Warehouse Design Guide: Layout & Tips for Efficient Warehousing

The various factors in warehouse layout design and how to decide what is right for you based on your business needs.

Warehouses are often designed in a way that can lead to congestion and wasted time and effort. This can be due to the placement of entrances and exits, the overall warehouse layout, or the use of equipment. To avoid congestion, wasted time and effort, it is important to create an efficient layout that minimizes these problems.

empty warehouse

Table of Contents

The Benefits of Good Warehouse Layout Design

The main benefits of the right layout in a warehouse are that it can improve efficiency and productivity. A thought out warehouse design can help employees move around and find items quickly, which can lead to shorter wait times and less wasted time. Additionally, a well-organized warehouse can help reduce mistakes, accidents and injuries.

Improved Efficiency

Finding items faster, moving around easier, shorter wait times. Warehouse management systems can help in finding items faster and improving overall efficiency.

Improved Safety

Fewer accidents and injuries, less equipment wear and tear

warehouse efficiency

Factors to Consider In Your Warehouse Layout Design

When designing a warehouse, there are several factors to consider to create an efficient and effective space.

First, it is important to consider the warehouse’s primary purpose. If the warehouse is primarily for storage, then emphasis should be placed on creating ample space for shelves and pallets. There are many types of pallet racks and various configurations that suit the various types of storage space. Additionally, the choice of material handling equipment, such as forklifts and pallet jacks, plays a crucial role in optimizing aisle spacing, storage infrastructure, and workflow within the warehouse.

Conversely, an eCommerce business may have rapid inventory cycle rates due to their picking and packing, and shipping. A dedicated space for quality control is essential to ensure accurate product inspections, prevent bottlenecks, and maintain overall efficiency.

If the warehouse will be used primarily for distribution, then loading and unloading areas must take priority. These types of functions require a lot of floor space for the staging of inbound and outbound pallets. Developing and understanding a specific warehouse strategy for your business is also critical in this process.

Different Types of Primary Warehouse Uses

Use this list below to help you determine what the primary use of your warehouse or business is. Knowing this helps you to determine the appropriate layout and priority of storage space in your warehouse layout design.

Common Areas in Warehouses

Understanding the various areas most often found in warehouses helps you when designating space for your needs. While you may not need all the items in this list, it’s good to know the main core components of warehouse operations.

different segments of a warehouse like storage areas and picking and packing area
  • Storage. Probably the most basic and common aspect of warehousing is the holding of materials for a set amount of time, aka “storage”. The amount and style of the storage space in layout of your warehouse design depends on the primary use of your warehouse.

  • Inbound and Outbound. A proper receiving process for your warehouse is key to managing inventory and preventing high operational costs. Your staff must check every truckload and shipment upon arrival ensuring that the quantity, seals, and product codes all match the purchasing team’s records. Direct access for trucks and vehicles to loading and unloading areas is crucial for efficiently carrying out these activities.

  • Picking and Packing. Warehouse picking and packing is the process of selecting and preparing items for shipment. This can include selecting the appropriate items from stock, packing them into boxes or other shipping containers, and making sure that all the necessary documentation is in order.

  • Offices. Even the most basic storage operations need a space to process data and other business activities. Offices enable employees to do this. Additionally, offices function as meeting spaces for employees or as a space to review and fill out paperwork. The amount of office space you need depends largely on the primary use of your warehouse.

Other Important Factors

Other important factors to consider include traffic flow, warehouse management system (WMS) compatibility, and packing and shipping requirements. By taking all of these factors into account, you can layout the warehouse design so that it optimizes space and increases efficiency.

The Basics of Warehouse Layout: 3 Core Components

There are several factors to consider when designing your warehouse layout, including the type of warehouse you are operating, the nature of your business, and the traffic flow through your warehouse.

  1. How you use the space. Your warehouse layout should be designed to make the most of your available space and increase efficiency. Consider using adjustable pallet racks, which can be adjusted in height depending on the size of your items. Additionally, use dividers or separators to create distinct areas for different types of goods. This can help reduce confusion and minimize mistakes when stocking and picking items.
  2. The type of equipment. In addition to the layout of your warehouse, consider investing in additional equipment such as conveyor belts and pallet jacks to help move goods quickly and efficiently. This can help reduce travel time between areas of the warehouse and improve productivity.
  3. Safety measures. Finally, make sure that your warehouse is designed with safety in mind. Create clear pathways, use non-slip flooring, and install lighting in dark or dimly lit areas. This will help reduce the risk of accidents and injuries.

By following these guidelines, you can design an efficient warehouse layout that optimizes your space, reduces safety risks, and increases productivity.

Types of Warehouse Layouts

Selecting the most efficient layout for your warehouse is crucial for optimizing storage and streamlining the shipping process. The most common warehouse layouts are L-shaped, U-shaped, and straight. Each has its advantages and disadvantages, so it’s important to select the layout that best suits your needs.

L shaped warehouse layout

L Shape Warehouse Layout

A very common type of warehouse layout is the L-shaped layout, which is typically used for warehouses that are long and narrow. This type of layout allows for a good deal of flexibility in terms of traffic flow and warehouse space utilization. It also helps separate inbound and outbound shipping areas which reduces congestion. However, it can be more difficult to establish good segments and flow than other types of warehouse layouts.

U shaped warehouse layout

U Shape Warehouse Layout

A U shaped warehouse is square or rectangular and has a layout that forms a U shape. This warehouse shape is effective at keeping inbound and outbound traffic separate. This helps minimize congestion so materials can flow smoothly.

A U shaped warehouse layout is not well suited for a service such as cross-docking due to the longer distance and more irregular path required to move materials.

Straight warehouse layout

Straight Warehouse Layout

Finally, the straight layout is probably the most common type of warehouse layout. This layout allows for a great deal of flexibility in terms of warehouse space utilization, but it can be difficult to manage due to its lack of structure.

For certain types of operations, it can create bottlenecks if not well segmented. However, the straight warehouse layout (especially when docks are on opposite sides) works well for a cross-docking process.

Steps for Designing a Warehouse Layout That Meets Your Need: A Warehouse Planning Process

There are a lot of similarities between various types of warehouses. For example, every warehouse needs receiving and shipping areas. However different businesses have specific needs depending on the type of work that occurs in the warehouse. An eCommerce fulfillment company is going to operate differently than a large cross-docking warehouse. Here are some steps to help create a warehouse layout design that will work for your needs:

Step 1: Evaluate the Type of Warehouse Space

From the list in the previous section, you must first analyze your space and its natural shape. Is your warehouse an I shape or an L shape? Or perhaps you have a basic rectangular or square-shaped facility. Take note of this and the location of doors, windows, docks, plumbing, or other features that are not easily relocated.

Step 2: Determine the Total Usable Space

The next step when planning your warehouse layout is to obtain a good idea of what raw materials you are working with. To do this, you need to determine the total amount of usable storage space by volume (not just square feet). Knowing your volume of space is important because the clearance height of your warehouse is the number 1 most impactful metric in determining its capacity.

Consider this, going from a 15-foot to a 20-foot ceiling clearance height increases your warehouse volume by over 33%! If you lease your warehouse, most likely you pay per square foot. But it’s always worth evaluating the ceiling clearance height in your cost analysis. Going up is almost always more effective than going out.

Need help calculating usable warehouse space?

We have developed a simple tool that immediately calculates the total usable volume for you with some basic inputs.

Step 3: Determine the Priority of Your Warehouse Processes

Do you run an eCommerce business? Then you will need a layout that suits order fulfillment operations. Are you a small company that only needs a small warehouse space? Then what may be most important to you is how efficient your storage space is. If you primarily perform cross-docking procedures, then a large open floor area for your receiving and outbound areas may be more important. In any case, you must first understand the priority of your specific needs.

Step 4: Determine the Total Required Space For Each Process

After you have laid out the priorities for your warehouse, you need to know how much space is required for those processes. This is where you allow the needs of your particular business to drive the space allotment. If your business has 100 pallet spaces cycling per month, then you know that you need at least that amount in your storage areas. You should never exceed 80% of your capacity as a rule of thumb.

In this step, you can look ahead to the type of equipment that is utilized in each space. You will need to accommodate not just the total number of square feet, but also any special requirements such as clearances around dock doors, receiving areas, forklifts, conveyors, or other machinery.

Make sure to plan for the future!

The goal of almost any company is to grow. Therefore you need to plan for your future growth goals which may mean that the required space you allot to each segment of your process is more than your current consumption.

Step 5: Partition Each Space According to The Flow of Materials

In this step, you imagine that materials are received at your facility. In doing so, you will lay out the flow or arrangement each section of the warehouse as it moves through it. This usually means that your design process starts with the receiving area, which is an important place to start. Often the receiving area in warehouse layout designs is ignored which causes many problems with in-flow and tracking down the road.

From there, your inbound material may move to the storage area, or possibly a workstation if you have a QC process or other processes. Then you can determine the location and size of those segments of your operations. The important part of this process is considering how smoothly material transitions from one area to the next. Repeat this process until you arrive at your outbound area.

Step 6: Experiment and Evaluate

Once you have the first draft of your partitioned space, you will need to evaluate it against other layout options. This is where you can take different ideas, ideally from other stakeholders in your company, and test them against each other. On-site experimentation is a great way to accomplish this, either by walking the warehouse floor or digital warehouse layout tools.

Step 7: Select Appropriate Equipment

Selecting equipment is one of the final steps in warehouse layout design. That’s because the decision of what kind of equipment to use should not drive the layout, rather the layout (and specific business needs) drives the equipment selection. For example, a small warehouse may need higher-density storage solutions due to its smaller warehouse size.

For each area of your warehouse, you need to determine the most appropriate equipment to meet your needs. Not all warehouse equipment is created equal, nor for the same purpose. A cross-docking warehouse does not need carton storage solutions. Likewise, a large industrial warehouse may not need climate-controlled storage where some eCommerce products do.

The key is to let your warehouse and business needs dictate your equipment needs, not the other way around. Of course, you should always look for ways to improve efficiency that fit within your overall budget. Choosing the right material handling equipment, such as forklifts, pallet jacks, shelving, and racking systems, is crucial to optimize aisle spacing, storage infrastructure, safety measures, and workflow within the warehouse.

Step 8: Create an Implementation Plan

The final step in creating a warehouse layout design is to create a plan for making your design a reality. This involves the inclusion of managers or other stakeholders in the various departments of your company.

Your final warehouse layout implementation plan should have at least 3 core components:







Completing Your Warehouse Layout Design

The tendency for anyone is to pat ourselves on the back and enjoy the fruits of our labor after completing a large project. This is good, but once you have installed and implemented your warehouse layout your work has only begun.

This is because any good warehouse operation must incorporate lean principles into the overall warehouse. Lean principles ensure that your entire process is constantly improving and focused on long-term correction rather than band-aid solutions.

Warehouse Supply Chain illustration

Final Tip: Your Warehouse Is Your Supply Chain

One aspect of warehouse management that is not often considered is how a poor layout for your warehouse can contribute to your supply chain. Consider this: there are no steps in the supply chain that are completely isolated from the rest of the chain.

Key Takeaway:

Each link in the supply chain has an affect on all the other links. Your warehouse efficiency is no different.

While some links tend to affect the overall chain more or less than others, they all have an effect. Good warehouse layout and proper warehouse management are a key factor in minimizing negative effects on your supply chain. This reduces backorders which results in unplanned shifts in demand putting pressure on suppliers or other providers.

Do you need warehousing help?

If you’re debating whether or not to outsource your warehousing efforts, please consider our classic warehouse services. What makes our services classic? There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.

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There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.

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