Warehouse layout design and Plant layout design follow four specific steps whether you are building a new facility or redesigning an existing facility. The goal of these efforts is minimizing labor movement and therefore cost.
There are two approaches to redesigning warehouses and plants to achieve labor savings. One is the use of automation. These projects can provide tremendous savings, however, there are significant issues you must be aware of before making this investment. First, automation usually requires multi-million dollar investments in hardware and software. Second, anytime equipment and software are involved, there are risks that they won’t work together when turned on. Finally, automation can be very inflexible. If your products, order-patterns or volume change, you can be stuck with a system that doesn’t match your business.
The goal of Facility Layout Redesign is minimizing labor movement and therefore cost.
Supply Velocity’s approach to facility layout planning flows from our background as Lean Practitioners and doesn’t require large investments. Instead, we approach labor movement as non-value added, and use the Lean methodology to reduce unnecessary move time. This requires four basic steps: 1) understand the current state, 2) identify and eliminate the non-value-added work in the current state, 3) design the future state, and 4) plan the transition to the new facility layout.
Understand the Current State
When designing a new warehouse or plant, or redesigning an existing one, it is important to understand the current process. This requires the use Lean Six Sigma tools including Spaghetti Mapping, Time Studies, Pareto Analysis, and Process Flow Mapping. Spaghetti maps visualize the movement of labor in the facility, and help people see the excessive movement in the current process. Time studies accompany spaghetti maps and provide detailed data on the duration of each step to process an order. Pareto analysis shows the velocity of inventory items and is used to make sure fast moving items are located close to where they are used. Process Flow Mapping provides a visual of an order’s information flow and ensures that the layout is aligned to the information flow.
Identify & Eliminate Non-Value Added Steps
Process flow maps, spaghetti maps and time studies are carefully analyzed to identify non-value-added work that can be eliminated. After identification, the team brainstorms how to eliminate non-value-added work, and prioritizes these action items based on benefit and difficulty. The improvements can involve layout, workstation design or process changes.
Create New Layout
The layout team uses the prior steps to make specific decisions on layout (example: where fork-trucks should be parked), or determine general layout principles (example: inventory items should have only one location in the facility). These decisions and principles are turned into a layout plan by making paper cut-outs of racking, machinery, fork-trucks, other storage media and equipment, and placing them on a drawing of the empty facility. Using paper cut-outs allows for an interactive experience and experimentation. The final version is put into a computer-drawing to ensure the layout will work. At this stage, the team will locate SKUs based on velocity to make sure high volume items are convenient to put-away and pick. After layout is complete the team will begin implementing 5S Visual Management to instill operational discipline and make the transition to the new layout easier to implement.
With all workstations, inventory items, and racking locations designated, the team must plan the transition. This involves a detailed step-by-step plan for what moves when, considering dependencies and the need to track locations of everything during the move. We often use a Gantt chart to keep track of these dependencies.