Develop future operational excellence

The majority of the supply chain costs are locked in the infrastructure. Successfully designing a high performance logistics centre requires the involvement of business knowledge, logistics expertise and real estate development competence

Review of future business requirements

Analyse logistics concept and assess business case

Search and
select location

7 Steps to an ideal logistics concept

1. Determine the objective and location of the facility

The first step should involve defining the objectives and goals of the facility. What is it there for? What market does it service? Is it part of a network? What types of goods will be stored? What is the anticipated life of the facility? Why should it be a greenfield site? Where should the location ideally be located (centre of gravity) and what are the location decision drivers such as access to market or customers, labor, taxes, logistics utilities, workforce availability, regulatory climate and support infrastructure. What is the business case? Should it be lease or a turnkey development solution?

 

It is very useful to write down the objectives, timing, budget and resource requirements so all stakeholders are aware and aligned on the expected outcome and focus on operational and/or design goals.

2. Define volumes and functional requirements

Defining future business growth scenarios is mostly one of the hardest and most time-consuming components of a design project. Developing these scenarios and making the right assumptions is very complex. The most important facts that are needed for logistics planning are:

 

  • Quantities of products to be stored.
  • The throughput velocities, including incoming goods, customer orders, transfers, dispatches and returns.
  • The nature of orders and specific picking requirements, e.g. is picking performed in containers, pallets, cartons, multiple, or single units?

 

Furthermore it is important to understand what functions need to be involved. Everything that needs to be included on the site footprint needs to be described in full, e.g. warehouse, offices, gantry cranes, loading docks, forklift charging areas, dangerous or hazardous goods, cool or cold rooms, clean rooms, manufacturing or packaging operations, security infrastructure, staff facilities, etc. Equally important is that relative dependencies between functions are determined so that the design team can correctly frame functional proximities for best flow and operation by staff.

3. Match storage modes, IT systems and mechanized technologies with volumes

Once the data has been analyzed, the design engineer can start detailing the logistics solution. In case of static racking equipment, mezzanines and the like, or mechanical equipment such as conveyors, carousels, stacker cranes etc., all equipment and systems must be applied according to their purpose, limitations, technical requirements and fit with the volumes handled.

 

A critical aspect of equipment selection is that the designer has expert knowledge of available equipment and technologies, and how to apply them.
This is a complex area that deserves careful consideration. Expert advice from materials handling equipment and software suppliers, industry specialists and developers of Next Level logistics centres is required to ensure that the design is well founded, robust and practical.

4. Logistics flow

One-way flow
The best warehouse operations are those that design their logistics processes with a one-way flow. Whether straight, clockwise, counter clockwise, up or down, make sure it flows in a one-way direction.

 

Flow vs. Capacity.
The second rule of flow is that free movement has priority over storage capacity. If the design compromises on the size and quantity of aisles and movement space, for sake of storage capacity, beware this can cause suboptimal performance over the life of the facility.

5. Handling efficiency

To maximize efficiency keep the product handling and distance of movement
by people to a minimum; ‘more touches and distances, more cost’! Ideally
from 3-5 touches of the product, while goods are the in the logistics centre.

6. Evaluate your concepts

The developed concept design options must be evaluated to ensure that the
objectives are achieved. The two common approaches to assessment are:

 

  • Quantitative analysis: return on investment, payback, cost per order to
    supply, cost per order cubic meter.
  •  Qualitative analysis: reviewing the advantages and disadvantages of options considered. Ideally the evaluation is best performed both individually and in a team workshop environment.

 

An interactive workshop can often reveal a late insight, idea, or missed detail that can significantly impact upon the logistics concept or the building design.

7. Consult widely and involve all stakeholders

As part of the development process all should be regularly consulted as the design involves executives, managers, and operators – not to mention equipment suppliers, developers, architects, builders and councils with regards to planning and legal requirements, operational needs, preferences, ideas and opinions.

 

At Next Level we typically work integrated in a cohesive and dedicated team charged with managing the project from early design phases through to completion.

Our Next Level integrated approach

Find the best suitable location

Develop a competitive logistics and financial concept

Design the most optimal building

Build effective and efficient to deliver the best quality

Maintain the facility up-to-date

Find the best suitable location

Develop a competitive logistics and financial concept

Design the most optimal building

Build effective and efficient to deliver the best quality

Maintain the facility up-to-date

Back