Operational Assessment to Improve Distribution Center Capacity


Is your distribution center running out of space? Did you feel the pressure of needed space this pastOperational Assessment for Capacity Holiday season? Considering the following tips could add on two to five more years in your facility. Here are the top factors we review during an operational assessment when looking at warehouse layout to improve capacity.

  1. Thoroughly understand the flow and utilization of the current layout, including rack configuration, slotting/pick philosophy, receiving, putaway, replenishment, inventory management, and packing and shipping. Include peak seasonal trends and a thorough volume analysis of inbound and outbound product flow.

  2. Identify the dimensions of the footprint as well as the clear height. Are there physical impediments to change? What are the characteristics of the building? How does the building dictate or impair the process flow from receiving through shipping?

  3. Review the space during the operational assessment and figure out how you use the available space. Look for storage racks that do not utilize the clear height; pick areas used as flow rack without overhead storage above them; conveyor located on the floor that inhibits the use of high cube area or the flow of product; or offices or work areas located in potential high cube areas.

  4. How does the current design and practice of product storage configuration and pick location configuration lend itself to efficient utilization? Example: It’s great to use flow rack for high-volume picking, but use of the flow rack's depth is wasted.

  5. In addition to pick, pack, and ship, does the warehouse incorporate processes such as kitting, value-added processes, imprinting on demand, or manufacturing? Do you store raw material and finished goods?

  6. Does product move efficiently from the receiving area, or are there delays—either vendor-created or client-created?

  7. Does the current material handling equipment operate effectively in the current environment? Will it function efficiently in the revised layout?

  8. Identify using the operational assessment, what the capabilities and restrictions of the current system are. What will be required to advance the system’s capability to support new flow processes? For instance, systems must be capable of supporting barcode scanning.

  9. How many dock doors are there? Do you use the same doors for both shipping and receiving? What is the schedule of activity for both functions?

  10. Consider the work schedule. How many employees can function effectively during a shift? How many shifts are required to complete the various activities? The goal is to achieve maximum utilization of the material handling equipment and fixed assets.

  11. Does the operation require off-site storage and related processes?

  12. Do you apply performance metrics and manage a performance reporting program to make the most of your most valuable asset—the employees?

  13. Analyze how effectively the inventory management program maintains accuracy to eliminate wasted and lost time in order fulfillment and returns processing. Does the product line present shelf life concerns?

  14. Once you have completed the operational assessment, and decide to initiate changes; make a list of what changes should be initiated immediately and completed within three to six months and which changes require longer to implement and complete. It’s equally important to determine which action items are capital-intensive. These may be either necessary or secondary but will be required in the long term.

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