Blog enero 24, 2023

Optimizar la Red de Distribución: Calculando la Capacidad real en el diseño de Centros de Distribución

ABOUT THE AUTHOR

David Beaudet has been helping companies make better distribution infrastructure decisions since 2004. His consulting experience spans many industries including food, pharmaceuticals, apparel and spare parts.  He is a regular speaker on topics relating to distribution centre design.


Capacity is one of the most fundamental concepts in a warehouse’s design. But what does capacity truly mean in the context of your distribution operations? It’s not as simple as quoting a number of pallet spaces or the total cubic volume in your building. Knowing how to define true capacity, how to calculate it, how much excess you should have to operate and what to do when you don’t have enough, plays a fundamental role in designing your warehouse and optimizing your distribution network.

Different stakeholders define warehouse capacity in diverse ways, depending on why and how they view the facility:

  • Buyers look for empty space to fill with inventory and new listings
  • Distribution Centre (DC) managers look for flexibility to execute efficient operations
  • Owners look to maximize the return on the distribution asset in which they invested through a lease or purchase

These stakeholders need a common approach to understanding capacity if they want to strike a balance between their competing needs, or at least agree on when it’s time to address a capacity problem or plan for growth.

 

 

I. Calculating Your Warehouse’s Capacity

The Three Dimensions of Capacity

The capacity of a distribution centre has three dimensions: storage, throughput and slotting. A warehouse reaches full capacity in each dimension independently, though limitations in one often will affect the others.

We can define each dimension as follows:

Warehouse Slotting Capacity – the number of pick locations that can be provided to support an operation’s active stock-keeping units (SKU) base.

The number of pick facings is limited by the materials handling infrastructure that supports the pick line. A well-engineered pick line provides locations sized to individual SKU requirements, balancing excessive travel during picking against frequent replenishments to restock locations. Usually, when the number of active SKUs increases, the size of locations on the pick line must be reduced to make room for new items.

As the size of locations gets smaller, replenishment tasks and picker congestion increase, leading to lower operating productivity.

Storage Capacity – the amount of physical inventory that can be stored within the warehouse. This is a function of the total number of storage locations within the DC and the size of these locations. It is important to distinguish between the gross storage capacity and the operating capacity of a facility.

  • Gross storage capacity represents the capacity if every location were full – a theoretical capacity that cannot be achieved in reality.
  • Operating storage capacity is the realistic capacity of the warehouse that accounts for operating constraints, such as the need to put away receipts into open locations, and physical constraints, such as the inability for product to perfectly fill any given location.

Throughput Capacity the handling volume of the distribution centre. It represents how many orders, lines, cases and units a warehouse can receive or ship over a given period of time. Typically, throughput capacity is limited by bottlenecks that arise from space and infrastructure limitations. These bottlenecks first appear during peak periods and then, as volumes increase, become chronic constraints.

 

Uncovering Operating Penalties: KPIs for Your Warehouse

While some indicators of capacity shortages may be obvious (e.g., there’s not enough space to put away pallets), others can be more difficult to detect (e.g., the pick line is too short to place each SKU in its ideal slot size).

When a distribution centre ignores such indicators and operates beyond capacity, it pays clear and hidden operating penalties. By tracking capacity related Key Performance Indicators (KPIs), you can identify these penalties and act rapidly to address them.

Here are some KPIs related to your warehouse’s capacity:

1. SKU-to-slot size assignments

Measurement: Replenishment instances per week per SKU

General Rule: Re-slot SKUs generating more than one replenishment task per day (fast movers) or per week (medium/slow movers)

2. Storage capacity utilization

Measurement: Pallets on hand vs. pallet positions and Cubic feet on hand vs. net cubic feet capacity

Target: Keep 15% open reserve pallet spaces to facilitate putaway and replenishment (the amount is a function of inventory turns)

3. Pick slot utilization

Measurement: SKUs vs. pick slots

Target: Keep 10% open pick slots to easily introduce new SKUs or provide a buffer during peak periods

4. Dock-to-stock time

Measurement: Delay between receipt and putaway times

Target: Reduce over time

5. Damages & mispicks

Measurement: Rate as a percentage of units picked

Target: Minimize over time

6. Throughput productivity

Measurement: Units per hour, using the handling unit as the proper unit of measure

Target: Improve over time

Any KPI trending in the wrong direction indicates a capacity problem. But not all capacity problems entail that you should be hunting for a bigger, taller building right away. The overall goal, when addressing your capacity issues, is to optimize your distribution network while you maximize your ROI. Sometimes, improving space configuration within your current installations is going to be the best solution to achieve that goal.

If you find your KPIs declining, identify and explain the capacity elements hurting your ability to operate efficiently. Here are some potential reasons you might be having trouble with capacity in your DC:

 

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