When working with clients on warehouse sizing projects we conduct an analysis of the type of picking operations that will be performed, and then build this into the design concept, from which we can determine the warehouse sizing details.

Holding requirements include defining the physical size of the inventory on hand. Unless the on-hand total is fairly stable across the year, it is usually preferable to plan for a high but not peak inventory level. To fully utilize the space, it is important to determine how product needs to be stored (e.g., floor stacked, pallet rack, shelving, case flow) and how much of each fixture type will be required. Cube data (length × width × height) for each product is a very useful kind of information for many aspects of capacity planning. Workflow requirements encompass everything from how product arrives to how it leaves the facility and everything in between. The objectives of this aspect of planning are to minimize product handling, to reduce travel as much as possible, and to minimize the resource requirements (labor, packaging, transportation) to move the product to the customer. Among the factors to consider are the following: (1) Link the way product arrives with where it is to be stored (location capacity). If possible, store all of a product in one location and pick from that location as well. This does not work if stock rotation matters (expiration dates, serial number, or lot control issues). (2) Locate the highest-volume products (greatest number of orders, not physical size) closest to the outbound shipping area to minimize the travel required to pick and ship orders for them. (3) Because vertical travel is always slower, locate as many products as possible on or close to the floor. (4) Allow for staging space to handle product that is in transit, such as items waiting to be put away. Future requirements include accommodating growth in the form of higher volume of existing SKUs, an increase in the number of SKUs, more customers, and more orders. If expansion is already a thought, consider how that will be accomplished from the outset. If possible, expand the space without disrupting ongoing operations. Factor in the impact of additional space on flow, not just holding capacity.