t3s4 warehouse design

8/13/2019 T3S4 Warehouse Design

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The Do's and Don'ts of Warehouse Design

Track 3 Session 4


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Partner

GCL Group

[email protected]

(514) 733-3000

Phil Gautrin
mailto:[email protected]:[email protected]


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ACHIEVE OPERATIONAL EXCELLENCE 2008 MATERIAL HANDLING & LOGISTICS CONFERENCE SPONSORED BY HKSYSTEMS

Abstract

This pragmatic overview will be valuable to the

existing owner who is seeking refinements, aswell as those looking at a clean sheet of graph

paper. Included will be a structured process for

warehouse configuration, discussion of thecommon pitfalls to avoid and guidance in

planning for the unplanned.

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Agenda

Not an every day project

Warehouse design methodology Dos & Donts

Planning for the unplanned

Key Takeaways

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Not an Every Day Project!

Most companies do such project every 10 years

Rarely logistics managers go through morethan two warehouse design projects

Too many logistics managers do not take the

time to visit other operations

Preconceived ideas are often a hurdle

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It is a Very Important Project

Requires large capital investments

Competing for funding against otherdepartments: Manufacturing, R&D, Marketing

Project must be justified with proper ROI

No second chance for funding if failure

Outsourcing is always an option!

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Hopefully You Wont Be One Of

Them! We never achieved our productivity targets as

our business model drastically changed We ran out of space the first year

With the fuel cost and our sourcing strategy,

our DC location is not optimal anymore

We thought of everything, except our

employees!

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Location, Location, Location!

Freight accounts for 30-50% of logistics costs

Rising fuel cost and chronically congestedroads

Qualified and loyal labor is harder to find

Shippers are looking at alternate means to ship

their products: rail, waterways

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9/28ACHIEVE OPERATIONAL EXCELLENCE 2008 MATERIAL HANDLING & LOGISTICS CONFERENCE SPONSORED BY HKSYSTEMS

Define

Benchmarking

Project management

Phase 2Design

Vision

Phase 1Characterize

Phase 3Roadmap

Analyze Conceptual

design

Detailed

design Roadmap

Warehouse Design Methodology

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Define

Objective:

Project kick-off and scope validation Methodology:

Define project scope (perimeter)

Validate top managements objectives Introduce project team

Define project management guidelines

Define communication protocols Review proposed methodology

Validate project schedule and identify key dates

Deliverable: Validated project charter 10



Analyze

Objective :

Develop a thorough understanding of currentoperations

Methodology :

Review list of required information Interview Supply Chain stakeholders:

o Procurement, Customer service, Logistics, Transportation,

Finances, IT Review process mapping & operational observations

Validate layouts and equipment lists

Validate and analyze received information:questionnaires, files, reports 11



Analyze (Continued)

Methodology (Continued)

Perform detailed analysis (level of detail may varybased on the project scope, budget and information

received):

o Characterize network and service levels

o Characterize products (families, classes, logistics data)

o Inventory deployment and turnover

o Logistics flows

o Layout and capacity evaluation

o Operational costs

Deliverable :

Detailed analysis of current operations12



Vision

Objective :

Transpose strategic master plan and best practicesinto design parameters

Methodology :

Review strategic master plan and transpose intologistics data

Review industry best practices and trends

Perform gap analysis between current state and bestpractices

Identify clients strengths and weaknesses

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Vision (Continued)


Define alternate operating modes and network strategiesto be evaluated:

o Cross-docking, hub and spoke, slow mover centralization, order

profile

Perform pre-slot to select picking and overstockequipment

Perform SWOT analysis:

o Strengths, Weaknesses, Opportunities, Threats

Deliverables :

Gap analysis completed

Pre-slot analysis validated by client Selection of operating modes 14



Conceptual Design

Objective :

Develop various concepts for new DC taking intoconsideration :

o Strategic master plan and best practices

o Future operating modes

o Physical and financial constraints

Methodology :

Identify applicable technologies:o Storage, picking , material handling, traceability

Re engineer processes (best practices and

kaizen sessions)15



Conceptual Design (Continued)

Methodology (Continuted)

Develop various concepts (3-4):o Lowest investment

o Flexible and phased concepts

o Optimal concepts (automation)

Evaluate, for each concept:

o Capacity

o Capital expenditure requirements

o Manpower requirements and operational budgets

Deliverables :

Concept description16



Detailed Design

Objective :

Select concept to be implemented Methodology :

Determine optimal concept:

o Qualitative and quantitative aspects

Finalize recommended concept

o Detailed layout

o List of required equipmento List of required building changes (if applicable)

o Description of proposed concept (processes and

logistics flows)

o Manpower requirements and productivity levels17



Detailed Design (Continued)


Finalize recommended concept (Continued)o List of system modifications (if applicable)

o Implementation cost (capital expenditure & transfer)

Deliverables : Description of recommended concept:

o Operational modes, logistics flows, equipment required

Detailed layout Plan Budgetary evaluation of recommended concept

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Roadmap

Objective :

Determine action plan to implement proposed concept Methodology :

Summarize analysis, assumptions and concepts in a

business case Prioritize actions:

o Benefits, complexity and cost

Establish implementation schedule

Deliverables :

Business case for top management

Action plan to implement proposed concept List of additional recommendations (peripherals)

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Typical Schedule

Define

W1 W2 W3 W4 W5 W6

Phase 1 : Characterize

Phase 2 : Design

Phase 3 : Action plan

W7 W8

Steering committee

Analyze

Vision

Conceptual design

Detailed design

Action plan

Project management

Benchmarking

Project duration : 8-12 weeks based on data availability



Dos

Consider all options

Design for 3-5 years

Visit installations and talk to users

Build a business case (Voice your project)

Optimize slotting

Implement or enhance WMS

Simulate complex concepts

Set baseline to track improvements

Think Green

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Donts

Replicate current operations (apply Lean)

Compromise on flexibility

Fail to plan for Flex areas

Compromise on safety

Try to do miracles with used equipment

Do it as a side project

Apply a cookie cutter approach

Fail to challenge inventory levels

Rely on the average for everything

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Murphys Law Will Apply!

Develop a go-live and roll-back plan

Perform numerous Dry Runs prior Go Live

Beware of Big Bangs

Consider having a mirrored operation

Do not think there will be no client impact

Set the expectations prior D Day

Develop a Disaster Recovery Plan

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Case Study : Success Stories

Company A: Cosmetics

Unit independent case flow racks Changed the unit pick area layout more than 10 times

in 5 years to adapt to growth and business changes

Company B: E-commerce Implemented high speed sortation system within a

two-tier picking concept

Able to changeover picking areas every day toperform over 500 sales a year (textile, toys,

appliances, food)

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Case Study : Horror Stories

Company A: Paper and Printed Forms

AS/RS for full pallet moves Business model changed and facility became

useless

Company B: Pharmaceuticals 2 tier unit pick mezzanine

Business model changed from direct to indirect

distribution 2 years after opening

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Warehouse of the Future?

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Key Takeaways

Address your C-levels pains

Consider all options

Visit other installations for best practices

Design for flexibility and understand peaks

Simulate complex systems

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Questions?

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t3s4 warehouse design

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