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What Are the Benefits of Electronic Shelf Labels in Warehouse Racking?

When designing an optimized layout for your warehouse facility, one should give the whole process careful thought.

Our previous articles have discussed the importance of having an optimized warehouse design and stressed how such designs could impact the productivity and overall effectiveness of the facility. While most, if not all, would agree and subscribe to the idea of having an optimized warehouse layout to improve efficiency and productivity, many downplay the design process as something simple and easily completed without extensive preparation or planning.

This is where many business owners and warehouse administrators make a mistake, not realizing that the design process is much more complex than what they initially conceive. The design process is so critical that it could make or break the overall effectiveness and productivity of the warehouse facility.

When designing an optimized layout for your warehouse facility, one should give the whole process careful thought, as well as take into consideration several factors that could affect certain elements in the operation of your facility, including use of labor, traffic flow, and safety risks. The following describes some tips and suggestions that can guide you through the design and optimization process. Not all may apply to your warehousing situations, but these could provide a good start that will place you in the right path towards optimization.

Prerequisites and Considerations Before You Begin

An inefficient warehousing system with racks upon racks of non-moving inventory is tying up valuable capital that could amount to millions or even billions of dollars. On top of that, the business would be racking up on additional overhead costs, particularly with regards to labor and other necessary resources that drive operations.


On the other hand, warehouses that have adopted optimized designs are raking in huge benefits One of the biggest benefits in optimized warehouse design, aside from the perceived positive impact on productivity and efficiency, is on its direct impact with regards to the facility’s Return on Investment (ROI). Facilities with optimized designs and streamlined operations are spending only 50% less on their supply chains compared to those who have not.

Racking in Warehouse

Racking in Warehouse

These and other factors make it imperative for businesses and warehouse facilities to optimize their operations, particularly with regards to the design and configuration of their layout and facilities. But before you even begin your journey towards warehouse optimization, you must first stop and look into the following prerequisites and considerations.

Have a Clear Understanding of Your Objectives

One important factor to take into consideration during the planning stage is that everyone involved should have a clear and concise understanding of your objectives. Such objectives would depend on what your organization is giving importance in your warehousing strategy (ex: provide better customer service or reduce warehousing costs.) Objectives can be general, but it can also be made more specific (ex: maximizing space or increasing flexibility) depending on what your prioritization needs are.

Have a Clear Understanding of Your Local Building Codes

One of the pitfalls in designing warehouse layouts is jumping in and starting the re-layout process without first knowing local building codes and other compliance requirements. Many of these local building codes are very specific, like in the clearance requirements between pallets, size of forklift aisles, ingress/egress paths, and other similar requirements.

Have a Clear Understanding of Your Process Flow

Every warehouse facility is unique as it caters to different industries with different operations and workflows. One of the main goals of an optimized warehouse is to have a smooth and efficient flow of processes or operational steps. It is important that before you start your design process, to take into consideration your workflows and have a clear understanding of the bottlenecks, required changes or required enhancements that would optimize these workflows.

Have a Clear Understanding of Your Inventory

Another critical element in your warehouse facility that warehouse managers should have a clear and functioning understanding is with regards to your inventory. This is very important as the size, shape, layout, and flow of items and people would depend heavily on the types and natures of the items or products you have in your inventory. Each square foot of your facility costs money, so it is imperative that you maximize the space according to your inventory. On top of that, you also need to understand which inventories are fast-moving or seasonal so that you can design access to these items in the most cost-effective way.

Involve Your Managers, Consultants, and Contractors

There is a tendency among business owners to take matters into their own hands, including attempting to perform the design and re-layouting activities. This would be a big mistake, as you may overlook certain aspects and considerations that would affect the overall performance of your facility. The best practice in planning your design is to get your managers, consultants, and contractors involved. Their collective experience and knowhow in current trends and innovations would prove beneficial in your re-design efforts.

Have a Floor Plan or Schematic Diagram to Start With

The best way to start any re-design activity is to start with a detailed and drawn-to-scale schematic diagram, floor plan or layout plan of your existing facility. It would be a huge mistake to start planning a racking layout, organizing sections in your facility, and putting equipment in types of machinery in place, using verbal cues or even your “visualization.” Get your plans down to writing using a reference that is accurate down to size detail and existing installations. With this, your plans will be accurate and avoid costly mistakes in the long run.

Warehouse Rack

Warehouse Rack

Design an Optimized Warehouse Racking Layout with These Steps

Now that you have a clear understanding of what you should prepare or take into consideration before your design optimization work, it is now high time to proceed with the process and establish an optimized warehouse racking layout.

Determine Docks and Receiving Space According to Your SKUs

An integral part of the design pace is to identify the number of docks and to receive space you need to accommodate the types and quantities of your SKUs and inventories. That is why it is very important to have a clear understanding of your inventory before you even start with the design process. Identify not only the number of docks, racks, and bins, but also identify the materials, sizes, and configurations of your racks based on the product.


It would be much easier for you to do this using a Warehouse Management Software (WMS) or an Inventory Management Software (IMS), as you can have an accurate accounting of the SKUs you have in your inventory. If these systems are not yet in place, you can still go for the traditional route and make use of simple spreadsheets software to identify the rows, depths, and quantity of your rack requirements.

Warehouse Aisle

Warehouse Aisle

Make Use of Vertical Space

One of the best ways to maximize the utilization of the space in your facility is to design your rack layouts with consideration for the use of available horizontal and vertical spaces. There are two approaches to do this. One is to make use of racks or storage units that are taller and have more shelves in place. However, you will need the availability of forklifts and special ladders or platforms to access the stored inventories in these racks and bins. On the other hand, if tall racks would not work for you, try subdividing your vertical sections and add another floor.

Make Room Available for Forklifts to Move Around

While optimizing and maximizing space is key to improving the efficiency and productivity of your warehouse facility, it is also important to ensure that there is sufficient space along the aisles that can accommodate your forklifts and other warehousing equipment. Cramped workspaces would not be comfortable to work in, as well as becoming a deterrent for the smooth and unhindered flow of inventories to and from the facility.

Select the Optimized Shape for Your Rack Layout

The shape of how you design your track layout will depend on the types of inventories your have, the applications these inventories are for, and the flow of materials, equipment, and tools in your warehouse operations. One of the most common warehouse formats follow the U-shaped flow, with the shipping and receiving docks placed near one another. With this type of flow, handling of products is minimized, and it is possible to have cross-docking processes as needed. Other types of warehouse layout include the I-Shaped layout, and the L-shaped layout, with the receiving and shipping areas located on opposite sides of the facility. Such layouts are required if there is a need for higher security and isolated monitoring for other sections of the facility.

Integrate Loading and Unloading Areas

It would be best practice to have the loading and unloading areas properly integrated into the sizes of your warehouse structure. This design can increase the speed and efficiency of loading and unloading of products on and off your delivery vehicles. The only drawback here is that there should be sufficient space in your facility to accommodate such designs, but it would be best to consider this right from the start.

Test Your Rack Layout Design with a Slotting Analysis

When performing a slotting analysis, you will need to analyze the best combinations of item categories, the speed or velocity of product movement, and the unit of measure used when picking or reserving items from your inventories. With a proper slotting analysis performed, you can have a good balance in the picking and replenishment of items for optimum inventory quantities. At this point, it would be good to make use of warehouse technologies like RFID scanners and intuitive Electronic Shelf Labels so you can have a more accurate insight of your inventories, stock levels, and other information.

ESL in the Warehouse

ESL in the Warehouse

Design Several Layouts and Test Most Effective Ones

In the design process, it would be of no wonder if you can come up with various combinations and configurations in the layouts that you generated. There may be certain advantages or disadvantages in a certain layout, so it would be best to perform and validate the efficacy of each of these layouts before you commit to one and have it rolled-out throughout the facility. Things to consider in testing these layouts include the efficiency of product flow and throughput, utilization of space and the building, minimum safety risks, and minimal impact on the environment.

Make Use of Automated Technologies

One important aspect that you should include in your warehouse design is the use of automated tools for your racks, shelves, and bins. There are a whole lot of innovative technologies available, such as the RFID tags and scanners mentioned earlier, or the use of ESL solutions like the ones from SoluM. Other devices that are fast becoming popular include automated picking tools such as the pick-to-light tools, voice-controlled picking tools, and even more sophisticated robotic tools.

ESLs in the Warehouse

ESLs in the Warehouse

You can integrate this with new and upgraded software solutions like the Automated Inventory Management Systems, Warehouse Management Systems, and Automated Storage and Retrieval Systems. You can still go further and make use of warehousing solutions for the future that are available now, such as Collaborative Robots and Automated Guiding Vehicles (AGVs).

The Take Away

One of the most important aspects of any business is the warehouse, and the efficacy, efficiency, and productivity of the warehousing layout are critical to the continued success and sustainability of the warehouse facility. It is vital that you do it right the first time when designing your warehouse layout, or make changes to old warehouse design, into something much more innovative and optimized to help you realize the goals of your business.


Contact us today if you are looking for a beyond capable solution that can elevate the performance of your warehouse operations.

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