How to Set Up a Warehouse

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Warehouses can differ in their size, what they store and how they are organized, but there is one thing they should all have in common: the efficient flow of materials. When you're setting up a new warehouse, it helps to keep the requirements for flow in mind rather than thinking of a warehouse as merely a place to store items. It's a dynamic system rather than a static one. Every item in a warehouse needs to be tracked, moved, stored and prepared to be shipped.

TL;DR (Too Long; Didn't Read)

To set up a warehouse, you will need to specify storage areas and workflow paths and select equipment for moving, storing, packing and shipping materials.

Goals for a Warehouse

Regardless of what you plan to do with your specific warehouse, there are four goals that all warehouse planning should have in common. Everything else should be secondary to these goals. The number of forklifts you have or the length of your conveyor belts won't help a warehouse system that doesn't take these factors into account first.

  1. Efficiency: Limit the distance items need to move and the number of times they need to be handled.

  2. Maximize space: People, products and equipment will all need room. However, there should be no need to spread things out too far. The farther things are from each other, the more time is required to move them.

  3. Inventory control: Have a system to ensure that you always know exactly what is in the warehouse and where it is located.

  4. Safety: Ensure you have the right equipment and procedures to do what needs to be done and that all staff are trained. This will reduce workplace injuries and damage to materials. 

Warehouse Startup Checklist

  1. Storage space: Ensure the warehouse has enough space that you can grow into as your inventory increases. This includes vertical space as well as square footage.

  2. Parking and loading dock: There should be enough room for trucks to back into your loading dock. If you are shipping large items, a raised loading dock is essential so workers can drive forklifts or hand carts directly into the trucks.

  3. Select tools and equipment: This includes storage, material transportation, packing and positioning equipment as well as shipping/receiving equipment.  

  4. Plan your layout: Either on paper or using a computer, draw out the plans for your warehouse, including workspace areas, indicating what will go where.  

  5. Plan the workflow: Based on your layout plans, examine the workflow and adjust the plans as needed, ensuring that employees have adequate space to work and that materials can be moved efficiently.

  6. Test your plans: With your plans complete, go to the warehouse and mark out the different areas (placing tape on the floor if needed) and walk through the workflows. Adjust your plans as needed before installing equipment.

Warehouse Equipment Checklist

The tools and equipment needed for a warehouse will depend on the warehouse's size, its layout, the quantities of items being stored and the size of these items. A small warehouse may not need much in the way of machinery, but the things you need in a warehouse that is larger or that has heavy items may include a few forklifts and cranes.

  • Storage equipment: Shelves, racks, bins, etc. to store items

  • Material transportation equipment: Used for moving items

  • Packing and positioning equipment: Used for packing orders

  • Shipping/receiving equipment: For bringing items into the warehouse and sending out orders

  • Tools: Any items required to assemble, paint or otherwise prepare items in addition to the tools needed to assemble the storage equipment and workstations

  • Inventory tracking system: Usually includes at least one computer and warehouse management software.

Storage Equipment in a Warehouse

Storage equipment includes things like warehouse scaffolding, racks, shelves, bins and drawers. This varies according to what you will be storing and the space you have. The weight of the items should determine which storage options you choose.

Different items have different storage needs based on their size and weight. Even if the warehouse specializes in a particular item, like books, you will likely need a variety of storage options since some titles will be packed on pallets 4 to 6 feet high, and other titles may have just a dozen copies to be stored. Make sure the shelves and containers fit as many items as possible without wasted space between them.

Small items can be stored in bins of different sizes, in tubs or in cartons. They may need to be retrieved in quantities of two or three several times each day or in quantities of a few thousand every couple of months. The equipment you choose should be based on how often the items are required and in what quantities in order to reduce the time spent retrieving them.

Material Transportation Equipment

Transportation equipment includes any machinery used to move objects from one place to another inside the warehouse. Manual transportation equipment includes hand carts, push carts and dollies. Manual pallet jacks are used to move items on pallets from one place to another over short distances, while walkie stackers can handle larger loads and move them up and down onto warehouse racks.

Powered transportation equipment includes forklifts and cranes used for moving pallets or especially heavy items. They can place and retrieve pallets on high shelves and are recommended for moving materials distances of 40 feet or more.

A third type of equipment for moving materials is the conveyor belt. These are stationary tracks for moving items along a specific path. They can be powered or used manually by pushing items along the track.

Packing and Positioning Equipment

Packing and positioning equipment is used to keep items in place while people are working with it. This can be as basic as a table or workbench used for packing boxes. Hoists and clamps, racks and pulleys may be required for other tasks, like painting or assembly. The specific equipment you will need will vary depending on what tasks are performed in the warehouse.

If you are packing orders for shipment, you will also need a supply of cardboard boxes and may need bags and packing fillers. A stapling machine, tape and tape guns, glue guns and other materials should also be on your equipment checklist. Stools or chairs for workstations may also be needed depending on how long staff will be at a workstation.

Shipping/Receiving Equipment

While most warehouse equipment is important, nothing is more vital than having the right shipping equipment. Customers expect materials they have ordered to be sent promptly and correctly.

Barcode scanners and appropriate inventory software ensures that everything is itemized and accounted for once it enters the warehouse and that items are removed from inventory when they are shipped. Inventory discrepancies due to human error are just a matter of time when manually counting items and entering them into inventory. Other must haves for shipping usually include:

  • Labels and label printers
  • Scales for weighing items to be shipped
  • Pallets
  • Shrinkwrap 
  • Strapping machine

Warehouse Management Software

Like all of the other equipment, your choice in warehouse management software (WMS) will depend on the size of the warehouse and what is being stored. A WMS will be able to track inventory when you scan it with a barcode reader, keep a record of where it is stored and remove it from inventory when it's shipped. If you have a small warehouse, you could accomplish the same thing using an Excel spreadsheet and a barcode reader.

Comprehensive WMS or enterprise resource planning software will be able to accomplish much more, including:

  • Advanced pick slips: Orders can be consolidated and listed according to their order in the warehouse, saving time for pickers.

  • Empty shelf and bin availability: You can automatically designate locations for items when they are received.

  • Allocated and non-allocated inventory: Inventory that is in the warehouse but is being shipped is separated from non-allocated inventory.

  • Prioritized stocking locations: Items that are picked more often can be allocated to more convenient locations.

  • Movement tracking: Items are tracked as they are moved from a bin to a cart to a packing area to a shipping area.