All You Need to Know About Optimizing Your Warehouse Layout

Do you know warehouse optimization can help improve productivity & help you manage your demand effectively? Here are tips to help you optimize warehouse layout.

Team Hopstack
September 20, 2022

Order fulfillment is the word of the market for e-commerce enterprises. One of the most critical variables in a warehouse’s long-term performance is speed and accuracy. If you want to be successful, you must properly store and organize your inventory so you can choose, pack, and transport efficiently, quickly, and accurately.

Here is where it becomes critical to have proper warehouse optimization and layout.

Warehouse layout optimization is a technique you should not undertake without due consideration. You require a solid awareness of what you're dealing with and the limits before you can take action to enhance your warehousing architecture and procedure. Once you've identified your gaps and areas of unmet demand, you may start optimizing your new warehouse plan in detail.

A good warehouse layout design can help you optimize your processes and reduce shipment times. However, if you aren't maximizing the warehouse space available- it can have a detrimental impact on your supply chain, workflow, and shipment delays.

Whether you're starting a new warehouse or already have one, you'll need to optimize warehouse layout to improve productivity. Although there is no one-size-fits-all solution for warehouse layout design, there are several guidelines you may follow to maximize your warehouse's productivity and income.

Types of Warehouse Layouts/ Warehouse layout examples  

The different kinds of warehouse layouts include: 

U-Shaped Warehouse Layout

This arrangement is ideal for any size warehouse. The loading/unloading areas are on the same side of the structure. However, you can separate them by this design.

L-Shaped Warehouse Layout

On one side of the building is the goods reception zone, while the dispatch area is opposite. You can dedicate the rest of the facility's capacity to product storage and order fulfillment.

I-Shaped Warehouse Layout

You can receive and dispatch goods on opposing sides of the warehouse, with storage in the middle.

Depending on your business needs, you must make an informed decision on the types of warehouse layout. 

Let’s look at some tips covering the significant aspects of logistics and warehouse functions. 

Tips on critical aspects of the logistics and warehouse functions 

Tip 1: Examine the current throughput of the warehouse or inventory assessment 

Identifying and assessing difficulties in the logistics facility is the first stage in warehouse layout improvement. Knowing what warehouse inefficiencies need attention is critical for determining improvement opportunities, inventory management planning, and making wise decisions.
Advanced warehouse automation platforms help with inventory assessment and optimization.

Tip 2: Examine the requirements for the product

After you've assessed the facility's condition, you'll need to evaluate the sort of product held and the company's needs. This method bears much weight for warehouse layout optimization because certain businesses require a dedicated location for a specific task. Value-added service (VAS) stations, for example, convert items and meet unique consumer needs (e.g., screen-printing a T-shirt with a personalized message).

Tip 3: Select appropriate storage systems

It's critical to choose the correct storage system to maximize the productivity of your logistics operations while saving space in your warehouse. The organization should consider whether it should automate or continue handling its warehouse activities manually.

When determining whether to use an automatic or manual storage system many considerations come into play. Although there is no specific formula for choosing the best solution, automating is an active option to increase productivity, maximize warehouse storage space, and improve the operators, merchandise, and storage systems' safety.

Tip 4: Space assessment 

The next step in warehouse layout optimization is to plan how you distribute the space. Space utilization is important. The five areas of a warehouse include goods receipt, storage, order processing, packaging, and returns control, each dedicated to a specific task.

To guarantee an optimal flow of motions, each of these regions should have its own space (for example, the warehouse storage and picking areas should be close to one another so that there is never a shortage of goods to pick and effective warehouse picking optimization). Other aspects of the warehouse design, such as offices, changing rooms, and production lines, must also be considered. New-age warehouse automation software platform offers space optimization controls and AI-powered facility layout suggestions that help warehouses save costs and fulfill orders more effectively.

Tip 5: Install a WMS

The usage of a warehouse management system to digitize your facility is perfect for optimizing the layout. The WMS uses rules and algorithms to distribute products in the warehouse. It reduces the number of product movements, whether handled by automated or manual equipment. For eg. Hopstack’s proprietary AI provides businesses with inventory forecasting and demand planning

Tip 6: Make room for future expansion

It's critical to consider its prospects while redesigning a logistics facility. It's pointless to rearrange the warehouse if you have to do it again as the number of SKUs or demands grows.

Tip 7: Demand forecasting and planning 

To accommodate high demand periods, use your forecasting and demand planning tools to add extra storage capacity into your warehouse plan. You should factor supplier lead times, stock-out charges, and inventory, carrying expenses into your storage estimates. Optimize your warehouse estimations to save money and keep lead times in line with demand.

Tip 8: Use palletizing strategy 

In a warehouse, you group boxes with pallets. Palletizing stock overflow is another low-cost, low-commitment option to deal with seasonal demand spikes. You can place excess goods on pallets and store these pallets in a designated overflow area instead of adding extra shelf storage into your warehousing plan to account for substantial demand cycles. Pallet racks make the racking system efficient.You can move the palletized inventory to shelves and bins when space becomes available. 

Tip 9: Seasonality maintenance 

For big, seasonal swings in your business' demand cycles, on-demand warehousing may be the ideal option. During high-volume periods, outsourcing warehouse requirements allows you to maintain in-house personnel consistently; while addressing excessive order fulfillment variances.

Tip 10: Engage with subject matter experts 

To begin, the strategy for optimizing your warehouse for seasonal demand should include suggestions from subject matter experts in each of the warehouse's critical areas. These professionals should've worked through many seasonality cycles in your warehouse, business, and sector. They'll have seen the bottlenecks, stock-outs, and overflow caused by seasonality in your warehouse. Such subject matter experts will guide you in implementing AI and ML based solutions to face seasonality and demand fluctuations using historical data. 

Contact our subject matter expert for more help.

How do cloud-first and AI-powered warehouse management systems help optimize the warehouse layout?

  • Analyze space and floor plans to determine and provide warehouse layout optimization opportunities.
  • Maintain optimum stock rotation to enable a cost-effective use of space.
  • Helps make effective decisions to choose the right space location, basis of movement of materials.
  • Improve physical movement of workers and materials from inbound to outbound logistics.
  • AI powered WMS indirectly impacts the overall warehouse operating cost by saving excessive time spent in placement and retrieval of goods.
  • Time, efforts and money saved with an optimized warehouse layout directly results in happy associates, satisfied customers and increase in revenue.

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Team Hopstack Author
Team Hopstack

Hopstack brings you the latest articles, guides and long-form explainers on topics relating to warehousing technology and automation, supply chain and robotics