business may negotiate better rates if its volume of shipments increases.

With our scenario in mind, it may be tempting to think that the least costly option is the best choice. However, some businesses may (and do every day) choose to outsource warehousing even though the cost is greater.

While it may sound silly, this illustrates the main point of this article. That is, while cost is definitely a driver of business decisions (and an important one) it’s not the only consideration. Some businesses feel that the value of not having to deal with warehousing operations is worth the extra cost. Perhaps they can achieve better service like same-day shipping for all orders whereas they could not by doing it themselves. Some businesses just want to focus on making great products, leaving the mechanics to someone else.

On the flip side, a finance-savvy entrepreneur may consider land investment and infrastructure improvements a long-term investment strategy for the business. Alternatively, they may consider purchasing a larger plot of land so they can scale their business with greater ease than typically found with an outsourced warehousing solution.

Overall, there are plenty of reasons why a business may choose to go with one option over another – even if on paper it’s more costly. The decision is all about risk & reward and what is most important to you.

Overcoming the Scalability Concern

As mentioned above, one of the biggest challenges that I hear for outsourcing warehousing is the ability of the outsourced fulfillment company to grow with its business. Many startups and eCommerce businesses need to be able to scale up rapidly as their demand increases.

However, most third-party providers aren’t able to expand with this business growth. Even if they can expand, it’s usually not fast enough to handle the fulfillment volume needed by the customer.

At AMS, we invested early on into the land so that we could offer our customers not only the necessary infrastructure to meet their needs, but scalability in a timely manner.

Key Takeaways For Building vs Outsourcing Warehousing

Deciding between building vs. outsourcing your warehouse operations depends on the specific needs of your business.

In this article, we saw that building your own warehouse space can certainly cost less to run annually. However, in total it may take many years to break even when compared to the cost of outsourcing. Yet, the decision is never based on cost alone. Many other elements play into it.

When evaluating the pros and cons of each option it is important to consider factors such as upfront investment costs, scaling capabilities, customer service levels and inventory management.

Free Warehouse Planning Tools

Warehouse Capacity Calculator

Need help figuring out the total volume of usable space in your warehouse? We built a simple tool to help you calculate that.

Calculate Space

Pallet Storage Capacity Calculator

The pallet storage capacity calculator quickly determines the total number of pallets your warehouse can store based on rack configuration.

Calculate Pallets

Related Content

Looking for a warehouse partner?
Trust our classic customer service.

There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.

Warehousing

The post Building vs. Outsourcing Your Warehouse: Pros and Cons appeared first on AMS.

]]> How to Set up a Warehouse: A Step-By-Step Guide https://www.amsc-usa.com/blog/how-to-set-up-a-warehouse/ Thu, 05 Jan 2023 16:43:13 +0000 https://www.amsc-usa.com/?p=1141 A 7 step process for how to set up a warehouse space that is both efficient and well suited to your specific business needs.

The post How to Set up a Warehouse: A Step-By-Step Guide appeared first on AMS.

]]>

How to Set up a Warehouse: A Step-By-Step Guide

A 7 step process for how to set up a warehouse space that is both efficient and well suited to your specific business needs.

Are you a business that is ready to take the plunge and set up a warehouse for inventory storage, decreased shipping times, and overall cost savings? Whether it’s your first time setting up a warehouse or you need an upgrade, this step-by-step guide will walk you through everything you need to know to setup an efficient and smooth running warehouse.

From selecting the right location to installing management software and staffing appropriately, every detail matters when it comes to understanding how to set up a warehouse. There are 7 total steps involved, though different experienced warehouse managers may break them down in various sub-steps. Let’s get started!

Get A Quote – Tell Us About Your Warehouse Set Up Requirements

two engineers discussing how to set up a warehouse

Table of Contents

01.

Size

The amount of required space
02.

Location

Where the warehouse is located
03.

Flow

The movement of materials
04.

Equipment

To move and process materials
05.

Digitize

Implement digital inventory
06.

Staff

Obtain well-trained employees
07.

Lean

Monitor & implement lean
BONUS

Backup

Have a contingency plan

Step 1: Determine the Amount of Required Space

It is important to decide how much square footage you need for your warehouse space. That way, you will know if the warehouse has ample space to meet the requirements for the amount of material or other processes you need to accommodate.

Additionally, knowing your warehouse space requirements helps you estimate the cost of rent, utilities, materials, and more. Space requirements play a major role in the overall warehouse layout (step 2) as well. So, it is important to take some time and think carefully about how much space you will need in your warehouse before you begin any implementation.

If you are setting up a headquarters for your business, you will likely also need dedicated office space, so take account of that when designing your warehouse.

A blueprint to determine warehouse layout, warehouse space, and warehouse storage

Pro Tip: Consider High-Density Pallet Racks

Different types of pallet racks greatly affect the cost per square foot to store pallets. Some configurations enable pallets to store at a much greater density than other solutions. For example, a four-deep rack with 8 pallet spaces high requires much less floor space per pallet than a single-deep rack with 4 pallet spaces high. You can quickly see the difference with our pallet storage capacity calculator.

Don't Ignore Future Needs

Something vital to consider when determining how much space you need is to consider your future growth goals. If you don’t plan for your future storage and throughput needs, you may find yourself looking for a new space again. Since the capital cost of building a warehouse is usually recovered over several years, failing to plan for the future can be a costly and critical mistake.

Step 2: Pick a Good Location

After you know how much space you need to run your warehouse, you can figure out where it should be located. As it is with nearly every other venture, location is key. At the very least, the size requirements you determined in step one may disqualify some locations from your list of options.

A warehouse location in along major highways

Why the Location of Your Warehouse Matters

You need to be sure that you are choosing a location that is accessible and convenient for your customers. If your warehouse is too far away, your customers may not be willing to go out of their way to get their products from you.

You also need to consider the cost of shipping. If your warehouse is located in a remote area, the cost of shipping may be higher than if your warehouse were located in a more populated area. This can impact your bottom line and may deter potential customers from doing business with you.

Another factor to consider is the climate. If the potential location of your warehouse is in a region that often has severe weather such as snow storms, this may cause frequent interruptions in your business. This will help to ensure that your products are stored properly and that they do not spoil due to the heat.

Want to know more?

Learn More About Warehousing Services
Warehousing Services

Step 3: Designate a Warehouse Layout & Flow

A warehouse layout is important when setting up a warehouse because it can affect the flow of goods and workers. A well-organized warehouse can improve efficiency and worker productivity. There are a few different types of overall warehouse layouts:

  • Straight
  • L-shape
  • U-shape
A graphic illustrating the 3 types of order picking warehouse layouts

Each warehouse layout has its advantages and disadvantages. For example, a straight layout is good for high-volume warehouses because it allows for quick and easy access to all parts of the warehouse. However, it can be difficult to maneuver large items through it.

An L-shape layout is good for small warehouses because it uses less space than other layouts. However, it can be difficult to move goods from one side of the warehouse to the other.

A U-shape layout is good for medium-sized warehouses because it allows workers to move between adjacent aisles quickly.

Warehouse Flow Determines Efficiency

Warehouses not only need the right overall layout, but also an efficient flow of materials. This means taking into account the product types and quantities that will be stored. Not only the types and quantities of products but how they move through the warehouse. This involves thinking about the different sections that will be needed, such as packing and shipping, receiving, and storage areas.

The best warehouse layout includes a good directional flow from inbound and outbound docks and between warehouse aisles

Each area will need its own layout and a clear directional flow in and out. A receiving area layout, for example, needs inbound docks, a staging area, and an outbound section for materials to move to their next areas such as storage or manufacturing. A shipping area usually needs to be located close to the storage area and has packing stations.

Pro Tip: Utilize Layout Software

It's helpful to draw up your warehouse layout design in software specifically suited for warehouse floor plan creation. Tools like these help you visualize and allocate space for the different areas of your warehouse including storage spaces, and warehouse picking areas. If you plan on manufacturing, you can also draw up ample production space in your warehouse layout.

Step 4: Choose Necessary Warehouse Equipment

With your overall layout and flow in place, next, you need to know what equipment is needed for your warehouse space.

Different kinds of equipment can greatly affect the efficiency of a warehouse setup. Warehouse storage equipment like pallet racks, shelving units, and other solutions for storage space help organize goods for better access and visibility. This helps workers quickly locate items as needed and reduces wasted time looking for items.

An overhead image of a forklift for warehouse equipment

Materials storage also requires the movement of materials. That means pallet jacks, forklifts, dollies, and other material-handling equipment are also necessary for your warehouse setup. Automated storage solutions such as conveyor belts and automated guided vehicles are a great way to make the movement of materials in your warehouse layout more efficient.

Note: Consider Automation

Warehouse automation is a great way to utilize technology to get the best possible use of your warehouse floor space, even for small warehouse spaces.

Warehouse safety is also important and requires the right equipment. For instance, pallet jacks help to move heavy loads safely while ladders provide access to hard-to-reach areas. Other safety items may include protective gear like gloves and glasses as well as fire extinguishers.

Finally, warehouse security is essential to protect both goods and workers. This may include CCTV cameras, alarms, or locks on doors or shipping containers.

Step 5: Implement a Warehouse Management System

It’s important to have a dedicated system to monitor and manage items in your warehouse. That’s because manually tracking inventory leads to all sorts of human error and labor hours. A digital inventory or warehouse management system (WMS) helps you keep track of what products are in your warehouse and when they need to be replenished by automating data entry and storage.

A WMS does far more than just store inventory information though. Some robust systems will guide you through the entire warehouse setup process so you can ensure you have the ideal warehouse layout. It can also help you quickly store, locate, pick, and track products from receiving through shipping. This ensures that products are delivered on time and helps reduce the costs associated with lost or damaged goods.

Not only that, but a WMS can also help streamline processes by analyzing high-turn SKUs and altering their position, or even picking pathways in the warehouse.

Ultimately, a warehouse management system can help you maximize the efficiency of your warehouse and ensure that goods are delivered on time. It’s a valuable tool for any warehouse operation.

Need Warehousing Help?

Let AMS Handle Your Warehousing Needs
Get Started

Step 6: Staff & Train Appropriately

Finally, it’s important to ensure your warehouse has the right staff to properly function. This includes having enough staff to manage operations efficiently as well as training them on the best practices for warehouse management.

Having a well-trained, knowledgeable team is essential for an efficient warehouse. You need staff who can quickly and accurately process orders, manage inventory, and ensure safety protocols are followed.

Investing in the right staffing solutions also helps reduce turnover rates so you don’t have to constantly train new employees. This helps keep your operations running smoothly and costs down.

The right warehouse staffing solutions can help you maximize efficiency in your warehouse, ensuring that goods are processed quickly and accurately while keeping costs down.

warehouse staff being trained on proper use of workspace equipment and equipment storage

Step 7: Monitor Efficiency & Implement Lean

Of course, the key to an efficient warehouse is ongoing monitoring. This includes tracking performance and making small changes as needed to improve efficiency and reduce costs.

One way to do this is by implementing lean warehousing principles. Lean seeks to streamline processes by minimizing waste, reducing cycle times, and improving quality standards. It looks at the entire system to identify areas of improvement.

For example, you may implement 5S, which focuses on effectively organizing and maintaining the workplace. Or you may use just-in-time (JIT) inventory to reduce inventories and speed up production.

By monitoring efficiency and implementing lean, you can ensure that your warehouse is as efficient as possible, helping to increase productivity and reduce costs.

Conclusion: How To Set Up a Warehouse

Setting up and managing an efficient warehouse requires careful planning and ongoing monitoring. While there are many things to consider, the key steps include finding the right space, investing in the right equipment, implementing a warehouse management system, investing in staffing solutions, and monitoring efficiency.

By taking these steps you can ensure that your warehouse runs smoothly and efficiently, helping you meet customer demands while reducing costs. With the right warehouse setup and management, your business can easily achieve its goals.

Staff deciding on efficient warehouse layout for equipment such as packing tables, warehouse aisles, and receiving and shipping areas

Bonus Step: Have a Contingency Plan - Third-Party Warehousing

While having an efficient warehouse is essential for business success, sometimes it is difficult to manage the process yourself. Outsourcing your warehousing processes is always an option you can consider.

By outsourcing, you can take advantage of experienced professionals who have already built out the layout, flow, software, people, and process to complete your tasks as efficiently as possible. Many times, the scale and capabilities of a third-party warehouse are less costly than building the solutions yourself. With the right partner who can scale with you, you don’t have to worry about having enough space for your growing requirements.

Free Warehouse Planning Tools

Warehouse Capacity Calculator

Need help figuring out the total volume of usable space in your warehouse? We built a simple tool to help you calculate that.

Calculate Space

Pallet Storage Capacity Calculator

The pallet storage capacity calculator quickly determines the total number of pallets your warehouse can store based on rack configuration.

Calculate Pallets

Related Content

Looking for a warehouse partner?
Trust our classic customer service.

There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.

Warehousing

The post How to Set up a Warehouse: A Step-By-Step Guide appeared first on AMS.

]]> Small Warehouse Layout: How to Design a Small Space https://www.amsc-usa.com/blog/small-warehouse-layout/ Thu, 22 Dec 2022 21:50:35 +0000 https://www.amsc-usa.com/?p=1112 A small warehouse layout is challenging to make efficient, but by focusing on the "3 F Process", you can make the most of a tight space.

The post Small Warehouse Layout: How to Design a Small Space appeared first on AMS.

]]>

Small Warehouse Layout: How to Design a Small Space

A small warehouse layout is challenging to make efficient, but by focusing on the “3 F Process”, you can make the most of a tight space.

A successful warehouse layout has a direct impact on your bottom line. An efficient space can save you time and money, while a poorly designed one can cost you both. If you’re running a small operation, though, you might not have the luxury of a lot of space to work with. Here are some tips for making the most of what you have.

A small warehouse space

Start With Our Warehouse Layout Guide

Have you read our guide about warehouse layout? If not, then jump over there first before following the steps below.

Table of Contents

The "Three Fs" in Small Warehouse Layout

When considering how to layout your small warehouse space, I find it easy to break down the components into 3 easy to remember aspects. These are the “three F’s” of small warehouse design:

Function

The main process in the warehouse.

Form

The physical characteristics of the warehouse.

Flow

How the materials move through the warehouse.

Function: Understand The Main Use of the Warehouse Space

There are many types of warehouses and many types of activities that occur in warehouses. These include things like kitting, cross-docking, storage, assembly, manufacturing, basic storage, and more. Different kinds of activities require different workflows, equipment, and overall layouts. So, before determining the right layout for your small warehouse, you first need to get clear about what functions you will perform.

Form: Measure the Available Space

You need to know how much volume of usable space you have to work within your warehouse. In a small warehouse layout, every cubic inch of space is valuable.

To do this, you first need to know the total volume of the warehouse. You can find this by multiplying the length by the width in feet. This value is your total square feet. Then, multiple the total square feet by the ceiling height clearance. The resulting value gives you the total cubic volume of your warehouse floor plan. From here, you can subtract the space devoted to other activities such as office space, bathrooms, or other areas.

Free Warehouse Planning Tools

Warehouse Capacity Calculator

Need help figuring out the total volume of usable space in your warehouse? We built a simple tool to help you calculate that.

Calculate Space

Pallet Storage Capacity Calculator

The pallet storage capacity calculator quickly determines the total number of pallets your warehouse can store based on rack configuration.

Calculate Pallets

Figure Out Density Requirements

Once you know exactly how much space is available in your small warehouse, you can figure out how densely packed it needs to be. Not all racks are created equal and different configurations can hold more or less storage in the same amount of space. For example, a gravity flow rack can usually store a lot more pallets in the same space as a standard rack with standard aisle widths.

Square Feet Consumption Per Pallet
Pallets High
1
2
3
4
5
6' Aisle

Pallets Deep
1
88.85
44.42
29.62
22.21
17.77
2
72.00
36.00
24.00
18.00
14.40
9.5' Aisle
1
110.29
55.15
36.76
27.57
22.06
2
82.72
41.36
27.57
20.68
16.54
3
73.53
36.76
24.51
18.38
14.71
4
68.93
34.47
22.98
17.23
13.79
5
66.18
33.09
22.06
16.54
13.24
13' Aisle
1
131.74
65.87
43.91
32.94
26.35
2
93.44
46.72
31.15
23.36
18.69
3
80.68
40.34
26.89
20.17
16.14
4
74.30
37.15
24.77
18.57
14.86
5
70.47
35.23
23.49
17.62
14.09

The data above assumes standard 40″ x 48″ pallet dimensions, 96″ long load beams, and 4″ uprights. A 25% common-area allowance, and an average 85% warehouse utilization has been added to the pallet dimension calculations to reflect real-world warehouse requirements.

Consider Necessary Equipment

Once you have an idea of what kind of storage density you need for your small warehouse, then you should have a better picture of the right equipment to meet that need. Examples of typical equipment include storage racks and shelves, material handling tools (e.g. pallet trucks and forklifts) packaging stations, packing materials, and security systems. Depending on the type of material you store, or specific services, you may also need specialized types of equipment. These can include specialized racks or climate-controlled storage.

A great example of storage density leading to the requirement of specialized equipment is specified racking type and aisle width. Smaller aisle widths allow for more racking to exist in the same amount of space. However, the smaller aisle also limits the amount of traffic that can move between the racks. Additionally, a different type of forklift is necessary to pick pallets in smaller aisles. Sometimes these adjustments limit the carrying capacity or maximum reachable height of machinery.

Example of good shipping area design and flow

Flow: Establish Clear Material Flow

As illustrated in our warehouse layout article, establishing good flow is a critical part of designing an efficient warehouse. This is even more important in a small warehouse. The reason for this is that small warehouses tend to suffer from more bottlenecks and congestion due to the lack of extra walkway space. Therefore, small warehouses must spend extra time considering how material moves and look for strategies to remove bottlenecks wherever possible.

Generally speaking, the material should flow from the receiving area in one direction into storage. From the storage area, it should move in one direction to the shipping or outbound area.

Adopt a Picking Strategy

To gain the most efficiency in your small warehouse space as possible, you will need to choose the right picking method. Each of the 4 main types has its advantage and disadvantage, so it depends largely upon what kind of products and the total number of orders in your business. Here are the main 4 types:

Implement a Digital Control System

A warehouse management system (WMS) and a warehouse control system (WCS) will greatly simplify managing your small warehouse layout. When you rely upon manual record-keeping, a few problems arise. First, it can take an extensive amount of time to keep track of changes in inventory or other processes. Second, errors can easily creep in due to a lack of input control and human variation.

A WMS clears up these two concerns with digital inventory management and a process system that is controlled by software. A good WMS will look for the most efficient way to perform a task, whether it’s the route a worker takes from a pick list or the flow of material through the warehouse. It also relieves warehouse management teams from manually tracking data which reduces or eliminates costly errors.

Implement Continual Improvement (Lean) Practices

Lean warehousing is a 5 tiered approach to continually optimizing your warehouse processes. Lean is all about streamlining processes and shedding unnecessary components along the way. Applying lean principles to supply chain management eliminates activities that bring nothing of value to the table and focuses on improving efficiency without compromising output quality. The result? A faster, more profitable process!

It’s hard to understate how vital this is for a small warehouse layout. While larger facilities may have some room to expand and contract various segments, a small warehouse does not. Thus, it’s vital to eliminate unnecessary activities in favor of the greater priority.

warehouse staff being trained on proper use of workspace equipment and equipment storage

Don't Ignore Safety

The bottom line about warehouse safety is that it tends to require more space to properly ensure. For example, establishing walking lanes vs. forklift lanes adds additional room that may not be readily available in a small warehouse. So the temptation is to de-emphasize safety concerns to increase capacity. Do not do this! Not only are there ethical concerns with ignoring safety measures, but losing an employee to injuries (or worse) significantly reduces the throughput of your operations. This is especially true in a small warehouse.

Safety should always be the priority in any warehouse – small or large. The good news is, ensuring safety doesn’t mean that you need to significantly limit the capacity of your space. However, it does require the devotion of some amount of space to properly implement.

Summary: Designing a Small Warehouse Layout

When designing a small warehouse space, remember the 3 main factors: Function, Form, and Flow. Creating a warehouse space can be challenging, but by taking the time to plan and consider these factors, you’ll ensure the long-term efficient operation of your small warehouse.

Small Warehouse FAQ

The key considerations when designing a small warehouse layout include the main function of the warehouse, the size and shape of the warehouse space, and the flow of material through the warehouse. Other important things to consider are things like the type of material handling equipment that will be used, the number of staff required to manage and maintain operations, and the safety and security needs of the facility.

To ensure efficient storage and retrieval of goods in a small warehouse setting, you must first determine what kind of storage infrastructure (racking, etc.) is best suited for your type of materials. For example, it may be more beneficial to use vertical solutions such as shelves or racks instead of horizontal ones. Efficient storage requires careful planning and organization, such as labeling all items clearly and ensuring there is appropriate aisle space for easy access. Finally, automated systems such as barcode scanners and warehouse management systems can significantly increase efficiency for the storage and retrieval of goods in a small warehouse setting.

There are several types of shelving or racking systems that can be used for a small warehouse layout. These include fixed systems with horizontal shelves made from metal or wood as well as adjustable systems such as pallet racks. These adjustable systems have horizontal beams that can accommodate different sizes and weights of items. Another type of shelving or racking system is a type of mobile system which can move around the warehouse for different uses.

The safety measures that should be taken when designing a small warehouse layout include staff training, clearly marking barriers or hazards, and installing adequate lighting and ventilation. A comprehensive fire safety plan should also be in place that includes smoke alarms, sprinklers, and a well-maintained fire extinguisher system.

You can optimize the workflow in a small warehouse environment by starting with an overview diagram of the space. Starting with the receiving area, trace the flow of material as it enters the docks, through storage, and finally the outbound shipping area. This basic step should allow you to identify any areas that could use improvement either by allocating more space or shifting the arrangement so that congestion is reduced or eliminated. Automated technologies such as robotics are costly, but greatly help optimize the workflow of a small warehouse.

Related Content

Looking for a warehouse partner?
Trust our classic customer service.

There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.

Warehousing

The post Small Warehouse Layout: How to Design a Small Space appeared first on AMS.

]]> Receiving Area Layout: Best Practices, Tips, and Examples https://www.amsc-usa.com/blog/receiving-area-layout/ Thu, 15 Dec 2022 21:23:08 +0000 https://www.amsc-usa.com/?p=1096 What the receiving area in a warehouse is and 2 core components of efficient receiving area layout. Plus examples of good and bad layouts.

The post Receiving Area Layout: Best Practices, Tips, and Examples appeared first on AMS.

]]>

Receiving Area Layout: Best Practices, Tips, and Examples

What the receiving area in a warehouse is and 2 core components of efficient receiving area layout. Plus examples of good and bad layouts.

As a part of your overall warehouse layout design, the receiving and shipping areas are usually the first appointed, and one of the most important. When improperly laid out, the shipping and receiving process can negatively affect the entire warehouse. In this article, we will discuss the components of efficient receiving area layout to minimize any potential bottlenecks in warehouse operations.

Get A Quote – Tell Us About Your Receiving Area Requirements

receiving area layout

Table of Contents

What is a receiving area?

A receiving area is a designated space in a warehouse where incoming goods are received and processed. This is usually called an “inbound” process.

Unless the primary type of warehouse is for cross-docking, the receiving area should be located as close to the storage area as possible. This helps minimize the distance goods have to travel for put-away. In a cross-docking setup, however, shipping and receiving should be located near each other.

Start With Our Warehouse Layout Guide

Have you read our guide about warehouse layout? If not, then jump over there first before following the steps below.

4 Main Areas in a Receiving Area

There are 4 main areas that occur in a receiving area. Here is how they usually break down:

01.

Docks

Where inbound trucks connect to your warehouse.

02.

Staging

Temporary storage for incoming materials.

03.

Inventory

Where inbound receipts enter in the inventory system.

04.

Put Away Lanes

Where handling equipment moves materials to storage.

Anatomy of the 4 main areas in a warehouse receiving department

The Importance of Proper Receiving Area Layout

A receiving area layout is important because it is the first place where goods can bottleneck in your warehouse. This can cause backups or other problems throughout the rest of the warehouse.

An efficient warehouse receiving layout allows goods to process quickly, safely, and with accuracy. Good accuracy minimizes costly errors, such as incorrect shipments or misplaced items.

Need help calculating usable warehouse space?

We have developed a simple tool that immediately calculates the total usable volume for you with some basic inputs.

2 Components of Efficient Receiving Layout

To obtain an effective receiving area layout, 2 main considerations should be taken into consideration. By prioritizing these 2 considerations, you can create an effective receiving area layout that helps optimize warehouse operations.

The Physical Characteristics of the Receiving Area

The physical characteristics of the space include both the size and layout of the area, infrastructure, and any other features. The layout of the receiving area should allow for safe unloading and inspection of goods. Infrastructure needs include electrical outlets, IT and automation systems, and other necessary warehouse equipment such as forklifts or pallet jacks.

The Flow of the Receiving Area

After the physical characteristics of the receiving area are clear, the mapping of material flow within the receiving area is next. The receiving process itself should be mapped out in detail so that workers know exactly where and what steps to take when receiving goods. During this process, the goal is to bottlenecks and unnecessary travel. For example, the staging area for inbound goods should be near (or next to) the docks, and also near the main storage area.

Tips for Optimizing Receiving Area Process

Now that you understand the importance of having an effective receiving area layout, let’s discuss how to design one. Here are some tips for creating an efficient receiving area:

  • Ensure adequate docking infrastructure. To maximize material flow efficiency, you need enough docks (and proper docks) to accommodate incoming shipments. This depends entirely on your forecasted volume of material. Ideally, inbound and outbound docks are segregated in different areas of the warehouse.
  • Automate your warehouse processes. Automation can be very impactful  for increasing efficiency in a warehouse. A warehouse management system (WMS) or other warehouse management software enables better planning and direction of inbound activities. Not only that, but these control systems can direct quality control, inventory control, picking process, and storage space. Some WMS’s even direct supply chain processes which helps further optimize efficiency.
  • Invest in appropriate equipment. Some equipment may help your receiving process and some may not. This depends on what specific kind of receiving process you have. Regardless, you should consider using standard material handling equipment like forklifts and pallet jacks. Other equipment like a barcode system helps gain maximum efficiency.
  • Designate enough staging space to accommodate peak traffic expectations. The amount of required staging space you need depends on the volume of goods you expect to receive. In general, there should be ample room for employees to unload and inspect goods, as well as enough room to store the goods until they can be moved into the main warehouse.
  • Don’t ignore ergonomics. Make sure the layout is ergonomic and organized so workers can access items easily. This may include the location, labeling, and type of bins or other storage mediums you use. For example, placing heavy or popular items at waist level rather than on the floor reduces employee strain
  • Plan the layout for heavy equipment traffic. Forklifts or other mechanized equipment need to be used safely and efficiently. Proper layout often includes designated walking and forklift paths and dedicating enough room for the safe use of the equipment. Forklifts carrying heavy loads can be dangerous if not allowed enough space to maneuver.

Examples of Receiving Area Layouts

To help understand how these principles work in an actual receiving area layout, we have put together a couple of examples to illustrate this. While there are many more kinds of examples we could examine, these two provide a basic overview of the core considerations to establish an efficient receiving process.

Example of Bad Receiving Area Layout

Example of bad shipping area design and flow

A brief glance at the example above and it’s plain to see that this layout has poor flow. A receiving area like this would suffer from heavy congestion and a high probability of safety issues. Here are the main concerns with this layout:

  • Not enough docks
  • Not enough forklift space
  • Bad staging area location
  • No clear lanes for heavy machinery traffic

Example of Good Receiving Area Layout

Example of good shipping area design and flow

This example is much better, with clear lanes of traffic and flow that moves in one direction toward the rest of the warehouse. A receiving area design like this would minimize any bottlenecks that occur by simply altering the use of the space, and ensuring enough dock doors are present.

  • Ample capacity
  • Good staging area location
  • Clear flow
  • Safety markers for human working areas
  • Clear lanes for heavy machinery traffic

Final Thoughts About Receiving Area Layout

Since the receiving area is the first touch point of your entire warehouse operation, it’s best to consider it first in your warehouse layout. If you don’t, then the rest of your warehouse efficiency will suffer and costly problems will arise. You can use the principles in this article to help you plan ahead for your receiving area needs, and implement a design that will work for you.

Related Content

Looking for a warehouse partner?
Trust our classic customer service.

There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.

Warehousing

The post Receiving Area Layout: Best Practices, Tips, and Examples appeared first on AMS.

]]>