Warehouse Design Report: Evaluating CBS Fulfillment Center Design

This report analyzes the design of the National Fulfillment Centre at Cranfield Business Supplies (CBS). It explores the importance of warehouse design within the supply chain, emphasizing its impact on cost and efficiency. The report delves into various managerial factors affected by warehouse redesign, including inventory optimization, redundancy, and customer management. It examines the benefits of the proposed design, focusing on inbound and outbound optimization, operational profiling, and warehouse change objectives. The analysis highlights areas for improvement, such as warehouse zoning and overall structure, and provides recommendations for cost-effectiveness and storage methods. The report references key literature on warehouse design and management to support its arguments, ultimately aiming to provide a comprehensive evaluation and recommendations for enhancing the CBS warehouse design.

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Introduction
Warehouses are among the essential part of the supply chain and logistics system. The makeup
of 20% of the overall logistics cost. In the US, the operation cost of a warehouse is 20%, and in
Europe, it accounts for 25% of the operations costs. This shows their importance from the cost
perspective. Thus, they should be effectively and efficiently designed, and their functions should
be in high-performance levels to minimize the operations costs and to ensure efficiency.
Although most of the time, warehouses are related to their high price, an optimal and well-
managed warehouse management system is needed, and it is critical to the modern concept of a
supply chain system (Ekren 2020). It plays a crucial role in managing successful business
operations and logistical processes. At the same time, customers visit the warehouse, make
orders which should be picked, transported, and delivered to the pickup points of the customers.
Furthermore, several missions require to be optimally managed. They include realizing the
transportation economies, providing the market with various product mixes, ensuring
manufacturing companies achieve production economies, provide products buffer location, and
provide a temporary place of materials for recycling or disposal.
An adequately managed warehouse enjoys easy access to the market, efficient product delivery
time, sufficient storage space, and good physical location. It is essential to improve the overall
efficiency of the warehouse's functionality and management to make sure that the inventory
levels are properly managed and are reduced as much as possible. To fulfill this objective and
obtained a well-managed and functional warehouse, there are several critical factors to consider
when analyzing the overall warehouse performance (De Koster, Johnson, and Roy, 2017). These
factors include workforce turnover, on-time delivery, product distribution cost, customer order
picking accuracy, and the total inventory capacity.

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One of the critical factors that can significantly impact the overall performance of a warehouse is
warehouse designing. Getting a perfectly designed warehouse will decrease the warehouse area.
It will minimize the traveling time, and the distance covered and properly selecting the best route
to pick orders will significantly reduce the overall operation costs. Because among the prominent
users of the total warehouse costs, time, and labor is order picking, it can be improved by
developing a functional warehouse design (Di Tria, Lefons, and Tangorra, 2017). During the
redesigning process of a warehouse, various factors are thus affected. This report will highlight
various managerial factors that are affected by the redesigning of the national fulfillment center
at Cranfield Business Supplies.
Fulfillment center
Fulfillment centers make it possible for eCommerce merchants to outsource warehouse services
and product shipping services. This relieves them from creating unnecessary physical storage
spaces to keep the products. This is beneficial to the merchant with limited ability to manage
their inventories. Warehouses have numerous functions in the modern commerce sector. some of
the tasks performed by warehouses are illustrated in the figure below

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Redesigning these fulfillment centers have a great impact on the overall management of the
warehouses. Some of the management issues that will be affected are discussed below
Inventory optimization
Warehouse redesigning significantly affects the types of products in the warehouse, which best
satisfies the total demands of the customers. Warehouse management typically focuses on
projecting inventory reordering and ensuring inventory accuracy is maintained throughout the
distribution and ordering process. Redesigning will create a managerial struggle to establish the
right inventory mix, especially when it comes to fulfilling seasonal changes in the warehouse.
Having the wrong inventory at the warehouse is as detrimental as having an empty warehouse.
Proper warehouse management practices work towards solving the possible occurrences of
wrong stock in the warehouse.
Redundancy

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Designing a warehouse will, in most cases, lead to repeating various processes over and over
during the general operations of the warehouse. It can range from repeatedly sending an
inventory to a wrong department, conducting inventory stock-taking, or implanting various
operational principles to achieve the same outcome that only requires a single strategy (Sprock,
Murrenhoff, and McGinnis, 2017). Redundancy occurs in warehouse designing due to a possible
occurrence of a mistake during the designing process that required an extra activity checkpoint.
Unfortunately, process repetition increases the overall operating costs and does not solve the
intended managerial problem.
Customer management
Proper customer management is critical to the success of any warehouse. It forms the overall
bedrock for all managerial practices. When designing the warehouse, it is imperative to make
sure that proper customer service policies and physical layout requirements of the warehouse are
met. It is also essential to align the overall managerial approaches to provide top of the art
customer service. To achieve this, the warehouse management team is required to be on the
frontline when dealing with customer management daily. From time to time, the weight of
unsatisfied customers is felt. Most fulfillment centers are setting the pace in providing a variety
of product to the customers, and customers have generally raised their expectation levels that are
to be met satisfactorily. Designing can lead to the management failing to identify the shift in the
customer's expectations, which means that more and more customers are overly demanding
impeccable order accuracy, reduced shipping time, and flawless customer service.
Warehouse layout design optimization is critical to the overall effectiveness of operations
success. It does improve not only the total warehouse space but also increases the overall
warehouse productivity, which leads to cost reduction. This ensures that goals and objectives are

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met with customers getting satisfactory services by ensuring that their orders are met on time all
the time. The key to attain this is to redesign the overall inventory flow, using efficient material
handling equipment, and employing the right people to meet the strategical requirement of the
warehouse. From the illustrated warehouse design layout, the following benefits can be derived
from it that will help the national fulfillment center at Cranfield Business Supplies attain its
objectives.
Outbound and inbound optimization
Just as the illustrative warehouse shows inventory inflow and outflow, the management can
optimize the inventory is moved, stored, and transported out of the warehouse. As stock can be
received earlier, the illustrative warehouse benefits the management by clearly indicating the
inbound routes, which are essential for order scheduling and put away control. This is beneficial
as it helps the management to determine the most suitable date and time a particular shipment is
received based on the equipment and labor factor available. The design can also help manage
mint to plan for an appropriate route to be used when it comes to picking and packing inventory
outbound processes. From the logistics figure, the paths for suppliers to deliver inventory to the
warehouse are clearly indicated. This is critical for the management to save operational cost and
delivery time while increasing overall productivity.
Operational profiling
Warehouse designs are critical in building the overall functional profiling of various operations.
It is expected that the design of the warehouse will be able to processes operational profiling.
The graphic design shows the potential of capturing several activities which form the primary
function of the warehouse. From the inbound and outbound logistics that can be adopted, it is

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possible to implement various strategies that will help in inventory bulk handling, put away the
inventory returns and manage storage requirements for the slow-moving goods. Separate
processes may be adopted to manage inventory picking and packaging. This can be beneficial to
the warehouse as it will be possible for the management to account for full inventory pallets and
improve item retrieval speed and optimize the route designed around the warehouse.
Warehouse change objectivity
For some reason, the issue of redesigning the warehouse may be due to storage shortage and
inefficient racking arrangement of inventory in the old facility. The graphic design of the
warehouse shows a detailed, granular outline that will meet the storage demand of the fulfillment
center. Objectivity baseline can be drawn from the current key performance indicators reports,
and then a suitable report is built based on the overall objectives of the new design.
There are various factors in the illustrative design that require improvement due to some
limitations the routing system adopted. However, it is essential to note that there is no single
optimal solution that can be used in designing warehouses. Secondly, it possible to point out an
optimal solution in solving the routing system in a warehouse which may seem illogical to other
parties involved in day to day running of the warehouse. some of the aspects that can be
improved in the illustrative design include
Warehouse zoning
Having appropriated zones in the warehouse is critical in minimizing movements and the
traveling distance, which leads to improving the overall operations efficiency. The illustrative
design can be created in a way that will make it possible for the inventory to be moved within a

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short distance. It is critical in reducing congestion, and makers the order pickers to grow more
familiar with various item location zones.
Overall warehouse structure
A conceptual design of the warehouse is responsible for determining functional departments
within the warehouse, which may include several inventory storage compartments, technology
adopted, and the way various orders are assembled. The structure of the illustrative warehouse
design can be improved in a way that will make it possible to meet the storage needs and the
throughput needs and minimize the operational costs. So it is essential to define various
departmental functions and their interactions clearly.
Recommendation
Since this report was done on single case analysis, for providing a professional validating
opinion in developing processes of production of efficient warehouse design, it is essential to
incorporate the following factors to improve the overall performances of the warehouse
i. Cost: all actions in the redesigning process in one or the other relate to costs.
Designing costs can be on various dimensions, space costs, equipment costs, and the
warehouse cost. The adoption of proper technology, which will lead to cost
minimization, is one of the strategies recommended in solving the structural problem
of the designing process. It is vital to design a cost-effective facility that optimizes
performances as well as reduce material wastage.
ii. Warehouse storage: it is essential to identify storage methods that will be used in the
warehouse. to improve the overall efficiency of the warehouse, it is recommended the
following storage structure is critically followed

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References
De Koster, R.B., Johnson, A.L. and Roy, D., 2017. Warehouse design and management.
Di Tria, F., Lefons, E. and Tangorra, F., 2017. Cost-benefit analysis of data warehouse design
methodologies. Information Systems, 63, pp.47-62.
Ekren, B.Y., 2020. A simulation-based experimental design for SBS/RS warehouse design by
considering energy related performance metrics. Simulation Modelling Practice and Theory, 98,
p.101991.
Sprock, T., Murrenhoff, A. and McGinnis, L.F., 2017. A hierarchical approach to warehouse
design. International Journal of Production Research, 55(21), pp.6331-6343.