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Question: We are a small company increasing our line of products and the complexity of our operations from inventory/warehouse management to accounting systems. I am trying to think ahead. We will receive four new products by the end of the year, but I need to make sure that our current warehouse and systems can support that without overloading. Do you know of any resource that can help me in the organizing of my warehouse?
--Lourdes, Atlanta, Ga.

Lourdes:You are very smart to do your homework on this issue before the new models arrive on the dock. Good planning and analysis can make a huge difference in how well the new models are integrated into your processes.

You've already discovered that increasing the number of product offerings increases complexity throughout the organization. Adding models also means more business decisions, like deciding which service parts, if any, you will hold in inventory. Both more models and more transactions means more chances of someone making a mistake. Look-alike parts can add to the confusion. Along with a smart layout of your warehouse you will likely need new procedures to eliminate/reduce the potential for error.

In any warehouse, efficient use of space and efficient use of put-away and picking manpower is critical. Many companies have chosen to automate much of the process and much of the decision-making, from moving product for an order to the right place on the dock, to determining where to put or get product.

In working with a variety of companies over the years, I've found some basic questions that need to be addressed early in the assessment process:

1. Do you have an inventory plan or forecasted sales volume for each of your products? How much inventory you expect to have for the various products is important to how you will design both put-away and picking, and is key in defining space required.
2. As you look at projected swings in inventory, what is the minimum and maximum space (cube, weight, and facings) that inventory requires?
3. There are two general types of warehouse layouts. In one, you assign a fixed area for a specific part to be stored. It is always put away there and always picked from there. The second type allows a part to be stored in many places within your warehouse at any one time. The first approach requires more warehouse space than the second. The second requires a computerized system to keep track of where everything is. It will tell you where to put a part away, and it will tell you where to pick it. These systems help you manage shelf life and obsolescence, as well. There is inexpensive technology to help with that.
4. Order characteristics are very important to good warehouse storage design. How many line items on an average order? How many units in an order? You can have one person pick an order complete, going wherever in the warehouse he needs to go. Alternately, you can assign warehouse areas to individual order pickers. Several people may be involved in picking an order, and an order consolidation process close to the shipping dock will be required.
5. The number of transactions (put away and pick) will also impact your systems, layout and staffing.

Your question is not a simple one to answer, but by looking at these questions you will be on the right track.

Best of luck!
--Operations Expert Rebecca Morgan

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