When trying to figure out how tall, wide and deep a warehouse should be, you need to address three key considerations:
- Storage – how much inventory will the warehouse carry?
- Pick Line – how many SKUs will the warehouse stock?
- Throughput – how much product will the warehouse receive and ship daily?
Each of these dimensions on their own determines the size of warehouse you need.
This is a deceptively simple driver of warehouse space requirements. Figure out how many pallets to store and how many pallets go in a rack – that tells you how many racks you need and, in turn, how many square feet of warehouse space.
I could write a hundred posts with qualifications to that quick formula, but I’ll summarize them in the following way:
It is impossible to use 100% of the gross storage capacity of a warehouse unless that warehouse receives and ships nothing. The art and science of determining your true warehouse storage requirements comes from properly profiling the inventory so that you can match that inventory to its ideal type of storage. For example, installing 5-deep pushback racking may result in a terrific gross storage capacity, but if the inventory profile consists of 10,000 SKUs with 1-2 pallets on hand, then you will never use more than 50% of that capacity.
Many supply chains have grappled with SKU proliferation while working to lower inventory levels. The result is that pick lines – the size and arrangement of locations to pick from – have become more important in determining warehouse space requirements – often more than storage needs.
There are three fundamental aspects to sizing a pick line.
- Each item requires a dedicated space along the pick line (a slot) sized to balance keeping the pick line as short as possible while avoiding excessive replenishment activity.
- The order assembly strategy that minimizes labour and completes the order within the time frame set by customer service. (E.g., zone picking, batch picking, one-picker-one-order)
- The sequencing of product such that the warehouse delivers assembled orders in a stable, product-sensitive way (e.g., no crushables on the bottom of a pallet)
When a warehouse works beyond capacity it loses its working space. For example, inbound and outbound pallets begin to clog operating aisles, slowing the movement through the warehouse to a crawl and creating difficult if not impossible conditions to access product in the racking.
For a warehouse to function, it needs that empty, working space. That space allows the warehouse to receive product, stage product, move product within the storage area, pick product and pack and stage outbound orders. These functions require equipment that have minimum operating widths and turning radii. They can perform tasks at defined speeds which translates into so many tasks per hour.
Congestion is corrosive to warehouse productivity. Gridlock is the warehouse’s death knell. To avoid it, you must provide sufficient space to complete the number of hourly tasks by function – across all functions – to achieve the warehouse’s throughput.
The length, width and height of a warehouse depend on its storage, pick line and throughput requirements. Each of these dimensions of warehouse space requirements influence what the total warehouse footprint should be.