Setting up and designing your warehouse layout

Setting up a warehouse is more than just stocking shelves

with ecommerce inventory. A warehouse should be designed to optimize
storage and streamline fulfillment workflows. 

Investing in a warehouse is a tremendous undertaking; it involves supply

chain planning, budgeting, financing, and executing in-house fulfillment.
Here is an overview what warehousing entails:

 Finding warehouse space that meets your needs, from loading

docks to optimal storage space
 Optimizing the space to minimize costs, manage inventory, and
fulfill orders efficiently 
 Purchasing forklifts, conveyors, and other equipment 
 Keeping inventory secure and performing warehouse audits as needed
 Paying taxes, utilities, office supplies, internet, and other
administrative expenses
 Implementing technology to automate inventory tracking,
fulfillment, and shipping
 Hiring, training, and managing staff to meet order demand
 Complying with regulations and obtaining the proper licenses and
certifications 
 And much more 

Once you find the right warehouse, planning and designing the layout is a
crucial first step as it will impact supply chain efficiency. 

4 processes to keep in mind when designing your

warehouse layout
As you begin building a proper warehouse layout, you will want to focus
on functionality and efficiency. 
You will have to think beyond how to fit all your inventory in the space
available and consider different ways in which you can optimize the
space to minimize costs and improve productivity. 

Before you begin designing the layout of your warehouse, here are the
four primary fulfillment processes to keep in mind.

1. Warehouse receiving and stowing

A poor warehouse receiving process can can lead to stock control issues

and high operational costs. As soon as you receive new inventory, your
staff should be prepared to check every truckload and shipment, including the quantity, integrity
of seals, and product codes to ensure that what’s in the boxes matches what you ordered and
expect.

Depending on the size and volume, unloading inventory might require

heavy lifting and equipment such as forklifts and pallet jacks. Based on
the size, weight, and type of products you sell, inventory can be stored
either on a palette, a shelf, or a bin.

2. Inventory tracking

Once you receive inventory, you will need a system to track what’s
available to sell. Manually tracking inventory will only get you so far, and
once monthly order volume increases, it will soon become inefficient —
not to mention it will cost you. 

The ability to track inventory in real time is an important part of the ecommerce supply
chainand critical for ecommerce brands that want to scale. 

This can be done by implementing an inventory management software that provides

a real-time overview of current inventory levels to ensure you have enough stock to meet
demand and replenish inventory accordingly. 

Investing in the right technology to manage inventory will power up your

warehouse and set your team up for success. 

3. Warehouse picking

Warehouse picking requires the right warehouse setup and layout design
for the process to be as smooth, accurate, and efficient as possible. As
you think through possible ways to design a picking workflow, consider
the following:

 How will you generate pick and assign out picking lists? 

 How far will the picking team need to walk to pick items?
 How will the picker know where items are located?
 Will do batch picking?

How your picking team operates will determine how quickly items are
picked without compromising accuracy. 

4. Shipping process

Now comes the shipping process. You and your team is responsible for
loading trucks and making sure that all orders are picked, packed, and
shipped accurately when they leave the warehouse. Be sure to
accommodate room in your warehouse for a large volume of orders
being loaded simultaneously. 

You also have the option to choose between parenting with major
domestic and international carriers, regional parcel carriers, or a mix of all. It all
depends on where your warehouse and customers are located. Once you choose the right
carriers to partner with, you can negotiate shipping rates and schedule pick-up times. 

Once orders are in the carrier’s hands, you can send order tracking to
share updates with your customers, so they can be notified on when to
expect their delivery. 

6 warehouse layout design best practices

How you design your warehouse’s layout depends on your business. For
instance, storing furniture pieces requires a different storage layout plan
than stocking small, delicate jewelry items with multiple SKUs. 

However, across the industry, there are warehouse layout design best
practices to keep in mind (even though your layout will need to change
over time as you grow).

1. Outline the warehouse workflow

When brainstorming a warehouse layout design, you need to draw out
the internal warehouse workflows and how each will connect with one
another.  And you will need to plan it around dock doors from where the
carriers will drop off and pick up.

From receiving inventory to stowing items on warehouse racks, to

picking and packing items, to preparing orders for shipment, map out the
ideal work spaces that will maximize efficiency, keep the warehouse
organized, and enable productivity. Don’t forget to consider ways to
minimize any safety issues and the overall wellness of your team.  

2. Define the warehouse work stations

What are the essential work stations that you need? 

Do you have enough space in your warehouse layout design for all your
employees to work comfortably?

Oftentimes, creating one-way workflow is the most efficient way to set

up warehouse work stations. A simple one-way flow helps to ensure
safety and eliminate congestion in the warehouse.

Once you determine how to set up different work stations, you can
create paths with signs or floor tape to provide clear direction for your
staff.

3. Optimize for storage

Warehouse best practices include choosing the right inventory storage

system that will optimize the picking, packing, and shipping process to ensures order accuracy,
efficiency, and speed. 

Reorganizing routes or zones, or even an entire warehouse, can seem

like a daunting and time-consuming project. You will need to determine
how to best store inventory to optimize carrying costs, move large
amounts of inventory to different locations, and make sure its done
correctly so it doesn’t cause any issues during the picking process. 

To optimize storage and warehouse processes, be sure to learn

how warehouse slottingworks, so you can organize your warehouse around functionality and
efficiency.
4. Implement a warehouse management system

Using a warehouse management system (WMS) can lead to lower error

rates, improved overall warehouse performance, and more timely
inventory replenishment. Though a WMS will not directly impact the
warehouse layout design, it will impact the way you layout the equipment
and work stations.  

Warehouse automation is an integral part of optimizing the supply chain, as it

reduces the time, effort, and errors caused by manual, variable tasks.

5. Adapt the picking and packing area

Planning out a picking workflow ahead of time will help you get your
warehouse up and running on the right foot. But it’s important to note
that an efficient warehouse will continuously need to improve the picking
and packing process to encourage high order accuracy — especially as your
business grows.

Optimizing warehouse picking processes and/or implementing order

picking software are two of the most effective ways to optimize the supply
chain. Depending on the warehouse size, number and types of products in it, and total staff
count, one picking strategy may suit you better than others.

Here are a few common warehouse picking strategies you can

implement:

Batch picking

Batch picking consists of working on the same orders in bulk or batches

all at once in a row, instead of one at a time or by different people in
between other orders. This picking strategy is ideal for fulfilling many
identical orders that use the same SKUs.

Zone picking

Zone picking consists of assigning pickers to a specific area of the

warehouse and only pick one order at a time within that area. If an order
needs products from more than one zone, it is handed off usually via a
conveyor belt.

Wave picking
Wave picking is a combination of batch and zone picking, where a picker
will stay within a zone but pick more than one order at a time. This
strategy works best for warehouses with large numbers of SKUs.

Discrete picking

Discrete picking is when a picker works on one order at a time as each

one is placed. The same picker retrieves all SKUs in the order and can
handle orders across the facility. This method is best for small
businesses with low SKU counts and/or small warehouses or storage
facilities.

Whatever picking strategy you decide to implement, the goal is to

enhance team productivity and maintain a high order accuracy rate as
your business grows. 

6. Collect employee feedback

It’s important to speak to your employees and get their feedback and
implement any changes that will help with their day-to-day tasks. Ask
your employees to review the warehouse layout design and any
suggestions they can think of to improve it. 

Your picking team will understand your current warehouse layout better
than anyone because they’re constantly moving around the entire space.
Be sure to work with them to identify opportunities to create better
fulfillment workflows that eliminates headaches, confusion, and human
error during the entire process. 

Warehouse layout design checklist

Planning and designing a warehouse is a huge undertaking. To help you
get started, here is a simple warehouse layout design checklist. Consider
the following questions to help you make better decisions as you plan
your ideal warehouse layout. 

Is your design optimized for your warehouse workflows?

How are you reducing inefficiencies, such as long walks between each
order picked? What picking strategy will you implement? Decide how
you’ll create an efficient workflow before you establish workflows,
productivity zones, inventory storage areas, and equipment storage. 

Does your design take equipment space into consideration?

Can a forklift get around in a safe distance via routes marked on the
ground? What about people?

What type of equipment will you need to pick and pack items off your
shelves? Where will store the equipment so it’s easily accessible? For
instance, if you use one piece of equipment after another, but the two are
stored on opposite ends, it can cause inefficiencies and slow down
processes. 

Does your design include enough room for growth?

How are you utilizing space both vertically and horizontally? Are you at
100% capacity? Will you need to re-rack over time? Make sure to plan for
future growth to avoid the need to recreate your entire warehouse design
from scratch. As you grow, your layout and processes should provide
flexibility to scale. 

Will your design allow employees to move freely and without

obstruction?

Can your team move freely? Is the space designed to minimize safety
risks? Be sure to create safe productivity zones for your employees to
move throughout the warehouse efficiently. Plan ahead to avoid
unnecessary congestion or overcrowding of staff. This will also help to
eliminate error during the fulfillment process. 

Why businesses move from their own warehouse to

outsourced fulfillment
Fulfilling in-house is a huge operational and financial undertaking. Good
planning is necessary to develop the infrastructure, secure the
warehouse(s), and purchase the equipment you’ll need.

Outsourcing fulfillment to a tech-enabled 3PLlike ShipBob can eliminate

the stress and energy of managing a warehouse, help you cut overhead
costs, and provides you access to best-in-class technology, so you can
view inventory and order status in real time, even across multiple
fulfillment center locations.  

Here’s an example of a $20 million brand that was managing their own
warehouse, but decided to outsource direct-to-consumer fulfillment to ShipBob: 

After launching two years ago, managing their own large warehouse, and
hitting the $20 million-mark in annual sales, one ecommerce brand finally
decided to move order fulfillmentfrom their own warehouse to ShipBob.

They found ShipBob’s value is the ability to scale across the country
with fulfillment centers throughout the US, and the ability to send out more packages than they
could do in-house.

“ShipBob’s value is the ability to scale across the country, with

fulfillment centers throughout the US and the ability to send out
more packages than we are able to in-house. ShipBob is an excellent
solution for businesses that are looking to grow and scale.”

Read the full story here. 

How ShipBob’s warehouse setup works for

ecommerce
Leasing, designing, and managing a warehouse can not only take a
considerable amount of time, but it’s also a big investment for a lot of
effort, which could be used on other aspects of your ecommerce
business.

Once ShipBob’s receive your inventory, we follow standardized

processes to optimize storage to help save you on costs. Even as you
expand into more warehouse locations, you can keep track of storage
expenses from the ShipBob dashboard:
Along with optimizing storage costs, you don’t have to worry about hiring
staff to manage demand, design, and optimize picking workflows, or
worry about investing in technology and equipment. 

Here are some of the other benefits of outsourcing warehouse

management and fulfillment to ShipBob. 

Warehouse setup around order assembly

Across all ShipBob warehouses, the warehouse layout is centered

around efficiency, accuracy, and consistency. Our warehouse setup
ensures that items can be located and pick efficiently to improve order
accuracy while speeding up the fulfillment process. 

Whether it’s assigning pickers optimized routes, opening more fulfillment

center locations (across the US and globally) to cut down on shipping
times, or improving our picking and packing processes, ShipBob is constantly looking for
ways to improve and achieve higher levels of efficiency.

Along with having control over operations, ShipBob owns the entire order
tech stack, which increases the velocity and scale at which we can make
any type of change to our technology based on real-time customer
feedback.

“Before ShipBob, we used to work with another 3PL that was terrible.
With our old 3PL, we’d have to reach out 3-4 times per day, and I
even had the CEO’s number because there were so many issues and
fulfillment errors all around. I’m super happy we switched to
ShipBob. We got a fresh start, and it was a very smooth and easy
transition.”

Torii Rowe, COO & Co-Founder of MANSSION

Inventory control and labeling

With so many products shuffling in and out of each warehouse, ShipBob

uses a proprietary WMS to help you control inventory as we make use of
unique barcodes across the warehouse. 

Every action ShipBob performs — receiving, counting, picking, packing,

returns, etc. — is handled much more efficiently when a barcode is
adhered to each item. ShipBob highly encourages the use of product
barcodes, so we can accurately scan and stow each item. Learn more
about our barcode process here.

From the ShipBob dashboard, you get a full inventory overview, including
days of inventory on hand remaining, so you can better forecast demand
and set proper reorder notification points based on historical data:

“So many 3PLs have either bad or no front-facing software, making it

impossible to keep track of what’s leaving or entering the
warehouse.
On the supply chain side, I just throw in what we placed at the factory
into a WRO in the ShipBob dashboard, and I can see how many units
we have on-hand, what’s incoming, what’s at docks, and so on. I can
see all of those numbers in a few seconds, and it makes life so much
easier.”

Harley Abrams, Operations Manager of SuperSpeed Golf, LLC

Organizing SKUs

With ShipBob, you can easily connect your store(s) and even design
a multichannel distribution system that lets you sync SKUs and orders to view all inventory,
fulfillment centers, sales channels, and customers in one place.

At ShipBob we constantly organize SKUs to fit the warehouse layout and make it

easier for fast moving SKUs to be placed closer to the picking area or reevaluating SKUs that are
performing less than average. 

For instance, from the ShipBob dashboard, you can:

 Visualize SKU velocity and days of inventory remaining on hand.

 Input changes in projected order volume or scenarios to calculate
changes in inventory turnover.

“We roll out new products and designs on our website 1-3 times a
month and send new inventory to ShipBob each week. It’s really easy
to create new SKUs and restock existing ones using ShipBob’s
technology, which is especially important with high inventory
turnover.”

Carl Protsch, Co-Founder of FLEO

Consistency across all locations through proprietary software

Warehouse management in one facility to the next is possible by

providing a consistent experience to all customers in all locations.

ShipBob’s owns the entire tech stack that powers our distribution

centers to provide consistency, reliability, and speed across our entire
domestic and international fulfillmentnetwork. You can take a look at
ShipBob’s locations here. 

Our WMS also acts as a control center to compile all distribution metrics, including fulfillment
performance and shipping insights, across all elements of our fulfillment centers. 

Our WMS connects with our best-in-class merchant dashboard, so you

can view insights related to:

 How many orders per hour a picker can pick

 How long it takes to receive, count, and stow new inventory that
arrive
 How well ShipBob is hitting SLAs
 How many and which orders can’t be fulfilled because of
inadequate stock levels
 How many days does it take for my orders to be delivered

”As our business grew, fulfilling orders quickly became very time-
consuming, and warehouse operations became a challenge. We
found ShipBob, who checked all our boxes for a 3PL. They have
ended up being the perfect solution for us and we have never looked
back!”

Waveform Lighting Team

To learn more about how ShipBob can help you optimize warehouse
management and fulfillment, click the button below.