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Principles of Warehouse Layout Optimization and Design

With the explosive growth of eCommerce businesses across every industry, many organizations are adjusting their warehouse layouts and workflows to accommodate smaller, more frequent orders as opposed to larger, weekly shipments. As this adjustment takes place, the importance of properly and productively utilizing your warehouse space becomes increasingly apparent. An efficient warehouse layout streamlines your warehouse operations, speeds up shipping times, simplifies order fulfillment, keeps workers happy by getting rid of useless tasks, improves safety outcomes, increases order picking accuracy and much more.

If you’re considering redesigning your warehouse, first ask yourself one question: what is your ultimate objective in optimizing your warehouse layout? Do you want to optimize your storage? Create more efficient routes through each station? Eliminate bottlenecks and traffic jams? Improve worker safety? Whatever the reason may be, there is a planning process to follow and design best practices to implement that guarantee you’ll get the most out of your warehouse.



Begin with a comprehensive audit of your current warehouse layout to assess the space available before undergoing a large layout makeover. Are there specific HVAC, temperature or lighting requirements? How much shelving and storage will you need for your inventory? Check current travel times within the warehouse from station to station to see where improvements need to be made. When conducting the audit, don’t forget to leave room for expansion later on.


With the help of design software or a warehouse layout consultant, the next step is creating a blueprint or map of your entire warehouse. As you create the blueprint, divide all major areas and product locations within the warehouse into zones and label everything for better warehouse navigation. Labels should clearly list the dimensions and height restrictions of all spaces with accurate and precise measurements, including exits and entryways, locations of all installed equipment, existing support structures like columns and walls, and shelving or storage space. You’ll also want to indicate the direction of every workflow throughout the warehouse.


You can now start implementing the changes. Decide on a layout (see the 3 design options listed in the following section), find ways to maximize your storage space (also in the following section), and get your entire team involved in the redesign. Take advantage of automation technologies throughout the optimization process. While it may take extra time now setting up conveyor lines, voice-based scanners or RFID readers, these solutions will save a tremendous amount of time and money down the road. Not to mention, they make life easier for your warehouse employees by reducing the time it takes to learn the new layout, processes, workflows and equipment.


Test the new layout before making final implementations by doing a walkthrough with members of your staff. Make sure everything is functioning and accessible as it needs to be when everyone begins working on Day 1. Carefully document all last-minute changes that need to be made so they can be shared with relevant stakeholders.


Regardless of the layout you choose, every warehouse or distribution center should have at least 5 core areas: loading/unloading, receiving, storage, picking and packing, and shipping. A return station or station for damaged items is optional but could mean avoiding overloading your receiving station.


The typical warehouse or distribution center will usually be designed in one of three ways:

  1. I-shaped: In an I-shaped design, loading is at one end of the I and shipping is at the other, with storage in the middle.
  2. U-shaped: This is where the loading and shipping zones form the top two points of the U while storage and receiving make up the base of the U.
  3. L-shaped: Loading and receiving form one side of the L and shipping forms the other, with storage space spread throughout both sides.


A good rule of thumb is to dedicate approximately 25% of your total warehouse space to storage. Whether you prefer nice, grocery-store-like aisles, or would rather group equipment and products together in logical “clusters”, make sure everything is easily accessible for your workers. Forklifts, pallet jacks, hand trucks and service carts should be able to move unencumbered through your aisles. All of your most popular or highest-selling items should be placed in easily accessible areas of shelves and closest to shipping lanes to minimize the distance pickers need to travel during picking tasks.


  • If additional storage space is required, add more shelving or rack space vertically.
  • Set up shelving to run in only one direction.
  • Fewer, longer aisles are better than many, shorter ones.
  • Keep the picking area close to the storage area with specific zones for specific products (in-season, most popular, etc.). 
  • Give extra space for loading and unloading.
  • Having a proper loading dock can greatly simplify receiving of pallet shipments.
  • Use a smooth warehouse floor type that minimizes dust buildup and equipment damage. Certain floor types, like pitted concrete, have a tendency to damage rolling carts.


While implementing a warehouse management system (WMS) is great for optimizing your overall supply chain, sometimes it’s not quite enough to get your business where you want it to be. More often than not, we’ve found that, in addition to reputable WMS software, certain layout changes are necessary to improve the flow of goods through your warehouse. Using our Warehouse Setup module, DATASCOPE automatically adopts the SYSPRO warehouse structure. Each SYSPRO warehouse is configured with picking areas, storage zones and bin locations. As each transaction is processed, operators can be directed based on predefined rules in these areas, zones and locations.

DATASCOPE has a deep interest in optimizing distribution centers and we take great joy in upgrading warehouses from dirty “backwaters” to organized, clean machines. We work with a local company to get the basic layout right before completing detailed CAD drawings. Whether you want to build a new greenfield centralized distribution center or simply extend your existing one, our consultants offer high-level project management tips and advice on improving material flows, building correct pallet rack heights, choosing the material handling equipment best suited for your new operation, and integrating your data with advanced analytics for better forecasting.

Schedule a demo of our WMS today to try it for yourself, or contact us to see how you can get started on your own warehouse layout optimization project!

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