Warehouse layout

Layout of a warehouse depends on the proposed material handling system and requires development of a floor plan to facilitate product flow. It is difficult to generalize about warehouse layouts since they must be refined to fit specific needs. If pallets are to be utilized, the first step is to determine the pallet size. A pallet of nonstandard size may be desirable for specialized products, but whenever possible, standardized pallets should be used because of their lower cost. The second step in planning a layout involves the pallet positioning. The basic method of positioning pallets in a mechanized warehouse is a ninety-degree, or square, placement where a square placement means that the pallet is positioned perpendicular to the aisle. The square method is widely used because of layout ease.

Pilferage protection

Protection against theft of merchandise has become a major factor in warehouse operations. Such protection is required as a result of the increased vulnerability of firms to riots and civil disturbances. All normal precautions employed throughout the enterprise should be strictly enforced at each warehouse. Security begins at the fence. As standard procedure, only authorized personnel should be permitted into the facility and surrounding grounds and entry to the warehouse yard should be controlled through a single gate. Without exception, no private automobile-regardless of management rank or customer status-should be allowed to penetrate the yard adjacent to the warehouse. To illustrate the importance of the stated guidelines, the following actual experience may be helpful.

A particular firm enforced the rule that no private vehicles should be permitted in the warehouse yard. Exceptions were made for two handicapped office employees. One night after work, one of these employees accidentally discovered a bundle taped under one fender of his car. Subsequent checking revealed that the car was literally a delivery truck. The matter was promptly reported to security, which informed the employee not to alter any packages taped to the car and to continue parking inside the yard.

Over the next several days, the situation was fully uncovered, with the ultimate arrest and conviction of several warehouse employees who confessed to stealing over $100,000 of company merchandise. The firm would have been better off purchasing a small vehicle to provide transportation for the handicapped employees from the regular parking lots to the office. Shortages are always a major consideration in warehouse operations.

Many are honest mistakes in order selection and shipment, but the purpose of security is to restrict theft from all angles. The majority of thefts occur during normal working hours. Computerized inventory control and order processing systems help protect merchandise from being carried out of the warehouse doors. No items should be released from the warehouse unless accompanied by a computer release document. If samples are authorized for use by salespersons, the merchandise should be separate from other inventory. Not all pilferage occurs on an individual basis.

Numerous instances have been discovered where organized efforts between warehouse personnel and truck drivers resulted in deliberate over-picking or high-for-low-value product substitution in order to move unauthorized merchandise out of the warehouse. Employee rotation, total case counts, and occasional complete line-item checks can reduce vulnerability to such collaboration.

Product deterioration

Within the warehouse, a number of factors can reduce a product or material to a non-usable or non-marketable state. The most obvious form of product deterioration is damage from careless transfer or storage. Another major form of deterioration is non-compatibility of products stored in the same facility. The primary concern is deterioration that results from improper warehouse work procedures. A constant concern is the carelessness of warehouse employees. In this respect, the forklift truck may well be management’s worst enemy. Regardless of how often operators are warned against carrying overloads, some still attempt such shortcuts when not properly supervised.

In one situation, a stack of four pallets was dropped off a forklift truck at the receiving dock of a food warehouse. Standard procedure was to move two pallets per load. The value of the damaged merchandise exceeded the average daily profit of two supermarkets. Product deterioration from careless handling within the warehouse is a form of loss that cannot be insured against and constitutes a 100 percent cost with no compensating revenue.

Some terminology

• Eliminate Handling: If not, make the handling distance as short as possible.
• Keep Moving: If not, reduce the time spent at the terminal points of a route as short as possible.
• Use simple patterns of material flow (the simplest path is a straight line path of flow which minimizes the handling distance between two points). If not, reduce backtracking, crossovers and other congestion producing patterns as much as possible.
• Carry pay loads both ways: If not, minimize the time spent in ‘transport empty’ by speed changes and route locations.
• Carry full loads: If not, consider increasing the size of unit loads, decreasing carrying capacity, lowering speed, or acquiring more versatile equipment.
• Use Gravity: if not, try to find another source of power that is reliable and inexpensive.