KM-05-KT02: Warehousing and Facilities Planning and Control
Learning Outcomes
After completing this lesson, learners will be able to:
- Explain principles for planning warehouse operations.
- Explain warehouse and facilities capacity planning.
- Describe warehouse and facilities optimisation.
- Identify key regulatory and personnel-planning considerations.
- Explain principles for designing materials-handling operations.
- Describe the benefits of yard planning and management.
- Assess warehouse and facilities performance.
- Explain warehouse control towers and command centres.
- Describe warehouse interfaces with procurement, order management, transport and maintenance.
1. Warehousing and Facilities Planning
Warehousing and facilities planning determines how space, inventory, people, equipment and information will be organised to support supply chain requirements.
Planning should align the warehouse with:
- Expected inventory levels
- Customer demand
- Order profiles
- Product characteristics
- Supplier deliveries
- Transport schedules
- Service-level requirements
- Safety and security
- Available budget
- Future growth
2. Warehouse-Planning Process
A warehouse-planning process may include:
- Define the warehouse’s purpose.
- Analyse current and forecast demand.
- Determine inventory requirements.
- Analyse products and order profiles.
- Calculate space and capacity requirements.
- Design receiving, storage and dispatch areas.
- Select storage and handling systems.
- Determine technology requirements.
- Plan personnel and shifts.
- Identify safety, security and regulatory requirements.
- Establish operating procedures.
- Set performance targets.
- Implement and monitor the plan.
3. Facility Location
Warehouse location affects total supply chain cost and customer service.
Location decisions should consider:
- Proximity to suppliers
- Proximity to customers
- Road, rail, port and airport access
- Transport cost
- Property and utility costs
- Labour availability
- Security
- Infrastructure reliability
- Municipal services
- Environmental conditions
- Future expansion
- Exposure to disruption
Example
A distribution centre close to Gauteng’s major customer market may support shorter delivery times. However, a site with poor highway access or severe congestion may increase transport delays and costs.
4. Facility Design
Warehouse design should provide suitable areas for:
- Vehicle arrival
- Receiving
- Inspection
- Quarantine
- Put-away
- Storage
- Replenishment
- Picking
- Packing
- Value-added services
- Marshalling
- Dispatch
- Returns
- Waste handling
- Equipment charging or fuelling
- Employee facilities
The design should support a logical flow and minimise unnecessary movement.
5. Product and Order Analysis
Before designing the operation, the organisation should analyse:
Product Profile
- Number of stock-keeping units
- Dimensions
- Weight
- Value
- Demand frequency
- Shelf life
- Hazard classification
- Temperature requirements
- Handling needs
Order Profile
- Number of orders
- Lines per order
- Units per line
- Order frequency
- Order size
- Delivery priorities
- Seasonal patterns
- Returns volume
An e-commerce operation processing many small orders requires a different layout from a warehouse dispatching full pallets.
6. Warehouse-Capacity Planning
Capacity planning determines whether the warehouse has sufficient space, people and equipment to handle expected activity.
It considers:
- Storage positions
- Floor area
- Building height
- Receiving capacity
- Dispatch capacity
- Loading bays
- Staging space
- Labour hours
- Equipment availability
- Processing capacity
- Peak demand
7. Storage Capacity
Storage capacity may be expressed as:
- Pallet positions
- Bin locations
- Cubic metres
- Square metres
- Tonnes
- Tanks or silos
- Individual units
Capacity Utilisation
Capacity utilisation = Capacity used ÷ Total available capacity × 100
Example
A warehouse has 5,000 pallet positions, of which 4,000 are occupied.
Capacity utilisation = 4,000 ÷ 5,000 × 100
Capacity utilisation = 80%
Very high utilisation may reduce operating flexibility because empty locations are needed for receiving, put-away and stock rotation.
8. Throughput Capacity
Throughput is the volume of goods processed during a period.
It may include:
- Pallets received per hour
- Cases picked per shift
- Orders packed per day
- Vehicles loaded per hour
- Units dispatched per week
A warehouse may have sufficient storage but inadequate receiving, picking or dispatch capacity.
9. Capacity Constraints
Possible constraints include:
- Insufficient storage positions
- Limited staging space
- Too few loading bays
- Equipment shortages
- Labour shortages
- Narrow aisles
- System limitations
- Poor layout
- Product congestion
- Maintenance downtime
- Peak-season demand
Capacity planning should identify the true constraint instead of assuming that more warehouse space is always required.
10. Warehouse Optimisation
Warehouse optimisation improves the use of:
- Space
- Labour
- Equipment
- Inventory
- Information
- Time
- Energy
The objective is to improve service, safety and cost performance across the whole facility.
11. Optimisation Strategies
Slotting
Slotting assigns products to suitable storage and picking locations.
Fast-moving products may be placed:
- Close to dispatch
- At accessible heights
- Near related products
- In larger picking locations
Reducing Travel
Warehouse travel may be reduced through:
- Logical product placement
- Suitable picking routes
- Zone picking
- Batch picking
- Better replenishment
- Correct workstation placement
Improving Space Use
Methods include:
- Suitable racking
- Use of vertical space
- Correct aisle width
- Mezzanine floors
- Product-location reviews
- Removal of obsolete stock
Balancing Work
Work should be distributed across receiving, picking, packing and dispatch to prevent bottlenecks.
Technology and Automation
A WMS, scanning system, conveyors or robotics may improve performance where the cost and operational need justify the investment.
12. Planning Materials-Handling Operations
Materials handling involves moving, protecting, storing and controlling goods within the facility.
Planning should consider:
- Product characteristics
- Movement frequency
- Travel distance
- Load size
- Storage height
- Required speed
- Employee safety
- Equipment capacity
- Facility layout
- Product damage risk
- Operating cost
13. Materials-Handling Principles
Minimise Handling
Each unnecessary movement increases cost, time and damage risk.
Use Suitable Equipment
Equipment must match the product, load and operating environment.
Maintain Continuous Flow
Receiving, storage, picking and dispatch should be coordinated to prevent delays.
Standardise Where Practical
Standard pallets, containers and procedures can improve efficiency and safety.
Protect Products
Handling methods should prevent:
- Crushing
- Impact
- Contamination
- Temperature deviation
- Spillage
- Theft
Separate People and Equipment
Pedestrian walkways, barriers, warning systems and traffic rules reduce collision risk.
14. Equipment Planning
Equipment planning should determine:
- Required equipment type
- Quantity
- Capacity
- Availability
- Operator requirements
- Maintenance needs
- Charging or fuelling arrangements
- Backup requirements
- Safety controls
Equipment should not be used above its rated capacity.
15. Yard Planning and Management
The warehouse yard controls the movement and waiting of vehicles outside the building.
Yard management includes:
- Entry and exit control
- Vehicle identification
- Appointment scheduling
- Parking allocation
- Loading-bay allocation
- Trailer management
- Vehicle movement
- Security
- Driver communication
- Queue management
16. Benefits of Yard Management
Effective yard management can:
- Reduce vehicle waiting time
- Prevent congestion
- Improve loading-bay use
- Improve warehouse security
- Support driver safety
- Improve receiving and dispatch schedules
- Reduce detention costs
- Improve shipment visibility
Example
A distribution centre may allocate timed delivery appointments to suppliers. Vehicles arriving early are directed to a waiting area and called to a bay when receiving capacity becomes available.
17. Warehouse and Facilities Control
Warehouse control monitors whether operations are being completed according to:
- Plans
- Schedules
- Procedures
- Budgets
- Quality standards
- Safety requirements
- Customer-service targets
Control requires accurate operational information.
18. Warehouse-Control Process
- Establish targets and operating standards.
- Allocate work and resources.
- Monitor activities.
- Record performance.
- Compare actual results with targets.
- Identify deviations.
- Investigate causes.
- Implement corrective action.
- Monitor whether the correction is effective.
19. Common Warehouse Deviations
- Inventory discrepancies
- Receiving backlogs
- Delayed put-away
- Picking errors
- Damaged products
- Dispatch delays
- Equipment breakdowns
- Unsafe conditions
- Excessive vehicle waiting
- Space shortages
- High overtime
- System interruptions
Corrective action should address the cause rather than only the immediate symptom.
20. Safety and Regulatory Control
Warehouse planning and control should address requirements relating to:
- Occupational health and safety
- Fire protection
- Emergency exits
- Materials-handling equipment
- Hazardous substances
- Product storage
- Environmental protection
- Waste management
- Food or pharmaceutical controls
- Security
- Incident reporting
The exact requirements depend on the facility and products. Current authorised legal and regulatory information must be used.
21. Personnel Planning
Personnel planning determines the employees and skills required for each warehouse activity.
It considers:
- Workload
- Shift requirements
- Peak periods
- Required competence
- Equipment licences or authorisation
- Safety training
- Supervision
- Leave
- Absenteeism
- Overtime
- Temporary labour
- Backup personnel
22. Personnel-Control Principles
Employees should receive:
- Clear responsibilities
- Work instructions
- Suitable training
- Safe equipment
- Appropriate supervision
- Performance feedback
- Opportunities for development
Performance targets must not encourage unsafe work or poor quality.
23. Warehouse Performance Measures
| Measure | What it evaluates |
|---|---|
| Receiving cycle time | Speed of receiving and recording goods |
| Put-away time | Speed of moving goods into storage |
| Inventory accuracy | Agreement between records and physical stock |
| Picking accuracy | Correctness of picked products and quantities |
| Order cycle time | Time from order release to dispatch |
| On-time dispatch | Orders dispatched according to schedule |
| Storage utilisation | Use of available storage capacity |
| Labour productivity | Output relative to labour input |
| Equipment uptime | Availability of operational equipment |
| Vehicle turnaround time | Time vehicles spend at the facility |
| Damage rate | Goods damaged during warehouse operations |
| Safety incidents | Accidents and unsafe events |
| Cost per order | Warehouse cost associated with processing orders |
| Energy consumption | Energy used by the facility |
Performance should be reviewed across cost, service, productivity, quality and safety.
24. Control Towers and Command Centres
A warehouse control tower provides central visibility across facility operations.
A command centre supports real-time coordination and response, particularly during disruptions.
Information may include:
- Incoming vehicles
- Receiving progress
- Inventory status
- Order priorities
- Picking progress
- Equipment availability
- Loading-bay status
- Outbound schedules
- Operational exceptions
- Performance indicators
25. Control-Tower Functions
- Consolidate operational information
- Identify bottlenecks
- Monitor order progress
- Coordinate departments
- Prioritise urgent work
- Allocate resources
- Manage exceptions
- Communicate with stakeholders
- Support corrective action
Example
A control tower identifies that picking is behind schedule while several delivery vehicles are due to arrive.
Management may:
- Reallocate employees to picking.
- Prioritise orders by departure time.
- Reschedule loading bays.
- Inform transport planners.
- Monitor recovery against the revised plan.
26. Interface with Procurement
The warehouse provides procurement with information about:
- Goods received
- Supplier discrepancies
- Product quality
- Inventory levels
- Replenishment needs
- Supplier delivery performance
Procurement provides the warehouse with:
- Purchase orders
- Expected deliveries
- Supplier information
- Product specifications
- Agreed quantities
- Delivery schedules
27. Interface with Customer-Order Management
Order management provides:
- Customer orders
- Product and quantity requirements
- Delivery priorities
- Special instructions
- Required completion times
The warehouse provides:
- Inventory availability
- Order progress
- Dispatch confirmation
- Shortage information
- Picking or packing exceptions
28. Interface with Transport Operations
Transport provides:
- Vehicle details
- Vehicle capacity
- Arrival times
- Loading requirements
- Route and delivery sequence
The warehouse provides:
- Load readiness
- Shipment dimensions and weight
- Product-handling requirements
- Loading sequence
- Dispatch documentation
- Delay notifications
Poor coordination may create vehicle queues, waiting time and late deliveries.
29. Interface with Technical Maintenance
Maintenance supports:
- Forklifts
- Conveyors
- Racking
- Dock equipment
- Refrigeration
- Lighting
- Fire systems
- Automated equipment
- Backup power
The warehouse should communicate:
- Equipment faults
- Service requirements
- Safety concerns
- Operational priorities
Maintenance should communicate:
- Planned downtime
- Repair progress
- Equipment availability
- Safety restrictions
- Return-to-service approval
30. Information-System Interfaces
Warehouse information may be exchanged with:
- Enterprise resource planning systems
- Inventory systems
- Order-management systems
- Transport-management systems
- Procurement systems
- Customer relationship systems
- Maintenance systems
- Facility-monitoring systems
Integrated information reduces duplication and improves decision-making.
31. Sustainability in Warehouse Planning
Sustainable facility practices may include:
- Energy-efficient lighting
- Solar energy
- Waste separation
- Packaging reduction
- Water conservation
- Equipment-efficiency monitoring
- Reduced unnecessary movement
- Recycling
- Temperature-control efficiency
- Building insulation
Sustainability measures should be assessed for their operational and financial effect.
32. Future Growth and Flexibility
Facilities should be able to respond to:
- Demand growth
- New products
- Online-order growth
- Customer-service changes
- New technology
- Seasonal peaks
- Regulatory changes
Flexibility may be supported through:
- Adjustable racking
- Multipurpose work areas
- Modular equipment
- Scalable systems
- Expansion space
- Cross-trained employees
33. Lesson Summary
- Warehouse planning aligns facilities, people, inventory, equipment and information with supply chain demand.
- Capacity includes storage, throughput, labour, equipment, staging and loading facilities.
- Optimisation improves overall space, time, labour, equipment and service performance.
- Materials-handling systems must suit the products, workflow and safety requirements.
- Yard management coordinates vehicles, appointments, parking and loading bays.
- Warehouse control compares actual performance with plans and initiates corrective action.
- Personnel must be appropriately trained, authorised and safely scheduled.
- Control towers provide central visibility and support exception management.
- Warehousing interfaces with procurement, customer orders, transport and maintenance.
- Facilities should support safety, sustainability, flexibility and future growth.