Requirements of Contemporary Warehouses

The emergence of eCommerce and innovative business models has changed the role of warehouses. The new business landscape of this century has increased the strategic significance of warehouses. Today, warehouses play a more immersive role in the triumph of business models. This has changed how warehouses are designed, developed, and managed. A few important requirements of contemporary warehouses are highlighted ahead.

Choosing a strategically advantageous location

One of the important requirements for modern-day retail and eCommerce businesses is to maintain the shortest possible stock replenishment and delivery timelines. This makes it necessary to choose warehouse locations keeping in mind the said objective. It also alleviates the pressure and burden of inventory management. Another important objective in warehouse location selection strategy is achieving cost competitiveness. Longer distances mean higher carrying and holding costs. Warehouse location also plays an important role in facilitating business growth and expansion. A warehouse with the flexibility of expansion and scalability and the locational suitability of serving more business volume or additional regions is always more advantageous than one without these features.

Holding Capacity to Meet Extensive and Dynamic Merchandising Needs

Today, customers are habituated to choosing from a multitude of options. Even if they end up making the obvious choices, the idea of having choices is powerful. Retail and eCommerce companies are also aware of this and they seek to ensure that the popular brands/products, their variants, and different packaging sizes are available in their online and offline stores. Losing customers and sales because of stock unavailability is not an option. This necessitates that warehouses have the necessary holding capacity with a desired level of flexibility and scalability to meet the dynamic merchandising strategies without a disproportionate burden of costs. Improved holding capacity also calls for space optimisation measures and the selection of appropriate storage systems.

Empowered by Technology

A modern-day warehouse simply cannot be contemplated without the right technologies in it.

For large warehouses, the use of warehouse automation solutions like robotics, automated storage and retrieval systems, and automated guided vehicles have become the industry standards.

Whether a warehouse is small or large, having the right WMS software application is a must. Manually managing and accounting for thousands or hundreds of products and packages every day is simply not possible. Another big advantage of using an advanced software solution is its analytics features.

Networking and connectivity is another important technological requirement in warehouses. Mobile-based internet services are not the answer here as network coverage tends to be poor in the interiors of warehouses. Warehouses also need to coordinate with other departments and external parties. Poor connectivity can hamper this ability.

Omnichannel Capabilities

Today, there is a widespread adoption and incorporation of the omnichannel strategy. This affects how warehouses are developed and operated. Running warehouses with their traditional capabilities is no longer sustainable. Lending omnichannel capabilities to warehouses calls for a different approach. First of all, demand patterns tend to fluctuate more in omnichannel. Also, the demand patterns are more diverse and dynamic. Secondly, the fulfilment of orders placed online must compete with timelines offered by online channel direct competitors. Thirdly, more robust and agile capabilities for reverse logistics must be implemented. Thus, omnichannel brings flavours of specifications that are different from traditional warehouse design requirements.

Space Optimisation

Space optimisation is not a new requirement for warehouses. However, the nature of this requirement has changed with time. Optimising spatial resources in warehouses is no longer just about maximising storage capabilities. In addition to the standard objectives, now warehouse designing also concerns achieving quicker movement, room for use of warehouse equipment, process orientation, flexibility to hold diverse inventory and volumes, lean objectives, continuous improvement, automation, flexibility to adjust competitiveness, and technology integration. These new requirements also have a bearing on many standard features of warehouses like safety and security, cost control, and coordination with other business departments and external entities.

Process Automation

Process automation has become an undeniable necessity in the operational landscape. The proficiency and efficiency levels required in contemporary warehouses are not possible with fully manual systems. While automation provides enhanced speed and accuracy to operations, on the flip side, it allows for human resource redirection to more creative and complex processes. Automation also brings digitisation of information. This helps in process information-sharing, routine decision-making, policy-making, and making strategic changes using data analytics and other statistical capabilities. With BI dashboards, it is easier for warehouse managers and other concerned stakeholders within the organisation to keep an eye on real-time statistics and derive insights for better operational and strategic control.

Driven by the right technologies

If technology is represented in a continuum, complete automation would be in its final stages. There are other levels of technologies as well which are essential to aid human effort in operations. In modern-day warehouses, some of the relevant technologies/applications are:

• Warehouse Management Systems (WMS)
• Data Analytics
• Radio Frequency Identification (RFID)
• IoT sensors
• AI-powered forecasting solutions
• Pick-to-light systems
• Voice-command solutions
• Wearable technology
• AR/VR

Every technology or its applications plays a unique role in operations. It is important that the right technologies are identified and implemented. SOPs and SOP-IT integration are critical to the process of determining the best-fit IT solutions and achieving the desired performance and ROI.

How YRC can help

With a scaling international footprint, Your Retail Coach (YRC) is a 10+ year-old retail and eCommerce consulting brand specialising in enterprise solutions for startups and existing brands and businesses. Since inception, we have served 500+ clients in 25+ sectors with a success ratio of over 94%. In warehouse design consulting, we engage experienced and expert warehouse consultants in the design and delivery of our services. From idea to execution, YRC’s warehouse design consultants adhere to established strategies and methodologies with necessary improvisations and tailoring. Highlighted below are some of the important elements and services of YRC in warehouse design consulting.

Requirement Analysis, Establishing Design Objectives and Strategies

Before embarking on any other activity, it is important to first establish the required features or specifications of the proposed warehouse. These specifications differ from business to business and hence, influence the final outcome. In requirement analysis, we consider a wide range of factors that have implications on warehouse design. These factors include business strategies, nature of inventory, storing and stowing requirements, frequency of movement of inventory, frequency and volume of orders, expected logistical patterns, ease of accessibility, safety and security, etc.

The warehouse design planning, strategies, and objectives are derived from the requirements and specifications identified in the requirement analysis. An important outcome is also arriving at the spatial requirements of the proposed warehouse.

Location Analysis

The location of a warehouse has many important implications for business. The most obvious implication is on the costs of transportation. Needless to say, suppliers and logistic service providers tend to charge more to cover longer distances. The same is true for in-house logistics as well. This also affects outbound and delivery services affecting customer/client experience. The location factor also has a bearing on the availability of workforce and staff management. There are also financial implications by way of real estate costs. In warehouse location analysis, we carry out a thorough analysis of these and a host of other factors in determining the suitability of warehouse location.

Warehouse Layout Planning

A good warehouse layout and operational excellence go hand in hand. The quality of warehouse space planning determines whether the movement of people, equipment, and inventory in warehouses is smooth or not. Smooth navigation is essential in warehouses to facilitate quicker execution of warehouse operations. Quicker operations and optimised storage capabilities allow businesses to handle more volume. The chances of errors and mistakes are also limited in well-planned and organised warehouse layouts.

In warehouse layout planning, our design team follows planned and proven methodologies in identifying warehouse layout requirements and giving shape to the final solution. In addition to the aforementioned considerations, other factors taken into consideration include product features, order profile, material and equipment handling, process workflows, safety and security, ergonomics, technology, scalability, warehouse optimization, and more.

Determining Storage Systems

Warehouse storage solutions play a decisive role in accomplishing the objectives of space optimisation, operational excellence, and cost savings. Different storage solutions are used for different kinds of product categories. For example, pallet racking is suitable for packaged food and beverages and consumer goods. Shelving is another popular storage system and it is ideal for fashion products like apparel and footwear. The strategy of mezzanine flooring is also common in warehouses to create room for administrative workstations. For loose products like wheat and pulses, bulk storage solutions like silos, bins, and tanks are used. As warehouse design consultants, we understand that formulating storage strategies is not a standalone task based on products alone and it draws implications from broader warehouse design objectives as mentioned in the starting line.

Technological Integration

Three important aspects of technology in contemporary warehouses are WMS (Warehouse Management System), warehouse automation, and analytics.

A Warehouse Management System (WMS) can provide valuable inputs for warehouse layout and operations planning. For example, WMS can help identify suitable storage locations based on product-wise order patterns. So, WMS is not something that should be sorted later for better inventory management and warehouse operations but in the warehouse design process itself for coming up with a better warehouse.

Coming to potential automation solutions in warehouses, this too must be taken into account in the warehouse design process. Automated Storage and Retrieval Systems that specify spatial dimensions serve as an example here.

Data analytics tools help in predicting future demand patterns based on historical data. This affects decisions of space allocation to different product categories. Data analytics also facilitate a better understanding of product characteristics for identifying appropriate storage solutions. Again, the selection of analytic solutions is something that cannot be postponed for the onset of actual operations; it must be addressed in the warehouse designing process.

YRC reckons the significance of these technologies in the warehouse design process and helps businesses select and incorporate the best-fit solutions – later to serve in managing warehouse operations as well.

Warehouse Ergonomics, Safety and Security

Warehouse designing is not confined to achieving the objectives of space optimisation and efficient operations. There are also important considerations with regard to ergonomics, safety, and security.

Ergonomics is an approach of making a working environment that is fit for staff. For example, dimensions of workstations must be appropriate for the employees in general as well as specific individuals. Another example is having proper lighting to avoid incidents of stumbling. The essence of ergonomics is not just to ensure safety but also to make work environments fit and comfortable. Quality refreshments and restroom facilities serve as examples here.

Some of the important considerations in warehouse safety management include fire prevention measures, fall prevention measures, use of Standard Operating Procedures, SOPs for material and equipment handling, use of navigational maps, employee training, emergency response systems, waste disposal, etc.

Security in warehouses is essential to safeguard assets covering inventory, storage systems, equipment, buildings, industrial and digital devices, etc. The objective is to prevent or limit the scope of damage, theft, and accidents concerning warehouse assets.

At YRC, we take into account ergonomics and safety and security considerations in our warehouse design planning process.

Financial Planning

Building a warehouse entails heavy investment. From real estate and licenses to logistics and utility bills, a wide range of capital and operating expenditures are involved in establishing and running a warehouse. Without proper financial planning, setting up and operating a warehouse can run into unexpected financial troubles. Having a sound financial roadmap helps deliver a strong ROI on investments made.

As a part of warehouse design consulting services, in financial planning, we make detailed projections and planning concerning relevant financial and commercial elements. Some of these elements are highlighted below:

• Capital requirements
• Operational outlays
• Budgeting
• Demand projections
• Revenue projections
• Inventory turnover rates
• Cost control measures
• Technology maintenance and upgradation
• Planning for the creation of reserves and funds
• Contingency planning
• Insurance
• CBA (Cost-Benefit Analysis)
• ROI analysis

Warehouse Operations Planning

Warehouse designing is not just about developing a good physical structure. The benefits of a good warehouse design are realised when it goes live i.e. where its operations begin. The quality of operations planning affects the ability of warehouses to optimise workflows and achieve efficiency in resource utilisation. It also plays an important role in optimising workforce requirements and coming up with more effective staffing solutions. Sound operations planning impacts the volume-handling capacity, speed, and accuracy of order fulfilment. All these aspects make operations planning an important constituent of warehouse design.

In warehouse operations planning, we deliver solutions on two important areas of warehouse operations management. The first one is warehouse SOP development and implementation assistance and the second one is the institution of warehouse KPIs to keep an eye on and manage warehouse throughput and performance.

Future Considerations

Warehouses are usually big structures that cannot be easily altered in any major way if warranted. Therefore, it is important to consider the elements of flexibility and scalability in the warehouse design process. In this regard, we put our experience and expertise into action towards ensuring that room for future warehouse expansion and modifications is duly incorporated into our warehouse design solutions.