The ultimate guide to warehouse layout design

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In today’s competitive business landscape, warehouses are the backbone of many operations. A great warehouse layout design can increase efficiency, reduce costs, and ensure safety.

But as many eCommerce business leaders know, it’s not as easy as just throwing all your inventory into one space.

In fact, many businesses are leaving thousands (or tens of thousands) of dollars in revenue on the table simply because they aren’t intentional with their warehouse setup.

In this very comprehensive blog post on warehouse layout design, you’ll come away knowing:

  • How your warehouse both directly and indirectly impacts your bottom-line income
  • 20 essential tips for improving warehouse efficiency, security, and storage space
  • Strategies for reducing costs while optimizing warehouse layout design
  • Tips on how to best utilize available storage space
  • Methods for increasing the speed of inventory movement
  • Advice on selecting the most effective materials handling equipment
  • The importance of implementing a smart shelving system
  • Practical steps toward creating an efficient workspace design and warehouse layout
  • Ways to optimize order picking processes in warehouses
  • Techniques for integrating technological solutions into your warehouse designs

We’ve got a lot to cover, so let’s dive right in.

How does warehouse layout design affect your business?

Optimizing your warehouse layout may be way down on your priority list. After all, there’s product to be ordered, partnerships to be made, websites to maintain and more. So is warehouse layout optimization really worth all the effort?

The answer is a resounding yes. Here are a few reasons why an optimal warehouse layout and layout can, directly and indirectly, impact your bottom-line profits.

Improved productivity

A well-designed warehouse layout can help streamline the picking and packing operations. As well as reducing the number of steps and man-hours spent on tasks. This can help reduce costs and increase the efficiency of the warehouse.

An optimal warehouse layout also minimizes the number of walking or driving routes, thus reducing the amount of time spent on tasks.

In the warehousing world, this is known as “motion waste” and it’s one of the biggest culprits of inefficiency.

Reduced human error

A well-thought-out warehouse design can help minimize the potential for human error. By streamlining the process, employees are more likely to complete their tasks without any errors.

This is especially true when it comes to picking and packing orders. An optimized warehouse space helps reduce cognitive fatigue by making the process easier to understand and execute.

Common errors in warehousing include mislabeling, incorrect picking, and incorrect packing. All of these can be reduced or completely avoided through the implementation of an efficient warehouse layout.

Improved supply chain

Your warehouse space is part of your supply chain, meaning that it has a direct impact on its speed and efficiency.

When operations are efficient, it can help reduce lead times and increase customer satisfaction.

This in turn leads to increased revenue as customers are more likely to return if they have had positive experiences.

In addition, an optimized warehouse layout can help reduce costs by reducing the number of inventory moves. And it does so by providing a more cost-effective supply infrastructure.

Better customer service

An optimized warehouse layout design can also help improve customer service by reducing the time it takes to fulfill orders.

This is especially important for eCommerce businesses, as customers are now accustomed to near-instant gratification when it comes to order delivery.

By optimizing your warehouse layout, you can reduce fulfillment times and ensure your customers get their orders quickly and accurately.

Increased safety

An optimized warehouse layout also increases employee safety. By reducing the number of walking routes and having clearly marked paths, employees are less likely to be injured on the job.

In addition, an organized warehouse makes it easier to quickly identify and address potential safety hazards. For example, blocked walkways or improper stacking of items.

An optimized warehouse also allows for better visibility of workers throughout the facility. That way, supervisors can quickly intervene if needed and help ensure that employees are adhering to safety guidelines.

We’ll talk more throughout this post about some specific safety protocols you can implement to make your warehouse as safe as possible.

Lower shipping costs

Having an optimized warehouse layout also helps businesses cut down on shipping costs.

By organizing the warehouse in a way that is as efficient as possible, businesses can reduce their need for additional packaging materials. This will result in fewer shipments and lower shipping costs overall.

Also, an optimized warehouse can help reduce labor costs associated with packing and shipping orders.

It’s also worth noting that all of these factors inform and compound upon each other (either positively or negatively). For example, when you have fewer errors in your warehouse, that means fewer mis-ships, which equates to fewer returns.

Fewer returns mean lower shipping costs (not to mention happier customers).

That’s why it’s so crucial for warehouse managers to understand the symbiotic nature of how all these factors fit together.

Technological integration

As technology continues to advance and evolve, warehouse managers are increasingly turning to technology-driven solutions to help optimize their warehouses.

From automated robotic systems to AI-powered inventory management systems, there are a number of ways you can integrate tech into your warehouse operations in order to improve efficiency and reduce costs.

But all of this depends on having a strong foundation of the fundamentals of warehouse layout best practices. Without that foundation, no amount of technology will be able to make up for poor planning and execution.

In summary, a well-thought-out warehouse layout can help improve productivity, reduce human error, increase safety and lower shipping costs. Not to mention provide an opportunity for technological integration. All of these factors ultimately lead to improved bottom-line profits.

Less necessary warehouse space

One of the best (and worst) feelings as a warehouse manager is optimizing your warehouse design and warehouse layout to find that you don’t actually need all the space you’re paying for.

It’s a great feeling because, hey, you can downsize and cut costs!

It’s a bad feeling because you’ve likely been overpaying on warehouse space for months.

Either way, an optimized warehouse helps you get to the bottom of any unnecessary space, so you can make the necessary changes and save money in the long run.

By improving efficiency and organization in your warehouse, you’ll be able to reduce wasted space and make better use of existing resources.

On the flip side, an ideal warehouse layout will help increase the overall storage capacity of your space. This will  give you ample space to store more products than ever before.

Ultimately, optimizing your warehouse layout and design is beneficial for both short-term and long-term gains. The reason for this is that it can help you reduce costs today, while also helping to maximize profits in the future.

Warehouse layout tips

Alright, I’ve thoroughly argued for the benefit of a well-designed and laid-out warehouse. Now, let’s get into the nitty-gritty of the practical ways you can make this happen in your own organization.

Here are some warehouse layout tips that you can implement today:

1. Utilize vertical space

I’ve you’ve ever shopped at an IKEA store, you’ve likely noticed something peculiar about how they arrange all their décor.

It’s all stacked vertically. Why? Because in Sweden, the company’s country of origin, smaller spaces are more the norm. Thus, vertical space optimization was born out of necessity.

This is one of the best-kept secrets of warehouse layout optimization, especially in the West, where we’re typically blessed with much larger spaces.

Here are some practical ways to utilize vertical space in your warehouse:

  • Utilize the height of shelving and pallet racks to store as much as you can
  • Invest in stacking systems so products can be stored on top of one another
  • Use ceiling rack systems to hang items from the rafters
  • Install mezzanine floors to add additional shelf space in your warehouse

Here are some examples of common vertical storage technologies:

  1. Boltless Shelving Stacking Systems are shelves that can be easily assembled without any bolts or screws.
  2. Cantilever Racks are sturdy racks designed for storing long and bulky items like steel pipes, lumber, and furniture.
  3. Pallet Flow Rack System is an inventory control system that utilizes gravity-fed lanes for a continuous flow of products via pallet racks.
  4. Gravity Flow Racking System uses gravity to move stock along tracks and onto the pick face when needed.
  5. Push Back Rack System is a space-saving storage solution where each pallet is rolled back on top of the previously stored unit as the product is removed from the front.
  6. Mobile Compactor System provides high-density storage through motorized shelving units which can be moved together to create more space in your warehouse.

Mezzanine floors are another great way to make the most of vertical space.

These structures are like extra floors that can be installed in a warehouse to create more shelf space, offices, or storage areas.

No matter what technology you choose, utilizing the height of your warehouse is one of the best ways to maximize its efficiency and capacity.

2. Optimize warehouse aisle widths

In addition to vertical space, another way to optimize your warehouse layout is to ensure that your aisles are wide enough.

Aisle widths can vary depending on the size of your product and how much traffic you expect in certain areas, but there is a general rule of thumb for aisle widths:

  1. Pallet racks should be at least 4 feet wide
  2. Full pallet aisles should be 6-9 feet wide
  3. Stacking racks should be 5-6 feet wide
  4. Gondola shelving should have aisles that are 8-12 feet wide

By creating the proper aisle widths, you can ensure that your warehouse is safe and efficient.

Additionally, wider aisles can help to improve visibility and reduce congestion in your warehouse.

3. Build your warehouse layout design based on your products

I know it sounds obvious, but your warehouse should accommodate whatever products you’re offering — not the other way around.

For this reason, every warehouse is going to be as unique as each business.

When designing your warehouse, you’ll want to consider factors like the size and shape of products, pallet sizes, box sizes, and any other special requirements.

For example, if you’re storing perishable items that need to be kept cool or frozen, then you’ll have to factor temperature-controlled zones into your warehouse layout design.

If most of your items are small or abnormally shaped, then you’ll need to consider alternatives. These may include floor-level shelving, mezzanine floors, or even vertical carousels.

By taking into account the specifics of your products and operations, you can create a suitable layout that maximizes efficiency and meets the requirements of your business.

4. Implement warehouse automation wherever possible

You can further optimize your warehouse layout by implementing automation technologies. For instance, robotic palletizers, automated storage and retrieval systems, and conveyor and sorting systems.

These technologies can help to reduce manual labor for tasks like sorting, picking, packing, and shipping — allowing your employees to focus on more value-added activities.

But if you don’t have the resources to have an army of obedient robots in your warehouse, don’t write this point off.

You can automate many other facets of your warehouse, inventory, and order management using relatively inexpensive software and hardware.

Some examples include:

  • Automated replenishment systems, which reduce the need for manual stocktaking
  • Barcode and RFID scanners, which automate picking processes
  • Inventory management software, which helps you keep track of stock levels
  • Warehouse management systems like SkuVault, which can be used to optimize labor, generate efficient pick lists, and manage your inventory
  • Order processing software, which can be used to quickly generate invoices and process orders

These systems can help to streamline processes in your warehouse, freeing up time for you and your employees.

5. Regularly clean, organize and audit your warehouse

In addition to keeping up with the latest technology and automation, one of the simplest ways to optimize your warehouse is by regularly cleaning, organizing, and auditing it.

Regularly cleaning your warehouse is essential for ensuring that it is well-maintained, organized, and efficient.

This means taking the time to clean up any spills or dirt, disposing of any unnecessary clutter, and making sure all shelves are properly organized and labeled.

It also includes conducting regular audits to make sure that items are in their proper place and that the shelves are properly stocked with inventory.

By taking the time to clean, organize, and audit your warehouse on a regular basis, you can make sure that it is as efficient and organized as possible.

6. Create easy-to-understand information labels and photos of products

In the world of picking and packing, time is measured in seconds, not minutes.

Wasted time, compounding over the course of several days or weeks can lead to you being behind on orders, and thus, unhappy customers.

One of the easiest ways to reduce motion waste in your picking workflow is to create easy-to-understand information labels and photos of products that you affix to containers.

This way, workers can quickly identify the right product to pick without making any mistakes, which will reduce the time spent on picking each item.

Think about it: what do you think is easier for a busy warehouse worker? Remembering that the Teddy Bear iPhone case you sell is SKU “SV-TDBR-IP14-CASE,” (which you label on the container)? Or simply displaying a photo and description of that product?

This technique is an extremely simple one you do today, and the effort-to-benefit ratio makes it a no-brainer.

7. Store similar products next to each other

Storing similar products next to each other in a warehouse layout is essential for ensuring an efficient and profitable operation.

With goods arranged in this way, it is easier for workers to locate the items they need quickly, thus saving time and effort.

Furthermore, having an organizational strategy in place streamlines the picking process. This can reduce motion waste and make it easier for workers to complete tasks.

Lastly, by having similar products stored together, you can expose customers to more of your product range and thus increase sales.

You can also group your products by different categories, including:

  1. Products that are frequently purchased together
  2. Items that have similar sizes, shapes, or weights
  3. Goods with similar expiration dates
  4. Products that require special storage areas

Creating an efficient warehouse design that keeps similar products together is key to ensuring a successful and profitable operation.

8. Provide your warehouse workers with detailed maps and pick routes

In order to ensure that your warehouse layout is as efficient and productive as possible, it is essential to provide your workers with detailed maps and pick routes.

This will help them to quickly locate the items they need without wasting any time trying to figure out where items are located.

A prerequisite to building out effective pick routes is to understand (and design) the natural flow of a warehouse.

Warehouse flow is the efficient movement of goods, personnel, and inventory throughout a warehouse.

It is designed to minimize time spent in the warehouse, reduce motion waste and maximize customer satisfaction.

Having an effective warehouse flow also helps ensure that orders are fulfilled quickly and accurately, which is essential for any successful business.

In order to design an effective warehouse flow, it is essential to understand the different stages in the picking process and how they can be optimized.

This includes breaking up the picking process into several distinct areas that are easy to identify and use logical route patterns.

By providing your workers with detailed maps and pick routes, you will not only save time but also ensure that orders are fulfilled accurately and efficiently.

(By the way, SkuVault Core generates digital and physical intelligent pick lists on a per-order basis, saving you even more time and reducing motion waste. Click here to learn about this cutting-edge feature.)

9. Classify your inventory using the ABC method

The ABC method of inventory classification is one of the most effective inventory management systems. And it can be extremely useful in helping you optimize your operations.

This system classifies items based on their value. A-items are those that have a high turnover rate and generate the most revenue for your business. Meanwhile, C-items have the least impact on sales and are typically stocked in the smallest quantities.

By utilizing the ABC inventory system, you can prioritize goods for stocking, replenishment, and picking to ensure that your more important items (A-items) have higher visibility and take precedence when it comes to allocating time and resources.

When designing an efficient layout for your warehouse, it is important to think about how to store and organize items according to their ABC classification.

For example, you should place your A-items or top sellers in a strategic location so they can be picked quickly and efficiently. Most commonly, this means right next to your processing and packing station.

By using the ABC method of inventory classification, you will be able to optimize your warehouse floor plan and ensure that it is as efficient as possible.

Additionally, this system can help you identify which items are the most profitable so that you can focus on stocking and promoting them.

Just make sure you couple this strategy with a robust inventory management platform like SkuVault Core or Linnworks. That way, you’re not trying to manage all of these product classifications in a spreadsheet, or worse, in your head.

10. Use ergonomic equipment and techniques

To ensure the safety and health of your warehouse workers, it is essential to use ergonomic equipment and techniques whenever possible.

Ergonomics involves designing tools, equipment, and workplaces that take into account the capabilities of their human users.

Providing your employees with ergonomically designed tools can help reduce physical strain and injury while also improving their overall productivity.

These tools can include adjustable workstations, chairs, and tables that can be customized to each worker’s individual needs.

Additionally, providing your workers with powered industrial trucks, automated material handling equipment such as conveyors, and automated guided vehicles are all excellent ways to minimize physical strain in the warehouse.

By implementing ergonomic equipment and techniques into your warehouse design, you can ensure that your workers are as safe and productive as possible.

This will not only improve their job satisfaction but also help keep your business running smoothly.

Consider incorporating these other safety best practices into your new warehouse layout:

  1. Having designated loading and unloading areas with ample space for employees to move around
  2. Including a warehouse blueprint, as well as documentation of the internal and external layout of the warehouse.

11. Implement proper lighting

It’s crazy how simply increasing the amount of light in a warehouse can improve worker productivity and morale.

Adding more light can make it easier to spot items on shelves, read labels, and see colors or unique markings.

If you’re looking for the most cost-effective way to increase lighting in your warehouse, installing LED lights is an excellent option.

LED lights are brighter and use less energy than traditional lighting, making them a great choice for warehouses.

You can also install motion-detecting lights to ensure that areas are only lit when they are actually being used, which can help reduce your overhead costs.

Finally, consider installing skylights or windows whenever possible as natural light can make it easier for workers to see and can also help reduce fatigue.

By implementing the proper lighting, you can ensure that your warehouse is well-lit and that your employees have the visibility they need to work efficiently.

12. Utilize floor markings to improve flow and efficiency

Properly marking your warehouse floors can help employees quickly and easily move throughout the space, allowing them to find what they need quickly.

Some of the most common types of floor markings include lines, arrows, crossroads, and stop boxes.

Lines are used to mark aisles and guide forklift drivers while arrows and crossroads can help direct traffic flow.

Stop boxes, on the other hand, are used to indicate where material handling equipment should stop and start when unloading or picking up materials from different areas of the warehouse.

Floor markings should be visible, easy to understand, and consistent throughout the entire warehouse for maximum efficiency.

13. Create zones and implement zone picking or wave picking

Zone picking is a type of order fulfillment system in which the warehouse is divided into several different zones.

Each zone contains a specific set of products that are to be picked for orders placed in that zone.

This method can help save time and minimize errors by allowing workers to pick items from multiple zones at once. As a result, they don’t have to travel back and forth or search for items in different areas.

Wave picking is a similar system that involves grouping orders into batches, or “waves”, and having workers pick certain items from each wave at the same time.

Both of these methods can help streamline your warehouse operations and improve overall productivity.

14. Install security measures

Unfortunately, so long as warehouses are run by humans, theft and pilferage will exist.

Installing security measures such as CCTV cameras, alarms, motion sensors, access control systems, and RFID readers can help protect your inventory from theft.

These measures can also help to deter potential thieves and make your warehouse a safer environment for employees.

By installing the right security measures, you can ensure that your warehouse is well-protected and any stolen items can be quickly identified.

And oftentimes, the mere presence of these measures will deter any would-be bad actors from doing things they shouldn’t.

15. Invest in a digital warehouse management system

Having an effective warehouse inventory system is essential for staying organized and running a successful operation.

A digital warehouse management system like SkuVault Core can help you to keep track of inventory in real time, manage orders, optimize fulfillment, and reduce costs.

It can also help you to identify any areas of improvement, allowing you to make changes quickly and efficiently.

Investing in a digital warehouse management system can help you to run your warehouse more effectively and ensure that all of your operations are running smoothly.

16. Create standard operating procedures for your employees

Standard operating procedures (SOPs) are formal guidelines that specify which tasks must be done, how they should be performed, and when they should be completed.

Having these in place can help to improve employee efficiency and ensure that all processes are followed properly.

It is important to create SOPs for each department or role within the warehouse so that everyone knows what is expected of them and how to do their job correctly.

Warehouse SOPs should include specific instructions on the following topics:

1. Safety: Employees must adhere to safety guidelines such as wearing proper clothing and personal protective equipment (PPE), avoiding dangerous areas, and adhering to all posted signs and warnings.

Additionally, employees should be trained in basic first aid and safety procedures.

2. Quality control: Quality control processes should be established to ensure that all products meet the quality standards set by the company and that any necessary inspections are completed properly.

3. Inventory management: Employees must be trained in proper inventory management techniques. This includes how to store and track items, manage stock levels, and utilize warehouse management software.

By having clear and concise SOPs in place, you can save time, reduce confusion, and ensure that your warehouse operations are running as smoothly and efficiently as possible.

Plus, it makes onboarding new employees much simpler and less expensive and acts as a reference guide for existing employees.

17. Monitor environmental conditions

This is a factor most warehouse managers don’t consider, but the temperature and humidity levels in your warehouse can have a significant impact on your inventory.

Items such as electronics, food, and medicine are very sensitive to environmental conditions and require careful monitoring to ensure that they stay safe for use or consumption.

Installing sensors and alarms can help you keep track of the environment in your warehouse, alerting you to any changes that need to be addressed.

You should also check for any areas of your warehouse that are particularly prone to damage from moisture or other elements. For example, near windows or by busy loading and shipping areas.

By monitoring environmental conditions in your warehouse, you can ensure that your inventory is stored safely and effectively.

18. Use a color-coding system for quick product identification

Using a color-coding system to identify and organize products can be extremely helpful for warehouse operations.

It makes it easier for employees to quickly identify items, which reduces the amount of time spent searching for the correct product.

For example, you could assign a specific color for each type of product or use colors to differentiate between items of different sizes, shapes, or weights.

You could also use color-coded labels to indicate the shelf life of products and expiration dates. This allows employees to easily identify items that need to be moved or discarded.

Color coding is a great way to help streamline your warehouse processes and improve efficiency.

It’s also an inexpensive and low-maintenance solution that can help to keep your warehouse layout efficient and organized.

19. Allocate space for hazardous materials

If you store hazardous materials in your warehouse, you must ensure that they are stored safely and securely.

You should allocate a specific area of your warehouse for storing hazardous materials and make sure that it is clearly marked.

Employees should be trained on proper handling procedures as well as safety protocols such as the use of protective gear or specialized storage containers.

You should also regularly check the condition of any containers or packaging used to store hazardous materials and replace them if they show signs of deterioration.

Lastly, you should establish a system for tracking when hazardous materials are moved in or out of the warehouse. That way, you can easily identify any items that may have gone missing.

20. Invest in an RFID or barcoding system

RFID (radio-frequency identification) or barcoding systems are invaluable tools for tracking products in your warehouse.

These systems can be used to quickly scan items, giving you an accurate count of inventory levels and helping to reduce errors and confusion.

They also make it easier to identify any discrepancies between the number of items in your inventory system and the actual number of items on the warehouse floor.

Moreover, RFID systems can be used to track products from the moment they enter the warehouse until they are shipped out. This helps ensure that all items are accounted for at every step of their journey.

Investing in an RFID or barcoding system can help to streamline your warehouse operations and reduce costs. It is a worthwhile investment for any business that wants to optimize its inventory management.

Final thoughts

Running a successful warehouse requires careful planning and an organized system. In this blog post, we discussed many tips to help you improve your warehouse layout and improve your overall profitability.

Creating the right warehouse layout design for your business doesn’t happen overnight. We’d recommend focusing on one or two of these best practices, implementing them, then moving on to the next ones.

If you need somewhere to start, the tips with the highest ROI will likely be:

  1. Investing in a barcoding or RFID system
  2. Implementing proper lighting
  3. Creating designated loading and unloading areas with sufficient space for workers
  4. Assigning a storage area to a particular product or business need
  5. Creating documented SOPs for quality control and safety
  6. Printing photos and product descriptions to affix to inventory containers
  7. Cleaning, organizing, and auditing your warehouse
  8. Investing in digital warehouse management software

Designing a good warehouse layout is just the beginning. Now, you need to establish inventory control best practices for your warehouse staff to follow. That’s where SkuVault Core comes in. From improving space utilization to dispatching incoming customer orders quickly, this cost efficient solution can boost operational efficiency in numerous ways.

Want to learn more about how SkuVault Core can help streamline your inventory management processes? Schedule a live demo today, or check out our features page for more information.

Matt Kenyon

Matt Kenyon


Matt has been helping businesses succeed with exceptional content, lead gen, and B2B copywriting for the last decade. When he’s not typing words for humans (that Google loves), Matt can be found producing music, peeking at a horror flick between his fingers, or spending quality time with his wife and kids.