Final Group Project
- 1. 1 WAREHOUSE DESIGN & LAYOUT PROJECT 3 BY: SAURABH PATIL PRATEEK MISHRA ABHISHEK BOLIMERA
- 2. 2 INDEX: LIST OF DIAGRAM: SR.NO. CONTENT PAGE NO. 1. Introduction 1 2. Warehouse Operations 2 3. Product Description 3 4. Calculations 4 5. Layout 9 6. Racking Arrangements 10 7. Costing 15 8. Assumptions 17 DIAGRAM NO. TITLE PAGE NO. 1. Warehouse Layout 1 2. Plant layout 9 3. Pallet Live Racking 10 4. Fork Lift 10 5. Double Deep Racking 11 6. Reach Truck 12 7. Narrow Aisle Racking 13 8. Narrow Aisle Truck 13 9. Cost Analysis 16
- 3. 3 LIST OF TABLE: TABLE NO. TITLE PAGE NO. 1. List of Products 3 2. Pallet requirement 4 3. Demand analysis 5 4. Pallet Calculation for Receiving Area 5 5. Pallet Calculation for Shipping Dock 6 6. Pallet Calculation for Picking Area 7 7. Pallet Calculation of Sorting Area 8 8. Pallet Calculation for Bulk Storage 8 9. Plant Layout 9 10. Forklift description 10 11. Reach Truck Description 12 12. Narrow Aisle Truck Description 14 13. Warehouse Leasing Cost 15 14. Racking Cost 15 15. Equipment Cost 15 16. Indirect Cost 16 17. Total Cost 16
- 4. 1 1. INTRODUCTION: Warehouses are commercial building for storage of goods. Warehouses are used by manufactures, importers, exporters, wholesalers, transport businesses, customs etc. It is important to understand the design of a warehouse for smooth flow of operations like loading, unloading of goods, movement of goods within warehouse and their storage in their respective place. The dimensions and characteristics of the warehouse infrastructure are important and must be accurate. They are important for the design of shelves, to calculate the capacity of the installations and the distribution of the goods inside the warehouse. There are various things which need to be considered access, floors, windows, columns, boxes, lines and power lines. Buildings regulations, design according to weather and location should be studied properly. Diagram1: Warehouse layout
- 5. 2 2. WAREHOUSE OPERATIONS: Operation of warehouse depends upon the type of industry and the products stored. Receiving: It starts with advance shipping notification before arrival of goods (ASN). It helps in planning proper unloading of products which helps in completing rest of operations faster. Storage: It is one of the major activities of the warehouse. Products are divided according to their category and then stored in their respective places. Order Picking: When a customer order is received, a checking process should be performed to verify that the products are available for the customer. Then a picking list guide is produced to help the pickers in their activities. Packing and shipping: Products are packed and then they are ready to be shipped. Packing is preferred near the out area as product can get damaged if more movement is done. Pallet storage and Racking: Pallet storage systems are considered while designing warehouse. Pallet is a frame on to which goods are loaded in bulk.
- 6. 3 3. PRODUCT DESCRIPTION: This particular warehouse deals with 20 different products. There are 5 different items that fall into the ‘A’ category, 5 products that falls under the ‘B’ category and 10 products in ‘C’ category. The names of the individual products along with their demands are listed in the below table. SR. NO. SKU CATEGORY DEMAND / MONTH DSI 1 Kit Kat A1 1 Million 15 Days 2 Mars A2 1 Million 15 Days 3 3 Musketeers A3 1 Million 15 Days 4 Milky way bar A4 1 Million 15 Days 5 Baby Ruth A5 1 Million 15 Days 6 Nestle Butterfinger B1 300 K 30 Days 7 Hershey bar B2 300 K 30 Days 8 Cadbury chocolate B3 300 K 30 Days 9 Almond joy B4 300 K 30 Days 10 Bounty B5 300 K 30 Days 11 Galaxy C1 50 K 60 Days 12 Hershey’s C2 50 K 60 Days 13 Reggie bar C3 50 K 60 Days 14 Snickers C4 50 K 60 Days 15 Sky bar C5 50 K 60 Days 16 Toblerone C6 50 K 60 Days 17 Twix C7 50 K 60 Days 18 Uno C8 50 K 60 Days 19 Zero bar C9 50 K 60 Days 20 Welch’s fudge C10 50K 60 Days Table 1: List of products
- 7. 4 4. CALCULATION 4.1 CALCULATIONS OF SIZE OF EACH PRODUCT: Pallet Size: 48*40*4.5” (Taking U.S. Standard Pallet) Carton Size: 16*8*10” (This will account for 100% Utilization of the pallet) Size of product A, B & C: 8*4*8” (Same size for all three products) Catron’s per pallets = Pallet size/ Carton size = (48*40*60) / (16*8*10) = 90 carton/pallets Item’s per carton = Carton size/ Item size = (16*8*10) / (8*4*8) = 5 items/carton Item’s per pallet = Pallet size/ Item size = (48*40*60) / (8*4*8) = 450 items/pallet Number of pallets for demand: Table 2: Pallet requirements Total demand = No. of items * Demand Pallets required = Total demand/450(items/pallet) No. OF ITEMS DEMAND TOTAL DEMAND PALLETS REQUIRED PRODUCT A 5 1000000 5000000 11112 PRODUCT B 5 300000 1500000 3334 PRODUCT C 10 50000 500000 2223
- 8. 5 4.2 INVENTORY CALCULATIONS: Inventory in days for the items o A items: 15 days o B items: 30 days o C items: 60 days DEMAND STORAGE DAYS ACTUAL DEMAND SAFETY STOCK DEMAND WITH SS FINAL DEMAND PRODUCTS A 5000000 15 5000000/2= 2500000 10% 250000 2500000+250000 = 2750000 PRODUCTS B 1500000 30 1500000 20% 300000 1500000+300000 = 1800000 PRODUCTS C 5000000 60 5000000*2= 1000000 30% 300000 1000000+300000 = 1300000 Table 3: Demand analysis Actual demand = Demand*number of months Demand with safety stock = Actual demand*Safety Stock Final Demand = Demand+ Demand with safety stock 4.3 CALCULATION FOR RECEIVING DOCK: The receiving dock is designed to hold one day of incoming goods and can be block stacked 2 Pallets high. The assumption is that the pallets would be moved into bulk storage area within this time frame. Since the pallets contain the same product, we can safely assume that we utilize 100% of the pallet space. DEMAND DAILY DEMAND (Demand/30Days) PALLETS NEEDED (Demand/450) PRODUCTS A 5000000 166667 371 PRODUCTS B 1500000 50000 112 PRODUCTS C 500000 16667 38 TOTAL 512 Table 4: Pallet calculation for receiving area
- 9. 6 Pallet Needed = Demand/(Items/Pallets) 512 Pallets are needed in the receiving dock. With the reference (http://www.spartanwarehouse.com/warehouse-space-calculator) we can calculate the total area needed for the Receiving Deck. We get 4267 Sq. ft. with 80%Utilization. 4.4 CALCULATION FOR SHIPPING DOCK: The Shipping dock (Dispatch Area) is designed to hold 1.5days worth of goods, within this timeframe the goods will be loaded onto an outgoing truck. Since the pallets are essentially mixed, they cannot be safely stacked over each other. Thus, we assume a 70% cubic efficiency on each of these outgoing pallets. Demand Daily Demand (Demand/30Days) Demand for 1.5day (Daily demand*1.5) Pallets needed (Demand/315) PRODUCTS A 5000000 166667 250000 794 PRODUCTS B 1500000 50000 75000 238 PRODUCTS C 500000 16667 25000 80 TOTAL 1112 Table 5: Pallet calculation for shipping dock Pallet Needed = Demand/(Items/Pallets) (As the cubic efficiency is only 70%, we would consider it to be 450 instead of 315 i.e. 70% of 450 is 315) We require 1112 pallets in shipping docks With the reference (http://www.spartanwarehouse.com/warehouse-space-calculator) we can calculate the total area needed for the Shipping Deck. Thus, we get 18533 Sq. ft. for 80% space utilization Pallet efficiency is 70% as these pallets cannot be stacked to 100% since they are made up of mixed product and would not stack safely.
- 10. 7 4.5 CALCULATION FOR PICKING AREA: The picking area will be loaded at the end of each day with 1 full day of product for each of the 20 SKUs sold. This product will be in full pallets, any partial pallets left in the picking area at day’s end will remain there. DEMAND DAILY DEMAND (DEMAND/30DAYS) PALLETS NEEDED (DEMAND/450) PRODUCTS A 5000000 166667 371 PRODUCTS B 1500000 50000 112 PRODUCTS C 500000 16667 38 TOTAL 512 Table 6: Pallet calculation for picking area Pallet Needed = Demand/(Items/Pallets) 512 Pallets are needed in the receiving dock. With the reference (http://www.spartanwarehouse.com/warehouse-space-calculator) we can calculate the total area needed for the Shipping Deck. Thus, we get 8533 Sq. ft. for 80% space utilization Thus, to give some leeway for products left over from previous days picking, we calculate the picking area to be of 8600 sq.-ft. 4.7 CALCULATION OF SORTATION AREA: The sortation area is designed to hold 1 hour worth of goods, and the space utilization is just 10% of the actual foot print of the product. This is because there are a number of packaging equipment’s which takes up floor space. Here the pallets are sorted; stretch wrapped, labelled and is sent to the correct dock so that it can be loaded onto an outgoing truck.
- 11. 8 DAILY DEMAND (Demand/30Days) DEMAND/HOUR (Demand/16) PALLETS NEEDED (Demand/450) PRODUCTS A 166667 10417 23 PRODUCTS B 50000 3125 7 CPRODUCTS 16667 1042 3 TOTAL 33 Table 7: Pallets calculation for sorting area Thus, we get 860 Sq. Ft for 10% utilization as these pallets cannot be stacked to 100 %since they are made up of mixed product and would not stack safely. 4.8 CALCULATIONS FOR BULK STORAGE: DEMAND SAFETY STOCK DEMAND WITH SS ITEMS/ PALLET NO. OF PALLETS AREA (sq. ft.) PRODUCT A 2500000 1.1 2750000 450 5556 21166 PRODUCT B 1500000 1.2 1800000 450 3334 12693 PRODUCT C 1000000 1.3 1300000 450 2223 8469 TOTAL 11113 42328 Table 8: Pallets calculation for bulk storage Total number of pallets required are 11113 and the area is 42328 with 70% efficiency.
- 12. 9 5. LAYOUT Following the final layout of the warehouse. Minor adjustments have been done to the shape so that the layout looks for practical implementations. SR. NO. TYPE OF AREA DIMENSIONS (L*B) TOTAL AREA (SQ. FT.) PERCENTAGE 1 Receiving Dock 160*26 4267 5.72% 2 Shipping Dock 200*80 18533 24.84% 3 Picking Area 240*45 8600 11.53% 4 Sorting Area 85*10 860 1.15% 5 Bulk Storage Area 350*120 42328 56.76% TOTAL 470*160 74600 100% Table 9: Plant layout Thus, Total Area of the Warehouse according to the layout will be: 470*160=74600 sq. ft. Diagram 2: Plant layout
- 13. 10 6. RACKING ARRANGEMENT FOR PRODUCT A: Racking System: Live Pallet Racking Diagram 3: Live pallet racking Diagram 4:Fork lift The bulk storage of product A is going to comprise of 278 columns containing 20 pallets each. Let assume 8.5 ft. between each or these sections. Now let’s assume 0.5 ft. between each of the columns for the supporting structure of the racking. Advantages of Pallet Live Racking o Enables perfect pallet turnover (FIFO SYSTEM). o Maximum capacity as storage system is compact. o Time and space saved in pallet handling. Picking equipment: Counter Balanced Fork Lift We chose to employ counter balanced forklift to undertake operation on live pallet racking. Since the forklift will be operating inside the warehouse so to keep the emissions inside the warehouse limited it is advisable to operate an electric counter balanced forklift. Table10: Forklift description Manufacturer Toyota Model 7FBEST10 Capacity 1 – 1.5 tons Type of Drive Electric Overall Length 2365 mm Overall Width 990 mm Turning Radius 1230 mm Cost $16,033
- 14. 11 The racking system we are implementing for Product A bulk storage is Live Pallet Racking and we are stacking 5 pallets high. Using these conditions, we have calculated that dimensions of the Product A bulk storage should be 300 ft. long and 70 ft. wide which would occupy 2100 sq. ft. of area which is well within the allocated area of 21166 sq. ft. for Product A bulk storage o Length = 300 ft. o Width = 70 ft. o Height = 5 pallets o Area = L*B = 300 * 70 = 21000 sq. ft. FOR PRODUCT B: Racking System: Double Deep Racking Diagram 5: Double deep racking Advantages of Double Deep Racking o Increased storage capacity compared with Selective Racking o Medium to low storage system. o Can increase pallet storage by as much as 10-15% depending on racking layout.
- 15. 12 Picking Equipment: Reach Truck To operate on a double deep racking the forklift needs to reach inward towards to racking to store or pick a pallet that is stored against the, hence we need to employ a reach truck and again to minimize the emissions inside the warehouse we need to employ an electric forklift. Diagram 6: Reach truck Manufacturer Toyota Model 8BDRY15 Capacity 3 – 3.5 tons Type of Drive Electric Overall Length 2200 mm Overall Width 1023 mm Turning Radius 1158 mm Cost $36,000 Table11: Reach truck description The racking system we are implementing for Product B bulk storage is Double Deep Racking and we are stacking 5 pallets high. Using these conditions, we have calculated that dimensions of the Product B bulk storage should be 210 ft. long and 60 ft. wide which would occupy 12600 sq. ft. of area which is well within the allocated area of 12693 sq. ft. for Product B bulk storage. o Length = 210 ft. o Width = 60 ft. o Height = 5 pallets o Area = L*B = 210 * 60 = 12600 sq. ft.
- 16. 13 FOR PRODUCT C: Racking System: Narrow Aisle Racking Diagram 7: Narrow Aisle racking Advantages of Narrow Aisle racking o Less floor area for aisle o FIFO inventory management o Design Flexibility o Immediate access to every pallet. Diagram 8: Narrow aisle truck
- 17. 14 The isles of powered mobile racking are too narrow for a common counter balanced forklift to access, hence a narrow aisle truck needs to employed. Manufacturer Toyota Model BTVECTOR Capacity 1.25 – 1.5 tons Type of Drive Electric Overall Length 1700 mm Overall Width 1430 mm Turning Radius 1023 mm Cost $15,000 Table 12: Narrow aisle truck description The racking system we are implementing for Product C bulk storage is Narrow Aisle Racking and we are stacking 5 pallets high. Using these conditions, we have calculated that dimensions of the Product C bulk storage should be 286 ft. long and 29 ft. wide which would occupy 8294 sq. ft. of area which is well within the allocated area of 8469 sq. ft. for Product C bulk storage o Length = 300 ft. o Width = 70 ft. o Height = 5 pallets o Area = L*B = 300 * 70 = 2100 sq. ft.
- 18. 15 7. COSTING: Costing of the warehouse is done on annual basis. Warehouse construction cost is taken and all the direct and indirect cost have been included. COST OF WAREHOUSE: UTILITY COST/sq. ft. ($) TOTAL AREA (Sq. ft.) TOTAL COST ($) Warehouse 60 74600 4476000 Table 13: Leasing cost COST OF RACKING: PRODUCT TYPE OF RACKING COST/RACK ($) TOTAL RACKS COST OF RACKING ($) A Flow Rack 100 556 55600 B Double-Deep Racking 70 150 10500 C Narrow aisle Racking 50 150 7500 TOTAL 73600 Table 14: Racking cost Cost of equipment: TYPE OF RACKING EQUIPMENT COST OF EQUIPMENT ($) NUMBER OF EQUIPMENTS TOTAL COST ($) Flow Rack Counter Balanced fork lift 17000 2 34000 Double-Deep Racking Electric fork lift 36000 1 36000 Narrow aisle Racking Narrow aisle truck 15000 2 30000 TOTAL 100000 Table 15: Equipment cost
- 19. 16 INDIRECT COST: UTILITY COST/sq. ft. ($) TOTAL AREA (Sq. ft.) TOTAL COST ($) Electricity 0.24 74600 17904 Maintenance 0.15 74600 11190 Office equipment 0.1 74600 7460 Insurance 0.3 74600 22380 TOTAL 58934 Table 16: Indirect cost TOTAL COST: UTILITY COST ($) Cost of warehouse 4476000 Cost of racking 73600 Cost of equipment 100000 Indirect cost 58934 TOTAL COST 4708534 Table 17: Total cost Thus, the total cost of warehouse for a single year would be $729334. Diagram 9: Cost representation diagram 4476000, 95% 73600, 2% 100000, 2%58934, 1% COST ANALYSIS Warehouse Racking Equipments Indirect cost
- 20. 17 NOTE: Cost is taken warehouse electricity, equipment etc. is from google 8. ASSUMPTIONS: o One material picking equipment of each kind is sufficient for handling the volume of goods. o The warehouse is located in a corner such that it is feasible to locate two dock doors on either side of the warehouse. o We ignore the weight constraints associated with the product. o We do not calculate costs for dock doors, offices or employee lounges. o We assume that products are stored linearly, there is no application of random storage in this warehouse.