– Supply Chain Insight –
So, you invested BIG dollars in your warehouse expansion. Don’t let that investment fall by the wayside.
We’ve seen it happen time and time again…
Expansion projects are an inevitable reality for most warehousing and distribution professionals, whether it’s a physical expansion of the existing footprint or an expansion / re-design of the internal layout without touching the building itself.
While expanding the physical footprint is, of course, a significant project, even a re-design of an internal layout can be expensive and disruptive. Both require significant investment when it comes to time and resources and should be done right, not just to ensure the activation is as smooth as possible but to maximize the return on investment.
An expansion project is usually proposed when more operating capacity is needed. This is could be to alleviate constant capacity constraints, or it could happen as a part of an optimization project to reduce waste and increase efficiency. Unfortunately, an expansion on its own does not guarantee either of those things.
While I don’t want to oversimplify the process, I want to highlight the most important steps and when each should be taken. If you have an expansion project on the horizon and want to ensure you’re setting yourself up for success, follow these steps.
- Understand your detailed requirements
It goes without saying that, before you break ground or invest in any equipment, you need to not only understand your requirements but also clearly define the ultimate goal of the project. The reality is, if you’re spending the money on an expansion project, there is a reason behind it. An expansion obviously creates more physical space but you should be asking yourself why you need the extra space. Is it to cover potential growth? is it to alleviate dangerous and unproductive bottlenecks? Is it to create more layout flexibility? It sounds basic but it’s a step often skipped, believe it or not.
2. Connect your requirements to multiple conceptual designs
Now, while you may be restricted when it comes to where the expansion can go and how big it can be, you do have control over how you adjust your layout to the expanded area and what equipment you use.
With your goals and requirements in mind, we always recommend generating at least 4 different concepts to work from. You can go from best-case-scenario all the way down to the most conservative design or you can choose to conceptualize different designs altogether based on investment required, complexity, implementation time, expected benefit, etc. This part of the process takes time, lots of data, and specialized tools, but generating multiple concepts can help you more easily visualize all the different trade-offs and options you may have. Most avoid this step – and ultimately just work towards a single concept – not because they don’t want to compare and contrast but because they don’t have the tools to do it feasibly.
2. Choose a concept that works, and make sure it’s connected to your final design
One of the biggest missteps an organization (or project team) can make when expanding an existing site is to put work into the conceptual design but not connect it with the final product. We’ve seen this happen too many times, and it doesn’t just risk your ROI, it risks complete project failure on the day of implementation. This points to the importance of ensuring your conceptual design is feasible and it also points to the importance of alignment and follow-through, especially if multiple teams are involved.
3. Ensure you have a method of maintaining your layout year-round
The value of consistent maintenance of slotting and the overall layout cannot be understated, especially when it comes to maximize the return on an investment like this, and especially for seasonal high-volume operations.
Usually when planning an ROI, you will base expectations on your design and, if you’ve designed your layout properly, it will reflect an optimized state. The problem is, without proper maintenance of slotting (and potentially some seasonal layout adjustments) the layout won’t stay in an optimized state for long. If you’ve annualized your return, be sure that you have the ability to ensure your layout is optimal year-round.
No expansions or site activations on the immediate horizon, but want to make sure your existing sites are optimized and waste free? A no-obligation Strategic Opportunity Assessment is a great place to start.