Warehousing is an integral part of supply chain management. Contrary to popular belief, warehousing is not just about storing products. It also involves inbound and outbound functions. A well-managed warehouse contributes to the overall efficiency, helping the business meet its strategic goals.
Warehouse modernization: The need
Warehouse management has come a long way. Earlier businesses considered warehouses nothing more than a building that can be used to store products. Thanks to major industry developments, the definition of warehousing has drastically changed over the past few decades. Satisfying customers is no more enough. To get their customers to rally around their brand, businesses need to exceed their expectations. This has forced companies to revisit their definition of warehousing.
In the 21st century, using an archaic warehouse is a cardinal sin. Warehouses that do not employ modern processes and systems fail to meet fluctuations in demand. People working in old warehouses that utilize manual processes are at high risk of sustaining a debilitating, and in a worst-case scenario, life-threatening injury. Frequent accidents can impact efficiency and productivity, dragging down the warehouse’s profitability. In a nutshell, an old warehouse that uses equipment and processes that were developed decades ago is more of a curse than a blessing.
Modern warehouses do much more than just storing items. Their functions include inventory control and cost management. Modern warehouse designs meet stringent standards. They are developed keeping employee safety and space in mind. The operations are developed to help save time and maximize warehouse space utilization. These kinds of warehouses utilize the latest equipment and processes designed to help warehouses management teams accurately forecast inventory demand. When forecasting is spot on, businesses are able to avoid losses that result from wastage (due to inaccurate forecasting).
Adapting your aging warehouse: A few tips to consider
Adapting an old warehouse has become more of a necessity than a matter of choice. Upgrading your warehouse can be the missing piece of your customer experience puzzle. Improving your warehouse will open doors to new opportunities and help you drive operational efficiency. Your smart warehouse will help improve labor efficiency and scalability, reduce the turnaround time, and promote transparency.
Upgrading an existing warehouse has its fair share of challenges. There are multiple factors at play. Even a single, seemingly innocuous mistake can send the business down the wrong path. To steer clear of disastrous results, you need to plan your every step well in advance. There should be no room for speculation. Struggling to answer the question- how to build a modern warehouse? Here are a few tips to help you plan the transition:
1. Define your transition goals
What is it that you expect to achieve by upgrading your warehouse? Do you expect your modern warehouse to help you speed up your order fulfillment or reduce labor costs? Do you expect to maximize space by redesigning your warehouse? Defining your project goals and objectives will help you focus on things that matter.
Once you have a plan, enlist structural engineers to visit your warehouse and brainstorm the best solution aligned with your needs. This is the best time to create your budget. Figure out how much you can spend. To ensure a positive return, frame the project around the internal rate of return.
2. Involve your city
When adapting your warehouse, you need to win the support and trust of every stakeholder inside and outside your business, especially city leaders. Once you have finalized the layout and design of your new warehouse, get the necessary approvals. Invite the planning commission to tour your facility. Ask an executive to give the members a guided tour. Brief them about your plan and be prepared to answer their questions.
3. Come up with a plan to maximize warehouse space utilization
One of the most important things that impact a warehouse’s profitability is how efficiently the business utilizes the warehouse space. When working on a warehouse transition project, you need to come up with a plan that focuses on maximizing every square foot.
The flying-L or -T layout leads to maximum utilization of space. Come up with a plan to utilize every inch of vertical space. Consider consolidating multiple storage locations utilized for storing units of the same product. Use aisles with the minimum width (that can match your material handling requirements without dragging down operational efficiency).
Consider using a mezzanine to house functions that do not require high-bay storage. Though expensive, mezzanines are used by warehouses around the world, thanks to their unparalleled ability to help utilize warehouse space. Consider combining your shipping and receiving docks.
4. Decide whether to renovate, expand, or build
If your warehouse needs a major revamp or renovating your existing facility won’t serve your business needs, building a new facility can be a more feasible option. When deciding whether to renovate, expand, or build from scratch, the most important factor to consider is the location. Which location serves the needs of different stakeholders (customers, employees, and suppliers)? Which location has the lowest tax rate? Which location is closest to the interstate?
Choose the option that maximizes answers to these questions.
5. Plan your warehouse design
When planning your warehouse design, answer important questions such as:
- What type of products do you plan to store in the improved warehouse?
- How do you plan to store your products? (individual items vs. pallets versus cartons)
- Do you deal with goods that need to be stored in compliance with special regulations?
- Do your products require special handling?
For best results, adopt the FAST approach to the warehouse design layout.