“PROPOSED DESIGN OF A STORAGE WAREHOUSE IN QUEZON CITY”

A Thesis
Presented to the

Faculty of the Civil Engineering Department The University of Manila 546 M. V.

Delos Santos St. Sampaloc, Manila

In Partial Fulfillment

Of the Requirements for the

Degree of Bachelor of Science in Civil Engineering

Submitted by:

Corpuz, Angela Reigh O.

Balasta, Metze
Vergara, Emerson G.
Isidro, Jayzelle G.
Balatucan, Ruelheen
Angustia, Jaecie Joraine Elaine
Brillante, Reynaldo

4TH YEAR BSCE- SET B

Submitted to:

Engr. Perfecto L. Zaplan Jr.

i
 TABLE OF CONTENTS

PAGE
TITLE PAGE i
TABLE OF CONTENTS ii
LIST OF FIGURES iii
ACKNOWLEDGEMENT iv
ABSTRACT v
APPROVAL SHEET vi
CHAPTER
1 INTRODUCTION 1
Background of the Study 1
Statement of the Problem 2
Significance of the Study 2
Scope and Delimitation 3

2 REVIEW RELATED LITERATURE 4

Local 4
Foreign 7
Conceptual Framework 9
Definition of Terms 16

3 METHODOLOGY 17
Project Design 18
Project Development 19
Evaluation 20
Testing 21

BIBLIOGRAPHY 22

ii
 LIST OF FIGURES

FIGURE TITLE PAGE

01 Framework for warehouse design and operation problem 13

02 Project Development Process 19

iii
 ACKNOWLEDGEMENT

The completion of this research paper would not have been possible
without the participation and assistance of a large number of people, the names
of whom cannot all be listed. Their contributions are deeply valued and gratefully
acknowledged. The group would like to express their heartfelt gratitude to the
following individuals in particular:

Praise and thanks to the all-powerful GOD for his guidance and blessings
throughout our research paper, which enabled us to successfully complete it.

We'd like to express our heartfelt appreciation to our research professor,

ENGR. PERFECTO L. ZAPLAN JR., for his unwavering support and patience.
His advice was extremely beneficial throughout the entire research and writing
process for this thesis.

Finally, we would like to express our heartfelt gratitude to our parents for
their financial, physical, and emotional support throughout this research. Without
them, this research paper would not be possible.

iv
 ABSTRACT

The logistics delivery and distribution industry in the Philippines is rapidly expanding.
Since it has a huge inventory capacity, proper management results in higher labor
productivity, faster work speeds, better asset utilization, and better work progress
monitoring throughout all levels. Companies require a location to keep commodities,
especially those that are not urgently needed and that have a large supply of raw
materials, since there are so many goods that are owned by businessmen nowadays.

This research will show business owners a warehouse that is use to store products. It
uses a marketing tactic known as product demand, which can lead to price increases
because the higher the demand, the more people are prepared to pay. When demand
rises, profit tends to rise at a faster rate. This is a win win situation between the
warehouse and the said business owners.

The layout, order picking policies, and equipment selection are the most significant
aspects of warehouse design. The layout design of a warehouse is the most essential
component in its design, as it is the foundation of various issues and supports the
warehouse's operation, particularly in storage assignment policy. The arrangement of
different functional departments of the warehouse, calculating the number of lanes,
number and position of docks, space requirement calculations, flow pattern planning,
and so on are all key aspects of warehouse layout design. Maximizing modularity,
adaptation, compactness, accessibility, flexibility, space usage, and reducing
congestion and mobility are all characteristics of a well-designed plan.

This study's research implemented both qualitative and quantitative descriptive

methods, with descriptive research describing the features of the population or
phenomenon under investigation. In other words, descriptive research focuses mostly
on "Why" certain things or events will occur.

v
 APPROVAL SHEET

This thesis entitled, “PROPOSED DESIGN OF A STORAGE WAREHOUSE

IN QUEZON CITY” submitted by CORPUZ, ANGELA REIGH O., BALASTA,
METZE, VERGARA, EMERSON G., ISIDRO, JAYZELLE G., BALATUCAN,
RUELHEEN, ANGUSTIA, JAECIE JORAINE ELAINE, BRILLANTE,
REYNALDO, in partial fulfillment of the requirements for the degree of
BACHELOR OF SCIENCE IN CIVIL ENGINEERING had been examined and
is recommended for acceptance and approval.

ENGR. PERFECTO ZAPLAN JR.

Instructor, CE Department
Advise

Accepted and approved by the committee with a rating of __________.

vi
 CHAPTER I
INTRODUCTION

Background of the Study

This study is entitled “PROPOSED DESIGN OF A STORAGE

WAREHOUSE IN QUEZON CITY”. The study aims to illustrate that having a
warehouse is important especially for the business owners around Quezon City.

A storage warehouse is described as a structure where things are stored,

the holding and preservation of goods until dispatched to the consumers. It is a
structure featuring a number of dock doors on both sides for receiving, storing,
and dispatching products (Berg 2007). The storage function can be carried out
successfully with the aid of warehouses that are used to store commodities.
Typically, these are enormous, basic buildings on the edges of cities, towns, or
villages.

These days there are a lot of goods that are owned by the businessmen,
the companies needs a place where they can store the materials especially the
things that are not needed immediately or that has a high supply of raw
materials. According to Hékis et al. (2013), when searching for inventory
management solutions, most companies have chosen to supply their products
using distribution centers. Companies currently operate in complex
environments, where inventory management has now become a factor in
determining a company's competitive advantage over its competitors.

1
Statement of the Problem

The following problem stated below will help the researchers to develop
an accurate design of a storage warehouse. This study also aims to answer the
following questions:

1. How do the researchers plan and gather ideas for the study called
Proposed Design Of A Storage Warehouse?

2. How do the researchers design and develop the study called Proposed
Design Of A Storage Warehouse?

3. How do the researchers provide solutions to increase the

performance of warehousing operations?

Significance of the Study

This study will look into the most significant aspects of warehouse layout
design, such as strategic planning to make the most of warehouse capacity,
ensuring a smooth operation, and increasing efficiency. The most important part
of warehouse management, especially in the Philippines' fast growing logistics
delivery and distribution industry, is warehouse management. It has a large
inventory capacity, therefore appropriate management leads to increased labor
productivity, faster work speeds, better asset utilization, and better work
progress monitoring at various levels.

2
Scope and Delimitation

The Scope of this study is to present a warehouse for the business

owners that can use as storage for their product. It applies a marketing strategy
called product demand this may result in price surges, as the more demand
there is, the more people are willing to pay. When the demand increases, the
profit tends to grow rapidly.

The Limitations of our study are to prioritize those entrepreneurs who

need warehouse for their business.

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 CHAPTER II
REVIEW RELATED LITERATURE

The aim of the literature review is to provide the concepts, the finished
thesis, conclusions, the conceptual framework, and definitions of words are all
included in this chapter. A review of the storage warehouse literature from both
domestic and international sources. Those in this chapter help to acquaint the
reader with knowledge that is relevant to and similar to the current study.

Local

According to Bonifacio et al (2008), IDS Logistics is a company that

specializes in contract logistics, warehousing, and supply chain management
for customers throughout the Philippines. This inquiry is focused on IDS
Logistics' Warehouse Department, which is in IDC Bldg. E. Rodriguez Jr. Ave.,
Ugong Norte, Quezon City. A new system is proposed to address the
highlighted issues, which includes assigning laborers to only pick in one region
(1601 or 1608), regulating/controlling the process of releasing work orders,
redesigning inventory reports, and changing the layout, which includes
changing the lights

According to Pagcaliwagan et al (2015), the goal of expanding

commodity coverage was established by the National Food Authority. Other
food items, such as raw or fresh and manufactured, processed, or packaged
food products, were included in addition to grains. A concrete two-story building
was built beside the national highway at Brgy. Balagtas, Batangas City, in 1980.
The Provincial Office of Balagtas was located on the ground floor, while the
Regional Office was located on the second story. With the ever-increasing
demand for more product variety and faster response times, the ability to build
seamless and effective logistic operations has become increasingly important.

4
 As logistic costs account for a significant portion of overall production
costs, these procedures are also crucial in defining a company's
competitiveness. Indeed, warehouse technology has seen a lot of
advancements in the last ten years. Topics like planning and control have
gotten a lot of attention in the general and scholarly journals when it comes to
warehouse management. (Van den Berg, 1996), as well as the citations therein.
Storage buildings are most often involved in the sourcing, production, and
distribution of commodities at various stages, from raw materials to work-in-
progress to finished goods. As a result, numerous operations take place in a
warehouse, necessitating different types of facilities, personnel, and equipment
to meet each role.

Base from Nascimento et al (2016), when looking for inventory

management alternatives, several companies have chosen to supply their items
through a central warehouse. These environments, as components of a
company, should evolve, cut costs, track results, and maintain a focus on the
satisfaction of their clients. To fulfill this informational need, an information
system that facilitates the location of products, reduces errors, but nonetheless
meets the expectations of customers in a storeroom, warehouse, or distribution
center has become increasingly popular. Nascimento et al (2016), Deployment
Warehouse Management System: Case study in a Distributor Center and
Wholesaler

According to Ken Research (2018) the major opportunities and cautions

of a growing need of maritime, aviation and land transport system has a great
effect in warehousing market. The growth in import and export in the Philippines
augmented positively in warehousing market size. Being as one of the most
strategic locations, retail sector is the largest contributor to the warehousing
sector, followed by container freight, cold storage and others. The companies
from the sector require warehousing facilities to store the products which will
trigger the demand for warehousing space incoming future.

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 As stated by Duque, et al (2019) facilities particularly in warehousing
design should promote a harmonious flow of raw materials, equipment,
manpower and final products at minimum cost. In Logistic operation, warehouse
is significant part of the supply chain. Manila is one of the major logistics hub as
the size of the market is expected to hit 71 billion. Because of this opportunity,
the competition between companies providing logistics continuously thrive to
gain competitive advantages. Lay out design in warehouse facilities aims to
optimize limited storage space and gives comfort to employees to increase the
productivity labor. Design arrangement should promote better control for the
management and utilizes the available space efficiently.\

Based on the Philippines DOH's Warehouse Management System

Assessment (2019). Transportation, additional warehousing, and brokerage
services are provided to 3PLs through transit warehouses that facilitate the
transfer of items to regional, provincial, or rural health facilities. According to a
comparison of stock statistics from 2016 and 2017, warehouses are operating at
maximum capacity due to an increase in inventory volume. The Department of
Health considers that there is a mismatch between allocation quantities and end
user requirements in corridors and offices that are currently being used as
storage facilities. There are restrictions on how the LMD manages stock
distribution and, as a result, how regional and provincial offices manage stock
allocations. The central level has authorized the regional warehouse to rent
1,000 sqm. of space due to a lack of certified 3PLs at the regional level

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Foreign

The development of new information technology provides the opportunity

to improve the efficiency of warehouse operations. In particular, the
implementation of enterprise resource planning (ERP) systems and warehouse
management systems (WMS) has made it possible to store and track
information in order to handle and coordinate operations faster and with fewer
resources (Faber et al., 2002).

Another technological advancement is the introduction of radio frequency

identification (RFID) and barcodes, which has made it possible to identify
products and storage locations automatically throughout the warehouse,
resulting in shorter handling times and cost savings (Poon et al., 2009). Despite
these advancements, companies continue to struggle with low efficiency;
therefore, they seek new ways to improve their warehouse operations (Gu et al.,
2007).

Warehouse operations are often regarded as critical in supply chain

management (SCM) because they enable customers to receive the right product
at the right time and at the right price (Faber et al., 2013). Because of the
increased emphasis on shorter lead times, constant changes in customer
demand and wider product ranges, the importance of and pressure on
warehouse operations has increased, such as the ability to store multiple articles
and to pick and assemble a wide range of customer orders (Rouwenhorst et al.,
2000; Baker and Canessa, 2009; Hübner et al., 2016). Consequently, warehouse
operations are often considered a burden because of the amount of capital and
operating expenses they require (Bartholdi and Hackman, 2010).

According to De Koster et al. (2007) and Baker and Canessa (2009),

warehouse operations represent approximately a quarter of the total cost of
logistics in the supply chain. Companies therefore constantly strive to cut costs

7
and improve efficiency in their warehouse operations, such as by reducing
inventory and increasing the turnover of stock (De Koster et al., 2007). They also
aim to resolve issues that might cause late or inaccurate deliveries in order to
improve customer service levels (Huertas et al., 2007).

Warehouse types and operations According to Bartholdi and Hackman

(2010, p. 3), warehouses can be described as “the points in the supply chain
where [a] product pauses, however briefly, and is touched”. Warehouses have
an important intermediate role within the supply chain, which affects both costs
and services (Faber et al., 2013). There are several reasons for maintaining
warehouses, such as (i) to better match supply and customer demand, (ii) to
consolidate a range of products to reduce transportation costs and to manage
distribution processes more efficiently, and (iii) to enable the postponement of
product differentiation by configuring generic products close to the customer
(Bartholdi and Hackman, 2010; Faber et al., 2013).

Warehouses can be categorized based on the customers they serve and

the operations they conduct. The existing research is scattered; however,
between two and seven categories have been suggested (see e.g.,
Rouwenhorst et al., 2000; Bartholdi and Hackman, 2010). For the purpose of this
study, we build on the categorization presented by Van den Berg and Zijm
(1999), which includes contracted, distribution and production warehouses. This
classification provides a clear division between the different types of
warehouses, and it reduces the risk of ambiguity. Unlike other classifications,
Van den Berg and Zijm (1999) also considered the issue of liability, which is an
important aspect of warehouse operations that are part of supply chains with
multiple legal entities.

Characteristic of the warehouse of a contracted or third party logistics

provider is that an external partner manages and is liable for some or all
warehouse activities. Distribution warehouses are used to collect, consolidate

8
and/or assemble a wide range of products from different suppliers and then
deliver them to downstream customers. Typically, in distribution warehouses, the
product range is large, whereas the quantities per order may be small, which
increases the amount of time consumed by picking (Rouwenhorst et al., 2000).

Production warehouses are used mainly to store material throughout the

production process. The storage includes raw material, semi-finished products
and finished products, and it may require the storage of large quantities during
long periods (Rouwenhorst et al., 2000). Each of the three warehouse types
involves various operations. In general, all warehouses have operations for
receiving, put-away, storing, picking and shipping (Van den Berg and Zijm, 1999;
Gu et al., 2007; Bartholdi and Hackman, 2010). Contracted and distribution
warehouses may have cross-docking flows, which means that certain items are
not stored, but instead shipped directly after they are received. Recently, coupled
with the advancement of e-tailing and omnichannel distribution, there has been a
massive increase in the return flow of goods from consumers. Returns can be as
high as 15% for mass merchandise and 35% for catalog and e-commerce
retailers (Jayaraman and Luo, 2007). Considering that liberal returns policies are
often coupled with omnichannel retailing, the return rates in certain countries and
product categories continue to grow (Bernon et al., 2016).

Conceptual Framework

According to Backer and Canessa (2009) today warehouses became a

key aspect of an supply chain system and they play an essential role in success
and failure of any kind of businesses. Based on the purpose of using
warehouses, they can be named differently. When goods move directly from
incoming to shipping vehicles without storage, they can be called cross docking
points. If activities like pricing and labeling have been done for customers, they
will be value added service centers. They are called production postponement

9
points if their main role is configuring or assembling products based on
customer demands.

In the case that distribution is the main function the term distribution
center is commonly used. Finally they are called returned good center if the
purpose of usage is to store faulty or end of life goods (Baker and Canessa,
2009).

However in most ordinary warehouses raw materials and finished goods

should be received, stored and delivered to the customers after orders are
picked. Hence if the main function is buffering and storage the term warehouse
is used (Koster et al., 2007). In these days competitive market environment,
companies try to achieve high volume production with minimum inventories and
deliver products to the customers within short response time through a well-
designed logistic system. So warehouse design and performance has very high
impact in order to reach to this goal. Warehouses should make a balance
between four important factors in marketing: low volume, high variety, frequent
delivery, and short response time (Berg and Zijm, 1999). Hence continues
improvement in design and performance of warehouse systems help companies
to be competitive in market (Gu et al., 2007).

JIT (Just In Time) approach as a lean principle become demanded from

warehouses in order to have a frequent delivery with lower volumes in a smaller
and more sufficient warehouse area (Berg, 1999). The efficiency and
effectiveness in any supply chain system is largely determined by the design and
performance of warehouses (Rouwenhorst et al., 2000).

Even though the importance of warehouse design and its effect on cost is
clear, still there is no comprehensive, defined and accepted method for
designing warehouses. Based on this, almost all warehouse designers have
their own unique approach (Baker and Canessa, 2009). However there is a

10
need to find such a systematic approach for 21 warehouse designing in order to
be implemented in any different type of warehouses to increase the
performance of the warehouse and reduce cost (Rouwenhorst et al., 2000).

According to Baker and Canessa (2009) the most important aspect in

designing a warehouse is layout, order picking policies, and equipment choice.
Hassan (2002) mentioned in his paper that the most important factor in
designing a warehouse is its layout design which is the basement of several
issues and support the operation of the warehouse mostly in storage assignment
policy. Other important issues that are related to the layout design of a
warehouse include: the arrangement of different functional departments of the
warehouse, determining the number of aisles, number and location of docks,
space requirement estimations, the flow pattern designing, and etc.
Characteristics of a well-designed layout could be summarized as: maximizing
modularity, adaptability, compactness, accessibility, flexibility, space utilization,
and reduction of congestion and movement (Hassan, 2002). During designing a
warehouse, these operational efficient factors should be taken in account in
order to improve the overall warehouse performance (Roodbergen and Vis,
2007).

Between an item is received by the warehouse and be delivered to the

customer as an order, some errors in both accuracy and completeness may
happen which consume more time. An optimum layout design improve these
operation efficienies and reduce these errors and big part of wastes (Koster et
al., 2007). With this significant impact on customer service level and logistics
costs, also with considering the complexity of warehouse operations, the design
should be as cost effective as possible. It also should be mentioned that a large
extent of warehousing investment cost is at the design phase (Baker and
Canessa, 2009).

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 According to Rouwenhorst et al. (2000), design of a warehouse usually
starts from a functional description, continues with technical specification,
through equipment selection and layout determination. In each step,
minimizing cost and response time and maximizing throughput and storage
capacity should be considered. Different purpose of warehouse usage has
different requirements. For storage warehouses the storage cost will become
more important and should be more efficient for long period storage items in
large quantities in a cheap storage system. The main design objective in this
case is low investment and operation costs and the main criteria is storage
capacity. However, for work-in-process warehouses the objective is fast
retrieval from the warehouse since mostly the demand volume is unknown. As
a result, the design constraints should consider the response time which is the
important factor in this case (Rouwenhorst et al., 2000).

All activities inside warehouse system are interrelated to each other

and all related-on warehouse design. For example, the storage assignment
policy limit the storage space, and as a result travel distance will be reduced.
At the same time order picking cost will be reduced through improving labor
performance with a new routing planning. All of 22 above factors enhance the
operating efficiency and space utilization and finally reduce the overall cost
(Lihui and Hsieh, 2006).

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Figure 1. Framework for warehouse design and operation problem

13
 Illustrates a conceptual framework for the design, control, and
optimization of an industrial storage system. This framework is the result of the
integration of different models and supporting decision methods & tools by the
adoption of a systematic multi-step approach.

Warehouse design problems can be also discussed from interrelated

decision-making levels, strategic, tactical, and operational level for long,
medium, and short terms respectively. In order to evaluate warehouse design
problems, some performance criteria are needed including investment and
operational costs, volume and mix flexibility, throughput, storage capacity,
response time, and order fulfillment quality (accuracy). These criteria will be
discussed in three different decision-making levels (Rouwenhorst et al., 2000).

Strategic level: This process flow can be broken down into two
continuous decision problems: one based upon technical capabilities and the
other one based on economic considerations dealing with the selection of
systems and equipment. The first problem concerns the storage unit, the
storage systems and suitable equipment for the products and orders, while not
conflict each other. This warehouse design problem concerns both the design of
the process flow and the selection of the main warehouse system type. The

14
problem has an input of the products and orders characteristics, while the output
specifies combinations of systems that are technically capable products
handling and improve the performance (Rouwenhorst et al., 2000).

The second warehouse design problem concerns about economic

considerations. The aim of solving this problem is optimizing a possible
combination system to minimize investment and operational costs. All decisions
are taking in this level are related to each other. The following shows some
relations between several decisions (Rouwenhorst et al., 2000):

 The number of resources determines warehouse investment costs.

 The warehouse storage capacity is related to the type and dimensions
of the storage system.
 The type and dimensions of the resources presents maximum
warehouse throughput - The factors related to the maximum
throughput demonstrates warehouse response time

Tactical level: Fields of tactical decisions usually are the dimensions of

resources, storage system sizes, number of employees, the determination of a
layout and several organizational issues (Rouwenhorst et al., 2000) A bunch of
problems occur at the tactical level decision making and should be considered
simultaneously. Some of these problems listed below:

 Organizational problems including the picking zones dimensioning,

the ABC zoning, replenishment policies and batch sizes, and
selection of a storage policy
 Storage systems dimensioning including the forward and reserve
areas, also dock areas
 Type and number of material handling equipment
 Establishing a layout of the overall system

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  Number of personnel. The goal of solving all these design problems in
tactical level and the same in strategic level is to improve the
performance, reduce waste and minimize the cost (Rouwenhorst et
al., 2000)

Operational level: Most decisions in operational level concern the

assignment of tasks, and scheduling and control of people and equipment such
as: the assignment of replenishment tasks to personnel, and the allocation of
incoming products to free storage locations. The major difference between
decisions taken in this level with two previous levels is that decisions made at
this level often can be considered independently (Rouwenhorst et al., 2000).

DEFINITION OF TERMS
Replenishment- restoration of a stock or supply to a former level or condition

Storage- the action or method of storing something for future use

Modularity- degree to which a system's components may be separated and

recombined

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Warehouse- a large building where raw materials or manufactured goods may be
stored before their export or distribution for sale

Logistics- the detailed coordination of a complex operation involving many people,

facilities, or supplies

Inventory- a complete list of items such as property, goods in stock, or the contents
of a building

Supply- a stock of a resource from which a person or place can be provided with the
necessary amount of that resource

Demand- an insistent and peremptory request, made as if by right:"a series

of demands for far-reaching reforms

Commodity- a raw material or primary agricultural product that can be bought and
sold

Allocations- the action or process of allocating or distributing something:"more

efficient allocation of resources

Entities- a thing with distinct and independent existence

Supply chain- the sequence of processes involved in the production and distribution
of a commodity

Consolidate- combine (a number of things) into a single more effective or coherent

whole

Ambiguity- the quality of being open to more than one interpretation

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e-commerce - commercial transactions conducted electronically on the internet

Constraints- a limitation or restriction

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 CHAPTER III
METHODOLOGY

This chapter explains various methodologies that were used in

gathering data and analysis which are relevant to the research. The
methodologies will include areas such as the project design, project
development, operational and testing procedure, and lastly, evaluation and
testing procedure. The following areas are consisting of information and data to
finish this research.

Project Design

This study is utilized by Quantitative and qualitative research are

complementary methods that work well together to provide insights that are both
deep and wide. Qualitative and quantitative tools in research design will deliver
more actionable insight. Regardless of this research will study the design of a
Storage Warehouse.

The researchers of this study will be going to use qualitative and

quantitative descriptive method and researchers know that descriptive research
describes the characteristics of the population or phenomenon that is being
studied. In other words, descriptive research primarily focus on “Why” a certain
things or certain events are going to happen (McCombes, 2019). Hence, that the
researchers will going to use descriptive in order to collect or gather
information’s that can do or that can help in research study in which a descriptive
type of a quantitative and qualitative research seeks to describe the currents
status or phenomenon of the research that is being- proposed. Basically,
researchers also will be able to conduct a survey also from the selected people
to become a main respondent in the said research conduct.

The presents study also is aiming to know that the purpose of

descriptive research is. Of course, to described, as well as explain, or validate

19
some sort of hypothesis or object when it comes to a specific group of people
that are able to be a part of this research that a researcher will be conducted.
Thus, descriptive research describes situation as well and researchers will be
able to sort some ideas and information's to their respondents too.

Project Development

Figure 2. Project Development Process

PLANNING/CONCEPTUALIZATION

IDENTIFICATION OF DESIGN STANDARDS AND

PARAMETERS

PRESENTATION OF ARCHITECTURAL AND

STRUCTURAL PLANS WITH INITIAL ESTIMATE

IDENTIFICATION OF DESIGN CONSTRAINTS,

TRADE-OFF

LOAD IDENTIFICATION, STRUCTURAL

ANALYSIS, AND FINAL DESIGN

20
Evaluation

All location codes are easily readable (including from a distance) and barcoded,
ensuring no confusion exists regarding which code corresponds to which location
(particularly for the lower beams in a pallet rack or in a shelf area where location sizes
are often tiny). Ergonomic considerations should have been incorporated into the
design of worker positions. Numerous facilities have grown organically: gradually,
additional buildings and systems have been added. Multiple warehouse locations
necessitate transportation between the components. How is this procedure structured?
Is it possible for inventory to be lost during transport? If not handled properly, this area
should receive a low score. The technical condition of buildings, doors, floors, dock
levelers, dock shelters, sprinkler systems, heating, and cooling systems, and sprinkler
installation can all be determined during a visit.

The floor's quality (i.e., flatness and absence of pits and ramps) is critical if
forklifts, reach trucks, or high-bay trucks are used for discrete transport. The basic
layout of the facility is critical to achieving peak performance. U-shaped layouts, in
which dock doors are primarily located along a single façade, typically result in better
performance (more expansion options, more flexible use of dock doors and
receiving/shipping personnel, fewer crossing flows, and shorter average travel
distances) than layouts with dock doors on opposite sides of the buildings (I-shaped
layout).

Although labor is the primary component of operational costs (particularly in

distribution warehouses), facility costs (including technical installations) are close. It
makes no difference whether buildings and technical installations are owned, rented, or
leased. As a result, no space should be squandered. Massive warehouses result in
increased costs and frequently inefficient processes due to lengthy travel times for
storage, order picking, or cross-dock. When storing large quantities of slow-moving
products, high-bay stacking is preferable. Naturally, land and labor costs vary by

21
country. When labor and land are relatively inexpensive, buildings are typically less
expensive. If the land is expensive, buildings are also more expensive.

On the other hand, insufficient space may obstruct the effective and efficient
execution of a process. If products must be dropped at temporary locations due to a
lack of space in the excellent area, if products must be dug up due to improper storage,
or if excessive waiting and delays occur due to other workers using maneuvering
spaces, this area receives a low score. While multiple people working in the same area
may be necessary (for example, order pickers and replenishers in a pallet storage
area), blocking and congestion should be avoided. This case can be accomplished by
restricting traffic to one direction or distributing fast-moving articles across multiple
storage zones.

Testing

This warehouse is a relatively straightforward area to assess. When a facility is

clean, it typically indicates that management has a good handle on process
organization. Items are not lost in clean facilities, inventory accuracy increases (as is
order fulfillment accuracy), and there is a general sensitivity to orderliness. Order
picking warehouses (where the case and item picking take place) generate much waste
(pallets must be unwrapped, boxes must be opened), and workers must quickly dispose
of it. Wastebaskets are located in front of racks in well-run warehouses, where waste
can be separated immediately at the source by type.

A well-run facility has clean air, low noise levels, and adequate lighting.
Ergonomic considerations should have been incorporated into the design of worker
positions. Due to the repetitive or strenuous nature of much of the work, poorly
designed work positions result in high absenteeism and labor turnover. Pickers do not

22
have fixed work positions in many warehouses because they drive trucks or walk with
pick carts. Workers undoubtedly device workarounds (do first and confirm later), which
may jeopardize the system's integrity. Safety is paramount in many warehouses,
particularly those utilizing heavy pallet lifting or order picking trucks or cranes. Order-
picking and forklift trucks can weigh several tons and travel at a high rate of speed.
Warehouses should have safe pedestrian paths and collision prevention devices.

Workers on foot should avoid working in congested aisles alongside heavy order-
picking trucks. Unsafe working conditions can be identified by the amount of damage to
racks, trucks, or signboards displaying the number of accidents or by the presence of
people smoking in a battery charging area. Working conditions that are unsafe should
result in a low score on this criterion. Hygiene (as determined by hazard analysis and
critical control points) is critical for warehouses that process (pet) foods,
pharmaceuticals, or raw materials for such products. If deep-frozen products are left in
an inadequately conditioned receiving or shipping area for an extended period, their
condition may deteriorate.

23
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