A Warehouse Layout That Improves Efficiency and Cuts Costs 

Every industry has different fulfillment needs, and how their warehouse is set up goes a long way in either hindering or optimizing operational performance.

Take the food and beverage industry, for example. New products arrive frequently, but without a proper first-in, first-out (FIFO) system, older inventory can get pushed to the back, leading to spoilage, increased labor, and lost revenue. If cold storage areas aren’t positioned near shipping and receiving zones, temperature-sensitive items may spend too much time outside their required environment, further increasing the risk of waste, recalls, and lost revenue.

And it’s not just this industry. Warehouse layout plays a critical role across the board. Product size, shape, and weight influence storage configurations. High inventory volumes require space for bulk storage. Seasonal surges may call for flexible or temporary layout adjustments.

That’s why businesses should look for fulfillment partners with expertise in warehouse design and who can adapt to specific industry needs while prioritizing safety, efficiency, and scalability.

Core principles of an efficient warehouse layout 

An efficient, cost-saving warehouse layer features four principles: flow, accessibility, space utilization, and safety. When working with a 3PL partner to optimize layout, these should be top of mind: 

Flow 

Flow streamlines the movement of goods from receiving to shipping and is central to operational efficiency. The layout flow impacts everything, including picking and packing speed, space optimization, and minimizing wasted movement. This leads to faster order fulfillment and reduced costs while improving productivity, inventory management, and enhancing safety. 

Accessibility 

Accessibility is designing warehouse layout for improved equipment access and product retrieval while also addressing safety. To improve accessibility, fulfillment teams must reduce travel time with clear pathways and give access to items in a way that makes it easy for employees to locate and retrieve orders.  

Space utilization 

Space utilization affects flow, accessibility, and safety. In other words, it’s a key component in warehouse layout. It should maximize vertical and horizontal space, optimize aisle width, and support efficient inventory management systems. Space utilization is generally comprised of a mix of racking systems, carousels, lifts, mezzanines, zones, dedicated areas, and more. 

Safety 

Safety is paramount to brand reputation, compliance, partnerships, labor force retention, and preventing operational disruptions. This means keeping aisles clear, reducing congestion, and planning for compliance. While the priority should be protecting workers, safety also minimizes financial loss by maintaining product integrity and boosting productivity. 

Each industry will have different flow, accessibility, space utilization, and safety needs that affect their warehouse layout. Here are some examples: 

Key warehouse layout factors by industry 

Factor	Food & Beverage	Chemicals	Retail / Ecommerce	Paper / Packaging	Industrial Goods
Product characteristic	Perishable, varied sizes, sensitive to spoilage	Hazardous, flammable, requires containment	High SKU variety, small to medium packages	Large pallets, bulky, stackable	Heavy, oversized, durable
Inventory volume	High volume with fast turnover	Moderate, requires secure storage	High SKU count, fast-moving inventory	Bulk storage with seasonal spikes	High volume with steady demand
Order profiles	Frequent small orders, strict FIFO	Bulk or batch shipments	High-frequency picks, multi-line orders	Fewer picks, larger quantities per order	Mixed orders with parts, tools, and large equipment
Material handling equipment	Pallet jacks, chill zone carts	Specialized hazmat forklifts, spill kits	Pick carts, conveyors, AMRs	Standard forklifts, palletizers	Cranes, heavy-duty forklifts
Seasonality	Holiday, summer drink surges	Less seasonal, but subject to global disruptions	Peak seasons (Q4, back-to-school, promos)	End-of-year bulk orders	Stable, occasional project-based spikes
Receiving/ shipping volume	High volume, time-sensitive	Controlled flow, requires documentation	Rapid in/outflow, frequent parcel carriers	Infrequent bulk deliveries	Large batch loads, scheduled shipments
Temperature control	Critical (cold/frozen zones)	May need temp-controlled or ventilated rooms	Optional (beauty, perishables)	Not needed	Not needed
Compliance & safety	Food-grade standards, HACCP, lot tracking	OSHA, EPA, Responsible Care® standards	Basic OSHA compliance	Clean, dry conditions	OSHA, weight and height stacking regulations
Labor & workflow	Fast picking & packing, ergonomic layout essential	Trained staff, safety protocols critical	High picker density, fast packing stations	Moderate staffing needs	Skilled handling, equipment operation
Technology & automation	Real-time WMS, batch picking, temp tracking	Inventory controls, digital compliance records	Advanced WMS, real-time inventory, robotic picking	Basic WMS integration	Scanning and tracking for industrial parts

Key layout types and when to use them 

While each business and product will have unique warehouse layout needs that can be optimized with the help of a strategic partner, there are some common layouts used for specific types of fulfillment operations. For instance, a U-shaped layout is often ideal for smaller operations that need order control. An I-shaped layout (also known as a throughput layout) is ideal for high-volume, cross-docking, or direct-to-consumer (DTC) environments. Lastly, an L-shaped layout can support specialized flows and operations with separate inbound and outbound areas.  

Despite these norms, choosing the right 3PL provider will give businesses access to experts that can tailor warehouse layouts to their specific needs, boosting productivity, efficiency, and cost-savings. 

Functional zones and best practices 

When creating an optimized warehouse layout plan, businesses should consider four primary zones. This includes the receiving area and dock placement, staging space, and inspection areas, and the storage area, along with features such as pallet racking, bulk storage, and bin shelving, based on product types.  

Two other main areas are the picking area and the packing and shipping area. Retailers should look at batch vs zone picking and how to minimize picker travel time for the picking area. The packing and shipping area needs will cover things like workstation design, conveyor access, and staging lanes. 

Each industry has considerations that influence warehouse layout. For example: 

• Retail and ecommerce have high SKU counts and frequent picking 

• Chemicals require hazmat zones, ventilation, and have segregation requirements 

• Paper products need bulk storage and the ability to stack goods 

• Food and beverage lean on FIFO methodology, cold storage, and sanitation standards 

• Furniture or industrial goods will likely require oversized storage zones and accessibility for special handling equipment  

Technology’s role in warehouse layout optimization 

Modern fulfillment technology has an enormous influence on how efficient operations are. More logistics providers are investing in integrated tech stacks to automate and cut costs. According to McKinsey & Company, automation in logistics and fulfillment is expected to account for more than a third of capital spending. And the investment in tech and automation can help with warehouse layout optimization as well.  

Warehouse management systems (WMS), barcode scanning, and automation influence layout decisions by streamlining inventory tracking, guiding picking paths, and reducing manual errors. The real-time data from these systems supports re-slotting to improve storage efficiency as demand shifts. There are also simulation tools that let operations teams model and forecast layout scenarios before making the physical changes.

Relying on 3PL expertise for optimal warehouse layout 

It’s essential to be able to rely on a 3PL partner’s expertise to help improve warehouse layout.

Imagine being able to do something such as reducing labor hours by 30% by redesigning layout to shorten picking paths and consolidate high-velocity SKUs near packing stations. By right-sizing storage zones and reconfiguring layouts based on specific inventory and order profiles, 3PLs help ensure space is used effectively. This could mean creating dedicated areas for seasonal overflow or reorganizing bulk storage to improve accessibility.  

The right layout isn’t one-size-fits-all; it’s about optimizing your operations. Want to improve your warehouse efficiency and boost cost savings? Talk to a WSI expert today about how an optimized warehouse layout can save you time and money.