Strategos Lean Briefing

The Newsletter of Lean Manufacturing Strategy
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Kansas City

14 JUL 2004

Issue# 37

Designing A Warehouse

Transactions, Inventory and Equipment

With today's focus on lean-- elimination of waste and inventories, manufacturers may neglect warehousing and distribution. But,  Lean Manufacturing may actually increase the need for effective warehousing.  This is particularly true for companies who have outsourced production and must now become experts in supply chain management, warehousing and distribution.  Overseas sourcing  also increases the importance of warehousing and distribution.

It is easy to overlook the complex and critical aspects of warehouse design.  Companies often lose up to 30% of their storage space and 40% of their productivity through inadequate design.

There are at least five goals for warehousing: Customer Service, Storage Capacity, Flexibility, Lowest Investment and Operating Cost. These goals often conflict and most companies are lucky to achieve 2 or 3 of them. The "trick" is to learn  what the tradeoffs are, which are  most critical, and to how to achieve the  best balance.

Warehouse design is not easy or simple.  Complex analysis, coupled with experience, is required  and a "shoot from the hip," Kaizen approach does not work. Extensive knowledge and experience is required to do it right.

As an example of several of the tradeoffs involved see the web pages on  Warehouse Design  and  Transaction-Inventory Analysis.  The U.S. Navy's  "Warehouse Modernization and Layout Planning Guide,"  NAVSUP 529; is also available fordownload. this 700-page handbook contains detailed procedures, data and information.

Ed Phillips


The Sims Consulting Group

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Books & Videos

Guide to Cycle Counting

Warehouse Planning Guide

Human Side of Lean Video