Layout of Supply Chain Real Estate

Why Building Layout Matters

At its very basic level, the industrial building is two dimensional, meaning that it consists of a width and a length, or widths and lengths if irregularly shaped. While three dimensional topics such as clearance heights and sprinkler systems often determine an industrial building’s utility, it’s layout can be equally important.  The dimensions of a building can determine if a distribution operation is moving goods profitably, a manufacturing operation produces product efficiently, and a warehouse operation stores product effectively. For these reasons, supply chain real estate practitioners should be aware of how their company or client’s operation translates into an ideal building layout for any new real estate search or re-design of current facilities.

Much like clearance heights and sprinkler systems, the optimal building layout is not uniform for all users. For example, a less-than-truckload (LTL) distribution company may prefer a thin, rectangular facility with a significant amount of dock high positions on one or multiple sides. This shape will allow the LTL to effectively move and sort as many goods in and out of the warehouse to the largest amount of trucks possible. It will also reduce the distance between moves inside the warehouse, which greatly improves pick times and related key performance indicators. Conversely, a manufacturing company may prefer a thicker, almost square-shaped facility with inbound and outbound loading on only the narrowest side. This shape will allow the manufacturer to plan long production runs, starting from the inbound areas and weaving around to the eventual outbound side or storage areas.

Outside of greenfield developments, where the building shape and amenities can literally be designed around material handling requirements, the responsible parties of a firm looking for a new industrial property would select a facility that either exists or will exist based upon an already entitled design. For the most part, architects have designed speculative industrial buildings to a) maximize site coverage and b) appeal to the widest possible audience of users. For these reasons, most modern industrial buildings will have a rectangular shape with loading on one or both wider sides.

For the warehouse/distribution user, buildings which have greater than average depths (400’+) and one-sided loading will often be at an operational disadvantage compared those with shallower depths. This is especially the case for operations with higher inventory turns using forklift or manual order picking. It may not be the case for operations with higher inventory turns using automated picking systems. However, at this time the vast majority of operations use forklift or manual order picking due to the high expense of automated picking systems. Therefore, for the vast majority of warehousing and distributing operations buildings with average to below average distances from loading areas will be preferred.

 

 

 

Bays and Column Spacing

As part of my final project for the Global Logistics Specialist program at California State Long Beach (GLS Website), my team and I determined the cubic capacity and utilization for an entire network of fictitious warehouses run by a fictitious retailer. We found that the bay and column spacing within a warehouse can have a significant impact on key performance indicators (KPIs) for warehouse occupiers in ways that are not always obvious. In this post I discuss bays and column spacing in a warehouse and why they are important for supply chain real estate participants to consider when a) designing a new warehouse location and/or b) perhaps re-designing an existing warehouse.

The definition of bays and column spacing are similar but not always identical. I define bay areas as the floor areas in the warehouse not occupied by columns, walls or other permanent impediments. The length and width dimensions attributed to bay areas and column spacing are typically the same, with some notable exceptions. Bay areas can have different names in different areas of the warehouse. For example, a speed bay is an area adjacent to the loading areas ideally measuring at least 60′ from the dock to the first column. Used to move goods in a quick and efficient manner, any storage done within a speed bay is usually short-term.

Typical column spacing is the most common storage area between the columns, usually measured by the distance between the columns lengthwise and by depth away from the loading areas in a one sided or flow-through building. For example, if you were peering through the middle loading door of a building with 52′ x 50′ typical column spacing, 52′ would be the width between each column and 50′ would be the depth to the next column away from you. Atypical bays would include any areas along the non-loading walls.

So why are bays and column spacing important to supply chain practitioners? One reason is that they impact a warehouse’s space utilization. Improper column spacing can lead to wasting significant square footage areas and storage capacities due to less overall storage positions. Depending on a number of factors such as pallet size, minimum aisle width, and material handling equipment, a 52′ column spacing and a 56′ column spacing will likely result in very different levels of square footage utilization and storage capacities.  Warehouse occupiers should calculate their optimal column spacing within a warehouse prior to occupancy in a new facility or as part of an audit to determine how well they are utilizing their storage capacity in an existing warehouse. According to Tompkins International, a formula for calculating optimal column spacing is:

[(Depth of Rack * 2) + Flue + Aisle Width] / # of Sections of Rack between Columns

The “Flue” is the space between the row of back to back racking, which is called the longitudinal flue.

Column spacing is also important because it influences the choice of material handling equipment. In order to utilize the available square foot and cubic capacities in a warehouse, certain material handling equipment are required. For example, according to Tompkins a 54′ column spacing allows for a 10′ aisle with typical 48″ racking. Since most counterbalanced forklifts will require a 12-15′ aisle, 54′ column spacing would require narrow aisle material handling equipment in order to maximize the usable square feet and cubic capacity. Therefore, racking decisions may require weighing the potential increased material handling costs with the cost of square foot and storage capacity.

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A survey of new warehouses in Southern California show a variety of column spacing dimensions being used, mostly depending on the clear height being offered. For potential e-commerce fulfillment centers, required column spacing is a minimum of 56′-60′ to allow for the large order picking equipment common in the industry and required minimum clearance is 36’+ to allow for multi-level mezzanines/equipment. Two new developments at the Brickyard in Compton and Pacific Industrial/Clarion’s Imperial Distribution Center in Brea have 36′ clearance heights with 56′ x 50′ typical bays.

For new buildings in Southern California with 32′ clear, the typical bay is 52′ wide with varying depths. Western Realco’s new buildings at 4150 N. Palm Street in Fullerton and 3300 E. Birch Street in Brea have 52′ x 60′ typical column spacing. At Pacific Point East @ Douglas Park in Long Beach, Sares Regis has 52′ x 50′ typical column spacing as does Duke’s new warehouse in Lynwood.

racking-plan-building-b
source: The Brickyard South Bay website

Supply chain participants should be aware of how bay areas and column spacing in their warehouses impact their KPIs. If you need help evaluating new or existing warehouses in your supply chain, including evaluating existing column spacing, please feel free to reach out to me.


References

“SPEED BAY.” SPEED BAY. BOMA International, 2016. Web. 01 Dec. 2016.

Holste, Cliff. “Distribution Center Design: Designing from the Inside Out.” Distribution Center Design: Designing from the Inside Out. Supply Chain Digest, 11 Mar. 2008. Web. 01 Dec. 2016.

Johnson, Wendy. “The Importance of Optimal Column Spacing.” Tompkins International. Tompkins International, 30 July 2015. Web. 01 Dec. 2016.

“How to Optimize Your Existing Warehouse Space | Washington and California,.” Raymond Handling. Raymond Handling Concepts Corporation, 13 Aug. 2014. Web. 01 Dec. 2016.

Fallsway Equipment Company. “Warehouse Operation | Finding Your Aisle Dimensions.” Fallsway Equipment Company. Fallsway Equipment Company, 12 June 2014. Web. 01 Dec. 2016.

Foster, Margarita. “The View From E.CON: E-commerce Real Estate Evolves | NAIOP.” The View From E.CON: E-commerce Real Estate Evolves | NAIOP. NAIOP, 2015. Web. 01 Dec. 2016.