What you need to know about creating a functional warehousing system – In 12 Parts (a week by week Guide).
About the Author:
Paul Casebourne has spent a life time in service to the Materials Handling Storage and Distribution Industry with over 50 years in materials handling experience from the shop floor to running and operating businesses. He has worked in over 7,000 locations and handled over 20,000 business enquiry problems. In this personal sharing of his experience with you he means you as part of us, the people who provide an amazing facility without which the modern world ceases to function and is held in fine and delicate balance as the events of the early parts of the 21st century have reminded us all only too well. Author, engineer, installer, designer and manufacturer these are some of the fundamentals he shares with you. Please feel free to use and enjoy the ‘takeaways” Sign up here to receive this series in monthly instalment building up into a set of usable, practical help for modern warehousing for businesses in all stages of development.
For busy people who want a quick reference, I will cut to the chase. Here are the 12 things you are looking for to line up your ducks:
- Asset Planning – Tangible and intangible
- Equipment options and what to use
- Special designs
- Design and build – Hidden costs
- One Direction
- Operations, what affects them: Purchasing, Picking lists, Collection Equipment, Stock Management, Packing processes, Shipping, Last mile.
- Counting the Cost
Why are there 13 items when there should only be 12? …Welcome to Warehousing!!
Part 1. Asset Planning
Hidden opportunities in free assets – take a look!
It’s not what you have that defines you, it’s what you do with what you have!
According to a recent report by United Kingdom Warehousing Association and Savills there are about 1500 key warehouse sites in the UK amidst a shortfall, of course there are many more facilities if you know where to find them and how to engage with them creatively and many operations have facilities within facilities which won’t be represented here, but it highlights the need to understand the importance of good asset planning and more importantly “thinking”
Two free assets are customers and suppliers. They appear as goodwill in the contract when selling a business because business is about relationships and relationships are far less tangible in business which is why they are called intangible assets. Will people pay for these? (well, yes especially if you can turn them into tangible data for example) Social media certainly fits under this heading, it’s a cunning way of building up valuable data as grocery has been keen to point out over the years. It’s what you do with it and how you use it that turns it from intangible to very much touchy feely assets, the sort investors kill to have and governments legislate to protect from abuse.
Does data need warehousing space? Oh yes!! If you align assets properly in time and space you’re in business. The first warehouse you will have is the one you visualise in your mind, quite literally a virtual warehouse. Basically, “needs must” is a strong mover and shifter. Always start by searching out your low or no cost asset bases. Low cost assets include assets used to develop sales, incentives such as warranties, up-selling in exchange for discounts, valuable giveaways and of course supporting information.
Then there is subcontract, paid for by others for as long as margins permit. After that it all gets more expensive so you need to expect a return which exceeds the cost of the asset deployed, plus operations and depreciation and leaves something over that makes it worthwhile. You can run a warehouse out of an aircraft hangar or from a mobile phone. Just remember 2 things, businesses don’t fly planes or provide landing sites, pilots and controllers do and officers don’t fight wars, the rank and file soldiers do. Expeditors are the sort of mercenary end of warehousing but they are seriously cheaper than your own army. Of course they can take all the pain away along with some of your profits, but headache cures are not free, so if you would rather sit on a beach in Hawaii and run your business click here. (the video is actually by a company called “expeditors” you should find it interesting). In over 50 years in the industry I can say so far I have avoided any recordable incidents.
Here is some serious fork truck trivia and why you may be equally happy to leave warehousing to others:
- Fork truck fatalities account for 20% of all industrial accidents
- 10% are in warehouses
- Your risk of death or injury increases 3 fold in transport and warehousing
- Around 1500 people will be hospitalised due to site traffic incidents, mainly due to mechanisation
- The management solution to this is training if you want your warehouse to remain a focused asset.
- Training is a good example of a low cost intangible asset
My Message is that warehousing is not as easy as it looks, so if tidying your bedroom is not you, you are going to hate warehousing!
Back to serious stuff….If you have an order in your hand you have Pandora’s warehouse, virtual or real. If you choose your assets well the lid stays firmly on it, releasing “hope” but keeping the rest in check.
Setting up a warehousing operation is rarely a “one thing”. Most businesses are multi focused for the sake of diversity. This way they can benefit from opportunity niches which evolve out of their “type of business” or segment. The asset starts to build from the minute you buy or receive stock, whether you own it or not. I don’t propose to get into haulier type operations or subcontracted transport, however it obviously is a consideration.
If you don’t want to get involved at all, you can simply subcontract your entire warehouse to an expediter and they will do the lot for you. The gain is zero employment responsibility and tight risk control. You reduce cash demand too and it all becomes a straight P&L charge. It often appeals to government operations or for interim “growth stepping” while you achieve asset density in other areas. If you are fortunate enough in your supply chain you can create a “virtual warehouse” made up of suppliers’ stock expedited by your suppliers at zero cost. This would be an advanced ‘drop-ship’ warehouse concept and there are a number of business models which have rocketed out of nowhere with this concept including Amazon type models who have started with such a model and reverse engineered it.
So thinking about the route you are creating is critical because all the supporting services listed in item one will be engineered round that process.
- A customer is free, a supplier is free. time your added value well and start a warehouse with zero cash
- Farm out warehousing until you reach sufficient asset density, expediters or suppliers
- Conserve cash
- Establish low cost or no cost assets quickly
- Group products and niches into SKU’s
- Whether you are an operator turned manager or a career manager, all assets require safe, risk contained environments. Know your strengths, never hold back on asking for help, as we say in the north: shy bairns get nought!
- Assets rarely perform just one function, tangibly or intangibly. Develop this awareness for you and your stakeholders
- Intangible assets matter
- For more reading on warehousing ‘thought” processes click here
Part 2. Equipment
How to bring systems together
Equipment Options invisible help
Sophia Amoruso founder of Nasty Gal. in 2006 she began collecting second hand clothes and selling them on eBay. With the money she made she acquired a warehouse and used Social Media such as MySpace to build her customer base up. By 2016, her net worth was $280 million. She didn’t get there by luck her advice I would précis as follows; Accept everything as it is and don’t get hung up on distractions.
You really don’t need money to start a business you need hard working assets which are often invisible, mixed with good ideas and systems. Have a system!
Wherever you are in business development, a quality computerised stock control system is eventually going to be useful. Inventories are essential in all business both tangible or intangible. Where tangible is the actual stock, then pricing, markets, order mechanisms and methods are all intangible. However that still makes the business valuable.
The more intangible your business, the less tangible assets you will use or need. You still have to decide the best way to use the assets at your disposal. That includes transport between suppliers and customers and the processes of both which determine the products you are supplying them and the method. For the purposes of this let’s assume that like Sophie you are better off with a warehouse.
The easiest and fastest space will always be on the ground. Block stacking is the densest use, just not the most accessible. FIFO and LIFO are at the core of all warehouses, and refining these processes will decide stock rotation, accessibility, demand and the type of equipment required.
- The cheapest space is always a vertical block ascending from the floor, less set down time.
- The time taken to access it is determined by volume
- The travel distances are determined by layout and access requirements
- The capacity requirement is determined by tangible and intangible asset arrangements
- Set down time increases in proportion to height, which in turn adds to travel time
- All these things determine size
A great purchasing system linked to a great warehousing system will take these factors into account and route ‘picking and putting’ operations accordingly. Normal heights are to around 10m depending on stock rotation and ageing. The densest storage with maximum access can be achieved with an articulated forklift truck. A good warehouse eave height for this starts at not less than 6m assuming palletised stock. There are exception, garments are one of them and area of specialism in themselves, there are others too. If you fall into one of these special groups click here help is at hand
Hire is often a good choice given what standard forklifts can handle and the cost of the asset. It just won’t appear positively on your balance sheet, but it will still be a major operating asset. 125 lifts a shift is very productive.
What sort of fork truck all depends on the density and product shapes you need to handle.
For example the steel industry handling 6m lengths or more may favour cranes. They can play an enormously important role in warehousing but so can 5 tonne, 4 directional forklifts operating in cantilevered racking systems which open up storage for long and random lengths of product. This also applies to plastic pipes and timber as other examples. Pallet racking often favours grocery but less so soft fruits and breaking bulk can cause some real headaches trying to organise mixed stock. If you are using pallet racking to brake bulk, the chances are you are losing 4 pallets for every level you use like this.
There are 4 main picking methods which subdivide into other hybrid groups. These are:
A) Batching: Most order picking is pick to batch, even a single pick often comes in some form of batching. The alternative is to pick a quantity of an SKU and sort it out at a packing station, this is called cluster picking.
B) Zoning: Wave picking is a variation of the above and and maybe Zone picking too. Zone picks are simply product groups in one location to provide dense pick areas to save legs.
C) Electronic: Pick to light is a barcode scanner but may not solve stock level issues as these have to be changed elsewhere, whilst pick to Voice allows you to correct the variances without recording Saturday’s football results in passing distractions ! After that you cross the line into automation. I am a big fan of pick to voice.
D) Improvised: Nobody talks about this, it usually is code for trouble and occurs with new stock-lines which don’t fit the original investment. Warning signs include stock damage, poor stock control and infrastructure damage and are often accompanied by grumpy staff who have nowhere to put anything. If this is happening to you, you probably need an asset overhaul. You should do this every 5 years as a matter of discipline. The mark of a really good supplier of the equipment is the one that dives in and helps you without question for the next 15 years to squeeze a ton more out of your investment you didn’t know you had!! Those people are rare, if you have one they are gold dust! It is much harder to sort it back out than put it in new. Not everyone can or will be able to support you.
Manual handling equipment, and mechanised handling methods are well worth researching. It’s all about where you want to use it, speed and other operational tasks going on around the operation.
Once you pick, you need to pack then marshal. Out the door is not going to be the same process or set up as WIP stock batches for production or grocery for example. Decide where you are and how you fit in. If you are a warehouse YOU ARE the supply chain and you MUST link all sides of the business.
As the supply chain, then the implication is you are in logistics. The right vehicle makes a vast difference.
The choice of LLOPs, Man-up, Trolleys, Reach, VNA, NA, Fork truck etc, etc, all depends on what combination of what is discussed here that actually affects you. You then have a choice of storage layouts. You can see more storage options here
To see more about shelving systems (for which man-up trucks may also be used) click here
- Block stacking is the cheapest, just not very accessible. There are links to a variety of storage systems which also reference equipment
- Decide your picking method and equip accordingly
- Remember marshalling and packing systems need space too
- Speed matters
Part 3. Sizing
Have a plan: How to get free help with warehouse layout models
Low Cost Routes to design Layouts DIY
Assuming you either don’t have a warehouse or are looking at ways to change or expand what you have, it’s useful to have a layout of the space. Simple representations of the bay sizes (usually 2.8 x 900mm or 1100 mm x 2.8mm, actual rack size by a height of your choosing, will be an easy overlay on to a blank floor area easily represented in most computer programs or the old fashion way with a ruler and squared paper.)
If you have a scaled drawing with some sizes even from an agent, and post code, great. If not you can usually find it on google earth and measure to within 500 mm. When you then divide the drawing measurement into the same aerial Google earth shot the quotient will be the measured agent’s drawing dimension, divided into the dimension you took from Google earth, allow about 500mm for the building wall perimeter thickness to give you an approximate figure and then add the rectangular representations of the pallet bays in to give you an idea of foot print. Each rectangle is 2 pallet spaces times a height, most modern buildings are above 5m at the eave, usually 6.
Example Google earth measurement: 30m x 40m
Agent’s drawing : 30mm x 40mm
Scale: 30,000 divided by 30 = 1000 therefore scale is 1: 1000 or round odd decimal points up and use it as a check for an initial model.
Low Cost Routes to design Professional Layouts
In the above example there are 252 ground floor locations illustrated x say 4 high i.e.1008 pallets.
Most suppliers will do this for you. What you should avoid doing is using competitors’ drawings to obtain alternative prices after they have done work for you. Most don’t charge, but a full survey with design and layout drawings may be worth up to £2500. It’s a small industry and quite the opposite from saving money, you might become victim of closed ranks, cartelling or refusals to quote. Thankfully this is uncommon, but it does go on.
No reputable companies mind spade work and it is to your advantage as each may come up with better ideas for you. If you want to use someone’s drawings because you know what you want but want to be free to choose, offer to pay for them and make it clear you want to own the designs because you have to go out to tender. Often the company may offer to give you the money back if you buy through them. That way you have the best of both worlds and develop a very desirable reputation in the industry. Sadly this does happen, I have been sent drawings with revision 16 on them. The only time this is acceptable is when the advice is unhelpful, so you can explain what you “don’t want”.
- A site plan is worth its weight
- Google Earth, estate agents and the storage equipment industry are good sources of free help
- Offer to pay if you want a design that you can go to tender with, you can always negotiate a refund if you proceed
Part 4 Location
– What you need know for warehousing
This comes under the heading of working from home, using containers and “lock-ups” for stock, choosing a warehouse location which requires no staff and remote operation. Some of the biggest industries on the planet started from a bedroom, a kitchen or a garage, for example, Sophia Amoruso, Jeff Bezos, Hewlett Packard, Apple and Smiths Crisps with the little blue bags of salt too (which nobody remembers).
Start up Warehouses
There are landowners, farms and small nursery industrial estates which often come with clerical support to help you get started. Plan your SKU size to make sure you will fit in.
in the SME range the help is a little more hands on, but then it often pays to get a good chartered surveyor to help you choose somewhere. Pick more than one if possible and look for grants and financial incentives from the landlord. Buy or lease, this matters. Check what the future plans are for the region especially if you are buying. Blocked accesses to motorways, new roads, railways and watercourses are just a few of the things to watch out for.
Access to main routes and HGV access is important, there are no free meals. If the site is cheap there will be a reason. It is not hard to add up these costs, gift horses are rarely worth having in this industry, the vets’ bills can be crippling!! Check thoroughly your likely cost of location or ownership. Check lease documents very carefully, they usually come with financial handcuffs. The costs of relocation are very high. You don’t want to be doing it every couple of years.
The closer you are to your customers, the cheaper your operation and the more competitive you will be. Your own delivery fleet is not cheap but subcontract will never be better than you are. Make sure the site traffic works for you.
- Start as you mean to go on
- Do your home work
- Seek professional help
- Look for financial incentives
- Seek concessions
- Pick a good location based on facts
Part 5. Expediting (Internal Operations)
Adding perspective, making goods flow from quality warehousing space
Having picked a location, decided upon how you are going to equip, established your supply chain, got an order, you now have to deliver it.
Normally you would send part bulk or break bulk. If it is by the pallet this can usually be turned round out of the rack, so line them up, do the paper work and label up and call in transport – Job done.
It’s rarely that easy, usually your service is a combination of size, storage and adding some sort of value, which means you have to do something. In the vast majority of cases that will involve some sort of branding, assembling orders and packaging the end result, you may then go on to do sub batches and master batches. You might wish to revisit section 2. At all events, I can say without hesitation that you can only reach comfortably to a depth of 600 mm into a shelf without stretching. If you are going to do this think of shelf depths of 450 to 500mm deep double sided, especially if you want your pallet racking to do two jobs efficiently. Back to back runs of pallet racking are death to stock efficiency.
My advice is to separate stock which doesn’t work in racking into an appropriate shelf depth. This may still be shelved pallet rack but remember that the beams will be 100mm high for 2 ton pallet beams so you lose a shelf on every 2 m of useable headroom. If you can’t get to the back you lose a whole pallet location every time you do it. You can still do this but only efficiently on a s single run where you can get at both sides. Otherwise use shelving and don’t be persuaded to site rack under pallet beams. Zone the two stock types away from each other into pallet and break bulk stock. It will be quicker and more efficient. You can go up to 8m easily and cheaply with man up order pickers if you want to use head room. You can lease them and it will probably be less cost than with a two tier shelving system or a mezzanine.
Mezzanines are great people space but terrible shelf space. Packing, processing, or production yes! Storage rarely efficient. The exception is storage and combined people operations. It is very easy to create walkways in shelving and racking, providing very dense storage.
So having stock warehoused, sort the pick runs out, you now have bundles of ‘stuff’ that need to be set up for despatch.
Inline packing operations include:
Plain surface tables such as packing tables – they can be fabricated or made from cold formed slotted steel sections and personalised.
Conveyor feeds into operator stations, these can also be inline if you are making up boxes of consignments which are picked as they pass an operator, then down the line for packing material additions, sealing and labelling
Sort and batch down a belt driven conveyor to similar omni directional systems which arrive at batch collation points for final pack and despatch. These are generally partial or fully automated.
Simple systems proceeded by trolley or tote picks usually arrive at either marshalling or packing points
Boxes are often palletised and may go through automated or semi automated packing operations including pallet wrappers sited in conveyor lines or loaded by forklift.
If you are embarking on such a project this end of the industry is moving at a fast engineering pace and many improved technologies are appearing almost monthly. It would pay to talk it through with specialists or engineers capable of bringing multiple product projects together for you. If this is of interest to you, click here
This line was transformed from the above into the designs illustrated below; with screens, packing and labelling systems. Result productivity more than doubled. This system is actually in use.
It’s hard to know everything going on in your industry sector especially in smaller businesses. Here are the top tips from the MHE sector:
- Don’t be afraid to use specialists, they come with some amazing free support to get you started.
- Don’t expect your warehouse manager to design your next phase of growth. They have enough to do with operations.
- Don’t rush it, the average life of a system exceeds 15 years, some are 25 or more ( I see them regularly). Right first time beats wrong forever.
- Do think equipment through, with hundreds of options and items, manufacturers and product lines you have a better chance of a lottery win than getting the mix or combinations right without the correct help.
- Remember everyone wants you to buy their products.
- A specialist engineer will work for you and protect you. This type of project often comes under small works. To the right engineers sheds and systems are what they do best and quickly too. They will already have been where you are dozens of times and know the right course of action for your business.
For more on this sort of help click here
Part 6. Special designs
How to protect high value good by specially designed warehousing
Pallet racking, shelving and packing systems all come in standard formats, but hybrids and specials can be inspirational and very profitable with returns on investment instantly measurable with almost hypersonic paybacks. For example: a company where an initial investment works but the business lines grow requiring large scale variation, which in turn result in improvised solutions at operative level, can rapidly get into a downward spiral which gradually turns into a bottomless pit for costs.
Manufacturing operations may often fall into this predicament. Warehousing for manufacturing plants can turn into an operation nemesis, building up over the years into critical proportions. If that’s you, help is at hand click here
It’s not always as easy as it sounds. A few years back I built a special pallet rack bay (14 of them to be exact) to take high value tubular print rolls. It was light weight so I designed a high density cantilever rack system on 10 levels to take a significant quantity, (700) of production stock for fast change overs and high roller protection. A competitor of my client managed to gain access and copied the idea. It collapsed. Engineers calculate loads and ensure safety margins. There is more to being a designer than meets the eye. Specials are often more expensive, but the payback when print rollers are £900.00 each is astronomical. When we make specials it’s because it’s worth it.
This is the special design I built:
It was copied using standard 2.7m wide bays. The load on the rear beam simply twisted the beams and the uprights buckled under the load. This is just one example of how special designs can transform bottom line costs exponentially in either direction. In this case it was an entirely original design using technically adapted, cold formed knowledge built up across 30 years of sheet metal working, fabrication and rolling mill work applied into field applications to fit a specific understood need. That can’t be copied. It is also exactly what good design is all about. The purpose of this narrative is to explain that picking products can be very special and purposeful especially for production issues. If it can be designed and drawn then often creative solutions can make a vast difference to your competitive edge. It is always worth testing boundaries and living on the outer edge of your industry. As we would say if you’re not living on the edge you’re probably taking up too much room!!
- Take a “project opportunity” to take stock of business progress
- It is very difficult to salvage a business with a market which has slipped through its fingers, the photographic industry (Kodak) and media industry (Blockbusters) are testimony to that, engineering has had its share too. So, take time, take stock, plan for change
- Good design in expert hands is worth its weight, seek it out where you can
- If you don’t have time to do it right first time, how are you going to cope with the chaos of peak period or bottlenecks?
- A problem shared is a problem halved, click here
Part 7. Design and Build (Hidden costs)
Warehouses: What to watch out for in sort outs and new builds
The most obvious cost of design and build is change. Three rescue lines for this are prototypes, planning and giving the project enough time for change and training even 30 product lines can be an SKU challenge, never mind 4500. People often expect the equipment supplier to sort such issues out, they won’t. You need logistics experience to wade through the documentation and spreadsheets to work all this out for you. Consultancy companies may also lend a hand. Just remember key data normally involves key staff. Partnerships improve outcomes.
Hidden cost #No. 1: When your staff are unlocking information to 3rd parties their own work slides. For a building it takes about 2 days of someone’s time by the time costs arrive and the same again for warehouse systems. There can be up to 6 weeks of analytical time to organise existing stock lines in size order so that SKU information may be transformed into designs which can become operational in warehouses. Add labelling and stock control systems plus I.T systems to this and it soon adds up. Then there are transport systems to think about, it’s a long tick list to check out before you are on safe ground with costs. We in the industry are moving house or managing change for living, the average established business performs the tasks once every 15 years.
This is just warehousing, if you want to add in greenfield sites and new builds the lists gets longer. The average entry costs for the smallest of budgets for small to medium sized businesses is unlikely to be less that £25,000 by the time planning and design works are commissioned. None of this has anything visibly to do with the cost of the shell you are going to erect on the land. Then there is servicing it, a whole other set of costs. £800 per square meter is not buying palaces by the time you move in. It will get you a habitable building for warehousing assuming you already own the land.
Even relocation is substantial sums of money and there are costs associated with procedural delays too, again encountering professional fees. If you have a warehouse it is often cheaper to leave old stock in place (at least in part) and re-equip the new location rather than have your business stopped whilst you move.
To avoid shocks and surprises, a complete checklist is a good place to start. Here is a suggested list as a Takeaway for you to use. It will not be exhaustive, every project is different, here are 20 to be going on with:-
- Planning designs
- Level survey
- Environmental survey
- Geotechnical design
- Drainage and effluent systems
- Services, designs and routing
- Construction phase hospitality
- Shell design
- Environmental compliances
- Landscaping, site lighting
- Site traffic
- Loading and unloading
- Number of operational layouts required (production lines, admin, warehousing etc)
- Canteens, office, storage designs
- The move, training, recruitment, staff relocations, transport systems to work
- Know thy neighbour!! (insurances)
- Fire protection system
- Yard storage and supplies for electric vehicles, bikes, car park etc, Public transport
Part 8. Direction
Exposed: The invisible algorithm that creates order in your warehouse
The flow of your work is critical. It affects warehouse design and especially height. I have designed many buildings where the height has eventually come down to 5 millimetres in the end to fit systems into place. I remember an entire 10,000 pallet position warehouse being corrected and moved because the aisles for the trucks were 25mm out, the trucks were guided and the guides had been made too narrow, they couldn’t fit down them. There was a lot of contract reviewing going on that day. The devil is in the detail. The biggest risk is the design time line, it can be lengthy and as issues arise, changes are made and lack of design awareness or even forgetfulness can incur some expensive errors, i.e lifts that don’t fit into lift shafts, buildings that create extreme wind vortices and fry cars, a fabulous conveyorised unmanned warehouse which allows goods in, but nobody thought about getting them out again. (T5) Government, NHS projects and infrastructure projects spiralling out of financial control. These are just a few examples of things that can go wrong. Assuming your project has achieved suitable empty shell status you now have the pleasure of setting it out in a meaningful way. Again this is critical. Should your planning break down and you have lorries backing up on to public highways, buildings taken up with critical safety equipment which blocks containers, transport and storage availability, someone may wish that they hadn’t cut back on well rehearsed contingency programs which could have limited damage.
- As few changes in direction as possible
- It can be helpful to start with a cross docking notion and adding in the various interventions until it reaches goods out
- Marshalling space is really important, it’s easier to do on the ground
- Your warehouse should be thought of as a 6 directional zone
- Get your products in Cartesian order
- Have a plan B
Of all these “e” is probably the most important engineering reference and it is a handy way to set out and remember your project really easily as it gives you a system to work with
As a systems designer there are a lot of ducks to line up. Flow is always the most important, different systems do different jobs so here is how to start:
Red – X Co-ordinate (Also front to back)
Green – Y Co-ordinate (Also left to right)
Blue – Z Co-ordinate (Also up and down)
Red – X Co-ordinate – Lateral manual mechanical transportation and storage systems. Trucks and trolleys (for picking), boxes and containers, pallets, mezzanines, multi-tier storage racking and shelving
Green – Y Co-ordinate – Lateral powered transportation system such as conveyors, robotic and guided systems (including gravity rollers, gravity being a force or power) LLOPs, cages etc
Blue – Z Co-ordinate – Lifting systems, cranes, man up trucks, forklifts, lifts
It at leasts provides a system for grouping tasks up with purpose. Use the same system in racking and storage to divide up SKU space. If you have ever wondered
why uprights are often blue and beams are in the red colour spectrum, it might have something to do with this.
All storage can be divided into Cartesian co-ordinates and colour coded. It makes for really simple positioning for locating and picking and automates well into inventory management software. It provides a mathematical method of organisation. The outcome is ODS One Directional Systemisation holistic thinking
- Adopt an organisational method day 1
- Group your warehouse strategically, labelling, equipment, flow and feeds, packing, loading and unloading
- Add operations and training interventions as you go
- List the critical show stoppers, size, quantities, integrations and co-ordinated check lists
- Remember Plan B – there is nothing wrong with Plan B, by the time the British Army arrived in Kosovo they were on Plan 75 and implemented plan 43 on landing, all well rehearsed and practiced in readiness.
Part 9. Operations, and what affects them
Operations which impact warehouse activities and affect stakeholders
Purchasing, Picking lists, Collection Equipment, Stock Management, Packing processes, Shipping, Last mile are some of the the functions which can impact hard on warehousing
In any warehouse there will be an operating system. If this is “Harry” then if Harry is out, nobody knows where anything is or goes. If you are Harry, you probably work in a fresh produce market and turn all your stock in one day (or so). Even Harry has his problems when his local authority warehouse can’t cope with stock and it backs up stacked outside. It rains, Harry’s tomatoes are in cardboard boxes, they collapse when the cardboard gets wet, Harry loses his entire night’s profit. Harry bought a retractable shelter to protect his stock. Harry’s tomato stock stacks don’t collapse anymore.
“Harry’s Shelter”. Paid for itself in the first month.
If you are Harry in the warehouse you are a very important high risk strategy and you probably could use a little help.
For everyone else it comes down to resource organisation, which means systems. Helping Harry usually means splitting down tasks into their smallest component part and not only does this form the part of any good QA system, it gives you a chance to look at workplace efficiencies. So when you have been tasked with “sorting out the warehouse” your first job is to look at all your stakeholders and work through it.
Here is a list to get you started:
- Despatch/goods in and transport
- Financial supporters
Why all these people and departments? Because whatever you do for one affects the others, it can have a detrimental effect on warehouse infrastructure and wreck SKU arrangement, reduce capacity, make systems redundant and cause picking mayhem. If you happen to be a warehouse for a manufacturing operation, the warehouse is the Sword of Damocles and if it falls it can stop production in its tracks. We all have been through that during Covid. If you don’t think you need to re-examine procedures, take a leaf out of the government’s book, if you don’t think it affects you or anyone else, try work parties or “eye tests” as an excuse for thinking no one else cares or is affected. Involving stakeholders stops shocks and surprises, fast track progress and wins hearts and minds.
Once a job arrives on the warehouse floor it’s all hands to the pump to get the job out. In my opinion direct into a pickers ear is the shortest route for a picking list and if stock is not where, what or how it should be, then it can be addressed there and then. Saves legs, trees and disruption. There are other systems but this is the most direct route and it bolts on to warehouse management systems.
The flow of goods through the warehouse requires well organised operations. By definition this whole process is defined by the investment so one eye must be constantly on how that investment is servicing the needs of the business. Just because you buy a fork truck doesn’t mean you put people permanently out of work. What it really means is that jobs and careers change, but there are more people employed today than at any other time in our industrial past. So the argument about de-skilling simply doesn’t stand up. The real skill then changes to operations, manufacturing support for operations and efficiency in the best interests of our people and planet.
The 10 people the new equipment replaces move into manufacturing, construction and technology, so far from job losses it is the foundation of job creation. It is essential that warehousing rises to the challenge of better equipping its operations with storage and handling systems that integrate with transport infrastructure and explore the benefits of systems which get into the last mile of service as Amazon and many pallet distribution companies have done. This means setting up packing lines and warehousing systems equipped to penetrate the value of these delivery opportunities. Constantly reacting to change and embracing such disruption as a matter of budget to keep your businesses out in front. If Brexit has brought us pain it has done so by clearly illuminating that. We now have the return of export departments lost for 40 years, just to send goods to Northern Ireland.
If you find you have been affected by statutory procedures and regulations, then labelling systems, marshalling for goods out and how you warehouse and handle your stock and break bulk will all be affected too. However please bear in mind that every stakeholder can do that to you and government, Customs and Excise and tax are not even mentioned in that list and there will be others too, watch out for them. Your immediate neighbours are in the the list above. You are their key asset.
- Know your stakeholders and include for them operationally as they affect you
- Decide on what your system is going to be at the outset.
- There is nothing wrong with Harry’s warehouse if it works, just don’t dump it on Harry through ignorance
- Gear up properly for the tasks
- Know thy neighbour
Part 10. Organisation
Once you have all your lines SKU’d you have equipment to select and organise. Here are some key questions to ask in this respect:
- How many groups are there?
- What sizes are the SKU’s in each group?
- Can they be batched?
- What weights are involved for each SKU type?
The answer to these questions will tell you:
- Whether you need pallet based SKU’s
- Box/basket based SKU’s
- Carton based based SKU’s
- Mobile based SKU’s
- Loose stock
Chemicals and drinks can be the hardest to deal with, they are heavy, often awkward shapes and often small volumes with special storage needs such as bunding.
For most other items where dispensing or break bulk is less of an issue, then your choice is shelving or pallet racking appropriately mechanised or with easy mobility access. (by that I mean pallet trucks, cages or trolleys)
The real problems start when your warehouse is there largely to service manufacturing because the stock is not simply a product or line it becomes a component. Getting goods out of stock and into cell pick WIP stock or assembly line format can be intensive and the systems for this add a dimension to warehousing which is lead by a different set of needs and stakeholders. For example you might be picking to stillage, bin, pallet or box, it may depend on some of this storage kit being returned ready for the next pick. Production might benefit from offline preparations or assemblies and all of this needs space to cater for it.
The worst thing to do is to push products together which simply don’t fit. Pallet racking makes really bad shelving, for a start you can’t reach the back of it, the beams are far too high on the “Z” axis space, every 4th pallet rack beam loses one complete shelf space and mixing them up with pallets is really vastly inefficient. Don’t be afraid to separate out stock groups, getting into headrooms is exactly what multi-tiered storage shelving and mezzanines are about. A man-up order pricker can be used to access both faces of a single run of pallet rack providing storage access for long parts and back to back storage for parts between 450mm and 650 mm deep. So that is a situation where metal parts of high weight would be good examples of when pallet racking with 2 tonne beam level capacities might actually be a good solution. Both shelving and pallet racking will readily sub divide into boxes and tote bin stackable storage so that one very small item such as a washer may be easily accessed
All storage systems can be supported by lifts, order pickers, conveyors, packing stations and fork trucks as well as an array of standard and custom made solutions such as trolleys. if you need a bespoke solution or design click here. They are a specialist equipment design and construction company.
- Spend time sorting out and grouping SKUs
- Don’t mix storage systems which waste space
- Custom designs are very affective profitable solutions
Part 11. Re-Organisation
Why re-organising a warehouse can produce huge savings and rejuvenate tired investments
Re-organisation is a tough assignment. In most situations you won’t be anywhere near the early evolutionary period and have no idea why things are the way they are. It is often regarded as the poisoned challis and it is definitely the job nobody wants to do unless it is strip it out and start again. ‘Sort it out’ is definitely an Arghhhhh!
There are some of us out here that revel in the jobs nobody else wants to do or perhaps can do and where stripping out and start again might be the choice of a vested equipment supplier, but the dyed in the wool engineer will be loathed to throw anything out in case it can be used. I had such a case recently, where a £400,000 investment at today’s prices, no longer cut the mustard, product was being farmed out and the costs were £250,000 a year to operate it. Companies had quoted to replace it at around £300,000.
However I saw potential in the installation without threatening other operations and simply moving round the equipment that was there to create more effective operating space and at the same time reducing the footprint. A saving of £950,000 was within grasp for a small investment, that shows instant payback. However sometimes the building is full and needs to be added to. If that is you, click here.
Sometimes other solutions outside the main stores are a better alternative again. If you are seeking to use external space click here
- Reorganisation is complex but there is quality help out there that can save major disruption and save vast sums of money
- Orderly change is not difficult to achieve
- Space can often be found in surprising ways if you connect with the right engineers
Part 12. Counting the cost
How to avoid watering down the effectiveness of a warehouse
In a recent job we tackled, a provider saved our client £10,000 on two articulated trucks. The specification was for a triplex mast but without making it clear to the client a duplex mast was provided. I know the truck manufacturers well and they would never have knowingly done that. However it was done and dusted and the change to triplex added £20,000 to the cost. So it was left. The 148 pallet positions on the high value stock turn has lost £1,400,000 in goods over the life of the project.
Systems which are inefficient cost money. There are many different warning signs that are relatively easy to pick up on; damage, lost stock, picking errors, untidiness, improvisations which are clearly inefficient. Old stock where there should be space and dust where there should be stock are just a few. The easy way out of this downward spiral is to implement change and update. Even if you do nothing, you will gain valuable and useable information and stay ahead of the game. If you are not doing monthly stock takes then you should be asking questions.
Slip sheets can load the container on a waiting HGV in 3 minutes instead of having trailers and containers hanging around, it is the epitome of marshalling space, but there is much that can be done to cut transport costs, using subcontract storage or spending more time looking for stock than you do sending it out.
How to use your warehouse and how well it serves your purpose would not be an issue if you were the only one in your industry with no competition. In 72 seasons (at the time of writing this) no Formula 1 team ever competed in last year’s car without trying to improve its performance and nobody is entering a 20 year old vehicle. So why would anyone think a 20 year old warehouse is going to be as good as one we construct today. So what has changed?
Well, software for a start, forklifts, 20 years ago 4 directional trucks and articulated trucks were not in most people’s warehouse vocabulary. Yet these trucks are operating the same capacity warehouses in half the footprint, half the rates, half the rent, at 10 % of the heating costs and with less staff.
Racking has changed, new FIFO systems exist that did not 20 years ago. Camera technology can count, fork weigh scales can provide instant quantitive data and electronic system track and protect value, pick to voice has been perfected and systems are getting smaller and faster which means you don’t actually need a warehouse at all. Pallet trucks have lithium batteries which assist lifting and provide power drives. You can run your entire business from a beach in Hawaii. We are global. With globalisation comes new business challenges.
Add this all up and new ideas come into focus, you can run your business from a mobile phone. I knew of a man who actually hired out jet airliners that way.
- Nothing is for ever
- Allowing assets to expire must be a calculated action
- Change is inevitable
- Translating new opportunities into the warehouse environment is not optional
Part 13. The unexpected twist to the tale
How simple systems produce great warehouses
In item 8 we talked about having direction, the more mathematical cryptic mind may have immediately spotted the basic formation of algorithmic thought process, in fact the word Cartesian originates from Descartes mathematical methodology which applies to a whole spectrum of Philosophy, Mathematics and Science, but why?
Automation is a form of repetition of an event. Not only is it a big algorithm user it doesn’t have to be a computer, computerised or even mechanical, software is a form of automation, typewriters are mechanical automation. A wheel is the most basic form of automation. Warehouses are in 3 dimensions and are omnidirectional as well as dynamic.
That can be pretty hard to get your mind round. Speech is learned by repetition of what is heard, you see something and your brain attaches sound to the vision etc, all of this is automation in process by learned algorithm. So when we talk about RGB and XYZ we are creating a structure or series of hooks on which to hang procedures which can be viewed like a gallery, worked with or on and have observable dynamics which you can use almost anywhere, but they really explode into life in your warehouse like the recipes for great meals, and we all know how many books there are on cooking. Life is better with recipes.
That is the fundamentals of algorithms. So if we want to know how much weight a piece of steel takes, we need to know its chemical composition, its form and test it. We have pulled it to breaking point, stretched it and bent it. We measure the results and bingo you have a recipe for how that metal will perform in a given application, so now I know what beams and uprights to use, how to configure them and can tabulate them for repetitious use. Automated.
Job done Algorithms are static, but their applications are usually fluid. When you adopt this mind set, suddenly anything is possible, and you don’t need to spend £4bn developing the next generation of transformers. Although it would be great to have a “Bumble Bee” parked up in the garage!!
So now you know you can automate your warehouse from simple mindsets, create great manual systems which computer algorithms then speed up with a view to finding the ideal equipment to work effectively in a Cartesian environment, which is exactly what a warehouse is. I can recommend reading up on this subject as a workout for your mind. I find it both useful and interesting, but then I guess I would, it’s sort of my job.
- You don’t have to be a mathematician to understand automated warehousing, just adopt a good basic formula as a starting point for conceptual organisation
- Co-ordinates provide a foundation for dynamic operations
- Co-ordinates are readily programable
- From this one, coordinated direction can be mapped
- A population chart can be established and an extraction system devised which is reversible.
- Automating boots on the ground can be done with pick to voice to keep the whole system correct in real time, or camera/lasers to mechanical kit for full automation using programmed picking system