July 24 2006 03:56 PM

Is your organization planning a brand new warehouse or the expansion of an existing warehouse? Of course the planning of the project will incorporate the physical requirements of the building(s), but youll also want to consider the following issues: building codes, budget, insurance issues, quality programs, processing philosophies, customer service, the strategic plan and disaster recovery.


Projects can end up being labeled as less than successful if any of these issues happen to be overlooked during the planning process. In todays environment, it is very difficult for one person to design and implement this type of program because of the data gathering and defining of filters to be used. Often, the team approach is more effective. Teams that share in the responsibility of the launch can be most successful if they segment the duties of researching the data based upon team member experience.


The Role of Budget

Budget always plays a significant role in any project. Almost immediately, the question arises of how much money will be allocated. The next step is to gather data and launch a feasibility study, using prior projects as benchmarks.


During this portion of the project, its important to remember  projects reviewed as benchmarks probably included cost overruns, additional phases after the initial cutover and delays. Sometimes parts of the initial project get moved back to later phases because of costs.


Decisions made on previous projects concerning safety are often driven by the commodity being processed. The companys insurance provider impacts the sprinkler systems and clearance between the product stored and the sprinkler heads. There have been cases where companies planned to use four-tiered racking to store product, only to find that the slope of the roof no longer had the amount of ceiling height required to place full pallets in every location on the top tier. It is very important that all of this data is presented to the final decision makers.


Compatible Philosophies

The philosophies that are used to set up the process and run the warehouse should at least be compatible. Make sure no single warehousing philosophy governs the set up or runs the warehouse 100%. For example, you probably would not want to use random stocking locations if the product typically falls into an 80/20 split for distribution. Quality programs such as ISO will have as great an impact on the process as do lot sizes.


Perhaps the best approach to storage of products would be a combination of random and dedicated spaces for inventory. This could be determined by a standard ABC analysis studying lot sizes and the number of transactions for the products in question. By combining the A and C items in the same general area and allowing the B items to act as the random storage product, you should be able to process shipments with a minimal amount of re-stocking. This type of approach even lends itself to FIFO and hard-product allocations.


As with any warehouse, the key will be to establish a close link between the materials group and the distribution group. In this atmosphere, controlling receipt of the inbound product will reduce the number of times that a material must be re-stocked. A items should have an established goal of re-stocking less than one time in three lots, on average. Data entry is the area that generally ends up doing the most work after the fact to keep the allocations straight.


Strategic Plan

When planning a major warehousing change it is always best to review the strategic plan to insure nothing vital is overlooked. At times, companies will consider a new product without realizing it has special requirements. In addition, a change in fulfillment commitments to the customer or an increase in international focus may drive up the amount of material that needs to be held to ship complete. All this could drive up inventory or pull orders storage.


Building Issues

Projects typically will focus on issues around the tasks of the building. As the size of the building is determined, you must still remember that the building selected can be exactly what is needed in size and still not accomplish the goal because it has the wrong lay-out for the process flow. Make sure that serious attention is given to the number of docks, the balance of in-bound versus outbound, the commodity that is being processed, special equipment requirements, etc. The warehousing philosophy will affect the number of docks that will be used at the facility as well as loading capabilities.


A major portion of this segment of the project deals with setting up the picking areas. It is essential that details include enough space to allow free movement in this area. Whether you are picking small wares out of bins, racking or pulling entire pallets, the program needs to look at the requirements for the A, B and C items so you do not create a bottleneck before the facility is up and running. Travel time is the primary measurement that needs to be strongly considered when establishing the picking process.


Disaster Recovery

Finally, many companies are going to quality management systems that require an audit of the process if a significant change occurs. Most of these programs are sensitive to the need to have an established Disaster Recovery program in place. While many of these audits will grant a certain amount of flexibility on defining a disaster, when the disaster recovery program activates, they generally agree they are after details that would address catastrophic failure. When preparing this plan, look once more at the strategic plan. If your focus changes 18 months down the road, you wont need to completely re-write your program.


All of these issues do not come into play on every project. However, it is best to eliminate them from consideration at the beginning rather than have them surprise you during or at the end of the project.


Randy Knapp is with W.M. Carter & Assoc. You may contact him at 937-653-6382.