Developing a Warehouse Layout Design Framework for Fast Growing Companies - A Case Study at Oatly AB

Abstract: Problem description: The importance of the warehouse in the supply chain network is increasing and the overall efficiency of a supply chain is to a large extent determined in the warehouses. It is acknowledged that warehouse design is a complex task mainly due to the many relationships to other functions within the company. The complexity is further enhanced by many activities and parallel processes performed within the warehouse. As a consequence, there are many aspects needed to be considered when developing a warehouse layout. Warehouses are generally expensive to change regarding facility, equipment and racks. Companies in volatile and fast moving markets should therefore consider the future demand and flexibility to changes in future demand in the warehouse layout design process. Purpose: The purpose of the study is to develop an aligned warehouse design solution for current and future operations considering a company ́s growth expectation. Research questions: What aspects should be considered when designing a warehouse layout to ensure that it is aligned with the company ́s growth expectations? How can a warehouse layout design be generated that ensures flexibility and ability to handle future warehouse operations? Methodology: To find a warehouse solution that is aligned with the current and future operations a warehouse the answer to the research questions was investigated in current research on warehouse layout design. The aspects found which were considered important for fast growing companies were thereafter put in a framework, the warehouse layout design framework. The framework has its basic structure from current literature on warehouse layout design. The framework has been applied through a single case study at Oatly AB. Oatly AB is suitable for this study as the company has experienced considerable growth during the last few years. Based on the case study, further refinements have been made to the framework. Conclusion: Aspects that have been found to be especially important for the development of the warehouse layout are growth expectations, the current layout and flexibility for a volatile future demand. The objective of the warehouse, primarily the focus on product portfolio strategy, was also found to be an important aspect for the layout design. The warehouse layout design framework puts additional focus on the growth of the company and as a consequence, forecasting of the expected in- and outbound warehouse material flows. Therefore, the framework is useful for companies facing unsure growth. The main benefit of the framework is the sequence of steps that guide the user towards an aligned warehouse layout. The steps does not allow for any aspects being left out in the analysis. Additional case studies should be made to find other aspects being of high concern for other types of warehouses in different industries.