Page 222 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Unit 9: Warehousing

1. How many warehouses should we have? Notes
2. Where should we locate them?
3. What should be the size or capacity of each of them?
The ideal warehouse design is limited to a single story so that product does not have to be
moved up and down. The use of elevators to move product from one floor to the next requires
time and energy. The elevator is also often a bottleneck in product flow since many material
handlers are usually competing for a limited number of elevators. While it is not always possible,
particularly in central business districts where land is restricted or expensive, warehouses should
be limited to a single story.

Notes Regardless of facility size, the design should maximize the usage of the available
cubic space by allowing for the greatest use of height on each floor.

Most warehouses have 20- to 30-foot ceilings, although modem automated and high-rise facilities
can effectively use ceiling heights up to 100 feet. Through the use of racking or other hardware,
it should be possible to store products up to the building’s ceiling. Maximum effective warehouse
height is limited by the safe lifting capabilities of material-handling equipment, such as forklifts,
and fire safety regulations imposed by overhead sprinkler systems.

Warehouse design should also allow for straight product flow through the facility whether
items are stored or not. In general, this means that product should be received at one end of the
building, stored in the middle, and then shipped from the other end.

9.4.2 Handling Technology

The second principle focuses on the effectiveness and efficiency of material-handling technology.
The elements of this principle concern movement continuity and movement scale economies.
Movement continuity means that it is better for a material handler or piece of handling equipment
to make a longer move than to have a number of handlers make numerous, individual, short
segments of the same move. Exchanging the product between handlers or moving it from one
piece of equipment to another wastes time and increases the potential for damage. Thus, as a
general rule, fewer longer movements in the warehouse are preferred.

Did u know? Movement scale economies imply that all warehouse activities should handle
or move the largest quantities possible.
Instead of moving individual cases, warehouse activities should be designed to move groups of
cases such as pallets or containers. This grouping or batching might mean that multiple products
or orders must be moved or selected at the same time. While this might increase the complexity
of an individual’s activities since multiple products or orders must be considered, the principle
reduces the number of activities and the resulting cost.

9.4.3 Storage Plan

According to the third principle, a warehouse design should consider product characteristics,
particularly those pertaining to volume, weight and storage.
Product volume is the major concern when defining a warehouse storage plan. High-volume
sales or throughput product should be stored in a location that minimizes the distance it is

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