Cause and Effect of Warehouse Layout and Product Quantity

When designing a new warehouse, or possibly just expanding on a current layout, it is important to factor in the impacts on labor to determine the optimal warehouse size and layout. Over the course of a recent project, our team encountered a specific set of warehouse constraints not typically observed in the distribution centers of today’s economy. More specifically, the warehouse in which this labor force operated was clearly experiencing significant labor inefficiencies due to its size, layout and product count.

There are typically two things that directly impact labor productivity with regard to warehouse layout and setup.

    1. First and foremost is the size of the warehouse. We are not simply referring to bigger is better, but does the new design or warehouse expansion provide enough room for the labor force to operate unimpeded. Are the aisles wide enough? Are there any bottlenecks? Are the docks wide enough? Are there multiple entry/ exit points to each area? In the case of our recent project, it was clear that dock space was insufficient and significant bottlenecks were present throughout the warehouse. While we typically can’t fully redesign a warehouse space, operational and process improvements can usually be made to improve overall workflow.
    2. Probably most important is the total number of products stored in the warehouse with respect to the size/ volume of the warehouse. While carrying a large variety of products is important to satisfy customer needs, it should be carefully weighed against the final impact on labor productivity. There comes a point where carrying a variety of products becomes detrimental to the overall operation. An over diversification of products results in the following labor impacts:
      • A much higher frequency of comingled (mixed) pallets in the reserve locations resulting in much slower replenishment times.
      • A significant decrease in home slot replenishments pallets per hour.
      • A significantly higher level of smaller hand stack locations from which the order selectors pick their assignments.
      • Due to the higher level of smaller pick locations, a much larger number of replenishments are necessary throughout the evenings to avoid selector shorts.
      • In order to meet the number of replenishments necessary to fill smaller pick locations, additional forklift operators are necessary. Additional forklift operators in the aisles results in higher congestion levels.
      • Longer pick path to accommodate the large SKU count will negatively impact the overall warehouse throughput.

While operational process improvements and labor standards implementations are typically the focus of increasing labor efficiencies, warehouse layout and product variety should not be overlooked as they have a significant impact on labor efficiency. It is important to find the optimal balance of product variety based on warehouse size to help avoid the more detrimental impacts on warehouse labor productivity.

Phone: 312-602-4000
222 W. Adams
Chicago, IL 60606
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