Life Cycle Of A Warehouse Design Project

This article tends to outline the basic design methodology and project life cycle of a typical warehouse or distribution center (DC) design project. The methodology illustrated tries to cover all the aspects of the engineering and business needs but may not be a one stop solution and need to be adapted on case basis.

Solution design is the art and science of analyzing your supply chain and finding ways to improve your warehouse’ design and operations to get optimum service levels.

Every warehouse design starts with some objectives in mind like costs, throughput, corporate goals KPIs etc. These objectives come with some inevitable constraints like deadlines, site availability, IT and engineering constraints and some risk which management must carry.

Data Analysis and Assumptions

It all starts with the assumptions and forecast for growth and data supporting them. Typically, three important set of data (Product, inventory and transaction data) are required to measure and evaluate few important metrics of business. These metrics are as but not limited to receipt velocities. dispatch velocities, order profile and storage needs. These metrics define type of warehouse and operations need.

Concept Design

This is the phase of project where it starts taking shape. With the help of derived metrics in previous stage tentative size, height etc. of the warehouse can be estimated. It is this stage where different options for the warehouse’ design can be evaluated with cost benefit analysis and business need in mind. Output from this phase is a frozen concept which will be detailed out in next stage.

Detail Design

Every high-level assumption made in the previous stages are fine tuned here. Actual site needs to be finalized before layouting is started. Storage mode, equipment and IT infrastructure including system specification required are to be finalized at this point. Process flows are to be defined (Ex. Shikumi diagram. Project timeline can also be freezed with tentative go live date. We can even estimate the manpower that will be required to start and run the facility. And now, now that we have most of the missing piece of our picture, we can easily estimate the capital expenditure and operational expense required for starting and running the facility.

Implementation

Implementation starts with procuring or leasing MHE, storage equipment, manpower and IT solutions. Awarding business to a 3PL can also be part of procurement and the activities illustrated in the Go-Live phase in flow chart are conducted after selection of the 3PL. Releasing tenders, RFQs, RFPs and interacting with vendors is part of this stage. This is last but one of the most time-consuming part of the cycle which can go from few weeks to months based on size, complexity of solution and availability of building before we hit our go live date.

Again, this is not a complete warehouse solution guide but can act as a framework to avoid starting designing your warehouse from scratch.