- Selection of order picking and sorting systems
- Selection and integration of loading/unloading systems and packing systems
- Definition of order picking principles, e.g. pick-by-light or pick-by-voice
- Route optimisation
- Pick optimisation
Development of a Warehouse Strategy
We help you to develop an optimized and future-proof warehouse strategy.
Why is a warehouse strategy important?
The development of an effective warehouse strategy requires continuous review and adjustment of the employed storage methods, the warehouse structure, the warehouse management system, and inventory control. This begins with a thorough evaluation of the logistics processes to identify weaknesses and exploit optimization potential. Modern warehouse management systems also play a central role here, not only enabling inventory management and optimizing warehouse processes but also enabling a wide range of automation solutions and additional logistical services. ebp-consulting supports you in integrating new technologies more effectively and flexibly adapting your warehouse strategy to market changes.
Selecting the right type of warehouse is another crucial aspect of your warehouse strategy. Factors such as product characteristics, volume, and turnover rate must be considered. Dynamic storage concepts, such as cross-docking or the use of innovative storage techniques, offer the possibility to further increase efficiency while ensuring greater flexibility. A targeted analysis of your company’s specific requirements enables the selection of a suitable system that optimizes both the spatial arrangement and the processes in the warehouse. By focusing on modern technologies such as automated storage systems or mobile warehouse management, you can ensure that your warehouse is not only optimally organized but can also respond quickly to future challenges. Thus your warehouse strategy becomes not only a cost factor but a strategic competitive advantage.
Another essential component of your warehouse strategy is the implementation of an effective warehouse management system. These systems help you make optimal use of the available storage space and dynamically control storage locations based on warehouse movements. Timely adjustments to storage space allocation can prevent bottlenecks and shorten picking times. A smart assignment of items to storage locations also promotes better clarity and efficiency throughout the entire logistics process.
Our consulting focus areas when creating the optimal warehouse strategy
The following aspects form the framework for developing a robust and future-proof warehouse strategy; each point requires careful consideration.
1. Strategic orientation of the warehouse in the supply chain network
he warehouse’s position determines its primary role. It must be clearly defined whether it is a central element for cost savings with a defined service level or for service improvement without significant additional costs.
- Goals: minimize transport costs, reduce delivery times, increase delivery flexibility, or buffer production fluctuations.
- Network role: Should the warehouse function as a regional hub, a central distribution center (CDC) or regional distribution warehouse (RDC) for end customers, as a cross-docking point (throughput point without storage) or as a production warehouse (raw materials/finished products)?
- Strategic question: Where in the network (center of gravity) does the warehouse generate the most value (e.g., close to the customer for fast delivery, close to production for consolidation)?
2. Definition of warehouse functions
Based on the strategic orientation, the specific processes are defined.
- Core functions of warehouse logistics: goods receipt, quality control, put-away, inventory management, picking, packing, and goods issue.
- Logistic value-added services (VAS): labeling, price marking, packaging, display construction, assembly of sets, returns management, or specific customer requirements.
Defining these functions determines the layout, required technology, and staffing needs.
3. Specification of performance indicators (KPIs) and performance requirements
Clear, measurable goals are crucial for control and performance monitoring.
- Service level KPIs:
- Order fill rate: percentage of orders delivered complete and on time. o
- Throughput time: time from order receipt to goods issue. o Turnover rate: how often the average stock is sold per year. •
- Cost KPIs:
- Warehouse costs per line item / per pallet
- Costs per m² / m³ of stored goods
- Productivity metrics such as picks per hour per employee. •
- Quality KPIs:
- Picking error rate
- Inventory accuracy (cycle counting accuracy).
4. Make-or-Buy analysis or in-house vs. outsourced operation
These two points are closely linked. The decision whether to perform warehouse services in-house or to procure them is one of the most fundamental strategic choices.
- In-house (Make / In-House):
- Benefits: full control over processes, data, and quality; development of specific know-how.
- Disadvantages: high initial investments (CAPEX), capital binding, full responsibility for personnel and risks.
- Outsourcing (Buy / 3PL):
- Benefits: lower capital expenditure (OPEX-focused), access to the service provider’s logistics know-how, scalability (easier capacity expansion/contraction), focus on core business.
- Disadvantages: less control, dependence on the service provider, potentially higher coordination effort.
5. Green-field planning vs. brown-field optimization
The choice of approach depends on existing structures and the company’s growth.
- Green-field (new build on greenfield):
- Benefits: maximum design freedom for layout and technology, optimal adaptation to current requirements and processes.
- Disadvantages: high costs, long planning and construction times, site risk
- Brown-field (optimization of existing spaces or even buildings):
- Benefits: faster implementation, use of existing infrastructure and locations, lower initial investments.
- Disadvantages: constraints from existing architecture (column grid, ceiling height), often only suboptimal process flows possible.
6. Consideration of optimal technology deployment and automation level
The degree of automation and the appropriate basic warehouse technology must fit the requirements (volume, product variety, speed) and the chosen operating model.
- Manual: low investment, high flexibility, dependent on personnel costs.
- Semi-automated: use of MDE devices, pick-by-light / pick-by-voice, sorters. A good compromise between investment and efficiency.
- Fully automated: autonomous transport systems (FTS/AGV), automated small parts storage (AKL), robotic picking. High investment, very high performance, low operating costs, low flexibility for assortment changes.
7. Evaluation of different investment models for a own warehouse property
Clarification of whether to rent or invest and how the investment is financed. The choice of model has major impacts on the balance sheet and liquidity.
- Rental or leasing models: Buildings and/or equipment are rented/leased instead of purchased, which preserves the balance sheet (similar to the OPEX approach in the 3PL model).
- Asset-based financing: traditional loan financing, where the warehouse building or equipment serves as collateral.
- Sale & lease back: The company sells the property or equipment to an investor (e.g., a logistics service provider or a leasing company) and immediately rents it back
8. Selection and integration of the right warehouse management system (WMS/LVS)
The strategy must determine what kind of system is needed and how it will be integrated into the existing IT landscape (e.g., ERP system, Transportation Management System). Here are some strategic considerations for the LVS:
- Functionality: Do you need a basic LVS that only manages storage locations and counts stock? Or an advanced system that handles complex picking strategies (multi-order picking, batch picking), dynamic route optimization, yard management, and the control of automated equipment (e.g., robots, AKL)?
- Integration: Is the LVS a module of the existing ERP system (e.g., SAP WM/EWM) or an add-on specialized solution from another vendor?