Developing a warehouse move plan is critical to successfully transitioning to a new facility. Here are key aspects to plan for months before your intended move in date.
First, let’s look at some common problems companies encounter in opening new warehouses and distribution centers:
- Lack of sufficient detail planning and budgeting;
- Construction and permitting delays.
- Inaccurate warehouse inventories before and after the move;
- Under-estimating elapsed time required to install and test new WMS, conveyance, sortation, tenant improvements and material handling systems taking place at the same time as the warehouse move;
- Insufficient manpower planning to remain operational and make the move.
If you’re in the process of evaluating potential warehouses, here is a checklist to help you determine which facility works best for you:
If you are considering a warehouse move, here are 10 considerations for developing the warehouse move plan:
1. Project management
Opening a new warehouse location is a major undertaking. For an existing building, it often takes at least 3 to 6 months from the time the lease is signed to opening date. If you are implementing a new WMS, conveyance and sortation system and technology, this could push the project timeline out at least six more months for implementation and testing.
Many times operations are less productive for the first couple months in new facilities which causes budget and customer service issues. Most companies are lean in terms of project management and will need to provide adequate resources to this phase in order to be successful. Determine early on who is going to take responsibility for planning, budgeting, task management and reporting weekly on progress.
2. Warehouse Space Planning
As you plan out how you will use the warehouse, here are the major considerations:
- What are the space needs by department? For example, how much space is needed for receiving and staging for put away; pick carts awaiting packing; packing stations and materials; and returns processing?
- What will be the layout in terms of inbound product flow and outbound order processing?
- How do space needs change during peak periods?
- What types of storage media should be considered - floor stack, pallet rack, shelving, or VLMs?
- What aisle width and rack designs are options?
- What material handling, automated sortation, and conveyance systems are used?
3. Determine Labor Plan
Have a realistic estimate of the amount of time required to plan and open the new center and remain operational at the same time. Often this means planning overtime for both locations maybe for a number of months.
From the physical transfer of inventory, plan out the time required to count, shrink wrap and transport the product. Then at the new facility, the time to receive into the new stock locations and set up operations for inbound product and order processing.
If the new facility is in the same MSA, how many employees are going to be making the move and how many new employees are needed to cover the ones who are not making the move?
If the existing warehouse is being closed, how much time will be involved in packing up equipment and office items? If the existing space is being vacated how much time will be required to return space to the original condition? How much trash hauling is required?
4. Understand Local planning, Permitting Process and Compliance to Building Codes
If you are planning to make changes to the new facility, make sure you have a resource that understands all of the applicable building codes for the area you are moving to. Ensure that your resource is capable of determining what information and the level of detail that is required to obtain the necessary permits to outfit and occupy the warehouse.
5. Inventory Considerations
As part of the move plan, review all products and liquidate aged or dead inventory. Don’t move it to the new facility.
You can also use some of the major methods other companies use to reduce overstock.
One of the major problems in warehouse moves is inaccurate inventory which slows down order picking in the new facility. The move can make the existing warehouse inventory inaccurate also.
We have found that the best way to start the new facility with accurate inventory is to do a physical inventory at the SKU level; shrink wrap pallets; and mark the pallet with a license plate. Map out the new facility’s locations and determine the exact stock location where each pallet will be put away. This helps both facilities to start with accurate inventory and will also help speed up the truck loading and unloading times.
6. Re-route Purchase Order Deliveries and Returns
Determine what product and quantities need to be rerouted on purchase orders to the new facility. This reduces the number of pallets of product that need to make the physical move from the old to the new facility. Notify vendors and update paperwork and change the address for returns or transportation management. What customer notifications and vendor compliance website changes are needed?
7. Planning Racking and Material Handling
In closing one warehouse and opening another, management often wants to know, “Why can’t you use the existing racking and material handling equipment?” Think through what would need to happen to exit part of the existing warehouse; uninstall racking and reinstall the rack in the new facility while staying operational. The clear height at the new facility may be much taller than the one at the existing facility, therefore making the current rack not needed. There are labor and contracting costs, however, so it may be costly in other ways in terms of congestion and disruption. Reuse of the equipment can be done, but it definitely complicates the move and requires extensive planning and perfect execution. Also, material handling equipment will need to be available in both locations – forklifts and other equipment can be rented short term. Determine the feasibility before committing.
8. Planning and Scheduling Transportation
After you have planned out what you are going to move from an inventory perspective, determine how many trailers it’s going to take to move that inventory; the transportation costs and schedule. The costs are always much higher than anyone initially expects. Plan out the transportation in terms of palletized inventory and the number of trailers needed by day. Negotiate the contract early to assure commitment.
9. Installation and Testing of the WMS, Automation and Technology
It is necessary to add into the move plan the implementation of the WMS, automation and technology in the new facility. There needs to be sufficient time to test existing and new technologies, automation, and material handling equipment. These tasks have to be planned for and shouldn’t be minimized, otherwise missing opening dates is possible.
10. Communicate with Employees
Depending on how involved each employee will be in the warehouse move, be sure to communicate any pertinent information to them regularly. Some supervisors and managers will be involved in the planning, move of inventory, transportation and executing the move. Hourly workers will need new procedures written for various move tasks (e.g. physical inventory and prep for truck loading).
In summary, define the detailed steps to be performed, assign responsibility and establish realistic estimates and timelines to complete the move plan. Remember that many steps will be dependent on others being completed first. Update and communicate the plan weekly to all stakeholders.