Wednesday 19 February 2020

Warehouse construction: Design phase

The shortage of storage space and high rental rates force companies to build storage facilities independently. However, such projects require very serious knowledge. Indeed, the main goal is not just to build an object, but to "teach" it how to handle cargo flows.
Therefore, the design phase is one of the most important in the construction of the warehouse building design. With description, we will begin a series of articles on this topic.
The design begins with the creation of a design team. Its area of responsibility fully covers such blocks of work as:
1)    logistic calculation of a warehouse complex;
3)    business planning (feasibility study - feasibility study);
4)    Construction and equipment of the warehouse.
The above work, which is often called subprojects, is fully initiated, executed and supervised by the project team.
But there are those that are not fully within its competence — for example, the issue of project financing, marketing research and staff selection.
In addition, it must be taken into account that the work execution order is also of fundamental importance, especially if the deadlines are very tight.
Finally, the third point that you need to pay attention to is the formulation of the goal of creating the project. Target designation should be unambiguous, measurable and achievable.
Roughly speaking, a warehouse for storing our own products and a warehouse for the provision of logistics services will be different. Having decided for yourself the question of purpose, you need to answer the following two:
1.    What should be the characteristics of the warehouse complex?
2.    How can we understand that the goal has been achieved and the project has been completed?
Examples of successfully formulated project goals are presented in the corresponding box:

Examples of successful goal setting for different warehouses

1.            For the project of creating a distribution centre

The main goal of the design work is the design, construction, equipping and reaching the calculated indicators of the company's distribution centre for commodity processing and storage of at least 15 thousand items for the purpose of meeting the needs of the company's sales divisions by reducing annual logistics costs for 4%.

2.            For a commercial warehouse project

The main goal of the design work is the design, construction, equipment and commercial launch of a pallet warehouse with a total storage capacity of at least 10 thousand pallet places with an average daily throughput of at least 800 pallet places and a discounted payback period of no more than seven years (implied in the project documents the concept of “pallet place” will be formalized by weight and size characteristics).
Typically, a detailed designation of a project is carried out directly by the project manager and agreed upon at the level of top management or company shareholders.

Start of the project team

A thorough and complete formalization of project indicators allows you to begin to form a project team. It begins the analysis and generalization of marketing data in the context of the commercial activities of the warehouse. The logistic examination of the land and the analysis of goods flow to determine the main characteristics of the warehouse complex, preliminary calculation of the investment indicators of the project. The results of this phase of work are:
1.    Justification of the need for a warehouse complex.
2.    The study of options for the master plan.
3.    Preliminary calculation of the throughput and storage capacity of the warehouse (for each option separately).
4.    The preliminary budget for the implementation of the project for each of the proposed options. 5. Preliminary investment assessment of the project by options.
6.    Conclusion - a recommendation for choosing an option for the final (detailed) development.

How are results obtained?

Typically, the results obtained are submitted for discussion to the company's management to decide on the feasibility of further work and/or adjusting the goals and objectives of the project.
If the results of the discussion are positive, the project team proceeds to the detailed logistic design of the warehouse complex and the preparation of the terms of reference (TOR) for architectural and construction design of the facility. This stage completes the logistics design with the following necessary results:
1.    A detailed master plan of the site with traffic patterns of traffic and human flows.
2.    The geometric dimensions of the warehouse complex and its technological zoning.
3.    Space-planning decisions on the technological zones of the warehouse.
4. Calculation of requirements for warehouse equipment (gates with dock leveller platforms, shelving equipment, palletizers, scales, etc.).
5.    Calculation of needs for loading machinery and equipment (VET) (hydraulic trolleys, forklifts, conveyors, reach trucks, high-rise commissioners, etc.).
6.    Calculation of requirements for warehouse personnel.
7.    Description of the main technologies for cargo handling.
8.    Terms of reference for architectural and construction design, indicating the composition of the facilities of the warehouse complex (checkpoint, generator, dining room, etc.) and all technological loads.
9.    A detailed budget for the implementation of the project.
10.  Economic calculation and determination of investment indicators of the project.

The second stage of work

At the next stage of work, the project team holds tenders for the selection of organizations of the general designer (architectural and construction design and approval of the project), the general contractor (construction of the warehouse) and suppliers of warehouse equipment and machinery. Based on the results of the tender, contracts are concluded with the winners, and the project for creating a warehouse complex goes into the stage of architectural and construction design. The simultaneous selection of the general designer, general contractor and equipment suppliers allows us to design the warehouse taking into account the technological base of the general contractor and to provide all the requirements of the equipment suppliers for the size of equipment installation sites, technological openings and driveways. The result of this phase of the project are signed design contracts, construction and supply of warehouse equipment. In parallel with the architectural and construction design, the project team is engaged in a detailed description of the warehouse operation technologies and selects a warehouse management system (WMS), if necessary.
Typically, the duration of this stage is several months, which allows the beginning of construction to fully detail the technology, taking into account the functionality of the WMS solution. The construction part of the project ends with the acceptance of the warehouse complex by the State Commission with the signing of the relevant act. Now the facility is ready for operation, and the project team is entering the most difficult phase of the project - the withdrawal of the warehouse complex to the calculated performance indicators. (This step will be discussed in more detail in the next article in the series)
If the project's task is to create a distribution centre in the interests of its own business, it is necessary to conduct a prospective SWOT analysis of the company's activities without its own retail centre and for the case of the project. In the economic part of the project, the main attention should be paid to the issue of assessing and reducing costs on a business scale. The relative predictability of sales allows us to design unique technologies for processing goods flow, achieving the required economic indicators for a given warehouse throughput. Just because of the use of special technologies, the construction of such a retail centre will be carried out according to a unique project.


The greatest certainty of goods flow is characteristic of production warehouses since their maximum throughput is determined by the nameplate productivity of the serviced production lines. Often, free areas of workshops or auxiliary facilities are allocated for storage facilities of production companies, which usually means that they need to be repaired or reconstructed. When working in a project, it is necessary to assess possible risks and be able to manage them.


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  2. Warehouse construction is the construction of a commercial warehouse in a pre-built or modular format designed for long term use. Warehouse construction projects often include high-rise office space, flexible production spaces, and multi-level facility support systems. Warehouse construction also includes the structural engineering services necessary to ensure that the warehouse meets all applicable codes and is safe enough for retaining walls operation. Warehouse construction jobs are a popular choice for companies involved in manufacturing and distribution because of the considerable capacity and storage of these types of buildings.

    When a new building is needed to store and organize large volumes of goods, such as raw materials and finished goods, or when a current building is showing signs of wear, a warehouse conversion or a new construction project is the more preferred option. In addition to meeting specific business requirements, commercial warehouse construction jobs also allow the flexibility to meet local zoning requirements. Many states require businesses to have a minimum volume of space available for each type of business use. For instance, if a manufacturer produces goods that are used by a variety of retailers throughout the country, the manufacturer may wish to build a warehouse in either a northern or southern region depending on the availability of access roads, road access, and other factors.