Warehousing and
Inventory Management
Warehouse Space and Layout Planning
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Basic Warehousing Decisions
 1. Ownership (rent, lease or build)
 2. Size and number of warehouse
 3. Where should warehouses be located?
4. How much capacity is required?
5. What type of warehousing layout is
appropriate?
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Warehouse Space Planning
 What is the one thing you always run out of
in a warehouse?
 The answer is space....................
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Warehouse Space Planning
1. Determine what is to be accomplished
2. Determine how to accomplish it
3. Determine space allowances for each
element required to accomplish the activity
4. Calculate the total space requirement
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Two Major Activities Require Space Planning
1. Receiving and Shipping Activities
2. Storage Activities
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Space Planning for Receiving and Shipping
 The most important functions of a warehouse
take place on the receiving and shipping
docks.
 Unfortunately, these are also the most
neglected areas of the warehouse.
 How then do we plan the space requirements
for shipping and receiving?
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Methodology of Space Planning
for Receiving and Shipping
1. Defining the materials received and shipped
2. Determining dock bay requirements
3. Dock bay configuration
4. Manoeuvring allowances inside the warehouse
5. Buffer and Staging area requirements
6. Dock-related space requirements
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1. Defining the Materials Received and Shipped
An excellent tool – Receiving and Shipping
Analysis Chart (RSAC)
Columns 1-5: define what is to be received or shipped
Column 6: size of shipment
Column 7: when the receipts and shipments will occur
Columns 8-9: list the types of carriers
Columns 10-11: handling methods & time required for loading/unloading
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2. Determine Dock Requirements
 Determining the requirements for the
receiving and shipping dock bays
 How many dock bays are required?
 Frequency
of activity
 Carrier inter-arrival time and service time
 Guessing
 Waiting-line analysis
 Simulation
 How should the dock bays be configured?
 Types of vehicle at the dock bay
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3. Basic Dock Configuration
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Consolidation
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Consolidation
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4. Manoeuvring Allowances Inside
the Warehouse
 Space needed to enter and exit the carrier and to
travel between the carrier and the receiving buffer
area or the shipping staging area
 Area occupied by the dock leveling devices
 An aisle located between the back edge of the
inside dock leveling device and the receiving buffer
area or the shipping staging area

Required width: 6-8 feet for manual handling and nonpowered
material handling equipment and 8-12 fleet for powered material
handling equipment
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5. Buffer & Staging Area Requirements
 The receiving buffer area


serves as a depository for the materials unloaded from the carrier
perform thorough check-in and inspection
 The shipping staging area


serves as an accumulation point for the merchandise that comprise a
shipment
perform packaging, unitizing or verifying the customer order
 Determining the amount of the buffer/staging area




a matter of the degree of control over the dock area
based on how much area is required during the surge periods
Existing facilities – by analyzing historical shipping patterns
New facilities – ask the anticipated suppliers and users & based on the
anticipated surges in activity
 Aisle space within the buffer/staging area
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Receiving and Shipping Area
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6. Determine Dock-Related Space Requirements
 Office Space
 Receiving hold area
 Trash disposal
 Empty pallet storage
 Truckers’ lounge
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Space Planning for Storage Activities
1. Defining materials to be stored
2. Choosing a storage philosophy
3. Space requirements for alternative storage
methods
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1. Defining the Materials to be Stored
A useful tool – Storage Analysis Chart (SAC)
Columns 1-5: define what material are to be stored
Columns 6-8: how much is to be stored
Columns 9-12 how the materials are to be stored
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2. Determine Storage Philosophy
1. Fixed location storage


each individual SKU is always stored in a
specific location, and
no other SKU may be stored in that location,
even though that location may be empty
2. Random location storage

any SKU may be assigned to any available
storage location
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3. Determine Alternative Storage
Method Space Requirements
1.The space requirements are directly related to
the volume of material to be stored, and
2. The use-of-space characteristics of the
alternative


Aisle allowance
Honeycombing allowance
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Aisle & Honeycombing Allowance
1. Aisle allowance is the % of space occupied by aisles
 It is necessary within a storage area to allow accessibility to
the material being stored
 The amount of aisle allowance depends on


the storage method, which dictates the no. of aisles required,
and
the material handling method, which dictates the size of aisles
2. Honeycombing allowance is the % of storage space lost
 It occurs whenever a storage location is only partially filled
with material and may occur horizontally and vertically
 The unoccupied area within the storage location is
honeycombing space
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Honeycombing Space
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Objectives of a Warehouse Layout
1. To use space efficiently
2. To allow the most efficient material handling
3. To provide the most economical storage in
relation to costs of equipment, use of space,
damage tomaterial and handling labour
4. To provide maximum flexibility in order to
meet changing storage and handling requirements
5. To make the warehouse a model of good
housekeeping
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Layout Planning Methodology
Layout planning methodology consists of two steps:
 Generate a series of warehouse layout
alternatives
 Evaluate each alternative against specific
criteria to identify the best warehouse layout
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Generate Alternative Layouts
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Evaluate the Alternative Layouts
1. Popularity Philosophy
2. Similarity Philosophy
3. Size Philosophy
4. Product Characteristics Philosophy
5. Space Utilization Philosophy
 Conservation
of space
 Limitations on use of space
 Accessibility of material
 Orderliness
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New concept in
warehousing
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Virtual warehouse
 Discussion of the implication of virtual
warehouse in MSC
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Q&A
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