7 Ways to Improve Your Capacity with Layout and Design Principles

One of the most frequent themes we hear from clients when discussing layout and design projects is that space capacity is a concern in the current facility. If a new facility is not in the future for your company, how can you continue growing sales and inventory, knowing you only have the current space to work with. Let’s make the assumption that your company is already fine-tuning inventory forecasting and removing excess and aged inventory – what are the next steps? 

This article looks at some of the ways changes to the layout and design can help to improve capacity and extend the life expectancy of the current space.

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16 Ways to Increase Distribution Center Capacity

As a basic principle, companies need to ensure that the operations are as efficient as possible, increasingthroughput as much as possible while maximizing the capacity and utilization of the space before opting to move to a new facility.  It is critical that the operations have truly taken advantage of the existing facility, due to the high cost of relocating distribution center operations.  

Relocating a facility can, at times, be inevitable, but the disruption of business and impacts on labor mean that you must at first be sure that you have maximized the existing facility. In addition, most major markets are at record levels of warehouse occupancy rates, and lease costs are at all-time highs.  New warehouses being built on speculation are large centers that may not be suitable for small to moderate-sized businesses. 

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Developing a Warehouse Move Plan

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.

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Warehouse Layout Design Principles

bigstock-Trucks-And-Warehouse-1129204There are several basic principles that apply to warehouse layout design and running an effective distribution center operation. Without the proper layout and design of your distribution center, no matter the square footage, you will face capacity issues, decreased productivity, and storage inadequacies. 

In this blog, we’ll discuss the 28 key principles that you should consider for warehouse layout design and productivity.

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How to Calculate Fulfillment Cost Per Order

Fulfillment cost per order (CPO) is the sum of all the warehousing expenses involved, including:
  • receiving, putting away and storing the product.
  • fulfilling orders through picking, packing, shipping.
  • reverse logistics or returns processing from customers.

Historically, fulfillment managers only looked at the labor portion of the CPO. But, this may only be 50% of the costs. A fully loaded cost per order is a better metric and includes facilities and occupancy costs and packing material costs.

This blog shows you how to calculate the fulfillment cost per order, cost per line, and cost per box shipped.

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11 Ways to Improve Dock to Stock Processes in Your E-Commerce Warehouse

Every fulfillment business, regardless of size, faces the same daily pressure to meet service levels making ‘Dock to Stock’ the battle cry of every receiving department. For best-in-class companies, the Dock-to-Stock turnaround time to receive, check-in, inspect and put away stock is two hours (sources: F. Curtis Barry & Company client studies and Warehouse Education and Research Council reports).  Vendor compliance policies and EDI are essential to meeting these high-performance requirements.  

In comparison, many small to moderate-sized businesses dock-to-stock may average 24-48 hours, or longer, to clear receipts.  Turnaround time is only one factor.  Some receipts will sit for days awaiting resolution by the buyer and the vendor or some necessary rework in the warehouse.  All this time merchandise is not available for sale. There is a very real cost your company absorbs in the warehouse, accounting, and purchasing (or buying) departments from these trading partner problems.

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Warehouse Inventory Management During an E-Commerce Warehouse Relocation

The biggest challenge you’ll face in relocating a warehouse is disruption to your business. If you are fully invested in inventory at an existing 3PL or your internal facility, how will you transfer inventory to start up the new facility without having to shut down for days or even weeks?

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Does Your Order Taking, Customer Service and Fulfillment Build Customer Confidence?

As we shop this Christmas season, we have had three examples that stand out from all the rest:

  •  We had our first same day order and same day delivery from Amazon.com. It wasn’t something we requested but we pleasantly surprised to get. Amazon has two distribution centers in Richmond, VA where we live. The order was placed on a Saturday in the late morning and delivered within four hours to our home. Frankly, I know that this isn’t an economical option for most businesses (maybe including Amazon). But I’ll tell you it is a formidable marketing weapon. It was extremely fulfilling to receive the item so quickly without leaving home. 
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Get Ready For Holiday Season - Conduct an Operational Audit Now!

Summer time is here, the kids are out of school, time to hit the pool, right? I know that you don't want to operational audithear this, but it is prime time to conduct an operational audit to identify those areas needing improvements. Believe it or not there are only 5 months left before the Holiday season is here again! Make certain that you have ample time to implement your fixes, develop strategies and plans for the distribution center. What are the objectives you and your management team have set for improving operations this year?

Here are a few areas to look at for your operational audit in order to determine what changes will be most beneficial to your distribution center and operations: 

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Assessing and Applying the Proper Level of Material Handling Solutions

Once viewed as a cost center and a necessary evil, warehousing and fulfillment are now being seen as aMaterial Handling Solutions potential competitive advantage. The enhanced overall view of the supply chain is placing increased emphasis on the importance on the warehouse and operations.

A well thought out material handling solutions plan can improve the bottom line of many businesses, but a poorly thought out or implemented project can put the entire business at risk. We see many cases where warehouses are misapplying the available technology to their specific problems or issues.

READ: 38 Fulfillment Cost Reduction and Productivity Improvement Ideas

Consideration has to be given to the reason for considering the technology or material handling solutions to determine what desired results or objectives are needed. This information will help determine if the proposed solution is appropriate and will deliver the results needed.

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