Warehousing was supposed to disappear with Lean Manufacturing. This has rarely occurred but
the nature of warehousing often does change from storage-dominance to transaction dominance.
Warehousing buffers inbound shipments from suppliers and outbound orders to customers.
Customers usually order in patterns that are not compatible with the capabilities of the
warehouse suppliers. The amount of storage depends on the disparity between incoming and
outbound shipment patterns.
In addition, the trend to overseas sourcing has increased the need for warehousing and its
importance in the supply chain.
One key to effective design is the relative dominance of picking or storage activity. These
two warehouse functions have opposing requirements.
Techniques that maximize space utilization tend to complicate picking and render it
inefficient while large storage areas increase distance and also reduce picking efficiency.
Ideal picking requires small stocks in dedicated, close locations. This works against storage
Automation of picking, storage, handling and information can compensate for these opposing
requirements to a degree. However, automation is expensive to install and operate.
The figure below shows how different transaction volumes, storage requirements and
technologies lead to different design concepts.
High Pick & High Storage
This indicates a large and active warehouse such as a
Distribution Center (DC). In these situations, high technology automated picking
combined with mechanized handling and high density storage justifies itself.
High Pick & Low Storage
With high picking activity but low storage, the picking area
should be compact and dense and storage is simple. Some automation of picking may
Low Pick & High Storage
Here the requirement is for high density storage with high
bays, multi-levels and dense packing. Low turnover means that picking can be manual or
Low Pick & Low Storage
A simple, small warehouse requires neither automation or
sophisticated storage devices. Stacked pallets, floor storage or simple racks and
shelves suffice. Handling is manual.