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Improve Warehouse Layout Optimization

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Daliah Okoro

Seasonality can have a tremendous impact on your entire supply chain, including your warehouse operations. It can affect what and when inventory items shift from slow-moving to fast-moving and vice versa. It can impact lead times from your suppliers to your distribution center and consequently move capacity requirements for in-house storage areas. It can also affect resource requirements for order picking, packing, assembly, and staging operations. There is little that goes on in a warehouse facility that seasonality does not influence, and therefore it should be a significant part of any warehouse layout optimization plan.

Engage Your Subject Matter Experts‍

Experts planning how to optimize the warehouse

To start, the plan for optimizing your warehouse for seasonal demand should consist of ideas from subject matter experts in each of the critical areas of the warehouse. Ideally, these experts will have experienced several seasonality cycles for your warehouse, business, and industry. They will have experienced your warehouse's bottlenecks, stockouts, or overflow caused by seasonality. They should be your first resource for suggestions on how to improve your warehouse to handle these seasonal fluctuations. Their ideas can make up the backbone of your process improvement plan. And your subject matter experts can facilitate the early and rapid adoption of any process changes.

Understand Your Current State‍

You may first want to establish a baseline for your business' performance through several cycles of seasonality. These metrics will inform you about the magnitude of any seasonal pain points so that you can focus on maximizing your investment in resources to improve the biggest drains on your warehousing operations during seasonal ebbs and flows.

Forecasting And Demand Planning‍

Use your forecasting and demand planning tools to build excess storage space into your warehousing plan to account for high demand periods. Your estimate of storage requirements should take into account supplier lead times, stockout costs, and inventory carrying costs. Optimize your warehousing estimates to minimize cost and to balance lead times with demand expectations.

Design And Layout‍

People discussing a warehouse design

Warehouse design and layout should be coupled with your picking strategy. And because a significant amount of time is spent picking products to fill orders, the plan for your warehouse should minimize the amount of unproductive time spent order picking.

For smaller operations, discrete or batch picking may be optimal. Match these picking strategies with a U layout configuration to maximize a compact storage area. Receiving is at one end of the U and shipping at the other end. Workers move between the two ends to pick, pack, and sort orders. This configuration is best for small fulfillment teams and warehouses with a few daily deliveries and shipments.

More extensive operations are unduly constrained by the U layout and are better served by a flow-through design with receiving on one side of the building and shipping on the other. All other warehouse operations are laid out between the two docking areas. Wave and zone picking are often utilized for this configuration when demand volume is high. Typically, for this design, floor plans are spacious, and storage requirements are substantial.

So, before implementing your warehouse layout optimization plan for seasonal changes, consider the combination of picking strategy and layout that will help to minimize errors, bottlenecks, and wasted time when fulfilling orders for shipment.

Outsourcing‍

On-demand warehousing may be the perfect solution for large, seasonal fluctuations in your business' demand cycles. Outsourcing warehouse requirements during high volume periods allow you to keep in-house resources stable while meeting extreme variations in order fulfillment. On-demand warehousing and third-party logistics companies provide temporary solutions to planned and unexpected increases in warehouse requirements. You can maintain constant internal staffing, equipment, and storage levels while outsourcing overflow requirements during peak fulfillment periods that exceed your in-house capabilities.

Palletizing Strategy‍

Boxes organized with pallets in a warehouse

Another low-cost, minimal-commitment way to handle seasonal increases in demand is to palletize stock overflow. Instead of building excess shelf storage into your warehousing strategy to account for cycles of high demand, you can place excess stock on pallets and store these pallets in a designated overflow area. The palletized inventory can be moved to shelves and bins when space becomes available.

Pallets from a reputable wood pallet distributor would work well in many warehouse environments. Most pallets are stackable and reusable. And they are designed for fork truck handling.

Conclusion‍

Seasonal fluctuations in demand often require seasonal changes in warehouse strategy. These changes account for oscillations in the frequency of deliveries and shipments, shifts in the amount and type of on-hand inventory, and increases and decreases in the warehouse’s staffing requirements. Optimizing for seasonality allows your warehouse to operate more efficiently to avoid stockouts, reduce fulfillment errors, manage staffing requirements, and minimize inventory carrying costs. All of which translates into improvements in customer service and satisfaction. There are many ways, as discussed above, to optimize your warehouse for seasonal demand. Should the palletizing strategy be the right strategy for managing inventory overflow during peak demand periods in your warehouse, contact Pallet Market for a pallet online quote.