Your customer service offer is one of the most critical of these factors, particularly concerning order lead times. For example, if speedy delivery is a part of your service strategy (which is often the case in today’s on-demand environment), you will either need to locate your warehouses close to customers, or close to the facilities of your preferred carriers. This requirement, in turn, will influence decisions about the number of warehouses required, and their capacity.
What we’re looking for here is a logical sequence of operations within the warehouse where each activity is located as close as possible to that which precedes it and similarly, the function that follows it. We are concerned with the controlled and uninterrupted movement of materials, people and traffic with, if possible, no cross-flow clashes or areas of high traffic or work density.
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Aside from considering customer service aspects, such as lead times and supply chain velocity, you will also need to think about anticipated throughput and more specifically, receiving, storage, and dispatch volumes, as well as the types of processes that will be performed in your warehouse facilities. Your distribution strategy too, will have a bearing on network optimisation.
If you are already familiar with the FAST concept in warehouse design layout (if not, see the sections below), you will know that the objective of FAST is to ensure each activity-locations are close enough together to enable smooth workflows, but not too close to clutter the process and reduce efficiency. You can apply the similar thinking to the layout of your warehouse network, although the emphasis should be more on locating your warehouses close enough to customers to support your service offering, without introducing difficulties on the supply side.
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See the difference.
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