Warehouses serve a variety of inventory storage and value-added services.  Their role within the food supply chain dictates their configuration, necessary cooling and freezing systems, material handling equipment, processes, and systems. For example, a warehouse storing frozen packed cases with one SKU per standard GMA pallet for a company that only ships full pallets to retail locations would have a very different configuration from a warehouse/distribution center servicing an E-Commerce model requiring multiple picks and packs of Fresh product (32°F to 50°F) of orders destined for homes in Miami in August. 

Adroit works with our clients to design the warehouse on a holistic basis to ensure all the components work together. It is important the mission of the warehouse be understood.  Inventory can be like a gas, expanding to the limits of its container.  If the warehouse exists due to a problematic Sales and Operations Planning process then the focus should shift to first correcting those problems and working to eliminate the inventory.  Form a cross-functional improvement team and take the time to write a mission statement for the warehouse.

Services and Functions

With a mission statement in hand clarify the services that the warehouse serves. These can be among others:

• Short/long term storage for shelf-stable (50° to 75°F), Fresh (32° to 50°F), and Frozen(0° to 32°) and Deep Freeze(<0°F)
• Consolidation warehousing
• Break-bulk warehousing
• Cross Docking
• Pallet level Pick and Ship
• Case Level Pick and Ship
• Bulk storage (Tanks, Silos, etc)
• RePackaging
• ReLabling
• Shrink Wrapping
• Shipping
• Etc

Stratify the inventory and ensure that you have the storage dimensions and temperature requirements, etc of each SKU. Create a current state and a forecast of the total volume necessary by storage class. Overlay the storage class with the services/activities to project or understand the transaction volumes by inventory and customer class.

With this information at hand move on to review and develop the site design.

Site Design

The warehouse should be designed with the concept of directed picks and puts to drive to an accurate perpetual inventory. It is essential that products be assigned specific locations on the basis of the characteristics of the product.  Key variables to use as input into the design include:

• Velocity
• Weight
• Bulk, case, liquid, etc
• Temperature, Humidity
• Allergens
• Pallet Types (GMA, EU, UK, 2 way, 4 way, etc)
• Other special storage requirements

Where possible consider zones organized to facilitate flow through the facility with fast movers traveling less distance on average than slow movers, etc.  Piece pick and pack processes may require special cells and equipment.

Storage and Racking

With your inventory plans roughly organized into zones within the warehouse determine the racking systems necessary for the particular zone. Again the material variables factor into which type of racking to use. Concurrent with the racking design determine the appropriate material handling equipment. Large amounts of pallets of the same SKU allow for higher density storage solutions. Diverse SKUs require less density to enable easy picks and puts.

Racks

• Selective Pallet Racks provide spacing for one pallet per aisle facing slot. This allows for easy and immediate access to all of the pallets and provides for easy cleaning. These are ideal for food and beverage because of the sanitation and the need to rotate stock.
• Double Deep Racks provide space for two pallets per aisle facing slot. This allows for increased density but at the expense of needing to move the pallet in front to access the pallet behind. So if you have a commitment to the same SKU in the slot and that both pallets will be pulled at the same time then this makes sense.
• Back Racking and Push Back Racks provide even more storage per aisle facing slot.  The pallets sit on carts that push back when the next pallet of the slot is added. When a pallet is removed the pallet gently slides forward so there is always a pallet ready to be picked.  As with the double deep racks, use these when there will be common SKUs in the slot and keep in mind stock rotation.
• Flow Racks provide a solution in which the pallets are put in on one end and are gravity to fed to the other end. This provides a FIFO or first in first out pallet flow.  These are useful where there are many pallets of common SKUs that should be rotated based on expiration date.  They provide great density but keep in mind that if you have a 5 pallet deep flow rack and you want to access the 3^rd pallet you will need to pick three pallets to get to it.
• Drive-in and Drive-Thru Racks provide a multi-tier system in which the forklift drives into the slot and places the pallet.  They enable a forklift to, for example, drive into a slot 4 pallets deep and place the pallet on the third level. Next, the forklift could place a pallet 4 deep in the second level, and then the first.  Then 3 deep, etc.  These work when you have a lot of the same SKU to be stored or sets of pallets that will be picked and shipped together. They provide great density allowing up to 75% more storage than selective racks.  The downside is that to pick a specific pallet in the middle of the cube you will have to let down many pallets.
• Roll Formed Cantilever Rack provide an unobstructed horizontal slot.  They are good for storing long items that will lay horizontally.  We typically don’t see these in food and beverage warehouses.

Bins

For E-Commerce models, etc it is often necessary to pick at the piece level.  For these situations bin storage systems are useful. A given “pallet spot” can be subdivided into bins.  There are a vast number of storage bin configurations.

Pallets

When dealing with international imports/exports or really any supply chain activity it is important to clarify the pallet dimensions. Standard North American pallets are called GMA and have a dimension of 48”x40”. Beverages or Dairy may ship on a variety of sizes including 40”x 40” , 36”x 36” or 48”x36”. UK pallets are 1200mm x 1000mm or 47.24” x 39.37”.  EU pallets are 800mm x 1200mm or 31.50” x 47.24”.

Cooling and Freezing Systems

The International Institute of Refrigeration is an organization that promotes knowledge of refrigeration and associated technologies and applications. One of their key focus areas is on Food quality and safety from farm to consumer. They have organized Commission C2 – Food Science and Engineering to focus on the topic. There are a number of factors that food and beverage companies need to consider when designing their cooling and freezing processes.  The most critical is the freezing time due to the impact on product quality, product safety, and costs.  Things like package size, material, cooling temperature, product temperature upon entry, etc  affect the time to freeze a product.

There are several different types of freezers. The most typical in warehousing is the Air Blast Freezer or Cold Storage Freezer.  These are ideal for already frozen product.  Forced air can be used to improve freezing effectiveness. The Spiral Belt Freezer is a good solution to quickly freeze product post-processing. It maximizes belt freezing surface while minimizing space.   A tunnel freezer subjects the product on a perforated belt or bed with a strong vertical air blast to quickly freeze the product.

Material Handling and Picking Systems

Typically, over 50% of the warehouse operating costs are associated with order picking.  The profile of the distribution channel, typical customer orders, and SKU attributes dictate the configuration of the picking process.  As pick volumes increase, costs increase. As costs increase automated picking systems become more feasible. Total travel distances and total time on the pick drive costs. Consider the types of picking methods.

• Single Order Picking – For low volume or simple order picks this setup works well.  Individual pickers are tasked to pick all of the lines of an order. They pick the items and bring them to the pack and ship station. Once the pick for a specific order is complete they are then given the next order for picking.
• Batch Picking – Individual pickers are tasked with picking the total needed for specific SKUs across multiple orders.
• Multi-batch Order Picking or Cluster Picking – Individual pickers are tasked with picking multiple SKUs for multiple orders.  The picks are segmented by carts that have multiple bins. By multi-tasking the pick the number of pick trips is minimized.
• Wave Picking – for larger and more sophisticated warehouse operations. Orders are organized into groups according to a range of filters including order type, zones, delivery date, etc.  Pickers pick SKUs from multiple zones and place them in a sorting area for packing into individual shipments.  Typically advanced Warehouse Management Systems facilitate.
• Zone Picking – Large warehouses can be divided into sections or zones.  Personnel are dedicated to the zones and execute picks within their zones. To ensure coordination of the picks an advanced Warehouse Management System is utilized.

Process and Systems

Adroit advocates defining the warehouse operational procedures and the configuration of a Warehouse Management System(WMS) concurrently. Use the WMS to standardize work procedures and to facilitate best practices.

One of the main roles of a WMS is to coordinate order selection.  Two methods of selecting orders are discrete selection and wave (or batch) selection.  With discrete selection individual orders are processed for shipment.  Waves can be coordinated by an area of the warehouse with workers given responsibilities for zones. This can facilitate SKU knowledge and help to further limit miss picks. Procedures

WMS also coordinates work procedures that are important for receiving and shipping.  Directed put away of products tied to matched purchase receipts is critical to an accurate perpetual inventory system.

Basic Functionality of a Warehouse Management System includes:

• Receiving – match the goods to the purchase order and record traceability records such as manufacture item, lot, receipt date, etc. Activities may include trailer inspection, temperature history records, transport time, etc.  It is possible to obtain much of this information via an Advanced Ship Notice.  Arrangements should be taken to have suppliers stack product to the desired height on pallets to avoid breaking down or repacking pallets which adds considerably to the receiving costs.
• Lot and Serial Tracking – A Lot is a unique identifier for a set of pallets or cases. Serialization assigns identifiers at the pallet or case level.
• Put-away – move the goods from the receiving dock to the directed storage location
• Cycle-count – systematically count the SKUs and match to the records in the WMS. Correct discrepancies.
• Pick – locate, pick, and transport SKUs to packing/loading
• Task Management – coordinate resources across warehouse management activities
• Quality Analysis and Quarantine – based on inspection criteria, such as skip lots, etc inspect and complete qualitative and quantitative analysis. Pending results or with unfavorable results
• Replenishment – based on re-order points set by sku..replenishment orders are issued when inventory levels fall below the re-order point levels.
• Pack – facilitates a variety of operations such as multiple different SKUs going into one case, different cases combined into a mixed pallet.
• Basic Cross-dock – Facilities a receipt and just in time shipment to an order without executing a putaway and pick. The product moves directly from the receiving dock to outgoing shipping. It does not go into long term storage.
• Inventory Control – The absolute key to a successful WMS is an accurate perpetual inventory. WMS systems facilitate tasking of operators with picks, puts, let downs, cycle counts, etc.  The operator receives instructions via the system and confirms via scans, etc when complete. This can be through a tablet or equipment mounted terminals.  The directed and system enforced discipline drives much improved inventory accuracy.
• Work Order management – WMS systems facilitate orders such as breaking down pallets, etc. light Value Added Services (VAS).  A work order is created and items are processed into new items.  This can include breaking pallets to apply labels, mixing SKUs to create kits, etc.
• Shipping – The ship function consolidates packed items into a shipment that in turn is used to complete an order. Upon marking items as shipped the inventory record reduced by the amount shipped.

Advanced Functionality of a Warehouse Management System Includes:

• Yard Management – YMS couples the warehouse with inbound and outbound transportation. This includes dock appointments, inbound and outbound security, etc.
• Labor Management – The WMS works to minimize travel times, track worker productivity, control the types of transactions an individual work can complete and support workforce planning based on planned orders and activities.
• Warehouse Optimization – Different SKUs have different physical characteristics and move at different velocities. Velocity means the volume of product that moves through a warehouse. Inventory turns is a velocity metric. Advanced optimization reviews history and forecasts to assist in stratifying inventory into groups and then organizing the warehouse into zones based on the velocity of the product. Fast movers are generally located closer to the pick/pack stations and on the bottom shelves.
• Value-added services – light Value Added Services (VAS).  A work order is created and items are processed into new items.  This can include breaking pallets to apply labels, mixing skus to create kits, etc.