How to Design a Hyperlocal Fulfillment Center

Rolling Cantilever Rack

Pallet Rack Mezzanine

One of the fastest rising trends in modern supply chains is that of the hyperlocal fulfillment center. These specialized warehouses are designed to meet the needs of hyperlocal businesses, offering order and delivery services to customers in the immediate area. Warehouse racking arrangements, access to products, and loading procedures all have to be rethought when designing an effective and efficient hyperlocal fulfillment center.

Understand customer expectations

When approaching the design for your hyperlocal fulfillment center, it is vital to understand the expectations of your customers. One of the biggest factors to consider is that of speed.

The hyperlocal business model is highly specific. It has risen in response to the popularity of delivery services such as Amazon, which allows customers to schedule next-day deliveries.

Hyperlocal businesses offer goods and services to their area only. Some are relatively small, independent businesses, while others could involve large warehouses. Frequently, they will serve as the last part of a longer supply chain, accepting orders and then sending them out to local customers almost immediately.

Regardless of the size of your business, a hyperlocal model generally means the customer will expect delivery within days, or possibly one day, of their order.

Consider products and goods

It is important to consider the type of products or goods you will be handling. Hyperlocal centers could provide everything from electronics to groceries. Each type of item will require a different approach to storage and handling.

For example, if your fulfillment center deals in perishable goods and products, speed will be a primary concern in your designs. For larger products, allowing access for transportation will be particularly important.

Plan for quick turnover

It is worth noting that even if you are handling non-perishable products, long-term storage may not be much of a consideration for hyperlocal centers. Depending on your business model, any product you handle may only be in the warehouse for a short while.

No matter the product, your first question should be “how long will this take to ship?” Any item should have a fast, easily predictable flow from storage to shipping.

When storing products for a short time, you can utilize more shallow racking. You may only need a few products on each rack before they are shipped and replaced with new items.

Intuitive designs

An unexpected issue some warehouses may face is that of untrained staff. This is because hyperlocal businesses can rise very quickly. If you have set up a fulfillment center to meet the needs of a brand-new business, you may need to use staff who are unfamiliar with warehouse design.

Additionally, some hyperlocal fulfillment centers might be designed to serve a large number of customers and may hire multiple new staff members at once. This may leave little time for training. Using intuitive designs for racking and product flow can allow new staff to learn quickly.

Some added features can be especially helpful with this. For example, an automated picking system can have a light indicator added. This is a lighting system that indicates which items or cartons need picking, saving staff members time and effort.

Allow easy access

Make sure your racks are not arranged in long, unbroken aisles. Shorter aisles with breaks allow easy access to different areas. Otherwise, staff will need to walk the length of the racks to access the next aisle, wasting time.

If you require forklift access, make sure you design wide aisles. This may feel like a waste of square footage, but the time spent maneuvering a forklift in tight space can slow the entire center down. In addition, OSHA regulations require aisles to be of regulation width for any equipment used. You may be able to balance the need for wider aisles by utilizing the height of your space.

Traditionally, warehouse storage dictates that smaller items be stored higher, while bulkier items are lower. You should still follow these safety procedures. However, consider adding racks to allow easy access to the most popular items lower down.

Picking areas

Rather than shipping a single product at a time, many hyperlocal fulfillment centers will require every order to be filled by picking. A customer may purchase multiple products of different kinds, that must be picked and shipped together.

Unlike a long-term storage warehouse, your picking area may be the most important in the facility. For some, the entire warehouse may be designed as a picking area. This is when easy access to your pallet racking is especially important. Alternatively, you might consider an automated system.

Sorting areas

The sorting area is where the products will be divided into containers, ready for shipping. Ideally, this will be integrated into the picking area, or placed near it.

Make sure boxes and containers are stored correctly. These should have their own dedicated racks or shelving, allowing staff to access them immediately.

Different sizes and types of containers should be sorted with clear labelling. Make sure there is a set procedure for choosing the size of container, as this saves time when staff fulfil the orders.

Direction of movement

There should be a clear direction of movement in all areas of the warehouse. While some sections, such as the picking area, might involve staff moving in various directions, most traffic should be predictable.

When creating your design, map out the direction of the workflow. Starting with the reception area, track the movement of a product into storage, picking, sorting, and dispatch.

Keep track of inventory

With the fast turnover rate of a hyperlocal fulfillment center, keeping track of your inventory is vital. Some centers may vary the products they handle, with inventory changing rapidly. A number of centers may have products arriving only to be repacked and shipped out again immediately.

Some hyperlocal businesses are based around seasonal products. In this case, you may need to adjust the locations of certain products in your inventory based on the time of year.

Make sure all inventory location information is frequently updated so staff can find the products quickly when picking.

Pallet rack mezzanines

The use of pallet rack mezzanines can add efficiency to many hyperlocal fulfillment center designs. These allow you to utilize the height of your space fully.

Staff can use the mezzanine catwalks to access items on the pallets further up. For fast picking access and quick turnover, this is ideal.

These may be especially useful for centers with limited floor space. Hyperlocal fulfillment centers are often based in urban areas, designed to meet the needs of a condensed population. As a result, warehouse space may be limited. High, vertical storage can be an excellent solution.

Conveyors

For the speed and high flow of a hyperlocal fulfillment center, a conveyor system is of huge benefit. These systems allow easy transport of products from one area of the warehouse to another with minimal effort. There are various conveyor types to choose from, including powered and non-powered options.

Many hyperlocal fulfillment warehouses will be dealing with consumer products, food items, and other light items. These may allow you to use a flexible conveyor system, which is suitable for lighter products. Flexible conveyors allow you to make the most of a small space.

Conveyors may also be added for movement from your sorting and fulfillment areas to your docks. Portable or extendable conveyors can allow you to move containers directly into a waiting truck, for a vastly shortened loading process.

Carton flow racks

The concept of “first in, first out” is frequently used for warehouses storing perishable goods. However, this concept can easily be applied to many products in a hyperlocal warehouse.

Carton flow racks allow this system to be integrated into your storage and picking areas. The racks are wheeled and tilted so that a new carton rolls into place every time the front carton is removed. New cartons are loaded from the back.

This is an excellent way to increase efficiency and product flow. Loading areas are separated from picking areas, and you can be certain that no products will be left on their racks.

If you already have a racking system in place, you can purchase tilted, wheeled platforms to add to the racks. This transforms them into carton flow racks without the need for an entirely new installation.

Automated systems

Automated shelving systems have the potential to solve many of the issues of a hyperlocal fulfillment center. The products are stored within an automated rack unit, and a drawer or tray moves up and down, collecting the items. These are placed into cartons, which are delivered to a waiting worker.

Workers can remain in a single location rather than walking to pick different items, saving huge amounts of time. Additionally, by managing the inventory through the use of software, the chance for potential errors is significantly reduced.

Two popular types of automated picking systems currently in use are the carousel and the vertical lift.

Carousels

Automated carousel systems use rotation, in a similar design to that of a ferris wheel. The rotation lifts and lowers the drawers, to reach and collect different items on the shelving unit. This is often the fastest automated system.

However, the structure of the carousel means the storage racks have to be placed a uniform width apart. If you have many different sizes of products, this may not be a suitable choice.

Vertical lifts

Automated vertical lift modules move their collection drawers up and down, fetching items from storage racks and delivering them once all items have been collected.

This is a slightly slower system than the carousel. However, you can use racks of different heights, allowing greater variations of products without wasting vertical storage space.

Pick modules

A pick module is a module made up of combined storage elements. For a small warehouse, as many hyperlocal fulfillment centers are, this can be an excellent way to optimize space.

These modules are designed to take advantage of your vertical space as much as possible while limiting the horizontal footprint of your storage. You can include carton flow racks, conveyors, pallets, and more, designed to your specifications.

In addition, the concentrated design of the modules means a picker can stay in one location while working. They will spend less time walking, and more time fulfilling orders.

Popular items

Paying special attention to the most popular items you ship will help you optimize your time. Popular items should be designated high flow. They should be given priority both in terms of where you locate their racks, and where you place them within the racks.

For example, if you use a manual picking system, place high flow items on racks between waist and shoulder height. This makes only a small difference in the time it takes for an employee to pick the item. However, when dealing with a high number of orders, these small changes can have a significant effect on the overall time spent throughout the day.

If you have an automated system, popular items should be placed at the quickest collection point. For example, this might mean placing them lower down on a vertical lift system, allowing the lift to reach and pick them faster.

Optimal slotting

If you notice that certain products are frequently ordered together, it is worth reslotting these items to place them close to each other. This can significantly shorten the time spent fulfilling orders.

This can be done for both manual and automated systems. Automated systems, although fast, can be made even faster if the picking process requires only a few actions. The closer together you keep these popular items, the faster the process will be.

Many automated systems can track the popularity of certain product combinations for you and can make recommendations for optimal slotting.

Design for docks

Integrated docks are preferable to external docks for a hyperlocal fulfillment center. Although it can be more challenging to schedule arrivals and departures, they allow for far greater speed when loading and unloading.

Given the time constraints hyperlocal fulfillment centers often face, it is vital to pay attention to the design of your reception and dispatch areas. There should be plenty of access to both loading and unloading bays, allowing you to deal with a fast handling flow.

You can use the location of the docks to determine the location of various products, keeping high flow nearby. However, despite the smaller size of many hyperlocal fulfillment centers, make sure to leave adequate space around the bays. The speed with which you will load, and unload may increase the risk of accidents if you place racks close by.

For a large hyperlocal warehouse, it is worth considering the addition of extra docks if possible. Alternatively, invest in a software system that can schedule the arrival and departure of trucks for you.

Final Word

At Shelving + Rack Systems, Inc our team understands that efficient use of storage space is a priority. For assistance in choosing the right design for your fulfillment center, please call 800-589-7225 (RACK) or complete our online contact form to speak to a project manager. We can help you with design, installation, and integration, even custom designing solutions to accommodate your unique space.

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